Walton v McBride S44/1995 [1995] HCATrans 411 (24 November 1995)

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Sydney No S44 of 1995

B e t w e e n -

MERRILYN WALTON

Applicant

and

WILLIAM GRIFFITH McBRIDE

Respondent

Application for special leave to appeal

BRENNAN CJ

DAWSON J

TOOHEY J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 24 NOVEMBER 1995, AT 12.15 PM

Copyright in the High Court of Australia

MR J. BASTEN, QC: If the Court pleases, I appear for the applicant in this matter. (instructed by D.M. Swain, Health Care Complaints Commission)

MR P.L.G. BRERETON: If the Court pleases, I appear with my learned friend, MS D. HOGAN-DORAN, for the respondent. (instructed by Blake Dawson Waldron.

MR BASTEN: Your Honours, the issue which is raised by the present application is whether the conferral or a power to award costs to the Medical Tribunal is to be understood to extend to the award of costs on an indemnity basis and not merely an award on the ordinary basis.

BRENNAN CJ: Why is that a question that should engage the attention of this Court?

MR BASTEN: If the court below is wrong in holding that the power does so extend, then in my respectful submission the issue is significant, not merely for the Medical Tribunal but in terms of the principles which are applicable more broadly to other inferior courts and tribunals.

BRENNAN CJ: It is a question simply of statutory interpretation and that is one which can be dealt with adequately by the ultimate court of appeal for the State.

MR BASTEN: It is a question of interpretation, your Honour, and it is the question of interpretation, though, of a very commonly used word, namely the word "costs".

BRENNAN CJ: It does not lend itself to great philosophical dispositions.

MR BASTEN: It may not, your Honour, but it may have practical consequences of great significance and one can imagine the difference, as we understand, between party and party costs and indemnity costs can involve large sums of money and in various tribunals those sums might be significant. Your Honours, in Latoudis v Casey this Court accepted what had not theretofore been understood to be a general principle of common application in court of summary criminal jurisdiction, namely that an award of costs should follow the event. That finding was based significantly on the proposition that costs were compensatory in nature and did not involve any punishment of a party who incurred costs.

Now, when one comes to the principles which underlie an award of indemnity costs, the basic underlying difference between such an award and a party and party award is based on some concept that there has been an abuse of the process of the tribunal or court in some way. In other words, it is an extension of the principle which was accepted by this Court in Latoudis v Casey into quite a different area.

DAWSON J: Not necessarily. It is based on the idea that costs should be truly compensatory in some instances for some reasons.

MR BASTEN: In the sense that one is not ordering triple or quadruple costs, as the courts of equity apparently used to do in England, that I accept is so, your Honour.

DAWSON J: Costs, as they are ordinarily understood, are less than compensatory.

MR BASTEN: With respect, your Honour, we accept that. What we say is that when in 1984 the Parliament introduced the term "costs", it so understood that proposition too. In other words - - -

DAWSON J: And you have got authority in your favour.

MR BASTEN: Yes. Your Honour, but if that proposition is correct, then the principles which are applied by the Court of Appeal, by the majority, must be wrong and the principles which were accepted by the President must be right and, as the President himself noted, one of the reasons for thinking that those principles were as he stated them was because of the quite extraordinary consequences which might flow across the administration of justice in other courts and tribunals in the State if a contrary proposition were accepted.

I suppose in that sense, with respect, we would adopt what the learned President said at page 25 at line 20. On the assumption that his Honour is correct in his analysis of the legislation he says:

Assuming such express power to be unnecessary to a superior court of record,.....it is far from clear that it is unnecessary for a subordinate tribunal of limited jurisdiction. Yet if it is true of this Tribunal that it has such powers, it is presumably true of all the other Tribunals of the State which have a general power to award undefined "costs".

DAWSON J: That depends on the statute which applies to those tribunals, and his Honour is not right when he says, surely, that Cachia v Hanes established what it did because in Cachia v Hanes there was a rule of court and his Honour's view was that he could amend it judicially without the rule committee being involved.

MR BASTEN: His Honour's view in the Court of Appeal in Cachia v Hanes?

DAWSON J: Yes.

MR BASTEN: Oh yes, and I am not - - -

DAWSON J: And he was alone in that view.

MR BASTEN: He was, your Honour, and I do not seek to support - - -

DAWSON J: But it depends on the legislation, as it did in Cachia v Hanes, and in that case really the subordinate legislation - - -

MR BASTEN: That is undoubtedly so, your Honour. What we say here is, though, that most tribunals and inferior courts do not have either that rule-making power, nor do they have the legislation which goes into any detail as to the meaning of the term "costs". What I think I was putting to your Honours in my opening remarks in answer to the Chief Justice's question was perhaps a slight modification of what the President says there. It is, we would say, a very large question of policy but I would not necessarily assume that the answer will be applicable in all cases because, as I accept from your Honour Justice Dawson, the statutes will differ and the statutory context will differ.

DAWSON J: And the nature of the tribunal will differ.

MR BASTEN: The nature of the tribunal will differ.

DAWSON J: I mean, a Court of Petty Sessions, whatever it is called now, is very different to the Medical Tribunal.

MR BASTEN: That is certainly so, your Honour.

DAWSON J: It deals with different matters, different magnitude.

MR BASTEN: I do not take issue with that at all, your Honour. All I say is that if the correct principle to be applied though in interpreting the term "costs" in various contexts is one which starts with the premise that properly understood the term "costs" refers to those costs which are necessary and proper to the attainment of justice, which is the party and party concept, then one would have a different starting point in relation to both other courts and other tribunals. And, of course, the result may differ, but the starting point of principle is important and that was what, as I understood it, became a matter of importance in Cachia v Hanes, albeit the costs in that case were costs under the Supreme Court Rules. One might have said, I suppose, in Cachia that the principles, whilst of general application, were being considered in a very specific statutory context.

DAWSON J: I am not sure that that argument assists you because, whilst the costs which were spoken of in Cachia v Hanes were costs in a strictly legal context, and in the context of the rules in particular, you do not have that context with the Medical Tribunal sort.

MR BASTEN: Your Honour, that may go to the question of whether the court below was correct or not. I was really answering the question on the assumption that the President's approach was correct and in that context answering the question, which means a reasonable doubt would attend the decision of the majority and saying, in that context, why in my submission there was a special leave question involved in the case.

DAWSON J: Where is the point of principle there?

MR BASTEN: The point of principle can perhaps be put in two ways: firstly, in the decision of the majority the President and Justice Powell were of the common view that the term "costs" did not apply to other than legal professional costs. The President and Justice Powell then differed as to whether those costs included other than party and party costs. The decision of the majority on the question of indemnity costs became the conclusion of Justice Cole and Justice Powell, but Justice Cole based his approach on the conclusion that "costs" was not so limited to legal costs at all. So that there is an unsatisfactory statement basis for the conclusion below.

But the statement of principle must therefor be, as the case presently stands, that of Justice Powell which was simply to conclude that "costs" as understood by Parliament in 1984 should not be treated as limited to those costs necessary and proper for the attainment of justice.

TOOHEY J: But essentially it is a dispute as to the meaning of a term, is it not? If the Court of Appeal had purported to lay down guidelines, as it were, for the awarding of costs other than on a party and party basis, and I appreciate there is some reference to that in the judgment at least I think of Justice Powell, some question of general principle might emerge. But I must say it does not strike me that the judgment of the court below admits of that sort of argument.

MR BASTEN: It certainly is not a question which goes to the guidelines as to the discretionary exercise of any power, and I take some consolation from that. But might I take your Honours to page 47 in the application book because the critical passage setting out the principle as I would understand it in the judgment of Justice Powell commences at line 50 on that page. His Honour recognises:

that the common law courts had no power to award costs on other than a party and party basis -

and, of course, that was the statutory power. He then goes on to refer, at line 10 on page 48, after reference to Andrews v Barnes, to:

more recent authority would suggest that the power to award costs on other than a party and party basis is not to be limited to superior courts of record of general jurisdiction, and that, in the absence of any limitation expressed, or to be implied, into the particular provision enabling the particular court or tribunal to award costs.....there is no reason -

why it should not so extend. Now, if that principle is wrong, and we would say it is because the reference to Andrews v Barnes is, for example, a reference to an equity case and we would say that has no application in considering costs of such a specialist tribunal, then there is an issue of principle as to how one addresses the meaning of the term "costs" in the very many statutes in which it is to be found.

TOOHEY J: But although his Honour speaks of "no reason in principle" he is really saying that there is no reason in principle why the word "costs" in the relevant legislation should not extend to an award of costs on an indemnity basis.

MR BASTEN: Yes.

TOOHEY J: Rather than saying, "Well, these are the circumstances in which costs on an indemnity basis might be appropriate".

MR BASTEN: That is so, but that is the issue we seek to agitate, whether his Honour was correct in addressing the concept of costs in that way.

TOOHEY J: That is so, Mr Basten, but then it brings you back to the problem that it is a matter of construction of a particular word in a statute.

MR BASTEN: I obviously cannot quibble with that, your Honour. All I say in that regard it is a very common term and it is frequently used undefined in statutes. Whilst I accept precisely what Justice Dawson put to me, namely that the result in particular cases may differ, depending on the structure of the tribunal and the context in which the term is to be considered, nevertheless the principles to be applied in interpreting that term are of importance and common.

Your Honours, I was going to explain the background to the history of the legislative provision which is set out by Justice Cole at pages 61 to 62. What his Honour does in those pages is to note that - perhaps I should start at page 61 that, prior to the amendment set out at lines 30 to 35, in 1983 the Medical Practitioners Act 1938 did not contain a power to make regulations relating to costs at all and that when it was inserted, as the second reading speech indicated, set out at line 40, the expectation was that the costs would be awarded against the doctor, although the statutory provision was not so confined, and that as appears at the following page at lines 15 to 20 was precisely the first regulatory power that was provided.

The present provision, which is set out on the following page 63 at lines 5 to 10 is broader in the sense that it covers all the parties to the proceedings. That is the form in which it is now to be considered. So we would say that that statutory context indicates perhaps something specific to this case but a reason why it is incorrect to think that the approach adopted by Justice Powell in this context was correct.

The other matter which I was going to refer to, if I may, in terms of the importance of the question derives from a recent decision of the Court of Appeal in Ohn v Walton 36 NSWLR 77, if I might hand up copies to your Honours. It was not on the list. This was a case in which the Court of Appeal, also considering the current rule and the current context, determined that the principles in Latoudis v Casey, namely that costs generally follow the event, should apply in relation to this tribunal. Perhaps if I may take your Honours to page 79 at letters A to B, the Chief Justice, in a passage at the top of page 79, sets out the conclusion that although the Medical Tribunal differs from a civil court or a prosecution in a criminal court:

they are both examples of proceedings in which orders for costs may be made, and what has been said about costs in such proceedings offers guidance in the present context.

That was a conclusion which was also adopted by other members of the court, including Justice Powell at the top of page 81.

Your Honours, really it illustrates, in my submission, the fact that there is a matter of principle involved in the interpretation of the power to award costs in this Court. It does involve an extension of the principles set out in Latoudis and quoted from the Chief Justice's judgment in Latoudis at the bottom of page 84 of the Court of Appeal in Ohn's Case. It is the difference between compensatory awards and awards which involve the mark of disapproval of the prosecution in the dismissal of the proceedings.

If one is to go beyond the power to award costs on the party and party basis, one is into an area in which there is a mark of disapproval. The question is whether the Medical Tribunal has been given that power. We say it has not - - -

BRENNAN CJ: Is not this case that you have just referred us to a good illustration of the way in which the Court of Appeal must be a court to supervise both the interpretation and the exercise of a power conferred by the Medical Act upon the tribunal?

MR BASTEN: Certainly, your Honour.

BRENNAN CJ: You might just as well bring to this Court the question of whether or not the principles in Latoudis v Casey should apply to the exercise of the discretionary power, the Ohn v Walton question. We are simply not in a position to deal with these questions; not with ease in the way in which the Court of Appeal can deal with them.

MR BASTEN: There is no doubt that the superior Court of Appeal in the State should have a final say. The question is whether there is an issue in relation to the regulation of professions and the way that tribunals which commonly regulate the profession in a similar manner throughout the country conduct their business and exercise their powers. And they have very great powers. I think I come back to the point, your Honours, that the principles underlying these cases are matters which, in my submission, are proper for this Court to consider.

Ohn v Walton did not come to your Honours no doubt because it was accepted that that was a proper case in which the Court of Appeal had applied the Latoudis principles. This question, we say, involves much more difficult issues and ones which, in our submission, the court did not come to a correct conclusion on. As a matter of the practice of the courts and tribunals of New South Wales, I have no difficulty with your Honour's proposition. We just say there is an issue of general principle which arises in the context of this case. Those are my submissions, your Honours.

BRENNAN CJ: We need not trouble you, Mr Brereton.

This application does not give rise to any question which is of sufficient importance to attract a grant of special leave. The interpretation of regulation 27 of the regulations under the Medical Practitioners Act (NSW) or clause 13 of Schedule 2 of the Medical Practice Act 1992 (NSW) is a question which prima facie ought to be determined by the Court of Appeal rather than by this Court. The choice between the majority and the minority views expressed in the Court of Appeal does not depend on any question of general legal principle. For that reason special leave will be refused.

MR BRERETON: May I seek an order for costs in respect of the matter?

MR BASTEN: Nothing to say, your Honour.

BRENNAN CJ: Special leave will be refused with costs.

AT 12.35 PM THE MATTER WAS CONCLUDED