Viscariello v Legal Profession Conduct Commissioner (No 2) - [2021] SASCFC 35

SUPREME COURT OF SOUTH AUSTRALIA
(Full Court)
VISCARIELLO v LEGAL PROFESSION CONDUCT COMMISSIONER (No 2)
[2021] SASCFC 35
Judgment of The Full Court
(The Honourable Justice Lovell, the Honourable Justice Hughes and the Honourable Auxiliary Justice Tilmouth)
30 August 2021

APPEAL AND NEW TRIAL - PROCEDURE - SOUTH AUSTRALIA - POWERS OF COURT - COSTS
The Full Court dismissed the appellant's appeal from an order of a single judge refusing his application for judicial review on 14 May 2021. The appellant now seeks an order that the parties bear their own costs of the appeal. The respondent seeks an order for his costs of the appeal in a lump sum amount.
Held, per Tilmouth AJ (Lovell and Hughes JJ agreeing):
1. The appellant is to pay the respondent's costs of the appeal to be agreed or taxed on a party party basis;
2. The respondent's application for costs assessed as a lump sum award is dismissed.
Legal Practitioners Act 1981 (SA); Legal Practitioners (Miscellaneous) Amendment Act 2013 (SA); Supreme Court Act 1935 (SA) s 40; Uniform Civil Rules 2020 (SA) r 194.5(2), referred to.
Beach Petroleum NL & Anor v Johnson & Ors (No 2) (1995) 57 FCR 119; Copping & Ors v ANZ McCaughan Ltd & Ors (1995) 63 SASR 523; Cornwall & Ors v Rowan (No 4) [2006] SASC 111; EMI Songs Australia Pty Ltd v Larrikin Music Publishing Pty Ltd [2011] FCA FC 92; Hadid v Lenfest Communications Inc [2000] FCA 628; Latoudis v Casey (1990) 170 CLR 534; Oshlack v Richmond River Council (1998) 193 CLR 72; Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin (1997) 186 CLR 622; Refugee Review Tribunal, Re; Ex parte Aala (2000) 204 CLR 82; Stead v State Government Insurance Commission (1986) 161 CLR 141; Viscariello v Legal Profession Conduct Commissioner [2021] SASCFC 24, considered.

VISCARIELLO v LEGAL PROFESSION CONDUCT COMMISSIONER (No 2)
[2021] SASCFC 35

Full Court – Lovell, Hughes JJ and Tilmouth AJ

LOVELL J: I agree with the reasons of Tilmouth AJ and the orders he proposes.
HUGHES J: I agree with the orders proposed by Tilmouth AJ for the reasons given.
TILMOUTH AJ:
Applications for costs of the appeal
This Court dismissed Mr Viscariello’s appeal from an order of a single judge refusing his application for judicial review on 14 May 2021.[1] The matter returns to the Court to determine the costs of the appeal.
[1] Viscariello v Legal Profession Conduct Commissioner [2021] SASCFC 24 at [1]–[2], [111].
At first instance Mr Viscariello sought orders compelling the Legal Profession Conduct Commissioner (“the Commissioner”) to investigate numerous complaints made by him, initially to the Legal Practitioners Conduct Board (“the Board”) and subsequently to the Commissioner himself, in accordance with successive versions of the Legal Practitioners Act 1981 (SA).
The issues on appeal
The gravamen of Mr Viscariello’s grounds of appeal in this Court were that the single judge erred in concluding that the Commissioner did not fail to discharge the mandatory statutory duty to investigate Mr Viscariello’s complaints. This issue turns on the proper construction of the Legal Practitioners (Miscellaneous) Amendment Act 2013 (SA). The single judge was further alleged to have erred in concluding that a number of delegations purportedly made by the Commissioner were not invalid. A subsidiary complaint was made as to an adverse costs order. Mr Viscariello failed to convince this Court of any error made by the single judge in respect of any of these grounds. This Court’s dismissal of Mr Viscariello’s appeal against the adverse costs order at first instance means that costs order remains undisturbed. Consequently, only the costs of the Full Court appeal are left for determination.
Legal principles
As the subject appeal was heard on 7 December 2020 after the Uniform Civil Rules 2020 (SA) (“UCR”) came into operation on 18 May 2020, questions of costs are now determined according to the UCR. Rule 1.4(1) thereof provides that the UCR apply to “a step in a proceeding taken on or after the commencement date”. Undoubtedly a substantive appeal proceeding constitutes such a step.
To begin with, s 40 of the Supreme Court Act 1935 (SA) provides that the costs of and incidental to all proceedings shall be in the discretion of the Court. This section confers a wide unfettered discretion to make awards for costs, a discretion to be exercised judicially.[2] However, as a general rule costs follow the event as between party and party as provided for in r 194.5(2) of the UCR. Moreover, as a general consideration, a successful party has the reasonable expectation of obtaining a favourable order for costs.[3]
[2] Copping & Ors v ANZ McCaughan Ltd & Ors (1995) 63 SASR 523 at 527.
[3] Latoudis v Casey (1990) 170 CLR 534 at 557, 569; Oshlack v Richmond River Council (1998) 193 CLR 72 at [134].
Summary of parties’ positions
Mr Viscariello contended that because this Court was “highly critical” of the inaction on the part of the Board and the Commissioner in investigating his complaints,[4] each party should bear their own costs of the appeal. His counsel referred to the Court’s conclusion that there was little evidence of substantive progress in dealing with the complaints, together with relatively long periods of unreasonable and unexplained inactivity.[5]
[4] Viscariello v Legal Profession Conduct Commissioner [2021] SASCFC 24 at [58]–[61].
[5] Viscariello v Legal Profession Conduct Commissioner [2021] SASCFC 24 at [56], [64].
Counsel emphasised that the single judge found against Mr Viscariello on the decisive ground relating to the proper construction of the Legal Practitioners (Miscellaneous) Amendment Act 2013 (SA), even though it was not pleaded by the Commissioner, and which was not argued or put in issue at trial. The single judge concluded that any acts or omissions of the former Board were not the responsibility of the Commissioner as a consequence of the transitional provisions contained in the Legal Practitioners (Miscellaneous) Amendment Act 2013 (SA), and therefore the Commissioner could not be held responsible for any acts or omissions of the Board.
This Court noted that the “relative sparsity of reasoning to this conclusion is however largely attributable to the fact that no submission was directed to the effect of clause 16 of the transitional provisions by either party”, before concluding:[6]
This aspect of the appeal related to the contention that the primary judge failed to afford Mr Viscariello procedural fairness by dismissing the mandamus/judicial review action and allegation of maladministration on grounds not pleaded, not argued at trial and not subject to submissions by the parties. The complaint wholly relates to the point disposed of above encompassing the conclusion that any acts or omissions of the Board could not be “sheeted home” to the Commissioner and therefore the Commissioner could not be held responsible for any acts or omissions of the Board. For all the reasons advanced earlier, there is no foundation for the conclusion that there was in the result a denial of procedural fairness. The issue was fully ventilated before this Court and for the reasons advanced above, the point was destined to fail anyway.
[6] Viscariello v Legal Profession Conduct Commissioner [2021] SASCFC 24 at [106].
Accordingly, it was submitted that it was “grossly unfair” to Mr Viscariello that he was first put on notice that the transitional provisions may be fatal to his case upon reading the trial judgment. Hence, the submission continued that Mr Viscariello “was caught completely by surprise” and consequently the Full Court appeal was the first occasion available to him to agitate the issue.
As against this, it was contended by the Commissioner that this Court found that from 1 July 2014, Mr Viscariello was largely the “author of his own demise” and accepted the finding of the single judge “that the ordinary person might well consider the delay since 2014 to be justified”.[7] Hence, Mr Viscariello’s submission that the Full Court was “highly critical” of the Commissioner or that the Commissioner’s “conduct contributed to the continuation of these proceedings” was, in the Commissioner’s submission, without foundation. The Commissioner further sought an order for his costs of the appeal to be assessed in the “fixed sum of $36,000” to cover his counsel fees in “an effort to finalise these proceedings expeditiously”.
[7] Viscariello v Legal Profession Conduct Commissioner [2021] SASCFC 24 at [63]–[64], [73].
Informal offers
An additional consideration for this Court is the effect of an informal offer dated 2 October 2020, which the Commissioner asserted put Mr Viscariello on notice that his proposed appeal “was futile as the complaints he had made had been finalised”. The offer proposed resolution of the appeal on the basis that Mr Viscariello discontinue his appeal and each party bear their own costs of both the appeal and the action at first instance. Had he accepted this proposal, Mr Viscariello would become entitled to the return of $10,000 lodged with the Court by way of security for costs.
Whilst this offer actually made no express reference to the effect that Mr Viscariello’s appeal “was futile as the complaints … had been finalised”, it did assert that the ground of appeal based on the “transitional provisions” “will almost certainly fail, for the reasons set out in our submissions”. The Commissioner’s submissions dated 18 September 2020 however certainly did.[8] By reply letter dated 7 October 2020, Mr Viscariello referred to a settlement conveyed earlier in a letter to the Commissioner’s delegate, expressed in terms of the Commissioner consenting to an order compelling him to exercise his powers to carry out investigations into all Mr Viscariello’s complaints “according to law”, but otherwise rejected the Commissioner’s offer to settle.
Consideration
[8] Paragraphs 19 and 26.
Exemptive orders from the general rule
There are circumstances in which it becomes appropriate and reasonable for a party to bear the expense of a portion of an issue in a case on which that party has failed.[9] As McHugh J pointed out in Oshlack v Richmond River Council,[10] a successful party will be disentitled to an order for costs if its conduct justifies that course. Justice McHugh earlier observed in Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin:[11]
In some cases, however, the court may be able to conclude that one of the parties has acted so unreasonably that the other party should obtain the costs of the action. In administrative law matters, for example, it may appear that the defendant has acted unreasonably in exercising or refusing to exercise a power and that the plaintiff had no reasonable alternative but to commence a litigation.
[9] Cretazzo v Lombardy (1975) 13 SASR 4 at 12.
[10] (1998) 193 CLR 72 at [69].
[11] (1997) 186 CLR 622 at 624–625.
If taken, that alternative course does not require mathematical precision.[12] Rather it is one based on impression and evaluation and by producing a result which best reflects the interest of justice in the entire circumstances of the case.[13] Indeed as Gleeson CJ once observed in relation to costs, “there is a limit to the extent to which the wheels of justice can grind fine”.[14]
[12] Cretazzo v Lombardy (1975) 13 SASR 4 at 14, 16.
[13] EMI Songs Australia Pty Ltd v Larrikin Music Publishing Pty Ltd [2011] FCA FC 92 at [9].
[14] Forsyth v Deputy Commissioner of Taxation (2006) HCA Trans 521 (27 September 2006).
In the first instance proceedings of the case at bar, the single judge held, as to costs:[15]
In my reasons for dismissing the primary application I was critical of the handling of the plaintiff’s complaints at times, particularly by the Board. However, to the extent that the plaintiff sought to hold the Commissioner accountable for the Board’s actions, he failed. True he commenced these proceedings against the Board, but he had the opportunity to review his case upon the amendments to the Legal Practitioners Act 1981 (SA) being made that brought an end to the Board and created the office of the Commissioner. It appears that motivated by his distrust of the Commissioner on account of the Commissioner having previously been employed at Minter Ellison Lawyers, the plaintiff chose to proceed attempting to hold the Commissioner responsible for action or inaction on the Board’s part, and opened a second front challenging various delegations the Commissioner made in an effort to put in place a structure that allowed for the plaintiff’s complaints to be investigated. In the Full Court he was successful in part in his challenge to the delegations, but that partial success was taken into account by the Full Court as part of the costs orders it made. Overall the plaintiff has failed. Whilst I have been critical of the Commissioner, I do not think that he acted in any way such as to give the plaintiff, in effect, no real choice but to commence these proceedings.
[15] Viscariello v Legal Profession Conduct Commissioner (No 2) [2019] SASC 165 at [8].
His Honour made an order that Mr Viscariello pay 85 per cent of the Commissioner’s costs, largely on account of a concession by the Commissioner that he applied “late in the piece” to amend his defence relating to declarations of invalidity of various delegations made by him.[16] It can be seen that his Honour made no allowance in awarding costs on account of the fact that the proper construction of the transitional provisions was neither raised by the Commissioner nor the subject of submissions at trial.
[16] Viscariello v Legal Profession Conduct Commissioner (No 2) [2019] SASC 165 at [5], [14].
As noted earlier, this Court upheld this costs order for the following reasons:[17]
The primary judge made an order that Mr Viscariello pay 85 per cent of the costs of the Commissioner in the proceedings before him, in addition to other ancillary costs orders.
It was submitted that the discretion to award costs against Mr Viscariello miscarried because the primary judge took into account an irrelevant consideration that Mr Viscariello should have re-assessed his prospects following the abolition of the Board and the creation of the office of the Commissioner, particularly when that issue was not raised during the course of the trial on behalf of the Commissioner or by the primary judge of his own motion during the hearing. It was further submitted that this amounted to an unfair, unjust and irrelevant “veiled criticism of the Appellant” causing the costs discretion to miscarry.
Considered in context, it is apparent the primary judge did no more than observe that the basis of the attacks by Mr Viscariello did not change in response to the significant legislative changes wrought by the 2014 Amendments, as they should have. This aspect of his case fails in any event for the reasons detailed earlier. For the same reasons, the failure to raise the issue was of no consequence given that the order for costs fell well within discretionary limits. As Mr Viscariello is not successful on any ground of appeal, there is no occasion to review or vary the cost order.
[17] Viscariello v Legal Profession Conduct Commissioner [2021] SASCFC 24 at [107]–[109].
The informal offers
In light of the decisions of this Court and of the single judge as to the incidence of trial costs, the offer to resolve the appeal on the terms suggested by the Commissioner in his correspondence of 2 October 2020 (on the basis that Mr Viscariello discontinue his appeal and each party bear their own costs of the trial and the appeal) was a generous one. This conclusion is strengthened by the capacity of Mr Viscariello to retrieve the $10,000 lodged as security for costs.
By the same token, Mr Viscariello reasonably harboured a genuine grievance on account of the stark reality that it was only upon reading the trial judgment that he was first put on notice that the transitional provisions were pivotally fatal to his case. It was by no means obvious that withdrawal was his only option; the decision to proceed involved an inherently difficult forensic decision. The point was in any event, reasonably arguable. For these reasons it is inappropriate to apply the Commissioner’s offer adversely to Mr Viscariello. In contrast, Mr Viscariello’s offer was an unrealistic one.
It can be accepted that the issue of the effect of the transitional provisions was not one joined between the parties at trial. Neither party made submissions on that point before the single judge. However, any unfairness arising from the approach of the single judge was cured on appeal by both parties fully agitating their arguments on appeal. This court upheld the single judge’s reasoning and thus resolved the question of law against Mr Viscariello. Clearly then this is an instance of an appellate court resolving a question of law unfavourably to an aggrieved party.[18] In the circumstances, there is no foundation for disentitling the Commissioner to an order for costs.
[18] Stead v State Government Insurance Commission (1986) 161 CLR 141 at 145; Refugee Review Tribunal, Re; Ex parte Aala (2000) 204 CLR 82 at [4], [104], [122], [131]–[133], [172], [211].
Lump sum costs
In a further affidavit filed following judgment, the Commissioner deposed to the fact that he incurred counsel fees to date of $33,501 (excluding GST) and anticipated further counsel fees of $2,500 (excluding GST). The lump sum figure put forward of $36,000 is said not to include any claim for his work on the case or that of his in-house and instructing solicitors. On the face of it, the offer appears reasonably favourable to Mr Mr Viscariello particularly as it would avoid taxation pursuant to Part 5 of Chapter 16 of the UCR.
Even so, there is an objection by Mr Viscariello to making a lump sum award on the basis that the Commissioner proffers no reference to the legal principles or the relevant facts governing the exercise of the discretion to make such an award. It is further contended that it would be unfair to uncritically accept the Commissioner’s estimate that his entitlement to party party costs is substantially greater than the amount of the lump sum offer and that there are valid reasons why it is likely in a taxation process “that a substantial part of the counsel fees will be disallowed or reduced”. It is unnecessary and undesirable to go into the details of the latter complaint because it is properly a matter for taxation, not the Court.
As to the former, put bluntly it is not open to the Court to make an unprincipled and unsubstantiated lump sum order for costs in the circumstances.[19] Before exercising the power to fix a lump sum fee, the court must be confident that the “approach taken to estimate costs is logical, fair and reasonable”.[20] On the material before it, this Court is in no position to duly consider or assess the quantum of costs, irrespective of how reasonable it might otherwise appear to be. Mr Viscariello is therefore entitled to take his chances on taxation, no doubt in the expectation that he might better his position and yet at the same time, with full awareness that he may not.
[19] Cornwall & Ors v Rowan(No 4) [2006] SASC 111 at [12].
[20] Beach Petroleum NL & Anor v Johnson & Ors(No 2) (1995) 57 FCR 119 at 123 cited with approval in Hadid v Lenfest Communications Inc [2000] FCA 628 at [27]; Cornwall & Ors v Rowan(No 4) [2006] SASC 111 at [15].
Conclusion and orders
For the above reasons, it must follow from the circumstances that there is no proper basis upon which to depart from the general principle that costs should follow the event and awarded on a party party basis.

The order of the Court should therefore be that the Commissioner has his costs of the appeal to be agreed or taxed on a party party basis. The application by the Commissioner for a lump sum award should be dismissed.