In this decision, the Court of Appeal held that QCAT had no power under s 462 of the Legal Profession Act 2007, in the absence of “exceptional circumstances”, to limit the amount of costs to be awarded.
Sofronoff P and Morrison JA and Douglas J
4 July 2019
QCAT dealt with a complaint against the respondent, who was said to have breached his duty as a solicitor by allowing his interest as a solicitor to conflict with the interest of a client. . The Tribunal found that the respondent’s breach of duty (which was admitted) amounted to unsatisfactory professional conduct. –. Before the Tribunal, the respondent conceded that there should be an order for costs in favour of the Legal Services Commissioner (“the Commissioner”). . The respondent submitted that costs should be fixed. . The Commissioner contended that the order should simply be for the payment of costs to be assessed. .
Section 462 of the Legal Profession Act 2007 (“LPA”) relevantly provides:
“(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.
(4) A disciplinary body may make an order requiring the Commissioner to pay costs, but may do so only if it is satisfied that—
(a) the Australian legal practitioner or law practice employee has not engaged in prescribed conduct; and
(b) the body considers that special circumstances warrant the making of the order.
(5) An order for costs—
(a) may be for a stated amount; or
(b) may be for an unstated amount but must state the basis upon which the amount must be decided.”
There was no suggestion of “exceptional circumstances” within the meaning of s 462(1) LPA. . The Tribunal said: “Weighing up the applicant’s lack of success on the issues which were litigated, and the manner in which the case was conducted, it seems appropriate to make an order which would limit the costs to be awarded to the applicant”. . It fixed the costs at $2,500. . In making that order, the Tribunal relied upon a passage in Legal Services Commissioner v Bone  QCA 179 where it was held that the wording of s 462(4) and (5) was such that an order for a “stated amount” comprehended that the costs ordered might be part only of the overall costs. , .
Court of Appeal
The issue for the Court of Appeal was whether the Tribunal had the power to limit costs. Morrison JA (with whom Sofronoff P and Douglas J agreed) noted that in Legal Services Commissioner v Baker (No 2)  2 Qd R 249 and Legal Services Commissioner v Bradshaw  QCA 126 the Court of Appeal held that the effect of s 462(1) is that unless the Tribunal is satisfied that there are “exceptional circumstances”, it must make an order for the costs of the whole proceeding. –. Morrison JA was not convinced that the interpretation reached in those decisions was plainly wrong. . Accordingly, his Honour held that the Tribunal’s reliance upon the passage from Bone was misplaced. .
Morrison JA then considered whether s 462(5) LPA permits the Tribunal to make an order that limits costs. . He said (footnotes and paragraph break omitted):
“What s 462(5) does not permit is an order that limits the costs. To do so would run contrary to the obligation in s 462(1) … I do not accept the respondent’s submission that this approach would render [s 462(5)(a)] nugatory. Under that subsection an order for costs ‘may be for a stated amount’. The two forms of order can operate together … One can envisage cases where the order is made under s 462(1) but the evidence establishes what those costs actually are, in which case they can be for a ‘stated amount’. It follows, therefore, that the Tribunal in this case purported to exercise a power it did not have. It could have stated the costs, if all of the costs of the proceedings could have been quantified in a way so they could be ‘stated’. But that is not the case. Not only was there no evidence of what all of the costs were, but the Tribunal did not purport to do that exercise. Rather, it made an order limiting the costs.” –.
Morrison JA then considered the facts of the case, and concluded that there was no basis for limiting the costs ordered, even if the Tribunal had the power to do so. . In the result, the appeal was allowed. .
M J Hafeez-Baig