The applications for costs by both the applicant and respondent are refused.

1. This is an application for costs by the respondent, Ms Chen, following the withdrawal of a long-running professional disciplinary proceeding brought against her in 2017 by the applicant, the Victorian Legal Services Commissioner (VLSC). This was brought under s 300 of the Legal Profession Uniform Law (Victoria) (Uniform Law).[1]
2. There is also a cross application by the VLSC, made under s 303(4)(a) of the Uniform Law, for payment of its costs of three unsuccessful interlocutory applications made by Ms Chen.
3. The withdrawal order was made on 6 October 2023, under s 74(1) of the Victorian Civil and Administrative Tribunal Act 1998 (VCAT Act). Section 74(2)(b) provides that if an applicant withdraws an application or referral, VCAT may make an order that the applicant pay all, or any part of, the costs of the other parties to proceeding. [2]
4. Also applicable is clause 46D(2) to Schedule 1 of the VCAT Act, which has the effect that the Tribunal must not make an order for costs against the VLSC unless it is satisfied that 'special circumstances make it appropriate' to do so. That is the key issue for determination on Ms Chen's application for costs.
5. Ms Chen argues, amongst other things, that the magnitude of the ordeal which she has been through, ultimately leading to all the charges against her being withdrawn, amounts to special circumstances.
6. The VLSC argues, in effect, that Ms Chen has brought the hardship she has suffered upon herself from the way in which she has conducted her case. It says the disciplinary prosecution was properly brought, and conducted, and that the withdrawal was for pragmatic reasons, in light of the cost and delays (especially those associated with the multiple applications brought by Ms Chen herself) in the course of the preceding.
7. This matter has a long history, described in detail below. In summary, Ms Chen was acting for a party in a family law proceeding in 2015. Following a complaint received by the opposing party, the VLSC investigated and in 2017 brought disciplinary charges against Ms Chen. The case was heard over four days (16 to 18 July 2018 and 3 July 2019) before Senior Member Butcher.
8. On 26 February 2020 Ms Chen was found guilty of charges of professional misconduct concerning conferring with her client while he was under cross examination, without proper basis for doing so (Charge 1), and providing false and/or misleading information to the VLSC in writing about this on 31 March and 13 December 2016 and 20 March 2017 (Charge 7). [3]
9. VCAT then made orders on several occasions preparatory to the matter then being listed for the 'stage 2' hearing, that is, on a question of penalty. However, that penalty hearing never occurred.
10. Ms Chen brought two applications to the Supreme Court of Victoria (in 2020 and 2021) and two applications to VCAT for the case against her to be summarily dismissed under s 75 of the VCAT Act (in 2021 and 2023). The latter s 75 application was subsequently withdrawn. Ms Chen also made two interlocutory applications to VCAT seeking the production of documents (in 2021 and 2023). A consistent theme in these applications brought by Ms Chen was that she alleged that the disciplinary prosecution against her had been improperly brought, that it involved fabrication of evidence and was otherwise an abuse of process.
11. These applications by Ms Chen were all unsuccessful, but with one very significant exception. On 2 March 2023, by consent, Justice Cavanough converted an application to appeal into an application for certiorari,[4] and ordered that the VCAT decision of 26 February 2020 be quashed, with the case remitted back to VCAT. This was on the basis that VCAT's reasons for decision were inadequate, and the finding in relation to Charge 7 was ambiguous.
12. At first, the VLSC indicated it would re-prosecute the case against Ms Chen. However, upon further consideration, and after a directions hearing on 9 May 2023, it determined not to do so. In its letter of 8 June 2023, the VLSC indicated that was due to the impact which the passage of time since the alleged conduct in March 2015, and the three days of hearing in 2018, may have on the evidence required to establish the charges at a rehearing.
13. The VLSC opposes the application for costs which Ms Chen has made in light of the withdrawal of charges by the VLSC. It contends that there are no 'special circumstances' here.
14. Ms Chen opposes the VLSC's application for her to be ordered to pay costs of the three interlocutory hearings. She contends it is outside the scope of s 303(4)(a) of the Uniform Law. Indeed, she submits costs should be awarded to her for those hearings, since these should be regarded as 'costs in the cause'.
15. For the reasons given below, I have determined that each of the applications for costs by both Ms Chen, and by the VLSC, should be refused.

1. There was a contested hearing of the disciplinary charges at VCAT, over four days: 16 to 18 July 2018 and 3 July 2019.[5] Ms Chen was represented by Mr Peter Morrissey SC. The VLSC was represented by Mr Scott Morris of counsel.
2. Closing submissions were to be filed by both parties after day 4 of the VCAT hearing (3 July 2019). The VLSC's submissions were filed on 11 July 2019. On behalf of Ms Chen, submissions signed by her counsel, Mr Morrissey SC, were filed on 22 July 2019. In the conventional way, these addressed in detail the evidence which had been given concerning Charges 1 and 7, the credibility of the two key opposing witnesses (Ms Chen and the husband in the family law proceedings respectively) and issues going to proof of the disciplinary charges.
3. On the same day, 22 July 2019, Ms Chen also filed additional 'supplementary submissions' which she drafted herself. These were not signed by her counsel. They made allegations against the VLSC's representatives similar to some of those on which the subsequent s 75 applications and requests for documents were based. They included allegations that the disciplinary proceeding brought against her was void, as she was denied procedural fairness during the process of determining to bring the case at VCAT. It was also alleged that statutory declarations of three witnesses prepared for the disciplinary case against her were manipulated and falsified. These were statutory declarations made by counsel for the husband, counsel for the wife, and the solicitor for the wife in the family law proceedings.
4. By Reply submissions of 24 July 2019, the VLSC objected to these 'supplementary submissions' on the grounds that they made serious allegations against the VLSC representatives which were not raised, nor put to the persons against whom allegations were made, during the hearing.[6]
5. After the decision of 26 February 2020 finding her guilty on Charges 1 and 7, Ms Chen brought an application for leave to appeal to the Supreme Court against the Tribunal's decision finding her guilty of professional misconduct. That appeal was unsuccessful.[7] Justice Ginnane found, in effect, that the appeal was premature. VCAT had only made findings of professional misconduct ('stage 1') but had not yet made orders under the Uniform Law ('stage 2'). An appeal under s 148 the VCAT Act could not be brought until orders were made (that is, not until penalty was determined by the Tribunal).[8]
6. On 14 May 2021, VCAT's President ordered the reconstitution of the Tribunal for the conduct of this matter, following the retirement of SM Butcher.
7. In 2021, Ms Chen brought an application for discovery of 16 categories of documents. Amongst other things, these included notes of conferences with witnesses in the preparation of the case against her, VLSC internal documents created during that process, documents concerning a complaint she filed against the VLSC's counsel, and documents concerning communications with the chambers of Justice Ginnane.
8. On 2 September 2021, that request was refused by the Tribunal (for reasons given orally). This was largely on the basis that the documents Ms Chen sought were relevant to 'stage 1' of the disciplinary process, namely, consideration of the evidence and making of findings on the charges brought. They were not relevant to 'stage 2' of the VCAT proceeding, namely, determination of penalty, which was the stage the proceeding was at.
9. On the hearing of that application on 2 September 2021, Mr Cawthorn QC appeared for Ms Chen, and Mr Bruno of counsel appeared for the VLSC. The reason for the VLSC briefing new counsel was that Ms Chen had made a complaint against Mr Scott Morris in relation to his conduct of the proceeding against her, and, without accepting the validity of that complaint, the VLSC had determined it was appropriate to brief different counsel.
10. Ms Chen next brought an application for the disciplinary proceeding to be summarily dismissed under s 75 of the Victorian Civil and Administrative Tribunal Act 1998 (Vic). Ms Chen contended that the disciplinary proceeding against her amounted to an abuse of process, and that the Tribunal did not have jurisdiction to conduct it.
11. On 12 July 2022, that application was refused by the Tribunal.[9] This was, broadly, on the basis that the Tribunal had made its findings against her, and so it was too late to make arguments based on her contentions of witness statements having been tampered with, and alleged misconduct by the VLSC's investigators and legal representatives.
12. At [17]-[18] of that decision, the Tribunal said, by way of summary:

...the s 75 Application is based on a combination of allegations of falsifying and tampering with evidence by the VLSC's legal representatives; alleged breaches of process by the VLSC in investigating the matter and in bringing the case against her; and alleged errors of law in the VCAT decision of 26 February 2020.

For the reasons set out below, Ms Chen's application for summary dismissal is refused. In effect, it seeks that VCAT review its own findings of professional misconduct, which it does not have power to do. As Justice Ginnane determined, VCAT needs 'to complete its statutory task under s 302'of the Uniform Law. That is, having made findings, to proceed to conduct a further hearing and then make orders on the question of penalty. Once that decision has been made, Ms Chen can consider the decision as a whole (findings and penalty). If at that point she wishes to do so, she may file an application for leave to appeal under s 148 of the VCAT Act.

Additionally, even if a s 75 application could be brought in the circumstances of this case, the matters relied on by Ms Chen fall well short of satisfying me that an order summarily dismissing the disciplinary proceeding brought against her should be made. No sufficient basis for the serious allegations she made against the VLSC's representatives was apparent. Those allegations were not raised by her counsel during the hearing.[10] They depend on proving that two members of counsel and an instructing solicitor swore statutory declarations which were false, at the behest of the VLSC's investigator.[11] No statement by her counsel has been produced supporting her assertion that no agreement had been reached on the third day of the hearing. On the contrary, the transcript plainly indicates her counsel endorsed the statement that an agreement had been reached.[12] The contention that the Tribunal's analysis concerning Charge 7 was insufficient may be an appeal point, but it is not a ground for summary dismissal. The allegations concerning tampering and falsification of the evidence of the husband and other witnesses, to the extent they relate to Charge 1, may also be appeal points. The contentions that s 299(2)(b) and s 462 have been breached appear on their face to be incorrect.

1. Ms Chen filed an application to appeal against this decision on 10 August 2022. In association with this, she filed a discovery application, a stay application and a Notice to Produce documents. These summonses came on before Justice Cavanough on 2 February 2023. Mr Hines of counsel appeared for Ms Chen and Mr Bruno for the VLSC.
2. Justice Cavanough indicated that he had 'read a very large amount of material on this case over three days'.[13] He commented that the proposed appeal and the present applications for documents and a stay were 'a long way from the heart of the matter',[14] which was the decision of SM Butcher. Given the imperatives of the Civil Procedure Act 2010 (Vic), it was appropriate to try to get to the real issues, and deal with the matter practically and in a common-sense way.[15]
3. During the course of discussion on that occasion, His Honour indicated his preliminary view that the applications for documents and a stay, and the appeal itself, were extremely weak, but, by the same token, the decision of SM Butcher appeared to be infected by legal error.
4. Concerning Charge 7, His Honour commented it was not clear whether SM Butcher had found Ms Chen's conduct to be deliberate, reckless or careless. Given SM Butcher had retired, it would be difficult for another member to 'sentence' in relation to that sensibly. While perhaps one could infer that SM Butcher must have found it was deliberate, the new member could not know what was in SM Butcher's mind. And concerning Charge 7 and possibly Charge 1 as well, the statement of reasons appeared inadequate.[16]
5. His honour raised the possibility of converting the appeal to an originating motion seeking certiorari to quash the decision of SM Butcher. Indeed, a draft order to that effect, in the form of an aide memoire, for discussion purposes, was handed to counsel by His Honour.[17]
6. The matter was adjourned for a month, and on 2 March 2023, there was a further hearing before Justice Cavanough. Ms Chen appeared for herself on this occasion. Mr Bruno appeared for the VLSC. He indicated the VLSC agreed to SM Butcher's findings being set aside, as suggested at the 2 February 2023 hearing.
7. After a long discussion between His Honour and Ms Chen (occupying 44 pages of transcript), Ms Chen ultimately indicated she consented to orders that the decision of SM Butcher be quashed. In effect, the Court remitted the VLSC's disciplinary application back to the Tribunal for reconsideration.
8. During discussion on 2 March 2023, His Honour made it clear to Ms Chen on multiple occasions that her s 75 application was hopeless, and her appeal against it had no chance of succeeding. His honour noted that the Tribunal's decision had already been the subject of an unsuccessful appeal to the Supreme Court before Justice Ginnane, who had determined that any appeal was premature.
9. It was Justice Cavanough who suggested that Ms Chen's proposed appeal, in effect, be transformed into an application for judicial review, based on errors in the Tribunal's decision, rather than on any of the bases Ms Chen was seeking to rely on.
10. The Transcript of that hearing includes the following:
    • At page 9, His Honour said, in response to Ms Chen's concern about there being further delays entailed by the decision being quashed and remitted back to VCAT: '...but in part that's because you've been bringing unsuccessful challenges yourself. You haven't been abiding by the directions that have been given for you to file documents. Instead you bring challenges to the court, you bring appeals, you bring a s75. The time is mainly because of you.'
    • At page 18, His Honour reiterated: 'It's mainly because of you, Ms Chen. You have fought at every point, you've appealed, you've taken challenges, you can't really get very far talking about time because you're the one that's responsible for the time, mainly.'
    • At pages 11-12, His Honour explained to Ms Chen that the Court has no power to order that the VLSC not proceed with the case at VCAT (which is what Ms Chen desired to occur).
    • At page 14, His Honour said to Ms Chen that on the information he had, her appeal to the Supreme Court 'could not possibly succeed'. Ms Chen was warned, in effect, that subject to anything she might say to convince the Court otherwise, the likelihood was that her discovery and stay applications would be dismissed, and her Notice to Produce application would set aside, with costs.
    • At page 15, Ms Chen suggested that an invalid charge had been brought against her. His honour responded: 'You have [had] the opportunity to put that before Mr Butcher. You cannot come back later and say things that you should have said before.'
    • At page 21, His Honour told Ms Chen that the documents she had been seeking were only relevant to the issue of liability, not penalty, which was the only issue at that point before the Tribunal.
    • At pages 23-24, His Honour indicated to Ms Chen that having read all the relevant material and Ms Chen having added nothing of significance orally, his view at that point was that it would be 'completely futile and pointless' to even entertain her discovery and related applications, because, as far as His Honour could see at that point, she had no prospect whatever of setting aside the Tribunal's decision refusing her s 75 application.
    • At page 43, Ms Chen complained that the Tribunal just listens to the Commissioner, not her. His honour described that as a scandalous allegation, and required that she withdraw it, which she did.
    • At page 45, after Ms Chen finally agreed to consent to the order to quash the Tribunal's decision, His Honour commented that she was fortunate the VLSC had not applied for the costs of today, given how much extra cost has been unnecessarily incurred.
11. I also note that during the 2 February 2023 hearing, His Honour noted:

And it's a little bit unfortunate that there seems to be a tendency to have material that is prepared by counsel and also material that's prepared by the solicitor direct... And they seem not to speak to each other, necessarily, all the time. There seems to be quite a history of that going through the whole of the matter, going back years.'[18]

1. In summary, the s 75 application Ms Chen issued at VCAT, and her appeal to the Supreme Court, were brought on an entirely different basis to that on which Justice Cavanough made his decision to quash the VCAT decision of 26 February 2020. His honour made it clear that Ms Chen's purported appeal to the Supreme Court was completely misguided.
2. That order of 2 March 2023 relevantly said:

1. The parties agree, and the Court accepts, that the underlying decision of the Victorian Civil and Administrative Tribunal ("VCAT") made on 26 February 2020 whereby VCAT found the applicant (Ms Chen) guilty of two charges of professional misconduct brought by the respondent Commissioner and made an order that the VCA T proceeding be adjourned to a further hearing on a date to be fixed for the purpose of hearing submissions on disposition and gave ancillary directions ("VCAT's 26 February 2020 decision") is affected by error of law on the face of the record in that:

(a) VCAT's statement of reasons for the decision was inadequate in relation to both charges; and

(b) VCAT's finding in relation to one of the charges (charge no. 7) was ambiguous as to whether the information found to have been provided by Ms Chen was found to be false or was found to be misleading and as to whether Ms Chen was found to have acted deliberately or to have acted recklessly or to have acted carelessly.

1. The parties agree, and the Court accepts, that there are special circumstances in this case warranting the grant of any necessary extension of time.
2. It will be a matter for the parties and VCAT to determine what steps may hereafter be taken in relation to the VCAT proceeding.

1. Pursuant to rule 2.04 of the Supreme Court (General Civil Procedure) Rules 2015 ("the Rules") and all other enabling powers of the Court, compliance with the requirements of the Rules is dispensed with to the extent necessary to permit the making of this order.
2. Any necessary extension of time is granted.
3. This proceeding be treated as an application for an order in the nature of certiorari to quash the whole of VCA T's 26 February 2020 decision.
4. There be an order in the nature of certiorari to quash the whole of VCA T's 26 February 2020 decision.
5. There be no order as to the costs of this proceeding.
6. The VLSC at first indicated it would seek to prosecute the disciplinary application afresh, in relation to Charges 1, 2 and 7. There was a directions hearing on 9 May 2023 in which there was discussion about the complexities of conducting the disciplinary proceeding afresh in all the circumstances.
7. Also, Ms Chen foreshadowed another application for summary dismissal of the disciplinary proceeding. Orders were made for submissions to be filed in relation to that application. Ms Chen filed her submissions on 6 June 2023. The application was brought on two bases.
8. The first basis was that the Tribunal lacked jurisdiction to re-hear and determine the proceeding. Under this head Ms Chen alleged:

(A) That there was no valid delegation made to the VLSC's investigator, Mr Priday, > > (B) That there was no valid complaint in relation to Charge 1, and > > (C) That there was no evidence of wilfulness, recklessness or carelessness in relation to Charge 7. Ms Chen said, 'As a matter of fact, Charge 7 was purely made up by Scott Morris'

9. The second basis was that the disciplinary prosecution was an abuse of process. Under this head, Ms Chen alleged:

(A) 'Scott Morris intentionally tampered particulars of further amended Application to fit two Charges', > > (B) 'The investigation was fundamentally flawed, which is unfair prejudice to me and interfere[s] with the administration of justice, ' > > (C) 'There was no investigation report after "investigation" and the commissioners further amended application is invalid', and > > (D) 'Charges 1 and 7 have not been satisfied to the requisite standard of proof.'

10. Then, on 8 June 2023, the VLSC gave notice of intention to withdraw the disciplinary proceeding. The VLSC's decision was stated to be on the basis of the protracted nature of the litigation which had occurred, and the impact of the passage of time since the alleged conduct in 2015 on the evidence now required to establish the charges at a rehearing.
11. The VLSC's letter stated that despite the seriousness of the allegations in Charges 1, 2 and 7, and its view that Ms Chen's summary dismissal application was misconceived and without foundation, it had decided to withdraw the disciplinary prosecution on the basis of the following considerations:
    • the passage of time since the alleged conduct the subject of Charge 1 (and alternative Charge 2) took place in March 2015;
    • the fact that the first instance hearing of the charges took place in the Tribunal in 2018 and 2019;
    • the protracted nature of the litigation (both at the Tribunal and the Supreme Court of Victoria) between the parties since the findings of the Tribunal in February 2020;
    • the material impact that the passage of time, since the alleged conduct in March 2015 and since the first instance hearings in 2018 and 2019, may have on the evidence now required to establish the charges at any rehearing (likely to take place in the second half of 2023 or sometime in 2024, depending on the Tribunal's availability).
12. The VLSC proposed that the proceeding be withdrawn on the basis that each party bears its own costs. In the event Ms Chen did not agree, the VLSC sought that the parties be heard on the question of costs before any withdrawal order was made.
13. On 23 June 2023, Ms Chen responded, in effect alleging that the withdrawal was to protect the VLSC's counsel and employees and stating that she was seeking costs.
14. On 6 July 2023, Ms Chen filed a Notice to Produce 13 categories of documents. This request for production of those documents was stated to be made, 'Pursuant to the Freedom of Information Act 1982 and procedur[al] fairness.'
15. At a further directions hearing on 3 August 2023, the parties agreed to negotiate. However, the issues between them were not resolved.
16. A directions hearing was conducted on 6 October 2023. By consent, the Tribunal granted Ms Chen leave to withdraw her application for summary dismissal under s 75 of the VCAT Act, and granted the VLSC leave to withdraw this proceeding under s 74 of the VCAT Act. That left only the question of costs.
17. Ms Chen maintained her request for production of documents. It was agreed this would be determined on the papers, after receipt of submissions from both parties.
18. The Tribunal's decision on this application to produce documents was handed down on 22 December 2023.[19] The application was refused.
19. At [47]-[51], The Tribunal relevantly said:
    1. In my view, Ms Chen has not identified a legitimate forensic purpose in context of her costs application, for the production of the documents she seeks.
    2. Ms Chen has made serious allegations against counsel and employees of the VLSC, the regulator of lawyers in Victoria, in their conduct of the disciplinary case against her. She is under an obligation to articulate a proper basis for those allegations.
    3. Ms Chen cannot simply make assertions of improper conduct, without more, and then contend this is a basis for documents to be ordered to be produced in the course of conducting the argument about costs.
    4. However, that is what she has done. Her submissions simply comprise multiple generalised assertions of bad faith and improper conduct. They do not articulate any proper basis for her allegations.

1. At [61]-[64], the Tribunal said:
   1. The fact that Ms Chen's senior counsel only raised matters relating to the preparation of witness statements/affidavits in cross examination in a limited way and did not raise these allegations in his final submissions, does not tend to lend support Ms Chen's contention of improper conduct.
   2. In the civil case of Champagne View Pty Ltd v Shearwater Resort Management Pty Ltd ('Champagne View')[20] Gillard J said:

...in a proceeding such as the present where the plaintiff does not wish to proceed because of events which have occurred since the issue of the writ and in cases where parties compromise the issues but cannot agree on costs the courts have laid down rules to guide them in the normal exercise of the discretion. However, it must be emphasised that the rules are merely guidelines and that in the final determination the discretion must be exercised in accordance with the circumstances of the particular case.

The starting point in this area is the judgment of Hill J in Australian Securities Commission v Aust-Home Investments Limited [1993] FCA 585; (1993) 44 FCR 194. His Honour considered a number of authorities and summarised propositions relevant to the dispute in the present matter as follows -

(1) Where neither party desires to proceed with litigation the Court should be ready to facilitate the conclusion of the proceedings by making a cost order.

(2) It will rarely, if ever, be appropriate, where there has been no trial on the merits, for a Court determining how the costs of the proceeding should be borne to endeavour to determine for itself the case on the merits or, as it might be put, to determine the outcome of a hypothetical trial. This will particularly be the case where a trial on the merits would involve complex factual matters where credit could be an issue.

(3) In determining the question of costs it would be appropriate, however, for the Court to determine whether the applicant acted reasonably in commencing the proceedings and whether the respondent acted reasonably in defending them.

(4) In a particular case it might be appropriate for the Court in its discretion to consider the conduct of a respondent prior to the commencement of the proceedings where such conduct may have precipitated the litigation: cf Sunday Times Newspaper Co Ltd v McIntosh [1933] NSWStRp 37; (1933) 33 SR (NSW) 371.

1. This reflects the obvious undesirability of litigating contested issues (which were not resolved during the course of a proceeding) for no other purpose than the determination of a costs application.
2. In the circumstances of this case, there is no basis to depart from the principles set out in Champagne View. The time for challenging evidence is past. Ms Chen was represented by experienced senior counsel, who choose to interrogate the technical issues she now raises to a limited degree only, according to professional judgement. But that part of the case is finished. Witnesses will not now be recalled. The inquiry into factual matters, and into any technical matters such as internal VLSC processes for the investigation and disciplinary prosecution is over.

57 Finally, the decision referred to Ms Chen's expressed desire for her case to be the subject of 'thorough investigation'. The Tribunal said at [76]:

1. The VLSC is not unaccountable or immune from scrutiny. There are processes available for that. If improper conduct by a government regulatory agency is identified by the Tribunal in the course of conducting proceedings brought before it, or if there are reasonable grounds for suspecting improper conduct, it may refer to that in its decision, or alert a relevant office holder. But investigating the conduct of agencies is obviously not the role of VCAT. Its obligation is to determine matters brought before it in accordance with law.

58 A compulsory conference was conducted by a member who had no prior involvement with the matter on 19 March 2024, but this did not resolve the question of costs.

1. Accordingly, a timetable was set for submissions on costs by the parties. Submissions were filed by Ms Chen dated 22 April and 20 May 2024 (by way of Reply). These were prepared by Ms Chen herself. Once again, they focussed on the conduct of the original complainant, the VLSC's staff and its counsel, in relation to the conduct of the disciplinary proceeding against her. The VLSC filed submissions dated 6 May 2024.
2. There was a hearing on the question of costs on 12 November 2024. The VLSC was represented once again by Mr Bruno. Ms Chen was represented by Ms Cherry of counsel. She made oral submissions, and did not speak to Ms Chen's earlier written submissions. After the hearing, further brief written submissions were provided by both counsel, in relation to a discrete point which arose out of discussion during the hearing. The transcript of the two hearings before Justice Cavanough on 2 February and 2 March 2023 (quoted above) was also provided, after the hearing.

Legal framework for the two costs applications here

1. Section 74 of the VCAT Act relevantly provides:

74 Withdrawal of proceedings

(1) If the Tribunal gives leave, an applicant may withdraw an application or referral before it is determined by the Tribunal.

(2) If an applicant withdraws an application or referral -

...

(b) the Tribunal may make an order that the applicant pay all, or any part of, the costs of the other parties to the proceeding;

1. Clause 46D of Schedule 1 to the VCAT Act relevantly provides:

46D Costs in disciplinary matters

(1) [repealed]

(2) The Tribunal must make an order requiring an Australian legal practitioner whom it has found guilty of unsatisfactory professional conduct or professional misconduct to pay costs (including the costs of the Victorian Legal Services Commissioner and the complainant (if any)) unless the Tribunal is satisfied that exceptional circumstances exist.

(3) The Tribunal must not make an order for costs against the Victorian Legal Services Commissioner unless satisfied that special circumstances make it appropriate to do so.

(4) Section 109 does not apply to a proceeding under Division 3 of Part 5.4 of the Legal Profession Uniform Law (Victoria).

303 Costs

(1) The designated tribunal must make orders requiring a lawyer whom it has found guilty of unsatisfactory professional conduct or professional misconduct to pay costs (including costs of the designated local regulatory authority and the complainant), unless the designated tribunal is satisfied that exceptional circumstances exist.

(2) The designated tribunal may make orders requiring a lawyer whom it has not found guilty of unsatisfactory professional conduct or professional misconduct to pay costs (including costs of the designated local regulatory authority and the complainant), if satisfied that -

(a) the sole or principal reason why the proceedings were instituted in the designated tribunal was a failure of the lawyer to cooperate with the designated local regulatory authority; or

(b) there is some other reason warranting the making of an order in the particular circumstances.

(3) The designated tribunal may make orders requiring -

(a) a local regulatory authority; or

(b) a person, body or fund nominated in relevant jurisdictional legislation for the purposes of this section -

to pay costs, but may do so only if satisfied that the lawyer concerned is not guilty of unsatisfactory professional conduct or professional misconduct and the designated tribunal considers that special circumstances warrant the making of the orders.

(4) The designated tribunal may make orders requiring -

(a) a lawyer in respect of whom proceedings are pending before the designated tribunal; or

(b) a person, body or fund nominated in relevant jurisdictional legislation for the purposes of this section -

to pay costs on an interlocutory or interim basis.

(5) An order for costs -

(a) may be for a specified amount; or

(b) may be for an unspecified amount but must specify the basis on which the amount is to be determined.

(6) An order for costs may specify the terms on which costs must be paid.

(7) It is intended that jurisdictional legislation may provide a right of appeal against or a right of review of the designated tribunal's decision.

How these provisions are to be applied in this case

1. As a preliminary matter, I note there are two potential pathways for Ms Chen to obtain a costs order against the VLSC: First, s 303(3) of the Uniform Law and second, s 74(2)(b) of the VCAT Act, as conditioned by clause 46D(3) of Schedule 1 to the VCAT Act.
2. As is apparent from the text of s 303(3) set out above, the s 303(3) 'pathway' requires 'special circumstances', but also imposes the requirement (which the other pathway does not) that the Tribunal be satisfied that Ms Chen 'is not guilty of unsatisfactory professional conduct or professional misconduct'.
3. Ms Chen's written submissions of 22 April 2024 stated that the parties were in agreement that the 'legal framework for the cost application is s 74(2) of the VCAT Act'. The VLSC's written submissions of 6 May 2024 contended that the power to award costs under s 303(3) was not enlivened, given that no finding on liability for the disciplinary charges has been made (the charges having been withdrawn in the circumstances described above). Ms Chen's submissions in reply of 20 May 2024 appeared to accept this as they did not deal with the s 303(3) pathway.
4. At the hearing, however, Ms Cherry contended that the additional hurdle in s 303(3) was in fact cleared by Ms Chen. This was on the basis that s 303(3) does not specifically impose a requirement that the practitioner have been found not guilty. And also, that she is 'prima facie not guilty because of the absence of a finding against her'.
5. But, Ms Cherry said, this may well not matter much, and her argument then focussed on the s 74(2)(b) pathway.
6. In my view, the VLSC's contention on this issue is clearly correct, and in the absence of a finding on liability, the requirement in s 303(3) for Tribunal be satisfied that Ms Chen 'is not guilty of unsatisfactory professional conduct or professional misconduct' is clearly not satisfied in this case.
7. Therefore, determination of Ms Chen's application for costs will involve consideration of the s 74(2)(b) / cl 46D(3) pathway.
8. Hence, concerning Ms Chen's application for costs, the key question to be determined is whether the Tribunal is satisfied that special circumstances make it appropriate to award costs to Ms Chen.
9. Concerning the VLSC's application for costs, the question to be determined is whether the Tribunal should exercise its discretion under s 303(4)(a) to require Ms Chen to pay costs on an interlocutory basis, in relation to the three specific applications she pursued unsuccessfully in 2021, 2022 and 2023.
10. In my view, this provision creates a broad discretion in relation to costs of interlocutory applications. Unlike the discretion applicable in relation to Ms Chen's costs application, it is not conditioned by any of the provisions of cl 46D (except for the exclusion of s 109 of the VCAT Act - which is the Tribunal's general costs power). Similarly to the discretion under s 74(2)(b) (see below) this is to be exercised in accordance with s 97 of the VCAT Act, which states:

The Tribunal must act fairly and in accordance with the substantial merits of the case in all proceedings.

1. The considerations applicable to the exercise of these two discretions clearly overlap.

1. Ms Chen's written costs submissions of 22 April and 20 May 2024, like those made in her interlocutory applications described above, largely focused on her allegations about the conduct of the original complainant, the VLSC and its employees and counsel in bringing the disciplinary charges against her, and in its conduct of the case. Familiar allegations of the complaint against her being improperly made, false evidence, 'planted facts', bad faith, coaching witnesses, and the like were ventilated. Ms Chen again alleged that there was in fact no plea agreement reached on the third day of the hearing (despite the transcript indicating that her senior counsel, Mr Morrissey SC, indicated her agreement to the plea deal described by Mr Morris for the VLSC).[21] It was contended that these matters satisfied the requirement of 'special circumstances'.
2. After receiving the VLSC's written submissions on costs of 6 May 2024, Ms Chen put in a Reply submission of 20 May 2024. In relation to the criterion of 'special circumstances' in cl 46D(3), she said at [21]-[23]:
   1. Beach J in Denysenko v Dessau[22] stated that "special" when used in this connection must mean something unusual, exceptional or extraordinary.
   2. The circumstance that are alleged to be special in the present proceeding must be considered in the context of disciplinary proceedings brought under the Uniform Law to indicate the range of circumstances that can be properly described as special. In other words, an "unusual" circumstance.
   3. When taken paragraphs 1-92 of my submission on 22 April 2024 as whole, there is no doubt to establish that there are special circumstances. However, in the present case, it is not only special circumstances. The Applicant's conducts are clear in abuse of the Tribunal process, to pervert the course of justice and that course of justice has been perverted.
3. Allegations of this nature made by Ms Chen were found to be unsupported by evidence in the earlier interlocutory decisions handed down by the Tribunal. Further, it is not appropriate to consider to allegations challenging the legal validity of the VLSC's investigation and disciplinary prosecution in the course of a costs application - see the Tribunal's findings in its decision of 22 December 2023 concerning her Notice to Produce, set out above.
4. For these reasons, I do not accept that these arguments by Ms Chen advance her case on costs at all.
5. Ms Cherry's oral submissions contained some more nuanced references to the conduct of the VLSC.
6. Key points put by Ms Cherry in oral argument were as follows.
   • Three charges were withdrawn after three days of hearing, and subsequently the entire case was abandoned.
   • For Ms Chen, this process has been a traumatic eight-year ordeal.
   • Her reputation has been damaged as a result of the 26 February 2020 decision of SM Butcher finding her guilty of two of the allegations brought against her.
   • The summary dismissal application Ms Chen brought in 2021/22 should not be regarded as unmeritorious, given that ultimately, it transformed into the application for certiorari, which was upheld by Justice Cavanough.
   • In conducting the disciplinary proceeding, the VLSC had caused delay and expense by inadequate drafting of the charges, which subsequently required amendment. It was also submitted that the VLSC had led the Tribunal into error by referring to Ms Chen having multiple alternative states of mind, in Charge 7.
7. Concerning the VLSC's cross application for costs, it was submitted that where no application for costs was made at the time each of the three interlocutory applications were determined, the costs of these applications should be regarded as costs in the cause, such that the VLSC should pay Ms Chen's costs of these hearings, rather than the other way round.[23]
8. On the issue of 'special circumstances', the VLSC's written submissions of 6 May 2024 relevantly said at [24] to [27] and [32] to [34]:

1. There are no "special circumstances"[24] which would it make it appropriate for the Tribunal to order costs against the Commissioner having regard to:

(a) the nature and history of the proceeding; > > (b) the reasons the Tribunal's findings of 26 February 2020 were subject to a grant of certiorari; > > (c) the Commissioner's reasons for withdrawing the disciplinary proceeding, following the grant of certiorari; > > (d) the Respondent's conduct in bringing unmeritorious interlocutory applications and delaying the overall progress of the proceedings following the first Stage One hearing.

1. It was appropriate for the Commissioner to have brought the disciplinary proceedings against the Applicant, considering the protective regime under the Uniform Law and the Commissioner having formed the opinion that the Respondent's conduct may have amounted to professional misconduct for the purposes of section 300(1) of the Uniform Law. It is to be recalled that the Tribunal originally found the Respondent guilty of two counts of professional misconduct on 26 February 2020. Having done so, the Tribunal originally concluded there was a basis to the application brought by the Commissioner against the Respondent. There is no basis to the Respondent's assertions that the proceedings were brought without any basis or that the investigation against her was irregular or improper. 2. Although the Commissioner withdrew some charges during the first Stage One hearing following the parties announcing an agreed position as to liability (at the conclusion of day 3), reducing the scope of a proceeding does not ordinarily provide a basis to award costs against the Commissioner.[25] 3. Following the Tribunal's findings of professional misconduct on 26 February 2020, the Respondent made an application for leave to appeal against the findings pursuant to section 148 of the VCAT Act, which application was found to be incompetent and was dismissed by Justice Ginnane.

1. As such, the original Stage One findings made by the Tribunal were not set aside because of any conduct on the part of the Commissioner. Instead, they were set aside for the reasons identified [by Justice Cavanough - above].
2. When the matter returned to the Tribunal for rehearing, after considering the matter further following a directions hearing before the Tribunal on 9 May 2023, the Commissioner appropriately, and in compliance with her model litigant obligations, sought leave to withdraw her further amended application for order and identified her reasons for doing so in a letter of withdrawal dated 8 June 2023.The reasons identified:

[these are set out above and not repeated here]

1. At all times following the first Stage One hearing the Respondent has engaged in conduct which unnecessarily prolonged the proceedings. The Respondent made the unmeritorious interlocutory applications referred to above. Even following the Commissioner's withdrawal of the disciplinary application, the Respondent failed to act in a way so as to allow these proceedings to end quickly. Instead, the Respondent made a further unmeritorious application for documents.
2. In summary, the VLSC submitted that there is nothing about the circumstances of this case which is favourable to Ms Chen which amounts to special circumstances. Rather, this was an ordinary disciplinary proceeding, properly brought by the VLSC, properly conducted. Much of the adverse impact and delay suffered by Ms Chen was, in effect, self-inflicted. The legal errors identified by Justice Cavanough were not made as a result of misleading or incorrect submissions made by the VLSC.
3. In relation to the VLSC's own application for costs, its submission noted that in seeking leave to withdraw the disciplinary proceeding by letter dated 8 June 2023, it had indicated it would be agreeable to there being no order made as to costs, if Ms Chen were to agree to that. The VLSC stated it does not seek costs in respect of stage 1 of the hearing (up to February 2020).
4. The VLSC reserved its rights in the event that Ms Chen sought costs from it. As it was, Ms Chen did not agree to its proposal, and made an application for costs against the VLSC. The VLSC submitted that Ms Chen then made a further unmeritorious application for the production of documents, purportedly in relation to the issue of costs.
5. The VLSC relies on s 303(4)(a) of the Uniform Law, which provides that the Tribunal may make orders requiring a lawyer in respect of whom proceedings are pending before it to pay costs on an interlocutory or interim basis. It said that although the Tribunal has granted it leave to withdraw the disciplinary proceeding, the Tribunal is still required to determine the question of costs to finally dispose of all issues in the proceeding between the parties.
6. It submitted that in these circumstances the power to award the Commissioner costs pursuant to section 303(4)(a) of the Uniform Law remains available consistent with the principle enunciated by Justice Morris P in Jeffery v Corrections Victoria and The Herald and Weekly Times Limited [2004] VCAT 1211, at [38].
7. The submission went on (at [43]):
   1. The Commissioner has been put to significant expense by the Respondent's conduct in making each of these unmeritorious interlocutory applications. Each of the applications has repeated the same or similar unfounded allegations and they have lacked substance. None of the interlocutory applications should have been made. The Respondent was represented at the hearing of the 2021 application for documents but was otherwise unrepresented. Although that may be so, the Respondent as a legal practitioner was expected to apply forensic judgment when making her application. The Respondent was also obliged not to impugn the reputation of others without having a basis. The Respondent failed in both respects.
8. Finally, it submitted that each application Ms Chen has made has unnecessarily prolonged the proceedings. The VLSC has incurred the costs of defending each of them. This included the costs of changing counsel shortly following the return of the matter to the Tribunal following the decision of Justice Ginnane (given that Ms Chen had made serious allegations against its former counsel).

1. The effect of cl 46D(3) is that the default position is that a practitioner is not to be awarded their costs in a disciplinary proceeding. This is in the context where similarly, the default position is that a practitioner found guilty of unsatisfactory professional conduct or professional misconduct will be required to pay the VLSC's costs unless there are exceptional circumstances. So the provisions establish an asymmetrical costs regime.
2. The balance is tilted towards practitioners being treated more onerously, in terms of costs, than other civil litigants, including, for example, health practitioners under the Health Practitioner Regulation National Law (Victoria) Act 2009.[26] It is different to the position of criminal defendants in circumstances where charges brought against them are resolved other than by findings being made against them (where the principles in Latoudis v Casey[27] apply).
3. In Legal Services Commissioner v McNamara [2011] VCAT 1533 (at [14]), Deputy President Macnamara (as he then was) considered that 'exceptional circumstances' should be categorised as something more out of the ordinary than 'special circumstances'. That view was accepted in Kiatos and Low.
4. Like McNamara, Kiatos and Low were both decisions where the practitioner was ultimately found guilty of charges which were less serious than those originally brought. In all three cases, it was found that the fact that lesser findings than originally alleged were found proved, did not amount to 'exceptional circumstances' such as to displace the prima facie position under cl 46D(2) that costs should be awarded in favour of the regulator. In Kiatos and Low (but not in McNamara) as part of an integrated analysis, the practitioner also argued that there were special circumstances which justified a costs order in their favour, but in those cases that submission was rejected.
5. The Macquarie Dictionary relevantly defines the word 'special' as 'distinguished or different from what is ordinary or usual'.[28] However, dictionary definitions do not take the issue as to the meaning of 'special circumstances' very far, in my view. The question here is to be decided very largely by reference to the particular circumstances pertaining, and whether the Tribunal regards them as being sufficient to warrant a departure from the default position that there be no costs order.

1. In my view, it is clear that the additional cost and delay experienced by Ms Chen since 26 February 2020, has been overwhelmingly due to the way in which she has chosen to conduct her case.
2. The above narrative amply demonstrates this. Each of the applications Ms Chen brought could properly be described as misconceived. She has repeatedly made scandalous allegations against the VLSC, its staff and the original complainants' conduct, without any evidence having been provided to back these up.
3. Had she taken the conventional course of allowing the matter to proceed to determination on penalty, a reasonable expectation would have been that the Tribunal would have completed the 'stage 2' hearing by mid - late 2020 (bearing in mind the impact from the Covid-19 pandemic from March 2020). She would then have had the opportunity to appeal to the Supreme Court, and any such appeal would likely have been completed well and truly by the end of 2021.

1. I turn now to the submission on behalf of Ms Chen that the summary dismissal application she brought in 2021/22 should not be regarded as unmeritorious, given that ultimately, it was transformed into the application for certiorari, which was ordered by Justice Cavanough.
2. In my view, an analysis of the circumstances, and of the transcript of the hearing on 2 March 2023 before Justice Cavanough indicates that this submission draws a long bow. As indicated, in that proceeding, Ms Chen had embarked on a different and unproductive pathway, and her success was entirely due to the intervention by His Honour (and even then, it took a great deal of discussion before she accepted that outcome).
3. I reject the contention that the summary dismissal application should not be regarded as unmeritorious.

1. I do not accept that the impact on Ms Chen's reputation of this matter is a factor which weighs in her favour on the question of costs. During the costs argument, and in earlier interlocutory hearings, this consideration was referred to by Ms Chen. It is true that SM Butcher's decision of 26 February 2020 remains on the public record (on Austlii and Jade), despite having been overturned by the order of Justice Cavanough of 2 March 2023 (which order is not published on those public databases).
2. However, the record has been set straight by my decision on Ms Chen's application for an order for the production of documents of 22 December 2023[29] which is published on those public databases. Additionally, of course, this present decision will similarly be published on those databases. So the record has been set straight.

1. I am not satisfied that the VLSC caused extensive delay or expense during the hearing before SM Butcher, in relation to the drafting of the disciplinary charges, as submitted by Ms Cherry.
2. This argument was made in general terms, without reference to specific aspects of the evidence, or to the transcript. It was submitted that Charges 1 and 2 as originally drafted could never have been proved - they alleged the content of conversations between Ms Chen and her client in the evening, while he was still under cross examination, when there was no evidence of the content of those conversations. This led to the amendment of the charges to remove reference to the content of those conversations.
3. However, an alternative way of characterising the situation is that the VLSC did have a witness statement from the client which alleged that Ms Chen did discuss his evidence with him that evening, but that when he went into the witness box, he turned out not to be a very good witness for the prosecution.
4. The transcript of 18 July 2018 (the third day of the hearing) indicates that agreement was reached between the parties that day for Charge 1 to be limited to conferring with the client by phone (not in person) and the allegations of procuring a falsely sworn affidavit from her client (Charges 3-6) were agreed to be dropped. Also, Charge 7 would be specified as careless, rather than deliberate or reckless. The agreement was that Ms Chen would plead guilty to Charges 1 and 7 as amended, comprising professional misconduct, with a fine and costs also agreed.
5. Later, Ms Chen retreated from this agreement (and has since consistently claimed that it had not been entered into) but (apparently in light of the evidence which had been given) the VLSC proceeded on the basis of the amended charges in any event.
6. With regard to the contention that the VLSC led the Tribunal into error by alleging multiple alternative bases in Charge 7 (deliberately and/or recklessly and/or carelessly) it is apparent that these alternative formulations were discussed during the hearing (for example, the proposed plea deal whereby Charge 7 would be specified as careless) and in submissions, such that the error was that of the Tribunal, rather than it being led into error by the VLSC.[30]
7. Ms Cherry also listed a number of examples of 'indulgences' which she said the VLSC asked for between 2018 and 2021. However, in my view, none of these are of any real substance.

Additional submissions on the 'substantial merits of the case'

1. The VLSC's submissions referred to the decision of Fletcher v Owners Corporation PS640914E1 [2019] VCAT 2017, which stated:

Section 74(2)(b) does not establish an entitlement to costs on withdrawal, rather, the section confers a discretion on the Tribunal. Further, although the Tribunal has a discretion to award costs on withdrawal of an application, that discretion must be exercised fairly, having regard to the substantial merits of the case: see s 97 of the VCAT Act.

1. Both parties made brief additional written submissions after the hearing on this question of 'the substantial merits of the case'.
2. With reference to the three remaining charges (namely 1 and 2, being alternatives, and 7), Ms Cherry submitted that each of these was fundamentally flawed.
3. She submitted that:

...each of them (Charge 2 explicitly and Charge 1 implicitly) relied on an alleged breach of each element of rule 17.4 of the Professional Conduct & Practice Rules 2005 then in force, but each Charge materially mis-stated the relevant test. Rule 17.4 relevantly prohibited a practitioner from engaging in certain conduct unless the practitioner believed on reasonable grounds that special circumstances required it. Each of Charges 1 and 2 simply asserted that the Respondent "did not have special circumstances", with no regard for the possibility of a reasonable belief. In those circumstances the Commissioner's onus could not have been discharged.

1. In response the VLSC submitted:
   1. Charges 1 and 2 of the Further Amended Application for Order were not fundamentally flawed as contended by the Respondent in paragraph [3] of the Respondent's further submissions. Charge 1 is a common law charge - it does not rely on a breach of rule 17.4 of the Professional Conduct and Practice Rules 2005. That is the subject of Charge 2 (the alternative charge).
   2. Charge 2 gave the Respondent sufficient notice of the case put against her and referred specifically to an alleged breach of rule 17.4. The Respondent's complaint about Charge 2 is a question of form, rather than substance. Even though Charge 2 did not specify all of the wording in rule 17.4, the Commissioner accepts that the Commissioner would nevertheless have been required to prove Charge 2 (which alleged a breach of rule 17.4) by reference to rule 17.4, including the Respondent's state of mind.
2. I agree that Charges 1 and 2 are not fundamentally flawed in the manner alleged by Ms Chen, for the reasons stated in those two paragraphs of the VLSC's submissions. Charge 1 does not on its face require proof of a breach of rule 17.4, although it appears both parties tended to use language which invoked the elements of that rule when discussing that charge. Nevertheless, it makes an allegation of misconduct at common law, in distinction to Charge 2.
3. Under Charge 2 (which was an alternative to Charge 1) it is clear the elements of rule 17.4 would have to be proved. But this still allows for the possibility that the Tribunal might be satisfied that Ms Chen had the specified 'reasonable belief'.
4. With regard to Charge 7, Ms Cherry submitted first that it was dependent on Charges 1 and 2. The argument was that if Charges 1 and 2 were fundamentally flawed, then allegation 7, which alleges provision of false or misleading information in response to a statutory inquiry by the VLSC about an alleged conversation with her client whilst under cross examination, must likewise fail.
5. However, the VLSC's submission in response fully answers this in my view:

...Charge 7 does not inherently rely on Charge 1 (or Charge 2 in the alternative) being found proven in the manner contended by the Respondent. Charge 7 could have been established even if the Tribunal did not reach the state of satisfaction as to each of the elements required to establish Charge 1 (or Charge 2 in the alternative). For example, if the Tribunal were to have found that the Respondent did have a conversation with her client on 31 March 2015 whilst he was still under cross-examination, but the Tribunal was not satisfied for some reason that Charge 1 or Charge 2 was established, the conduct alleged in Charge 7 was still capable of being found proven. That is because the conduct the subject of Charge 7 is not tied to each of the elements required to prove Charges 1 or 2 (as an example, see the particulars referred to in paragraphs 25 and 26 of the Further Amended Application for Order).

1. Secondly, Ms Cherry made various criticisms of the form of the redrafted Further Amended Application for Order, which she submitted meant that it was not capable of being proved. She invoked the following comment made by Justice Cavanough in the hearing on 2 February 2023:

If the matter were to go on, on which charges - there might need to be some clarification as to exactly how Charge 7 was going to be advanced...[31]

1. In response, the VLSC submitted that these really amounted to complaints about the particularisation of Charge 7 and the evidence to support it. The VLSC said any issues concerning particularisation could have been addressed by the provision of further particulars. And that issues concerning contested evidentiary matters are not matters to be addressed by the Tribunal for the purposes of the costs application.
2. The VLSC response went on to note that Ms Chen did not make an application to strike out the charges during stage 1 of the proceedings on the basis of the matters now raised. Nor did she make a request for particulars. It said that the above comment by Justice Cavanough serves to emphasise that questions concerning the form of the charges were matters to be considered as part of any rehearing. But of course, there was no rehearing, as the charges were withdrawn by the VLSC.
3. Once again, in my view, that submission is correctly made. The charges in the Further Amended Application for Order are not on their face fundamentally flawed in the manner contended. Accordingly, the argument on behalf of Ms Chen that this is a matter which runs significantly in her favour when considering the 'substantial merits' of the case, is rejected.

1. The parties agreed that there are no prior decisions in the legal professional disciplinary area which are directly on point, because the circumstances here are so rare.
2. Ms Cherry did however refer to the NSW decision of Council of the Law Society of NSW v Batalha [2020] NSWCATOD 158 (Batalha). Costs were dealt with briefly at the conclusion of that decision.
3. What occurred in that case was that some of the allegations brought were admitted by the practitioner. Other allegations that certain transfers of funds amounted to misappropriation of trust moneys were contested. Prior to the Tribunal's decision being handed down, however, the Law Society became aware of a decision delivered by the NSW Court of Appeal a week prior to the hearing, which was directly on point and against the Law Society's misappropriation case. Accordingly, it withdrew those allegations.
4. The Law Society sought its costs, including in relation to the withdrawn misappropriation allegations. The Tribunal held that that withdrawal constituted exceptional circumstances which justified the displacement of the usual rule that costs are awarded to the regulator. It held that the Law Society should only be entitled to costs in respect of those charges which had been established. And the practitioner was entitled to his costs in relation to the allegations withdrawn. In the result, the Tribunal ordered a complete set off, such that no costs orders were made.
5. It appears that relevantly similar provisions to cl 46D(3) governed the costs framework applied in that case.
6. The way in which the decision is expressed appears to indicate that the Tribunal was applying the test relevant to an application by the Law Society for its costs. That is, the test of whether there were 'exceptional circumstances' which justified displacement of the usual rule that a costs order be made in its favour.
7. That is different to the position here, where it is the practitioner who seeks costs, on the basis of 'special circumstances' applying. In Batalha, in its brief treatment of the matter, the Tribunal appeared to conclude that as a result of there being 'exceptional circumstances' justifying its refusal to award the Law Society its costs relating to the withdrawn charges, the practitioner's application for costs should also succeed in relation to those withdrawn charges. That is, it did not explicitly apply the applicable test of special circumstances to the consideration of the practitioner's request for costs.
8. The decision of Batalha is not of course binding. Nor, in the circumstances, is it persuasive, in light of the above considerations.

1. The impact of the above analysis is that the considerations raised by the parties in argument are largely adverse to Ms Chen. The sole factor of significance in her favour in the consideration of costs, is the fact that the allegations against her have ultimately been withdrawn.
2. But as indicated, that is as a result of a pragmatic decision by the regulator, influenced by the logistical aspects of conducting a re-hearing of the case against Ms Chen. It was because of matters such as the likely impact of the passage of time on the witnesses' memories and the complexity of re-hearing the case in circumstances where evidence is already on the record, in a context where the case would be likely to be fully contested.
3. It cannot be denied that Ms Chen has contributed to this situation by the way in which she has conducted her case.
4. The quashing of the Tribunal's decision of 26 February 2020 did not result from the disciplinary prosecution being improperly brought, or continued. Nor has the VLSC been shown to have conducted it in any manner which is contrary to their model litigant obligations, as regulator.
5. Rather, the errors in the Tribunal's decision of 26 February 2020 were those of the Tribunal itself, namely that the statement of the Tribunal's reasons for finding guilt on Charges 1 and 7 was inadequate, and the finding on Charge 7 was ambiguous.
6. It is true that the charges have been reduced in scope, however this is due to the way in which the evidence fell, and the withdrawal of Charges 3-6 and the narrowing of Charges 1, 2 and 7 is an appropriate step for the regulator to take. The remaining charges continued to raise serious breaches of ethical obligations.
7. Bearing in mind all the above matters, I find that there are not the special circumstances here which would justify overriding the prima facie position that the Tribunal must not make an order for costs against the VLSC.
8. On the other hand, the fact remains that at the end of this disciplinary process, there are no findings on foot against Ms Chen. That is obviously a very significant outcome from her point of view. She is, I understand, a sole practitioner, and the time, expense and effort she was required to expend, even if she had conducted the matter with reasonable efficiency, would nevertheless have been substantial.
9. In a situation where no disciplinary finding has ultimately been made against Ms Chen, and despite the circumstances in which this came about, it is in my view incongruous that she be required to pay costs of the VLSC.
10. While there is nothing in events which have occurred, or about the conduct of either party which would give rise to the 'special circumstances' required to overturn the default position that costs must not be ordered against the VLSC, in the circumstances, the issue of Ms Chen being required to pay costs is another matter.
11. In exercising my discretion under s 303(4)(a) at this stage of the case (and assuming that the fact that no cost applications have been made by the VLSC until this late point in the proceeding does not present any impediment to them), in my view, it is appropriate to take into account broader considerations than just the individual merits of each of the three interlocutory applications. Clearly, they were unmeritorious, and did not contribute in a legal sense to the positive outcome Ms Chen ultimately achieved.
12. But the fact that no findings have ultimately been made against Ms Chen is significant. Viewing the proceeding as a whole, for her to be required to pay costs to the VLSC would run contrary to broad notions of fairness which are to be invoked in exercising the wide discretion under s 303(4)(a), in accordance with the Tribunal's duty to act fairly in accordance with the substantial merits of the case.
13. Balancing these considerations, in my view, the appropriate conclusion is that the VLSC's application for costs be refused also.

1. The applications by both parties for costs are refused.

[1] The Uniform Law is given effect in Victoria by the Legal Profession Uniform Law Application Act 2014.

[2] Section 74(2)(b) applies after an application has been withdrawn Transport Accident Commission v Coyle 3 VR589; [2001] VSCA 236, per Batt JA. Ms Chen had foreshadowed her costs application in June 2023, after being advised of the VLSC's intention to withdraw.

[3] Victorian Legal Services Commissioner v Ms Xiao Yi Chen AKA Anna Chen v [2020] VCAT 238, (Senior Member Butcher).

[4] Certiorari is a longstanding non-statutory administrative law remedy, whereby a superior court quashes a decision which demonstrated an 'error of law on the face of the record'.

[5] The delay between days 3 and 4 occurred in a context where the Tribunal was advised a plea agreement had been reached on day 3, 18 July 2018, on narrowed allegations reached between the parties, including as to penalty, but which Ms Chen subsequently advised she did not agree to. Nevertheless, the VLSC determined to proceed on the narrowed down Charges 1, 2 and 7 only, with Charges 3, 4, 5 and 6 being withdrawn. The VLSC filed a further amended application for order (dated 31 January 2019) on 3 July 2019. Charge 2 fell away as it was an alternative to Charge 1.

[6] During the hearing in 2018, proofing materials for a number of the VLSC witnesses, were provided to Ms Chen's counsel, Mr Morrissey SC, at the respondent's request. Most of these witnesses were not called, or their evidence was not relied on. The VLSC's investigator (who subsequently became the VLSC's instructing solicitor in the case) was cross examined by Mr Morrissey SC in relation to the process of preparation of witness statements, including that the witness statements of the three lawyers were drafted in very similar language, representing the investigator's terms, rather than the witnesses'. But that did not extend to specifically putting allegations of tampering and falsification, as would be required (Transcript, p 76-100). Also, there is an indication in the transcript that these related to charges which were not proceeded with (Transcript at 192-3). The final submissions by Mr Morrissey dealt with the reliability of the evidence of the husband and Ms Chen respectively, rather than suggesting that any issues concerning the preparation of witness statements or statutory declarations relating to any other witnesses should be taken into account by the Tribunal before making a determination on the question of whether Charges 1 and 7 were proved.

[7] Yi Chen AKA Anna Chen v Victorian Legal Services Commissioner [2020] VSC 842.

[8] The only order that been made on 26 February 2020 was one requiring the parties to notify the Tribunal of their available dates the purpose of hearing submissions on disposition.

[9] Victorian Legal Services Commissioner v Chen [2022] VCAT 776.

[10] As noted, the VLSC's investigator was cross-examined by Mr Morrissey SC about the similar wording being used in the statutory declarations drafted for the three lawyers. But that did not extend to specifically putting allegations of tampering and falsification, as would be required (Transcript, p 76-100).

[11] Also, it is noted, the evidence of those witnesses was not tendered or relied upon, and they were not called, apparently as a result of the VLSC determining not to proceed with Charges 3,4,5, and 6 (see Transcript at 192-3).

[18] Transcript 3. It is noted that throughout the course of this proceeding, Ms Chen has briefed 10 different counsel.

[19] Victorian Legal Services Commissioner v Chen [2023] VCAT 1437.

[20] [2000] VSC 214, at [43]-[44].

[22] [1996] VicRp 65; [1996] 2 VR 221.

[23] Referring to Talarico v Timetrex Pty Ltd (Costs) (Building and Property) [2022] VVCAT 1403, per Member Sweeney.

[24] The submission footnoted cases concerning the differences in meaning between "special circumstances" and "exceptional circumstances", namely, Legal Services Commissioner v McNamara [2011] VCAT 1533, (McNamara) at [14] (DP Macnamara) and Victorian Legal Services Commissioner v Low [2017] VCAT 242 (Low) at [24] (Member Josephs). In a different legislative context, see Tomasevic v Secretary, Department of Social Services [2014] AATA 830, [37] to [44] and [63] to [73] (DP Forgie).

[25] Legal Services Commissioner v Kiatos (Legal Practice) [2013] VCAT 1524, (Kiatos) at [10(c)].

[26] See Psychology Board of Australia v Asher (Costs) [2020] VCAT 1281.

[27] [1990] HCA 59; (1990) 170 CLR 534.

[28] Macquarie Dictionary (online at 15 May 2025) 'special' (adj, def 6).

[29] Victorian Legal Services Commissioner v Chen [2023] VCAT 1437 at [12].

[30] See for example, the reference at [55] of the VLSC's closing submissions of 11 July 2019 to the distinction between deliberate and reckless conduct, summarised at Victorian Legal Services Commissioner v Gullquist [2017] VCAT 6 at [101]- [109]. This was also referred to in Mr Morrissey's submissions of 22 July 2019 at [76].