Psychology Board of Australia v Wilkinson (Costs) (Review and Regulation) [2022] VCAT 597

Jeffrey Wilkinson must, within 28 days of the publication of these reasons, pay the Psychology Board of Australia an amount of costs fixed in the sum of $15,000.

D Chisholm of Counsel (original and reply submissions) and S Cherry of Counsel (further submissions)

1 On 3 September 2020, the Tribunal found that Mr Jeffrey Wilkinson had failed to comply with audit and supervision conditions (Conditions) that had been imposed on his registration by orders made in 2017,[1] and that he failed to cooperate with legitimate enquiries made by the Australian Health Practitioner Regulation Agency and/or the Psychology Board of Australia (Board) in relation to his compliance with those Conditions: Psychology Board of Australia v Wilkinson (Wilkinson Findings).[2]

2 Subsequently, on 16 December 2020, the Tribunal found that Mr Wilkinson's conduct was professional misconduct under the Health Practitioner Regulation National Law (Victoria) (National Law) and ordered that Mr Wilkinson be reprimanded and disqualified from applying for registration as a psychologist for a period of 18 months: Psychology Board of Australia v Wilkinson (No 2) (Wilkinson Determinations).[3]

3 These reasons concern an application by the Board for costs in relation to the proceedings under section 195 of the National Law, which provides that the Tribunal 'may make any order about costs it considers appropriate'.

4 For the reasons which follow, we consider it appropriate to order that Mr Wilkinson pay the Board an amount of costs fixed in the sum of $15,000.

Principles regarding orders as to costs in Tribunal proceedings

5 VCAT was established to 'provide Victorians with a low cost, accessible, efficient and independent Tribunal delivering high quality dispute resolution'.[4] In this regard, the Court of Appeal has emphasised that the Tribunal should be a 'forum for speedy and inexpensive resolution of specific kinds of disputes'.[5] Consistent with these statements, an important element of the design of VCAT is that, ordinarily, each party is to bear their own costs of proceedings, unless the Tribunal is satisfied that it is fair to make an order for costs having regard to a range of factors: Victorian Civil and Administrative Tribunal Act 1998 (Vic) (VCAT Act), s 109.

6 However, it is important to recognise that the general rule as to costs may be displaced under an enabling enactment.[6] There are some proceedings where costs:

• cannot be ordered, such as in relation to state taxation proceedings;[7]
• must be ordered to be paid by a particular party (if certain conditions are satisfied), such as in relation to a review of a councillor conduct panel decision instituted by a council;[8] or
• may be ordered having regard to a test which differs from and is broader than section 109, such as in relation to transport accident matters where costs may be awarded provided it is 'just' to do so.[9] In Hanley v TAC (Hanley),[10] Judge Bowman referred to an earlier decision of the Supreme Court of Victoria[11] in support of his description of the relevant costs provision as providing a 'very wide' discretion.[12] He also observed that the 'legislative preference for the position that each party bear its own costs is absent', but that nevertheless 'it is clear that costs need not follow the event, as in a curial proceeding'.[13]

7 This differential treatment of costs extends to the Tribunal's disciplinary jurisdiction. So, for instance, in legal disciplinary matters, a lawyer found guilty of professional misconduct must be ordered to pay the regulator's costs unless 'exceptional circumstances exist'.[14] And, of relevance to this proceeding, in health practitioner disciplinary matters, costs may be ordered if the Tribunal considers it 'appropriate': National Law, s 195.

8 In Psychology Board of Australia v Asher (Asher),[15] the Tribunal held that section 195 was inconsistent with section 109 of the VCAT Act and, as such, the factors required to be considered under section 109(3) are not necessarily relevant in relation to costs under the National Law.[16] This differed from the decision in Nursing and Midwifery Board of Australia v Kumar (Kumar),[17] where the Tribunal formed the view that the two regimes are 'able to operate side by side'.[18]

9 However, in both cases, the Tribunal was clear that costs do not 'follow the event'.[19]

10 The decision in Asher goes on to suggest that there is no 'comprehensive list' of factors to be considered; rather the question is whether there is 'something in the particular proceeding that makes it appropriate for an award of costs to be made'.[20] As indicated in Kumar, appropriate means 'proper in the circumstances'.[21]

11 Before turning to the submissions of the parties, it is necessary to set out some further background as to the procedural history of this proceeding. A more detailed timeline regarding the proceeding is set out in the Appendix.

12 As indicated at the outset of these Reasons, the substantive proceeding related to Mr Wilkinson's failure to comply with the Conditions that had been imposed by the Tribunal in earlier disciplinary proceedings in 2017. The referral was made by the Board on 23 May 2019.

13 A compulsory conference was held in September 2019, following which the parties filed an Agreed Statement of Facts (Agreed Statement) setting out joint proposals as to the findings to be made by the Tribunal, the characterisation of Mr Wilkinson's conduct and the appropriate determinations to be made by the Tribunal. On that basis, the matter was listed for a half day hearing on 9 December 2019.

14 A few days before the scheduled hearing, Mr Wilkinson sent a four page document to the Tribunal raising various complaints about the conduct of the Board and indicating that he had already surrendered his registration as a psychologist and simply wanted to be left alone.

15 Further, at the hearing, Mr Wilkinson then raised broader concerns about the impact of the Privacy Act 1988 (Cth) (Privacy Act) on his ability to comply with the Conditions, effectively resiling from the Agreed Statement. As a result, it was necessary to adjourn the hearing to give Mr Wilkinson an opportunity to develop his 'defence' and to give the Board an opportunity to respond. Unfortunately, there was considerable delay in that regard, mainly because Mr Wilkinson had difficulty obtaining evidence from appropriate experts to support his position. Eventually, he produced correspondence with some academics regarding the operation of the Privacy Act.[22] We ultimately found that the Privacy Act 'did not operate to prevent Mr Wilkinson from complying with the [Conditions]'.[23] We went on to find that his conduct in failing to comply with the Conditions amounted to professional misconduct.[24]

16 In the event, there was a delay of some 12 months from the hearing that had initially been listed until the handing down of the Tribunal's decision on determinations. Further, instead of a simple half day hearing based on the Agreed Statement, there was additional time required for the preparation of submissions, and an additional hearing day required, before the Tribunal was in a position to make its findings and determinations.

17 The Board submits that the Tribunal's decision in Asher, ie. that the discretion to award costs under section 195 of the National Law is not constrained by section 109 of the VCAT Act, is 'to be preferred' to Kumar having regard to the composition of the Tribunal in Asher (including the Deputy President who heads the Administrative Division) and given that decision is more recent, benefitted from both written and oral submissions made to the Tribunal and 'gave serious consideration to the reasons in Kumar before choosing to depart from those reasons'.[25]

18 The Board contends that, in other cases where a broad discretion as to costs exists, there is a 'reasonable expectation (which does not rise to the level of a rule or presumption) that costs follow the event' and the Tribunal should follow those decisions.[26] In particular, it suggests that rather than searching for something that makes an award of costs 'appropriate', the successful party should only be deprived of its costs in 'exceptional cases', where 'special circumstances' are shown or 'for good reason'.[27]

19 The Board suggests that examples where an order for costs might not follow the event include circumstances where:[28]

• the Board fails to comply with its relevant obligations, such as those under the National Law or VCAT Act, or its duty to act as a model litigant;
• issues are separate and distinct, such that costs may be awarded in respect of some issues but not others; or
• there is a clear public interest in the determination of the matter in issue.

20 The Board submits that the view expressed in Asher that costs do not follow the event should be rejected as:

• the Tribunal's analogy to the position in equal opportunity proceedings is not apposite because the relevant legislation for those proceedings does not make provision for costs;[29]
• the Board's statutory function is to refer relevant matters relating to practitioner conduct to the Tribunal and it 'cannot avoid litigation in the Tribunal and save the cost of litigation by way of settlement';[30]
• any 'chilling effect' on a respondent pursuing a course of action 'without proper basis is surely to be welcomed, not discouraged';[31] and
• it is for the Board to determine whether it is appropriate to apply for costs in each case.[32]

21 Notwithstanding the foregoing position, the Board goes on to suggest that, based on Asher, the following non-exhaustive factors may be relevant to the determination of whether it is appropriate to award costs:[33]

• the nature of the respondent's conduct, including whether the conduct was 'deliberate or considered' and it 'fell completely outside the practice of the profession';
• whether the respondent's defence was 'merely to fairly and properly test the Board's evidence or ... went beyond this'; and
• the seriousness and strength of the allegations made against the respondent.

• the arguments made by Mr Wilkinson in relation to the Privacy Act re-agitated arguments which the Tribunal found had 'no basis' in 2017;[35]
• as a result of raising that issue, Mr Wilkinson filed additional submissions and material long after the original date specified in the Tribunal's timetabling orders of 1 July 2019 (and he also sought extensions of time for those additional submissions and material);
• the academic material he sought to rely on was not in admissible form, not based on proper instructions (including as to their proposed use in the proceedings) and did not enhance his position;
• by filing 'multiple variations of the same submissions' in relation to the Privacy Act, Mr Wilkinson was the cause of the extensive delay in the proceeding and associated costs.

23 The Board contends that an award of costs is appropriate because:[36]

• it was 'entirely successful' in the referral in the sense that the Tribunal found the allegations proven;
• it has complied with its obligations under the National Law, VCAT Act and otherwise to act as a model litigant;
• Mr Wilkinson's conduct occasioned unnecessary costs being incurred;
• it has a statutory duty to discharge which cannot be avoided by settlement or agreement; and
• it is inappropriate that the costs of 'heavily contested proceedings' be borne by the Board or indirectly by the profession (who pay registration fees).

24 The Board suggests that an agreement on the quantum of costs would be appropriate but, in the absence of that, they should either be ordered in a fixed amount or be taxed on the County Court scale.[37]

25 In the Applicant's Reply Submissions as to Costs filed on 15 October 2021 (Reply Submissions), the Board submits that the decision in Asher made it clear that, other than for consideration of whether costs are 'appropriate', 'there are no other statutory conditions, factors, criterion or limitations imposed on the discretion' in section 195.[38]

• the discretion to award costs is not dependent on the seriousness of the allegations against the practitioner noting that, in Asher, the Tribunal observed that it may not be appropriate to award costs against a practitioner facing serious allegations who 'simply tests the evidence' against him or her;[39]
• the Tribunal should reject any suggestion from Mr Wilkinson that he believed he had a reasonable defence in light of him having unsuccessfully litigated the point in 2017.[40] It says that, despite the Board drawing this to his attention, Mr Wilkinson 'persisted with his hopeless defence';[41] and
• rather than the Tribunal seeking to fix costs immediately, the parties have 14 days from the orders to seek to agree, failing which they can file submissions as to the appropriate quantum of costs.[42]

27 In its further submissions,[43] the Board submits that it is appropriate to make a 'broad brush' lump sum costs order and that an amount of $50,000 ought to be awarded, representing approximately 70% of its costs (including costs associated with the costs application).[44] Further, as no 'cogent basis' has been proffered by Mr Wilkinson for any costs to be paid by instalments, the Board says any costs should be payable 'in the usual 28 day period'.[45]

28 In contending for costs to be fixed at 70% of the solicitor-client costs, the Board notes that Counsel's hourly rate is well below the County Court scale for junior counsel and the majority of the solicitor work was undertaken by a lawyer or associate with an hourly charge that is also below the scale rate.[46]

29 In accordance with orders made by the Tribunal, the Board filed a schedule of costs (excluding the costs associated with the costs application) breaking down the costs for different stages of the proceeding. These indicate that, of the total costs incurred by the Board in the order of $70,000:

• approximately $45,000 relates to the referral of the matter to the Tribunal and preparations up to the time of the original hearing on 9 December 2019;
• approximately $16,000 relates to submissions regarding the Privacy Act issues raised by the respondent and the further hearing on determinations on 23 November 2020; and
• the balance (presumably) relates to its costs application.

30 Mr Wilkinson engaged LFS Legal to prepare his submissions on costs, which were filed on 20 August 2021 (Respondent's Submissions). He seeks that there be no order as to costs.

31 Mr Wilkinson notes that he is retired, not in good health, lives alone in a flat (which represents his only asset) and will depend on the age pension as his only income.[47]

32 Mr Wilkinson contends that there is 'no inconsistency in this present instance' between section 109 of the VCAT Act and section 195 of the National Law in the sense that the Tribunal 'is at liberty, no matter what legislation it relies on, to award costs, or not award costs, if the Tribunal believes it is fair and reasonable to do so'.[48] He observes that the decision in Asher suggests that 'it is rare for the Tribunal to award costs in health practitioner regulatory matters'.[49]

33 Mr Wilkinson distinguishes the seriousness of his conduct as compared to that of Mr Asher (which involved inappropriate sexual conduct on five occasions while in a position of trust), noting that he was disqualified for 18 months (compared to Mr Asher who had his registration cancelled and was disqualified for five years).[50]

34 While Mr Wilkinson accepts that he received a fair hearing, he says he 'felt overwhelmed' in circumstances where the Board was represented by one of the largest law firms and counsel with over 20 years' experience in this area of law.[51] He submits there are 'no exceptional or unusual circumstances that would give rise to a suggestion that the Tribunal should depart from its legislative starting point that there be no order as to costs'.[52]

35 Mr Wilkinson submits that the proceeding related to a 'compliance issue' (albeit serious) rather than a complex issue of law, he felt he had a reasonable defence and did his best to present that to the Tribunal.[53] He contends that he was 'entitled to test the [Board's] allegations', although recognising (now) that he misconstrued the Privacy Act (a defence which was 'correctly dismissed').[54]

36 In the alternative, Mr Wilkinson suggests that this proceeding is more akin to a legal practice list disciplinary proceeding where costs are awarded as a fixed sum,[55] and that the Tribunal should make an order as to a fixed sum 'to be paid in 24 equal monthly instalments'.[56]

37 In his further submissions, Mr Wilkinson suggests that the amount of costs claimed by the Board (ie. $50,000) is 'outrageous', suggesting that it 'took some 162 hours (or over 20 eight hour days) plus Counsel to overcome [his] defence'.[57] He contends that the Board 'has not demonstrated any reason why the Tribunal should depart from its starting point that parties are to bear their own costs'.[58]

38 We are not bound by either Kumar or Asher. However, we consider the reasons set out in Asher are compelling and that the broad discretion to make an order for costs in section 195 of the National Law is not constrained by the presumption (of each party bearing their own costs) or the considerations set out in section 109(3) of the VCAT Act, although some or all of the considerations may be relevant in a given case.

39 Further, the approach adopted in Asher is consistent with decisions regarding section 79(2) of the Transport Accident Act 1986 (Vic), which likewise establishes a broad discretion, albeit adopting slightly different language.

40 However, we reject any suggestion that costs should follow the event unless exceptional circumstances exist. Such an approach is:

• inconsistent with both Kumar and Asher;
• contrary to the decision in Hanley in the context of a similarly broad discretion regarding costs; and
• impermissibly replaces the statutory test, ie. whether it is appropriate to make an award of costs, with a different unenacted test.[59]

41 We consider that an award of costs is 'appropriate' in this proceeding for the following reasons:

(a) Mr Wilkinson's defence, based on the Privacy Act, was misconceived and involved re-running an argument that had already been rejected as 'spurious' in the proceeding in which the Conditions were imposed;[60]

(b) while Mr Wilkinson was unrepresented, and clearly out of his depth, he was given a number of opportunities to seek legal advice, but he chose not to seek legal advice (as opposed to consult with some academics) until it came to the question of costs;

(c) as we have previously found, Mr Wilkinson's decision to run the Privacy Act defence 'substantially explains the prolongation of the proceedings';[61]

(d) as a result, the Board incurred additional costs beyond those that would ordinarily be incurred in a proceeding regarding clear breaches of conditions imposed by the Tribunal in earlier proceedings, particularly the costs of preparing submissions regarding the Privacy Act and attending a further hearing on determinations; and

(e) those additional costs were incurred after Mr Wilkinson had surrendered his registration (in December 2018) and, as such, was no longer contributing to the cost of the regulatory system (ie. through his registration fees) meaning that, if no award of costs is made, those costs are indirectly borne by registered psychologists, the vast majority of whom comply with their obligations under the National Law.

42 However, we do not consider that it is appropriate to award costs up to the time of the original hearing on 9 December 2019. If the matter had proceeded on that date in accordance with the Agreed Statement, there would appear to be nothing making it appropriate to award costs in favour of the Board, particularly in circumstances where Mr Wilkinson had voluntarily surrendered his registration over a year prior to the hearing.

43 The Board accepts that 'it can be sensible, efficient and cost-effective for costs to be quantified as a lump sum ... "to avoid the expense, delay and aggravation involved in protracted litigation arising out of taxation".'[62] Further, the Board admits that Mr Wilkinson's financial circumstances 'may appropriately be taken into account in deciding whether costs should be ordered on a lump sum basis'.[63] As already noted, the Board submits that a 'broad brush' approach can and should be taken to the fixing of costs.

44 We accept those submissions and consider this is an appropriate case in which to fix the costs and bring an end to this already protracted proceeding.

45 We also accept the Board's submissions on the percentage (ie. 70%) to be applied to bring the actual costs in line with the County Court costs scale, being the default scale where an order for costs is made.[64]

46 Applying that percentage to the costs incurred after the 9 December 2019 hearing until the publication of the Wilkinson Determinations decision produces a figure of approximately $11,000.

47 Insofar as the costs of the costs application is concerned, there is no evidence of the actual costs incurred although, in the Board's further submissions, it is contended that it is 'reasonable to presume' the total costs of the Board are now $70,000, implying the costs relating to the costs application are in the order of $9,000.

48 Both of the costs submissions filed by the Board were signed off by Counsel. Noting the information provided as the hourly rates of Counsel, the actual costs relating to the costs application would appear to have involved considerable time being expended by the Board's solicitors on the preparation of those submissions. Given that the Tribunal's approach to costs in health practitioner disciplinary hearings has already been the subject of two published decisions, there would appear to us to have been a level of unnecessary duplication by involving both Counsel and solicitors.

49 Taking a broad brush approach, we have fixed the costs of the costs application at $4,000 and the total costs to be paid by Mr Wilkinson to the Board at $15,000.

Should Mr Wilkinson be given time to pay the costs, as fixed?

50 As already noted, Mr Wilkinson has requested that he be allowed to pay any costs in '24 equal monthly instalments', while the Board contends that there is no 'cogent basis' for such a request and he should be ordered to pay any costs within 28 days.

51 It is noted that in making his request, Mr Wilkinson refers to a legal practice disciplinary decision - Victorian Legal Services Commissioner v Flitner[65] - where costs were fixed in the sum of $5,000 and the solicitor was ordered to pay those costs in ten monthly instalments of $500. It is apparent that those orders were made by consent and, as such, the decision does not assist.

52 In the present case, there is insufficient evidence before us to be satisfied that Mr Wilkinson's only asset is the flat in which he lives, or that he otherwise does not have and cannot access funds to pay costs fixed at $15,000. In those circumstances, we will order that the costs are payable within 28 days of these reasons.

53 Obviously, it is open to Mr Wilkinson to provide further evidence of his financial position to the Board and come to some agreement with the Board as to payment terms.

Includes dismissal of an application by the respondent to dismiss proceeding

References the filing of an Agreed Statement of Facts, Findings and Determinations

Decision on findings reserved with timeline for written submissions on Privacy Act

Extension of time for submissions (as requested by respondent)

Extension of time for submissions (as requested by respondent)

Further directions as to submissions on Privacy Act

Extension of time for submissions on costs (as requested by applicant due to delay in respondent's submissions)

Setting the costs application down for determination on the papers

Orders that the parties file further submissions regarding costs (at the Tribunal's request)

[1] See Psychology Board of Australia v Wilkinson [2017] VCAT 807.

[2] [2020] VCAT 961.

[3] [2020] VCAT 1431.

[4] VCAT Practice Note PNVCAT3 (emphasis added).

[5] Director of Housing v Sudi [2011] VSCA 266; (2011) 33 VR 559 [19] (Warren CJ) (emphasis added).

[6] VCAT Act, s159 provides that if the VCAT Act is inconsistent with an enabling enactment, the enabling enactment prevails.

[9] Transport Accident Act 1986 (Vic), s 79.

[10] [2002] VCAT 420.

[11] Transport Accident Commissioner v O'Reilly & Others [1998] VSCA 106; (1999) 2 VR 436.

[12] [2002] VCAT 420 [6(i)].

[14] Legal Profession Uniform Law (Victoria), s 303(1).

[15] [2020] VCAT 1281.

[17] [2020] VCAT 1038.

[19] Asher [36]-[37]; Kumar [35]-[48].

[25] Applicant's Outline of Submissions at to Costs dated 11 August 2021 (Applicant's Submissions) [21].

[26] Ibid [28] (citing Latoudis v Casey [1990] HCA 59; (1990) 170 CLR 534, Northern Territory v Sangare [2019] HCA 25; (2019 265 CLR 164 (Sangare) and Ohn v Walton (199) 36 NSWLR 77).

[27] Ibid [29] (citing Sangare [25], Ottway v Jones [1955] 1 WLR 706, 713; Trade Practices Commission v Nicholas Enterprises Pty Ltd (No 3) (1979) 42 FLR 213, 220; Ritter v Godfrey [1920] 2 KB 47, 52 and Berry v British Transport Commission [1962] 1 QB 396, 338.

[35] Psychology Board of Australia v Wilkinson [2017] VCAT 807 [51].

[38] Reply Submissions [5] (citing Asher [49]).

[39] Ibid [6] (citing Asher [48]).

[43] Applicant's Submissions on Lump Sum Costs dated 21 April 2022.

[47] Respondent's Submissions [1]-[9].

[57] Supplementary Costs Submission dated 3 May 2022 [3]-[4].

[59] Such an approach was criticised by Pagone J in the context of a discretion to remit interest imposed on a state tax default: Conder Tower Pty Ltd v Commissioner of State Revenue [2012] VSC 107 [42]-[43].

[60] [2020] VCAT 961 [9].

[62] Applicant's Further Submissions [11].

[64] Victorian Civil and Administrative Tribunal Rules 2018 (Vic), r 1.07.

[65] [2021] VCAT 143.