Paras v Legal Services Commissioner (No 4) (LSD)

[2007] NSWADTAP 39

Appeal Panel - External

CITATION:	Paras v Legal Services Commissioner (No 4) (LSD) [2007] NSWADTAP 39
PARTIES:	APPELLANT Sophia Paras RESPONDENT Legal Services Commissioner
FILE NUMBER:	058010
HEARING DATES:	On the papers
SUBMISSIONS CLOSED:	9 May 2007
DATE OF DECISION:	27 July 2007
BEFORE:	Chesterman M - ADCJ (Deputy President); Riordan M - Judicial Member; Hayes E - Non Judicial Member
CATCHWORDS:	Costs
MATTER FOR DECISION:	Costs
FILE NUMBER UNDER APPEAL:	Legal Services Commissioner file no. 16121
DATE OF DECISION UNDER APPEAL:	05/06/2005
LEGISLATION CITED:	Administrative Decisions Tribunal Act 1997 Legal Profession Act 1987 Legal Profession Act 2004
CASES CITED:	Commissioner of Police, NSW Police v Snape (No 2) (GD) [2006] NSWADTAP 35 Council of the New South Wales Bar Association v Archer (No 5) [2005] NSWADT 72 Frumar v The Owners of Strata Plan 36957 [2006] NSWCA 278 Latoudis v Casey (1990) 170 CLR 534 Paras v Legal Services Commissioner (LSD) [2007] NSWADTAP 12 PM v NSW Bar Association (No 2) [2006] NSWADTAP 36 QT v Legal Services Commissioner (LSD) [2006] NSWADTAP 13 QT v Legal Services Commissioner (No 2) (LSD) [2006] NSWADTAP 27
REPRESENTATION:	APPELLANT In person RESPONDENT N J Beaumont, barrister
ORDERS:	1. The Appellant is to pay on a party/party basis the following costs of the Respondent:-; (a) All of the costs of and incidental to the applications filed by the Appellant and heard on 22 February 2006 and 26 April 2006; and; (b) 50% of the remaining costs of and incidental to the appeal.; 2. There will be no order as to the costs of the present application.

Introduction

1 This decision deals with the costs of an appeal instituted by a solicitor against a decision made by the Respondent, who is the Legal Services Commissioner.

2 By a letter dated 6 May 2005, the Respondent issued to the Appellant a private reprimand, under s. 155(3)(a) of the now-repealed Legal Profession Act 1987 (‘the LP Act’), in respect of conduct about which a complaint had previously been made against her under Part 10 of that Act. His decision to issue this reprimand was the subject of this appeal. It was based on a finding that, for reasons set out in the letter, the conduct in question would result in a finding of unsatisfactory professional conduct if the matter were to be brought before the Legal Services Division of this Tribunal.

3 The appeal was instituted on 7 June 2005, pursuant to s. 155(6) of the LP Act. Because this preceded the commencement of the Legal Profession Act 2004, the matter fell to be determined wholly under the LP Act: see Legal Profession Act 2004, Schedule 9, clause 15. The Appellant is a legal practitioner within the definition in s. 3 of the LP Act.

4 There was a significant delay in the determination of the appeal. The causes of the delay included the filing by the Appellant of three interlocutory applications. The Tribunal, constituted by the presiding member of the present Panel, heard the first of these applications on 22 February 2006 and the second and third on 26 April 2006. Its decisions on these applications are set out in QT v Legal Services Commissioner(LSD) [2006] NSWADTAP 13 (hereafter ‘QT 1’) and QT v Legal Services Commissioner (No 2) (LSD) [2006] NSWADTAP 27 (‘QT 2’).

5 A hearing of the substantive issues took place on 17 August 2006 and written submissions were filed thereafter.

6 In a decision delivered on 7 March 2007 (Paras v Legal Services Commissioner (LSD) [2007] NSWADTAP 12 – hereafter ‘Paras’), we dismissed the appeal. We made provision at [231] for the issue of costs to be determined ‘on the papers’, under s. 76 of the Administrative Decisions Tribunal Act 1997 (‘the ADT Act’), unless either party applied, giving reasons, for a hearing to take place. We indicated that any application for costs was to be filed within 28 days.

7 On 23 March 2007, the Respondent filed an application, with supporting submissions, seeking an order that the Appellant pay the costs of and incidental to the appeal on a party/party basis. The submissions were prepared by Mr Beaumont, who has been counsel for the Respondent during all these proceedings. On 9 May 2007, the Appellant, who has represented herself throughout, filed opposing submissions. Neither party requested a hearing.

The Tribunal’s power to award costs

8 Both parties submitted that the Tribunal’s power to award costs in relation to this external appeal, brought against a decision of the Respondent, was governed by s. 88 of the ADT Act.

9 We agree with this submission, which receives support from the Tribunal’s decisions in Council of the New South Wales Bar Association v Archer (No 5) [2005] NSWADT 72 at [25 – 69] and PM v NSW Bar Association (No 2) [2006] NSWADTAP 36. We add that s. 171E of the LP Act is not applicable because that section deals only with the costs of proceedings with respect to a complaint against a legal practitioner that have been commenced by the laying of an information in the Tribunal under s. 167(1).

10 Section 88(1) of the ADT Act states: ‘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 is satisfied that there are special circumstances warranting an award of costs.’

11 There was no significant disagreement between the parties in this case as to the implications of this requirement of ‘special circumstances warranting an award of costs’ It has been discussed in numerous Tribunal cases.

12 It is sufficient for present purposes to quote from three of these cases. The Appellant relied on the first two of them in her submissions regarding ‘special circumstances’ and on the third in a different context, mentioned below.

13 In Robinson v Commissioner of Police, NSW Police [2006] NSWADT 45 at [6-7], the Tribunal said:-

6 The Tribunal has no inherent power to award costs however, it has been given such a power under s.88 of the Administrative Decisions Tribunal Act 1997 ... It is a discretionary power but it can only be exercised where the Tribunal is satisfied that there are “special circumstances” warranting an award of costs. This means that in order to obtain a cost order an applicant has two hurdles to overcome. The first being able to identify “special circumstances” and the second being able to show that the “special circumstances” warranted an award of costs…

7 “Special circumstances” have been defined as “circumstances that are out of the ordinary, but without having to be extraordinary or exceptional”. It is well established that mere success in a review application does not constitute special circumstances…

14 In New South Wales Bar Association v Tedeschi (No 3) [2003] NSWADT 174, at [14], the Tribunal referred to submissions made to it as to the meaning of the phrase ‘special circumstances so warrant’ in s 171E(2) of the LP Act. The Tribunal expressed no disagreement with them. It stated that, according to these submissions, the phrase required

…something unusual or different about the case to take the matter out of the ordinary course, according to which the presumption that there be no costs order would be expected to apply, which renders that ordinary course apparently less appropriate or fair. But that does not require that the case be extremely unusual, uncommon or exceptional.

15 In Commissioner of Police, NSW Police v Snape (No 2) (GD) [2006] NSWADTAP 35 at [27 – 28], the Tribunal said:-

27…. the Panel has taken account of the relatively recent decision of the Court of Appeal in Cripps v G & M Dawson Pty Ltd [2006] NSWCA 81. Here the conduct of the appellant, a landowner, in refusing to recognise the existence of a retail shop lease granted to the respondent by a previous owner, in failing to register it and in withholding consent to the assignment of it, was held to be ‘clearly out of the ordinary and grossly unreasonable so far as the respondent tenant was concerned’ (see the judgment of Santow JA, with whom Mason P and Brownie AJA agreed, at [60]). The Court held that this constituted ‘special circumstances’, warranting a costs order in the respondent’s favour under s 88 of the ADT Act. Santow JA added at [60]: ‘While a finding of “ serious unfairness ” is not prerequisite to determining that there are special circumstances, it is nonetheless a highly relevant consideration’.

28 This decision, which modifies to some degree the description of ‘special circumstances’ set out in Practice Note No. 12, is clearly not applicable to the present case….

16 The Tribunal’s Practice Note No. 12, mentioned in the paragraph just quoted, was relied on by the Respondent as a guide to what may constitute ‘special circumstances’. It provides a non-exhaustive list of relevant considerations, in which the following items are of relevance in the present case:-

whether a party has conducted the proceeding in a way that disadvantaged another party to the proceeding by conduct such as - …
(iv) causing an adjournment;…

(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; …

where an appeal is lodged and the Appeal Panel considers the appeal was without any real prospect of success.

17 The Appellant raised two preliminary objections regarding the making of a costs order against her.

18 The first was that the Respondent did not have standing to apply for a costs order, as he was not ‘an adversary party in a true sense but rather the decision maker in quasi-judicial proceedings’. He had been permitted to participate ‘in a limited sense to provide a contradictor for the appeal and the interlocutory proceedings’.

19 In characterising the Respondent as ‘the decision maker in quasi-judicial proceedings’, the Appellant relied on an observation that we made in Paras at [211], relating to the functions exercised by the Respondent under s. 155 of the LP Act. The Appellant’s claim that the Respondent was permitted by the Tribunal to participate ‘in a limited sense’ only in these proceedings was apparently based on the Tribunal’s decision and reasons in QT 2 at [10 – 62].

20 In neither of these contexts, however, did was it said or implied that the Respondent was not a party to these proceedings. In fact, in QT 1 at [6] and again in QT 2 at [10], the Tribunal made it clear that the Respondent had ‘duly elected’ to be a party to the appeal, pursuant to s. 67(2B) of the ADT Act.

21 Irrespective of the matters raised by the Appellant, it is beyond doubt that the Respondent, being a party to these proceedings, has standing to apply for an order for costs. This preliminary objection by the Appellant is without foundation.

22 Secondly, the Appellant submitted that the Respondent could not apply for costs of the interlocutory proceedings with which the decisions in QT 1 and QT 2 were concerned because the Tribunal did not reserve costs in those decisions and the Respondent had not applied for costs within 28 days of each decision. Citing the Tribunal’s judgment in Commissioner of Police, NSW Police v Snape (No 2) (GD) [2006] NSWADTAP 35, the Appellant claimed that the Panel was now functus officio and no longer had the power to award costs in relation to these interlocutory proceedings.

23 This argument is also misconceived. Courts and tribunals regularly, though not invariably, defer decisions on the costs of interlocutory proceedings until after the proceedings as a whole have concluded. There is no rule of law or practice to the effect that if the costs of interlocutory proceedings have not been expressly reserved, they cannot be dealt with in a later order for costs.

24 The Appellant’s reference to a time limit of 28 days appears to have been prompted by our prescribing this time limit for applications for costs in our judgment in the substantive proceedings (i.e., in Paras: see above at [6]). No such time limit was set in QT 1 or QT 2.

25 The decision in Snape dealt with an entirely different issue. This was whether on account of a time lapse of about two years the Tribunal was precluded from determining an application for costs which the successful appellant had made during the appeal proceedings but which the Tribunal, due to an oversight, had failed to determine. Contrary to the tenor of this objection by the Applicant, the Tribunal in fact held that in these circumstances it was bound to determine the costs application.

The matters relied upon by the Respondent

26 The general thrust of the Respondent’s submissions. In maintaining that ‘special circumstances’ were present in this case, Mr Beaumont argued that the Appellant’s conduct of the appeal was characterised by three features of significance. These were as follows.

27 First, she engaged in ‘the prolix and largely misconceived pursuit of collateral issues’ which ‘significantly protracted the hearing and determination of these proceedings, both at the interlocutory and final stages’. Her arguments were frequently ‘diffuse’ or ‘obscure’ and due to carelessness (at least) she made factual statements that were wrong.

28 Secondly, she was wholly unsuccessful in two of her interlocutory application and her partial success in a third application became irrelevant on account of a later procedural decision taken by her.

29 Thirdly, during in the interlocutory and the substantive proceedings, she made serious and unwarranted accusations of improper behaviour by the Respondent and by the solicitor on the record for the Respondent.

30 In submitting that, ‘collectively at least’, these matters constituted ‘special circumstances’, Mr Beaumont wrote:-

Ms Paras had every right to appeal against the Commissioner’s decision to reprimand her, but she had no right to take up the scarce time and resources of the Tribunal as she did, nor otherwise to conduct her appeal in the irresponsible and dilatory manner in which she did.

31 The particular aspects of the interlocutory and substantive proceedings on which these submissions are based may be outlined as follows.

32 The interlocutory proceedings. The first interlocutory application by the Appellant was for an order referring a question of law – namely, whether the Respondent had power, under s. 155(3)(a) of the LP Act, to issue a private reprimand – for determination by the Supreme Court under s. 118D(1) of the ADT Act.

33 In QT 1, the Tribunal dismissed the application. It acknowledged at [52] that the Appellant’s claim that the Respondent possessed no such power was ‘arguable’. But at [47] it said also that ‘four considerations’, which were outlined in the ensuing paragraphs, ‘militate strongly against referral’. The second of these considerations was that the Tribunal could itself determine this question in disposing of the appeal.

34 It is useful to interpolate here that on 1 November 2006, after the only day of hearing of the substantive proceedings but before submissions had closed, the Appellant applied by letter to the Tribunal for this same question as to the Respondent’s power under s. 155(3)(a) to be determined by the Appeal Panel, as a preliminary question. As indicated in Paras at [85 – 87], we rejected this application.

35 In the same judgment, we decided the question adversely to the Appellant, at [200 – 207].

36 The second interlocutory application by the Appellant was for an order that the Respondent’s role in the proceedings should be limited to that of a party assisting the Tribunal, as opposed to a party with full adversarial rights

37 In QT 2 at [10 – 62], the Tribunal dismissed this application. It drew attention at [51] to the fact that the Appellant, in her Amended Notice of Appeal, had alleged bad faith on the part of the Respondent. It indicated at [58] that while the level of participation currently foreshadowed by him was not such as to cast doubt on his impartiality or his capacity to appear impartial, he might find it necessary, once she had filed her evidence, to contest strenuously some factual aspects of this evidence. It pointed out that in these circumstances doubt might arise regarding his capacity to appear impartial.

38 Accordingly, while dismissing the application, the Tribunal also directed at [60] that if these developments occurred the Respondent should apprise the Attorney General of the situation and ascertain whether the Attorney General would consider it appropriate to intervene in the proceedings under s. 69 of the ADT Act and take over from the Respondent the task of presenting a substantive defence to the appeal.

39 During August 2006, the Attorney General advised the Respondent that he did not intend to intervene, but that he would reconsider this decision if in the course of the appeal the Appeal Panel granted leave under s. 118B(1)(b) for the appeal to extend to matters other than questions of law.

40 Having previously applied for such leave to be granted, the Appellant indicated on 29 September 2006 that she no longer sought it. She gave as her reason the illness of a person that she had intended to call as a witness. As we pointed out in Paras at [83], this removed any need for the Attorney General to defend the appeal in lieu of the Respondent.

41 The Appellant’s third interlocutory application, heard on the same day as the second, was for an order that Ms Lynda Muston, who was the solicitor on the record for the Respondent, should no longer act for him in the proceedings.

42 In QT 2 at [63 – 86], the Tribunal dismissed this application. In the course of so doing, it observed at [71 – 72] that there was no foundation at all for the Appellant’s claim that Ms Muston, by virtue of her professional activities before she joined the staff of the Respondent was in a position of conflict of interest and duty for so long as she remained on the record in these proceedings.

43 The substantive proceedings. As explained in Paras at [79], the Further Amended Notice of Appeal, filed on 21 April 2006, set out thirteen grounds of appeal under ten headings. Some of these grounds were subdivided into separate claims. A further ground that the Appellant advanced at the hearing and in subsequent written submissions was not mentioned in the Further Amended Notice of Appeal. There were in total 20 separate matters raised by the Appellant.

44 At [89 – 90], we observed that we did not find the headings for the grounds of appeal to be particularly helpful, that not all of them were addressed in the Appellant’s submissions and that it had been difficult at times to discern the relationship between the errors of law alleged by her and the content of the submissions.

45 The Appellant failed to establish any of the grounds put forward by her. As the judgment in Paras demonstrates, the majority of these grounds were rejected with comparatively little discussion.

46 At three points in this judgment, we criticised the Appellant for having made allegations of improper conduct against the Respondent or a member of the Respondent’s staff without advancing sufficient evidence to warrant the making of such allegations.

47 First, we rejected, at [162 – 172], Ground 8 of the appeal, as formulated in the Further Amended Notice of Appeal. This Ground, which appeared under the heading ‘Abuse of power’, was as follows: ‘The Office of the Legal Services Commissioner improperly exercised the power conferred by section 155(3) of the Legal Profession Act by exercising it in a way which constituted an abuse of power and a denial of procedural fairness.’

48 At [170], we said:-

Neither through relying on the Respondent’s denial of a number of her requests in correspondence following his determination, nor through alleging (without supporting evidence) that he had recourse to an inappropriate standard of proof, does the Appellant come close to establishing an abuse of power or an improper exercise of power by the Respondent in the making of his determination. We have no difficulty in concluding that the Appellant has totally failed to substantiate these serious claims against the Respondent.

49 Secondly, we rejected, at [182 – 195], Ground 11 of the appeal, which alleged bias or the appearance of bias, on the part of the Respondent. One of the claims that the Appellant made in support of this allegation was that the Respondent had dismissed, without ‘investigation or appreciation’ of the document or the facts, a complaint against Mr Leather (another solicitor) which the Appellant described as ‘identical’ to the complaint in this case.

50 At [191], we said:-

As to the Appellant’s claim that the Respondent evinced bias against the Appellant through dismissing an allegedly ‘identical’ complaint against Mr Leather without proper investigation, our view is that it could not conceivably be upheld (and arguably should have not been advanced) in the absence of any evidence to support it.

51 Thirdly, we rejected, at [196 – 199], Ground 12 of the appeal, which repeated the claim, already dismissed in QT 2, that Ms Muston, the solicitor on the record for the Respondent, was in a position of conflict of interest and duty. Although this claim was not addressed in the Appellant’s submissions relating to the substantive appeal, it was not withdrawn. In rejecting it in Paras, we referred expressly to our observation in QT 2 (at [71 – 72]) that there was ‘no foundation’ for it.

52 Inaccurate statements. Finally, Mr Beaumont referred to two examples of what he described as wrong factual statements by the Appellant.

53 One was an assertion by her from the Bar table at the hearing on 17 August 2006 that, when corresponding with the Respondent in the period preceding his decision that she had been guilty of unsatisfactory professional conduct and should be reprimanded, she had not realised that he had power under the LP Act to take these steps. In Paras at [160], referring expressly to this correspondence, we said that the Respondent ‘took account of the existence of this discretionary power’ and ‘expressly requested the Appellant to make submissions with regard to it’.

54 The other was what Mr Beaumont called a ‘belated “correction”’, forming part of written submissions of the Appellant dated 8 December 2006. This related to a date of some significance in the matter, though the ‘correction’ went no further than substituting 6 September 2004 for 17 August 2004 as the relevant date.

The matters relied upon by the Appellant

55 The principal claims made by the Appellant in her submissions on costs were to the effect that her conduct of her case in the appeal had at all times been reasonable and that in both the interlocutory and the substantive proceedings she had raised ‘live’ issues requiring determination.

56 She contended that if the appeal proceedings as a whole, or any of the interlocutory applications that she had filed, had not been ‘sufficiently arguable’, the Respondent could have applied for an order under s. 73(5)(h) of the ADT Act dismissing them on the ground that they were ‘frivolous or vexatious or otherwise misconceived or lacking in substance’. But the Respondent had not attempted to invoke this provision.

57 A further argument advanced by her was that if a costs order were made against her, this would operate as a form of punishment of her. This would contravene a principle clearly stated by Mason CJ in Latoudis v Casey (1990) 170 CLR 534 at 543.

58 In relation specifically to her interlocutory applications, the Appellant argued that the Respondent had not been wholly successful in any of them. She referred to the following three aspects of the Tribunal’s judgments dealing with them.

59 First, although the Tribunal had dismissed her application for referral of a question of law to the Supreme Court, it had pointed out that there were few cases indicating the circumstances in which a referral should occur and had rejected Mr Beaumont’s claim that the question of law was not ‘seriously arguable’ (see QT 1 at [13] and [52]).

60 Secondly, in its decision regarding the limits of the Respondent’s role in the appeal, the Tribunal had directed that if certain developments occurred before the matter came on for substantive hearing the Attorney General should be given an opportunity to intervene in the proceedings and take over from the Respondent the defence of the appeal (see QT 2 at [60]).

61 Thirdly, the Tribunal, in dismissing the application for an order restraining Ms Muston from continuing to act for the Respondent, had indicated that in certain circumstances such an order might be appropriate at a future time (see QT 2 at [79 – 82]).

62 The Appellant also pointed out that in correspondence preceding the hearing of this last application, the Respondent had (a) failed to respond to a letter from her asking for details of Ms Muston’s involvement and (b) erroneously denied the existence of any power in the Tribunal to make an order restraining a legal practitioner from acting in proceedings.

Our conclusions

63 Broadly speaking, we agree with Mr Beaumont’s description of the manner in which the Appellant conducted her appeal. She did engage in a ‘largely misconceived pursuit of collateral issues’ which ‘significantly protracted the hearing and determination of these proceedings’. She was unsuccessful both in her interlocutory applications and in the appeal itself. A large proportion of her substantive grounds of appeal were without merit. Her arguments were frequently diffuse and obscure. She made serious and unwarranted accusations of improper behaviour by the Respondent and by the solicitor for the Respondent.

64 As the authorities outlined above at [11 – 16] show, there may clearly be ‘special circumstances warranting an award of costs’ under s. 88(1) of the ADT Act when the manner in which the unsuccessful party conducted the proceedings can be characterised in this way.

65 As the Appellant argued, however, ‘live’ issues were raised by her, both in her three interlocutory applications and in the appeal itself. It cannot be said that every point argued by her was without merit.

66 Our view of her interlocutory applications is as follows. The first of them raised a question of law (whether or not the Respondent had power to issue a private reprimand) that had to be resolved in the course of the appeal. Her case on this question was not strong but, as we have said, was not without merit. It was determined adversely to her in our substantive decision. The other two applications raised questions which (a) were arguable and (b) if certain developments had occurred in the period before the substantive hearing, might have called for specific orders to be made by the Tribunal. But since these developments did not occur, the Tribunal never did have to decide whether any such orders were necessary.

67 For these reasons, the Appellant, in all three instances, sought rulings that were obviously premature. Through so doing, she prolonged the proceedings unreasonably and unnecessarily and caused the Respondent to incur unnecessary costs.

68 Our response to the Appellant’s claim that in the appeal itself she raised ‘live’ issues for determination is that this can, in our opinion, be said of only five (at most) of the 20 questions that we had to resolve.

69 As our judgment in Paras indicates at [208 – 228], we found one question to be quite finely balanced. This was whether the Respondent provided to the Appellant adequate reasons for his decision that she had been guilty of unsatisfactory professional conduct and should be reprimanded. The cases on which she relied in this context (e.g. Frumar v The Owners of Strata Plan 36957 [2006] NSWCA 278) suggest that if we had resolved this question in her favour, the orders that we made in the appeal would have included an order setting aside the Respondent’s decision under s. 171N(4) of the LP Act.

70 With respect to four other questions that we determined (those raised in Grounds 2, 5, 6(a) and 13) we would say that the Appellant’s arguments had some merit, but were not strong. The last of these is the question (to which we have already referred in this judgment) whether the Respondent had power to issue a private reprimand.

71 Our opinion of the Appellant’s arguments on the remaining 15 questions put forward in the Further Amended Notice of Appeal is that they were clearly unmeritorious.

72 Paradoxically, perhaps, a consequence of their being unmeritorious is that the Respondent, in his submissions, did not have to put forward lengthy arguments in order to persuade us that they should be rejected. It is noteworthy that although the Appellant raised so many questions in the substantive appeal, the Respondent, in order to rebut her arguments, found it necessary only to appear through counsel at a one-day hearing and file two sets of written submissions, each comprising nine pages of double-spaced typescript.

73 Taking all these considerations into account, we conclude that the Respondent has shown that there are ‘special circumstances warranting an award of costs’. But because (a) the Appellant’s case on one point in the substantive appeal was quite strong and (b) if she had succeeded on this point, we might well have set aside the decision of the Respondent under appeal, it would not be appropriate to order that she pay all of the Respondent’s costs in the proceedings.

74 In our opinion, justice is achieved by ordering that the Appellant pay on a party/party basis all of the Respondent’s costs of and incidental to the three interlocutory applications filed by the Appellant and 50% of the remaining costs of and incidental to the appeal.

75 Neither party applied for the costs of this application itself. We make no order as to those costs.