Costs To Follow The Event In Victorian Disciplinary Proceedings Under The Health Practitioner Regulation National Law

The Victorian Supreme Court determined that costs should ordinarily follow the event in disciplinary proceedings brought by the National Board against a registered health practitioner.

In issue

• Whether costs should ordinarily follow the event in Victorian disciplinary proceedings brought by the National Board (the Board) against a registered health practitioner.

The background

The Health Practitioner Regulation National Law (Victoria) (the National Law) sets out that when a practitioner is referred to a tribunal, the tribunal may make any order about costs it considers appropriate for the proceedings.

Until now, the leading authority in disciplinary proceedings in Victoria in relation to costs has been the decision of the Victorian Civil and Administrative Tribunal (VCAT) in Asher,¹ which established that, even where allegations against a practitioner are proven, the Board will not necessarily be awarded its costs. That is, VCAT ruled that the principle that costs should ordinarily follow the event did not strictly apply when exercising the discretion as to costs in a disciplinary hearing under the National Law.

In Asher, VCAT explained that there must be 'something in the particular proceeding that makes it appropriate for an award of costs to be made', with the primary factor usually being the practitioner’s conduct that may have caused the Board to incur unnecessary costs. The policy reason for this decision was to protect a practitioner’s right to put the Board to its proof without fear of incurring costs.

In the first instance decision in Zhao,² the Tribunal determined that the respondent engaged in serious sexual misconduct, characterised as professional misconduct, which resulted in his registration being cancelled. The Board then applied for an order that the respondent pay its costs. However, relying up on the principles enunciated in Asher, the Tribunal ultimately decided to make no order as to costs.

The appeal

The Board appealed VCAT’s decision on costs, submitting that VCAT, when determining costs in a disciplinary proceeding under the National Law, should apply the ‘usual rule’ that costs follow the event unless there is reason to order otherwise.

In assessing the appeal, the Court considered VCAT’s powers under the National Law and the decisions of superior courts in other jurisdictions. In summary, the Court considered:

1. there was absolute discretion under the National Law for VCAT to award costs and no barrier for costs to be awarded against either party
2. the National Law is intended to be ‘uniform’ across Australia, itself bound by higher authority in other jurisdictions. While the position was similar across the country, the Court primarily referred to the stance of the New South Wales Court of Appeal that when tribunals charged with determining disciplinary matters brought against health practitioners come to exercise a broadly-expressed discretion in relation to costs, they are obliged to consider the principle that costs should follow the event (most recently considered in Qasim)³
3. absent a good reason otherwise, or the other authorities being ‘clearly wrong’, the same costs principle should apply in Victoria, and
4. that it would be a matter for the Victorian Court of Appeal to determine whether there should be a divergence in costs principles between Victoria and other Australian jurisdictions.

Accordingly, the Court allowed the appeal, concluding that VCAT should, when determining costs in a disciplinary proceeding under the National Law, apply the ‘usual rule’ that costs follow the event unless there is good reason to order otherwise.

Implications for you

For now, VCAT will be obliged to award costs to the successful party in health disciplinary proceedings absent a good reason to order otherwise.

Practically speaking, health practitioners will need to factor in the likelihood of such costs orders being made when weighing up a negotiated outcome against proceeding to a final hearing. For insurers and underwriters, the likelihood of adverse costs orders will need to be accounted for when raising and reviewing reserves (assuming the relevant policy responds).

Nevertheless, this issue may be further tested in a higher Victorian forum, noting Gorton J’s comments that had the Court 'approached this question free from authority' it may have reached a different conclusion.

Medical Board of Australia v Zhao [2026] VSC 457

Footnotes

^{1 Psychology Board of Australia v Asher (Costs) (Review and Regulation) (Corrected) [2020] VCAT 1281
2 Medical Board of Australia v Zhao (Review and Regulation) [2021] VCAT 1053
3 Qasim v Health Care Complaints Commission [2015] NSWCA 282}

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.