Wright v Nursing and Midwifery Board of Australia (Review and Regulation) (Costs) [2024] VCAT 692

1. Under s 201 of the Health Practitioner Regulation National Law (Victoria) ('National Law'), the Tribunal orders the respondent to pay the applicant's costs of the proceeding, including counsel's fees, in the sum of $46,692.24 (the fixed amount).
2. Payment is to be made within 28 days of the date of this order.

1. This is our decision on Mr Steven Wright's application for an order that the Nursing and Midwifery Board of Australia ('Board') pay his costs of this proceeding.
2. Mr Wright is a senior psychiatric nurse. On 4 December 2020, after receiving a notification from Monash Health, the Board made a decision to take immediate action against Mr Wright to suspend his registration. The Board made its decision under s 156 of the Health Practitioner Regulation National Law (Victoria) ('National Law').

1. On 9 December 2020, Mr Wright applied to VCAT to set aside the Board's immediate action decision.
2. We heard Mr Wright's application on 24 January 2023. We made orders at the hearing, setting aside the Board's immediate action decision and substituting for it a decision that no action be taken.
3. We gave oral and unpublished reasons for our decision, of which there is a transcript. In short, we considered that when the whole of the evidence was fairly considered, there was no objective basis for a reasonable belief as to serious risk warranting immediate action, nor was suspension warranted or necessary.
4. This was because, in taking immediate action, the Board had relied (unreasonably in our view) on a handful of text messages, amongst thousands, between Mr Wright and another nurse five years earlier, in the course of a consensual relationship between them The relationship started after she had completed a placement at Monash Health as a student nurse, during which Mr Wright was her preceptor ( a supervisory role). There is no prohibition in the relevant Code of Conduct of relationships between nurses and former students, in contrast to the position in respect of former patients.
5. The handful of messages relied on suggested that Mr Wright may have behaved inappropriately by what he had said to her during the placement. When the messages as a whole were read however, there were other messages from the former student that directly contradicted what she wrote in the messages relied on by the Board. They included 'complaints' that Mr Wright had always behaved appropriately during the placement, despite the interest she showed in him. Other messages, which were from Mr Wright and relied on as admissions by him of inappropriate conduct, did not support that view of them when read in the context of preceding or following messages.
6. We considered that there were some matters of concern in the text messages the Board had received from Monash Health,[1] that might have warranted further investigation, including reference to a photo of a subsequent student Mr Wright had taken at the request of the former student. In the context of immediate action powers, however, we considered there was no reasonable basis for a belief that Mr Wright, as at 2020, currently posed a serious risk justifying immediate action. Nor was suspension of his registration warranted or necessary in the circumstances. We also expressed concern at what appeared to be a 'moving of the boundary line' for immediate action.

1. Mr Wright applied for costs and damages against the Board. After discussion at a directions hearing in July 2023, about the scope of VCAT's jurisdiction, Mr Wright confined his claim at VCAT to an application for his legal costs, including counsel's fees, in the sum of $62,210.75.
2. He provided in support eight tax invoices of the law firm that represented him in this proceeding, up to and including the hearing.[2] The invoices are for work done and expenses between January 2021 and February 2023. The tax invoices itemise the work done with the date, a description, the practitioner, their rate, the units, and the amount.
3. The parties filed submissions in September 2023, and VCAT listed this costs hearing. Both parties asked us to determine the costs under s 201 of the National Law, rather than s 109 of the VCAT Act (or both). We agreed to do so.
4. Section 201 is the costs provision in the National Law relating to appeals by a practitioner under s 199 of the National Law, including this proceeding.[3] It provides:

The responsible tribunal may make any order about costs it considers appropriate for the proceedings.

1. Section 201 is in identical terms to s 195 of the National Law, the costs provision relating to proceedings brought to VCAT by a National Board under s 193 of the National Law. We say more later about the cases that have considered sections 195 and 201.
2. The dispute before us is about the quantum of the costs to be awarded to Mr Wright. In its written submissions, the Board accepted that it was open to the Tribunal to make an order to award costs to Mr Wright under the power given by s 201 of the National Law,[4] and that the Board would submit to the Tribunal making an order to do so.[5]
3. The Board said that by doing so however, it should not be taken to be admitting that it has not acted in good faith or that its defence of its immediate action decision lacked a reasonable basis.
4. The Board submitted that if the Tribunal made an order for costs, it should make an order for them to be fixed at $30,000.00, payable in 28 days. I return later to the basis of this contention, and Mr Wright's response.

'Any order considered appropriate': some principles

1. Applications for costs in cases at VCAT under the National Law, by either party, were rare until about four years' ago. There have now been several VCAT decisions in referral proceedings which considered s 195;[6] and one decision in a review proceeding, which considered s 201: Dr Kolta v Psychology Board of Australia (Costs) [2023] VCAT 108 ('Kolta'), in which Judge Jenkins presided.
2. The question of whether s 109 of the VCAT Act has a role to play has been considered in those decisions, with different views expressed, including that:
   • Section 109 of the VCAT Act and the National Law costs are not mutually exclusive;[7]
   • Some of the considerations in s 109 of the VCAT Act may be relevant in a given case;[8]
   • Section 109 of the VCAT Act, although giving a broad discretion, contains some specific constraints on the exercise of the discretion,[9] and to that extent is inconsistent with the National Law costs provisions,[10] which will prevail.[11]
3. There is now, however, a discernible consensus that decisions about costs in health practitioner cases will be made under the National Law provisions and we take that approach.
4. Contrary to a submission made by the Board, the discretion in the National Law provisions does not equate to a reasonable expectation (of parties to court proceedings) that costs will follow the event.[12] The discretion to make any order considered appropriate will include no order as to costs.
5. On its face, the discretion under the National Law is broad and unfettered, but is not unconstrained:

'Appropriate' means 'proper in the circumstances', which of itself operates as a constraint, and also requires consideration of the particular circumstances of the proceeding. Appropriate 'for the proceedings' also suggests that the particular circumstances of the proceeding will be considered.[13] And the guiding principles of the National Law, binding on a responsible tribunal, would also require any order to be fair.[14]

1. The Tribunal has an obligation to properly exercise the discretion given to it, including to be mindful that the purpose of a costs award is to indemnify or compensate the party in whose favour costs are awarded, and is not to punish the party against whom the award is made.[15]
2. Costs are to be considered on a case-by-case basis. They may be awarded, and expressed to be on an 'indemnity basis', as in Kolta, where amongst other costs orders,[16] the Tribunal awarded the applicant her costs of the costs application on an indemnity basis to be taxed in default of agreement.
3. We agreed with the general proposition, put by counsel for the Board[17] that VCAT does not ordinarily award costs on an indemnity basis, and that something more is usually required that takes the case out of the ordinary. But VCAT can and has awarded costs on an indemnity basis, as the list of cases where it has done so shows,[18] and it can and has been done so under the National Law.

1. The Board's written submissions advocated for a lump sum order, instead of the usual method of quantifying interpartes costs which is by taxation in default of agreement.
2. The Board submitted[19] that:
   • It accepts that it can be sensible, efficient, and cost-effective for costs to be quantified as a lump sum;
   • the primary purpose of a lump sum costs order is 'to avoid the expense, delay and aggravation involved in protracted litigation arising out of taxation';[20] and
   • it recognises that Mr Wright is self-represented in these costs proceedings. If the Tribunal fixes costs, it will remove the risk of a potentially lengthy and expensive taxation in the Costs Court.
3. Mr Wright also requested we fix the costs.
4. We agreed to do so.
5. It is sensible and cost-effective, and facilitates an efficient end to what has been four and a half years of litigation, for two years of which Mr Wright was unable to work in his profession.
6. It is open to us to do so under s 201 ('any order about costs it considers appropriate for the proceedings') and is an appropriate form of order in the circumstances.[21]
7. On the materials provided, including the bills provided, we are satisfied that that a lump sum order can be made that is fair as between the parties, and reasonable.
8. We agreed with the Board's written submission that we could adopt a 'broad brush approach' including a 'fairly straightforward' application of a percentage (with some specific items considered).
9. We consider that such a broad-brush approach is open under the notably broad discretion in s 201 of the National Law, particularly where, as here, the parties agree to the application of a percentage. It is consistent with the parties request that we fix the costs to save the expense and delay of a taxation, and not undertake a de facto taxation or assessment requiring the detailed application of the relevant scale to the work done.
10. The Board submitted 50% of Mr Wright's actual costs was appropriate. Mr Wright submitted that 100% was appropriate.
11. We mention here that, at the hearing, counsel for the Board made a new submission that we fix the costs only if we awarded no more than the sum the Board submitted was appropriate, i.e. $30,000.00; and we should otherwise make an order that they be taxed by the Costs Court in default of agreement.
12. We declined that suggestion for these reasons:
    • the parties filed their written submissions nine months ago;
    • this hearing was listed six months ago;
    • the parties had ample opportunity to agree the costs to be awarded; and
    • having failed to reach agreement asked that the Tribunal decide the matter and fix the costs to avoid the cost and delay of taxation.

1. We agreed with the submission of the Board that there were entries on the tax invoices that were likely to relate to (or clearly related to) work done in response to the substantive investigation into Mr Wright's professional conduct, that is, separately from the immediate action decisions and the review proceedings.
2. The Board started its investigation soon after the immediate action decision was made, and it continued, independently of the immediate action proceeding, until the Board referred allegations to VCAT in September 2023.
3. We acknowledge Mr Wright's contention and perspective that the investigation and the immediate action proceeding were inextricably linked, and that 'one informed the other'. Further the tax invoices are all headed 'Steve Wright v Nursing and Midwifery Board of Australia', and cover the period of the immediate action proceeding until its conclusion at the end of January 2023.
4. But in awarding costs of this proceeding, it is appropriate to separate out from any award, costs that do not directly relate to this proceeding.
5. The Board identified and set out items in the tax invoices totalling $5,794.00. We agree that the actual costs should be reduced by that sum.
6. The balance of the costs, including counsel's fees is $56,416.75.

1. Included in Mr Wright's total costs were counsel's fees totalling $7,794.24 including GST.
2. The nature and complexity of the proceeding, and its importance to Mr Wright, warranted both legal representation and counsel's involvement, particularly at the hearing.
3. We considered that counsel's fees were warranted and reasonable and should be awarded in full.
4. The balance, representing solicitors' time charges is $48,622.51.

1. The Board submitted that the solicitors' costs were otherwise excessive and disproportionate having regard to the nature and conduct of the review proceeding, and pointed to its own professional fees (excluding disbursements) of $26,000, including GST.
2. The professional costs (excluding disbursements) to Mr Wright, in contrast, were approximately $54,000, and after the items discussed above are removed, were just over $48,000.
3. Of itself, the comparison does not indicate that those costs were excessive. Firms may have different charging arrangements with their client, and different efficiencies.
4. This was a complex case. The complexity included the need to read some thousands of text messages to evaluate the basis of the Board's belief as to risk. Although the Board had relied on a handful of those messages, the importance of reading all of them was underlined by our view that there were other messages that contradicted or did not support the conclusions drawn by the Board. The Board had been unable to find a comparable case.
5. We did not think the reduction proposed by the Board was appropriate.
6. There was however, work done by senior lawyers at rates of over $600 an hour, that could probably have been done by more junior lawyers. This is consistent with the information that a more junior lawyer who had done much of the work on the file, at a significantly lower rate, left the firm, and the firm did not have a lawyer at the same level of experience to carry on all the tasks. There were also a number of charges for consultation between those senior lawyers.
7. As Mr Wright said, he had to pay for the work done by the senior lawyers regardless, but we nevertheless consider that when deciding what costs should be paid by the Board in this case, some reduction of the solicitor's costs is appropriate. In other words, while we agreed that costs should be awarded to Mr Wright, we are not awarding costs on an 'indemnity' basis.
8. Taking a broad-brush approach, we consider that a 20% reduction is fair and appropriate, reducing the solicitor's costs to $38,898.00.
9. With counsel's fees, the total costs to be paid by the Board to Mr Wright is $46,692.24.
10. We will so order.

[1] The messages had not been provided by the former student nurse, who had not made any complaint about Mr Wright's conduct. Nor had any other student in the years before or since. Printed copies were reportedly found by Monash Health in a personal locker. Mr Wright says they were unlawfully obtained.

[2] Mr Wright represented himself in the costs application part of the proceeding.

[3] Section 199 sets out Board and panel decisions that a person may appeal to a 'responsible tribunal', in this case VCAT.

[6] Nursing and Midwifery Board of Australia v Kumar (Costs) [2020] VCAT 1038 (Kumar); Psychology Board of Australia v Asher (Costs) (Corrected) [2020] VCAT 1281 (Asher); Nursing and Midwifery Board of Australia v Alvarez [2022] VCAT 444 (Alvarez); and Psychology Board of Australia v Wilkinson (Costs) [2022] VCAT 597 (Wilkinson).

[7] Kumar, where both were considered, with the same outcome. In Kolta, at [13] the Tribunal did not consider s 109 and s 201 to be mutually exclusive, but accepted that s 201 prevailed.

[8] Asher [27]; Wilkinson at [38].

[9] Including the requirement to make the decision by reference to specified criteria in s 109(3), noting that they include 'any other matter the Tribunal considers relevant'.

[10] Section 159 of the VCAT Act provides that if a provision of the VCAT Act is inconsistent with an enabling enactment, the enabling enactment prevails to the extent of the inconsistency.

[12] A submission to that effect made by the Board was rejected in Kumar at [34]-[48]; Asher [37]-[43]; Wilkinson at [40]. In Alvarez at [127] the Tribunal 'was also inclined to reject that submission' but did not need to decide the matter.

[14] Kumar at [24]: quoted with approval in Kolta, at [15] also referring to ss 4 and 3(3)(a) of the National Law as in force at the time; and in Wilkinson at [27].

[15] Asher at [34] referring to well-established principles.

[16] Including fixing the amount of particular disbursements.

[17] Referring to Pizer's Annotated VCAT Act, 7th edition (Pizer) pp 727-731.

[18] In the commentary at ibid pp 730-731. We note that in doing so in those cases, the Tribunal was making a decision under s 109 of the VCAT Act.

[20] Referring to Beach Petroleum NL and Claremont Petroleum NL v Johnson and Ors [1995] FCA 1250 at [6] per von Doussa J applying Leary v Leary [1987] All ER 261; see also Harrison v Schipp [2002] NSWCA 213 at [21] per Giles JA.

[21] We are making our decision under s 201 of the Nation Law, but note it is also open to the Tribunal under s 111(a) of the VCAT Act to fix the costs.