Holt v Dental Council of NSW

The stay proceedings

1. The application to stay the section 150 decision pending the outcome of the appeal was filed by the appellant on 13 February 2020. He sought orders that the decision should be stayed in its entirety or alternatively he should be permitted to practise as a dental practitioner on certain conditions pending the outcome of the appeal proceedings. In a letter dated 12 February 2020 the appellant's solicitors had asked that the respondent consent to the making of orders by the Tribunal staying the suspension of his registration subject to certain conditions. The respondent did not accept this offer, nor did it accept a subsequent offer in the same terms made on 5 March 2020.
2. The stay decision granted a stay of the suspension of the appellant's registration subject to conditions which were in terms similar to those proposed by the appellant in the offers referred to above.

The appeal proceedings

1. The appeal had been filed on 13 February 2020. On 16 April 2020 the appellant's solicitors wrote to the respondent seeking that the appeal proceedings be resolved on the basis that the parties consent to orders to be made by the Tribunal that the suspension decision be set aside conditional upon the appellant agreeing to the imposition of conditions which are in terms similar to those proposed by the appellant in connection with the stay application. The offer included a provision that the respondent pay the appellant's costs of the stay application.
2. The respondent did not accept this offer, nor did it make a counter-offer.
3. The appeal decision was published on 26 June 2020. The appeal was upheld, and no conditions were imposed upon the appellant's registration.

Costs on the ordinary basis

1. This is a costs jurisdiction. The appellant was successful in both sets of proceedings. Prima facie he is entitled to his costs, at least on the "ordinary basis" because there is no evidence or suggestion of any conduct on the part of the appellant which would disentitle him to these orders. Indeed, the respondent did not resist any costs order made on this basis.

Appellant's submissions

1. The appellant sought to justify an award of costs on an indemnity basis pursuant to the Calderbank principle with respect to the stay application on the basis that the compromise which he had proposed in the offers was reasonable, balanced the competing positions of both parties appropriately and preserved the status quo pending the outcome of the appeal. Furthermore, the offer included the imposition of a condition that the appellant refrain from becoming involved in treatment of a particular kind Australia wide, whereas the effect of the decision was to impose such a condition but limited to New South Wales.
2. With respect to the appeal, the appellant asserted that the offer which he made on 16 April 2020 was a genuine one which involved a compromise on his part extending to the imposition of conditions regarding the provision of certain treatment. Furthermore, he offered to bear his own costs. The offer was expressly made having regard to the Calderbank principles and it was unreasonable for the respondent not to have accepted it, especially as the outcome was more favourable to the appellant.

Respondent's submissions

1. The respondent's principal submission was that the Calderbank principles are not appropriate to be applied to the circumstances of these proceedings which involve an entity responsible for the regulation of those health practitioners practising in the dental profession. In support of this submission the respondent relied upon a decision of the Appeal Panel of the Queensland Civil and Administrative Tribunal in McGee v Queensland Building and Construction Commission [2018] QCATA 124. I intend upholding this submission, for reasons which I shall discuss shortly.
2. A second reason advanced by the respondent is that there was an alternative remedy available to the appellant rather than instituting an appeal, namely seeking a review pursuant to section 150A of the National Law which the respondent said would have exposed the appellant to "minimal costs." I reject this submission because where alternative remedies were clearly available, the appellant should not be prejudiced as to the quantum of his costs merely by selecting a remedy which may have been more costly, but nevertheless he was entitled to pursue.
3. Thirdly the respondent submitted that it was not unreasonable for the respondent to have refused to have accepted the proposals especially as, as was submitted, they involved a genuine compromise. As to the stay application offers, the first offer was made prior to the Delegates of the Council handing down their written reasons, and secondly it was unreasonable to expect the Council which comprise 12 members to have acted so quickly in considering an offer made at short notice prior to the hearing. It is not necessary that I consider these submissions. Their consideration would involve an examination of factual circumstances the details of which have not been provided.

Consideration

1. I have already noted that it is appropriate that the appellant have the benefit of a favourable costs order. In considering the applications made by the appellant that they be awarded on an indemnity basis, I first note that the provisions of Clause 13 of Schedule 5D are sufficiently broad to allow the awarding of costs on this basis.
2. In Monie v Commonwealth of Australia (No.2) [2008] NSWCA 15 Beazley JA (as her Honour then was), although in dissent, described the policy and purpose which applies to the recognition by the courts of the utility of Calderbank type offers in terms which I adopt as representing an orthodox and accepted formulation in the following terms 15 In Cutts v Head [1983] EWCA Civ 8; [1984] Ch 290; [1984] 1 All ER 597, Fox LJ, in recognising that the principles stated by Lord Cairns in Calderbank v Calderbank applied in cases other than matrimonial cases, stated at 315: "If a party is exposed to a risk as to costs if a reasonable offer is refused, he is more rather than less likely to accept the terms and put an end to the litigation. On the other hand, if he can refuse reasonable offers with no additional risk as to costs, it is more rather than less likely to encourage mere stubborn resistance." 16 In Computer Machinery Co Ltd v Drescher [1983] 1 WLR 1379; [1983] 3 All ER 153, Megarry VC stated at 1383: "Whether an offer is made 'without prejudice' or 'without prejudice save as to costs,' the courts ought to enforce the terms on which the offer is made so as to encourage compromises and shorten litigation. The latter form of offer has the added advantage of preventing the offer from being inadmissible on costs, thereby assisting the court towards justice in making the order as to costs." This statement was endorsed by Oliver J in Cutts v Head at 311. 17 The underlying public policy and private interest in encouraging the compromise of claims by awarding indemnity costs has long been recognised. In Leichhardt Municipal Council v Green [2004] NSWCA 341, Santow JA, after referring to Cutts v Head and Computer Machinery Co Ltd v Drescher, stated at [14]: "It can be seen from these cases that the practice of Calderbank letters is allowed because it is thought to facilitate the public policy objective of providing an incentive for the disputants to end their litigation as soon as possible. Furthermore, however, it can be seen as also influenced by the related public policy of discouraging wasteful and unreasonable behaviour by litigants." 18 In South Eastern Sydney Area Health Service v King [2006] NSWCA 2 (a case dealing with an offer of compromise under the rules of court), Hunt AJA (Mason P and McColl JA agreeing) stated, at [83], the purpose of the rules of court as being: "... to encourage the proper compromise of litigation, in the private interests of the litigants and in the public interest of the prompt and economical disposal of litigation." See also Macquarie Radio Network Pty Ltd v Arthur Dent (No 2) [2007] NSWCA 339 per Beazley JA at [15] (Mason P and Basten JA agreeing). 19 The same policy and purpose underlie offers of compromise made in the form of Calderbank offers: Elite v Salmon.
3. Whilst the utility of utilising Calderbank type offers is well-established in private inter- parties litigation, the context in which the proceedings in these matters was being litigated is significantly different. The respondent has a responsibility under the National Law to take such action as is lawfully available to it to protect the health and safety of the public. Included within such action is the obligation to consider whether and under what circumstances the registration of a dental practitioner should be suspended in the circumstances set out in section 150. 150 Suspension or conditions of registration to protect public [NSW] (1) A Council must, if at any time it is satisfied it is appropriate to do so for the protection of the health or safety of any person or persons (whether or not a particular person or persons) or if satisfied the action is otherwise in the public interest - (a) by order suspend a registered health practitioner's or student's registration; or (b) by order impose on a registered health practitioner's registration the conditions relating to the practitioner's practising the health profession the Council considers appropriate; or (c) by order impose on a student's registration the conditions the Council considers appropriate. (2) A suspension of a registered health practitioner's or student's registration under subsection (1) has effect until the first of the following happens - (a) the complaint about the practitioner or student is disposed of; (b) the suspension is ended by the Council. (3) If a Council for a health profession is satisfied a health practitioner or student registered in the profession has contravened a critical compliance order or condition, the Council must - (a) suspend the practitioner's or student's registration until a complaint concerning the matter is dealt with by the Tribunal; and (b) refer the matter to the Tribunal as a complaint. (4) A Council for a health profession may take action under this section - (a) whether or not a complaint has been made or referred to the Council about the practitioner or student; and (b) whether or not proceedings in respect of a complaint about the practitioner or student are before a Committee or the Tribunal. (5) Without limiting the conditions that may be imposed under subsection (1)(b), a Council may impose a condition requiring the registered health practitioner to undergo a performance assessment, but the condition has no effect unless the Commission agrees with the imposition of the condition. (6) A Council must give written notice of action taken under this section to the registered health practitioner or student concerned. (7) If a Council delegates any function of the Council under this section to a group of 2 or more persons, at least one of those persons must be a person who - (a) is not a registered health practitioner or student in the health profession for which the Council is established; and (b) has not at any time been registered as a health practitioner or student in that health profession under this Law or a corresponding prior Act.
4. The power to suspend registration created by section 150 is an important tool to protect the health and safety of the public in appropriate cases. Even assuming that the respondent did not have particular confidence in the decision to suspend made by its delegates, it has no power to reverse that decision once made. The only circumstances in which such a decision may be reconsidered are those provided by sections 150A allowing for a review, and 159 allowing for an appeal. In both cases such a reconsideration must be initiated by the health practitioner. 150A Review of certain decisions [NSW] (1) A registered health practitioner or student may apply to a Council for the review of a decision of the Council under section 150 to - (a) suspend the practitioner's or student's registration; or (b) impose conditions on the practitioner's or student's registration or alter conditions imposed on the practitioner's or student's registration. (2) On receiving an application for review, a Council - (a) may refuse to reconsider its decision if, in the Council's opinion, the application is frivolous or vexatious; or (b) must otherwise reconsider its decision, and in so doing must consider any new evidence or material submitted by the practitioner or student that the Council reasonably considers is relevant. (3) Following its reconsideration of a decision, a Council may - (a) affirm or vary the decision; or (b) set it aside and take any action the Council has the power to take under section 150. (4) A Council may vary or set aside a decision only if the Council is satisfied there has been a change in the registered health practitioner's or student's circumstances that justifies the variation or setting aside of the decision. … 159 Right of appeal [NSW] (1) A person may appeal to the Tribunal against any of the following decisions of a Council for a health profession - (a1) against a reprimand by the Council for the health profession under Division 3; (a) against a suspension by the Council for the health profession under Division 3 or a refusal to end a suspension; (b) against conditions imposed by the Council for the health profession on the person's registration under section 127AA or Division 3 or 4 or the alteration of the conditions by the Council; (c) against a refusal by the Council for the health profession to alter or remove conditions imposed by the Council under Division 3 in accordance with a request made by the person under section 150I; (d) against a decision by the Council for the health profession to give a direction or make an order in relation to the person under section 148E; (e) against a refusal by the Council for the health profession to alter or remove conditions imposed on the person's registration, or to end a suspension, imposed under Division 4 in accordance with a request made by the person under section 152K. Note - An appeal under this section is an external appeal to the Tribunal for the purposes of the Civil and Administrative Tribunal Act 2013. (2) An appeal may not be made in respect of a request by a person that is rejected by a Council because it was made during a period in which the request was not permitted under section 150I or 152K. (3) The appeal is to be dealt with by way of a new hearing and fresh evidence, or evidence in addition to or in substitution for the evidence that was before the Council, may be given.
5. In the circumstances of these proceedings the appellant chose the appeal route by invoking the provisions of section 159, which can only be determined by this Tribunal. Ultimately, whether the jurisdiction and powers of this Tribunal are invoked by way of an application for a stay of a decision to suspend pending the outcome of an appeal, or by way of an appeal simpliciter, any attempt by the parties to formulate consent orders for submission to the Tribunal must always be subject to approval by the Tribunal as being orders appropriate to be made in all the circumstances of the proceedings. In many cases the Tribunal is not in a position to consider approval or otherwise of proposed consent orders unless all of the relevant factual material has been made available. This fact differentiates these proceedings from proceedings in which private rights are sought to be enforced, and where the ultimate approval of a court or a tribunal is only required in exceptional circumstances, such as a litigant under an incapacity.
6. Obviously, it is in the public interest in any proceedings before this Tribunal that the parties endeavour to compromise their positions and reach some accommodation with respect to all or some of the controversy between them. Nevertheless, the requirement in proceedings under the National Law that any decision must be a decision which this Tribunal determines is an appropriate one removes it from the normal adversarial process found in personal litigation. Proceedings before this Tribunal under the National Law are more in the nature of an inquiry, as is to be found throughout that legislation in describing the role of this Tribunal. (See for example Subdivision 4 of Division 10). This renders it less likely that the purpose and policy of the Calderbank principles as described in Monie should be applied to these proceedings.
7. The respondent submitted that the Queensland decision in McGee was relevant to the determination of this issue. Mr McGee had applied to the Queensland Building and Construction Commission to be categorised as a "permitted individual" to enable him to hold a building licence under the Queensland Building and Construction Commission Act. The Commission declined his application. He then commenced review proceedings in the Queensland Civil and Administrative Tribunal. Mr McGee made an offer inviting the Commission to categorise him as a permitted individual, in exchange for which he would bear his own costs of those proceedings. That offer was rejected. Ultimately Mr McGee was successful in the proceedings and sought an order for costs including costs on an indemnity basis by reason of the refusal of the Commission to accept his offer to bear his own costs.
8. The provisions of the Queensland legislation dealing with the awarding of costs in the Queensland Tribunal are significantly different to those which apply in these proceedings. Nevertheless, observations made by the Appeal Panel are relevant to the consideration of the application of the Calderbank principles in the context of proceedings involving the regulation of professions and trades. In considering the reasons for the Tribunal set out below it is necessary to bear in mind that the Tribunal was dealing with the fundamental question whether any costs should have been awarded in favour of Mr McGee, including indemnity costs.
9. The Appeal Tribunal said: [45] The difficulty in a case such as this is that the principles relevant to Calderbank offers, and the statutory offer regime, do not sit easily with the nature of this proceeding and, in particular, with the statutory obligations of the QBCC. [46] The matter was significant in that it involved the issue of whether or not Mr McGee should hold a building licence. Under the QBCC Act a relevant event had occurred when the company of which Mr McGee was a director went into administration. At the time of this event the total amount owing to creditors was over $7 million, including a debt to the ATO of approximately $700,000. In order to be entitled to a licence Mr McGee had the evidential onus of establishing that he should be categorised as a "permitted individual". Section 56AD(8) of the QBCC Act provided: The commission may categorise the individual as a permitted individual for the relevant event only if the commission is satisfied, on the basis of the application, that the individual took all reasonable steps to avoid the coming into existence of the circumstances that resulted in the happening of the relevant event. [47] In deciding whether all reasonable steps had been taken, the commission was required to take into account the action of the individual in relation to certain aspects of the conduct of a business, including, relevantly: (i) keeping proper books of account and financial records; (ii) seeking appropriate financial or legal advice before entering into financial or business arrangements or conducting business; (iii) putting in place appropriate credit management for amounts owing and taking reasonable steps for recovery of the amounts; and (iv) making appropriate provision for Commonwealth and State taxation debts. [48] These aspects were mandatory considerations for the QBCC and were all in question at the time the review proceedings commenced and, in the opinion of the QBCC, at the time the offer expired … [50] It is necessary in a proceeding such as this in exercising the discretion to award costs, to consider the functions of the QBCC which include administering the QBCC Act and furthering its objects.[35] Those objects include the regulation of the building industry to ensure the maintenance of proper standards in the industry.[36] … [57] The nature of the proceeding was such that the QBCC had to be satisfied on the basis of the strength of the case made out by the applicant. A regulatory authority, such as the QBCC, should not be discouraged from acting in the way they consider responsible and reasonable by exposing them to the possibility of an order as to costs. In other words, the QBCC should not be under pressure to accept an "offer" which involves a compromise of its statutory obligations. The QBCC must ensure the applicant meets the criteria set out in the "permitted individual" provisions which have a protective purpose.
10. I agree with the observations of the Queensland Appeal Tribunal in McGee that the regulatory role of both the respondent and this Tribunal in proceedings under the National Law militate in general terms against the application of the Calderbank principles in assessing the quantum of costs which a successful party is prima facie entitled to be awarded. In so stating I should not be taken to be asserting that there will be no circumstances in which indemnity costs might be awarded. However, I do not regard the circumstances of these proceedings as justifying an award of indemnity costs.
11. It is true that I have found that the decision of the delegates of the respondent Council to suspend the registration of the appellant should be set aside without the imposition of any conditions. However, as I have found, the necessity that this Tribunal be satisfied that it would have been appropriate to have made the orders proposed by the appellant, assuming that the respondent had agreed to them in the context of the overall regulatory scheme does not render the refusal of the respondent to accept the offers as so unreasonable as to justify the awarding of costs on an indemnity basis.
12. Accordingly, I shall make an order for the payment of costs in the terms consented to by the respondent.

Order 1. The respondent is to pay the costs of the applicant and appellant respectively in each set of proceedings Holt v Dental Council of New South Wales [2020] NSWCATOD 37 and Holt v Dental Council of New South Wales [2020] NSWCATOD 62, such costs to be assessed in default of agreement.

I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales. Registrar DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 21 December 2020