Towie v Medical Practitioners Board of Victoria [2008] VSCA 157

Court of Appeal (Vic)|2008-08-26|Before: REDLICH and WEINBERG JJA and MANDIE AJA

ADMINISTRATIVE LAW - Review of VCAT decision to strike out appeal from Medical Practitioners Board of Victoria - Whether failure to comply with direction of Tribunal - Whether 'reasonable excuse'- s 78 Victorian Civil and Administrative Tribunal Act 1998.

PRACTICE AND PROCEDURE - VCAT - Usual directions - Order that applicant file and serve witness statements - Inappropriate order where review of disciplinary proceedings.

PROCEDURAL FAIRNESS - Right to adjournment of strike out application - Applicant in person - Failure to make clear that application was proceeding - Failure to give applicant notice of matters relied on - Denial of opportunity to be heard.

COSTS - Indemnity costs - Defence of appeal hopeless - Offer of compromise - Appellant prepared to forego small portion of costs.

APPEAL COSTS ACT 1998 - Whether Medical Practitioners Board represents Crown for purposes of s 38 Appeal Costs Act - Original application for strike out should not have been made - Refusal of certificate.

(The judgment of the Court was delivered by Mandie AJA)

1 This was an appeal (by leave granted) from a decision of the Victorian Civil and Administrative Tribunal ('VCAT'), constituted by a Vice-President thereof ('Tribunal'), made on 4 September 2007. On 30 July 2008 we allowed the appeal and orders were pronounced. These are the reasons for those orders and for orders that we will now make in relation to applications for costs and a certificate under the Appeal Costs Act 1998.

2 The appellant, a medical practitioner, had applied to VCAT pursuant to s 60 of the Medical Practice Act 1994 for the review of a decision of the respondent, the Medical Practitioners' Board of Victoria. That application for review by the appellant was struck out by the Tribunal in the decision now challenged by this appeal. The Tribunal's decision to strike out the appellant's application for review was purportedly made pursuant to s 78 of the VCAT Act 1998 which provides, so far as relevant:

(1) This section applies if the Tribunal believes that a party to a proceeding is conducting the proceeding in a way that unnecessarily disadvantages another party to the proceeding by conduct such as -

(a) failing to comply with an order or direction of the Tribunal without reasonable excuse; or

(a) order that the proceeding be dismissed or struck out, if the party causing the disadvantage is the applicant ...

(3) The Tribunal's powers under this section are exercisable by the presiding member.

3 The relevant matters leading up to this appeal are as follows.

4 On 20 November 2006, the respondent found that the appellant had engaged in two respects in certain 'unprofessional conduct not of a serious nature within the meaning of paragraphs (a) and (b) of the definition of unprofessional conduct in section 3(1) of the Medical Practice Act 1994' and the appellant was reprimanded.

5 On or about 28 November 2006 the appellant applied to VCAT for the review of the respondent's decision.[1]

6 On 12 February 2007 VCAT held a directions hearing but the appellant did not appear and a Senior Member of VCAT struck out his application for review. On 17 April 2007, the appellant appeared by counsel before the same Senior Member and apparently sought that his application for review be reinstated because the Senior Member directed that the appellant serve and file an affidavit containing reasons upon which he intended to rely for such reinstatement and the directions hearing was adjourned to 1 May 2007. On 1 May 2007 the said Senior Member struck out the appellant's application for reinstatement as the appellant did not appear.

7 The matter again came before VCAT, this time constituted by the Acting President, Judge Bowman, on 14 June 2007. On that occasion, the appellant was represented by counsel and it was ordered that his application be reinstated and reopened and a number of further directions were made, including the following directions which are relevant for the purposes of the present appeal:

4. Within 7 days of compliance with Order 2, Respondent to file and serve s.49 statement.[2]

5. Within 14 days of the filing and serving of the s.49 statement, Applicant to file witness statements and any further documents upon which he intends to rely.

6. Within 28 days of the receipt and filing of the material referred to in Order 5, the Respondent is to file and serve any material upon which it seeks to rely.

7. Leave is required to introduce further material at the hearing over and above that which has been filed and served in accordance with the above orders.

9. Fixed for Hearing on Monday, 20 August, 2007 at 10.00 am (Est. duration 4 days).

10. A graphic equaliser is to be provided at the hearing if available.[3]

8 It was common ground that a review by VCAT was by way of a rehearing de novo of the matter sought to be reviewed. It was indicated by counsel for the respondent on this appeal that these directions were standard or common directions of the kind made by VCAT on such applications for review. Of course, the propriety of Judge Bowman's directions is not in issue on this appeal and the appellant was represented by counsel when those directions were made.

9 Nevertheless, in circumstances where the alleged breach of those directions in main part gave rise to the order now appealed against, we should indicate that, in our view, the usual directions given at VCAT, would not generally be appropriate where an applicant seeks to review disciplinary proceedings and is a person who is or may be exposed to a penalty. A party may, in such cases, be required to file written grounds and an outline of argument which identifies in broad terms what is in issue on the application for review. But it will not ordinarily be appropriate that directions be given which require the applicant for review to provide an outline of argument, or any other written material, which contains a positive assertion or denial of facts or requires an election by the applicant as to whether he or she intends to go into evidence or requires any proposed evidence the applicant intends to call to be the subject of a witness statement which must be produced and served on the other side, before the case advanced against the applicant has been completed.

10 In Australian Securities and Investments Commission v Plymin,[4] a case in which Australian Securities & Investments Commission ('ASIC') claimed pecuniary penalties under the Corporations Law in relation to alleged insolvent trading by certain company directors, ASIC accepted that the defendant directors ought not be required to provide affidavits or statements of their evidence before the close of ASIC's case but sought an order that the defendants file and serve all affidavits upon which they wished to rely by any persons other than the defendants themselves. The Court held that the penalty privilege was a basic and substantive common law right that extended to protect the defendants from being required to provide evidence of other witnesses, including expert witnesses, before the close of ASIC's case. In an earlier ruling in the same case,[5] the Court had decided, for the same reason, that the defendants ought not to be required to deliver defences containing affirmative or positive allegations.

11 More recently, the Federal Court canvassed similar issues in a civil penalty proceeding[6] and came to similar conclusions. Finkelstein J observed that the penalty privilege would operate to prevent an order being made for the provision of witness statements[7] and also expressed the view that a defendant in such a case should not be required to plead a positive case (if any) until the plaintiff's case was concluded.[8]

12 Be that as it may, and this is a question central to this appeal, it is abundantly clear that the actual directions made by Judge Bowman did not require the appellant within the time fixed thereby to file a statement of his own evidence or any other document unless he had by that stage formed the intention to rely upon any such statement or document. There was nothing in Judge Bowman's directions that precluded the appellant from advancing his case at the review hearing by oral argument and without giving evidence and nothing in Judge Bowman's directions that precluded the appellant from deferring any decision as to whether he would give evidence until after he had heard the evidence advanced against him. Of course, if he did so defer his decision, he would have taken the risk that he would not obtain leave from the Tribunal (under Order 7) to rely upon oral or written evidence at the hearing, in the absence of a prior witness statement or document filed in accordance with Judge Bowman's directions.

13 Returning to an account of the relevant events, the respondent filed and served its s 49 statement on 28 June 2007. By letter dated 13 July 2007, apparently sent by email to the appellant's solicitor, the respondent's solicitors asked whether the appellant intended to file and serve any material as the time allowed for the same had expired. The appellant's solicitor responded by stating that he no longer acted for the appellant as his retainer had been terminated and that he would forward the email to the appellant. On or about 16 July 2007 the appellant filed and served a witness statement of his receptionist dated 11 July 2007.

14 By letter to the appellant dated 30 July 2007, the respondent's solicitors drew his attention to Judge Bowman's orders and noted that they had not received his witness statement although he had indicated by telephone on 16 July 2007 that he would be calling himself as a witness and that, despite his having then indicated that he would be filing a witness statement, he had not done so. The letter further stated that he had said by telephone that he would be requesting, by letter, an adjournment of the hearing commencing on 20 August 2007 but that he had not provided a copy of such a letter.

15 The date fixed for the hearing was altered by the Tribunal, of its own motion, from 20 August to 4 September 2007.

16 On 22 August 2007, the respondent's solicitors wrote to the Senior Registrar of VCAT in a letter which recited the procedural history of the matter and then requested that it be urgently listed for a hearing 'where the respondent will be making an application for the proceeding to be struck out or dismissed pursuant to s 78 of the [VCAT] Act.' The appellant appears to have received a copy of this letter and on 3 September 2007 he faxed a letter dated 25 August 2007 to the Senior Registrar of VCAT. The appellant's letter stated that, inter alia, that what he had told the respondent's solicitors was that 'I did not believe that I was a witness and therefore I probably would not be filing a witness statement but that if I did I will file it the next day subject to my legal advice' and that that would be within time for reasons that he gave. His letter concluded:

I am not a witness in this matter, but I am a respondent and I do not intend to file a witness statement.

The Victorian Government Solicitors Office has not filed any material in the form of witness statements nor indicated what evidence it intends to rely upon for example what witnesses are cooperating with attending the matter if any.

At this time there appears to be no case to answer.

17 The hearing commenced on 4 September 2007 with a discussion between the appellant and the Tribunal concerning the absence of a graphic equaliser in which the Tribunal indicated that one was not available to which the appellant responded that such equipment was readily available and that the issue was one of not only justice but discrimination. The Tribunal said that if the appellant wished to have this equipment, he would have to provide it.

18 Counsel for the respondent then stated that it sought to make a strike out application. This application proceeded, with a number of interruptions by the appellant who complained that he could not hear and who referred, among other things, to alleged 'grimacing and smirking' by the respondent's counsel. The sole ground relied upon by respondent's counsel for the strike out application was said to be the appellant's breach of Judge Bowman's order, constituted by his failing to provide his own witness statement when he had indicated that he would be giving evidence. Reference was also made to the appellant's letter received the previous day in which he stated the he was not a witness and did not intend to file a witness statement. The respondent's counsel submitted that the appellant was in breach of Judge Bowman's order and that the failure to provide his witness statement had disadvantaged the respondent within the meaning of s 78 of the VCAT Act and express reference was made by counsel to s 78(1)(a).

19 The appellant then made submissions in answer to the strike out application. Among other things, the appellant said that he had briefed a new barrister for the hearing on 20 August 2007 and given that barrister all the material. The appellant then stated that the matter was then adjourned by VCAT from Monday 20 August, without explanation, on the Friday immediately preceding the hearing date. The appellant said that he thus got no notice and had missed four days work. He said that the hearing date had been changed without consultation as to his availability, the availability of counsel, or the practicalities of arranging, on such short notice, an adjournment. He said that neither his solicitor nor his barrister were now available to represent him.

20 The appellant disputed the respondent's solicitor's version of their telephone conversation in relation to his giving evidence. The appellant said that he had told the solicitor that he had been advised that he was not to be considered as a witness who was required to produce a witness statement and that he would seek further clarification. The appellant then said that he had received advice from three barristers that he was not a witness but a respondent, that it would be most unusual for him to be treated as other witnesses and to be required to produce a witness statement and that the advisors commented to him that it was surprising that witness statements were to be provided from him (and that was his argument) but not for the accuser.

21 After some discussion, the Tribunal asked the appellant whether he was proposing to give any evidence in the proceeding and he replied: 'Well, I may, presumably if the matter proceeds.'

22 The Tribunal reacted to the appellant's statement by saying that he would not give evidence unless he filed a witness statement and, after a further exchange, that if he wanted to give evidence he would have to file a witness statement.

23 The appellant then said that he wanted an adjournment because the matter had been refixed for hearing without reference to him or his lawyers and that that was unjust. The Tribunal replied in substance that the matter could be adjourned until 10.30 am the next day in order that the appellant obtain some legal representation (saying 'there are many barristers at the Bar').

24 Transcript then shows that the matter proceeded as follows:

HER HONOUR: I would expect you to have counsel tomorrow morning. I am prepared to adjourn it until tomorrow morning to enable you to do so.

DR TOWIE: The man who has been instructed in detail, and at great expense by me to a barrister already. And I am entitled to continuity of representation. Can I finish?

DR TOWIE: Yes. And I am entitled not to be disadvantaged by the fact the judge did not consult about the availability of a man that I had briefed. I am entitled to chose who represents me, and I have chose and paid someone to represent me and I intend to proceed with him. Not to have to ...

HER HONOUR: Well, I have indicated to you, Dr Towie, that I am prepared to adjourned to matter until 10.30 tomorrow morning. If you don't want to take advantage of that, I will proceed to deal with the application that is being made to me this morning.

DR TOWIE: Well, you can adjourn it, but I haven't finished today. I wish to bring a number of matters to your attention myself.

HER HONOUR: So do you want an adjournment or do you want to proceed today?

DR TOWIE: Are you telling me when to ask for the adjournment?

HER HONOUR: I am saying, if the matter is to be adjourned, I will adjourn it now. If it is not going to be adjourned, I will go ahead and hear it.

HER HONOUR: I am not calling any witnesses. It is not up to me to call witnesses. This is a matter that you have brought on. It is not a matter that I have brought on. It is not a matter that Mr Bourke has brought on

DR TOWIE: Sorry, it is not a matter I have brought on at all. I am not - I am the respondent. I brought the matters to VCAT. The matter is to be heard de novo, as if I am the ....

HER HONOUR: Yes, but you are the applicant here. You are the applicant here in this application. You are seeking to set aside a decision of the Medical Practitioners Board.

DR TOWIE: But the matter is to be heard de novo. I am not the one that brings ....

HER HONOUR: Well, I am not going to argue with you. At the moment I want to sort this out. Do you want an adjournment until 10.30 tomorrow morning so that you can instruct your counsel?

DR TOWIE: I would like to make the application for the adjournment when I have finished making the - bringing to your attention the notices that I intend to bring today.

HER HONOUR: Well, what other matters do you wish to bring to my attention? Now, what I want to say to you before you answer that, is that I am considering an application that this proceeding be struck out because you have not provided witness statements. So that is the application I am dealing with at the moment. So is there anything you want to say to me in relation to that application?

DR TOWIE: This is not a directions hearing? Am I mistaken? Is this an ...

HER HONOUR: No, this is the hearing of the application.

DR TOWIE: This is the hearing. So this is not a directions hearing for a strike out proceeding?

HER HONOUR: What I am dealing with this morning is the application that Mr Bourke has just made for the proceeding to be struck out because you have not complied with the order made Judge Bowman requiring you to file witness statements.

DR TOWIE: That application was made on, I believe, the 22nd of August, and the VCAT declined to entertain that application. What you are telling me now is that application is going to go ahead.

HER HONOUR: Yes, I am telling you that I will either deal with it this morning or I will adjourn it until 10.30 tomorrow morning if you wish to have an adjournment.

DR TOWIE: So you are allowing the application to be brought without notice today.

HER HONOUR: I am having the application brought today, yes.

DR TOWIE: Okay, thank you. I just had to get that in the transcript is all. The matter I wanted to bring to your attention was a matter which you interjected before while I was talking about the - my objection to the proceeding, because I also intend to bring an application to have the matter struck out because of non-compliance by the - what the accuser, if they are not - are they the respondent or am I the respondent.

HER HONOUR: You are the applicant and the Board is the respondent.

DR TOWIE: Okay, so I call them the respondent. There will be no confusion. If I mix the terms you will have to forgive me, because my understanding is that I am responding to an accusation from the Medical Board. It is me that is accused.

HER HONOUR: No, no. The order has been made by the Medical Board, and the order stands. You are trying to have the order overturned. Now, is there anything you want to say to me as to this application?

DR TOWIE: Yes, okay. So we will proceed with what I was saying before, before you interjected. Now there are two accusations. The first one is, as I said, which is, to put it mildly, vague. And not only is the accusation vague, but it is not clearly put in what sense that ...

HER HONOUR: I am not going to hear argument as to the matters about ...

DR TOWIE: I can bring a strike - look, I am sorry, but I can bring a strike out application if I wish.

DR TOWIE: You have just permitted them to do that ...

HER HONOUR: Is there anything else you wish to say as to the application to have this matter struck out because you have failed to comply with the orders of Judge Bowman?

DR TOWIE: I wish to strike out the arguments of the respondent. Can you advise me ...

DR TOWIE: Excuse me, can I ask you to advise me what that is called to do that, because I am not a lawyer.

HER HONOUR: You are the applicant. You can withdraw your own application.

DR TOWIE: No, I am not withdrawing an application. It is incumbent upon you to assist me.

HER HONOUR: Right. All right. Well, I take the view, Dr Towie, that you are not properly responding to any of the questions that I have asked, and I think that the reason for that is that there is no logical reason what you haven't complied with the orders. I take the view that you do not propose to comply with the orders and I, therefore, strike this proceeding out pursuant to ...

DR TOWIE: But I have told you that I will provide a witness statement

25 Accordingly the Tribunal ordered that the appellant's application for review be dismissed pursuant to s 78 of the VCAT Act.

26 The Tribunal provided written reasons for this order. In those reasons the Tribunal set out the procedural history at length. In relation to the refixing of the hearing from 20 August to 4 September the Tribunal said: 'Unfortunately, a Member had not been available to hear this case on 20 August 2007. I therefore ordered on 17 August 2007 that the hearing be adjourned to today.'

27 It is apparent that VCAT did not consult the parties concerning the suitability of the adjourned date.

28 The Tribunal gave an account of what occurred at the hearing on 4 September and commented that the appellant 'continued to argue in an aggressive and non-responsive way.'

29 The Tribunal found that the appellant had conducted the proceeding in a way that unnecessarily disadvantaged the respondent for the following reasons:

(1) The appellant had shown disregard of the Tribunal's procedures in failing to attend three previous directions hearings - 'In my view, [the appellant's] claim to have been unaware of the Directions Hearings at which the matter was previously struck out, and his claim that previous delay was all the fault of his solicitor are not plausible. It is an excuse for his past inaction'

(2) The appellant had disregarded the orders of Judge Bowman to file and serve witness statements 'I find it implausible that he would not have been firmly told by each of those lawyers that he would need to file witness statements setting out the matters on which he relied well before the hearing date.'

(3) The appellant had conducted himself in an extremely aggressive and intimidating way - 'I record that in eleven years on the Bench I have rarely experienced such aggression and intimidatory behaviour from a litigant.' The Tribunal said that such conduct would not of itself have been sufficient for the proceeding to be dismissed under s 78 but it showed that the appellant was 'not willing to address any of the compliance issues raised by the Respondent in any sensible way, nor produce evidence sufficient to identify the grounds for the application so as to give the Respondent the opportunity to properly prepare to defend this application.'

30 The Tribunal concluded by stating that it had no confidence that if this application were to be unsuccessful the appellant would prepare his case for hearing and that it held the strong view that the appellant wished the application to be protracted but not heard.

31 We note that the Tribunal included, as reasons for its decision, a number of matters that were neither advanced by the respondent in support of the strike out application nor notified by the respondent or the Tribunal to the appellant as matters that might be taken into account by the Tribunal and in respect of which the appellant had no opportunity to provide a response.

32 The appellant's amended notice of appeal dated 6 February 2008 raised the following questions of law:

Did the Tribunal err in failing to take relevant matters into account, namely:

(a) the important consideration that a party should ordinarily be heard upon the merits of matters in issue (see Bell v Stevenson [2003] VSC 255, [65] (Ashley J), and

(b) it was incumbent upon the Tribunal to consider the alternative remedy of making of self executing orders because the making of an order under s 78(2)(a) or (b) should be a last resort and not a first resort (Bell v Stevenson [2003] VSC 255 [68], [69])?

Did the Tribunal misconstrue its function of review under section 51 of the VCAT Act 1998 in that it treated the appellant, who had been the respondent before the Medical Practitioner's Board of Victoria, as having the carriage of the matter on review?
Did the Tribunal err in misconstruing paragraphs 5 and 7 of the Orders that were made by His Honour Judge Bowman on 14 June 2007, in that the Tribunal failed to appreciate that:

(a) failure to comply with paragraph 5 (which provided that: 'within fourteen days of the filing and serving of the s 49 Statement, the applicant (is) to file witness statements and any further documents upon which he intended to rely)' did not constitute a failure which could bring s 78 of the VCAT Act 1998 into play;

(b) paragraph 7 (which provided that 'leave is required to introduce further material at the hearing over and above that which has been filed and served in accordance with the above orders)' contemplated that:

(i) the proceeding before the Tribunal would proceed even though there was a failure to file witness statements or other documents upon which the appellant would seek to rely at the hearing;

(ii) the Tribunal would exercise a discretion to permit the appellant to give evidence where no witness statement by him had been filed in accordance with paragraph 5.

Was the Appellant denied natural justice in that he was not accorded a fair hearing?
Was the appellant denied natural justice in that a reasonable apprehension has arisen that the Tribunal might not have brought a neutral mind to the determination of the matter?

33 In our opinion, the Tribunal fundamentally misdirected itself in the exercise of its discretion under s 78 of the VCAT Act. The Tribunal found that the appellant had disregarded Judge Bowman's orders by failing to file and serve witness statements. This finding was incorrect. The appellant had filed a witness statement of his receptionist. The issue that had been ventilated by the respondent was whether the appellant was bound to file a witness statement containing his own evidence. The Tribunal did not expressly grapple with this issue. Paragraph 5 of Judge Bowman's order required the appellant to file witness statements 'upon which he intends to rely'. It was clear from the appellant's stance that he did not intend to rely on a witness statement of his own. The order did not literally provide that if the appellant intended to give evidence himself, he was obliged to file a witness statement. Rather the order provided, when read as a whole, that the appellant could not, without leave, introduce material at the hearing which had not been earlier filed and served in writing within the time provided. But even if paragraph 5 of Judge Bowman's order is to be taken as requiring the appellant to file his own witness statement if he intended to give evidence, it was reasonably apparent from what the appellant said to the Tribunal that he had not finally decided that he would give evidence and that he wished first to know of or hear the evidence to be called against him. In any event, the Tribunal did not canvas any of these questions in its reasons.

34 Thus, in our view, the Tribunal was not entitled to conclude that the appellant was in breach of Judge Bowman's order and, alternatively, did not consider the matters that were relevant to be considered in reaching such a conclusion. Moreover, the Tribunal failed to consider whether, even if the appellant had failed to comply with Judge Bowman's order, he had a 'reasonable excuse'[9] nor did the Tribunal consider whether or why such a failure amounted to his conducting the proceeding in a way that unnecessarily disadvantaged the respondent. In our view, it was not open to conclude in the circumstances that the appellant's conduct (even if in breach of Judge Bowman's order) unnecessarily disadvantaged the respondent.

35 The ground is also made out that the appellant was denied procedural fairness. First, the application of the respondent should not have proceeded further following Dr Towie's request that it be adjourned.[10] The application was brought on by the respondent when Dr Towie, who was unrepresented, had attended the tribunal to complain, with some justification, that the hearing date of the appeal had been adjourned to the present date, without any consultation with his legal representatives who were not then available. Although he said enough to indicate that the respondent's application was without substance, the Tribunal took it upon itself to persist with the application when the appellant was entitled to have the application dismissed or adjourned. Secondly, as the Tribunal had resolved to proceed to hear the application, it was incumbent upon the Tribunal to make clear that it intended to do so. It was obliged to afford the unrepresented appellant a meaningful opportunity to deal with the substance of the allegation.[11] This the Tribunal plainly failed to do. The appellant was denied natural justice by the Tribunal because he was not given any opportunity to respond to the matters taken into account by the Tribunal in its reasons.

36 It is uncontroversial that an ingredient of the Tribunal's duty to accord procedural fairness involves the giving of a fair opportunity to those who are parties in the controversy to correct or contradict any relevant statement prejudicial to their view. In particular, when an order is to be made which will deprive a person of some right or interest or legitimate expectation, the person is entitled to know the case sought to be made against them and to be given an opportunity of replying to it. Consequently,

where the risk of an adverse finding being made does not necessarily inhere in the issues to be decided or where the facts or the inference which the judge contemplates drawing from the facts and which gives rise to a risk of an adverse finding are unknown to the party, the fundamental rule of fairness requires the decision-maker in some way to draw attention to the existence of that risk.[12]

37 We do not consider that it was made clear to the appellant that the Tribunal was proceeding to hear the application. Moreover, the appellant had no opportunity to deal with the allegation that he had shown a disregard of the Tribunal's procedure in failing to attend three previous directions hearings. Nor was he given an opportunity to deal with the contention, recorded by the Tribunal in its reasons, that his 'aggression and intimidatory behaviour' showed that he was unwilling to conduct himself in such a way as to give the respondent the opportunity to properly prepare and defend the application. For completeness we should state that we doubt that either of these reasons could have supported the order made. It is unnecessary to deal in more particularity with the specific questions of law raised by the appellant.

38 For the foregoing reasons, we were of the view that the Tribunal's decision should be set aside. It would usually follow from this that the respondent's application under s 78 of the VCAT Act should be remitted to the Tribunal (differently constituted) to be decided according to law. However, in the present case, we did not think that it was open on the material before the Tribunal to strike out the appellant's application for review pursuant to s 78 of the VCAT Act.

39 For the above reasons, it was ordered that the Tribunal's decision be set aside and in lieu thereof that the respondent's strike out application be dismissed.

40 The respondent accepted that it had to pay the appellant's costs of this appeal but sought an indemnity certificate under the Appeal Costs Act 1998. The appellant sought an order for indemnity costs on two bases. The first basis was that the defence of the appeal was hopeless and should never have been undertaken. The second basis was that the appellant had made an offer of compromise pursuant to O 26 of the Supreme Court Rules on 30 October 2007 in which he had offered to settle this appeal on the basis that the Tribunal's decision be quashed and the strike out application be remitted to VCAT and that the respondent pay 90% of the appellant's taxed solicitor's costs.

41 We would not have been inclined to make the order sought solely on the basis of the rejection of the offer of compromise. An offer that a party will bear a very small portion of its own costs may in particular circumstances be viewed as a sufficient offer of compromise to make a rejection of the offer unreasonable, but it will generally be the surrounding circumstances which support the order for indemnity costs. An evaluation of those circumstances will usually reveal that the proceeding has been commenced in circumstances where the applicant, properly advised, should have known it had no chance of success.[13] In our view it was irresponsible to seek to defend the Tribunal's decision, given that it involved a manifest denial of procedural fairness and a construction of the directions order that was not reasonably open. The failure or unwillingness of the respondent to address the weakness of its position prior to the appeal, whether born of, 'intransigence, careless indifference or an extended dismissive refusal'[14] warrants an order for special costs. Had the respondent taken a sensible course and conceded the appeal, it would have been unnecessary for the appellant to retain Senior Counsel and expend significant sums in pursuing the matter. The respondent should be ordered to pay the appellant's costs of the appeal (including reserved costs) on an indemnity basis.

42 The question was raised whether the respondent, Medical Practitioners' Board of Victoria, could not be entitled to a certificate under the Appeal Costs Act having regard to s 38 which provides that '[a] court must not grant an indemnity certificate in favour of the Crown or any person representing the Crown.'

43 In Applicants A1 & A2 v G E Brouwer (No 2),[15] Maxwell P, Neave and Redlich JJA held that the Chief Commissioner of Police was a person representing the Crown for the purposes of s 38 of the Appeal Costs Act. The Court said that the expression 'the Crown' for this purpose referred to the executive, represented by the ministry and the administrative bureaucracy which attended to its business. The Victoria Police was an agency of the executive government, performing important governmental functions and the Chief Commissioner was ultimately accountable to the relevant Minister and to Cabinet.

44 The position of the respondent is in our view different. The Medical Practitioners' Board of Victoria was a body corporate established by s 65 of the Medical Practice Act 1994. The members are appointed by the Governor in Council but are not subject to the Public Sector Management and Employment Act 1998.[16] The respondent is not in our opinion part of the executive or the administrative bureaucracy and does not perform governmental functions as such - nor is it answerable to a Minister or to Cabinet. We conclude that the respondent does not represent the Crown for the purposes of s 38 of the Appeal Costs Act.

45 The question remains whether the respondent should have a certificate under the Appeal Costs Act. Section 4 of that Act relevantly provides that, if an appeal against a decision of a court (this includes a tribunal) in a civil proceeding to the Court of Appeal succeeds, a respondent to that appeal may apply for, and the court may grant, an indemnity certificate in respect of costs.

46 The appellant has succeeded in this appeal by reason of errors made by the Tribunal. However, in our opinion, the respondent should never have made the application under s 78 of the VCAT Act to strike out the appellant's application for review because in all the circumstances nothing had occurred that so disadvantaged the respondent as to disentitle the appellant to a review on the merits and the respondent led the Tribunal into error by relying upon the appellant's alleged breach of Judge Bowman's order. Accordingly, we think that an indemnity certificate should be refused.

[1] There is a further document recording the respondent's decision dated 22 February 2007 and a formal application to VCAT for review of that decision dated 22 March 2007, but nothing turns on the respective dates of the decision and the application to review it.

[2] Section 49 of the VCAT Act provides that the decision-maker must lodge the statement of reasons and every other document in its possession considered relevant to the review of the decision.

[3] The appellant apparently has a hearing problem.

[5] Australian Securities & Investments Commission v Plymin (Unreported, Mandie J, Supreme Court of Victoria, 22 June 2001).

[6] See Australian Securities & Investments Commission v Mining Projects Group Ltd [2007] FCA 1620 (Finkelstein J) and cases therein cited.

[8] [2007] FCA 1620, [12]-[13], (Finkelstein J):

the plaintiff must prove his case without any assistance from the defendant ... What should occur is that the defendant should be entitled to rely on the privilege until the plaintiff's case is concluded. If at that point the defendant decides to run a positive case he can deliver an amended defence that will outline his case. In an exceptional case the Judge may grant a short adjournment to allow the plaintiff time to prepare, if he is otherwise taken by surprise. In most cases that will not be necessary. By the time the plaintiff has closed his case the nature of the defence will usually be apparent.

[10] McColl v Lehmann [1987] VicRp 46; [1987] VR 503, 506 (Kaye J); Collection House Limited v Taylor [2004] VSC 49, [23] (Nettle JA); Lewis v State of Western Australia [No 2] [2008] WASCA 155, [42]-[46].

[11] Collection House Limited v Taylor [2004] VSC 49, [28]-[30] (Nettle JA);

[12] Ucar v Nylex Industrial Products Pty Ltd [2007] VSCA 181, [43] (Redlich JA).

[13] Aljade and MKIC v OCBC [2004] VSC 351, [79]-[81]; Murdaca v Maisano [2004] VSCA 123.

[14] Aljade and MKIC v OCBC [2004] VSC 351, [103] (Redlich J).

[16] See s 67(1) and s 68(3) of the Medical Practice Act 1994.

Civil and Administrative Tribunal Act 1998

Public Sector Management and Employment Act 1998

Civil and Administrative Tribunal Act 1998

Public Sector Management and Employment Act 1998

At a glance

Court

Decision date

Before

Source

Judgment (133 paragraphs)

Parties

Legislation Cited (10)

Cases Cited (1)