Costs in the Local Court

Wood CJ at CL

1. On 12 December 1997, the appellant was charged with goods in custody (S 527C of the Crimes Act 1900), following the execution of a search warrant, on the previous evening, at his home at 629 King Georges Road Penshurst, by officers of the National Crime Authority. That matter came before the Local Court at Sutherland for hearing before Jennifer Betts LCM, on 8 May, 26 June and 31 August 1998. On 1 September 1998, Betts LCM found that there was no prima facie case and dismissed the charge.

2 The plaintiff thereafter made an application for costs pursuant to S 81 of the Justices Act 1902, a section which is in the following terms…

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3. The application for costs was refused, and these proceedings have now been commenced for orders in the nature of certiorari and mandamus, to quash the order refusing to award costs to the plaintiff, and to remit the proceedings to the Local Court to be dealt with according to law.

4. The facts are set out in the reasons for dismissing the charge. They show that upon their arrival and before executing the search warrant, the police saw the plaintiff, his wife, one of his children and another person in the house. When police knocked on the door, each of these persons moved quickly from the loungeroom area towards the rear of the premises. During the search, a total of $10,835 in bank notes was found, made up of $8,000 in bundles of $50 notes located between two pairs of shorts on the top of a dressing table in the plaintiff's bedroom, $1,000 in a bundle of $50 notes located in a drawer of a tallboy in his bedroom, $1,345 in $5 notes located under the bottom drawer of the tallboy, and $490 in $5 notes located in a bedside table. The goods in custody the subject of the charge were those banknotes.

5. Additionally during the search, a plastic decor lunchbox containing two resealable bags of green vegetable matter, later found to be 5.3 gms of cannabis, was located in a chlorine drum at the rear of the premises. The plaintiff said that the drum was his, but that he had not seen its contents before. A fingerprint of someone other than the plaintiff was found on the lunchbox. A box of similar GLAD plastic sandwich bags was found in the kitchen area, as well as another lunchbox similar to the one found in the chlorine drum.

6. The plaintiff informed police, when the money was found, that it was his and represented his life savings as well as some gambling winnings. He was a pensioner and not working. He participated in an ERISP but declined to answer any questions other than to supply his name and address.

7. Following his arrest, the plaintiff's solicitors sent a number of letters to the National Crime Authority and to the Police Prosecutor at Sutherland inviting dismissal of the charge. In the course of the correspondence the plaintiff's solicitor advised that he was a keen punter and kept his gambling winnings at home. It was asserted that on 12 August 1997, he had backed a winner with the TAB which had returned a dividend to him of $13,200. A letter from the TAB confirming that a dividend in that sum had in fact been paid out, on ticket number 6097151430, for an each way bet of $1000. The holder of the ticket was not identified, but it would appear from a letter dated 8 September 1998, annexed to an affidavit in support of the application, that documents inspected upon the return of a subpoena addressed to the TAB, showed that the dividend was paid out to one Norman Yates.

8. In relation to the sum of $1345, it was asserted by the plaintiff's solicitor that he had been saving $5 notes for his son for a considerable time. The other money was said to represent savings and winnings.

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17. In substance, the plaintiff asserts that because the NCA could not prove that the moneys were stolen or were otherwise unlawfully obtained, and did not investigate into, and was not in a position to disprove, the source of the moneys that had been suggested by him, the case was always bound to fail. As a consequence, it was submitted, the preconditions for a costs order specified in S 81(4)(c) and/or (d) were made out.

18. The present application falls to be determined by reference to the special principles applicable where relief is sought in the nature of certiorari or mandamus and not as an appeal simpliciter. Even so, the basis proposition on which the application was brought, appears to me to be questionable. In particular it overlooks the circumstance that for the offence charged it is sufficient if the thing in custody may be reasonably suspected of being unlawfully obtained. The word "may" falls short of "is", and the word "suspected" falls short of "known" or even "convinced" or "shown": Anderson v Judges of the District Court of New South Wales (1992) 27 NSWLR 701 at 714 and Haken v Johnson (Supreme Court of New South Wales, Wood J, 15 October 1993).

19. In the circumstances outlined where considerable sums of money (a large proportion being banknotes of a large denomination) were found in various parts of the plaintiff's home, where cannabis was also found in that home, and where the plaintiff was a pensioner, I am not persuaded that the proceedings were always bound to fail. Moreover, when the plaintiff had declined, as was his right, to be interviewed in relation to the source of his moneys, and where the only document offered in support of his claim was one provided by the TAB showing a payment out to a third party, I am not persuaded that the NCA unreasonably failed to investigate or failed to investigate properly, any relevant matter which suggested either that the plaintiff was not guilty or that the prosecution should not have been brought.

20. There is no entitlement to costs as of right in criminal proceedings, the common law principle historically being that the Crown neither pays nor receives costs: Latoudis v Casey [1990] HCA 59; (1990) 170 CLR 534 and Le Boursicot (1994) 79 A Crim R 549.

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29. The decision reached by the magistrate in relation to S 81(4)(c) essentially turned upon her finding that she could not be satisfied that the NCA unreasonably failed to investigate the matter, or if they had made further investigations, the proceedings would not have been brought. In reaching that conclusion she made reference to all of the relevant circumstances and correctly stated the matter that the defence had to establish.

30. Similarly in relation to S 81(4)(d) she correctly identified that the defence had to establish something about the conduct of the proceedings being an "exceptional circumstance" other than some matter mentioned in subsections (a)(b) or (c) of S 81(4), to make it just and reasonable for the plaintiff to have his costs. In that regard the mere fact that the proceedings were resolved in his favour was not enough. There had to be something in relation to the manner in which the proceedings were conducted that had led to it being just and reasonable for a costs order to be made.

31. In these circumstances the matter does not fall into the category of cases where there was not a real exercise of jurisdiction.

32. For these reasons, the plaintiff's claim must fail, and the summons should be dismissed. I order accordingly. I will hear the parties in relation to costs of the summons.

Spigleman CJ

1. This is a case stated by his Honour Judge Freeman of the District Court, pursuant to s5B of the Criminal Appeal Act 1912. His Honour had before him an appeal from the decision of a Magistrate to make an order for costs in favour of the successful defendant.

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5 The two questions of law which his Honour has stated for this Court are:

"a) Is it necessary before the Magistrate makes an order for costs in favour of a successful defendant that not only the s.41A requirements or at least one of them be made out to the satisfaction of the Magistrate, but that such requirement or requirements be one or more of the reasons or substantially connected with the reasons for the discharge of the defendant under s.41 of the Justices Act?

b) In the event I conclude that the Magistrate ordered costs on an incorrect basis, should I consider for myself whether costs should be awarded or simply uphold the appeal?"

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9. Nothing in the terminology employed in, or the structure of, s41A requires any connection between the basis on which an order of discharge is made or a committal for a different indictable offence is determined and the facts, matters and circumstances about which the Magistrate must be satisfied before making an order for costs.

10. Indeed, the terminology of subs2A strongly indicates that no such connection was required. Each of the subparagraphs involves matters going well beyond the reasons for a discharge or the basis for a committal for a different indictable offence. So far beyond that range does the terminology of each subparagraph go that one would need to read the words down substantially on each occasion that the matter arises. Paragraph (a) focuses on an investigation being "conducted in an unreasonable or improper manner". Similarly, paragraph (b) is concerned with initiation of proceedings "without reasonable cause or in bad faith". Paragraph (c) refers to an unreasonable failure to investigate "properly" any relevant matter. Paragraph (c) also applies to a case in which the prosecution should not have been brought "for any other reason". Paragraph (d) extends to "exceptional circumstances relating to the conduct of the proceedings".

11. As I have said, the terminology of each paragraph is broad and extends well beyond the facts, matters and circumstances which is likely or indeed capable of leading to a discharge or to a committal on an alternative charge. It is sometimes appropriate to read down general words in order to implement an actual or presumed Parliamentary intention. However, the words of each paragraph of subs2A do not suggest that it is appropriate to do so in the manner for which the respondent contends. Each paragraph travels so far beyond the suggested limitation that it would be quite perverse to restrict the scope of the subsection in this way.

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13. The submission can be tested by considering a case in which the prosecution was likely to fail on any one of a number of unrelated points. If a discharge is made on the basis of one such point, the proceedings would not need to determine other points and, perhaps, would not even get to the stage of hearing evidence relating to those other points. In circumstances where one of these other points was such as would, in the opinion of those advising the defendant, lead to a dismissal, then they may very well advise him or her to ask the Magistrate to determine the proceedings on that basis. However, the other ground for dismissing the proceedings may be dealt with more expeditiously than the basis that may lead to a costs order. The construction contended for by the respondent could lead to the incurring of unnecessary costs in the Magistrate's Court. Where the legislature is creating a regime for the payment of costs unnecessarily incurred, it is hardly likely that it intended to create a consequence of that character. In my opinion the first question should be answered "No".

Dunford J

17. I agree with the judgment of the Chief Justice on the substantive issue and also on the question of cost.

Hidden J

18. I also agree 

Sperling J

1. Mr Farley was charged on information, prosecuted by the Australian Securities and Investments Commission (ASIC), with market manipulation, contrary to s 998 of the Corporations Law. In particular, it was alleged that, on 23 March 1994, Mr Farley entered an offer to purchase 1000 shares in a listed company, intending to create a misleading appearance, namely, the appearance that there was buying support of the shares.

2. The proceedings were heard summarily by Ms L Horler, magistrate, sitting in the Local Court. On 23 June 2000, her Worship dismissed the information on the ground that the prosecution had failed to establish that Mr Farley's purpose in making the bid was to create a misleading appearance.

3. On 8 January 2001, her Worship made an order that ASIC pay Mr Farley's legal costs in the sum of $50,000.

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Was there error of law?

15. The considerations specified by the learned magistrate were such as to lead her to the conclusion that instituting and maintaining the prosecution against Mr Farley was unduly harsh to the point of apparent persecution, and that what had occurred constituted exceptional circumstances.

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17. I have no problem with the her Worship's observation that the passage from Fosse does not confine attention to the criminal proceedings themselves. Earlier events may provide a context. If the complaint is one of conduct injurious to the defendant, the conduct may be a blow upon a bruise. The circumstances may therefore include prior events upon which the conduct of the criminal proceedings is cumulative. But for para (d) of s 81(4) to be attracted, the circumstances relied upon as making it just and reasonable to award costs must relate to the manner in which the criminal proceedings were conducted.

18. Significantly, the learned magistrate's reasons include a finding that the matters specified in her judgment constituted special circumstances but the judgment does not include a finding that those circumstances related to the conduct of the criminal proceedings.

19. The matters specified in the judgment as constituting exceptional circumstances did not relate to the manner in which the criminal proceedings were conducted. It was not open to the to learned magistrate to find that they did. Either her Worship failed to find a necessary condition for the operation of para (d) or - if the finding is implicit - it was not open to be so found. Either way, there was error of law.

1. By an Amended Summons, the plaintiff seeks the following substantive orders…

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2. Pursuant to SCR Part 51B r 8, the grounds are stated as follows:

“1. This is an appeal against orders of Magistrate Dillion in the Local Court at Sydney on 4 June 2002 in which the learned Magistrate made orders dismissing the Plaintiff’s application for orders for costs pursuant to Section 41A of the Justices Act 1902.

2. In August 2001, following a lengthy investigation by the National Crime Authority (“NCA”), the Plaintiff was charged under s 29D and Section 86 of the Crimes Act 1914 (Cth) with an offence of having conspired between 1995 and 2000 with others to defraud the Commonwealth by avoiding taxation personally in respect of a company of which he was a director and also in respect of another company in which he and a fellow director had allegedly also conspired to defraud the Commonwealth. The Defendant was the informant and the arresting police officer.

3. On 20 March 2002, the proceedings against the Plaintiff concluded with the Commonwealth Director of Public Prosecutions (“CDPP”) offering no evidence.

4. In dismissing the information before the Court, the matter was then subject to a costs application heard before the Local Court on 17 May 2002.

5. The decision of the learned Magistrate in respect of the costs application, wherein he dismissed the Plaintiff’s application for costs, is the decision subject of appeal in these proceedings.

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38. I am of the view that the legislative intent behind s 41A(2A) of the Justices Act was to severely restrict the discretion to award costs against the prosecution.

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Section 41A Justices Act, generally

45. I gather that it was sought to be argued in the Court below that in circumstances where the plaintiff had given an exculpatory version, where no explanation is offered for the proffering of no evidence, it can be inferred that the investigation into the alleged offence was conducted in an unreasonable or improper manner (s 2A(a)); it can be inferred that proceedings were initiated without reasonable cause or in bad faith, or were conducted by the prosecution in an improper manner (subsection (b)); it can be inferred that the prosecution unreasonably failed to investigate, or to investigate properly, any relevant matter of which it was aware or ought reasonably to have been aware, and which suggests that either that the plaintiff might not be guilty, or that for any other reason the proceedings should not have been brought (subsection (c)). It seems to me that in the course of submissions, whilst having some regard to the requirement of the plaintiff to prove a case, ultimately the plaintiff relied on subsection (d), where the reference is to there being “exceptional circumstances relating to the conduct of the proceedings by the prosecution”.

46. Here one does not look at the evidence tendered by the plaintiff in the Court below, namely the exculpatory statements, nor to the fact that there was no evidence called by the defendant as to why it was that it proffered no evidence. Here, one is constrained to view the “conduct of the proceedings by the prosecution” as a whole.

47 I agree with the Magistrate’s conclusion as to subsections (a), (b) and (c). In Fosse v DPP & Anor [1999] NSWSC 367, Wood CJ at CL said (at 30):

“30. Similarly in relation to S 81(4)(d) she correctly identified that the defence had to establish something about the conduct of the proceedings being an “exceptional circumstance” other than some matter mentioned in subsections (a)(b) or (c) of S 81(4), to make it just and reasonable for the plaintiff to have his costs. In that regard the mere fact that the proceedings were resolved in his favour was not enough. There had to be something in relation to the manner in which the proceedings were conducted that had led to it being just and reasonable for a costs order to be made.” (emphasis added)

48 The phrase “exceptional circumstances” means what it says as a matter of ordinary English I would have thought. Subsections (2A)(a), (b) and (c) not having been made out, something of substance is required for (d). Mere proffering of no evidence is not enough. Nor is mere reliance on exculpatory statements of the plaintiff. Neither is remarkable in itself nor in combination. Here there is nothing more that does constitute “exceptional circumstances”. 

Hodgson JA

4. The case involves the interpretation of s.70 of the Crimes (Local Courts and Appeal Review) Act 2001 which is in the following terms…

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6. It appears from them that the Council’s case before the Magistrate was that the observations of its officers of premises where the appellant conducted car-crushing observations, on 30 July 2004 (when no crushed cars were observed on the ground) and on 1 August 2004 (when crushed cars were observed on the ground), supported an inference that pollution-causing car-crushing activities had been carried out on the premises between these dates, and that those activities had been conducted by the appellant.

7. The appellant’s case was that none of its employees were on the site during that period, and that the method it used to crush cars would not have resulted in cars being on the ground as observed by Council officers.

8. In the result, Talbot J held that it was not established to the requisite standard that the appellant conducted the relevant activities.

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DECISION

17. The relevant questions were whether the investigation into the alleged offence was conducted in an unreasonable manner, or whether the prosecutor unreasonably failed to investigate (or investigate properly) any relevant matter. No question was raised as to whether the proceedings were conducted by the prosecutor in an improper manner, under par.(b) of s.70(1).

18. In my opinion, the submissions based on the failure to call Mr. Harrop at the hearing are therefore misconceived. That failure relates to the manner in which the proceedings were conducted, not to the investigation. In any event, the finding of Talbot J did not amount to a finding that the proceedings were conducted in an improper manner.

19. However, in my opinion there is force in the submission that, in investigating the matter, Council officers should have asked Mr. Harrop what he observed between the nominated dates in relation to the crushing of cars and the presence on site of the employees of the appellant, particularly after the appellant had asserted to the Council that Mr. Irvine was not at the site, and that no other person authorised by the appellant was at the site, at relevant times. Whether or not it would have been reasonable to rely on a circumstantial case before that assertion was made, it is certainly arguable that it was no longer reasonable after the assertion was made, in circumstances where there was a witness who may have been able to give direct evidence of what occurred.

20. As regards s.70(1)(c), it could be said that a person seeking costs must identify a matter that the prosecution was or ought to have been aware of and that suggested that the appellant might not be guilty or that the proceedings should not have been brought. If the “matter” in question here is that there was a possible eye-witness, then it was not shown that this matter suggested that the appellant might not be guilty. If the “matter” in question is the evidence that that witness could give, although it could be said that the Council should have been aware of it, it was not shown that this evidence suggested that the appellant might not be guilty. Accordingly, in relation to s.70(1)(c), I do not think error by the primary judge was shown.

21. However, in relation to s.70(1)(a), I do not think it is necessary for the person seeking costs in every case to show that an investigation conducted in a reasonable manner would have suggested that the appellant might not be guilty or that the proceedings ought not to be brought. If a prosecutor knows there are five eye-witnesses to an event, and interviews and calls only one of them, and the prosecution then fails, I think s.70(1)(a) may apply even if the person seeking costs does not prove what the other four witnesses would have said. Similarly, closer to this case, if the prosecutor knows there is an eye-witness to what happened, but does not interview this witness, and instead relies wholly on a circumstantial case, in my opinion s.70(1)(a) may be satisfied even if the person seeking costs does not prove what the eye-witness would have said.

22 The only relevant reason given by the primary judge for not finding s.70(1) satisfied in relation to Mr. Harrop was that he could not determine what the outcome would have been if Mr. Harrop had been called. In my opinion, this could not be a sufficient reason for determining that s.70(1)(a) does not apply. The primary judge did not give reasons that could justify such a determination, and in my opinion this amounts to an error of law.

23. In my opinion, there was no independent error of law in relation to alibi. The mere assertion on behalf of the appellant that no-one with the authority of the company was on the site on 31 July 2004, and that it could be proved that Mr. Irvine was elsewhere, did not as a matter of law necessarily require a conclusion that it was unreasonable for the Council not to investigate Mr. Irvine’s possible alibi or to enquire whether or not there were alibis for all other employees. Any requirement for the prosecution to disprove alibis beyond reasonable doubt only arises if there is evidence capable of raising a reasonable doubt as to whether an accused was elsewhere at the time of the offence; and mere assertion by an accused person that there is an alibi is insufficient for this. If there was error by Talbot J on this aspect, it was an error of fact.

Howie J

28. I agree with Hodgson JA.

Price J

29. I agree with Hodgson JA.