It is rare for a disciplinary tribunal to award costs to the practitioner where the regulator has not established the allegations of misconduct. At the time that the regulator makes the referral to discipline it is not in a position to assess the credibility of the witnesses. In addition, its public interest mandate may require the regulator to refer matters to discipline even though it is uncertain as to the outcome after a full hearing. However, where legislation entitles a practitioner to seek costs against a regulator, the discipline tribunal must apply the proper criteria.
It should be noted that different legislation applies different tests to when such costs will be awarded. For example, a frequent test is whether the referral to discipline was unwarranted. The legislation applicable to the Alberta real estate regulator has a more general test related to the circumstances of the case. In Pethick v Real Estate Council (Alberta), 2019 ABQB 431, http://canlii.ca/t/j0xmj an appeal tribunal set aside a misconduct finding against the practitioner due to serious procedural defects in the original discipline hearing. However, it indicated that the practitioner would generally only receive an order for costs where the practitioner demonstrated that the regulator had acted in bad faith or for an improper motive. The Court concluded that this test was too stringent and referred the matter back to a hearing. The Court said:
Focusing on a party (or counsel’s) conduct and its effects, rather than on the party’s motives or intentions, makes sense in the context of costs. Costs awards are not primarily punitive; rather, they allocate the costs of legal proceedings fairly, and in light of who caused the costs to be incurred. They are “a tool in the furtherance of the efficient and orderly administration of justice”…. The efficient and orderly administration of justice requires that improper conduct be discouraged, not merely improper motives.
The Court returned the matter for reconsideration with the following guidance:
- The tribunal may properly consider the public mandate function of the regulator in deciding whether or not costs ought to be awarded.
- The tribunal cannot require the practitioner to demonstrate that the regulator or lower tribunal acted with an improper purpose or otherwise in bad faith in order to receive an award of costs.
- The tribunal can take into account whether the conduct of the proceedings against the practitioner constituted a marked departure from the standards to be expected in a regulatory proceeding of that type.
- The tribunal must consider the totality of the circumstances of a practitioner’s hearing and appeal, including other factors set out in the enabling statute.
While different statutes do set out different criteria, few require the demonstration of bad faith in order for the practitioner to receive a costs award.