Legislation cited: Legal Profession Act 2006 s 433

ACT Civil and Administrative Tribunal Act 2009 s 79

Subordinate

Legislation cited: Court Procedures Rules 2006 rr 1722, 1751, 1752

Cases cited: Council of the Law Society of the ACT v Legal Practitioner LP 202012 [unreported, 10 March 2023]

Donohue v Volanne Pty Ltd (No 3) [2021] ACTCA 20

Fountain Selected Meats (Sales) Pty Ltd v International Produced Merchants Pty Ltd [1988] FCA 202

Harada v Barnes [2021] ACAT 66

Legal Practitioner 'S' (Steven Gavagna) v Council of the Law Society of the ACT [2018] ACAT 12

Leichardt Municipal Council v Green [2004] NSWCA 341

Liverpool City Council v Estephan [2009] NSWCA 161

Olsen v Second East Auction Holdings Pty Ltd [2014] NSWSC 1840

Oshlack v Richmond River Council [1998] HCA 11

Tomanovic v Global Mortgage Equity Corp Pty Ltd (No 2) [2011] NSWCA 256

APPEAL TRIBUNAL: Temporary President G McCarthy

1. The appellant pay the respondent's costs as agreed or assessed on a party and party basis.

1. On 10 March 2023 the Appeal Tribunal made an order confirming the decision of the original tribunal in proceedings OR 12/2020, OR 13/2020, OR 14/2020 and OR 15/2020 that the appellant is guilty of professional misconduct in respect of 22 charges and unsatisfactory professional conduct in respect of two charges.[1] The Appeal Tribunal ordered the parties to file and serve written submissions as to costs by 24 March 2023. The respondent was granted an extension to file its submissions by 20 April 2023 and did so. The appellant did not file any submissions.
2. The matter was listed for directions on 5 May 2023 to set revised dates for filing and service of submissions on costs of the appeal. The appellant did not attend the hearing which proceeded ex parte the appellant.
3. At the hearing, the respondent submitted the Appeal Tribunal should determine costs forthwith as part of its function to hear and determine the appellant's appeal. The respondent did not wish to file further submissions in addition to its written submissions on costs dated 20 April 2023.
4. In an email to the Appeal Tribunal sent later in the day on 5 May 2023, which included an apology from the appellant for his non‑attendance, the appellant stated:

As the matter is the subject of Appeal, I am of the opinion that neither party should be making any submissions on costs at this stage given that the matter is the subject of Appeal.

1. Referring to the appellant's statement that "the matter is the subject of Appeal", we note that on 5 April 2023 the appellant filed an application with the Supreme Court for leave to appeal from our orders made on 10 March 2023.
2. We did not share the appellant's "opinion" that neither party should be making submissions as to costs at this stage. In our view, the question of costs should be determined forthwith as part of the determination of the appellant's appeal to the Appeal Tribunal. We therefore made the following orders:

(a) The appellant file written submissions as to costs (including submissions in response to the respondent's written submissions already filed) by 19 May 2023.

(b) The respondent file any written submissions in reply by 2 June 2023.

1. On 19 May 2023 in a further email to the Appeal Tribunal, the appellant submitted what we understood to be his submissions on costs. We state the content of the appellant's email in full:

The Appeals ACAT has made a number of jurisdictional errors in this matter. As a consequence, the decision is void ab initio. There never was a decision of the Appeals ACAT in this matter. There is no liability to pay costs in this matter.

The Appeals ACAT has been notified of the Appeal of the matter to the ACT Supreme Court. There is no liability to pay costs in those circumstances where there is an Appeal.

There are exceptional circumstances in this matter.

1. The appellant did not copy the respondent into his email to the Appeal Tribunal. On 15 June 2023, the Appeal Tribunal forwarded the appellant's email to the respondent. On 16 June 2023 the respondent filed written submissions in reply to the appellant's submissions.
2. In its submissions in reply, the respondent submitted we should reject the appellant's submission that, by reason of his application to the Supreme Court, there is no liability to pay costs. The respondent relied on a decision of the Federal Court, per Middleton J, in Wooldridge v Australian Securities and Investments Commission in which his Honour said:

It is to be first appreciated that a first instance decision is not, and should not be treated as, a provisional decision. ... As Gleeson CJ observed in Swain v Waverley Municipal Council [2005] HCA 4 ... at [2], the "system does not regard the trial as merely the first round in a contest destined to work its way through the judicial hierarchy until the litigants have exhausted either their resources or their possibilities of further appeal". There is a prima facie assumption that the judgment the subject of the appeal is correct.[2]

1. The respondent acknowledged that Middleton J's comments were made in respect of an application to stay a decision of the Federal Court that was the subject of an appeal, but submitted the principle applied equally to the appellant's submission.
2. In our view, the respondent's submission is correct. The appellant's claim of jurisdictional error on our part is, at present, no more than a claim that the Supreme Court has been asked to consider when hearing his application for leave to appeal. The clearly preferable course is that we determine costs of the appeal to us, sitting as the Appeal Tribunal, before the application for leave to appeal to the Supreme Court is heard so that all issues arising (or potentially arising) on the application for leave can be considered and determined at the same time.
3. If the appellant wishes to appeal also against our decision regarding costs of the appeal, he can apply to the Supreme Court to do so by seeking leave to amend his draft notice of appeal - if that were thought necessary.
4. For these reasons, we concluded we should proceed to determine whether the appellant should pay the respondent's costs of the appeal to the Appeal Tribunal and, if so, what orders should be made.
5. Section 433(1) of the Legal Profession Act 2006 (LP Act) relevantly states:
   1. Costs orders by ACAT

(1) If the ACAT finds an Australian legal practitioner guilty of unsatisfactory professional conduct or professional misconduct, the ACAT must order the practitioner to pay costs (including costs of the relevant council and the complainant), unless the ACAT is satisfied that exceptional circumstances exist.

(a) may be for a stated amount; or

(b) may be for an unstated amount but must state the basis on which the amount is to be decided.

(6) An order for costs may state the terms on which costs must be paid.

1. The appellant submitted, presumably with reference to section 433(1) of the LP Act, that "[t]here are exceptional circumstances in this matter". We presumed, for this reason, the appellant was inferentially submitting we should not order him to pay costs. What those exceptional circumstances are was not stated. Having regard to the order that the appellant file submissions as to costs by 24 March 2023, and the further order that he file submissions as to costs by 19 June 2023, we are satisfied the appellant has had ample opportunity to state the "exceptional circumstances" on which he relied.
2. The appellant made no submission regarding the requirement under section 433(5)(b) that the Appeal Tribunal state in an order for costs for an unstated amount "the basis on which the amount is to be decided". Perhaps, implicitly, the appellant was submitting that the question of "amount" did not arise because, on his submission, he should not be ordered to pay costs at all.
3. The respondent submitted there are no "exceptional circumstances" in this matter that excuse the Appeal Tribunal from its statutory obligation under section 433(1) to order the appellant to pay costs. Regarding the requirement under section 433(5)(b) to state "the basis on which the amount is to be decided", the respondent submitted the appellant should be ordered to pay the respondent's costs of the appeal "as agreed or assessed by the Registrar on a solicitor and client basis plus disbursements in full".[3]
4. An order requiring the appellant to pay costs on a solicitor and client basis would require him to pay "all costs reasonably incurred" by the respondent and of a reasonable amount, having regard to the costs allowable under rule 1722 (Costs - solicitors' costs generally) of the Court Procedures Rules 2006; and charges ordinarily payable by a client to a solicitor for the work.[4]

1. A preliminary issue, not raised by either party, was whether section 433(1) of the LP Act applies not only to the original proceeding but also to the appeal proceeding. This question was canvassed in some detail by a differently constituted Appeal Tribunal in Legal Practitioner 'S' (Steven Gavagna) v Council of the Law Society of the ACT.[5] The Appeal Tribunal in that matter concluded that section 433(1) applies not only to an original proceeding but also to an appeal proceeding. Whilst the question was not the subject of submission, we agree with that conclusion for the reasons given in that decision.
2. In this proceeding, two questions arose regarding costs:

(a) With reference to the proviso in section 433(1), whether we are "satisfied that exceptional circumstances exist".

(b) With reference to section 433(5)(b), whether we should depart from the usual practice of awarding costs on a party and party basis by ordering costs on a solicitor and client basis.

1. As to the first question, the appellant does no more than assert there are exceptional circumstances without specifying what they are. The respondent says there are none.
2. If the appellant was implying that his claim that our decision is void ab initio for jurisdictional error constitutes exceptional circumstances, we are not so satisfied. Referring to Middleton J's comment in Wooldridge, there is a prima facie assumption that our decision is lawful and correct.
3. Where we are not satisfied there are exceptional circumstances for the purposes of section 433(1) of the LP Act, we must order the appellant to pay the respondent's costs.
4. As to the second question, we drew guidance from rule 1751 of the Court Procedures Rules 2006 which provides that the Registrar must assess costs on a party and party basis unless a territory law or an order of the court otherwise provides. Rule 1752 enables a court to order costs on a solicitor and client basis, on an indemnity basis or on any other basis it considers appropriate. The first two options likely involve a higher impost of costs.
5. In Donohue v Volanne Pty Ltd (No 3), the Court of Appeal observed:

22. Usually, there must be some special or unusual feature in the case that justifies the Court in departing from the usual position that costs should be assessed on a party and party basis.

23. Special circumstances may exist where a party is guilty of a "relevant delinquency": Oshlack v Richmond River Council [1998] HCA 11 at [44]. This is not a reference to ethical or moral delinquency, but a delinquency bearing a relevant relation to the conduct of the case: Ingot Capital Investment v Macquarie Equity Capital Markets Ltd (No 7) [2008] NSWCA SC 199 at [24].

24. As stated in Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397 at 401, this may occur where it appears to the court that:

an action has been commenced or continued in circumstances where the applicant, properly advised, should have known that he had no chance of success.[6]

1. The purpose of a costs order is compensatory and not punitive. For this reason, whether to order costs on "the usual basis" (party and party costs) or another basis should be referenced to the costs incurred by reason of the appellant's impugned conduct of his case.[7] It was here we had difficulty with the respondent's submissions.
2. For example, the respondent relied on the appellant's challenge on appeal to findings of fact he had admitted in the original proceeding as a basis for claiming costs on a solicitor and client basis. For the respondent to submit that the appellant should not be permitted to do so, as a bare right, does not entail material time or cost. To the extent the appellant applied to do so by reference to admitted evidence, lack of success does not convert to a liability to pay costs on a solicitor and client basis.
3. The respondent relied on the appellant providing from the Bar table an account of what occurred that was completely different from the account he gave in the original proceeding, without reference to any of the evidence. Again, to respond to such a submission does not entail material time or cost. It entails no more than the respondent noting the self-evident proposition that where the appeal was to consider the decision under appeal for error of fact or law,[8] no weight should be given to the later and different account unsupported by anything.
4. The respondent relied on the appellant making submissions that were lacking in honesty and candour; scandalous; devoid of merit; with disregard for the law or the facts; or for relief the tribunal could not grant (in particular, that we should order the respondent to issue him with a practising certificate).
5. We have found the appellant repeatedly made such submissions. It was seeing such conduct on full display in the appeal proceeding that convinced us that the findings of the original tribunal to find him guilty of professional misconduct and to recommend his name be removed from the roll of legal practitioners were warranted, but we were not persuaded these failings amounted to a "relevant delinquency" in his conduct of his case. For example, the appellant did not cause any unnecessary delay. We are not satisfied that anything about his conduct or the arguments he put was "calculated to occasion unnecessary expense".[9] There appeared to be no insight at all into the weakness of his arguments or the impropriety of misleading a Court, the original tribunal or us on appeal about the law or the facts. The appellant's approach seemed to be that honesty and candour can be put aside, in the interests of achieving a forensic advantage or favourable outcome.
6. Seeing the appellant's character on display was productive, rather than wasteful, for the purpose of determining the appeal and the appropriateness of the original tribunal's findings. But that is not a basis for ordering costs on a solicitor and client basis.
7. To award costs on a solicitor and client basis in such circumstances is more to punish the appellant than to compensate the respondent which is not the purpose of a costs order.
8. Last, the respondent relied on the appellant's failure to comply with the Appeal Tribunal's procedural orders, for example his failure to file a statement of any intended evidence to be given by any intended witness. The respondent characterised the failure as a "relevant delinquency" for the purpose of seeking costs on a solicitor and client basis. We disagree. The failure did not disadvantage the respondent, and indeed compliance with the order would likely have led to the respondent needing to spend more time and consequential cost preparing evidence in reply.
9. Whilst "the basis on which the amount [of costs] is to be decided" is at the discretion of the decision-maker, Courts have repeatedly stated that a court or tribunal should not lightly depart from awarding costs on the ordinary or usual basis.[10] For the reasons given, we are not persuaded we should do so in this case. In our view, the appropriate order is that the appellant pay the respondent's costs as agreed or assessed on a party and party basis.

[1] Council of the Law Society of the ACT v Legal Practitioner LP 202012 [unreported, 10 March 2023]

[2] [2015] FCA 349 at [11]

[3] Respondent's submissions in relation to costs dated 20 April 2023, paragraph 3.3

[4] Court Procedures Rules 2006, rule 1752(3)

[5] [2018] ACAT 12 at [32] - [34] and [42] - [44]

[6] Donohue v Volanne Pty Ltd (No 3) [2021] ACTCA 20 at [22]- [24]

[7] Liverpool City Council v Estephan [2009] NSWCA 161 at [95]

[8] ACT Civil and Administrative Tribunal Act 2009 s 79; Harada v Barnes [2021] ACAT 66 at [5] - [11]

[9] Tomanovic v Global Mortgage Equity Corp Pty Ltd (No 2) [2011] NSWCA 256 at [97] - [98]

[10] Leichardt Municipal Council v Green [2004] NSWCA 341; Olsen v Second East Auction Holdings Pty Ltd [2014] NSWSC 1840 at [19]