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Valuers Registration Board v Murphy (No 2) QCAT 332
QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL
Valuers Registration Board v Murphy (No. 2)  QCAT 332
Valuers Registration Board
neil patrick murphy
Occupational regulation matters
31 October 2019
On the papers
The application by Neil Patrick Murphy for a costs order is refused.
PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – COSTS – INTERLOCUTORY PROCEEDINGS – GENERALLY – where disciplinary referral dismissed because of late referral – whether costs should be awarded to respondent
Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 47(2)(c), s 102
Queensland Civil and Administrative Tribunal Rules 2009 (Qld), r 86
Medical Board of Australia v Wong  QCA 42
Queensland Racing Integrity Commission v Vale  QCATA 110
Seeiseo Pty Ltd v Body Corporate for Taralla Apartments CTS 15627 (No. 2)  QCAT 10
Tamawood Ltd & Anor v Paans  QCA 111
KM Riedel instructed by Colin, Biggers & Paisley Lawyers
This matter was heard and determined on the papers pursuant to section 32 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (‘QCAT Act’).
REASONS FOR DECISION
- Mr Murphy is a registered valuer. He seeks an order for costs he incurred as respondent to a disciplinary referral made to the Tribunal by Valuers Registration Board. I dismissed the referral on 25 February 2019 on the basis that it was made late, and no extension of time should be granted.
- In September 2016 Mr Murphy appeared as an agent for a party in an interlocutory proceeding in the Land Court of Queensland. The Land Court gave its decision on the interlocutory matter in November 2016. In the course of the reasons, the Court expressed the view that Mr Murphy may have breached an ethical rule in appearing as an advocate because another valuer in his firm had provided the valuation relied on by the party in the proceeding.
- The Board subsequently investigated a complaint relating to this conduct.
- On 20 March 2018 the Board wrote to Mr Murphy advising that it considered that he had engaged in misconduct. It proposed to take disciplinary action by way of a reprimand, an order for an undertaking, and a monetary penalty.
- Under section 52 of the Valuers Registration Act 1992 (Qld), Mr Murphy then had three options: making written representations to the Board, requesting a hearing before the Board, or requiring the Board to refer the matter to the Tribunal. Mr Murphy chose the third option, on 10 April 2018. The Board made the referral to the Tribunal on 19 September 2018.
- On 12 October 2018 Mr Murphy applied for dismissal of the proceeding on the basis that the matter had not been referred ‘as soon as possible’. At the hearing of the dismissal application in February 2019, the parties agreed that in the absence of a specific timeframe for referral, it had to be done ‘as soon as possible’ under section 38(4) of the Acts Interpretation Act 1954 (Qld). The parties disagreed about whether the referral had been made as soon as possible. The Board’s position was that it had promptly engaged a lawyer to prepare the referral and the lawyer took longer than anticipated due to circumstances outside the Board’s control.
- I decided that the referral had not been made as soon as possible: the Board should have reassessed ‘once a few weeks had passed’ and sought alternate legal representation or prepared the referral itself.
- I did not accept submissions made on behalf of Mr Murphy that failure to refer as soon as possible deprived the Tribunal of jurisdiction. I decided that the Tribunal would have jurisdiction if it granted an extension of time. I regarded the question of whether an extension of time should be granted as ‘rather finely balanced’: there were competing public and private factors to be considered. I decided ‘on balance that the interests of justice do not favour an extension of time’. Accordingly, I refused to extend time, and dismissed the referral.
- It should be noted that the matter gave rise to some novel issues. Counsel cited cases where the ‘as soon as possible’ or equivalent requirement had been considered in various contexts, but none involved a disciplinary referral. There were no known authorities on whether the Tribunal retains jurisdiction, or on whether it is possible to extend time, in such a situation. These were not easy questions.
Costs application and the legislative provisions
- Mr Murphy seeks an order that the Board pay his costs of and incidental to the dismissal application on an indemnity basis, or alternatively on a standard basis in accordance with the District Court scale.
- Mr Murphy notes that the dismissal order was made under section 47 of the QCAT Act, and that section 47(2)(c) permits the Tribunal to make a costs order to compensate for any costs, expenses etc. Mr Murphy submits that the factors in section 102 of the QCAT Act will be relevant. That section calls for a consideration of whether the interests of justice require a costs order. It invites consideration of various factors including, relevantly, whether a party has unnecessarily disadvantaged another party, the nature and complexity of the dispute, the relative strengths of the parties’ claims, and the financial circumstances of the parties.
- Mr Murphy cites Seeiseo Pty Ltd v Body Corporate for Taralla Apartments CTS 15627 (No. 2). In that case the Tribunal observed that the ‘usual rule in s 100 that each party to a proceeding should bear their own costs… does not apply in circumstances where the proceedings are ended early under s 47’. The Tribunal, however, went on to observe that a decision on whether to award costs under section 47(2)(c) involves the exercise of a discretion, and the section 102 factors ‘will usually still be relevant’.
- Mr Murphy also argues that rule 86 of the Queensland Civil and Administrative Tribunal Rules 2009 (Qld) (‘QCAT Rules’), which is authorised by section 105 of the QCAT Act, is relevant. Rule 86 applies when party A makes an offer to settle which is rejected by party B, and the ultimate decision of the Tribunal is not more favourable to B than the offer. In that situation, the Tribunal may award A ‘all reasonable costs incurred by that party in conducting the proceeding after the offer was made’.
- I will consider the various aspects of Mr Murphy’s submissions below.
- Mr Murphy argues that the Board unnecessarily disadvantaged him in three ways.
- First, the Board in the course of the dismissal application made an oral application, without prior notice, for an extension of time for the making of the referral. This, it is said, deprived Mr Murphy of the opportunity to prepare for that application.
- I note that the extension of time application was a fall-back position for the Board, in the event that the Tribunal were to find that the referral had not been made as soon as possible. Quite often, fall-back positions will arise in the course of oral argument. In this case, an argument from the Board that an extension of time was appropriate, if required, was not startling. The lack of an extension of time application had been mentioned by Mr Murphy’s counsel in the outline of submissions she prepared the day before the hearing. She said in the submissions that if such an application were made, it should not be granted. So it is clearly a topic she had considered. She was able to respond appropriately to the application when it was made.
- I therefore do not consider that Mr Murphy suffered disadvantage by the lack of notice of the extension of time application.
- The second type of disadvantage contended is that the Board had been on notice that Mr Murphy’s counsel wished to cross-examine the Board’s secretary, but raised opposition to this only at the dismissal hearing.
- In my view, such an objection is unremarkable in oral advocacy. In any event, the objection was unsuccessful, so I do not consider that Mr Murphy was disadvantaged.
- The third type of disadvantage pressed by Mr Murphy relates to the Board’s ‘overall conduct of this matter’. The Board had received an informal complaint in December 2016, and then a formal complaint in April 2017. Yet it was not until March 2018 that the Board issued the notice of its proposed disciplinary action to Mr Murphy. The Board then took more than five months to make the disciplinary referral. This subjected Mr Murphy to ‘an extended and unnecessary period of uncertainty’. It caused his lawyers to engage in ‘protracted correspondence’ with the Board seeking confirmation that the referral had been made.
- An affidavit filed by Mr Murphy’s solicitor attaches correspondence sent on 4 June 2018. I note that in this correspondence the lawyers also took the opportunity to advance arguments as to why the matter should not be pursued by the Board.
- In my view, only disadvantage caused in the course of the Tribunal proceeding, including any delay in starting it, is relevant. This is because section 102(3)(a) of the QCAT Act refers to disadvantage to a party to a proceeding. That must be intended to refer to disadvantage to the person in their capacity as a party to a Tribunal proceeding, rather than disadvantage generally. Accordingly, any delay or other disadvantage prior to 10 April 2018, which is when Mr Murphy exercised his right to require the Board to refer the matter to the Tribunal, is irrelevant.
- I accept that Mr Murphy was subjected to a period of uncertainty in the months after April 2018. He would have incurred cost when his lawyers wrote to the Board on 4 June 2018, though I do not regard the description ‘protracted correspondence’ as warranted. Further, that letter went well beyond a mere enquiry about whether the referral had yet been made.
- The Board’s delay in referring, which led to the dismissal of the referral, has had the overall results of shortening the period of uncertainty faced by Mr Murphy and of reducing his costs. Had the matter been referred to the Tribunal in a timely way, Mr Murphy would have faced a longer and, if he chose to remain legally represented, costlier period of uncertainty until the matter was determined. There would have been a timetable for the filing of documents, a directions hearing, a compulsory conference and, if the matter had not settled at the compulsory conference, a hearing. Of course Mr Murphy may have sought a costs order at the end of the disciplinary proceeding. However, it is by no means certain that he would have been awarded costs even if no misconduct was established. The Board’s decision to commence a disciplinary proceeding could not be characterised as unreasonable. The Board had taken into account the opinion of the Queen’s Counsel it had appointed as investigator. The fact that the Board was then obliged to refer the matter to the Tribunal, upon Mr Murphy’s election, would have been a factor weighing against an award of costs: see, by way of analogy, Medical Board of Australia v Wong.
- So while I accept that there was short-term disadvantage to Mr Murphy caused by the Board’s delay in referring the matter, the significance is reduced because of the early ending of the proceeding which resulted.
The nature and complexity of the dispute
- For most matters in the Tribunal, a party does not have any automatic right to be legally represented. However, disciplinary proceedings are an exception.
- Mr Murphy submits that it was wholly appropriate for him to be legally represented given the risk to his reputation and livelihood. Further, some aspects of the dispute were complex. This included the dismissal application as it turned on questions of statutory interpretation. I accept these submissions.
- Nonetheless, a party who chooses to engage lawyers in a proceeding before the Tribunal cannot do so with an expectation that costs will generally ‘follow the event’ as they do in civil proceedings in the courts.
- Mr Murphy submits that ‘barring a successful party from recovering costs that were reasonably necessary to achieve a satisfactory outcome would not usually be in the interests of justice’. An observation of Keane JA (with whom the other judges agreed) in Tamawood Ltd & Anor v Paans is cited:
In the absence of countervailing considerations, where a party has reasonably incurred the cost of legal representation, and has been successful before the Tribunal, it could not rationally be said to be in the interests of justice to allow that success to be eroded by requiring that party to bear the costs of the representation which was reasonably necessary to achieve that outcome.
- The Tribunal referred to in that passage was the Commercial and Consumer Tribunal, which operated on a different but closely analogous costs framework. The party seeking costs in that case was a party who had been awarded damages in a building dispute. That is different to Mr Murphy’s situation of seeking costs after successfully resisting a disciplinary proceeding. In a disciplinary context, there will inevitably be a countervailing consideration to be taken into account, namely a public interest in not discouraging a regulatory agency from carrying out its statutory functions in appropriate circumstances. This requires a balancing exercise.
- As noted in Queensland Racing Integrity Commission v Vale (‘Vale’):
Protection from costs is intended to ensure regulators are not inhibited from authorising or taking enforcement action where there is a reasonable belief that the evidence justifies doing so.
Relative strengths of parties’ claims
- Mr Murphy submits that the Board’s argument that the referral had been made as soon as possible was weak. Further, he points out that the Board proceeded to make an extension of time application, without prior notice, that also failed. These factors, he submits, favour an order for costs.
- However, I consider that the Board had an arguable case that it had referred the matter as soon as possible. It took the approach that it had done all it could reasonably do in circumstances where the delay was caused by its lawyer, though I was not persuaded by the argument.
- The extension of time application had stronger prospects. The matter was rather finely balanced.
- Overall, then, I do not consider that Mr Murphy had a significantly stronger case.
- Mr Murphy points out that he is an individual, whereas the Board is a statutory body ‘aligned with the Queensland Government’. Presumably an implication is that the Board has greater financial capacity than Mr Murphy. However, it is not contended that capacity to pay costs is itself a basis for ordering costs.
…a losing public interest litigant will not necessarily be shielded from an adverse costs order just because the case was reasonably brought and conducted for proper motives on solid grounds if the same can also be said of the successful party.
Offers of settlement
- Mr Murphy points to the offer made in his lawyers’ letter to the Board dated 4 June 2018 that the matter be resolved by the complaint being dismissed, the referral to the Tribunal (if made) being withdrawn, and by Mr Murphy not seeking costs. The Board rejected the offer. The lawyers reiterated the offer in a letter dated 1 November 2018, but received no response within the stipulated offer period. Mr Murphy submits that rejection of the offers was unreasonable, and that an award of costs on an indemnity basis is warranted in the interests of justice and having regard to rule 86 of the QCAT Rules.
- However, I do not consider that it was unreasonable for the Board to reject the offers. As a regulatory agency, it was required to consider the public interest in disciplinary proceedings being pursued in appropriate cases in an effort to uphold ethical standards in the profession. The Board’s view that the matter should proceed was reasonable, even though it may also have been reasonable for the Board to conclude otherwise.
- Further, there were no decided cases to guide the parties on how the Tribunal might deal with a delayed referral. The Board was therefore in unchartered territory on the question of its responsibilities in the event that it failed to refer a matter as soon as possible.
Model litigant obligations
- Mr Murphy submits that the Board failed in its obligation to act as a model litigant, by not dealing with the matter promptly, and that it would therefore be appropriate to award costs. The following passage in Vale is cited:
…a successful respondent ordinarily has a powerful argument that costs should follow the event in disciplinary proceedings that are unreasonably or inefficiently prosecuted or are mounted with good intentions but on inadequate evidence.
- However, if I understand the submissions correctly, the references to unreasonable prosecution and to inadequately-evidenced prosecution are not relied on. That is appropriate because, in my view, there was an arguable case of misconduct based on undisputed evidence. It was reasonable for the Board to instigate the disciplinary process.
- There was inefficient prosecution by the Board, in that the referral did not occur as soon as possible.
Should costs be awarded?
- Overall, I do not consider that it would be appropriate to exercise the discretion to award costs to Mr Murphy. There was delay in the referral by the Board, which was undesirable, but in consequence the referral was dismissed. This shortened the overall proceeding. It is unlikely that costs would have been awarded to Mr Murphy in the event that the matter had proceeded to a full disciplinary hearing even if the Tribunal found there was no misconduct. The Board was exercising a public protective function in instigating the disciplinary process. Its case was based on undisputed evidence and was arguable. It had been Mr Murphy’s choice to engage lawyers even though there could be no certainty of costs being awarded.
- The Board’s decision to proceed with the referral after the dismissal application was filed was also reasonable in light of the Board’s public function, the uncertainty around how a late referral should be dealt with by the Tribunal, and given that the Board had arguable grounds for seeking an extension of time.
- I have decided to refuse Mr Murphy’s application for a costs order.
 Valuers Registration Board v Murphy  QCAT 41.
 Bunnings Properties Pty Ltd v Valuer-General; The Trust Company Ltd v Valuer-General  QLC 63.
 Valuers Registration Board v Murphy  QCAT 41, .
 Ibid, .
 Ibid, .
  QCAT 10.
 Ibid, .
 Ibid, .
 Rule 86(2).
 Written submissions for Mr Murphy dated 6 March 2019, .
  QCA 42, .
 QCAT Act, s 43(2)(b)(ii).
 Written submissions for Mr Murphy dated 6 March 2019, .
  QCA 111, .
  QCATA 110,  (citation omitted).
 Written submissions for Mr Murphy dated 6 March 2019, .
  QCATA 110, .
 Ibid, .
- Published Case Name:
Valuers Registration Board v Neil Patrick Murphy
- Shortened Case Name:
Valuers Registration Board v Murphy (No 2)
 QCAT 332
31 Oct 2019