Supreme Court New South Wales Medium Neutral Citation: Quach v Health Care Complaints Commission (No 2) [2018] NSWSC 1341 Hearing dates: 18 June 2018 Date of orders: 18 June 2018 Decision date: 31 August 2018 Jurisdiction: Common Law Before: Lonergan J Decision: (1) Pursuant to s 98(4) of the Civil Procedure Act 2005, the plaintiff is to pay the defendant's costs in a specified gross sum. (2) The gross sum subject to the above order is the sum of $3,000. (3) Each party is to pay its own costs of today. Catchwords: COSTS – gross sum costs order – where proceedings an abuse of process – notice of constitutional matter – where notice of constitutional matter after proceedings dismissed – where notice of constitutional matter misconceived and/or an abuse of process Legislation Cited: Civil Procedure Act 2005 (NSW) ss 56, 98 Health Care Complaints Act 1993 (NSW) s 99A Judiciary Act 1902 (NSW) s 78B The Commonwealth Constitution s 109 Uniform Civil Procedure Rules 2005 (NSW) rr 1.22, 1.23 Cases Cited: Australian Competition & Consumer Commission v C G Berbatis Holdings Pty Ltd [1999] FCA 1151 Beach Petroleum NL v Johnson (No 2) (1995) 57 FCR 119 Harrison v Schipp (2002) 54 NSWLR 738; [2002] NSWCA 213 Idoport v National Australia Bank [2007] NSWSC 23 Keen v Telstra Corporation Ltd (No 2) [2006] FCA 930 Kiwi Munchies Pty Ltd v Stern [2006] NSWSC 433 Leary v Leary [1987] All ER 261 Penson v Titan National Pty Ltd (No 3) [2015] NSWCA 121 Quach v Health Care Complaints Commission [2018] NSWSC 402 Quach v New South Wales Crown Solicitor [2017] NSWSC 904 Quach v New South Wales Crown Solicitor [2017] NSWSC 991 Category: Costs Parties: Michael Van Thanh Quach (Plaintiff) Health Care Complaints Commission (Defendant) Representation: Counsel: Plaintiff, in person B Thomson, solicitor (Defendant) Solicitors: Crown Solicitor's Office (Defendant) File Number(s): 2018/7882 Judgment 1. On 18 March 2018, I heard argument in respect of a summons filed by the plaintiff seeking various orders against the Health Care Complaints Commission. On that day, I made orders dismissing the plaintiff's summons and ordering the plaintiff to pay the defendant's costs. 2. I made that decision because it was evident that the summons was an abuse of process, being substantially the same as a summons already dismissed in Quach v New South Wales Crown Solicitor [2017] NSWSC 991 by myself and by Schmidt J in Quach v New South Wales Crown Solicitor [2017] NSWSC 904. 3. My reasons were published on 3 April 2018: Quach v Health Care Complaints Commission [2018] NSWSC 402. 4. On 14 April 2018, the plaintiff (Mr Quach) filed a notice of constitutional matter, purporting to give notice that the proceedings involved a matter arising out of the Constitution or involving its interpretation within the meaning of s 78B of the Judiciary Act 1902 (Cth). 5. Rule 1.22 of the Uniform Civil Procedure Rules 2005 prescribes that notice of a constitutional matter under s 78B of the Judiciary Act needs to be provided: 1.22 Notice of constitutional matter (cf Federal Court Rules, Order 51, rule 1) (1) If proceedings pending in a court involve a matter arising under the Commonwealth Constitution or involving its interpretation within the meaning of section 78B of the Judiciary Act 1903 of the Commonwealth, the party whose case raises the matter must file a notice of a constitutional matter. Note. Section 78B of the Judiciary Act 1903 of the Commonwealth provides that if a cause is pending in a State court that involves a matter arising under the Commonwealth Constitution or involving its interpretation, the court is under a duty not to proceed in the cause unless or until it is satisfied that notice of the cause and the matter raised in the cause has been served on the Attorneys-General of the Commonwealth and the States. The purpose of such a notice is to afford the Attorneys-General a reasonable time to consider whether or not they wish to intervene in the proceedings or to have the cause removed into the High Court for determination. (2) Notice of a constitutional matter must state: (a) specifically the nature of the matter, and (b) facts showing the matter is one to which subrule (1) applies. 1. Section 78B of the Judiciary Act 1903 (Cth) provides: 78B Notice to Attorneys-General (1) Where a cause pending in a federal court including the High Court or in a court of a State or Territory involves a matter arising under the Constitution or involving its interpretation, it is the duty of the court not to proceed in the cause unless and until the court is satisfied that notice of the cause, specifying the nature of the matter has been given to the Attorneys‑General of the Commonwealth and of the States, and a reasonable time has elapsed since the giving of the notice for consideration by the Attorneys‑General, of the question of intervention in the proceedings or removal of the cause to the High Court. (2) For the purposes of subsection (1), a court in which a cause referred to in that subsection is pending: (a) may adjourn the proceedings in the cause for such time as it thinks necessary and may make such order as to costs in relation to such an adjournment as it thinks fit; (b) may direct a party to give notice in accordance with that subsection; and (c) may continue to hear evidence and argument concerning matters severable from any matter arising under the Constitution or involving its interpretation. (3) For the purposes of subsection (1), a notice in respect of a cause: (a) shall be taken to have been given to an Attorney‑General if steps have been taken that, in the opinion of the court, could reasonably be expected to cause the matters to be notified to be brought to the attention of that Attorney‑General; and (b) is not required to be given to the Attorney‑General of the Commonwealth if he or she or the Commonwealth is a party to the cause and is not required to be given to the Attorney‑General of a State if he or she or the State is a party to the cause. (4) The Attorney‑General may authorize the payment by the Commonwealth to a party of an amount in respect of costs arising out of the adjournment of a cause by reason of this section. (5) Nothing in subsection (1) prevents a court from proceeding without delay to hear and determine proceedings, so far as they relate to the grant of urgent relief of an interlocutory nature, where the court thinks it necessary in the interests of justice to do so. 1. As set out in Australian Competition & Consumer Commission v C G Berbatis Holdings Pty Ltd [1999] FCA 1151 at [14] by French J: Section 78B does not impose on the Court a duty not to proceed pending the issue of a notice no matter how trivial, unarguable or concluded the constitutional point may be. If the asserted constitutional point is frivolous or vexatious or raised as an abuse of process, it will not attach to the matter in which it is raised the character of a matter arising under the Constitution or involving its interpretation – Nikolic v MGIC Limited [1999] FCA 849 cf Australian Securities and Investments Commission v White (unrep, Fed Court, 16/7/98, Drummond J). 1. Without repeating the content of the notice filed, suffice to say the matters referred to within it are misconceived and do not trigger any requirement of the Court to comply with the requirements of s 78B of the Judiciary Act. I will return to that later in the judgment. A copy of the Notice to is appended to this judgment: Annexure A - Notice of Constitutional Matter (246 KB, pdf) 2. The facts which Mr Quach says show that the matter is one to which sub-rule (1) applies, are also contained in the Notice. Again, they do not advance any basis upon which a determination could be made that the proceedings involve "a matter arising under the Commonwealth Constitution or involving its interpretation". 3. In any event, at the time of the filing of the notice, there were no "proceedings pending in a Court", because by then, the proceedings had already been dismissed by the orders I made on 19 March 2018 that were the subject of a judgment published on 3 April 2018. 4. As I apprehend it, the plaintiff's position is that he forwarded the Notice to the Court on 29 March 2018. This is 10 days after the orders dismissing the proceedings had been made in Mr Quach's presence after hearing oral argument in open Court. 5. The notice was apparently forwarded to the attention of my chambers. The court file suggests that the documents were then returned to the registry because the proceedings had already been dismissed with costs, and in any event the rules require any such notice, or indeed any pleading or notice of motion in proceedings to be filed (UCPR r 1.22(1)). 6. Quite apart from the fact that I had dismissed the proceedings by orders on 19 March 2018, these proceedings had been the subject of list management by the Registrar prior to that. When the matter was before the Registrar on 13 February 2018, a timetable was set for exchange of evidence and submissions. There was no mention at that time that there was a constitutional matter to raise. Mr Quach is thus also in breach of the requirements of r 1.23. 7. It became evident from the oral submissions that Mr Quach saw himself as complying with r 1.23 by the filing of the Notice and the forwarding of it to the Attorneys-General and attaching their responses, as he has done in his affidavit of 13 June 2018 (filed 14 June 2018). 8. He proceeded on the basis that he was entitled to treat the listing on 20 June 2018 as a "referral to the Court for directions" as envisaged by r 1.23(2), despite the fact being that the listing was only made to consider the defendant's gross sum costs order application which followed from the dismissal and costs order made on 19 March 2018. 9. Mr Quach submitted that because he had mentioned (irrelevantly) s 109 of the Constitution and s 78B of the Judiciary Act in the proceedings I determined on 19 March 2018, the Court was "on notice" of the constitutional matter. 10. Paragraphs [12]-[16] and [27]-[29] of my judgment of 3 April 2018 dealt with the argument purporting to be a constitutional point in the following fashion: [12] In oral submissions Mr Quach, who appeared for himself, made the following points. First, he said that s 3(1) of the Health Care Complaints Act limited the jurisdiction of the Health Care Complaints Commission ("HCCC") to proceedings in New South Wales, not proceedings in the ACT. By its terms, s 3 of the Act precludes the HCCC from being instructed in proceedings in the ACT. It appears that this submission was directed to a focus Mr Quach has regarding proceedings he himself commenced in the Supreme Court in the ACT against a solicitor employed by the HCCC. These proceedings were all determined unfavourably to him, most recently in Quach v RU (No 2) [2017] ACTSC 234. [13] In support of his argument, Mr Quach said s 106 and s 122 of the Commonwealth Constitution made it "very clear" that the Australian Capital Territory and New South Wales were different jurisdictions. He said that the HCCC is bound by its statue and can only act in the State of New South Wales. [14] In further support of this argument Mr Quach said that the Service and Execution of Process Act 1992 (Cth) did not include any provisions for subpoenas for production of documents. Again, this appears to focus on the ACT proceedings which deal with a subpoena Mr Quach issued to the HCCC which was the subject of a determination by Justice Penfold on 21 August 2017: Quach v RU (No 1) [2017] ACTSC 233. [15] Mr Quach relied upon the decision of Adamson J in Australian Vaccination Network Inc v Health Care Complaints Commission [2012] NSWSC 110 at [51] as illustrating the approach that was submitted I should take in dealing with his application. The argument rested upon [41] of her Honour's judgment which dealt with the statutory jurisdiction of the HCCC to carry out certain acts and the problem that arose in that case, where there had not been a formal complaint made to activate jurisdiction. [16] This argument is entirely misconceived. The conclusions reached in that judgment are irrelevant to Mr Quach's summons. The misapplication of this decision formed the basis for Mr Quach's request for a declaration that the HCCC could not "act" in the ACT. … [27] I have already referred to the previous proceedings commenced by summons by Mr Quach. The current proceedings are in effect a repetition of those and are therefore an abuse of process. The arguments raised regarding the Constitution are irrelevant and misplaced. The reliance upon Gedeon v Commissioner for the New South Wales Crime Commission (2008) 236 CLR 120; [2008] HCA 43 and Australian Vaccination Network Inc v Health Care Complaints Commission [2012] NSWSC 110 are misplaced. [28] None of the arguments raised by Mr Quach have any merit or persuasive effect. [29] The relief sought by Mr Quach is misconceived and the summons is dismissed. 1. I am in no doubt that the matters raised in the Notice of Constitutional Matter (or any that were mentioned in the summons) are misconceived. 2. Having assessed the Notice of Constitutional Matter, it is my view that it falls into the category of trivial, unarguable, frivolous and vexatious. It is based upon a misapprehension and misunderstanding of the law quoted within it. The timing and context in which it was raised suggests that its purpose was to delay and/or derail the proceedings I had already determined. To that extent the Notice amounts to a further abuse of process. 3. Additionally, there has been inadequate and late compliance with the Rules requiring Notice and its service. Even if the proceedings were still on foot, which they are not, I would refuse to extend time to allow these matters, which are misconceived and an abuse of process, to be pursued. 4. As properly submitted on behalf of the defendant, s 56 of the Civil Procedure Act 2005 (NSW) requires that matters be disposed of in an efficient manner and in a way which does not incur unnecessary costs. Section 56 provides relevantly as follows: 56 Overriding purpose (cf SCR Part 1, rule 3) (1) The overriding purpose of this Act and of rules of court, in their application to civil proceedings, is to facilitate the just, quick and cheap resolution of the real issues in the proceedings. (2) The court must seek to give effect to the overriding purpose when it exercises any power given to it by this Act or by rules of court and when it interprets any provision of this Act or of any such rule. (3) A party to civil proceedings is under a duty to assist the court to further the overriding purpose and, to that effect, to participate in the processes of the court and to comply with directions and orders of the court. … 1. The solicitor for the defendant argued that this Notice was served too late, it was not in compliance with the rules, and the defendant has a right to have the proceedings remain determined. 2. I accept those submissions, and to the extent necessary in the circumstances, the Notice is dismissed as unarguable, vexatious and an abuse of process. Gross sum costs order 1. The defendant's notice of motion for a gross sum costs order was returnable on 20 June 2018. 2. Section 98(4) of the Civil Procedure Act gives the Court power to order that a party is entitled to a specified gross sum instead of assessed costs. Section 98(4) provides as follows: 98 Courts powers as to costs (4) In particular, at any time before costs are referred for assessment, the court may make an order to the effect that the party to whom costs are to be paid is to be entitled to: (a) costs up to, or from, a specified stage of the proceedings, or (b) a specified proportion of the assessed costs, or (c) a specified gross sum instead of assessed costs, or (d) such proportion of the assessed costs as does not exceed a specified amount 1. As identified by von Doussa J in Beach Petroleum NL v Johnson (No 2) (1995) 57 FCR 119 at 120: The purpose of the rule is to avoid the expense, delay and aggravation involved in protracted litigation arising out of taxation. The power is appropriate to be used in complex cases. An order that costs be assessed as a gross sum does not envisage that any process similar to that involved in taxation should take place, but the power must be exercised judicially and after giving the parties an adequate opportunity to make submissions on the matter. 1. The Court should only make the gross sum costs order if it considers that it can do so fairly between the parties and that it has sufficient confidence that it is able to arrive at an appropriate sum: see Idoport v National Australia Bank [2007] NSWSC 23 at [9]. The approach to estimation of costs should be logical, fair and reasonable: Beach Petroleum NL v Johnson (No 2) (1995) 57 FCR 119 at 123. If the Court is persuaded to make a gross sum costs order then the Court may adopt a broad-brush approach: see Harrison v Schipp (2002) 54 NSWLR 738; [2002] NSWCA 213 at [22]. 2. In Penson v Titan National Pty Ltd (No 3) [2015] NSWCA 121 at [8] Campbell AJA accepted that situations where it might, depending on the individual circumstances, be appropriate to make a gross sum costs order would include: 1. Simple cases where there would be utility in "cutting the Gordian knot" of protracted fights about costs: see Keen v Telstra Corporation Ltd (No 2) [2006] FCA 930 at [5]; 2. Where the amount in issue is a modest sum and it would not be appropriate to require a further process of assessment to be undertaken: see Kiwi Munchies Pty Ltd v Stern [2006] NSWSC 433; and 3. Where the costs assessment is likely to be a protracted and expensive exercise and the other party is unlikely to pay: see Leary v Leary [1987] All ER 261 at 266. The evidence 1. The affidavit of Mr Thomson, sworn 20 April 2018, describes his position as Special Counsel in the Crown Solicitor's Office. A schedule of the costs charged by the Crown Solicitor in undertaking the legal work on behalf of the defendant was provided, indicating the total fees billed were slightly over $6,600. No disbursements had been incurred. There were no fees charged for the preparation of the gross sum costs order application, and it was submitted by the solicitor for the defendant that each party should bear its own costs of the gross sum costs order application. 2. The affidavit appended the Crown Solicitor's Office standard terms of engagement which set out the basis of charging, confirming that the Crown Solicitor's fees and disbursements attract GST except for Attorney-General's Legal Fund work and agency work for agencies grouped as part of the Department of Justice GST Group. 3. The memorandum of costs itemised work done in defence of the plaintiff's summons. Counsel was not retained and Mr Thomson, as an in-house specialist advocate, carried out the preparation and drawing of relevant submissions and documents, as well as the appearance work which led to a significant saving. Submissions of the applicant 1. Submissions filed on behalf of the applicant proposed a rounding down of the amount set out in the memorandum of costs by a sum of more than 50% to a figure of $3,000. This seems to me to be an entirely reasonable approach, and a modest sum, particularly in circumstances where the defendant had no option but to retain a solicitor and/or special counsel or counsel to appear to defend the summons. 2. It is appropriate that the defendant seek to avoid further protracted litigation in relation to costs. This is particularly so in circumstances where there have been previous proceedings filed by Mr Quach repeatedly canvassing almost identical subject matter. Mr Quach has filed and lost 10 proceedings before this Court and the Court of Appeal. His approach, to engage in repetitive attempts to re-agitate determined issues, has led to a declaration that he be determined a vexatious litigant in respect of those proceedings: see Quach v Health Care Complaints Commission [2018] NSWSC 402 at [1]. 3. It was submitted that this Court should make the orders sought, given the modest amount involved, the straightforwardness of the issues determined at hearing, and the generous discount of over 50% which leads to a modest and reasonable sum of $3,000. Mr Quach's submissions 1. The submissions made by Mr Quach circled back to matters already determined by me on 18 March 2018. He repeated, with slight variations, the matters listed in the purported constitutional notice which bear no relevance to the discretion available under s 98(4) of the Civil Procedure Act to make a gross sum costs order. 2. The submissions seemed to be: (1) There is no power to order costs because the Australian Capital Territory is not under the jurisdiction of New South Wales. (2) There is no power to order costs at common law (this is an argument that was raised in relation to costs generally and was dealt with in the judgment of 3 April 2018). (3) The Health Care Complaints Act 1993 (NSW) is in the criminal jurisdiction, not the civil jurisdiction, and so the Civil Procedure Act 2005 (NSW) does not apply to the Health Care Complaints Commission. (4) There is no mention of GST and therefore the cash flow generated to the Health Care Complaints Commission from prosecutions for costs is not reported to the Australian Tax Office and therefore is a "black economy". (5) The objects of the Health Care Complaints Act 1993 (NSW) say nothing about payment of costs. (6) In making this application, the Health Care Complaints Commission is asking the Supreme Court to validate its illegal operation in its issuing notices to use warrants and to prosecute people for money under s 99A(2) of the Health Care Complaints Act 1993 (NSW) outside the state of New South Wales, in the Australian Capital Territory. (7) The application is, in effect, an attempt to make a common law precedent for there to be lump sum payments to protect its "black economy" without a GST collection requirement. (8) Section 109 of the Constitution prevails over any state law, thus requiring the Health Care Complaints Commission to collect and report GST. 1. An additional matter was raised in the plaintiff's affidavit of 15 June 2018. This seems to be based on a misconception of the role of the Attorney-General in the Attorney's decision not to intervene in the proceedings. By letter of 7 June 2018 directed to Mr Quach, the New South Wales Attorney-General indicated that he did not wish to intervene in these proceedings, but if the matter proceeded to appeal, including any application for leave to appeal, or if the matter is removed to the High Court, then notice was required pursuant to s 78B so that the Attorney-General could reconsider the question of intervention. 2. As explained to Mr Quach in an exchange with the bench, this letter does not affect the retainer of Mr Thomson from the Crown Solicitor's Office to pursue the interests of his client, the Health Care Complaints Commission. The letter simply relates to a separate decision by the NSW Attorney-General not to intervene in a different capacity associated with the purported constitutional question. Decision regarding gross sum costs 1. I reject the plaintiff's arguments as misconceived. I find that a gross sum costs order is appropriate and likely to avoid further argument, expense, delay and aggravation. The approach to assessment of the amount involved is logical, fair and reasonable and the sum of $3000 is an entirely fair and reasonable one. Orders 1. For the reasons set out above, the Court made the following orders on 18 June 2018: 1. Pursuant to s 98(4) of the Civil Procedure Act 2005, the plaintiff is to pay the defendant's costs in a specified gross sum. 2. The gross sum subject to the above order is the sum of $3,000. 3. Each party is to pay its own costs of today. ********** Annexures Annexure A - Notice of Constitutional Matter (246 KB, pdf) 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: 12 October 2018