Chapman v Cole

[2006] VSCA 70

SUPREME COURT OF VICTORIA

COURT OF APPEAL

No. 3171 of 2004

COLIN JAMES CHAPMAN	Appellant
v.

Respondent PAUL RUSSELL COLE

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JUDGES:	WARREN, C.J., CALLAWAY and ASHLEY, JJ.A.
WHERE HELD:	MELBOURNE
DATE OF HEARING:	28 November 2005
DATE OF JUDGMENT:	28 March 2006
MEDIUM NEUTRAL CITATION:	[2006] VSCA 70

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Malicious prosecution – Absence of reasonable and probable cause – Malice – Standard of proof for inferences in a civil trial – Inference does not have to be “the only inference reasonably open” or a conclusion that “necessarily” follows if other facts are accepted.

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APPEARANCES:	Counsel	Solicitors
For the Appellant	Mr D.F. Hore-Lacy, S.C.	James T. Stevens
with Mr P.M. Moran
For the Respondent	Mr D.F.R. Beach, S.C.	Mahonys
with Mr N. Murdoch
WARREN, C.J.:

1. The relevant facts have been comprehensively set out in the judgment of Callaway J.A., which I have had the advantage of reading in draft. For the reasons given by his Honour, I agree that Ground 1 has been made out and that it is unnecessary to advert to Ground 2. The appeal should be allowed.

CALLAWAY, J.A.:

1. Following a prosecution that was successful in the Magistrates’ Court in 1992 but unsuccessful on appeal to the County Court in 1993, the appellant brought proceedings in the County Court against the respondent and the State of Victoria alleging malicious prosecution. The claim against the State was abandoned and nothing more need be said about it. The respondent admitted that he brought the charges against the appellant and continued to prosecute them. He denied that he acted without reasonable and probable cause and denied malice. The issues at the trial were accordingly confined to those two issues, together with issues relating to damages.

2. After a trial lasting nine days, the jury returned a verdict for the respondent. It was unnecessary for them to consider the issues relating to damages. The following were the questions they were asked, substituting “respondent” for “first defendant” and “appellant” for “plaintiff”:

   1.          Did the respondent institute, or continue prosecuting after instituting, charges against the appellant without any honest belief that the prosecution was justified?

   2.          In instituting, or continuing to prosecute after instituting, the charges against the appellant, was the respondent actuated by malice?

   The jury answered both those questions in the negative and judgment was entered

Chapman v. Cole 1 C.J. CALLAWAY, WARREN, J.A.

for the respondent.[1]

[1]              The first issue was left to the jury without opposition from counsel. In that sense the case was similar to Earnshaw v. Loy (No. 1) [1959] V.R. 248 at 249. See, however, the observations of Sholl, J. in that case and Fleming, Law of Torts (9th ed. 1998) at 683 – 684.

1. There are two grounds of appeal:

“1. The learned trial judge erred in his direction to the jury concerning the standard of proof required for inferences to be drawn.

2.        The learned trial judge erred in telling the jury that he had a recollection of the defendant giving evidence denying an offer made to the plaintiff (that if the plaintiff pleaded guilty to a charge on one specified date being 7 April 1990, the remaining charges would be withdrawn) when in fact the defendant had given no evidence on the point.”

1. It is unnecessary to say very much about the facts. The grounds of appeal may be understood without doing so. In essence, the appellant was accused of making threatening telephone calls. The respondent said that he regarded the complainants as “four very credible people”. The appellant alleged, among other things, that the respondent failed properly to investigate the appellant’s whereabouts at the time of the telephone calls via documents and telephone traces that would have established his innocence and that, not only did the respondent fail properly to investigate exculpatory material, he actively suppressed access to that material on the part of the defence. It was said that the respondent falsely informed the Magistrates’ Court that the telephone traces did not exist and that he resisted the appellant’s access to surveillance material. It is apparent, even from that brief summary, that the issues of reasonable and probable cause and malice depended largely on inference.

2. The judge directed the jury that the appellant had to prove the contested issues on the balance of probabilities. The direction he gave led to debate about the status of such cases as Briginshaw v. Briginshaw[2], Helton v. Allen[3] and Rejfek v. McElroy[4] in the light of Neat Holdings Pty. Ltd. v. Karajan Holdings Pty. Ltd[5]. There is no need to consider that point for the purpose of deciding the appeal[6]. It is enough to say that the civil standard of proof was explained to the jury and expressly contrasted with the standard applicable to a criminal trial.

   [2] (1938) 60 C.L.R. 336.

   [3] (1940) 63 C.L.R. 691.

   [4] (1965) 112 C.L.R. 517.

   [5] (1992) 110 A.L.R. 449, 67 A.L.J.R. 170.

   [6]              Compare R. v. Ali [1996] 2 V.R. 49 at 61 – 62.

3. Ground 1 arises from the directions his Honour gave in relation to inferences, which he described to the jury as “a particularly important part of the directions of law in this case”. Indeed, his Honour continued, it was the way in which counsel for the appellant brought the whole of his case together. The inferences sought to be drawn, from the material to which I have referred in [5] above, were “the nub of the case”.

4. The judge said:

   “Here, there are certain propositions of fact which the plaintiff says you should accept and the plaintiff then goes on and says, ‘If you accept those propositions, then the only inference reasonably open is the matter which I have to prove’. As you appreciate from the way the case has been put, this is known as, and as I have said to you, a malicious prosecution case. In other words, the plaintiff is alleging that in instituting or continuing with the charges, the defendant had a particular state of mind.

   It is not always easy to prove the other party acted with a particular state of mind. It has to occur almost in every case in the criminal jurisdiction, but not so much in the civil jurisdiction as here. Nevertheless, the plaintiff has to do that. The plaintiff has to prove that the defendant acted with malice.[7] The way in which the plaintiff does that is by proving certain facts or attempting to prove certain facts and asking you to draw the conclusion, if those facts are accepted, that it necessarily follows from those facts that the defendant had the state of mind that the plaintiff must prove here.” (Emphasis added.)

   [7]              In counsel’s arguments at the trial, and in the judge’s charge, little distinction was drawn between the first and second questions, both of which were treated as aspects of “malice” in a broader sense of the word. That is sometimes reflected in these reasons.

9 His Honour continued:
“The plaintiff says here, and it seems to me also that this is what this

case is about really: are you prepared to draw the inference favourable to the plaintiff that, if the facts are established to your satisfaction – not as in a criminal case beyond reasonable doubt, but because it is a civil case, on the balance of probabilities – that in this way if you are satisfied, and as the plaintiff asks you to be satisfied, that from the defendant’s, firstly, failure to investigate the plaintiff’s whereabouts via the documents that you have examined, secondly, his failure to investigate the phone traces from the documents that you have examined, and, thirdly, the failure to determine the outcome of the surveillance, which he had instigated, the only conclusion open to you is that the defendant was acting with malice?” (Emphasis added.)

Later he said:

“The only conclusion open to you, says Mr Hore-Lacy, is that Mr Cole was actively seeking to prevent access to the exculpatory material of which he was aware. He must have known that this material individually, but more powerfully collectively, demonstrated that the plaintiff was not guilty of these offences. Therefore, he could not believe that the prosecution was justified and that is the first question that is put before you.” (Emphasis added.)

1. Counsel for the appellant had asked the jury to infer that the respondent’s conduct evinced a consciousness of guilt. In the course of directing the jury on that topic, his Honour said:

   “So the question really is: is the only conclusion open to you that Mr Cole was conscious of his own responsibility in concealing material that was exculpatory in attempting to prevent Mr Chapman from using this exculpatory material?” (Emphasis added.)

2. For convenience, I shall refer to the parts of the charge extracted in [8] to [10] above as the first, second, third and fourth passages respectively.

3. Exception was taken to the effect that the judge had directed the jury that the criminal standard was to be applied to inferences. His Honour overruled the exception, for reasons captured in the following exchange:

   “HIS HONOUR: But the reasoning process requires a conclusion that it is the only explanation for facts of which you are satisfied on the balance of probabilities.

   MR HORE-LACY: That is my submission. It can’t be the only inference open on the balance of probabilities.

Chapman v. Cole 4 CALLAWAY, J.A.

HIS HONOUR: The facts are established on the balance of probabilities and to draw an inference you have to be satisfied that the inference is the only one open, although satisfied on the balance of probabilities only. But it still has to be the only one open, otherwise you can’t draw an inference at all.”

1. A distinction may be drawn between saying that an inference is “open”, in the sense that it is a possibility available for consideration, and saying that it is “open”, in the sense of being an available finding on the applicable standard of proof. The difference may be illustrated by an example given by counsel for the appellant below. There might, he said, be a jar of peanut butter in a lower cupboard to which a child has easy access. There might also be one in a higher cupboard that the child cannot reach except by first crawling on to a chair and then up on to a table. Two inferences are open for consideration, but only the inference that the peanut butter was taken from the lower cupboard is open to be found as a fact on the balance of probabilities.

2. In a civil trial the question is whether to draw an inference on the balance of probabilities[8] and there need only be circumstances raising a more probable inference in favour of what is alleged[9]; but, before it can be drawn, the inference must be something which follows from given premises as being at least probably

   true.[10]

   [8]              Transport Industries Insurance Co. Ltd. v. Longmuir [1997] 1 V.R. 125 at 129 per Winneke, P.

   [9]              Bradshaw v. McEwans Pty. Ltd. (1951) 217 A.L.R. 1 at 5, quoted by Tadgell, J.A. in Transport Industries Insurance Co. Ltd. v. Longmuir at 141.

   [10]             Gurnett v. Macquarie Stevedoring Co. Pty. Ltd. (1955) 55 S.R. (N.S.W.) 243 at 248 per Street, C.J.

3. The foregoing is, I believe, what the learned and very experienced judge meant in the exchange set out in [12] above; but Mr Hore-Lacy persuaded me, in the course of the argument, that it is not what the charge would have conveyed to the jury. Whether or not the second, third and fourth passages might be understood as simply referring to the only conclusion open on the balance of probabilities, and not to all the inferences available for consideration, the same cannot be said of the first passage.

4. The test was not whether an inference of malice was “the only inference reasonably open”. That is the test in a criminal case. Similarly, the appellant did not have to show that, if the underlying facts were accepted, an inference “necessarily” followed. It only had to be more probable than not. It is true that the burden of proof had been explained earlier and that the charge must be read as a whole[11], but there is too great a risk that the first passage may have led the jury to think that it was only the underlying facts that had to be established on the balance of probabilities and that the inference contended for by the plaintiff had to be the only reasonable view of those facts. If they thought that, their misapprehension would not have been corrected, and may have been confirmed, by the references to “the only conclusion open to you” in the other passages. Ground 1 should be upheld. The proviso in Rule 64.23(2) cannot be applied.

   [11]             That is basic, in both civil and criminal trials. For an early statement, in a civil context, see Guest v. Goldsbrough & Co. Ltd. (1886) 12 V.L.R. 804 at 810 per Williams, J.

5. Ground 2 relates to a matter that is unlikely to arise at a retrial. There is accordingly no need to decide it.

6. For these reasons, I would allow the appeal and direct a new trial. If “malice” is again used to encompass both absence of reasonable and probable cause and malice in the strict sense, it may be better to say “actuated by an improper purpose” rather than “actuated by malice” in the second question.[12] It would probably be better to do so in any event. I would hear counsel on the question of costs, but prima facie the appeal should be allowed with costs and the costs of the first trial should be reserved for determination by the judge at the new trial.

ASHLEY, J.A.:

[12] See [3] above and fn. 7.

1. I agree with Callaway J.A., for the reasons which his Honour gives, that Ground 1 has been made out, and that the appeal should therefore be allowed. It being unnecessary to do so, I say nothing about Ground 2.

2. I should add three matters.

3. First, I have the impression that the two paragraphs of the first impugned passage were probably drawn from a standard charge, adapted to fit the issues in the case. If that be the situation, then it is important that the unsatisfactory features of those passages be swiftly drawn to the attention of all judges.

4. Second, whilst it might be said that the learned judge’s references to “the only conclusion open”, in the second, third and fourth impugned passages, were consistent – if considered discretely – with the jury’s duty to find all matters, whether of fact or inference, on a balance of probabilities, there was in my opinion a real risk that the jury might have understood the instruction to be that the making of findings of fact and the drawing of inferences were to be approached differently. The risk that the jury might have so understood the latter passages was, in my opinion, certainly increased, and unacceptably so, when account is had of his Honour’s earlier references to “the only inference reasonably open”, and to what “necessarily follow[ed]”, as the appellant contended, if certain facts were found. I think that it would be best in future, even in a charge which did not contain the first passage impugned, if a direction was adopted which did not refer to “the only conclusion open” in isolation from a clear statement that any conclusion of inferential type is to be determined on the balance of probabilities.

5. Third, at the trial out of which this appeal arises, the issues of reasonable and probable cause and malice were both left for determination by the jury. Having regard to the nature of the particular factual dispute, I think that this was at least a sensible cause; and one that might well commend itself upon a retrial.

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Chapman v. Cole 7 ASHLEY, J.A.

Chapman v. Cole 2 CALLAWAY, J.A.

Chapman v. Cole 3 CALLAWAY, J.A.

Chapman v. Cole 5 CALLAWAY, J.A.

Chapman v. Cole 6 CALLAWAY, J.A. ASHLEY, J.A.