Pennisi v Legal Services Commissioner

This case concerned the proper interpretation of s 462 Legal Profession Act 2007. Under that provision, a disciplinary body must order costs against a practitioner who is found to have engaged in prescribed conduct unless there are exceptional circumstances. Here, the appellant was the subject of two charges relating to separate complaints. Both charges were heard in one proceeding. The appellant conceded the first and successfully contested the second. The tribunal held that as he had been convicted of the former charge, he was required to pay the costs of both charges as there were no exceptional circumstances. On appeal, the Court held that, on the proper construction of s 462, it was to be applied by reference to each complaint, such that the appellant should only be required to pay the costs of the first. The Court also considered the meaning of exceptional circumstances.

Bowskill CJ and Dalton JA and Kelly J

24 November 2023

The appellant is a legal practitioner. [1]. The Legal Services Commissioner alleged, on the basis of two separate charges, that the appellant was guilty of professional misconduct or unsatisfactory professional conduct. [1]. The two charges related to separate complaints. [6]. Charge 1 alleged that the appellant had failed to maintain reasonable standards of competence and diligence in the preparation of a new will and enduring power of attorney for Mrs M. [7]. Charge 2 alleged that the appellant failed to maintain reasonable standards of competence and diligence in the administration of the estate of Mrs H. [8]. The appellant admitted the facts alleged in charge 2 and accepted that those facts amounted to unsatisfactory professional conduct. [8]. There was no substantive hearing in relation to charge 2. [8]. Charge 1 involved a contested hearing. [7]. The tribunal found that the Commissioner had not established the charge, and it was dismissed. [7].

The appeal related only to the question of costs. The tribunal ordered that the appellant pay the Commissioner’s costs on the standard basis under s 462(1) Legal Profession Act 2007. That section provides, that 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”. [2]. The tribunal held that because the appellant was found guilty of charge 2, he was to pay costs of both proceedings unless exceptional circumstances were present. [11]. The tribunal found no exceptional circumstances established. [14].

On appeal, the appellant contended that, on its proper construction, s 462(1) applied separately to each complaint. [45]. The Court accepted that construction for four main reasons. First, s 462(1) is only engaged where there has been a finding that the practitioner engaged in prescribed conduct. [48]. Read in the context of the surrounding provisions, that must mean prescribed conduct in relation to a particular complaint. [48]. Second, s 462(1) refers to the practitioner paying the costs of “the complainant” which supports a construction that s 462 contemplates an order in respect of each complaint. [49]. Third, that construction is not inconsistent with the protective purpose of the provisions. [50]. Where the practitioner successfully contests a charge, the rationale for the practitioner to be required to pay costs is not apparent. [50]. Finally, that construction is supported on policy grounds. A practitioner should be encouraged to take responsibility for their misconduct where it is contestable, but the Commissioner should also be encouraged to consider whether contested charges have sufficient prospects of success. [50]–[51].

On that basis, the Court held that, in respect of charge 2, the appellant had accepted that there were no exceptional circumstances. [53]. However, the tribunal had a discretion as to costs under other parts of s 462. Under s 462(4), a disciplinary body may only require the commissioner to pay a practitioner’s costs if it considers that special circumstances warrant such an order. [2]. The Court noted that “special circumstances” imposed a higher bar than “exceptional circumstances”. [56]. There were no special circumstances in this case. The Court set aside the tribunal’s costs order and substituted an order that there be no order as to the costs of charge 1.

Notably, the Court, in obiter, considered the meaning of exceptional circumstances under s 462(1). [62]–[66]. In particular, the Court rejected the notion that the meaning of exceptional circumstances under s 462 could be informed by the meaning of that phrase in other contexts (including other costs contexts). [62].

L Inglis