CITATION: Council of the Law Society of NSW v. Dimitriou (No 2) [2010] NSWADT 37 DIVISION: Legal Services Division APPLICANT The Council of the Law Society of New South Wales PARTIES: RESPONDENT Georgina Dimitriou FILE NUMBER: 082020 HEARING DATES: On the papers SUBMISSIONS CLOSED: 28 October 2009 DATE OF DECISION: 5 February 2010 BEFORE: Molloy G - Judicial Member; Riordan M - Judicial Member; Hayes E - Non-Judicial Member CATCHWORDS: Costs LEGISLATION CITED : Legal Profession Act 2004 Administrative Decisions Tribunal Act 1997 Council of the Law Society v. Dimitriou [2009] NSWADT 249 Haralovic & Carr v Law Society of NSW (No2) [2007] NSWADT 97 Hingston v. Lynch (EOD) [2010] NSWADTAP 1 CASES CITED: Jonamill Pty Limited v. Alramon Pty Limited (No. 2) (RLD) [2010] NSWADTAP 3 Kyriacou v. Chief Commissioner of State Revenue [2009] NSWADT 175 Rucom Pty Limited and Anor v. Mutiplex & Ors [2010] NSWADT 1 Salon Today Pty Ltd v. MMIR Pty Ltd [2009] NSWADT 71 Trowbridge v. Morris [2010] NSWADT 18 WX v. NSW Medical Board [2010] NSWADT 12 APPLICANT C A Webster, barrister REPRESENTATION: RESPONDENT D English, solicitor ORDERS: 1.The Application by the Respondent for an order for costs is dismissed 2.No order as to costs of the proceedings or the Respondent's application for costs. REASONS FOR DECISION Background 1 In our decision 29 September 2009 we dismissed an Application by the Law Society for an order under Legal Profession Act 2004 Section 18(2) prohibiting any law practice from employing or paying the Respondent in connection with the legal practice engaged in by the law practice, without approval under Section 17 (Council of the Law Society v. Dimitriou [2009] NSWADT 249). 2 By self-executing order we directed that unless "either party moved the Tribunal within 28 days of the date of this decision in or to the effect that a costs order should be made, the order of the Tribunal will be that there be no order as to costs". 3 The Respondent has applied for an order for costs pursuant to Legal Profession Act 2004, Section 20(3) and Administrative Decisions Tribunal Act 1997, Section 88. The Law 4 Legal Profession Act 2004 Section 20 (relevantly) provides as follows: (1) The parties to an application to the Tribunal under this Division may be represented by an Australian legal practitioner at the hearing of the application. (2) On making an order under this Division or on determining an application for approval under section 17 (associates who are disqualified or convicted persons), the Tribunal may make orders for costs. (3) An order for costs: (a) may be for a specified amount or an unspecified amount, and (b) if it is an unspecified amount, may specify the basis by which the amount is to be determined, and (c) may specify the terms on which costs must be paid. The balance of this section is not relevant to the issue. 5 The Law Society contends, correctly, that there is no inherent power in this Tribunal to award costs and, consequently, the power to make orders for costs must be found in relevant legislation. But, in addition, the Law Society submits that in order to base an application for costs on section 20 the Tribunal has to make (relevantly) "an order under this Division". Thus it argued that where the Tribunal declines to make an order under section 18(2) then, presumably, there is no order made under the Division and therefore no costs order can be made. 6 Reliance was placed upon Haralovic & Carr v Law Society of NSW (No2) [2007] NSWADT 97. In that matter the Applicants filed an application seeking approval under section 17(3) Legal Profession Act for the Second Applicant to be an associate of the First Applicant. There is no need to go through the rather complicated aspects of the matter – suffice it to say that the Second Applicant discontinued the proceedings and reliance was placed upon paragraph [24] where that Tribunal said: "The concurring submissions on this question both placed some emphasis on the fact that the application filed under s.17 of the (Legal Profession Act) had been withdrawn at the instigation of the Second Applicant before the Tribunal had made any "order" or "determination" such as could trigger the operation of s.20(2)." It was submitted that the reference to "triggering" reflects the terms of s.20(2) which, on a literal reading, suggests that the Tribunal can only make orders for costs "on making an order under" Division 3 (ss.18 or 19) and not when the Tribunal declines to make such an order. The submission went on to state that if "that (is) the correct interpretation of s.20(2)…that section does not "provide for" the Tribunal making orders for costs in terms of s.88 (3) Administrative Decisions Tribunal Act". 7 Generously, the Law Society stated that such a construction of s.20 "may be arguable" but for the purposes of the present application the Society was content to rely upon s.88…". For our part, however, it seems to us that this Tribunal on 29 September 2009 did more than simply decline to make an order, but rather it dismissed the Application under s.18(2). A dismissal of an application is in fact an order – there is nothing in s.20 which states, directly or by implication, that such an order must be a positive order, ie. an order in favour of the relevant Applicant; in our view it is sufficient that an order is made in "proceedings on prohibition orders" such that if an order is made dismissing the Application then that is an order made under s.20 and therefore the Tribunal "may" make an order for costs. 8 If that conclusion is correct, and in any event having regard to the concession made by the Law Society in its submissions, then the relevant section that applies to the actual costs orders is s.88 Administrative Decisions Tribunal Act. If any authority is needed on that point then we refer again to Harolovic where that Tribunal made the following observations: "[25] In at least three decisions made under the Legal Profession Act 1987 , which is the predecessor to the ( Legal Profession Act 2004) , the Tribunal has expressed the view that s.88 provides the basis for cost orders in situations not covered directly by the Legal Profession Act . These decisions are Barwick v Law Society of New South Wales (No. 2)(LSD) [2003]NSWADTAP4(at [2000]), Law Society NSW v Khera (No. 2) [2004]NSWADT103(at [15]) and Council of the NSW Bar Association v Archer (No 5) [2005] NSWADT72. [26] The reasoning in the last of these authorities appears to the present Panel to support the conclusion that s.88 of the (Administrative Decisions Tribunal Act) would apply in the present situation even if an "order" as mentioned in s.20(2) of the (Legal Profession Act) had been made by the Tribunal. Because s.20(2) "provides for the awarding of costs" without indicating the basis on which costs orders can be made, s.88 of the (Administrative Decisions Tribunal Act) becomes applicable (as contemplated in s.88(3)) and s.88(1) states that the requirement of "special circumstances" should be observed." 9 Pausing at this point Haralovic was decided in 2007 before the 1 January 2009 amendments to the Administrative Decisions Tribunal Act. Consequently the "new" section 88 needs to be applied to the instant application. Because Dimitriou was heard and decided in 2009, after the "new" s.88 came into operation 1 January 2009, there is no requirement to look at the question of "special circumstances" as so carefully analysed in Haralovic; rather one needs to apply oneself to the amended s.88 and its particular terms. Section 88 ADT Act 10 This section came into operation on 1 January 2009 and is in the following terms: 1) Each party to proceedings before the Tribunal is to bear the party's own costs in the proceedings, except as provided by this section. (1A) 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 is satisfied that it is fair to do so having regard to the following: (a) whether a party has conducted the proceedings in a way that unnecessarily disadvantaged another party to the proceedings by conduct such as: (i) failing to comply with an order or direction of the Tribunal without reasonable excuse, or (ii) failing to comply with this Act, the regulations, the rules of the Tribunal or any relevant provision of the enactment under which the Tribunal has jurisdiction in relation to the proceedings, or (iii) asking for an adjournment as a result of a failure referred to in subparagraph (i) or (ii), or (iv) causing an adjournment, or (v) attempting to deceive another party or the Tribunal, or (vi) vexatiously conducting the proceedings, (b) whether a party has been responsible for prolonging unreasonably the time taken to complete the proceedings, (c) 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, (d) the nature and complexity of the proceedings, (e) any other matter that the Tribunal considers relevant. (2) The Tribunal may: (a) determine by whom and to what extent costs are to be paid, and (b) order costs to be assessed on a basis set out in Division 11 of Part 3.2 of the Legal Profession Act 2004 or on any other basis. (3) However, the Tribunal may not award costs in relation to proceedings for an original decision unless the enactment under which the Tribunal has jurisdiction to make the decision provides for the awarding of costs. (4) In this section, "costs" includes. (a) costs of or incidental to proceedings in the Tribunal, and (b) the costs of or incidental to the proceedings giving rise to the application, as well as the costs of or incidental to the application. 11 There is no need to review the law relating to the operation of this section. It is adequately set out in Salon Today Pty Ltd v. MMIR Pty Ltd [2009] NSWADT 71; Rucom Pty Limited and Anor v. Mutiplex & Ors [2010] NSWADT1; Jonamill Pty Limited v. Alramon Pty Limited (No. 2) (RLD) [2010] NSWADTAP3; Trowbridge v. Morris [2010] NSWADT 18; WX v. NSW Medical Board [2010] NSWADT 12; and Hingston v. Lynch (EOD) [2010] NSWADTAP1. Respondent's Submissions 12 The submissions filed on behalf of the Respondent were in short compass and pithy. It was submitted that the "proceedings were brought against the Respondent in circumstances where it was conceded from the outset by the Applicant that the Respondent was at all times employed by Lundy Lawyers. That concession was inconsistent with several of the charges brought against her." It was suggested that the charges relating to failure to provide cost disclosures and failure to provide receipts "should properly have been tested in the first instance against the person having the primary responsibility, ie the principal of the law firm by which the Respondent was employed." The employer was not called. Various files of the employer were not produced. Various "charges" brought against the Respondent were withdrawn "during the course of the hearing". The Applicant was "wholly unsuccessful" and "none of the allegations/assertions have been found to have been made out." The Respondent engaged the services of her solicitors and counsel in circumstances where "it was reasonable for her to be so represented given the serious nature of the charges against her and possible consequences to her of an adverse finding." Tribunal's Opinion 13 The Applicant Law Society filed detailed submissions in reply. There is no need for us to go through those well-prepared submissions. That is not to say that their content was other then helpful to the Tribunal; but the Tribunal has independently formed its own opinion. 14 The difficulty confronting the Respondent was that, to a large degree, she was the author of her own misfortune. The Tribunal attempted to make that plain in its judgment 29 September 2009. There is no need to review the various conflicts of evidence nor the difficulties that confronted the Respondent in all these circumstances. The Tribunal, however, made these important observations: at [76] it observed that the Respondent "although trying her best for the particular persons involved, became so enmeshed in the allegations that she allowed herself to not bring to the task an independent dispassionate approach." Indeed, she accepted this in her own evidence, which we attempted to set out in [77-78]. It is plain from those excerpts from the transcript that the Respondent adopted a less than dispassionate approach to the issues – she admitted that "once I got involved like that I should have just stepped backwards and walked away and let someone else handle it." 15 At [79] the Tribunal, having made reference to the excerpts from the transcript, noted that "the problem that was created by this Respondent in becoming too involved with her clients" and the Tribunal observed that advice "tendered outside the professional offices of a lawyer can often be misunderstood and the role and professionalism of the lawyer, or the paralegal, can be quite easily compromised." This observation was repeated by the Tribunal at [84] where the Tribunal observed that "instructions should have been given at the law offices and, in the circumstances, the employer should have been (on the evidence) more closely involved." 16 In our opinion the conduct of the Respondent, although no doubt thought by her to be in the best interests of her respective clients, was to some degree unprofessional and left her open to the complaints that were ventilated in the Tribunal. The Respondent, had she conducted herself in a more dispassionate and removed fashion, would more than likely not have come to attention and would have carried out her activities in a more professional fashion and thus not have left herself open to assertions/allegations, properly brought against her, to which she was obliged to respond. 17 Although it is true that a prosecutor has an obligation to bring forward all material that is relevant to the charges preferred (and there was clear evidence that the Law Society had in its possession the files of Lundy Lawyers pertaining to the matters in issue) that, in our view, is not sufficient to warrant a costs order in circumstances where the Respondent could easily have called for those files well prior to the hearing and have had access thereto. The failure by Law Society to produce the files is equalled by the failure of the Respondent to call for them. An inspection could easily have been carried out well prior to the hearing, appropriate documents extracted, copied and produced at the hearing. 18 It is not the case under s.88 that the mere fact of being successful in a case results in an award for costs. It may well be that the concept of "fairness" in the general sense of that word would require costs to follow the event. But that is not what s.88 says. As Handley JM said in Kyriacou v. Chief Commissioner of State Revenue [2009] NSWADT 175 at [38]: "it must be borne in mind that the primary principle stated in section 88(1) is that each party to proceedings before the Tribunal should bear that party's own costs. An award of costs is an exception to this general principle. It therefore remains the normal expectation that the parties in Tribunal proceedings should bear their own costs. To that extent the position in proceedings before the Tribunal is different from that in adversarial proceedings before the courts where the successful party can ordinarily expect an order for costs". Therefore, in order to obtain a costs order in this Tribunal one must fit within the parameters within s.88(1A), always bearing in mind that sub-section (e) ("any other matter that the Tribunal considers relevant") is of wide import and ought not to be read down or ignored and always bearing in mind that the test of "fairness" in the opening words of sub-section (1A) does not of itself open the door to costs simply following the event. 19 In our view the Respondent has not overcome the presumption in Section 88 (1); and in those circumstances there should be no order for costs. The Tribunal notes that there is no application by the Law Society for costs and thus the decision of this Tribunal is that there be "no order as to costs". ORDERS 1. The Application by the Respondent for an order for costs is dismissed. 2. No order as to costs of the proceedings or the Respondent's application for costs. 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.