Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Health Care Complaints Commission v Spruce (No.2) [2015] NSWCATOD 153 Hearing dates: On the papers Date of orders: 21 December 2015 Decision date: 21 December 2015 Jurisdiction: Occupational Division Before: A Britton, Principal Member J Ludington, Occasional Member B Radcliffe, Occasional Member M Cross, Occasional Member Decision: Respondent to pay 80% of the Applicant's costs. Catchwords: COSTS — principles applying to awarding costs under the Health Practitioner Regulation National Law (NSW) — whether presumption displaced that the successful party is ordinarily entitled to recover its costs Legislation Cited: Health Practitioner Regulation National Law (NSW) Mental Health (Forensic Provisions) Act 1990 (NSW) Cases Cited: Health Care Complaints Commission v Spruce [2015] NSWCATOD 89 Health Care Complaints Commission v Do [2014] NSWCA 307 Health Care Complaints Commission v Philipiah [2013] NSWCA 342 Lucire v Health Care Complaints Commission (No 2) [2011] NSWCA 182 Ohn v Walton (1995) 36 NSWLR 77 Qasim v Health Care Complaints Commission [2015] NSWCA 282 Williams v Lewer (1974) 2 NSWLR 91 Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; (2009) 239 CLR 175 Leading Edge Australia Pty Ltd v Kiri Te Kanawa (No 2) [2007] NSWSC 568 Shao Chun Bi v Mourad [2010] NSWCA 17 Category: Costs Parties: Health Care Complaints Commission (Appellant) David Spruce (Respondent) Representation: Counsel: V Hartstein (Applicant) Solicitors: Health Care Complaints Commission (Applicant) Richard Wise (Respondent) File Number(s): 1520009 Publication restriction: NON PUBLICATION ORDER APPLIES IN RESPECT OF CLIENT A REASONS FOR DECISION 1. The applicant, the Health Care Complaints Commission (the Commission) applies for its costs of the proceedings. The respondent, former pharmacist David Spruce, opposes that application and contends that each party should pay their own costs. 2. The proceedings concerned four complaints about Mr Spruce (the Complaints) referred by the Commission to the Civil and Administrative Tribunal of New South Wales (NCAT). The trigger for those complaints was an allegation made by "Client A" which resulted in Mr Spruce being charged with four counts of indecent assault. Those charges were ultimately dismissed under s 32 of the Mental Health (Forensic Provisions) Act 1990 (NSW). 3. We found proven the conduct particularised in the Complaints. We also found Mr Spruce guilty of "professional misconduct" and that he was "not competent to practise pharmacy" (respectively ss 139E and 139(a) of the Health Practitioner Regulation National Law (NSW) (the National Law)). In addition, we made orders declaring that if Mr Spruce was still registered we would have cancelled his registration as a pharmacist and disqualified him from being registered as a pharmacist for a period of 18 months from the date of our decision (Health Care Complaints Commission v Spruce [2015] NSWCATOD 89). 4. At the request of Mr Spruce we invited the parties to make submissions on costs after our reasons for decision had been delivered. Both parties provided written submissions. In making our decision we have taken those submissions into account and also those provided by the Commission at the commencement of the hearing. 5. For the reasons set out below we have decided that Mr Spruce should pay 80 per cent of the Commission's costs. The power to award costs 1. The power to award costs in proceedings where a complaint has been referred to NCAT for determination under the National Law, is found in cl 13 of Schedule 5D to the National Law: 13 Tribunal may award costs [NSW] (1) The Tribunal may order the complainant (if any), the registered health practitioner … at an inquiry or appeal before the Tribunal to pay costs to another person as decided by the Tribunal. (2) When an order for costs has taken effect, the Tribunal is, on application by the person to whom the costs have been awarded, to issue a certificate setting out the terms of the order and stating that the order has taken effect. … 1. The Court of Appeal in Health Care Complaints Commission v Philipiah [2013] NSWCA 342 (Philipiah) considered the exercise of the discretion to award costs and accepted at [42] that "[a]s a general rule, costs of proceedings before the Tribunal should follow the event". See also Qasim v Health Care Complaints Commission [2015] NSWCA 282 at [85]; Health Care Complaints Commission v Do [2014] NSWCA 307 at [51]; and in relation to a similar but not identical costs provision, Lucire v Health Care Complaints Commission (No 2) [2011] NSWCA 182 (Lucire) and Ohn v Walton (1995) 36 NSWLR 77 at p 79. While as a general rule costs follow the event, factors may exist that militate against the recovery of costs by the successful party: Philipiah at [42]; Lucire at [48]–[52]. 2. The authorities have emphasised that while the discretion not to award costs to the successful party is unfettered it must nonetheless be exercised judicially "according to proper fixed principles and rules of reason and justice, not according to private opinion": Philipiah at [43]. In Philipiah the Court of Appeal observed at [43] that it is "not easy to state the precise principles" that are to guide a decision-maker in exercising the discretion over costs. The discretion is only to be exercised where there are materials upon which to exercise it (Philipiah at [43]; Williams v Lewer (1974) 2 NSWLR 91 at 95). 3. The presumption that the successful party is entitled to be paid their costs is generally only displaced where there has been some "disentitling conduct" by the successful party: Oshlack v Richmond River Council [1998] HCA 11; 193 CLR 72 (Oshlack) at [40]. In Lucire at [49]–[53], the Court of Appeal identified three factors that militated against the Commission recovering all its costs in that matter: First, the Commission's lack of success in obtaining findings against the practitioner in respect of professional misconduct. Secondly, the Commission's failure to establish each of the particulars pleaded. Thirdly, oppressive conduct on the part of the Commission in the way in which it prosecuted the proceedings before the Tribunal, such as taking procedural steps that gave rise to unnecessary expense in preparing for the hearing. Should the power to award costs be exercised? 1. The Commission contends that the circumstances of this case do not warrant a departure from the general rule that the successful party has a reasonable expectation that its costs of the proceedings will be paid. Mr Spruce disagrees. He submits that each party should bear their own costs, and, in the alternative, that he be required to pay only a fraction of the Commission's costs. 2. As the Commission correctly points out, as the successful party it has a "reasonable expectation" of receiving its costs: Oshlack at [134]. The issue to be determined is whether the factors identified by Mr Spruce warrant a departure from the presumption that the successful party is ordinarily entitled to recover its costs. 3. In our view, there are reasonable grounds for departing from the general rule but not to the extent of ordering that each party should bear its own costs. 4. Firstly, the fact that Mr Spruce, although not admitting most of the elements of the Complaints, did not contest them merely saved the Commission from the expense that a fully contested hearing would have entailed. Regardless of the reasons for his failing to admit the Complaints, he did not do so and the Commission had to prove them by evidence. 5. Secondly, Mr Spruce's efforts to reduce costs were a benefit to him as well as to the Commission in that he did not incur the costs of a fully contested hearing. In any case, as a matter of principle (often honoured only in the breach) litigants are obliged to make genuine efforts to run their litigation efficiently: see generally Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; (2009) 239 CLR 175 and more particularly, Leading Edge Australia Pty Ltd v Kiri Te Kanawa (No 2) [2007] NSWSC 568 and Shao Chun Bi v Mourad [2010] NSWCA 17 at [47] per Allsop P. 6. Thirdly, Mr Spruce's inability to contest or comment upon allegations against him due to his own mental condition does not entitle him to a discount in relation to costs. Costs are not punitive but are compensatory. His co-operation in, and contribution to, the efficiency of the hearing saved him costs and reduced the costs of the Commission. Had he contested the hearing, his own and the Commission's costs, would have been considerably more. He has therefore already received the benefit of his co-operation and efficiency. 7. Nevertheless, the Commission was substantially but not wholly successful. It proved unsatisfactory professional conduct in relation to the "pharmacy incident", not professional misconduct. We also did not accept the Commission's submission that Mr Spruce be disqualified for two to three years. 8. For these reasons, we think that it is reasonable and appropriate to order that Mr Spruce pay 80 per cent only of the Commission's costs. I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales. Registrar 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: 22 December 2015