Bluett v Popplewell (No 2)
[2018] ACTMC 11
•3 July 2018
MAGISTRATES COURT OF THE AUSTRALIAN CAPITAL TERRITORY
Case Title: | Bluett v Popplewell & Ors (No 2) |
Citation: | [2018] ACTMC 11 |
Last submissions: | 15 June 2018 |
DecisionDate: | 3 July 2018 |
Before: | Magistrate Theakston |
Decision: | See [38] |
Catchwords: | COSTS – Magistrates Court criminal proceedings - order for costs – pro bono – indemnity principle – onus of proof – apportionment of costs |
Legislation Cited: | Court Procedures Act 2004 (ACT) ss 7, 9, Schedule 1 Court Procedures Rules 2006 (ACT) Magistrates (Summary Proceedings) Act 1975 (Vic) s 97 (b) Magistrates Court Act 1930 (ACT) ss 29, 85, 97, 122, 131, 244 |
Regulations Cited: | Magistrates Court Regulations 2009 (ACT) ss 4 (1)(b), 4 (3)(b)-(c), 5 |
Cases Cited: Parties: | Baker v Magistrates Court of the Australian Capital Territory and Another [2013] ACTSC 73 Bluett v Popplewell & Ors [2018] ACTMC 2 Bulga Underground Operations Pty Ltd v Nash [2016] NSWCCA 37 James v Surf Rd Nominees Pty Ltd [No 2] [2005] NSWCA 296 Latoudis v Casey [1990] 170 CLR 534 McNamara v Bao San & Ors [2010] NSWSC 809 Michael Kelly v Elisabeth Apps [1999] ACTSC 142 Oshlack v Richmond River Council [1998] CLR 72 R v Bui [2011] ACTSC 102 Shaw v Yarranova Pty Ltd & Anor [2011] VSCA 55 Trevorrow v State of South Australia (No 7) [2008] SASC 5 Urbaniak-Bak v Prail [2014] ACTSC 171 Valencic v Jordan [2017] ACTSC 120 Waters v P C Henderson (Aust) Pty Limited (Unreported, NSW Court of Appeal, Kirby P, Mohoney and Priestly JJA, 6 July 1994) Wentworth v Rogers [2006] NSWCA 145 Grant Bluett (Informant) John Joseph Popplewell (First Defendant) Kenneth Clancy (Second Defendant) Kerry Bronterre John Mellor (Third Defendant) |
Representation: | Counsel Mr J Walker (Informant) Mr G Mansfield (First, Second and Third Defendant) |
| Solicitors Director of Public Prosecutions (Informant) O’Connor Harris & Co Barristers and Solicitors (First, Second and Third Defendant) | |
File Numbers: | CC 2715 of 2017 CC 2721 of 2017 CC 2722 of 2017 |
MAGISTRATE THEAKSTON:
Background
These are my reasons in relation to an application for costs by the successful defendants.
The three defendants were each charged, and plead not guilty to a single summary offence. Following the hearing I found each offence not proved and dismissed the same: see Bluett v Popplewell & Ors [2018] ACTMC 2. The defendants have subsequently applied for a costs order in the terms of the order endorsed by a full court of the ACT Supreme Court in Baker v Magistrates Court of the Australian Capital Territory and Another [2013] ACTSC 73. That order read:
The informant pay the defendant’s costs of the proceedings in an amount agreed by the parties pursuant to s 4(1)(b) of the Magistrates Court Regulations 2009 or, in default of the filing an agreement under s 5 of that Regulation within 14 days of the date of this order, in an amount assessed by the Registrar in accordance with the scale of costs as applied under s 4(3)(b) and (c) of the Regulation.
The application is opposed by the prosecution on two grounds, namely:
(a)no costs order should be made because the defendants’ lawyers appeared on a pro bono basis; and
(b)in the alternative, if a costs order is made the order should only be for a proportion of the defendant’s costs because while the charges were dismissed, the defendants were only successful on two of the three grounds in which they defended the charges.
It was submitted by the prosecution that during the proceedings Senior Counsel for the defendants made mention to counsel for the prosecution that the defence were acting on a pro bono basis. There was no admission by the defence about that or about the existence or contents of any retainer between the defendants and their solicitors or any costs agreement with counsel. Similarly, there was no evidence about those facts. The only evidence tendered for the purpose of this application was an email thread between the opposing lawyers that included the claim about what Senior Counsel is reported to have said, a request for copies of any retainer or costs agreement, a refusal to provide such documents and an indication by the prosecution that they opposed the costs application on the basis that the defendants had no costs, due to them benefiting from the pro bono arrangement.
In these reasons I will address the following four issues:
(a)What costs arrangements are available in Magistrates Court criminal proceedings?
(b)How does the indemnity principle apply to those arrangements?
(c)Who has the onus of proof in relation to the indemnity principle?
(d)How should any apportionment of costs occur?
What costs arrangements are available in Magistrates Court criminal proceedings?
The common law does not provide for costs to be awarded by the courts: Oshlack v Richmond River Council [1998] 193 CLR 72 at [63].
While the Rule-Making Committee, as established under s 9 of the Court Procedures Act 2004 (ACT), is empowered by s 7 and Schedule 1 of that Act to make rules in relation to costs, the Committee has not yet made any such rules for criminal proceedings. This was acknowledged in 2011 in R v Bui [2011] ACTSC 102 at [69], and remains the case today. The various rules for costs in the Court Procedure Rules 2006 relate only to civil proceedings: Urbaniak-Bak v Prail [2014] ACTSC 171 at [43].
The award of costs in criminal proceedings conducted before the Magistrates Court is provided by ss 29, 85, 97, 122, 131, and 244 of the Magistrates Court Act 1930 (ACT). The first five provisions are not applicable to the present case. Section 244 reads:
244 Costs in criminal matters
(1) The power of the court to award costs is subject to the following:
(a)if the court makes a conviction or order in favour of the informant—it may order that the defendant must pay to the informant the informant's costs;
(b)if the court dismisses the information, or makes an order in favour of the defendant—it may order that the informant must pay to the defendant the defendant's costs;
(c)if a matter is adjourned—the court may order that the costs of and caused by the adjournment be paid by any party to any other party;
(d)costs ordered to be paid—
(i)must be awarded in the way prescribed by regulation; and
(ii)may be recovered under the rules about the enforcement of judgments of the court in civil proceedings.
(2) Subject to any order of the court, the expenses of a person who attends at court to give evidence or to produce documents must be allowed to the person (whether or not they have been examined or produced documents and whether or not they were subpoenaed to attend).
In Baker at [7] a full court proceeded on the basis that s 244, in addition to providing the method for the calculation of costs to be awarded, conferred a power to award such costs.
The provision does not list considerations for the purpose of exercising the initial discretion to award or not award costs. In that way the discretion could be described as ‘absolute and unfettered’ as used for example in Oshlack. However, in Latoudis v Casey [1990] 170 CLR 534, the High Court by a majority of 3:2 held that a similar provision should be construed so that in ordinary circumstances an order for costs should be made in favour of a defendant against whom a prosecution has failed. For example, Mason CJ stated at 542:
In ordinary circumstances it would not be just or reasonable to deprive a defendant who has secured the dismissal of the criminal charge brought against him or her of an order for costs.
The High Court had been considering s 97(b) of the Magistrates (Summary Proceedings) Act 1975 (Vic), which included a relevant consideration of ‘as the Court thinks just and reasonable’. While that consideration is not articulated within s 244 of the ACT Act, it would be difficult to argue that a similar consideration would not implicitly apply under that provision. Accordingly and not surprisingly, the principle from Latoudis has been followed in the Territory and applied for the purposes of the ACT Act: see for example Michael Kelly v Elisabeth Apps [1999] ACTSC 142 at [46].
However, the principle should not be understood to mean that there is a general rule in summary criminal proceedings that costs follow the event: Latoudis at 543 and 568-9. Additionally, there will be circumstances where it would not be just and reasonable to award costs to a successful defendant. In Latoudis at 544, Mason CJ provided the following example:
If, for example, the defendant, by his or her conduct after the events constituting the commission of the alleged offence, brought the prosecution upon himself or herself, then it would not be just and reasonable to award costs against the prosecutor.
Toohey J provided other examples at 565:
… if a defendant has been given the opportunity of explaining his or her version of events before a charge is laid and refused the opportunity, and it later appears that an explanation could have avoided a prosecution, it may well be just and reasonable to refuse costs …
In a similar theme, McHugh J stated at 569:
Speaking generally, before a court deprives a successful defendant in summary proceedings of his or her costs, it will be necessary for the informant to establish that the defendant unreasonably induced the informant to think that a charge could be successfully brought against the defendant or that the conduct of the defendant occasioned unnecessary expense in the institution or conduct of the proceedings.
The majority decisions also distinguished the above principle from an assessment about the reasonableness of the prosecutor’s conduct; and distinguished between the conduct of the defendant following the alleged offence, with his or her conduct at or prior to the alleged offence. The latter in both cases were held to not be relevant. Further, whether or not the charges were serious or brought in the public interest were considered not to be relevant to the question of whether or not it was just and reasonable to award costs. Accordingly, the enquiry is about the defendant’s conduct following the events giving rise to the charge, and not about his or her conduct during or before such events, or the conduct of the prosecutor during the proceedings.
In the present case, there is no suggestion that the conduct of the defendants following the events that gave rise to the charges, was such that it would be just and reasonable to not award costs. Each defendant was charged, pleaded not guilty to the charge and the charge was found not proved. There is nothing to suggest that any of the defendants brought the prosecution upon himself, or had any opportunity to explain the events that would have avoided the prosecutions, or otherwise induced the informant to think that the prosecutions would be successful.
How does the indemnity principle apply to those arrangements?
It is trite to say that the award of costs are compensatory in nature, and that they are not imposed for the purpose of punishing the losing party or providing a bonus to the successful party. This is known as the indemnity principle. (That principle should be distinguished from the expression ‘indemnity costs’.) In Wentworth v Rogers [2006] NSWCA 145 at [102], Basten JA stated:
The substantive issue at the heart of the appellants’ case was the principle that the fundamental purpose of an order that one party to litigation pay the legal expenses or ‘costs’ of another party is to provide an indemnity in relation to the whole, or usually part, of the legal obligation incurred by the other party to his or her lawyers. If that party is under no legal obligation to pay lawyers’ fees, no amount can be recovered from the unsuccessful party.
As s 244 of the Magistrates Court Act uses the term ‘costs’ without excluding the indemnity principle, and because that principle would be consistent with the purpose of the Act, I see no reason why that principle would not apply to the provision.
In the case at hand, the prosecution has only pointed to the possibility that the defendants may have been represented on a pro bono basis. There is no evidence before me supporting a finding either way. Further, the expression ‘pro bono’ may include a range of arrangements between clients and their lawyers. Such arrangements could include, for example, agreements not to charge any fees, agreements to charge reduced fees and agreements to waive fees if the client is unsuccessful. Again, I have no evidence to make any findings in that regard.
Who has the onus of proof in relation to the indemnity principle?
In such circumstances the onus of proof is of significance. In Shaw v Yarranova Pty Ltd & Anor [2011] VSCA 55 the court held that there was a presumption of a retainer in certain circumstances. Further, in order to avoid a costs order by invoking the indemnity principle, the party liable to pay such costs has the onus of proving that the benefiting party would be, under no circumstances whatsoever, liable to pay their lawyers’ fees. At [19] and [24] Redlich and Mandie JJA stated:
Courts generally accept the existence of a contract of retainer when a solicitor has performed work on behalf of a person with his or her knowledge and assent, in circumstances which are consistent with that person being the solicitor’s client. The existence of a contract of retainer and the liability of the client for the solicitor’s costs will be presumed, and the party who challenges the existence of the retainer in such circumstances bears the onus of establishing the absence of it.
…
There being a strong presumption of a retainer, it was for the applicant to either prove that there was no retainer or establish that there was an express or implied agreement between the respondents and their solicitors that under no circumstances whatsoever were they to be liable for their solicitor’s fees. (Footnotes omitted.)
A summary of principles, consistent with those described above, was adopted in Trevorrow v State of South Australia (No 7) [2008] SASC 5 at [17] and McNamara v Bao San & Ors [2010] NSWSC 809 at [18]. Those principles are:
- the indemnity principle is the guiding principle concerning the recovery of costs;
- the indemnity principle allows for an indemnity if there is a liability of the claimant to his or her solicitor;
- in the absence of any express agreement, the retainer of a professional person to act will normally give rise to an implied agreement for the payment of reasonable professional fees and disbursements;
- the onus is on the party seeking to avoid an order to establish that there is no liability on the part of the claimant to his, or her, solicitor for costs;
…
- the indemnity principle is a flexible principle, designed to allow for a just and fair result.
I note with some sympathy that the above onus would rest with the party with least access to information about the fee arrangements in question. However and as central to the decision in Shaw, there are processes available to such parties to compel production of relevant information.
The prosecution submitted that they made a statement from the bar table, and as it remained unchallenged, that statement was sufficient to displace the onus of proof. They relied upon the decision of Penfold J in Valencic v Jordan [2017] ACTSC 120. However, I note that decision related to the unique circumstances of sentencing proceedings, where courts are routinely informed about facts from the bar table. I am also not convinced the statement remained unchallenged. In any event, and even taking the statement from the bar table at its highest, that is the defendants were represented on a pro bono basis, such a basis may still involve liability to pay fees in certain circumstances. Accordingly, I am not persuaded there is any merit in that submission.
In the instant case there is no evidence supporting a finding that the defendants do not, under any circumstances whatsoever, have to pay their solicitors’ fees. The prosecution has not met the onus. Accordingly, the prosecution’s opposition to the costs order in favour of the defendants on the basis of the indemnity principle must fail.
How should any apportionment of costs occur?
It was clear from the start of the hearing that the charges were defended on three distinct grounds, namely:
(a)the offence provision was invalid because it impermissibly breached the implied freedom of political communication;
(b)the declaration of the protected area was invalid; and
(c)the actions of the defendants did not fall within the meaning of ‘protest, by any means’.
The defendants were successful only on the third ground, with rulings in the prosecution’s favour on the first two grounds. However, very little of the hearing was taken up with evidence relevant solely to the unsuccessful grounds. The defence’s written submissions in relation to the same were relatively short, but the prosecution submissions in that regard were comprehensive. I should also note for completeness that a significant amount of time was taken up with unrelated objections to tendency, and later relationship, evidence. Accordingly, the time spent during the hearing on the two unsuccessful grounds was not readily separable (nor dominant) from the balance of the hearing, but the time spent by the defence on preparing submissions in relation to those grounds is.
In Latoudis at 565, Toohey J contemplated costs orders in summary criminal proceedings for a proportion of the defendant’s costs, when he said:
… if the manner in which the defence of a prosecution is conducted unreasonably prolongs the proceedings, for instance by unnecessary cross-examination, neither justice nor reasonableness demands that the successful defendant be indemnified, at any rate as to the entirety of the costs incurred.
In Bulga Underground Operations Pty Ltd v Nash [2016] NSWCCA 37, the NSW Court of Criminal Appeal accepted, with some qualification, that the principles relating to the apportionment of costs in civil cases are also applicable to criminal proceedings. In doing so, the court adopted the following passage from James v Surf Rd Nominees Pty Ltd [No 2] [2005] NSWCA 296 at [32]:
… an unsuccessful party may be ordered to pay the entirety of the costs of the successful party, even though the successful party did not succeed on all issues. However, … the Court is entitled to make a different order.
The court also adopted the passage from Waters v P C Henderson (Aust) Pty Limited (unreported CA (NSW) Kirby P, Mohoney and Priestly JJA, 6 July 1994):
Where the proceedings involve multiple issues the application of the rule that costs follow the event may involve hardship where a party succeeds on some issues but fails on others. Particularly is this so where, for example, a defendant succeeds on issues that occupied the bulk of the time taken up by the proceedings. Nevertheless, unless a particular issue or group of issues is clearly dominant or separable, it will ordinarily be appropriate to award the costs of the proceedings to the successful party without attempting to differentiate between those particular issues on which it was successful and those on which it failed.
As indicated above, s 244 of the Magistrates Court Act provides that the costs are to be awarded in the way prescribed by the regulations. Those regulations relevantly read:
4 Awarding costs in criminal matters—Act, s 244(1)(d)(i)
(1) In awarding costs, the court may order that the amount to be paid is the amount–
(a)decided by the court; or
(b)agreed by the parties.
(2) The amount to be paid must be worked out in accordance with the Court Procedures Rules 2006, schedule 4 (the scale of costs) as applied under subsection (3).
(3) In working out the amount—
(a)a reference to the registrar is taken to be a reference to the court or the parties; and
(b)the amount allowed under an item in part 4.2 of the scale of costs is multiplied by 67%; and
(c)rule 4.12 (Costs—transitional) of the scale of costs does not apply.
5 Costs in criminal matters—agreement by parties
(1) This section applies if the court orders, under section 4 (1) (b), that the amount of costs to be paid is the amount agreed by the parties.
(2) If the party entitled to costs and the party liable for costs agree that the costs be set at a certain amount (the agreed amount), either party may file a written agreement to the costs being set at the agreed amount.
(3) The agreement must be signed by the parties or their solicitors.
(4) On the filing of the agreement, the agreed amount is taken to be the amount of costs to be paid.
(5) If the parties cannot agree on the amount, the court may order that the registrar assess costs in accordance with the scale of costs as applied under section 4 (3) (b) and (c).
As observed by Burns and Dowsett JJ in Baker, reg 4 contemplates that the court will assess the costs at the time of determining the entitlement to such an order, and reg 5 contemplates assessment by the Registrar where there has been an order to pay costs as agreed and no agreement has been reached. Burns and Dowsett JJ also observed that arrangements under the regulations, (which I note include the discretionary application of the scales of costs with a 67% discount), provide flexibility in the calculation of costs. In such circumstances, the expressions ‘party and party costs’, ‘solicitor and client costs’ and ‘indemnity costs’ are simply irrelevant when considering those calculations.
The defendants applied for an order that the prosecution pay their costs, as agreed, and if not agreed within a specified time, then as assessed by the Registrar. In response, the prosecution did not seek for the court to calculate the costs, but rather an order that the costs which are to be assessed by the Registrar, be limited to the issue where the defendant was successful, namely that the actions of the defendants did not fall within the meaning of ‘protest, by any means’.
I accept a court or a Registrar may effectively apportion costs when determining the quantum of costs, due to the flexibility available under the application of the scheme defined by the above regulations. However, I do not see the court as having a similar opportunity when making an order for costs to be paid as agreed, or when making a subsequent order that the Registrar is to assess costs.
As held in Baker, it is the arrangements as described within the regulations that provide for the calculations of costs, and not any extrinsic concept. That would equally apply to any global apportionment of costs exercised outside of the discretions provided by the regulations.
When an order is made for the Registrar to assess costs, the Registrar is required to undertake that task by applying the provisions of the regulations, and those arrangements include a significant degree of flexibility. Any apportionment by the court in such circumstances risks splitting that discretion between the two decision makers, and fettering the discretion granted to the Registrar. It creates a danger that individual factors may be considered by both decision makers, with the effect that such factors are counted twice.
Finally, I note that a Registrar assessing the costs may take into account the outcomes of these proceedings and the way in which the proceedings were conducted. In this case the Registrar would be entitled to take into account my observations about the proceedings described above at [25] and [26].
Accordingly, I will make the orders sought without any apportionment of the costs and note it may be a matter for the Registrar to determine what costs are to be awarded, taking into account, amongst other things, how the proceedings were conducted.
Orders
I make the following order:
The informant pay the defendant’s costs of the proceedings in an amount agreed by the parties pursuant to s 4(1)(b) of the Magistrates Court Regulations 2009 or, in default of the filing an agreement under s 5 of that Regulation within 14 days of the date of this order, in an amount assessed by the Registrar in accordance with the scale of costs as applied under s 4(3)(b) and (c) of the Regulation.
| I certify that the preceding thirty-eight [38] numbered paragraphs are a true copy of the Reason for Judgment of his Honour Magistrate Theakston. Associate: Sam Lynch Date: 3 July 2018 |
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