COSTS - whether discretion to award costs should be exercised in an appeal against decision made under s 175(1) of the National Law
Source
Original judgment source is linked above.
Catchwords
COSTS - whether discretion to award costs should be exercised in an appeal against decision made under s 175(1) of the National Law
Judgment (8 paragraphs)
[1]
REASONS FOR DECISION
In January 2020 we confirmed the decision made by the Occupational Therapy Board of Australia (the Board), to refuse to grant Mr Mukonoweshuro's application to remove conditions that had been imposed on his registration as an occupational therapist in August 2018: Mukonoweshuro v Occupational Therapy Board of Australia [2020] NSWCATOD 11 (the original decision).
These reasons address an application made by the Board seeking an order that Mr Mukonoweshuro pay its costs of these proceedings. For the reasons that follow, we have decided to order that Mr Mukonoweshuro pay the Board's costs. However, we decline to exercise the discretion to fix the amount of costs payable by Mr Mukonoweshuro.
[2]
Was Mr Mukonoweshuro served with the Board's application for costs?
In the course of these proceedings, the Board advised Mr Mukonoweshuro and the Tribunal of its intention to apply for an order for costs. In the original decision, we invited any party seeking an order for costs to file and serve that application together with supporting submissions within 14 days of the date of that decision. If such application was made, we invited the opposing party to file and serve any submissions in reply within 14 days of receiving the cost application.
As foreshadowed in the original proceedings, the Board filed an application for costs. That application was filed on 14 February 2020, which was within the time period specified in our orders.
In an email sent to NCAT on 28 February 2020 and not copied to the Board, Mr Mukonoweshuro wrote that he had not received an application for costs from the Board, that he was now living in Queensland, was "outside the Tribunal's jurisdiction" and leaving for South Africa the following day. He wrote that he lacked the funds to pay the Board's costs. In addition, he requested the Tribunal not to attempt to contact him at the email address from which he sent that email (the subject email address), as it was an Australian email address and, as of 29 Februray 2020, it would "no longer be functional".
NCAT provided the Board with that email and invited the Board to comment on Mr Mukonoweshuro's claim that he had not received its application for costs.
In an affidavit dated 27 April 2020, the solicitor with the daily carriage of the matter for the Board wrote that since taking over the matter in August 2019, she had communicated with Mr Mukonoweshuro on behalf of the Board on a regular basis, primarily via email communication. Throughout that period she sent Mr Mukonoweshuro approximately 14 emails to the subject email address. She received emails from him sent from that address. The solicitor wrote that on 14 February 2020 she served Mr Mukonoweshuro with a copy of the Board's costs application by email sent to the subject email address. She attached a copy of that email to her affidavit.
The Civil and Administrative Tribunal Rules 2014 (NSW) permits electronic service of documents by means of an email address specified by a party, where that party consents: r 16(4). The Rules require that the originating document (here, the "appeal form" filed by Mr Mukonoweshuro on 13 May 2019) contain an address for service: r 16(1). In that document, Mr Mukonoweshuro nominated the subject email address as his address for service. There is no evidence to indicate that Mr Mukonoweshuro advised the Board that he no longer consents to service by email at that address. We are satisfied that the Board served Mr Mukonoweshuro with a copy of its costs application and did so within the time frame we specified in the original decision. Therefore, we decided to proceed to determine that application, notwithstanding Mr Mukonoweshuro's claim not to have received the Board's application for costs.
[3]
Can the cost application be determined without a hearing?
The Civil and Administrative Tribunal Act 2013 (NSW) (NCAT Act) permits us to dispense with the requirement to hold a hearing to determine the Board's application for costs if we are satisfied that the issues for determination can be adequately determined in the absence of the parties by considering any written submissions or any other documents or material lodged with or provided to the Tribunal: s 55(2). Here, the only documents provided are those provided by the Board.
The matters for determination raised by the Board's costs application - whether the discretion to order Mr Mukonoweshuro to pay the Board's costs should be exercised and, if so, whether the discretion to award costs in a fixed sum should be exercised - are narrow in scope and do not raise complex issues of fact or law. We are satisfied that the application can be adequately determined in the absence of the parties.
Given Mr Mukonoweshuro's recent claim that "he is no longer in the jurisdiction", it is possible that if the costs application was listed for hearing, he would not participate. If a hearing were to be conducted, with or without Mr Mukonoweshuro's participation, the Board's costs, and the resources the Tribunal would be required to devote to these proceedings, will be increased. For these reasons we have decided that it is appropriate to exercise the discretion to dispense with a hearing.
[4]
Principles governing the exercise of the power to award costs
Where, as here, proceedings are commenced by a health practitioner under s 175 of the Health Practitioner Regulation National Law (NSW), the Tribunal is empowered to "make any order about costs it considers appropriate for the proceedings": s 175B. In exercising that power the general "rule" is that costs follow the event: Health Care Complaints Commission v Philipiah [2013] NSWCA 342 at [42]; Qasim v Health Care Complaints Commission [2015] NSWCA 282 at [85] and Health Care Complaints Commission v Do [2014] NSWCA 307 at [51]. The presumption that the successful party is entitled to their costs will generally be displaced only where there has been some "disentitling conduct" by the successful party: Oshlack v Richmond River Council [1998] HCA 11; 193 CLR 72 at [40]. Costs are compensatory not punitive. They are one of the risks of litigation: Vivaldi v Dental Board of Australia [2018] NSWCATOD 159.
[5]
Should the discretion to award costs be exercised?
As noted at [1] above, Mr Mukonoweshuro was unsuccessful in this appeal. In addition, his application for leave to appeal two earlier decisions made by the Board was refused: [98]-[100] of the original decision.
In circumstances where Mr Mukonoweshuro was entirely unsuccessful in his appeal and there is no evidence and nor is it suggested that the Board engaged in disentitling conduct, we have decided that it is appropriate to exercise the power to order Mr Mukonoweshuro to pay the costs of the Board.
[6]
Should the discretion to order costs in a fixed sum be exercised?
The more difficult question is whether the discretion to make an order for costs in a fixed sum should be exercised. Claiming that its total costs are $50,567, the Board seeks an order that Mr Mukonoweshuro pay costs fixed in the amount of $35,000, or such other amount as the Tribunal considers appropriate. In the alternative, the Board seeks an order that Mr Mukonoweshuro pay its costs as agreed, or assessed calculated on the basis that Mr Mukonoweshuro pay 80% of its assessed legal costs and 100% of its assessed disbursements.
The Board contends that exercising the power to order costs in a fixed sum is consistent with the objectives of the NCAT Act that the Tribunal resolve issues in proceedings justly, quickly, cheaply and with as little formality as possible: ss 3(d) and 38(4). It asserts that given the procedural history of this matter it is unlikely that the parties would reach agreement on costs, resulting in additional costs and delay.
The Board points out that Mr Mukonoweshuro has been on notice since at least August 2019 of its intention to seek an order for costs if his appeal was unsuccessful. Further, it points out that during a directions hearing in July 2019, Deputy President Judge Boland informed Mr Mukonoweshuro that he may face an adverse costs order.
In support of its claim that its total costs in these proceedings amount to $50,697, the Board relies on an affidavit prepared by the solicitor with carriage of the matter on its behalf. In that affidavit, the solicitor explained that Aderant Expert, a computer-based time billing and recording system, was used to calculate the Board's total costs. In that affidavit the solicitor described in broad terms the tasks that had been undertaken by her firm on behalf of the Board in this appeal.
[7]
Consideration
The National Law gives us a discretion to fix the amount of costs payable by Mr Mukonoweshuro. The issue raised by the Board's application is whether that discretion should be exercised. In NCAT, where an order for costs is made under the National Law, the usual practice is for the Tribunal to order that, in default of agreement, costs be assessed by a costs assessor.
The Legal Profession Uniform Law (NSW) requires that costs be proportionately and reasonably incurred; and proportionate and reasonable in amount: s 172(1). In considering those criteria, various factors including the level of skill, experience, specialisation and seniority of the lawyers concerned; the level of complexity, novelty or difficulty of the issues involved; the extent to which the matter involved a matter of public interest; the labour and responsibility involved; and a variety of other matters must be taken into account: s 172(2).
In exercising the power to fix costs, the Tribunal is not required to perform an assessment of costs in the same way as an assessor. Rather the Tribunal arrives at an estimate of the proper costs to be allowed by examining, on the basis of the particulars provided, of whether the quantification put forward by the successful party is logical, fair and reasonable: Sherborne Estate (No 2): Vanvalen & Anor v Neaves & Anor; Gilroy v Neaves & Anor [2005] NSWSC 1003 at [38]. On the available material, it is extremely difficult to undertake that task in this matter. We have no particular knowledge or expertise in the area of costs. Nor do we have the benefit of a contradictor. In addition, while the manner in which Mr Mukonoweshuro ran his appeal, which included raising numerous irrelevant issues, undoubtedly added to the Board's costs, total costs in the sum of $50,000 in a matter which ran for a single day, and which did not involve senior counsel or expert witnesses, on its face, appear high.
We acknowledge that it is extremely unlikely that the parties will reach agreement about the amount of costs payable to the Board. This will necessitate a cost assessment to be undertaken, which in turn will result in the Board incurring additional costs and will delay the recovery of the assessed costs. Nonetheless, we are not persuaded that it is appropriate to exercise the power to fix the costs in the sum sought by the Board of $35,000.
For these reasons we order:
1. A hearing on the application for costs is dispensed with under s 50(2) of the Civil and Administrative Tribunal Act 2013 (NSW).
2. Mr Mukonoweshuro is to pay the costs of the Occupational Therapy Board of Australia as agreed, or assessed calculated on the basis that Mr Mukonoweshuro pay 80% of the assessed legal costs and 100% of the assessed disbursements.
[8]
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
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Decision last updated: 06 May 2020