Alroe v Medical Board of Australia [2016] QCAT 440

CITATION: Alroe v Medical Board of Australia [2016] QCAT 440 PARTIES: Dr Christopher Alroe (Applicant) v Medical Board of Australia (Respondent) APPLICATION NUMBER: OCR197-14 MATTER TYPE: Occupational regulation HEARING DATE: On the papers HEARD AT: Brisbane DECISION OF: Justice Carmody DELIVERED ON: 9 November 2016 DELIVERED AT: Brisbane ORDERS MADE: 1. The respondent Board is to pay the applicant Dr Christopher Alroe his costs of and incidental to the proceedings in an amount to be assessed on the standard basis according to the District Court scale. CATCHWORDS: PROFESSIONS AND TRADES – HEALTH CARE PROFESSIONALS – MEDICAL PRACTITIONERS – LICENCES AND REGISTRATION – APPEALS AND APPLICATIONS FOR ORDER DIRECTING REGISTRATION – where the applicant succeeded in reviewing the respondent’s refusal to issue him specialist registration – where the applicant seeks the costs of his application – whether the interests of justice require the tribunal to make an order as to costs Health Ombudsman Act 2013 (Cth) Part 10 Queensland Civil and Administrative Tribunal Act 2009 (Qld) s 100, 102(1) Board of Examiners v XY (No 2) [2006] VSCA 190 -- 1 of 9 -- 2 Chiappalone v Medical Board of Australia [2015] QCAT 201 Fernando v Medical Practitioners Board (No 2) [2003] VSC 168 Keys v Medical Board of Australia [2015] QCAT 143 Laming v Medical Board of Australia [2013] QCAT 304 Latoudis v Casey [1990] 170 CLR 534 Lord Haven Pty Ltd v Greater Dandenong [2000] VCAT 1873 Oshlack v Richmond River Council (1998) 193 CLR 72 Psychologists Registration Board of Victoria v Herald & Weekly Times Ltd [2000] VSCA 118 Ripper v Kotzman [2008] VSC 448 Valorne Pty Ltd v Building Appeals Board [2013] VSC 641 Vega Vega v Medical Board of Australia [2014] QCAT 328 APPEARANCES (if any): This matter was heard and determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (QCAT Act). REASONS FOR DECISION [1] The applicant succeeded in reviewing the respondent’s deemed refusal of his application for specialist registration. He contends that, despite the general ‘no costs’ rule in tribunal matters,1 there are salient features of the case compelling the conclusion that the interests of justice require the tribunal to make a costs order in his favour.2 [2] The ‘features’ he relies on can be summarised as:  the matter was ‘inherently’ complex – both parties briefed QCs and it was heard by a judicial member of the tribunal;  the respondent’s litigation conduct, in changing its position at a late stage from a mentoring condition to a psychiatric counselling condition, needlessly complicated matters and forensically disadvantaged him; 1 QCAT Act s 100. 2 Ibid s 102(1). -- 2 of 9 -- 3  no evidence was tendered in support of the genuine need for, or utility of, either condition;  in failing to articulate the basis for its insistence on the psychiatric condition, the respondent denied him proper opportunity to respond to the case against him at an early stage and the matter might have been resolved earlier or without the need for a hearing at all;  the respondent’s case was much weaker than his and did not even identify a suitability-based reason or evidence why the psychiatric counselling condition was needed for specialist registration when it was not imposed on his unconditional general registration and no disciplinary or other suitability concern had arisen since 2014;  the respondent did not seek the imposition of any condition in the 2014 disciplinary proceedings, which it could reasonably be expected to have done if it really thought either was necessary;  the disparity in the financial resources of the respondent as a well- resourced statutory board and the applicant as a self-funded individual litigant; and  the lack of any evident basis for him having to incur professional costs in addition to the 2014 disciplinary proceedings of $90,000+ to fund representation in a proceeding in which the condition was found to be unnecessary to “close the gap between unfit and good enough”. [3] Despite admitting the complexity of the tribunal proceedings and conceding the applicant’s ultimate success, the respondent opposes any order for costs on the basis that:  success, of itself, is not sufficient justification for an award of tribunal costs, especially when there are countervailing considerations;  the applicant was advised in early February 2015 that psychiatric counselling, instead of mentoring, would be sought at the hearing set down in September 2015;  the applicant even agreed to abide by it, provided its terms could be met in Sydney rather than Brisbane where he practised;  in any case, the applicant can hardly plead forensic disadvantage in light of his ‘success’ as no adjournment was sought;  the respondent’s position is materially different to that of a body with no statutory obligation to the tribunal that can effectively withdraw from a proceeding at will. It is bound to appear on a statutory review of its decision but not as a ‘full protagonist’ (e.g. it cannot justify its -- 3 of 9 -- 4 decision)3 and is solely funded by registration fees and its resources are limited;4  there is a well-established line of authority that, because of its key role in the administration of justice and statutory obligations in review-type proceedings costs ought not be awarded against a regulatory body unless it has clearly “been guilty of serious misconduct, corruption or perversity”;5  the respondent duly fulfilled its statutory role in an unremarkable way and assisted the tribunal to reach the correct and preferable decision in a complex case in which the rival considerations were evenly based;  there was no finding of unfairness or impropriety against it;  the case for conditional specialist registration was not comparatively ‘weak’ just because the tribunal elected not to impose any conditions – rather, the tribunal discussed factors for and against were evenly balanced and clearly had reservations;  the applicant made no ‘genuine’ attempt to assist the respondent or resolve the dispute before tribunal intervention and inundated the respondent with 604 pages of irrelevant, non-responsive material during its investigation;  the applicant chose to bring the proceedings to have his specialist registration determined by the tribunal de novo;  the submission that the respondent should have sought the psychiatric condition as part of the 2014 disciplinary proceeding orders if they were really needed at all is difficult to understand; and  the applicant has not put on any evidence of financial hardship. [4] The applicant responds that:  the respondent’s reliance on general principles on the costs discretion derived from the practice in other jurisdictions is misplaced and must give way to the QCAT costs jurisdiction;  there is no basis for the claim of irrelevancy just because he filed 604 pages of information in response to a request to provide details of the steps he had taken to address his disciplinary history including training, education or mentoring; 3 Vega Vega v Medical Board of Australia [2014] QCAT 328 [75]. 4 Keys v Medical Board of Australia [2015] QCAT 143 [12]. 5 Board of Examiners v XY (No 2) [2006] VSCA 190; Psychologists Registration Board of Victoria v Herald & Weekly Times Ltd [2000] VSCA 118 [11]. -- 4 of 9 -- 5  regardless of what was discussed or proposed in any without prejudice discussions, the respondent did not take any formal steps to change its position until the morning of the hearing to formally amend its 6 January 2015 response or inform his solicitors of its intention to change its stance at the hearing;  when properly read in context, the tribunal simply did not accept the respondent’s position that conditional registration was justified because of his lack of insight; and  he never conceded that it was ‘necessary and satisfactory’ for him to see a Sydney psychiatrist. Tribunal costs [5] Costs orders in health practitioner disciplinary and review proceedings are governed solely by ss 100-109 QCAT Act.6 Under those provisions, the general rule is that each party to the proceeding bears the burden of their own litigation costs unless the interests of justice require the making of an order for one party to pay “all or a stated part” of another’s costs. [6] The tribunal has a “broad general discretion”,7 but it must be exercised in a principled way. An uncritical approach is inconsistent with the responsibility to exercise the costs discretion reasonably and justly. [7] In deciding whether the tribunal’s limited costs discretion is engaged, the tribunal may have regard to the factors listed in s 102(3). The stated factors are: whether a party acted in a way that unnecessarily disadvantaged another, the nature and complexity of the dispute, the relative strengths of the claims, the financial circumstances of the parties and, the widest in scope, “anything else the tribunal considers relevant”. [8] What costs consequences the interests of justice demand has to be decided case by case on the merits. The stated criteria in s 102(3) are indicative, not exhaustive.8 Not all will be as relevant or carry the same weight in every case. [9] Success is necessary but not sufficient. [10] Disciplinary bodies exercise functions that can seriously interfere with occupational rights. A high standard of procedural fairness and competent investigation is expected of them, including providing particulars of alleged deficiencies and proposed findings about the character and quality of professional suitability or integrity matters. [11] The practitioner must be given a fair opportunity to mount an argument against imposing conditions that are too onerous or will not achieve their 6 See Health Ombudsman Act 2013 (Cth) Part 10. 7 Laming v Medical Board of Australia [2013] QCAT 304. 8 Lord Haven Pty Ltd v Greater Dandenong [2000] VCAT 1873. -- 5 of 9 -- 6 intended purpose and, for its part, the Board must act reasonably in placing restrictions on a practitioner’s means of earning a living. [12] The parties’ financial circumstances and whether the regulator afforded natural justice or the practitioner “genuinely attempted” to assist it in making a correct decision on the merits are all relevant matters. So are the type of case and its subject matter. [13] Disadvantage is not enough for s 102(3)(a). It must also be unnecessary and, in light of s 48(1)(a)-(g) QCAT Act, characterised by some element of vexation, unreasonableness or litigation misconduct such as disobeying procedural orders or putting the opposing party to the expense of meeting a weak case. [14] Despite there being a no-costs starting point and no reasonable expectation of a costs order being made in favour of a successful party, costs orders are invariably made against a practitioner where the regulator succeeds in proving a referred disciplinary ground based on the relative strength of the competing cases. However, the Board contends a statutory tribunal whose decision is overturned should not be liable to an adverse costs order even if it failed to observe fundamental principles of procedural fairness9 unless it can be demonstrated that the tribunal has demonstrated serious misconduct, corruption or perversity.10 [15] The applicant disagrees and submits that the QCAT Act’s terms do not impliedly require a successful applicant to establish misconduct to activate the discretion. [16] The purpose of a costs order is to indemnify successful defendants for needless incurring litigation costs. It is not primarily for discouraging unreasonable litigation behaviour. [17] In Latoudis v Casey,11 (Latoudis) which concerned the costs discretion in summary criminal proceedings (where there is no general rule or practice that costs follow the event),12 McHugh J (a member of the narrow 3-2 majority) said:13 “Once it is perceived that costs operate as an indemnity and that the rationale of making a costs order is that it is just and reasonable that the successful party should be reimbursed for the costs incurred in bringing or defending the action, no ground exists for distinguishing between informants in summary proceedings who are public officials and those who are private persons. True it is that public officials should launch prosecutions only when the public interest requires it. This is the chief, but not the only, rationale for the rule that historically the Crown neither 9 See too Valorne Pty Ltd v Building Appeals Board [2013] VSC 641 [20]-[25]. 10 Psychologists Registration Board of Victoria v Herald & Weekly Times Ltd [2000] VSCA 118; Fernando v Medical Practitioners Board (No 2) [2003] VSC 168; Board of Examiners v XY (2006) VSCA 190; Ripper v Kotzman [2008] VSC 448. 11 [1990] 170 CLR 534. 12 See Toohey J at 562. 13 at 567. -- 6 of 9 -- 7 paid nor received costs. This rule also applied to a public official who instituted proceedings in his own name but really on behalf of the Crown: ... The purpose of enacting statutory provisions such as s. 97 of the Magistrates (Summary Proceedings) Act 1975 (Vict.) …, however, is to reverse the historic rule: ... Once a legislature abolishes the rule that the Crown and those who institute summary proceedings in the public interest neither pay nor receive costs, the various rationales of that rule cannot be used to justify the exercise of the discretion to refuse to order the payment of costs of a successful defendant in summary proceedings. To use them in that manner is to ignore the purpose of the legislature in enacting the legislation. Moreover, as the decisions on costs in summary proceedings in Queensland and Victoria demonstrate, if the rationales of the historic rule are taken into account in the exercise of the discretion to award costs, they result in practice in the continuance of the position which existed before the legislation, at least so far as informants not being liable for costs are concerned. In the rare cases in those States where a costs order is made against a police officer-informant, the real basis of the order is punishment of the police officer: he or she is ordered to pay costs because his or her conduct has fallen below what is expected of a police officer-informant. Paradoxically, the rationales of the historic rule are not used to defeat the exercise of the discretion in favour of the Crown or police informant when the informant seeks an order for costs. The result is unequal justice.” (citations omitted) [18] The minority (Brennan and Dawson JJ) saw good arguments for and against both sides of the argument, but opted for the longstanding policy position and practice of not awarding defence costs unless it better assured the administration of the law by discouraging doubtful or oppressive prosecutions. [19] Latoudis was later distinguished by a differently constituted High Court bench in Oshlack v Richmond River Council.14 There, unsuccessful private proceedings against a council approval development proposal were launched by a financially disinterested party in the public interest. The majority15 accepted that in refusing to order costs against the unsuccessful plaintiff the trial judge legitimately exercised his discretion by reference to the policy of the legislation and the public interest purpose of the proceedings. [20] In Psychologists’ Registration Board of Victoria v The Herald & Weekly Times Ltd,16 Charles JA (with whom Winneke P and Phillips JA agreed) noted the: “… very well established line of authority which holds that costs ought not to be awarded against a statutory tribunal which makes an order in excess of its powers unless it can be demonstrated that the tribunal has been guilty of serious misconduct or corruption or has acted perversely.” 14 (1998) 193 CLR 72. 15 As cited and applied by Chernov JA in Board of Examiners v XY (2006) VSCA 190 [15]. 16 [2000] VSCA 118 [11]-[12]. -- 7 of 9 -- 8 [21] The Victorian Court of Appeal later overturned a costs order in Board of Examiners v XY,17 where:  a doctor with a poor prescribing history was admitted to legal practice over the objection of the Admissions Board;  the interests of justice did not compel reimbursement of the applicant’s costs by the Board because its decision to reject the applicant as ‘unfit’ was reversed because of additional evidence and changed circumstances;  the Board’s conduct did not cause the applicant to incur appeal costs;  the Board’s position was relevantly different to that of the police prosecutor in Latoudis. It is a statutory body comprised of unpaid practitioners as honorary members performing quasi- judicial functions in the public interest and appears at appeals from its decisions to assist the court not as a protagonist;  it is uncommon for courts (at least, in Victoria) to order costs against tribunals whose decisions are overturned on appeal or review. [22] Nettle JA also disapproved the practice of according special costs considerations on the ground of poverty or financial disadvantage.18 [23] QCAT decisions on costs in successful reviews of regulatory body decisions have gone both ways. In some instances, a costs application has been declined on the basis that s 21 QCAT Act obliges the Board to participate. In others, costs orders have been made against a Board despite its acknowledged public interest role in review proceeding including where it was held that even if the allegations of impropriety were fully accepted the practitioner’s past conduct and assessed future risks did not warrant a proposed condition.19 [24] Ultimately, a choice must be made between two imperfect alternatives: one, requiring a regulatory body funded by its members acting in good faith and two, denying a successful respondent the (no doubt substantial) legal professional costs of defeating a condition that was held not to have been either apt or necessary for achieving its stated purpose. [25] The reasonableness in taking proceedings is relevant but not decisive. Likewise, the source of funds out of which an order for costs will be met. Forewarning of an intention to apply for costs is pertinent; as is a failure to conduct a full or proper pre-litigation investigation. 17 [2006] VSCA 190 (Chernov, Nettle and Neave JJA). 18 at [41]. 19 See, for example, Chiappalone v Medical Board of Australia [2015] QCAT 201. -- 8 of 9 -- 9 [26] In my opinion, uncritically exercising the costs discretion on the default basis that a regulatory or disciplinary body whose decision is overturned on review should not be ordered to pay all or any part of the successful party’s costs unless it has found to have acted unreasonably, perversely or corruptly is contrary to principle. [27] The QCAT Act is the sole determinant of whether, when and how much costs should be ordered in favour of a party to tribunal proceedings and it would be wrong to fetter the discretion by assuming in advance what the interests of justice call for where the Board or similar body is a party. [28] In this case, the Board sought to impose a condition that was not fit for the intended purpose of protecting prospective patients from any unacceptable risk the applicant posed. Whether the Board’s change of position was late or genuinely overly prejudicial or deprived the applicant of an earlier resolution or not, I think his relatively stronger case, overall success on review, the agreed complexity and need for legal representation outweigh the countervailing considerations such as the Board’s public interest role, bona fides and subjective reasonableness and compel a costs order in his favour in the overall interests of justice. ORDER 1. The respondent Board is to pay the applicant Dr Christopher Alroe his costs of and incidental to the proceedings in an amount to be assessed on the standard basis according to the District Court scale. -- 9 of 9 --