Chen v State of New South Wales

[2016] NSWCA 177

Court of Appeal

Supreme Court

New South Wales

Medium Neutral Citation:

Chen v State of New South Wales [2016] NSWCA 177

Hearing dates:

25 July 2016

Decision date:

26 July 2016

Before:

Leeming JA

Decision:

1. Dismiss the notice of motion filed on 26 May 2016 with costs.

 

2. Extend the time for filing the notice of motion as to competency, for the purposes of Pt 51 r 51.41(1), to 5 July 2016.

 

3. Stand over the notice of motion filed 5 July 2016 to the hearing of this matter.

 

4. Direct that the summons for leave to appeal filed 10 December 2015 and the notice of appeal filed 6 June 2016 be heard concurrently, on a date to be determined by the Registrar.

 

5. Stand the proceedings over before the Registrar on 27 July 2016, for the allocation of a date on that occasion or as soon as possible thereafter.

 6. Reserve the costs of the notice of motion filed 5 July 2016.

Catchwords:

PRACTICE – appeals – competency – matter at issue amounting to $100,000 – separate plaintiffs in single proceeding seeking to appeal – proceedings originally commenced seeking leave to appeal – whether appeal as of right – appeal to be heard concurrently with application for leave to appeal

  PRACTICE – security for costs – plaintiffs relatively impecunious – questions of general importance – fourteen day trial and substantial costs order – State's earlier application for security had been refused – application for security for costs dismissed

Legislation Cited:

District Court Act 1973 (NSW), s 127
Supreme Court Act 1970 (NSW), s 101
Uniform Civil Procedure Rules, rr 50.8, r 51.22, 51.41, 51.50

Cases Cited:

Brundza v Robbie & Co (No 2) (1952) 88 CLR 171
Charara v Integrex Pty Ltd [2010] NSWCA 342
Chen v State of New South Wales [2013] NSWCA 13
Chen v State of New South Wales [2014] NSWCA 41
Hall v van der Poel [2009] NSWCA 436
Kuru v New South Wales [2008] HCA 26; 236 CLR 1
McLaughlin v Daily Telegraph Newspaper Co Ltd (1904) 1 CLR 143
NSW Arabian Horse Association Inc v Olympic Co-ordination Authority [2005] NSWCA 210
Preston v Harbour Pacific Underwriting Management Pty Ltd [2007] NSWCA 247
Ren v Jiang (No 4) [2014] NSWCA 315
Schepis v Commonwealth of Australia [2012] NSWCA 398

Category:

Procedural and other rulings

Parties:

State of New South Wales (Applicant on the motions)
Ms Irene Rui Chen (First Respondent on the motions)
Ms Gong Xiang Xuan (Second Respondent on the motions)

Representation:

Counsel:
M Windsor SC (Applicant on the motions)
C A Evatt, N Ford (Respondents on the motions)

  Solicitors:
Makison D’Apice Lawyers (Applicant on the motions)
Juris Cor Legal (Respondents on the motions)

File Number(s):

2015/280108; 2016/175440

Publication restriction:

Nil

 Decision under appeal 

Court or tribunal:

District Court of New South Wales

Jurisdiction:

Civil

Date of Decision:

11 September 2015

Before:

Charteris DCJ

File Number(s):

2011/54439

Judgment

1. LEEMING JA: The State’s notices of motion for security for costs, in the amount of $60,000, and for dismissing the appeal as incompetent were referred to me by the Registrar yesterday. The notices of motion are dated 26 May and 5 July 2016. Despite the voluminous nature of the material supplied by the State in support of its motions, the hearing of which occupied the entirety of the morning, the salient factual background may be stated concisely.

Factual and procedural background

2. The plaintiffs, Ms Irene Rui Chen and Ms Gong Xiang Xuan, were arrested in Newtown on 21 February 2008. They brought proceedings in the District Court of New South Wales alleging false imprisonment, assault and battery and malicious prosecution. Following a 10 day trial, those claims were dismissed on 17 August 2012. However, this Court heard over two days in September 2013 an appeal, which was allowed on 10 March 2014: Chen v State of New South Wales [2014] NSWCA 41. This Court ordered that the State pay the applicants’ costs on appeal. The parties subsequently agreed the quantum of those costs, and the agreed amount ($160,000) has been paid.

3. Prominent in this Court’s decision was reference to five photographs, taken of the plaintiffs while being arrested, which were said to have been deleted by one of the arresting officers shortly thereafter. The photographs were recovered from the memory of the camera and deployed at the trial. They were said to demonstrate that unnecessary force had been used by the police officers.

4. Basten JA, with whom Meagher JA and Tobias AJA agreed, referred at length to the evidence supporting the proposition that one of the officers had deleted the photographs, and was critical of the failure by the primary judge to determine the issue. His Honour added that such a finding would have seriously affected the credibility of that officer (at [83]), and then added at [86]-[88]:

“There was no suggestion in chief, in cross-examination or in re-examination that Officer Jacques had accidentally deleted the photographs. If she did delete them, her evidence was false.

No doubt the benefits of seeing a witness provided the trial judge with an advantage not available to this Court. However, that advantage tends to be less with an experienced witness, such as a police officer, than with other sections of the community. It is sufficient for present purposes to say that the trial judge, in the judgment, did not grapple with the very real issues raised by this evidence. The ‘objective evidence’, as it is sometimes called, spoke strongly in favour of the proposition that the images were deleted by Officer Jacques.

Once that conclusion is accepted, the significance for the outcome of the trial is not in doubt. Taken in combination with the findings upon which doubt was cast above, relating to the force used in arresting both Ms Chen and Ms Xuan, the judgment must be set aside and, unfortunate as it may be, there must be a retrial.”

5. Following this Court’s decision, there was a second trial in the District Court which this time lasted 14 days in February and March 2015. On 11 September 2015, the primary judge entered judgment for the State. His Honour did not find that the photographs had been deleted by the arresting officer. The way in which this issue was attended to, and the tension with the reasons of this Court on appeal, is central to the pending appeal.

6. On 15 December 2015, the primary judge acceded to the State’s application and made a lump sum costs order that Ms Chen pay the State’s costs in the amount of $162,500 and Ms Xuan pay the State’s costs in the amount of $87,500. Neither of those amounts has been paid. The reasons for making a lump sum costs order were not provided to me.

7. In the meantime, the plaintiffs filed a notice of intention to appeal. On 10 December 2015 – prior to the making of the lump sum costs order, and (just) within the three month period within which to appeal – a summons seeking leave to appeal was filed. It was served on 15 December 2015. It was accompanied by the applicants’ summary of argument, dated 10 December 2015 and signed by counsel. It sought a concurrent hearing of the leave application and the appeal, as had occurred in 2014.

8. In May of this year, two days (28 and 29 September 2016) were reserved for this proceeding as a concurrent hearing, those days being said to be the first dates available to counsel briefed in the matter. However, by email to the parties dated 26 May 2016, the Registrar advised that the Court was “now minded to hear this matter as a leave only hearing, rather than concurrently”. The Registrar also advised that two Judges were likely to ask why there was not a right of appeal, in light of the particularised amounts of damages for economic loss, which included loss of a scholarship of $25,000 per year for a number of years and various other items of actual expenditure and claimed losses. The Registrar also pointed to NSW Arabian Horse Association Inc v Olympic Co-ordination Authority [2005] NSWCA 210 at [24] in support of the proposition that it was sufficient for both plaintiffs’ losses to amount to $100,000 in order for an appeal to lie as of right.

9. On 30 May 2016, the plaintiffs appear to have told the Registrar that they had an appeal as of right, and the Registrar extended the time to file a notice of appeal to seven days thereafter. A notice of appeal was filed on 6 June 2016. An affidavit setting out the material facts pursuant to Pt 51 r 51.22 of the Uniform Civil Procedure Rules was filed on 28 June 2016.

10. An email tendered when the application was heard suggested that the affidavit had not been served. The State relied on that failure to explain its failure to file a notice of motion challenging competency until one day after the period prescribed by r 51.41. No submissions were made against the State’s oral application to extend the time within which to bring a motion challenging competency, and there should in the circumstances be the requisite extension of time.

Competency of the appeal

11. One source of the difficulties arising on the question of competency is the failure by the primary judge to make alternative findings of damages (including exemplary damages) in the event that his Honour were wrong as to liability, in accordance with Kuru v New South Wales [2008] HCA 26; 236 CLR 1 at [12]. Hence submissions were exchanged (although, without conveying criticism to either side, they were more in the nature of assertions) between the parties as to what level of exemplary damages would be ordered if there had been an attempt by a relevant police officer to destroy photographic evidence and give false evidence to the Court. That is regrettable. After a trial of 14 days, and in circumstances where an appeal (or application for leave to appeal) was on the cards, in light of what had occurred after the first trial, it was more than foreseeable that there would be another hearing in this Court.

12. The State submitted that in light of the serious adverse credit findings made by the primary judge in relation to both plaintiffs, this Court could comfortably be satisfied that the $100,000 threshold would not be reached. The State also relied upon the finding to the same effect by this Court in 2014. The State was critical of the expression of opinion by the plaintiffs’ solicitor that the amount in issue exceeded $100,000, submitting that an opinion or belief was not sufficient in that regard: Schepis v Commonwealth of Australia [2012] NSWCA 398 at [12] and [26]. The State also contended that NSW Arabian Horse Association was distinguishable.

13. Dealing with the last point first, it is true that there is a difference between separate causes of action in proceedings that could, at least in theory, have been consolidated, and the separate causes of action brought by two plaintiffs in the same proceeding. The question, however, is whether the underlying reasoning is applicable by analogy. I do not regard that question as straightforward, in light of the range of circumstances to which the provision must apply. Consider for example a partnership suing on a debt for $150,000; does it follow on the State’s submission that leave is required? Or consider a proceeding where a large number of persons sought recovery of a particular tax said wrongly to have been exacted. The language of s 127(2)(c) (which is materially identical to s 101(2)(r) of the Supreme Court Act 1970 (NSW)) does not in terms attend to the possibilities of joint causes of action, still less of multiple plaintiffs advancing separate causes of action arising out of the same facts in the same proceeding.

14. So far as I can see, the weight of authority favours the State’s submission in this regard, which is supported by what was said in Hall v van der Poel [2009] NSWCA 436 at [3] (a decision to which I was not taken). That was a case where there were separate (unconsolidated) proceedings heard concurrently and the subject of a single judgment, and I am inclined to doubt that the availability of an appeal as of right turns on whether or not separate proceedings appropriate for consolidation were in fact consolidated. However, it is easy to see that this construction would give rise to results which might be thought to be unexpected. One example is an unsuccessful compensation to relatives claim where a surviving spouse claimed to be entitled to an amount in excess of $100,000, but the children’s claims were smaller; does the wife enjoy an appeal as of right but each child needs a grant of leave?

15. I think that this is a case where it is appropriate not to determine the competence of the notice of appeal. My reasons are that (a) I do not consider that I have received full submissions on the question of law, (b) I doubt in any event that I can apply the law in a meaningful way to the facts at hand, and (c) I am certain that nothing material turns upon the issue.

16. A determination of whether there is a “realistic prospect” of the plaintiffs increasing their wealth by $100,000 or more would involve an assessment of the realistic best case findings available to the plaintiffs if the judgment be set aside, including an assessment of exemplary damages. I am given little assistance as to the way in which the amounts claimed by way of economic loss are derived. (I note that it appears that the particulars of loss were quite different from those maintained at the first trial.) For example, it is entirely unclear whether it is said that there was a loss of a $25,000 scholarship for a single year or multiple years – the pleading unequivocally claims that it was for multiple years, but the affidavit provided pursuant to Pt 51 r 51.22 is consistent with it only being for a single year. In any event, there is nothing in the materials available to me to explain why it is submitted that the allegedly wrongful arrest caused the loss of that scholarship. There are other (smaller) amounts which one might readily accept were consequential upon the arrest (such as legal fees in securing the plaintiffs’ acquittal), but they are in the order of $16,000. I will not pause to deal with the other amounts, all small, contained in the pleading. I am doubtful that it has been shown that there is a “realistic prospect” of either or both plaintiffs achieving an outcome by which she or they are $100,000 better off if regard is had merely to the compensatory damages claimed.

17. Thus, as it happens, the amounts which most matter in terms of evaluating the realistic prospects of success are the claim for exemplary damages. But to assess the realistic best case award of exemplary damages would, if it is to be done meaningfully, require a close analysis of any provoking circumstances, which in turn gives rise to a series of issues. By way of example, there is a suggestion that one of the plaintiffs said, in the course of being detained, the words “I will sue”, but that those words were understood to mean “I will shoot”. I really have no proper basis for assessing the nuances of what occurred at the requisite detail to form a view whether there is a realistic chance of quite substantial exemplary damages. I consider that I have no proper basis to resolve the competing submissions by the State to the effect that exemplary damages if ordered might be a little higher than $25,000, and by the plaintiffs to the effect that they would be significantly higher than $25,000.

18. Ordinarily, it would be appropriate to determine this question. However, the somewhat unusual circumstances of this case are such that the question is entirely arid where, as here, there is an extant application for leave to appeal which may, on the course I favour, be heard and determined at a concurrent hearing.

19. The point would only matter if I were minded to accede to the State’s submission that there be a separate determination of the application for leave to appeal. I have reached the clear view that I should not take that course, for the following reasons.

20. First, the appeal concerns matters of public importance, in that its focus is that the police conduct themselves properly when exercising powers of arrest.

21. Secondly, there are very important matters at stake to the plaintiffs and to the police officers. Each of the plaintiffs was found to have given false evidence: see primary judgment at [179]. Conversely, the claim that a police officer tampered with relevant evidence, with a view to its being suppressed, is a very serious one, both for the individual officer, and for the police force generally. Given the nature of the matters at stake on both sides, I consider that it is inappropriate that the matter be dealt with on the basis of leave; rather it is preferable that the parties’ submissions should be addressed on a full appeal by way of rehearing.

22. Thirdly, there has been a 14 day trial, and a costs order in the amount of $250,000. Although costs do not contribute to the $100,000 threshold imposed by s 127(2)(c) of the District Court Act 1973 (NSW), plainly what is at stake is also of real pecuniary significance to the plaintiffs.

23. Fourthly, there seems to me to be no good reason why it is inappropriate to follow the course which occurred in 2013 between the same parties arising out of the same incident.

24. Accordingly, I propose to adjourn the State’s notice of motion filed 5 July 2016 to the hearing of the appeal, which should proceed simultaneously with the concurrent hearing of the application for leave to appeal.

Security for costs

25. I turn to security for costs.

26. Although initially the State relied on Pt 50 r 50.8, it is Pt 51 r 51.50 which imposes a requirement of “special circumstances” for the ordering of security for the costs of an appeal. That said, that rule does not apply in the case of an application for leave to appeal: see the decisions in Ren v Jiang (No 4) [2014] NSWCA 315 at [12], although it has been said that a court will be slow to order security for costs in such a case: see Charara v Integrex Pty Ltd [2010] NSWCA 342 at [13].

27. It will not be necessary for me to consider the differences applicable to an application for security for the costs of an appeal, as opposed to an application for leave to appeal. In the circumstances of this application, they could have no bearing on the outcome of the State’s motion.

28. The State pointed to the impecuniosity of the plaintiffs, the strength of the findings made against them, the failure to explain a reference in the reasons of the primary judge to there being at one stage $300,000 in Ms Chen’s bank account, and questions of proportionality. The State also relied on the fact that there had now been two trials, each with the same outcome adverse to the plaintiffs. It said that if security were not ordered, there would be no recovery by it of its costs of the appeal.

29. However, it was not submitted that the appeal was hopeless or unreasonable, and understandably so, in light of the discrepancy between the suggestions in this Court’s judgment in 2014 and the findings by the primary judge.

30. In Preston v Harbour Pacific Underwriting Management Pty Ltd [2007] NSWCA 247 at [18], Basten JA, with whom Ipp JA and Hoeben J agreed, said that:

“(1) no order for security should be made in the absence of ‘special circumstances’;

(2) consideration of what may constitute special circumstances should not be fettered by some general rule of practice;

(3) impecuniosity, without more, will usually be insufficient;

(4) an order may be appropriate if the appeal is shown to be hopeless, unreasonable or of an harassing nature;

(5) where a bona fide and reasonably arguable appeal would be stifled by an order for security, such an order should usually not be made, and

(6) the subject matter of the appeal, including an issue as to the liberty of the individual, or a public interest may provide a reason for not imposing a security order which would stifle the continuation of the appeal.”

31. I do not consider that those considerations apply more favourably to an applicant for security in respect of a leave application, as opposed to an appeal. Whether the application be based on the costs of an appeal or of an application for leave, I would not accede to the State’s application for security.

31. First, to the extent that the State relies upon evidence that there was a relatively large amount of money in a bank account six years ago, that is not to the point in July 2016, in circumstances where the gravamen of the State’s evidence is that the plaintiffs are relatively impecunious.

32. Secondly, I do not think it matters one iota that there have now been two trials, as opposed to one. This Court found that the judgment obtained following the first trial was required to be set aside. The State’s case for security is not improved by the misfortune suffered by both parties that the first judgment was in error and that this Court could not itself determine the dispute between the parties.

33. Thirdly, I would not regard the strength of the findings adverse to the plaintiffs to be material to the application for security. Once again, at the forefront of the proposed appeal is the way in which the primary judge dealt with, or more accurately failed to deal with, the evidence bearing upon the attempted destruction of the photographs. As noted above, the State did not contend that the appeal was meritless.

34. Fourthly, on the question of proportionality, I accept that there are large questions why the trial could or should have been permitted to run for 14 days. I am in no position to express a view as to why that was so. That being the case, I do not think that proportionality can be material to the present application. By that, I mean that only if I could be satisfied that the State made no material contribution to the length of the trial would I be able to employ the very substantial costs incurred by it to date in support of its current application.

35. Fifthly, there is the question of delay, to which the respondents point in their written submissions. The State by its written submissions in support asserts that “there has been no delay by the State in bringing the application for security”. That is simply not so. The application can, and should, have been brought shortly after service of the summons for leave to appeal and applicants’ summary of argument. There is no satisfactory explanation for the State’s delay in bringing the application until relatively shortly before the hearing. Applications for security for costs are to be made promptly. See McLaughlin v Daily Telegraph Newspaper Co Ltd (1904) 1 CLR 143 at 145 and Brundza v Robbie & Co (No 2) (1952) 88 CLR 171 at 175.

36. Sixthly and finally, there is no sound reason for taking a different course in respect of the State’s latest application for security than Allsop P took in relation to the State’s previous application for security. After rejecting the submission that the State had established special circumstances based upon the risk of the plaintiffs leaving the country or removing their assets from the country, Allsop P said this, which although expressly obiter was very much to the point:

“[T]he subject matter of the appeal raises important questions of the treatment of people in and about custody. The primary judge's findings are clear as to those matters and those findings are favourable to the respondent. Nevertheless, I do not think it is appropriate in a case of this character, in the circumstances that obtain, to order security for costs in relation to the appeal”: Chen v State of New South Wales [2013] NSWCA 13 at [4].

38. That accords with the last consideration to which Basten JA pointed in Preston v Harbour Pacific Underwriting Management Pty Ltd at [18], reproduced above, that “the subject matter of the appeal, including an issue as to the liberty of the individual, or a public interest may provide a reason for not imposing a security order which would stifle the continuation of the appeal.”

39. I should add that the fact that the State had sought, and been refused, security for its costs on appeal in 2013 was something which did not appear in the State’s submissions, written or oral. To be fair, it was not mentioned in the plaintiffs’ written submissions opposing security, and senior counsel who appeared before me for the State had not appeared at the trial or on the previous application. However, it was an important matter to which attention should have been directed, including in the lengthy affidavit in support of the application. Had it been brought to my attention prior to the commencement of Mr Evatt’s oral address, I expect the hearing would not have occupied so much time as it did.

40. Finally, in oral address the State made a fallback submission, to the effect that a lesser amount of security, say, $5,000, be advanced by the plaintiffs, by analogy with what was ordered in Charara v Integrex Pty Ltd. However, most of the considerations referred to above (especially, the importance of the issues (to both sides) and the decision of Allsop P in relation to the first appeal) tell equally against the State’s fallback submission, which I do not accept.

Orders

41. For those reasons, I make the following orders:

1. Dismiss the notice of motion filed on 26 May 2016 with costs.

2. Extend the time for filing the notice of motion as to competency, for the purposes of Pt 51 r 51.41(1), to 5 July 2016.

3. Stand over the notice of motion filed 5 July 2016 to the hearing of this matter.

4. Direct that the summons for leave to appeal filed 10 December 2015 and the notice of appeal filed 6 June 2016 be heard concurrently, on a date to be determined by the Registrar.

5. Stand the proceedings over before the Registrar on 27 July 2016, for the allocation of a date on that occasion or as soon as possible thereafter.

6. Reserve the costs of the notice of motion filed 5 July 2016.

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Decision last updated: 21 March 2018