NSW Architects Registration Board v Cserhalmi (No 2)

[2006] NSWADT 282

CITATION:	NSW Architects Registration Board v Cserhalmi (No 2) [2006] NSWADT 282
DIVISION:	General Division
PARTIES:	APPLICANT NSW Architects Registration Board RESPONDENT Otto Cserhalmi
FILE NUMBER:	053399
HEARING DATES:	On the papers
SUBMISSIONS CLOSED:	08/28/2006
DATE OF DECISION:	09/27/2006
BEFORE:	Chesterman M - ADCJ (Deputy President)
CATCHWORDS:	Architect - disciplinary finding - professional misconduct - Architect - disciplinary finding - unsatisfactory professional conduct - Architects Act - Architect - disciplinary finding - unsatisfactory professional conduct - Architects Act - Architect - discriplinary finding - professional misconduct
MATTER FOR DECISION:	Costs
LEGISLATION CITED:	Administrative Decisions Tribunal Act 1997 Anti-Discrimination Act 1977 Architects Act 1921 Architects Act 2003 Retail Leases Act 1994
CASES CITED:	Brooks Maher v Cheung [2001] NSWADT 18 Cripps v G & M Dawson Pty Ltd [2006] NSWCA 81 Doyle v Registrar, NSW Architects Registration Board (No 2) [2006] NSWADT 251 NSW Architects Registration Board v Cserhalmi [2006] NSWADT 110 PC v University of New South Wales (No 2) [2005] NSWADT 264 Townsend v Chief Executive, State Rail Authority [1999] NSWADT 104
REPRESENTATION:	APPLICANT P Griffin, barrister RESPONDENT M Davies, solicitor
ORDERS:	The Respondent's application for the costs of these proceedings is dismissed

Introduction

1 This decision relating to costs follows on from a decision of the Tribunal delivered on 13 April 2006: NSW Architects Registration Board v Cserhalmi [2006] NSWADT 110.

2 In that decision, the Tribunal held that that non-compliance with requirements stipulated in the Architects Act 2003 (‘the Architects Act’) deprived it of jurisdiction to hear and determine a disciplinary application brought under the Act by the NSW Architects Registration Board (‘the Board’) against the Respondent, Mr Otto Cserhalmi. Mr Cserhalmi is an architect registered under the Architects Act.

3 In its disciplinary application, the Board sought findings of professional misconduct and/or unsatisfactory professional conduct against Mr Cserhalmi. The application was made following investigation of a complaint lodged with the Registrar of the Board pursuant to s 34 of the Architects Act. Section 46 of this Act provides that the Board ‘may apply to the Tribunal for a disciplinary finding under this Division against an architect with respect to any complaint against the architect’.

4 In objecting to the Tribunal’s jurisdiction, counsel for Mr Cserhalmi argued that the broad scope of the power conferred on the Board by s 46 was limited by provisions within s 43. These are to the effect that, following investigation of a complaint, the Board must apply to the Tribunal for a disciplinary finding if satisfied that the architect is guilty of professional misconduct (s 43(3)) and that it may apply to the Tribunal if satisfied that the architect is guilty of unsatisfactory professional conduct (s 43(2)). In the latter situation, the Board may in the alternative take one or more of the steps enumerated in s 43(4). These include issuing a reprimand or caution and imposing conditions on the architect’s registration. A further provision of relevance is s 43(1), which states as follows:-

(1) After the Board has completed an investigation into a complaint against an architect, the complaint is to be dealt with in accordance with this section.

5 Counsel for the Board conceded that the Board, before resolving to apply to the Tribunal for a disciplinary finding against Mr Cserhalmi, did not satisfy itself that he was guilty of either professional misconduct or unsatisfactory professional conduct.

6 Upholding Mr Cserhalmi’s objection to jurisdiction, the Tribunal held that ‘subsections (2) and (3) of s 43 are intended to define exhaustively the circumstances in which the Board may make an application to the Tribunal under s 46’ (NSW Architects Registration Board v Cserhalmi [2006] NSWADT 110 at [59]) and that ‘it was the legislative intention… that if an application is made to the Tribunal in breach of the conditions stipulated in s 43(2) and s 43(3), the application should be deemed invalid and the Tribunal should lack jurisdiction to entertain it’ (at [60]). On account of the concession made by counsel for the Board, it was indisputable that these conditions had indeed been breached.

7 The Tribunal stated at [49] that because of ‘defects in the drafting of the relevant provisions’ the question whether the Board’s breach of these conditions invalidated the proceedings against Mr Cserhalmi was ‘not straightforward’.

8 The Tribunal rejected a second ground of objection that Mr Cserhalmi had raised, based on the fact that the complaint against him had not been verified by statutory declaration. It concluded that the complainant was exempted by a provision of the regulations under the Architects Act from complying with a requirement of verification contained in s 36(2) of the Act.

9 In its judgment at [86], the Tribunal gave directions regarding an application that Mr Cserhalmi had made for an award of the costs of the proceedings under s 48 of the Architects Act. These directions provided for the issue of costs to be determined ‘on the papers’, pursuant to s 76 of the Administrative Decisions Tribunal Act 1997 (‘the ADT Act’).

10 After initial written submissions on this issue had been filed by both parties, the Registry asked the parties’ representatives for further submissions relating to the question which will now be examined in this judgment. This is whether a requirement of ‘special circumstances’ contained in s 88(1) of the ADT Act must be satisfied in a costs application made under s 48 of the Architects Act. As this is the first disciplinary application made to the Tribunal under the Architects Act (previous applications relating to disciplinary matters have been made under the Architects Act 1921), there is no authority directly bearing on this question. Supplementary submissions relating to it were duly filed.

Whether or not a requirement of ‘special circumstances’ is applicable

11 Section 48 of the Architects Act states:-

48 Tribunal may award costs

The Tribunal may award costs under section 88 of the Administrative Decisions Tribunal Act 1997 in respect of proceedings commenced by an application under this Division.

12 The relevant parts of s 88 of the ADT Act are as follows:-

88 Costs

(1) Subject to the rules of the Tribunal and any other Act or law, the Tribunal may award costs in relation to proceedings before it, but only if it satisfied that there are special circumstances warranting an award of costs.

(2) …

(3) However, the Tribunal may not award costs in relation to proceedings for an original decision unless the enactment under which the Tribunal has jurisdiction to make the decision provides for the awarding of costs.

(4) …

13 Submissions on behalf of Mr Cserhalmi. Mr Malcolm Davies, who prepared the submissions on costs on behalf of Mr Cserhalmi, argued that, despite the reference to s 88 of the ADT Act in s 48 of the Architects Act, the requirement of ‘special circumstances’ in s 88(1) did not apply. It followed, he asserted, that Mr Cserhalmi should be awarded costs in conformity with the normal principle of civil litigation that ‘costs follow the event’.

14 In his initial submission on costs, Mr Davies cited in this connection the case of PC v University of New South Wales (No 2) [2005] NSWADT 264. The judgment in this case pointed out at [5] that the ADT Act divides the Tribunal’s jurisdiction into two categories: proceedings involving the ‘review of reviewable decisions’ and proceedings for an ‘original decision’. This dichotomy, it said, appears at several points in the Act.

15 At [6], the Tribunal stated that the costs powers of the Tribunal were ‘based on that categorisation’. While ‘the general rule’ was to be found in s 88(1) of the ADT Act, it was ‘disapplied (sic) in the case of proceedings for “original” decisions by subsection (3)’.

16 Having reproduced the terms of these two subsections of s 88, the Tribunal then said, at [7]:-

The result of these two provisions… is that in the Tribunal’s non-original (i.e. review) jurisdiction it may award costs based on the principle in s 88(1); but if the matter falls on the ‘original decisions’ side then the power must be found in the primary Act conferring jurisdiction on the Tribunal.

17 Mr Davies relied on these statements of principle in PC v University of New South Wales (No 2) for the proposition that, because the present proceedings were ‘in the Tribunal’s original jurisdiction’, the ‘ability to award costs’ was ‘determined by the original enactment’ – i.e. the Architects Act – free of any restriction imposed under s 88(1) of the ADT Act. Because s 48 of the Architects Act specifically authorised awards of costs, it could not, he said, be claimed that the ‘bar to awarding costs’ in s 88(3) of the ADT Act was applicable.

18 In his supplementary submission, Mr Davies sought to distinguish a Tribunal decision to which the Registry had drawn the parties’ attention in its letter requesting supplementary submissions. In this case, Townsend v Chief Executive, State Rail Authority [1999] NSWADT 104, the Tribunal held that the requirement of ‘special circumstances’ applied to awards of costs made in proceedings conducted in the Tribunal under the Retail Leases Act 1994 (‘the RL Act’). This followed, it said, from s 77A of the RL Act, which states: ‘The Tribunal may award costs under section 88 of the Administrative Decisions Tribunal Act 1997 in respect of proceedings commenced by an application under this Part.’ At [6], the Tribunal indicated that its jurisdiction under the RL Act involved ‘proceedings for an original decision’ within the meaning of s 88(3) of the ADT Act.

19 The reason why, in Mr Davies’ submission, the Townsend decision did not apply to the present case, despite the evident similarity between s 77A of the RL Act and s 48 of the Architects Act, was that a disciplinary application to the Tribunal under the latter Act was not properly to be regarded as ‘proceedings for an original decision’. In so arguing, it may be noted that Mr Davies appeared to contradict his earlier line of argument based on PC v University of New South Wales (No 2).

20 In advancing this contention, Mr Davies relied on the definition of ‘original decision’ in s 7 of the ADT Act. This section states:-

7 What is an original decision?

An original decision is a decision of the Tribunal made in relation to a matter over which it has jurisdiction under an enactment as the primary decision-maker.

21 It was not correct, Mr Davies argued, to regard the Tribunal as ‘the primary decision-maker’ in a case such as the present. This was because under the provisions within s 43 of the Architects Act that are outlined above at [4], the Board, not the Tribunal, was clearly designated as ‘the primary decision-maker’. Subsections (2) and (3) of this section stipulated that the Board, after investigating a complaint, could not apply to the Tribunal for a disciplinary finding unless it had first reached a decision that the architect in question was guilty of professional misconduct or of unsatisfactory professional conduct. The role of the Tribunal in hearing the application would therefore be not to make an ‘original decision’ in the matter, but to confirm or reject the ‘original decision’ that the Board had already made.

22 Finally, Mr Davies argued, in responding to the submissions filed on the Board’s behalf by Mr Patrick Griffin, that it was wrong to characterise a decision of the Board under s 43(2) or (3) of the Architects Act as merely ‘preliminary’. This Act, he said, did not establish any category of ‘preliminary’ decisions.

23 Submissions on behalf of the Board. Mr Griffin argued that the principles stated in Townsend should be applied to the present case. He drew attention to the following passages in the Tribunal’s judgment:-

8… the construction to be preferred is that s 88(1) of the Tribunal Act states the primary rule to be applied in proceedings before the Tribunal. Further, where two or more statutes are relevant to an issue of interpretation, a construction should be adopted which ‘facilitates the sensible operation together’ of the statutes...

9 Section 88(1) also allows for the possibility that the primary rule may be displaced or varied by the inclusion of the qualification “Subject to the rules of the Tribunal and any other Act or law …”

11 Section 77A of the Act does not purport to displace s 88 of the Tribunal Act.

12 The other relevant provision is s 88(3). I interpret that provision as being designed to ensure that the primary rule is not applied in original jurisdictions where there is no provision for the award of costs in the enactment conferring jurisdiction. In the present instance the primary enactment does confer a power to award costs. So the pre-condition for the operation of s 88(1) set by s 88(3) is satisfied.

13 Situations could arise where the enactment conferring jurisdiction expressly set a different standard for the award of the costs to that contained in the primary rule found in s 88(1). In such a situation I consider that the provision in the enactment conferring jurisdiction would be accorded priority….

24 As already mentioned, Mr Griffin submitted also that decisions by the Board under s 43(2) or (3) were ‘preliminary in nature’. They recorded, he said, a ‘threshold’ view that there was ‘sufficient evidence to seek a disciplinary finding by the Tribunal’. Since the Board was required to apply to the Tribunal for a decision as to whether the relevant architect was in fact guilty of professional misconduct and/or unsatisfactory professional conduct, the Tribunal was clearly the ‘primary decision-maker’.

25 The Tribunal’s conclusions. In the Tribunal’s opinion, the reasoning in Townsend, which has been applied in numerous Tribunal decisions under the RL Act, is applicable to costs determinations under s 48 of the Architects Act. In consequence, costs orders under this section may not be made unless the requirement of ‘special circumstances’ in s 88(1) of the ADT Act is satisfied.

26 In so concluding, the Tribunal agrees with Mr Griffin that disciplinary proceedings under s 46 of the Architects Act are ‘proceedings for an original decision’ because, in accordance with the definition in s 7 of the ADT Act, they will lead to ‘a decision of the Tribunal… in relation to a matter over which it has jurisdiction under an enactment as the primary decision-maker’. But the reason why this is so is not, as Mr Griffin argued, that the Tribunal’s decision is ‘primary’, in some vernacular sense, while the Board’s earlier decision under s 43 to apply to the Tribunal is merely ‘preliminary’. It stems instead from s 37 of the ADT Act and s 47 of the Architects Act, to which neither Mr Griffin nor Mr Davies referred.

27 Section 37 of the ADT Act states:-

37 Conferral of jurisdiction to make original decisions

The Tribunal has jurisdiction under an enactment to act as the primary decision-maker if the enactment provides that applications may be made to it for decisions made in the exercise of functions conferred or imposed on the Tribunal by or under that enactment.

28 Section 47 of the Architects Act sets out the ‘functions’ that are ‘conferred or imposed on’ the Tribunal by that Act when an application is made to it under s 46. The Tribunal is required by s 47(1) to determine ‘whether or not the architect is guilty of unsatisfactory professional conduct or professional misconduct’. It is empowered under subsections (2) – (5) of s 47 to make further decisions or orders consequent on its determination under s 47(1): for example, that the architect’s registration is to be cancelled or suspended.

29 When these provisions are read in conjunction with s 7 of the ADT Act (which is set out above at [20]), it is beyond doubt that when the Board applies to the Tribunal for a disciplinary finding under s 46 of the Architects Act, it sets in train ‘proceedings for an original decision’. Section 46, subject to the important limitations on its use that derive (according to the Tribunal’s earlier decision in the present proceedings) from s 43, is the section in the relevant ‘enactment’ (i.e. the Architects Act) which ‘provides that applications may be made to it [the Tribunal] for decisions made in the exercise of functions conferred or imposed by the Tribunal by or under that enactment’. The principal functions in question are those set out in s 47. The Tribunal accordingly has jurisdiction, within the meaning of s 37 of the ADT Act, to ‘act as the primary decision-maker’. It follows that any decision that it makes in the exercise of that jurisdiction is an ‘original decision’ within the definition in s 7 of the ADT Act, i.e., ‘a decision of the Tribunal made in relation to a matter over which it has jurisdiction under an enactment as the primary decision-maker’.

30 This conclusion, reached through the interpretation of some rather unwieldy provisions of the ADT Act, is supported in the Tribunal’s recent decision (delivered on 22 August 2006) in Doyle v Registrar, NSW Architects Registration Board (No 2) [2006] NSWADT 251. The Tribunal was dealing in that case with proceedings for the review of a decision by the Registrar under the earlier Act governing architects, i.e., the Architects Act 1921. It offered some comments, however, on the awarding of costs under the current legislation. Having quoted s 48 of the Architects Act at [17], it said at [18]:-

This provision is of no relevance as the present proceedings were brought under the 1921 Act. Moreover, the new provision is necessitated because it has as its context a different procedure – an application for an original decision. Section 46 of the new Act permits the new Board to apply to the Tribunal for a disciplinary finding. The Tribunal now has an original jurisdiction under the new Act, whereas under the 1921 Act it only had a review jurisdiction.

31 Once it is established that the proceedings in this case are indeed proceedings for an original decision, it follows that, in accordance with the Tribunal’s reasoning in Townsend v Chief Executive, State Rail Authority [1999] NSWADT 104, the requirement of ‘special circumstances’ in s 88 of the ADT Act must be satisfied in any award of costs made under s 48 of the Architects Act. The following two considerations produce this result.

32 First, section 48 of the Architects Act ‘provides for the awarding of costs’ within the meaning of this phrase as used in s 88(3) of the ADT Act. What Mr Davies referred to as the ‘bar to awarding costs’ (under s 88(1)) that s 88(3) creates is therefore not applicable here.

33 Secondly, section 48 does not spell out any criterion for awarding costs, but says simply that costs are to be awarded ‘under s 88’. If it had set out an alternative criterion, the criterion of ‘special circumstances’ in s 88(1) would have been displaced. This follows from the opening words of s 88(1): ‘Subject to the rules of the Tribunal and any other Act or law…’.

34 As the Tribunal explained in Townsend at [13 – 16], an example of a different statutory criterion, overriding that of ‘special circumstances’, is to be found in the Anti-Discrimination Act 1977 (see now s 110). But since there is no such express criterion in the Architects Act, costs awarded by the Tribunal in the exercise of the jurisdiction conferred on it by s 46 to make original decisions falls within the scope of the following proposition appearing in Townsend at [16]:-

Section 88(1) states a rule which applies, unless displaced by the enactment conferring jurisdiction, across a wide variety of jurisdictions.

35 The question now remaining for determination is whether or not there were in this case ‘special circumstances’ within the meaning of s 88(1) of the ADT Act.

36 Three general propositions have been established in numerous cases under s 88(1) (see eg Cripps v G & M Dawson Pty Ltd [2006] NSWCA 81 at [60]; Brooks Maher v Cheung [2001] NSWADT 18 at [14]). They are (a) that ‘special circumstances’ are circumstances that are ‘out of the ordinary, without having to be extraordinary or exceptional’; (b) that the circumstances must not only be ‘special’ but must also ‘warrant’ an order for costs; and (c) that where the unsuccessful party’s conduct can be characterised as ‘grossly unreasonable’, with the consequence that ‘serious unfairness’ is apparent, this is a ‘highly relevant consideration’.

37 The Tribunal’s Practice Note on costs (Practice Note No. 12, reissued on 11 May 2005) provides in clause 2 a non-exhaustive list of examples of what might constitute special circumstances warranting a costs order. The first three items in the list are of general application:-

- whether a party has conducted the proceeding in a way that disadvantaged another party to the proceeding by conduct such as -
(i) failing to comply with an order or direction of the Tribunal without reasonable excuse;

(ii) failing to comply with this Act, the regulations, the rules or an enabling enactment;

(iii) asking for an adjournment as a result of (i) or (ii);

(iv) causing an adjournment;

(v) attempting to deceive another party or the Tribunal;

(vi) vexatiously conducting the proceeding;

- whether a party has been responsible for prolonging unreasonably the time taken to complete the proceeding;

- the relative strengths of the claims made by each of the parties, including whether a party has made a claim that has no tenable basis in fact or law; …

38 In the Tribunal’s opinion, the particular circumstances of this case may well be described as ‘out of the ordinary’ and therefore ‘special’. The more difficult question is whether, in the light of the prevailing authorities, they are such as to ‘warrant’ an order for costs.

39 The parties’ submissions on costs did not expressly address this aspect of the case at any length, even though the possible applicability of the criterion of ‘special circumstances’ was expressly drawn to their attention. Mr Davies in his initial submissions did however contend that a denial of costs to Mr Cserhalmi would cause hardship to him, whereas an order for costs against the Board would not have this effect because under Part 6, Division 2 of the Architects Act it received public funding to enable it to perform its statutory functions.

40 In the Tribunal’s opinion, none of the recognised categories of ‘special circumstances warranting an award of costs’ is present in this case. The most important single factor leading to this conclusion is that, as mentioned above at [7], the question whether it had jurisdiction in these proceedings, which were the first to be instituted in the Tribunal under the Architects Act, was ‘not straightforward’. As a result of defects in the drafting of the relevant provisions of the Architects Act, there had arisen a difficult question as to whether the Board was or was not required to make an affirmative finding adverse to Mr Cserhalmi before it could file its disciplinary application in the Tribunal.

41 Accordingly, these were not proceedings in which the unsuccessful party’s claim that the Tribunal should exercise jurisdiction ‘had no tenable basis in fact or law’. Equally, the Board’s conduct in filing the disciplinary application without having first been ‘satisfied’ in the specific manner that the Tribunal held to be required by s 43 of the Architects Act was not ‘grossly unreasonable’.

42 There is moreover no evidence to suggest that the Board’s conduct of the case ‘disadvantaged’ Mr Cserhalmi in any of the ways illustrated in Practice Note No. 12 or ‘unreasonably prolonged’ the Tribunal’s determination of the issue of jurisdiction.

43 The Tribunal takes due account of Mr Davies’ submissions regarding what might be called the ‘balance of hardship’ in this matter. There is, however, no suggestion in the authorities on s 88(1) that a disparity, even a substantial disparity, in the resources available to the parties in a case constitutes a ground for finding (or indeed refusing to find) that ‘special circumstances warranting an order for costs’ exist.

44 A further relevant consideration is the fact that in the proceedings before the Tribunal a second objection to jurisdiction raised by Mr Cserhalmi, based on the absence of verification of the complaint, was rejected.

45 For the foregoing reasons, the Respondent’s application for the costs of these proceedings is dismissed.