Court of Appeal Supreme Court New South Wales Medium Neutral Citation: Livers v Legal Services Commissioner (No 2) [2021] NSWCA 164 Hearing dates: On the papers Decision date: 06 August 2021 Before: Ward CJ in Eq at [1]; White JA at [2]; McCallum JA at [18] Decision: Motion dismissed Catchwords: COSTS — Civil and Administrative Tribunal — disciplinary proceedings — costs incurred by a lawyer in defending allegations of professional misconduct — application for payment of costs from the Public Purpose Fund following successful appeal — statutory requirement for the Court to be satisfied that the lawyer did not engage in unsatisfactory professional conduct or professional misconduct — where solicitor admitted professional misconduct but on a basis not alleged by the Legal Services Commissioner in the proceedings before the Tribunal — proper construction of sch 5, cl 23(3) of the Civil and Administrative Tribunal Act Legislation Cited: Civil and Administrative Tribunal Act 2013 (NSW), ss 17, 23, 60, sch 5 cl 23(3) Civil Procedure Act 2005 (NSW), s 98(3) Legal Profession Act 2004 (NSW), s 497(1) Legal Profession Uniform Law Application Act 2014 (NSW), s 55 Supreme Court Act 1970 (NSW), s 75A(6) Uniform Civil Procedure Rules 2005 (NSW), rr 36.16(3A), 36.17 Cases Cited: Grace v Grace (No 9) [2014] NSWSC 1239 Gray v Richards (No 4) [2017] NSWSC 1714 Livers v Legal Services Commissioner [2020] NSWCA 317 Short v Crawley (No 45) [2013] NSWSC 1541 Tjiong v Tjiong (No 2) [2018] NSWSC 1981 Category: Costs Parties: Peter James Livers (Appellant) Legal Services Commissioner (Respondent) Representation: Counsel: S Prince SC, E Olivier (Appellant) T Wong SC, B Cameron (Respondent) Solicitors: Moray & Agnew (Appellant) Office of the Legal Services Commissioner (Respondent) File Number(s): 2020/108013 Publication restriction: None Decision under appeal Court or tribunal: New South Wales Civil and Administrative Tribunal Jurisdiction: Occupational Division Citation: [2019] NSWCATOD 180 Date of Decision: 27 November 2019 Before: The Hon F Marks, Principal Member P Moran, Senior Member J Schwager AO, General Member File Number(s): 2016/00378739 [Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.] Judgment 1. WARD CJ in Eq: I agree with the order proposed by McCallum JA and broadly with her Honour's reasons. On the basis that the power to grant the costs order here sought is constrained as McCallum JA explains, such an order could not possibly be made (and nor would it be of any utility to remit the matter to the Tribunal). Mr Livers concedes (and that concession is amply warranted) that his conduct amounted to professional misconduct. It was serious professional misconduct not unrelated to the proceeding but the very conduct that was before the Tribunal for consideration (albeit that the Commissioner was alleging fraud and a reckless lack of care in relation to that conduct). But for the agreement of the parties to bear their own costs I would have proposed that the notice of motion be dismissed with costs. As it is, I concur in the order that McCallum JA has proposed. In those circumstances it is not necessary to enter into debate as to whether the slip rule was properly invoked, save to say that I see force in White JA's observations on that issue 2. WHITE JA: McCallum JA, whose reasons I have had the advantage of reading in draft, has set out the circumstances giving rise to this application. I agree with her Honour, generally for the reasons her Honour gives, that Mr Livers' notice of motion should be dismissed. 3. I do not think that the slip rule (Uniform Civil Procedure Rules 2005 (NSW) r 36.17) is engaged. In his written submissions in reply delivered before the hearing of the appeal, Mr Livers contended that if the appeal were allowed the Legal Services Commissioner should pay the costs of the hearing in the Tribunal. At the hearing of the appeal, senior counsel appearing for the Commissioner opposed that course. She submitted that if the appeal succeeded this court should not make orders in respect of the costs of the proceedings before the Tribunal without receiving further submissions from the parties. Mr Livers did not press the issue on the hearing of the appeal. 4. It was in these circumstances that no orders were made in respect of the costs of the proceedings in the Tribunal. That was not an oversight. It remained open to either party to seek an order as to the costs of the proceedings in the Tribunal. 5. It does not matter that the notice of motion filed by Mr Livers seeking the orders set out at para 23 of the reasons for judgment of McCallum JA was not filed within 14 days of the entry (on 10 December 2020) of this court's orders setting aside the decision of the Tribunal of 27 November 2019 and dismissing the application by the Legal Services Commission for disciplinary findings and protective orders against Mr Livers. Those orders did not determine what costs order, if any, should be made in respect of the proceedings in the Tribunal. 6. If the present application were to be treated as one to vary an order made on 10 December 2020, then the power to make the orders sought would be found in r 36.16(3) to which the 14 day limitation period in r 36.16(3A) is inapplicable. I adhere to the views I expressed about this in Short v Crawley (No 45) [2013] NSWSC 1541 at [16], [17], [77] and [78]. 7. However, I do not think that r 36.16 is engaged because the present application is not one to vary an order made on 10 December 2020. 8. It does not follow that the court is functus. The order sought is an order "as to costs" within the meaning of s 98(3) of the Civil Procedure Act 2005. Such an order may be made after the conclusion of the proceedings. 9. Alternatively, adopting the approach taken by Brereton J (as his Honour then was) in Grace v Grace (No 9) [2014] NSWSC 1239, the principle of finality of judgments is not infringed because the application does not impugn any part of this court's judgment of 10 December 2020 (at [35]). (See also Gray v Richards (No 4) [2017] NSWSC 1714 at [18]-[25] (McCallum J) and Tjiong v Tjiong (No 2) [2018] NSWSC 1981 (Parker J)). 10. As to the substance of the application, I agree with McCallum JA and with Ward CJ in Eq that cl 23(3) of Sch 5 to the Civil and Administrative Tribunal Act does not authorise the order sought by Mr Livers in paragraph 1 of his notice of motion. 11. By paragraph 2 of his notice of motion Mr Livers sought, in the alternative, an order that the proceedings be remitted to the Tribunal for it to determine the costs of the proceedings in the Tribunal. 12. For the reasons given by McCallum JA, there would be no purpose in making that order if the order sought by Mr Livers were that his costs be paid from the Public Purpose Fund. 13. Without deciding, I doubt that cl 23 of Sch 5 of the Civil and Administrative Tribunal Act wholly displaces the operation of s 60. That is, if none of the provisions of cl 23 in Sch 5 is engaged, then I am inclined to the view that the Tribunal could award costs if satisfied that there were special circumstances warranting an award (s 60). 14. The Tribunal did not make any award of costs. It left the question of costs to be determined as part of "stage 2" of the proceedings. Without deciding the question, I think it is arguable that the Tribunal's power to make an order against the Commissioner may not be confined to the circumstances in cl 23(5). 15. Notwithstanding his original submission that the Legal Services Commissioner should be ordered to pay the costs of the proceedings in the Tribunal, Mr Livers does not now seek such an order. If such an order had been sought, it would have been appropriate for this court to deal with the application rather than to remit the matter to the Tribunal. 16. For these reasons I agree that order 2 of the notice of motion ought not be made. 17. Accordingly, I agree with McCallum JA that the notice of motion should be dismissed. 18. McCALLUM JA: The Legal Services Commissioner brought proceedings in the Civil and Administrative Tribunal seeking disciplinary findings and protective orders against Mr Peter Livers (a solicitor) on the basis of allegations that he had fraudulently altered a document and had been dishonest or at least recklessly careless in the provision of incorrect information in an application for a grant of funding for legal representation for a client. Mr Livers denied those allegations but admitted that he had been negligent in preparing the application in question. He further conceded that his negligent conduct amounted to professional misconduct within the meaning of s 497(1) of the Legal Profession Act 2004 (NSW). However, the Legal Services Commissioner had deliberately not framed the case on the basis of mere negligence. The Tribunal found Mr Livers guilty of professional misconduct on the basis that he had been dishonest. 19. Mr Livers appealed against that decision. We upheld the appeal on the basis that fraud and dishonesty were not established: Livers v Legal Services Commissioner [2020] NSWCA 317. My judgment (with which Ward CJ in Eq and White JA agreed) concluded as follows at [158]: "Mr Livers has conceded that his preparation of the amended client statement and his submission of the application form to WIRO containing the errors it did was negligent and that the conduct involved in those allegations amounted to professional misconduct within the meaning of s 497(1) of the Legal Profession Act 2004 being unsatisfactory professional conduct that involved a "substantial failure" to maintain a reasonable standard of competence and diligence. There can be no doubt that the concession was properly made. It was a serious matter to sign a certification in the terms in which Mr Livers did on the WIRO application form without taking care to ensure that the contents of the statement were accurate and not misleading. However, as I have explained, that was deliberately not the case put by the Legal Services Commissioner. In the circumstances, the challenge to the fraud case (including the reckless carelessness case) having succeeded, the only course this Court can properly take is to set aside the decision of the Tribunal and instead to dismiss the Commissioner's application." 1. That judgment was published on 10 December 2020. The Court's orders specified on the coversheet were entered into the Court's electronic record system, JusticeLink, that day as follows: Set aside the decision of the Civil and Administrative Tribunal made 27 November 2019. Dismiss the application by the Legal Services Commissioner for disciplinary findings and protective orders against the applicant. Legal Services Commissioner to pay the applicant's costs of the appeal. 1. By notice of motion dated 26 April 2021, Mr Livers seeks an order pursuant to the "slip rule" (r 36.17 of the Uniform Civil Procedure Rules 2005 (NSW)) to have the orders varied as follows: By making a further order that, being satisfied that the appellant did not engage in unsatisfactory professional conduct or professional misconduct, and that special circumstances warrant the making of the order, the appellant's costs of the proceeding before the Civil and Administrative Tribunal are to be paid from the Public Purpose Fund pursuant to sch 5, cl 23 (3) of the Civil and Administrative Tribunal Act 2013 (NSW). In the alternative to (1), by making a further order that the proceedings be remitted to the Tribunal to determine the costs of the proceedings before the Tribunal. 1. The Court has been informed that the Legal Services Commissioner consents to Order (1) and, in the alternative, does not oppose the making of Order (2). The Court was also informed that the parties have agreed to bear their own costs of the motion. 2. As indicated by the terms of the motion, the application invokes cl 23(3) of sch 5 of the Civil and Administrative Tribunal Act, which provides that an order requiring payment of a respondent lawyer's costs from the Public Purpose Fund may only be made if the Tribunal "is satisfied that the lawyer did not engage in unsatisfactory professional conduct or professional misconduct and the Tribunal considers that special circumstances warrant the making of the orders". 3. After the motion was filed, and notwithstanding the fact that the Commissioner consented to the principal relief sought, the Court invited the parties to address the following questions: 1. how and why the slip rule is said to be engaged. 2. whether it is open for this Court to make the order sought in light of paragraph [158] of the judgment. 3. why the court should be satisfied that there are special circumstances. 1. Mr Livers provided written submissions addressing those questions on 2 June 2021. The Commissioner responded in written submissions dated 8 June 2021. Neither party sought an oral hearing. The slip rule 1. It is convenient to proceed on the assumption that the slip rule is engaged. In his written submissions in chief in the principal proceedings in this Court, Mr Livers addressed the question of his costs in the Tribunal proceedings (briefly) as follows at [97]: "For the reasons above, the appeal should be allowed, the decision of the tribunal set aside and in lieu therefor order that the Commissioner's disciplinary application be dismissed with costs." 1. The Legal Services Commissioner opposed any order that he pay Mr Livers' costs of the proceedings in the Tribunal, noting that it would be necessary to establish special circumstances. Mr Livers addressed that issue in his submissions in reply. I note that, although those submissions referred to sch 5 cl 23, nowhere was an order sought in the terms now sought in the notice of motion. However, it may be accepted that the parties contemplated that there would be an opportunity to address the question of costs. Ordinarily, such applications are addressed not under the slip rule but under r 36.16(3A) by filing a notice of motion within 14 days after the orders were entered. 2. The judgment was published at a time when the court building was closed to the public under special arrangements put in place by the Chief Justice to address the COVID-19 pandemic. In accordance with the court's usual (unusual) practice under those arrangements, the judgment was published by me in chambers and in the absence of the parties. As already noted, the order stated on the cover sheet and entered into JusticeLink dealt only with the applicant's costs of the appeal. The applicant noted that the order proposed in the body of the judgment was not qualified in that way but the simple fact is that the judgment did not address the costs of the proceedings before the Tribunal. That appears to have been due to misconception or oversight on my part. The applicant's written submissions in support of the notice of motion identified a number of authorities which provide support for the contention that such oversight may be addressed under the slip rule. However, the order now sought (proposing that the costs be paid not by the Legal Services Commissioner but out of the Public Purpose Fund) does not appear to have been sought previously. In any event, as I have indicated, I am content to proceed on the assumption that the slip rule is engaged. Application for payment of costs from the Public Purpose Fund 1. I have reached the conclusion that an order requiring payment of Mr Livers' costs from the Public Purpose Fund cannot be made in the circumstances of this case for the following reasons. 2. The work of the Civil and Administrative Tribunal is allocated between four divisions. Disciplinary proceedings against lawyers are heard in the Tribunal's Occupational Division. Schedule 5 of the Civil and Administrative Tribunal Act provides for the composition and functions of that division: s 17 of the Act. Clause 23 in sch 5 is headed, inaptly, "Costs consequent of adverse conduct findings". The heading is inapt because cl 23 addresses circumstances beyond those where there is an adverse conduct finding. It is appropriate to begin with reference to s 60 of the Act, which provides: 60 COSTS (1) Each party to proceedings in the Tribunal is to pay the party's own costs. (2) The Tribunal may award costs in relation to proceedings before it only if it is satisfied that there are special circumstances warranting an award of costs. 1. Clause 23 in sch 5 creates a special rule in the case of disciplinary proceedings against lawyers which applies despite s 60: 23 Costs consequent of adverse conduct findings (1) Despite section 60 of this Act, the Tribunal must make orders requiring a respondent lawyer whom it has found to have engaged in unsatisfactory professional conduct or professional misconduct to pay costs (including costs of the Commissioner, a Council and the complainant), unless the Tribunal is satisfied that exceptional circumstances exist. (2) The Tribunal may make orders requiring a respondent lawyer whom it has not found to have engaged in unsatisfactory professional conduct or professional misconduct to pay costs (including costs of the Commissioner, a Council and the complainant), if satisfied that— (a) the sole or principal reason why the proceedings were commenced in the Tribunal was a failure of the lawyer to co-operate with the Commissioner or a Council, or (b) the lawyer has contravened an order of the Tribunal made in the course of the proceedings concerned, or (c) there is some other reason warranting the making of an order in the particular circumstances. (3) The Tribunal may make orders requiring payment of a respondent lawyer's costs from the Public Purpose Fund (within the meaning of the Legal Profession Uniform Law Application Act 2014), but may do so only if satisfied that the lawyer did not engage in unsatisfactory professional conduct or professional misconduct and the Tribunal considers that special circumstances warrant the making of the orders. The Tribunal is to have regard to the length and complexity of the proceedings when making a determination under this subclause. (4) The Tribunal may make orders requiring a respondent lawyer in respect of whom proceedings are pending before the Tribunal to pay costs on an interlocutory or interim basis. (5) The Tribunal may make orders requiring a person to pay costs (including, as appropriate, the costs of the Commissioner, a Council, the complainant and the respondent lawyer against whom the complaint was made), if satisfied that— (a) the person, whether before or during the proceedings, failed to produce or delayed in producing any document required or requested to be produced, and (b) the failure or delay contributed to delay in commencing, conducting or concluding the proceedings in such a way as to warrant the making of the orders. (6) The Tribunal may fix the amount of costs itself or order that the amount of costs be assessed by a costs assessor under the legal costs legislation (as defined in section 3A of the Legal Profession Uniform Law Application Act 2014). (7) An order for costs may specify the terms on which costs must be paid. 1. Although the clause is directed to the powers of the Tribunal, it is not in issue that this Court can exercise the same powers on appeal: s 75A(6) of the Supreme Court Act 1970 (NSW). The difficulty is that the power to make such an order is only enlivened if the Court is satisfied that the lawyer did not engage in unsatisfactory professional conduct or professional misconduct. 2. As recorded at [158] of the principal judgment (set out above), Mr Livers conceded that the conduct the subject of the allegations against him was negligent and amounted to professional misconduct within the meaning of s 497(1) of the Legal Profession Act 2004, being unsatisfactory professional conduct that involved a "substantial failure" to maintain a reasonable standard of competence and diligence. Mr Livers submitted that this concession does not preclude the making of an order under cl 23(3) requiring payment of costs from the Public Purpose Fund because the conduct admitted was not the conduct alleged in the proceedings. I do not accept that construction of cl 23(3). 3. The argument entailed two propositions. First, it was noted that s 60(2) is confined in its application to "costs in relation to proceedings before [here, the Court]". It was submitted that the power under cl 23(3) must also be so limited, that is, the power is confined to making an order "in relation to the proceedings" before the Court. So much may be accepted. 4. Mr Livers then submitted: "It follows that the requirement under cl 23(3) that the Court be satisfied that the lawyer did not engage in unsatisfactory professional conduct or professional misconduct must be limited to a satisfaction that the lawyer did not engage in the unsatisfactory professional conduct or professional misconduct alleged in the proceedings before the Court." [emphasis in original] 1. Mr Livers submitted that to construe the provision otherwise would produce absurdity in that "a lawyer who was at one time found guilty of unsatisfactory professional conduct or professional misconduct could never again have the benefit of an order under cl 23(3) in any other proceeding involving different allegations against the lawyer." 2. Whilst I accept that the power is plainly confined to the costs of the proceedings before the Tribunal or the Court (it could hardly be otherwise), I do not accept the argument to absurdity. 3. There are two fundamental difficulties with Mr Livers' argument. The first is a matter of construction. The power under cl 23(3) is enlivened upon the Tribunal or the Court being satisfied of a certain matter (that the lawyer did not engage in unsatisfactory professional conduct or professional misconduct). If it was intended to confine that power by reference to the conduct alleged, the clause could readily have been framed in terms that made that clear ("that the lawyer did not engage in the unsatisfactory professional conduct or professional misconduct alleged in the application"). Mr Livers' argument that to construe the provision otherwise would produce absurdity poses a straw man. It may readily be accepted that the clause is not to be construed so as to obviate the possibility of seeking costs from the public fund simply on the basis of previous professional misconduct in unrelated circumstances. However, it does not follow that, in determining whether to be satisfied in the terms of the clause, the Tribunal or Court is constrained by the terms of the application and not entitled to consider the whole of the evidence in the proceedings. To put the matter another way, it would seem wrong, where the matter that enlivens the power is the state of mind of the Court, to superimpose someone else's characterisation of the evidence on that issue. This is not a question of procedural fairness in the disciplinary proceedings, where plainly the findings of the Court must be constrained by the allegations brought forward. Mr Livers now seeks payment of his costs out of a fund established for ameliorative and philanthropic purposes (cf s 55 of the Legal Profession Uniform Law Application Act 2014 (NSW)). 4. Even if that is wrong, it is clear that the clause poses a higher bar than that the lawyer has been successful in defending the allegations in the proceedings. Just as a jury verdict of "not guilty" is not the same as a finding of innocence (but only a finding that the Crown has failed to discharge its onus of proof concerning the essential elements of the offence on the indictment), a finding that the case put by the Legal Services Commissioner was not proved does not of itself provide a basis for the Court to be satisfied that a lawyer did not engage in unsatisfactory professional conduct or professional misconduct. 5. I do not mean to suggest that the Court should in such a case pore over the record of the trial seeking to find other allegations proved. Each case will turn on its own facts. In the present case, the requirement for the Court to be satisfied in the terms of cl 23(3) is foreclosed by Mr Livers' own concession recorded at [158] of the principal judgement. 6. As to the alternative relief sought by Mr Livers, having regard to the view I have reached as to the proper construction of cl 23(3), and as no other order as to costs was sought, I see no utility in remitting the matter to the Tribunal. 7. For those reasons, I am of the view that the notice of motion must be dismissed. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 06 August 2021