McSteen v Architects Registration Board of Victoria

COSTS - Indemnity certificate under Appeal Costs Act 1998, s 4 - Applicant ordered to pay 85 per cent of respondent's costs of appeal - Whether applicant can apply for certificate to be granted to respondent in respect of 'notional' costs of applicant's partial success on appeal - Only respondent can apply for certificate - Appeal Costs Act 1998, ss 4, 6.

1 On 19 April 2018, the Court indicated that it would allow the applicant's appeal in this matter in part. The appeal concerned allegations of unprofessional conduct and careless or incompetent conduct contrary to s 32 of the Architects Act 1991 which had been made against the applicant by the respondent.[1] Of eight allegations originally made, four were found proven in the Victorian Civil and Administrative Tribunal.

2 The applicant succeeded on two of the nine grounds upon which he sought leave to appeal. The first of the successful grounds contended that the primary judge erred in concluding that the applicant's notice of appeal failed to identify a question of law sufficient to engage the jurisdiction of the Court. Success on that ground, of itself, did not give rise to any substantive relief in respect of the allegations against the applicant.

3 The sole substantive ground upon which the applicant succeeded contended that the Tribunal should not have found the first and second of the allegations proven, in circumstances where those allegations had been expressed in the alternative. Success on that ground led to this Court varying the finding of the Tribunal, to the effect that the finding that allegation 2 had been proved was set aside. The penalty which had been imposed upon the applicant in respect of allegations 1 and 2 was therefore now imposed on the basis of allegation 1 alone.

4 The Court invited the parties to file short written submissions as to costs and the form of orders on the appeal.

5 The applicant submits that the Court is entitled to take into account that the respondent opposed the applicant's relief on all grounds advanced by the applicant. The applicant accepts that the areas in which he had succeeded were limited but submits that they were significant. He submits that the respondent had sought an adverse finding against the applicant on allegation 2, both before the Tribunal and on appeal to the judge. The applicant does not now seek his costs against the respondent, but submits that the failure of the respondent to make appropriate concessions before the primary judge and in this Court justifies an adjustment of its entitlement to indemnity from the applicant.[2] The applicant submits that, by analogy with the position applying to a prosecutor, the respondent had a duty of fairness[3] and was obliged not to 'struggle for a conviction' but to 'make certain that justice is done as between the subject and the State'.[4]

6 The applicant therefore seeks an order that his liability for the costs of the respondent be limited to one-third of the standard costs of the appeal before this Court and before the primary judge.

7 The respondent submits that, because the matter involved discrete issues, there was a clear winner and loser on each issue. It submits that costs should follow the event in respect of each issue.[5] The respondent submits that the applicant's success on the appeal was qualified by the fact that the questions of law that were said to emerge from the amended originating motion only 'crystallised in the course of oral argument' in this Court.[6] Moreover, because the first ground was the threshold which the applicant was required to pass over in order to engage the Court's jurisdiction, it could not have led to substantive success of itself. As to ground 5, the respondent submits that the applicant abandoned his written submissions in the course of the appeal hearing and presented an entirely new argument.[7] It is submitted that, had the respondent been informed of the true ground at an earlier stage, the issue could have been resolved without the need for the new ground to be heard. When the new argument was advanced at the hearing, counsel for the respondent informed the Court that the finding of guilt on both allegations 1 and 2 raised a procedural fairness issue.[8]

8 The respondent submits that it had a 'resounding success' in respect of each of the remaining seven grounds. Further, the respondent submits that it dealt with changes in the way that the applicant put his case on the day of the hearing, thereby saving the resources of the Court and the parties.

9 The respondent submits that the applicant advanced 20 grounds of appeal before the judge, and additional grounds in oral argument.[9] The applicant had failed on all of those grounds, not only because he had failed to identify any question of law, but also because none of the grounds had been found to have any prospects of success. There was therefore no basis to award the applicant his costs before the primary judge.

10 The respondent submits that an appropriate course would be to order that the applicant pay 85 per cent of the respondent's costs of the appeal (allowing a discount of 15 per cent to reflect the partial success of the appeal). It submits that the respondent should retain the costs order made below, since none of the arguments advanced before the primary judge has been successful before this Court.

11 In our opinion, the submissions of the respondent should be accepted. The applicant has had success on the appeal of a most limited kind. While he has succeeded in having set aside a finding that he engaged in careless or incompetent conduct, a finding to the effect that the same conduct was unprofessional remains unaffected. The partial success of the appeal led to no different outcome in terms of penalty. As the respondent submitted, the argument that was successful on appeal was raised for the first time at the hearing of the appeal. In all the circumstances, the figure of 85 per cent advanced by the respondent is very fair and ought to be adopted.

12 As the respondent submitted, there is no basis to disturb the costs order made by the primary judge.

13 It should be added that, in our opinion, there is no substance in the suggestion made in the applicant's submissions as to costs that the respondent departed in any way from the duties incumbent upon a regulatory body in its position.

14 The Court will order that the applicant pay 85 per cent of the respondent's costs of and incidental to the appeal including the application for leave to appeal.

15 The applicant sought that an indemnity certificate be granted to the respondent under the Appeal Costs Act 1998 in respect of the appeal, being a certificate with respect to the applicant's 'notional costs of his limited success with such direction as the Court considers just, to allow the certificate for the whole or part' of the respondent's costs. Section 4 of the Act permits the Court to grant an indemnity certificate in respect of costs to a respondent to a successful appeal. However, it only empowers a respondent to apply for such a certificate. In the absence of such an application, the Court is not able to grant the respondent an indemnity certificate at the behest of the applicant.[10]

16 The obstacle faced by the applicant is not merely procedural. The application appears to have been made with the intention that the applicant might then apply to the Appeal Costs Board for direct payment of part of his costs under s 6 of the Act. However, that provision only operates with respect to an 'applicant whose costs ... were ordered to be paid by a respondent'; it does not extend to 'notional' costs in favour of a partially successful applicant. Since there is no order that the applicant's costs be paid by the respondent, s 6 would not avail the applicant in any event.

[1] McSteen v Architects Registration Board of Victoria [2018] VSCA 96.

[2] Towie v Medical Practitioners Board of Victoria [2008] VSCA 157; (2008) 29 VAR 252, 264-5 [41].

[3] R v Lucas [1973] VicRp 68; [1973] VR 693, 698 (Smith ACJ).

[5] APN Funds Management Ltd v Australian Property Investments Strategic Pty Ltd [No 2] [2012] VSC 365 [10]-[11].

[6] McSteen v Architects Registration Board of Victoria [2018] VSCA 96 [37].

[9] McSteen v Architects Registration Board of Victoria [2017] VSC 276 [14].

[10] Moreover, s 38 of the Act prevents the Crown, or any person representing the Crown, being granted a certificate. It is not necessary to decide whether this describes the respondent.