Viscariello v Legal Profession Conduct Commissioner [No 2]

[2019] SASC 165

SUPREME COURT OF SOUTH AUSTRALIA

(Civil)

VISCARIELLO v LEGAL PROFESSION CONDUCT COMMISSIONER [NO 2]

[2019] SASC 165

Judgment of The Honourable Justice Hinton

13 September 2019

PROCEDURE - COSTS - GENERAL RULE - COSTS FOLLOW THE EVENT

Application for costs.

On 1 July 2019 this Court dismissed the plaintiff’s application for judicial review (the primary application). The defendant applied for his costs of and occasioned by the plaintiff’s primary application in addition to costs of the application for permission to proceed, for preparation and attendance at a settlement conference and for an interlocutory application made by the plaintiff seeking orders restraining Mr Harris QC from acting as counsel for the defendant.

The defendant contended that costs should follow event. The plaintiff opposed the defendant's costs application. He submitted that the primary application was public interest litigation and that the defendant should pay 25 per cent of his costs or in the alternative that no costs order be made.

Held, allowing the defendant's application for costs:

1.       In relation to the application for judicial review, the plaintiff is to pay 85 per cent of the defendant’s costs of and occasioned by the proceedings, such costs to be taxed if not agreed;

2.       In relation to the application for permission to appeal, there be no costs order;

3.       In relation to the settlement conference, there be no costs order;

4.       In relation to the application that Mr Harris QC be restrained from appearing in the proceedings as counsel for the defendant, the plaintiff is to pay the defendant’s costs of and occasioned by the application, such costs to be taxed if not agreed.

Supreme Court Act 1935 (SA) s 40; Supreme Court Civil Rules 2006 (SA) r 200, referred to.
Caroona Coal Action Group Inc v Coal Mines Australia Pty Ltd (No 3) (2010) 173 LGERA 280; Northern Territory v Sangare (2019) 93 ALJR 959; Oshlack v Richmond River Council (1998) 193 CLR 72; Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin (1997) 186 CLR 622; Viscariello v Legal Practitioners Conduct Board [2014] SASC 53; Viscariello v Legal Profession Conduct Commissioner [2015] SASC 4; Viscariello v Legal Profession Conduct Commissioner [2019] SASC 111, considered.

VISCARIELLO v LEGAL PROFESSION CONDUCT COMMISSIONER [NO 2]
[2019] SASC 165

Costs

HINTON J:

1. On 1 July 2019 I dismissed the plaintiff’s application for judicial review (the primary application).[1] In consequence the defendant applied for his costs of and occasioned by the application. The defendant also sought his costs of the application for permission to proceed,[2] for preparation and attendance at a settlement conference and for an interlocutory application made by the plaintiff seeking orders restraining Mr Harris QC from acting as counsel for the defendant.[3]

   [1]    Viscariello v Legal Profession Conduct Commissioner [2019] SASC 111.

   [2]    Viscariello v Legal Practitioners Conduct Board [2014] SASC 53.

   [3]    Viscariello v Legal Profession Conduct Commissioner [2015] SASC 4.

2. These reasons should be read together with my reasons for dismissing the primary application.[4]

   [4]    Viscariello v Legal Profession Conduct Commissioner [2019] SASC 111.

3. Recently in Northern Territory v Sangare (Sangare) the High Court observed:[5]

   It is well established that the power to award costs is a discretionary power, but that it is a power that must be exercised judicially, by reference only to considerations relevant to its exercise and upon facts connected with or leading up to the litigation. While the width of the discretion “cannot be narrowed by a legal rule devised by the court to control its exercise”, the formulation of principles according to which the discretion should be exercised does not “constitute a fetter upon the discretion not intended by the legislature”. Rather, the formulation of principles to guide the exercise of the discretion avoids arbitrariness and serves the need for consistency that is an essential aspect of the exercise of judicial power.

   A guiding principle by reference to which the discretion is to be exercised – indeed, “one of the most, if not the most, important” principle – is that the successful party is generally entitled to his or her costs by way of indemnity against the expense of litigation that should not, in justice, have been visited upon that party. The application of that principle may be modified or displaced where there is conduct on the part of the successful party in relation to the conduct of the litigation that would justify a different outcome. For example, a successful defendant may be refused its costs on the ground that its conduct induced the plaintiff to believe that he or she had a good cause of action. But in the present case, there was nothing of this kind in the conduct of the appellant in relation to the litigation that might have weighed against the exercise of the discretion in its favour. There was no suggestion of any conduct on the part of the appellant, whether by unreasonable delay or a want of the cooperation required of litigants to ensure the “just resolution of the real issues in civil proceedings with minimum delay and expense”, that might have been taken into account to justify refusing the appellant an order for its costs.

   [footnotes omitted]

   [5] (2019) 93 ALJR 959 at [24]-[25] (The Court).

4. In my view these observations apply equally in relation to s 40 of the Supreme Court Act 1935 (SA).

5. The defendant contends that costs should follow the event (the general rule). That said, it is conceded that the defendant applied late in the piece to change his defence and that he should bear his own costs of doing so. The amendment was intended to support contentions that the plaintiff was precluded from seeking declarations of invalidity in relation to various delegations made by the Commissioner. I allowed the application to amend in part, but found for the plaintiff on the issues that the amendments raised. The defendant contends that any adjustment in his entitlement to costs to account for the costs associated with the amendment of the defence should not exceed a discount of 10 per cent.

6. The plaintiff resists the defendant’s application. He contends that the appropriate order is that the defendant pay 25 per cent of his costs, or, in the alternative, that there be no order as to costs. The plaintiff advanced two main contentions in support of the costs orders he sought. First, he submitted that the defendant acted unreasonably in failing to progress the complaints he made giving the plaintiff, in effect, no choice but to institute the proceedings. Second, he submitted that his application was motivated by a desire to ensure that the defendant discharged his duties under the Legal Practitioners Act 1981 (SA) such that it would be unjust to burden him with having to pay the defendant’s costs.

7. As indicated in the passage taken from Sangare, the application of the general rule that costs follow the event may be modified or displaced where the successful party conducts the litigation in a manner that would justify a different outcome. To similar effect in Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin McHugh J said:[6]

   In most jurisdictions today, the power to order costs is a discretionary power. Ordinarily, the power is exercised after a hearing on the merits and as a general rule the successful party is entitled to his or her costs. Success in the action or on particular issues is the fact that usually controls the exercise of the discretion. A successful party is prima facie entitled to a costs order. …

   … 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. Thus, for example, in R v Gold Coast City Council; Ex parte Raysun Pty Ltd, the Full Court of the Supreme Court of Queensland gave a prosecutor seeking mandamus the costs of the proceedings up to the date when the respondent Council notified the prosecutor that it would give the prosecutor the relief that it sought. The Full Court said that the prosecutor had reasonable ground for complaint in respect of the attitude taken by the respondent in failing to consider the application by the prosecutor for approval of road and drainage plans.

   …

   The critical question in this case then is whether or not the prosecutrix acted reasonably in bringing these proceedings and whether the respondents acted so unreasonably in not informing the prosecutor that an application to review the decision to refuse a visa was being considered that it would be proper for the Minister to pay the whole or part of the cost of the proceedings. In determining whether or not the prosecutor acted reasonably, it is necessary to mention some further facts in the matter.

   [footnotes omitted]

   [6] (1997) 186 CLR 622 at 624-625.

8. 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.

9. As to the submission that this is public interest litigation, in Oshlack v Richmond River Council Gaudron and Gummow JJ referred to the exception to the general rule with respect to costs captured in the notion of public interest litigation as a “nebulous concept”.[7] Nonetheless, it is recognised in the authorities that where litigation may properly be characterised as “public interest litigation” the nature of the litigation may provide reason to depart from the general rule.

   [7] (1998) 193 CLR 72 at [30].

10. In Caroona Coal Action Group Inc v Coal Mines Australia Pty Ltd (No 3) Preston J conducted a comprehensive review of the authorities dealing with the award of costs in public interest litigation.[8] His Honour concluded:[9]

    A review of the decisions on costs reveals that courts have used, in effect, a three step approach in determining whether to depart from the usual costs rule: first, can the litigation be characterised as having been brought in the public interest?; secondly, if so, is there “something more” than the mere characterisation of the litigation as being brought in the public interest?; and thirdly, are there any countervailing circumstances, including relating to the conduct of the applicant, which speak against departure from the usual costs rule?

    [8] (2010) 173 LGERA 280.

    [9]    Caroona Coal Action Group Inc v Coal Mines Australia Pty Ltd (No 3) (2010) 173 LGERA 280 at [13].

11. Later in his reasons his Honour helpfully summarised the results of his survey of the authorities:[10]

    With this background to the requirement of “something more”, what circumstances or factors have the courts identified that, when coupled with the characterisation of the litigation as being brought in the public interest, justify departure from the usual costs rule? The circumstances identified fall into at least five categories:

    (a)   the litigation raises one or more novel issues of general importance: see Arnold v Queensland (1987) 6 AAR 463 at 477, 491; New Zealand Maori Council v Attorney-General [1994] 1 AC 466 at 485; Oshlack v Richmond River Shire Council (Stein J) at 246; Oshlack v Richmond River Council (HCA) at [49], [144]; Ruddock v Vadarlis (No 2) at [17], [28], [29]; Plumb v Penrith City Council (2003) 126 LGERA 109 at [16], [17]; Engadine Area Transport Action Group v Sutherland Shire Council (No 2) at [20], [21]; Save the Ridge Inc v Commonwealth of Australia at [11]-[12]; Blue Wedges Inc v Minister for Environment, Heritage and the Arts (2008) 165 FCR 211 at [73]; Lansen v Minister for Environment and Heritage (No 3) (2008) 162 LGERA 258 at [34]; Anderson v Minister for Planning (No 2) at [9] and [10]; Minister for Planning v Walker (No 2) at [9]; Sharples v Minister for Local Government (No 2) at [21], [23] upheld in Sharples v Minister for Local Government [2010] at  [120], [123], [124]; and Teoh v Hunters Hill Council (No 3) (2009) 167 LGERA 432 at [130];

    (b)   the litigation has contributed, in a material way, to the proper understanding, development or administration of the law: Oshlack v Richmond River Council (HCA) at [136]; Friends of Hay Street Inc v Hastings Council (1995) 87 LGERA 44 at 47; Plumb v Penrith City Council (2003) 126 LGERA 109 at [16], [17]; Lansen v Minister for Environment and Heritage (No 3) at [34]; and Wilderness Society Inc v Minister for Environment and Water Resources (2008) 157 LGERA 413 at [7]-[9]. See also R (on the application of Corner House Research) v Secretary of State for Trade and Industry at [70] (“there is a public interest in the elucidation of public law by the higher courts”) and R v Aylesbury Vale District Council [2008] 1 WLR 878 at [15].

    (c)   where the litigation is brought to protect the environment or some component of it, the environment or component is of significant value and importance: Nettheim v Minister for Planning and Local Government (No 2) at 5 (heritage building); New Zealand Maori Council v Attorney General of New Zealand at 485 (Maori language which is a part of the national cultural heritage of New Zealand); Oshlack v Richmond River Shire Council (Stein J) at 245, 246 (habitat of endangered fauna, including the koala); Oshlack v Richmond River Council (HCA) at [20], [49]; R v Secretary of State for Environment Food and Rural Affairs [2001] EWCA Civ 1950 at [5] (public health and well-being); Anderson v Minister for Planning (No 2) at [11] (example given of one of the last habitats of an endangered species);

    (d)   the litigation affects a significant section of the public: Oshlack v Richmond River Council (HCA) at [20], [49]; Engadine Area Traffic Action Group Inc v Sutherland Shire Council (No 2) at [15], [17]; Anderson v Minister for Planning (No 2) at [14] referring to Sinclair v Maryborough Mining Warden (1975) 132 CLR 473; 34 LGRA 1 at 480, 487; Blue Wedges Inc v Minister for Environment, Heritage and the Arts at [73]; Wilderness Society Inc v Minister for Environment and Water Resources at [10]; and

    (e)   there was no financial gain for the applicant in bringing the proceedings: Oshlack v Richmond River Shire Council (Stein J) at [244], [246]; Oshlack v Richmond River Council (HCA) at [136]; Ruddock v Vadarlis (No 2) at [28]; Friends of Hay Street Inc v Hastings Council at 47; Engadine Traffic Action Group Inc v Sutherland Shire Council (No 2) at [15]; Lansen v Minister for Environment and Heritage (No 3) at [29], [32]; and Wilderness Society Inc v Minister for Environment and Water Resources at [10].

    [10]   Caroona Coal Action Group Inc v Coal Mines Australia Pty Ltd (No 3) (2010) 173 LGERA 280 at [60].

12. These indicia are intended to operate as a useful tool, not an exhaustive code, in the exercise of the costs discretion.

13. In the present case, having regard to Preston J’s indicia, I do not accept the contention that the primary application was public interest litigation. These proceedings served only the plaintiff’s purposes. They did not raise a novel question of general importance, they did not protect any public interest, they did not affect a significant section of the public. As the plaintiff made plain on numerous occasions in his correspondence with the Board and the Commissioner and in his submissions, he considered that he personally was treated differently by the Board to other complainants and other practitioners. I do not accept that his motivation was in any way altruistic. To the extent that he sought to ensure that the Board and subsequently the Commissioner discharged their statutory responsibilities, it was in pursuit of his own purposes. Of course, he is perfectly entitled to do that, but doing so, like any other litigant, he exposes himself to the risk of an adverse costs order.

14. In the circumstances I seen no reason why the general rule should not apply allowing for a discount as conceded by the defendant (albeit I would apply a slightly greater discount). I order that the plaintiff pay 85 per cent of the defendant’s costs of and occasioned by the primary application.

15. With respect to the application for permission to proceed, ordinarily such application is heard ex parte.[11] In his reasons Nicholson J explained:[12]

    The question of permission came before Blue J in the chamber list. Blue J arranged with the applicant that the respondent would be notified of the proposed proceedings so that it might consider whether it wished to apply for permission to be heard on the application for permission to proceed. On 7 February 2014, the respondent made before me such an application which, after hearing brief argument, I granted. I then heard over two part days the applicant’s, now contested, application for permission to proceed with his judicial review action.

    [11]   Supreme Court Civil Rules 2006 (SA), r 200.

    [12]   Viscariello v Legal Practitioners Conduct Board [2014] SASC 53 at [5].

16. Nicholson J granted the plaintiff permission to proceed on all grounds. I do not think it would be just to visit upon the plaintiff the costs of the application for permission to proceed when he succeeded over opposition. In my view the appropriate order is that there be no order for costs on the application for permission.

17. In relation to the settlement conference, again I think that the appropriate order is that there be no order as to costs.

18. As for the application to restrain Mr Harris QC, the plaintiff was unsuccessful. No reason arises not to apply the general rule. I do so. The plaintiff should pay the defendant’s costs, such costs to be taxed if not agreed.

    Orders

19. I order:

    1In relation to the proceedings before me, the plaintiff is to pay 85 per cent of the defendant’s costs of and occasioned by the proceedings, such costs to be taxed if not agreed.

    2In relation to the application for permission to proceed, there be no order as to costs.

    3In relation to the settlement conference, there be no orders as to costs.

    4In relation to the application that Mr Harris QC be restrained from appearing in the proceedings as counsel for the defendant, the plaintiff is to pay the defendant’s costs of and occasioned by the application, such costs to be taxed if not agreed.