Magill v Queensland Law Society Inc

• [1] On 8 July 2020, this Tribunal ordered that the application for review of the respondent's decision to cancel the applicant's practising certificate be dismissed, and made directions for the parties to file and exchange submissions on costs. The background of the matter is set out in the reasons for that decision in Magill v Queensland Law Society Inc (No 2).[1]
• [2] The respondent has sought its costs of the application and submitted that those costs should be fixed in the sum of $20,000. In support of that submission, the respondent filed an affidavit sworn by the respondent's Senior In-House Legal Counsel who had carriage of the matter on behalf of the respondent. She detailed the amount of time she spent attending to the matter, the basis for her claimed charge-out rate, and the out-of-pocket expenses incurred, principally counsel's fees. She deposed that the respondent's costs totalled $21,719.50, being $4,862 for in-house professional fees and $16,857.50 for disbursements. This was rounded down to $20,000, on the basis of the respondent wanting to avoid the time and expense associated with a costs assessment.
• [3] The starting point for present purposes is s 100 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) ("QCAT Act") which provides:
  1. Each party usually bears own costs

Other than as provided under this Act or an enabling Act, each party to a proceeding must bear the party's own costs for the proceeding.

• [4] That section is a plain indication that, as a matter of policy, the legislature turned its face against awards of costs in this Tribunal.[2]
• [5] That prima facie position is, however, subject to the availability of the discretion conferred by s 102:
  1. Costs against party in interests of justice

(1) The tribunal may make an order requiring a party to a proceeding to pay all or a stated part of the costs of another party to the proceeding if the tribunal considers the interests of justice require it to make the order.

(2) However, the only costs the tribunal may award under subsection (1) against a party to a proceeding for a minor civil dispute are the costs stated in the rules as costs that may be awarded for minor civil disputes under this section.

(3) In deciding whether to award costs under subsection (1) or (2) the tribunal may have regard to the following -

(a) whether a party to a proceeding is acting in a way that unnecessarily disadvantages another party to the proceeding, including as mentioned in section 48(1)(a) to (g);

(b) the nature and complexity of the dispute the subject of the proceeding;

(c) the relative strengths of the claims made by each of the parties to the proceeding;

(d) for a proceeding for the review of a reviewable decision -

(i) whether the applicant was afforded natural justice by the decision-maker for the decision; and

(ii) whether the applicant genuinely attempted to enable and help the decision-maker to make the decision on the merits;

(e) the financial circumstances of the parties to the proceeding;

(f) anything else the tribunal considers relevant.

• [6] It is, therefore, clear that the Tribunal retains a discretion to award costs if it "considers the interests of justice require it to make the order". Section 102(3) enumerates a number of matters to which the Tribunal may have regard when considering the interests of justice in a particular case. Those matters and their utility have been described in the following terms:[3]

The factors listed in s 102 are a guide to the considerations the Tribunal may take into account in deciding whether this is an appropriate case in which to award costs. In any given case, the relative importance of each criterion will vary. Further, their significance may relate to what stage the proceedings have reached. For example, questions about the relative strengths of the parties' cases may assume less significance upon an initial hearing, yet loom large when it comes to the costs of an application for leave to appeal.

• [7] These factors, individually and collectively, are not determinative, and go only to informing the exercise of a broad discretion, the touchstone of which remains the Tribunal's assessment of the interests of justice in a particular case. The discretion to award costs will only be exercised when the interests of justice in a particular case outweigh the prima facie "no costs" position under s 100. In that regard, Alan Wilson J, when President of the Tribunal, said in Ralacom Pty Ltd v Body Corporate for Paradise Island Apartments (No 2):[4]

Under the QCAT Act the question that will usually arise in each case in which costs are sought is whether the circumstances relevant to the discretion inherent in the phrase 'the interests of justice' point so compellingly to a costs award that they overcome the strong contra-indication against costs orders in s 100.

• [8] That proposition has since been consistently adopted and applied in the Tribunal, including in Warren v Queensland Law Society Incorporated (No 2)[5] and Fast Access Finance (Beaudesert) Pty Ltd v Charter (No 2).[6]
• [9] By reference to the matters identified in s 102(3), the respondent argued that the interests of justice in this case weighed in favour of a costs order. It submitted:

(a) The nature and complexity of the dispute was demonstrated by the applicant's engagement of senior and junior counsel for the hearing, the volume of material before the Tribunal, and the variety of matters put to the Tribunal for resolution;

(b) The applicant's case was weak. He persisted with the application, despite previous judicial findings against him, and evinced a lack of insight into his breaching conduct;

(c) The respondent gave the applicant ample opportunity to address the substance of the issues before it made the decision to cancel his practising certificate;

(d) There is disparity between, or at least lack of clarity about, the respective financial positions of the parties:

(i) On the one hand, the respondent is a body corporate established under the Queensland Law Society Act 1952 (Qld) and consists of local legal practitioners, some enrolled as members. It has statutory obligations and collects fees in the form of membership fees and practising certificate fees to cover the costs of its statutory regulatory functions. If the respondent is unable to recover costs, those costs will have to be met indirectly by local legal practitioners through those fees; and

(ii) On the other hand, the applicant has not adduced any evidence as to his financial position generally. He has been a partner, and director, of a law firm with a busy practice. There is no reason to conclude that the applicant is in a position of any particular financial disadvantage; and

(e) The costs claimed by the respondent are reasonable.

• [10] Not all of these submissions are persuasive on the facts of the present case. For example, despite the respondent's submissions, this was not a particularly complex case, either legally or factually. Nor did anything done by the applicant in advancing his application for review contribute to the complexities of the case. On the contrary, it is a credit to both sides that this application was run with significant efficiency. The parties complied promptly with all directions for the filing of material and submissions. Despite the significant logistical limitations imposed by the COVID-19 pandemic, the parties co-operated to participate in the final hearing by video conference, which itself ran very efficiently.
• [11] Similarly, the respondent's attempt to characterise the applicant's case as "weak" overstates the position. The applicant always had an arguable case, and this was recognised in the reasons for refusing the applicant's application for a stay of the respondent's decision.[7]
• [12] The applicant was entitled to seek a review of the respondent's decision. He adduced evidence before this Tribunal which was not before the respondent when it made its decision. It is important to recall that this was not an appeal against the respondent's decision, but rather was an application for review which was required to be heard and determined by way of a fresh hearing on the merits.[8] The purpose of the hearing was to produce the correct and preferable decision, based on the material before the Tribunal and current as at the date of the Tribunal's decision. Ultimately, for the reasons set out at length in the primary decision, the applicant was not successful in persuading this Tribunal that the correct and preferable current decision would be to issue him with a practising certificate. But he had respectable arguments to advance, and evidence on which to base those arguments, and to that extent it cannot be said that the claims he made in the review proceeding were devoid of merit.
• [13] It is true that there is scant material about the applicant's financial position. It is equally true that absent a costs order, the respondent will have to "self fund" the costs associated with its participation in this review proceeding. That, however, is a necessary function and unavoidable consequence of the respondent's statutory position as a "regulatory authority"[9] under the Legal Profession Act 2007 (Qld).
• [14] This is not a case like Warren, in which the applicant's conduct bordered on the egregious:

(a) Despite numerous directions hearings, the applicant in that case failed to apprise her opponent of her evidence and the full detail and nature of her case until almost a year after her application had been filed;

(b) She made numerous allegations of serious misconduct against Queensland Law Society ("QLS") officers. These allegations included misleading the Tribunal, making deliberately false statements and tampering with evidence. None of those allegations were proved at the hearing;

(c) The applicant's case for review was palpably weak. She did not lead any evidence as to the merits of the QLS decision, and her entire case was based on technical contentions which were found to be without substance. As Alan Wilson J said:[10]

It is compelling that Ms Warren's case was always weak, and that she should not have pursued it; and, that she aggravated a weak case with spurious and, as it transpired, unsustainable allegations against [QLS] staff.

(d) Despite having what should have been a relatively straightforward case, the way in which the applicant conducted her case meant that it became "complex, and hydra-headed".

• [15] The President concluded in that case that the applicant had pursued proceedings "which had little apparent merit and, on any realistic assessment, poor prospects and [had] done so in a way which has greatly added to the costs of her opponent".[11]
• [16] Perhaps unsurprisingly in those circumstances, the President considered that it had been demonstrated that the interests of justice called for a costs order to be made.
• [17] The present case was quite different. The applicant had a lawful entitlement to have access to this Tribunal's review jurisdiction, which exists in a prima facie "no costs" environment. The matter was conducted expeditiously and efficiently. It has not been demonstrated that the interests of justice in this case overcome the mandated primary "no costs" policy.
• [18] Accordingly, consistent with s 100 of the QCAT Act, it will be ordered that each party bear its own costs of and incidental to this proceeding.

[1] [2020] QCAT 226.

[2] McEwan v Barker Builders Pty Ltd [2010] QCATA 49, [17].

[3] Kehl v Board of Professional Engineers of Queensland [2010] QCATA 77, [10] (Deputy President Kingham DCJ).

[4] [2010] QCAT 412, [29].

[5] [2013] QCAT 234, [11] ("Warren").

[6] [2012] QCATA 172, [12].

[7] Magill v Queensland Law Society Inc [2019] QCAT 392, [11].

[9] See Legal Profession Act 2007 (Qld) sch 2 (definitions of "law society" and "regulatory authority").