Pennisi v Legal Services Commissioner
[2023] QCA 234
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- Pennisi v Legal Services Commissioner[2023] QCA 234
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Pennisi v Legal Services Commissioner[2023] QCA 234
Pennisi v Legal Services Commissioner[2023] QCA 234
SUPREME COURT OF QUEENSLAND
CITATION: | Pennisi v Legal Services Commissioner [2023] QCA 234 |
PARTIES: | VINCENT PENNISI (appellant) v LEGAL SERVICES COMMISSIONER (respondent) |
FILE NO/S: | Appeal No 5934 of 2023 QCAT No 4 of 2021 |
DIVISION: | Court of Appeal |
PROCEEDING: | General Civil Appeal |
ORIGINATING COURT: | Queensland Civil and Administrative Tribunal – [2023] QCAT 118 (Judicial Member Lyons KC) |
DELIVERED ON: | 24 November 2023 |
DELIVERED AT: | Brisbane |
HEARING DATE: | 13 September 2023 |
JUDGES: | Bowskill CJ and Dalton JA and Kelly J |
ORDERS: | The Court orders that:
Further to order 2 above, the Court proposes to substitute orders that:
In relation to this proposed order, the parties are at liberty to provide submissions, within seven days, if they wish to argue for a different form of order. If no submissions are received, orders in those terms will be made. |
CATCHWORDS: | PROFESSIONS AND TRADES – LAWYERS – COMPLAINTS AND DISCIPLINE – DISCIPLINARY PROCEEDINGS – QUEENSLAND – ORDERS – where the appellant was charged with two separate charges by the Legal Services Commissioner, which alleged he was guilty of professional misconduct and/or unsatisfactory professional conduct – where the appellant successfully contested charge 1, but agreed that his conduct the subject of charge 2 amounted to unsatisfactory professional conduct – where the appellant was publicly reprimanded and ordered to pay a pecuniary penalty in respect of charge 2, and was also ordered to pay the Commissioner’s costs of the application on the standard basis – where the appellant contended that the tribunal erred in awarding the Commissioner her costs in respect of charge 1, firstly on the basis that the tribunal misconstrued “exceptional circumstances” in s 462(1) of the Legal Profession Act 2007, or alternatively on the basis that the tribunal erred in failing to treat the two “charges” separately – whether the tribunal erred in making the costs order Acts Interpretation Act 1954 (Qld), s 32C Legal Profession Act 2004 (Qld), s 286(1) Legal Profession Act 2007 (Qld), s 65B, s 416, s 428, s 429, s 430, s 431, s 432, s 434, s 435, s 436, s 437, s 438, s 447, s 451, s 452, s 453, s 454, s 455, s 456, s 462 Attorney-General (Qld) v Francis (2008) 250 ALR 555; [2008] QCA 243, cited BHP Coal Pty Ltd v O & K Orenstein & Koppel AG (No 2) [2009] QSC 64, cited House v The King (1936) 55 CLR 499; [1936] HCA 40, cited Legal Services Commissioner v Baker (No 2) [2006] 2 Qd R 249; [2006] QCA 145, considered Legal Services Commissioner v Bone [2014] QCA 179, considered Legal Services Commissioner v Doyle [2021] QCAT 347, considered Legal Services Commissioner v McQuaid (2019) 1 QR 499; [2019] QCA 136, considered Legal Services Commissioner v O'Connor (No 2) [2006] LPT 002, considered Legal Services Commissioner v Scott (No 2) [2009] LPT 9, cited Oshlack v Richmond River Council (1998) 193 CLR 72; [1998] HCA 11, cited Speets Investment Pty Ltd v Bencol Pty Ltd (No 2) [2021] QCA 39, cited Walsh v Law Society (NSW) (1999) 198 CLR 73; [1999] HCA 33, cited |
COUNSEL: | A G Psaltis for the appellant D de Jersey KC for the respondent |
SOLICITORS: | Bartley Cohen for the appellant Legal Services Commission for the respondent |
- [1]BOWSKILL CJ: By an application made under s 452 of the Legal Profession Act 2007 (Qld), the Legal Services Commissioner alleged that, on the basis of two separate charges, the appellant was guilty of professional misconduct and/or unsatisfactory professional conduct and sought disciplinary orders under s 456 of the Act. The tribunal found the Commissioner had failed to establish the conduct of the appellant the subject of charge 1 fell short of the standard to be expected of a solicitor and dismissed that charge. The appellant accepted that his conduct the subject of charge 2 should be regarded as unsatisfactory professional conduct and it was dealt with on that basis, by a public reprimand and order for payment of a pecuniary penalty of $5,000. The tribunal also ordered that the appellant pay the Commissioner’s costs of the application, to be assessed on the standard basis.[1]
- [2]The costs order was made under s 462 of the Act, which provides as follows:
“462 Costs
- A disciplinary body must make an order requiring a person whom it has found to have engaged in prescribed conduct to pay costs, including costs of the commissioner and the complainant, unless the disciplinary body is satisfied exceptional circumstances exist.
- A disciplinary body may make an order requiring a person whom it has found not to have engaged in prescribed conduct to pay costs, including costs of the commissioner and the complainant, if the disciplinary body is satisfied that–
- the sole or principal reason why the proceeding was started in the disciplinary body was the person’s failure to cooperate with the commissioner or a relevant regulatory authority; or
- there is some other reason warranting the making of an order in the particular circumstances.
- Without limiting subsection (2), a disciplinary body that makes an order under section 460 may make a further order requiring an Australian legal practitioner, in relation to whom the order under section 460 relates, to pay costs in relation to the order.
- A disciplinary body may make an order requiring the commissioner to pay costs, but may do so only if it is satisfied that–
- the Australian legal practitioner or law practice employee has not engaged in prescribed conduct; and
- the body considers that special circumstances warrant the making of the order.
- An order for costs—
- may be for a stated amount; or
- may be for an unstated amount but must state the basis on which the amount must be decided.
- An order for costs may state the terms on which costs must be paid.
- The only other circumstances in which the tribunal exercising its jurisdiction in relation to a disciplinary application may award costs are the circumstances stated in the QCAT Act, section 103 or 104.
Note –
See the QCAT Act, sections 106 to 109 for provisions about the tribunal awarding costs.
- In this section –
engaged in prescribed conduct means engaged in unsatisfactory professional conduct or professional misconduct, or engaged in misconduct in relation to a relevant practice, as mentioned in section 456(1) or 458(1).”
- [3]In ordering that the appellant pay the Commissioner’s costs of the proceedings, the tribunal found there was no basis on which to apportion the costs, despite the Commissioner’s failure to establish one of the two charges brought against the appellant.
- [4]The appellant appeals against that costs order, on the following grounds:
- ground 1: that the tribunal erred in failing to construe the term “exceptional circumstances” in s 462(1) of the Act as applying to permit a proportionate reduction of the respondent’s costs of the discipline application where the appellant successfully resisted a contested charge the subject of the discipline application; or
- ground 2: alternatively, that the tribunal erred in failing to treat the two “charges” the subject of the proceeding below as separate “discipline applications” within the meaning of that term in section 452(1) of the Act, such that the tribunal erred in awarding the Commissioner her costs of contested charge 1.
- [5]The appellant seeks orders setting aside the costs order made below and substituting instead an order that:
- the appellant pay 20% of the Commissioner’s costs of the discipline application to be assessed on the standard basis; or
- alternatively, there be no order as to the costs of the discipline application comprising charge 1, and the appellant pay the Commissioner’s costs of the discipline application comprising charge 2, to be assessed on the standard basis,
together with the costs of this appeal.
- [6]The two charges the subject of the discipline application involved separate conduct in relation to two of the appellant’s clients.
- [7]Charge 1 alleged that the appellant failed to maintain reasonable standards of competence and diligence in the preparation of a new will and enduring power of attorney for Mrs M. The charge was particularised by reference to various steps it was said the appellant failed to take in order to properly address, and document, whether Mrs M had capacity at the time she executed those documents. Charge 1 was contested. The hearing before the tribunal on 18 August 2022 was solely concerned with the disputed charge 1. The tribunal ultimately found that the Commissioner had failed to establish charge 1 and it was dismissed, for detailed reasons given on 17 April 2023.
- [8]Charge 2 alleged that the appellant failed to maintain reasonable standards of competence and diligence in the manner in which he acted in the administration of the estate of Mrs H. The charge was particularised by reference to the appellant’s failure to attend properly to that matter, extending over a number of years, by failing to advise the executors of correspondence received by his office, failing to advise of distributions to be made from an investment fund that formed part of the estate, and the need to provide instructions in relation to bank account details, and failing to give advice and seek instructions about redeeming or withdrawing the investments, all of which resulted in undue delay in the finalisation of the estate. The appellant admitted the facts alleged and that the conduct amounted to unsatisfactory professional conduct. The tribunal described the appellant’s conduct in this regard as “quite concerning”, as the failure to properly attend to the matter extended over a number of years. The proceeding was conducted on the basis the conduct the subject of charge 2 constituted unsatisfactory professional conduct and the tribunal accepted, “not without reservation”, that the conduct should be characterised in that way.[2] There was no substantive hearing in relation to charge 2. It is apparent from the tribunal’s observation that the conduct was “quite concerning” that the “reservation” held by the tribunal was in terms of whether “unsatisfactory professional conduct” was an apt characterisation, as opposed to the more serious “professional misconduct”.
- [9]Submissions as to penalty, and a claim for compensation by Mr H, the complainant for charge 2, were dealt with on 4 October 2022.
- [10]Before the tribunal, there was no dispute that the appellant should be ordered to pay the Commissioner’s costs in so far as the proceeding concerned charge 2. However, the appellant contended that it was appropriate to apportion the costs of the proceeding overall, so that the appellant was not required to pay the Commissioner’s costs in relation to charge 1. It was submitted the tribunal should be satisfied “exceptional circumstances exist”, for the purposes of s 462(1), because charge 1 was the only contested charge; it occupied the bulk of the first day of the hearing; and the respondent’s cooperation in relation to charge 2 meant that the costs relating to that charge were likely to be minimal.
- [11]The tribunal rejected that submission, finding that there was no reason to refuse the Commissioner the whole of her costs of the proceeding.[3] In reasoning to that conclusion, the tribunal emphasised that there is “a very significant difference in the policy approach which underlies s 462, and that which underlies the general rule” as to costs, going on to say, at [87]:
“The starting point is s 462, and not the general discretion which is usually available to courts. Where the practitioner is found guilty of prescribed conduct, there is a statutory direction to award costs to the Commissioner (with a limited exception). Even if the practitioner is not found to have engaged in prescribed conduct, there may be an order for costs against the practitioner; and an order in favour of the practitioner in such a case is not the usual order – it is only made in special circumstances. The power to make a costs order is thus constrained by the language of the section, and is generally protective of the Commissioner. It is not possible to reason by analogy from the approach taken in courts applying the general rule as to costs, to the making of orders for costs in a discipline application.”
- [12]The tribunal observed, at [88], that:
“Whatever view might have been taken of a situation such as the present one, where the charges in the discipline application are completely unrelated and prescribed conduct is found on one charge but not the other, there is significant authority which it is difficult to depart from.” – namely, Baker v Legal Services Commissioner [2006] 2 Qd R 249.
- [13]By reference to Baker, in particular at [55]-[57], the tribunal said, at [89]:
“The Commissioner’s absence of success on some charges was expressly held not to constitute exceptional circumstances warranting a departure from the command in s 462(1) to order costs in his favour. Although there was some similarity between a number of the charges dealt with in Baker (they generally related to dishonest charging), that circumstance was not relied upon for the conclusion reached in that case.”
- [14]Accordingly, it was held that “[i]n the circumstances, there is no reason to refuse the applicant costs of the proceedings”.
Ground 1
- [15]The appellant submits that [89] of the decision reveals the tribunal erroneously proceeded on the basis that Baker established an absolute rule, that the Commissioner’s absence of success on some charges can never, in any case, constitute exceptional circumstances; that is not the effect of Baker; and, having misunderstood Baker, the tribunal applied the wrong principle,[4] such that it is appropriate for this Court to intervene, to set this part of the tribunal’s decision aside, and re-exercise the power under s 462.
- [16]The Commissioner submits that is an incorrect reading of [89] of the decision and that the tribunal merely intended to convey that Baker was authority for the proposition that the Commissioner’s absence of success on some charges in that case was expressly held not to constitute exceptional circumstances. The Commissioner accepts that there is no absolute rule and submits the tribunal did not act on a wrong principle to that effect. Even if the Court were to conclude that it did, the Commissioner submits the discretionary power under s 462 would be re-exercised in the same way in this case – that is, to require the appellant to pay all the Commissioner’s costs – because the present case is “materially the same” as Baker.
- [17]The decision in Legal Services Commissioner v Baker (No 2) [2006] 2 Qd R 249[5] concerned an appeal by a practitioner against a decision of (what was then) the Legal Practice Tribunal that the practitioner’s name be removed from the roll of legal practitioners, on the basis of findings made against him on a “series of charges” relating to a number of clients. It is not clear from the decision exactly how many charges were involved, but it seems to have been around 18. Some of the charges were not proved and others were withdrawn. However, the practitioner was found guilty of seven charges – including charges of dishonestly and wrongfully charging professional fees – which resulted in “findings of dishonesty in at least three charges and of unprofessional conduct in four”.[6] On the appeal against those findings, the practitioner succeeded in relation to only one charge of unprofessional conduct (failing to adequately supervise the conduct of an employed solicitor). That did not persuade the Court of Appeal to disturb the order that his name be removed from the roll.
- [18]At first instance, the tribunal had ordered that the practitioner pay the Commissioner’s costs. On the appeal, it was argued that there ought to have been an apportionment of the costs of the proceedings, having regard to the Commissioner’s failure on some of the charges decided by the tribunal and his withdrawal or failure to pursue some of the others. The relevant provision was s 286(1) of the Legal Profession Act 2004, which was in equivalent terms to s 462(1) of the current Act, providing that a disciplinary body:
“must make an order requiring a person whom it has found guilty[7] to pay costs, including the costs of the commissioner … unless the disciplinary body is satisfied exceptional circumstances exist.”
- [19]The argument for the practitioner in Baker was that s 286 should be construed as conferring a discretion to apportion the quantum of costs where, as here, each party has had a measure of success – not on the basis that this amounted to “exceptional circumstances”, but rather on the basis that s 286 preserved a broader discretion. The argument was summarised at [55] of the Court’s reasons, as follows:
“It was submitted on behalf of the practitioner that the Tribunal was wrong in construing s 286(1) as conferring no discretion but to order costs against a practitioner found guilty within the meaning of s 286(7), except where satisfied that ‘exceptional circumstances’ exist. By reference to s 286(5),[8] it was submitted that there is discretion to apportion the quantum of costs where, as here, each party has had a measure of success. Any other interpretation could, it was said, lead to absurd results; for example, a practitioner might be successful in defeating all but a single charge against him, which was relatively minor in the overall context of the time and effort expended on it in comparison to all the other charges in which the practitioner was successful. Yet he would nevertheless be bound to pay all the costs of the whole proceedings even though only one or a few charges might have been proved.”
- [20]The Court (McPherson JA, Jerrard JA and Douglas J agreeing) rejected this submission, holding that s 286(1) is not designed to confer or preserve the broad discretion over costs commonly found in statutory provisions.[9] As McPherson JA explained at [56]:
“… the criterion adopted in s 286(1) is whether the practitioner has been found guilty of one or more of the forms of misconduct specified in s 286(7). If he has, then an order requiring him to pay costs must be made against him unless the Tribunal is satisfied that ‘exceptional circumstances’ exist. It is true that s 286(1) refers simply to ‘costs’ and not to all the costs of the proceedings; but the latter is I consider its primary meaning in this context.[10] Section 286(1) is not designed to confer or preserve the broad discretion over costs commonly found in statutory provisions conferring power to award costs. If it had been intended to do so, it could and would have been expressed to that effect. On the contrary, the mandatory rule imposed by s 286(1) is designed to follow unless the Tribunal is satisfied that exceptional circumstances exist that call for some other order to be made, either generally or in terms of an amount under s 286(5)(a) or (b) or against the Commissioner under s 286(4).”
- [21]The Court found that the circumstances in Baker were not “exceptional”, saying at [57]:
“The present was not such a case. Even though he succeeded in some of the charges against him, the practitioner was found guilty of some seven charges that resulted in the ultimate sanction being imposed upon him of removal from the roll. No exceptional circumstances existed to defeat the mandatory requirement imposed by s 286(1) that he pay the costs including those of the Commissioner. That being so, the Tribunal was required to make the order that was made in this matter. In any event, if his Honour had discretion, it was or would have been appropriately exercised by making the order he did.”
- [22]The Court in Baker did not comment in relation to whether the example given in the appellant’s submissions in that case (set out in [55] of Baker, above) could or would amount to “exceptional circumstances”.
- [23]The decision in Baker stands as authority for the following propositions, applied to s 462:
- s 462(1) does not confer a broad discretion in relation to costs, such as is found in other statutory provisions conferring power to award costs;
- where the qualifying criterion is met (the practitioner has been found to have engaged in prescribed conduct[11]), s 462(1) imposes a mandatory rule which follows unless the tribunal is satisfied “exceptional circumstances” exist that call for some other order to be made;
- if the tribunal is satisfied “exceptional circumstances” exist, a discretion arises as to the order to be made in relation to costs (either generally, or in terms of an amount under s 462(5) or against the Commissioner under s 462(4));
- the circumstances in Baker were not “exceptional” – accordingly, the mandatory rule applied in that case.
- [24]Baker is not authority for the proposition that mixed success and failure on separate charges can or will never amount to “exceptional circumstances”, such as to displace the mandatory rule in s 462(1). As is apparent, the argument the Court was addressing in Baker was not directed to the meaning of “exceptional circumstances” (and whether the partial success of the practitioner in that case amounted to “exceptional circumstances”); but rather to the question whether s 286(1) (now s 462(1)) conferred a broader discretion to apportion costs. That argument was rejected. On the application of the section to the facts in Baker, the Court was not persuaded that the circumstances were “exceptional”.
- [25]The Commissioner does not contend otherwise;[12] although does submit the circumstances in which mixed success could be regarded as “exceptional” are limited.
- [26]In the present case, it is apparent from paragraphs [88] and [89] of the decision that the tribunal proceeded on the basis that Baker established an absolute rule. This appears both from the words used in those paragraphs and also from the words that are not there – that is, the absence of any discussion about the factual circumstances or reasons why the mandatory rule in s 462(1) had not been displaced. On the approach taken by the tribunal, that was unnecessary because the effect of Baker was that mixed success and failure on separate charges could never amount to “exceptional circumstances” for the purpose of s 462(1). That was an error, such that it is appropriate for this Court to intervene.
- [27]In my view, error is also demonstrated by the question raised by ground 2. Although that question was not argued below, as it is a matter of law going to the proper construction of s 462(1), it is appropriate to deal with it. As it is determinative of the appeal, I turn to ground 2 now, before coming back to the meaning of “exceptional circumstances” in the context of s 462.
Ground 2
- [28]The alternative ground 2 contends that, on the proper construction of chapter 4 of the Act, the jurisdiction to award costs under s 462 is exercisable in respect of “discipline applications”; each charge against the appellant was a separate “discipline application”; and the tribunal ought to have applied s 462 separately, to each charge. To address this ground, it is necessary to understand the broader statutory context of s 462.
- [29]The main purposes of chapter 4 as articulated in s 416 include (a) to provide for the discipline of the legal profession, (b) to promote and enforce the professional standards, competence and honesty of the legal profession and (c) to provide a means of redress for complaints about lawyers.
- [30]A client, or former client, of the relevant regulatory authority (Bar Association or Law Society) may make a complaint about a practitioner (ss 428 and 429). The person or entity that makes a complaint is called “the complainant” (s 429(3)(a)). Once a complaint is made, the Commissioner can take steps in relation to it, including to refer the complaint to mediation or dismiss it, where the complaint relates to conduct more than three years before it was made (s 430), request further information from the complainant (s 431), otherwise summarily dismiss the complaint (s 432), delay dealing with a complaint (s 434) or refer it to the Law Society or Bar Association to be dealt with (s 435). Otherwise, the Commissioner must investigate the complaint (s 436). As part of the investigation, a notice may be given to the respondent practitioner (s 437) who may make written submissions to the Commissioner “about the complaint” (s 438). The Commissioner is required to consider the submissions before deciding whether to “make a discipline application relating to the complaint” (s 438).
- [31]Following the investigation, if the Commissioner considers it appropriate, the Commissioner may start a proceeding under chapter 4 before a disciplinary body (s 447). If so, part 4.9 of chapter 4 (ss 452 to 463) applies.
- [32]Section 452 relevantly provides:
“452 Starting proceeding before a disciplinary body
- The commissioner may apply–
- to the tribunal for an order against an Australian legal practitioner in relation to a complaint against the legal practitioner or an investigation matter; or
- to the committee[13] for an order–
- against an Australian legal practitioner in relation to a complaint against the legal practitioner or an investigation matter; or
- against a law practice employee in relation to a complaint against the employee or an investigation matter involving the employee.
- An application under subsection (1) is a discipline application.”
- [33]Section 453 then provides that “[t]he disciplinary body must hear and decide each allegation stated in the discipline application”.
- [34]The Commissioner is obliged to “keep a complainant informed about the way the complaint is dealt with” (s 451). This includes giving “the complainant” notice of the date set down for starting the hearing for the discipline application. Section 656B provides that “[t]he complainant for a discipline application before the tribunal is entitled to appear at the hearing of the application in relation to–
- those aspects of the hearing that relate to a request by the complainant for a compensation order; and
- other aspects of the hearing, but only if the tribunal gives leave to the complainant to appear in relation to them.”
- [35]Section 454 provides that the committee may order the joinder of more than 1 discipline application involving the same practitioner. There is a note below s 454, directing attention to s 42 of the Queensland Civil and Administrative Tribunal Act 2009, “for joinders by the tribunal”. Section 42 of the QCAT Act is only concerned with joining and removing parties.
- [36]Section 455 empowers the disciplinary body to vary a discipline application by omitting allegations or including additional allegations, if satisfied it is reasonable to do so having regard to all the circumstances. There is a distinction drawn in these provisions between a complaint, and allegations the subject of a complaint.
- [37]Nevertheless, it also appears to be common practice for multiple complaints to be included in one proceeding before the tribunal. This is contemplated by s 80(2) of the Legal Profession Regulation 2017, which provides that “A discipline application may relate to more than 1 complaint or investigation matter”.
- [38]Section 456(1) provides that:
“If, after the tribunal has completed a hearing of a discipline application in relation to a complaint or an investigation matter against an Australian legal practitioner, the tribunal is satisfied that the practitioner has engaged in unsatisfactory professional conduct or professional misconduct, the tribunal may make any order as it thinks fit, including any 1 or more of the orders stated in this section.
- [39]The orders that may be made include a “compensation order” (s 456(4)(b)), the nature of which is further explained in s 464. If the orders made include a compensation order, to facilitate enforcement of the order s 457(2)(a) provides that “the complainant may file the order in the registry of a court of competent jurisdiction”.
- [40]Section 462 then deals with costs. The whole provision is set out above at paragraph [2] above, but for ease of reference s 462 relevantly provides that:
“(1) A disciplinary body must make an order requiring a person whom it has found to have engaged in prescribed conduct to pay costs, including costs of the commissioner and the complainant, unless the disciplinary body is satisfied exceptional circumstances exist.
- A disciplinary body may make an order requiring a person whom it has found not to have engaged in prescribed conduct to pay costs, including costs of the commissioner and the complainant, if the disciplinary body is satisfied that–
- the sole or principal reason why the proceeding was started in the disciplinary body was the person’s failure to cooperate with the commissioner or a relevant regulatory authority; or
- there is some other reason warranting the making of an order in the particular circumstances;
…
- A disciplinary body may make an order requiring the commissioner to pay costs, but may do so only if it is satisfied that–
- the Australian legal practitioner or law practice employee has not engaged in prescribed conduct; and
- the body considers that special circumstances warrant the making of the order.
- An order for costs—
- may be for a stated amount; or
- may be for an unstated amount but must state the basis on which the amount must be decided.
…”
- [41]In Baker, at [56], McPherson JA expressed the view that the primary meaning, in context, of the reference to “costs” in the equivalent of s 462(1) is to “all the costs of the proceedings”. In contrast, in Bone, at [45], Morrison JA said:
“Because of the framework in which a discipline application may be commenced and heard, and the way in which orders can be made, it seems plain that when s 462(4) provides that an order may be made requiring the payment of costs, those costs are the costs of the proceeding before the Tribunal. That is not to say that the phrase ‘costs’ means the costs of the entire proceeding, as the subsection does not use those words. It simply says ‘pay costs’. Further, because subsection (5) provides that the order for costs may be for a stated amount, that seems clearly to comprehend that the costs ordered may be only part of the overall costs.”
- [42]The meaning of “costs” in s 462(1) was revisited in McQuaid, with the Court in that case accepting that McPherson JA’s approach was correct – that “the costs” in s 462(1) refers to all the costs of the proceedings – and drawing a distinction between that provision and s 462(4), which confers a broader discretion (at [26]-[33]).
- [43]The Court in each of Baker, Bone and McQuaid was not asked to consider the point the appellant now raises in this case, which is as follows:
- the tribunal’s power to order a practitioner “to pay costs” is dependent on there being a “discipline application”, being an application by the Commissioner to the tribunal for an order against a practitioner “in relation to a complaint” against the legal practitioner (s 452);
- in the present case, there were two separate complaints against the practitioner – one by Dr M and the other by Mr H;
- on the proper construction of the provisions, in their context, although two separate charges were brought before the tribunal in one proceeding, as contemplated by s 80(2) of the Regulation, they were still separate “discipline applications”, each in relation to a complaint;
- accordingly, when applying s 462, the tribunal ought to have done so by reference to each of the charges separately.
- [44]Although not articulated in these terms in the appellant’s submissions, the effect of the submissions is that:
- in relation to charge 1 (where the result was that the practitioner was found not to have engaged in prescribed conduct), there should have been no order as to costs, since:
- (i)under s 462(2), the criteria for ordering the practitioner to pay costs was not present; and
- (ii)likewise, under s 462(4) there was no basis to order the Commissioner to pay the practitioner’s costs;
- (i)
- in relation to charge 2 (where the result was that the practitioner was found to have engaged in prescribed conduct), it followed from s 462(1) that the practitioner must pay costs, including the costs of the Commissioner and the complainant – necessarily, the complainant in respect of charge 2 only.
- in relation to charge 1 (where the result was that the practitioner was found not to have engaged in prescribed conduct), there should have been no order as to costs, since:
- [45]Viewed in their context, the relevant provisions of chapter 4 support the appellant’s ultimate construction – which is that s 462 is to be applied by reference to each “complaint” (or charge as they seem to be called). The provisions focus attention upon the conclusion reached variously in relation to “a complaint” or “the complaint”, even if there are multiple complaints within a discipline application.
- [46]Section 456(1), dealing with the decision and making of orders, makes the point clearly, as it commences with the words:
“If, after the tribunal has completed a hearing of a discipline application in relation to a complaint … the tribunal is satisfied that the practitioner has engaged in unsatisfactory professional conduct or professional misconduct…”
- [47]It is also clear from the provisions dealing with enforcement of, for example, a compensation order, that the reference to “the complainant” must be to a particular complainant in respect of a complaint (even if there were multiple complaints the subject of the discipline application).
- [48]Then one turns to s 462, in relation to costs. The criterion in sub-s (1), for the mandatory rule requiring a practitioner to pay costs, is that the disciplinary body “has found [the practitioner] to have engaged in prescribed conduct”. Read in the context of the surrounding provisions, that logically must mean “found to have engaged in prescribed conduct in relation to a [particular] complaint”. The order contemplated by s 462(1) in those circumstances, is one requiring the practitioner “to pay costs, including costs of the commissioner and the complainant”.
- [49]When s 462(1) is read in that context, the argument that the focus should be upon the outcome in respect of individual complaints is supported by the reference to the costs of “the complainant”. It could not have been intended that a practitioner would be required to pay the costs of a complainant in respect of a complaint which did not succeed, or which was withdrawn. The reference to “the complainant” in s 462(1) can only logically be a reference to the complainant in respect of any complaint forming part of the discipline application in respect of which the tribunal has found the practitioner has engaged in prescribed conduct. It follows, that the application of s 462(1), and the subsequent provisions, ought to be undertaken by reference to particular “complaints”, where there is more than one the subject of the discipline application.
- [50]This construction is not inconsistent with the protective purpose of the provisions; and it provides more certainty than an attempt to quantify or define what might amount to “exceptional circumstances”, when there has been mixed success in relation to multiple complaints brought within one discipline application before the tribunal. Some of the cases that have previously considered that question are discussed below, and demonstrate that this is an unsatisfactory process, in terms of where to draw the line. Policy considerations also support this construction, because it ought to encourage a practitioner to take responsibility for their misconduct where it is not contestable, and so reduce their costs liability (by avoiding the need for a hearing); it ought also encourage the Commissioner to consider whether contested charges have sufficient prospects of success to proceed with and, in any event, to conduct disciplinary hearings in a cost effective and efficient manner. Where a practitioner successfully contests a charge(s), the rationale for the practitioner to be required to bear all the costs of the entire proceeding is not apparent.
- [51]In a case like Baker application of the provisions construed in this way may not result in any significant reduction of the costs liability for the practitioner who has been found guilty of serious misconduct. This may be because the substantive costs will likely be attributable to the charges leading to the ultimate sanction, or because in such a case the circumstances might support making an order for costs against the practitioner under s 462(2), even in respect of charges which have not been proved. But in a case such as the present, construing the provisions in the way discussed above would result in a fairer outcome, given that the substantive costs must have been incurred in relation to the one charge which was contested and found not be established following a full hearing, with the only other charge being admitted. The Commissioner is not to be penalised, by the making of an order against her; but nor is the practitioner burdened with the entirety of the costs of the proceeding, when he has taken responsibility by admitting one of the charges, and successfully contested the other.
- [52]Although s 32C of the Acts Interpretation Act 1954, which provides that, in an Act, words in the singular include the plural, and vice versa, might at first have seemed to provide an answer to the appellant’s ground 2, it can be seen from the analysis above that the operation of that provision has been displaced by a contrary intention appearing in chapter 4 of the Act.[14]
Applying the relevant provisions, as properly construed
- [53]On the proper construction of s 462:
- in relation to the complaint comprising charge 2, in respect of which the tribunal found the appellant had engaged in prescribed conduct (unsatisfactory professional conduct), under s 462(1) the tribunal was required to order the appellant to pay the costs of that complaint, including the costs of the commissioner and the complainant, unless it was satisfied exceptional circumstances exist; and
- in relation to the complaint comprising charge 1, in respect of which the tribunal found the appellant had not engaged in prescribed conduct:
- (i)under s 462(2), the tribunal had a discretion to order the appellant to pay the costs of that complaint, including costs of the commissioner and the complainant, if the tribunal was satisfied that the sole or principal reason why the proceeding was started was the appellant’s failure to cooperate, or there was some other reason warranting the making of such an order; and
- (ii)under s 462(4), the tribunal also had a discretion to require the Commissioner to pay the costs of that complaint, but only if the tribunal considered that special circumstances warranted the making of the order.
- (i)
- [54]In so far as the complaint comprising charge 1 is concerned, there was no consideration at first instance of whether the discretion under s 462(2) was enlivened – because of the approach taken to s 462(1). However, there is nothing in the material before this Court which would indicate there was any basis to order the appellant to pay costs under that section. As to s 462(4), the appellant expressly disavows any suggestion that there were special circumstances such as to justify an order that the Commissioner pay the costs of that complaint.
- [55]Nevertheless, in considering the meaning of “exceptional circumstances”, for the purposes of s 462(1), it is relevant to have regard to what has been said of the meaning of “special circumstances” in s 462(4). That was considered in the earlier decision of this Court in Legal Services Commissioner v Bone [2014] QCA 179. After referring to Baker and a decision of Byrne SJA in Legal Services Commissioner v Atkins [2009] LPT 10, Morrison JA (with the agreement of Fraser and Gotterson JJA) summarised the relevant principles at [66] as follows:
“(a) the mere fact that a charge fails, or a particular factual allegation is not sustained, cannot establish ‘special circumstances’, because of the general rule that a practitioner found not guilty is not entitled to costs;
- if a charge has no substantial prospect of success, and that ought reasonably to have been know[n] by the LSC, that may amount to special circumstances;
- if the LSC knew or ought to have realised, if properly advised, that a particular allegation of fact had no real prospect of being established, that may amount to special circumstances; and
- where charges have a sufficiently substantial prospect of success to justify their prosecution, that will not amount to special circumstances.”
- [56]Although in another context, the words “special” and “exceptional” might seem synonymous, it is clearly to be inferred the legislature intended different meanings by choosing different words in s 462(1) and (4). Whilst it is difficult to articulate that difference precisely, the context supports the conclusion that “special” imposes a higher bar – because it appears in the section which confers power to make an order for costs against the Commissioner. Given the protective purpose of the provision,[15] and the rule,[16] reflected in s 462(1), that a practitioner pays the costs of disciplinary proceedings necessitated by their conduct, with something “exceptional” required to displace that, it follows that something even more exceptional – or special – is required before an order would be made against the Commissioner.
- [57]What might constitute “exceptional circumstances” is a matter of fact, to be determined on a case by case basis, and not capable of definition.[17] It requires a qualitative assessment,[18] directing attention to what it is, about the circumstances of the case, which would justify departure from the rule articulated in s 462(1). The rule that, where a practitioner has been found to have engaged in “prescribed conduct”, they must pay the costs of the proceeding, is justified by the fact that the Commissioner brings the proceeding in the public interest, to further the interests of the administration of justice and for the protection of consumers of services of the legal profession and the public generally. In order to displace that rule, something qualitatively “exceptional” is required.
- [58]On the view I take as to the construction of s 462, the order as to costs where there has been mixed success on separate charges is dealt with in a more straightforward way than trying to determine whether or not there is something “exceptional” about the overall outcome.
- [59]As to what might constitute “exceptional circumstances”, in Legal Services Commissioner v Doyle [2021] QCAT 347 at [54]-[56], “extraordinary delay” in prosecuting the matter, which had a “devastating” impact on the practitioner, was said to amount to exceptional circumstances “justifying a refusal to further burden [the practitioner] with an order for costs”.
- [60]Legal Services Commissioner v O'Connor (No 2) [2006] LPT 002, a decision of Mullins J (as her Honour then was), provides another example. Although the practitioner was found guilty of unsatisfactory professional conduct, the fact that the charge which the practitioner ultimately had to meet at the hearing of the application was different both in the terms and the particulars of the charge and the gravity of the offence than the charge that was set out in the application that commenced this proceeding, which resulted in the Commissioner and the practitioner incurring costs that were wasted, was said to be sufficient to establish exceptional circumstances (at [19]). The mandatory rule having been displaced, the practitioner was ordered to pay two-thirds of the Commissioner’s costs. The tribunal in that case noted (at [18]) that:
“The Commissioner fulfils an important public role under the Act in investigating complaints, making decisions on whether to dismiss them or to commence proceedings before a disciplinary body in relation to the complaint and prosecuting such proceedings. It is a matter of fairness, however, to the practitioner who is the subject of the complaint that the Commissioner formulates the charge against the practitioner with precision and gives careful consideration to the matters raised by the practitioner in the practitioner’s response that is usually provided to the Commissioner at an early stage of the investigation of the complaint.”[19]
- [61]The appellant also referred the Court to cases which have considered what might amount to special or exceptional circumstances sufficient to displace the general rule that applies in civil proceedings, for example under r 681 of the Uniform Civil Procedure Rules 1999[20] and to general considerations of fairness, which have been relied upon to justify departure from the usual rule, in other contexts, that costs follow the event.[21]
- [62]I do not accept, as a matter of principle, that the meaning of “exceptional circumstances” in s 462(1) is appropriately informed by the meaning given to that concept in the context of the broader discretion to award costs in other contexts. As this Court held in Baker and McQuaid, s 462(1) is not designed to confer or preserve the broad discretion over costs commonly found in other statutory provisions. The context and purpose of the provision is quite different. Whereas costs provisions such as r 681 UCPR have a compensatory purpose,[22] the purpose of s 462(1) is protective – of the Commissioner[23] – which justifies a narrower approach to what might be “exceptional” than might apply in the context of a general costs discretion.
- [63]In any event, in the circumstances of this case, in so far as the complaint comprising charge 2 is concerned, there are no exceptional circumstances such as to displace the mandatory rule under s 462(1), that the appellant pay the costs of that complaint.
- [64]For completeness, I record that the appellant did not contend that there were exceptional circumstances (in so far as only charge 2 is concerned). It was nevertheless appropriate, notwithstanding my view that the appeal ought to be allowed on ground 2, to consider the meaning of the phrase, and its application here, given the issue raised on this appeal by ground 1.
Orders
- [65]For those reasons, I would propose the following orders:
- The appeal is allowed.
- Set aside paragraph 5 of the orders made by the tribunal on 17 April 2023.
- Substitute orders that:
- the appellant pay the costs of the complaint comprising charge 2, including costs of the Commissioner and the complainant, to be assessed on the standard basis; and
- there be no order as to the costs of the complaint comprising charge 1; and
- The respondent pay the appellant’s costs of the appeal.
- [66]The proposed order 3(a) reflects the wording of s 462(1), which requires the tribunal to order the practitioner to “pay costs, including costs of the commissioner and the complainant”. The order 5 originally made by the tribunal simply referred to “the applicant’s costs of and incidental to the application”. As the parties did not address the question whether any substituted order made by this Court ought properly include the costs of “the complainant”, the parties should have seven days in which to consider the proposed order 3(a), and make submissions in relation to it if necessary. If no submissions are received, I would make orders in the terms set out above.
- [67]DALTON JA: I agree with the orders proposed by Bowskill CJ and with her reasons.
- [68]KELLY J: I agree with the reasons of the Chief Justice and with the orders proposed by her Honour.
Footnotes
[1]Legal Services Commissioner v Pennisi [2023] QCAT 118 (the decision).
[2]Decision at [57].
[3]Decision at [90].
[4]House v The King (1936) 55 CLR 499 at 505.
[5]This is the case referred to in the tribunal’s decision at [88]-[89] – the name of the case appears in the Queensland Reports as Legal Services Commissioner v Baker (No 2).
[6]Legal Services Commissioner v Baker (No 2) at [52] and [57].
[7]Defined in s 286(7) to mean “guilty of unsatisfactory professional conduct or professional misconduct, or of misconduct in relation to a relevant practice…”.
[8]Which was in the same terms as the present s 462(5), set out above.
[9]See also Legal Services Commissioner v McQuaid (2019) 1 QR 499 at [26]-[28].
[10]See also Legal Services Commissioner v McQuaid (2019) 1 QR 499 at [33].
[11]That is, the prescribed conduct in the charge or charges the subject of the particular proceedings before the disciplinary body: Legal Services Commissioner v Bone [2014] QCA 179 at [47]-[48].
[12]Transcript of hearing at 1-23.
[13]The “committee” is defined in schedule 2 to the Act to mean “the Legal Practice Committee established under the Legal Profession Act 2004, section 451, as continued in existence under section 621”.
[14]See s 4 of the Acts Interpretation Act 1954.
[15]Legal Services Commissioner v McQuaid (2019) 1 QR 499 at [26].
[16]See, for example, Walsh v Law Society (NSW) (1999) 198 CLR 73 at [77].
[17]See Attorney-General (Qld) v Francis (2008) 250 ALR 555 at 577 [92] per Mackenzie AJA (Fryberg J agreeing), in the context of the phrase “exceptional circumstances” in s 21(4) of the Dangerous Prisoners (Sexual Offenders) Act 2003, applied to s 462(1) in Legal Services Commissioner v Scott (No 2) [2009] LPT 9 at [19] (Fryberg J).
[18]See, by analogy, R v Yaroslavceff [2022] SASCA 123 at [71] per Doyle JA.
[19]See also Legal Services Commissioner v Scott (No 2) [2009] LPT 9.
[20]BHP Coal Pty Ltd v O & K Orenstein & Koppel AG (No 2) [2009] QSC 64 at [8]; see also Speets Investment Pty Ltd v Bencol Pty Ltd (No 2) [2021] QCA 39 at [16].
[21]Oshlack v Richmond River Council (1998) 193 CLR 72.
[22]Oshlack v Richmond River Council (1998) 193 CLR 72 at 97.
[23]Legal Services Commissioner v McQuaid (2019) 1 QR 499 at [26].