Section 87(2) of the State Administrative Tribunal Act 2004 (WA) (SAT Act) gives the State Administrative Tribunal (the Tribunal) a discretion to order one party to pay all or part of the legal costs of another party. This article examines the principles that apply to the exercise of that discretion, with a focus on cases involving disciplinary proceedings against legal practitioners brought by regulatory bodies such as the Legal Services and Complaints Committee.
The Discretion to Award Costs
The starting point is that parties ordinarily bear their own legal costs in proceedings in the Tribunal, unless the Tribunal orders otherwise.[1] However, under s 87(2) of the SAT Act, the Tribunal has a wide discretion to order one party to pay all or part of the legal costs incurred by another party. The rationale for such an order is to compensate or reimburse the party in whose favour the order is made, rather than to punish the unsuccessful party.[2] Even so, an order requiring one party to pay the costs of another remains the exception rather than the rule.[3]
The Onus is on the Party Seeking Costs
As the party seeking the costs order carries the onus, it must persuade the Tribunal that it is fair and reasonable in the particular circumstances to reimburse it for legal costs incurred.[4] However mere identification of some unreasonable conduct by the other party that increased costs will usually be insufficient.[5] The Tribunal generally requires a party seeking costs to show that the other party acted unreasonably in a way that unfairly caused increased costs to be incurred.[6]
A Cautious Approach in Disciplinary Proceedings
In disciplinary proceedings against legal practitioners, if the regulatory body is successful on the substantive application, it is common for the Tribunal to order the practitioner pay all or some of the regulatory body’s costs. This reflects the public policy interest in regulatory bodies performing their disciplinary functions to uphold standards in the legal profession, often with limited resources.[7]
Conversely, if the regulatory body is unsuccessful in a disciplinary proceeding, the practitioner has no entitlement to recover costs from the regulatory body. This reflects the public policy interest in not discouraging regulatory bodies from pursuing disciplinary proceedings where success cannot be guaranteed, but which should be pursued in the public interest.[8]
As summarised by President Barker in Medical Board of Western Australia and Kyi [2009] WASAT 22, the Tribunal’s usual approach is that:
"unless it can be demonstrated that an application made by a vocational regulatory body lacked any reasonable basis or was not made in good faith, costs should not be awarded against [that body] simply because the application was not successful".[9]
The Bases to Award Costs Against A Regulatory Body
The well-established bases on which the Tribunal may award costs against a regulatory body that has unsuccessfully pursued disciplinary action against a legal practitioner are therefore where the proceeding:
lacked any reasonable basis;
was not brought in good faith; or
amounted to an abuse of process in the way it was conducted.[10]
Each of those arguments sets a high threshold. As explained in Legal Services and Complaints Committee and Young [2023] WASAT 108 (Young), in applying those tests the Tribunal is guided by the principles applicable to determining applications for summary dismissal of proceedings under s 47(1) of the SAT Act.[11]
To establish the lack of a reasonable basis, it needs to be apparent that the disciplinary proceeding was manifestly groundless or that the regulatory body's case was so obviously untenable that it had no prospect of success.[12] This sets an extremely high bar. It requires more than merely showing that some aspects of the case lacked substance or were misconceived. Establishing an abuse of process requires clear evidence that continuation of the proceeding would cause unacceptable injustice.[13] Showing an absence of good faith in bringing the proceeding demands compelling evidence to that effect.
Withdrawal of Proceedings and Costs Applications
Where disciplinary proceedings are withdrawn prior to a substantive hearing, it can be difficult for the Tribunal to evaluate arguments that the proceeding lacked a reasonable basis or amounted to an abuse of process. As Young illustrates, in such situations the Tribunal will undertake a broad assessment of the basis for, and conduct of, the proceeding as a whole.[14] However given the exceptional nature of ordering costs against regulatory bodies, the Tribunal's starting point remains that withdrawal of proceedings does not of itself demonstrate they lacked a reasonable basis or were maintained other than in good faith.[15]
Conclusion
In summary, while the Tribunal has a wide discretion to award costs under s 87(2) of the SAT Act, an order that an unsuccessful regulatory body pay costs remains an exceptional course confined to the clearest of cases. As demonstrated in Young, the Tribunal applies caution in evaluating allegations of no reasonable basis, absence of good faith or abuse of process, even where disciplinary proceedings are withdrawn before a substantive hearing. It remains incumbent on the legal practitioner seeking costs to persuade the Tribunal that the high threshold under the governing principles has been met.
Footnote
[1] State Administrative Tribunal Act 2004 (WA) s 87(1)
[2] See Young at [39]; Western Australian Planning Commission v Questdale Holdings Pty Ltd [2016] WASCA 32 at [51]
[3] Young at [39]
[4] Questdale at [51]; Young at [39]
[5] Medical Board of Western Australia and Kyi [2009] WASAT 22 at [74]
[6] Medical Board of Western Australia and Kyi at [74]
[7] See e.g. Roberman v Medical Board of Western Australia [2005] WASAT 81 at [30]; Young at [41]-[42]
[8] See Motor Vehicle Industry Board and Dawson (2006) 41 SR (WA) 343 at [47]; Young at [42]
[9] Medical Board of Western Australia and Kyi at [73]
[10] See Young at [43]-[44]
[11] Young at [43]-[45]
[12] Young at [45], citing Agar v Hyde [2000] HCA 41 at [57]
[13] Young at [45], citing Medical Board of Australia v Woollard [2017] WASCA 64 at [136], [145]
[14] Young at [57]
[15] Young at [46], citing Medical Board of Western Australia v Roberman at [17]