Director of Public Prosecutions (Cth) v Ngo

[2012] NSWSC 1521

Supreme Court

New South Wales

Medium Neutral Citation:

Director of Public Prosecutions (Cth) v Ngo [2012] NSWSC 1521

Hearing dates:

31 August 2012

Decision date:

10 December 2012

Jurisdiction:

Common Law

Before:

Button J

Decision:

(1) Appeal upheld.

(2) The order for costs made by the Magistrate in the Local Court against the plaintiff and in favour of the defendant is quashed.

Catchwords:

CRIMINAL LAW - procedure - costs - interpretation of Criminal Code Act 1995 (Cth) - whether Chen v Director of Public Prosecutions (Cth) [2011] NSWCCA 205 applies to s 400.9 offences - arguable point of law - proceedings not initiated without reasonable cause

Legislation Cited:

Crimes (Appeal and Review) Act 2001
Criminal Code Act 1995 (Cth)
Criminal Procedure Act 1986

Cases Cited:

Chen v Director of Public Prosecutions (Cth) [2011] NSWCCA 205
Director of Public Prosecutions (NSW) v Elskaf [2012] NSWSC 21
Kanan v Australian Postal and Telecommunications Union [1992] FCA 539; (1992) 43 IR 257
Latoudis v Casey [1990] HCA 59; (1990) 170 CLR 534
Nimmo, Re Application for an Inquiry relating to an Election for an Office in the Australian Education Union (NT Branch) (No 2) [2011] FCA 728
R v Buckett (1994) 132 ALR 669
R v Zotti [2002] SASC 164; (2002) 82 SASR 554

Category:

Principal judgment

Parties:

Director of Public Prosecutions (Cth) (plaintiff)
Xuan Dong Ngo (defendant)

Representation:

Counsel:
I Bourke (plaintiff)
Submitting appearance (defendant)
Solicitors:
Solicitor for Commonwealth Director of Public Prosecutions (plaintiff)

File Number(s):

2011/398224

 Decision under appeal 

Jurisdiction:

9109

Date of Decision:

2011-11-16 00:00:00

Before:

O'Shane LCM

File Number(s):

11/81383

Judgment

Introduction

1. This is an appeal by the Commonwealth Director of Public Prosecutions ("DPP") against an order for costs made by a Magistrate in favour of a defendant after proceedings for a Commonwealth offence were withdrawn in the Local Court of New South Wales. The appeal raises a question of statutory interpretation with regard to the precise elements of that Commonwealth offence. An important part of the submissions of the DPP in support of the appeal is the proposition that her Honour misinterpreted the decision of the New South Wales Court of Criminal Appeal in Chen v Director of Public Prosecutions (Cth) [2011] NSWCCA 205.

1. The DPP is the plaintiff in these proceedings. In the Local Court he was the prosecutor of the offence, and the respondent to the application for costs. The defendant in this Court was the defendant in the criminal proceedings, and the applicant in the application for costs. For ease of comprehension I shall consistently refer to the DPP as the prosecutor, and to Mr Ngo as the defendant.

1. The defendant has entered a submitting appearance, save as to any order for costs of the proceedings in this Court.

Chronological background

1. On 10 March 2011, the defendant was charged with an offence pursuant to s 400.9(1A) of the Criminal Code Act 1995 (Cth) ("the Code"). The foundation of the charge was the finding of $80,000 in cash in the tyre well of a car possessed by the defendant. It was part of the prosecution case that the defendant had said to the police that the money had been loaned to him by an unnamed acquaintance.

1. On 6 September 2011, the decision in Chen v Director of Public Prosecutions (Cth) was handed down.

1. On 1 November 2011, the prosecutor withdrew the charge. There is no evidence why that occurred. The defendant applied for costs.

1. On 15 November 2011, that application was heard by her Honour. On 16 November 2011, her Honour granted the application.

1. On 9 December 2011, the prosecutor filed a summons commencing this appeal.

1. On 23 August 2012, an amended summons was filed.

Legislation permitting costs application

1. The costs application was brought pursuant to ss 213 and 214 of the Criminal Procedure Act 1986. Those sections are as follows:

"213 When professional costs may be awarded to accused persons

(1) A court may at the end of summary proceedings order that the prosecutor pay professional costs to the registrar of the court, for payment to the accused person, if the matter is dismissed or withdrawn.

(2) The amount of professional costs is to be the amount that the Magistrate considers to be just and reasonable.

(3) Without limiting the operation of subsection (1), a court may order that the prosecutor in summary proceedings pay professional costs if the matter is dismissed because:

...

(b) the matter is withdrawn or the proceedings are for any reason invalid.

...

214 Limit on award of professional costs to accused person against prosecutor acting in public capacity

(1) Professional costs are not to be awarded in favour of an accused person in summary proceedings unless the court is satisfied as to any one or more of the following:

(a) that the investigation into the alleged offence was conducted in an unreasonable or improper manner,

(b) that the proceedings were initiated without reasonable cause or in bad faith or were conducted by the prosecutor in an improper manner,

(c) that the prosecutor 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 suggested either that the accused person might not be guilty or that, for any other reason, the proceedings should not have been brought,

(d) that, because of other exceptional circumstances relating to the conduct of the proceedings by the prosecutor, it is just and reasonable to award professional costs.

..."

Legislation permitting appeal

1. The appeal was brought pursuant to s 56 of the Crimes (Appeal and Review) Act 2001. That section is contained in Division 2 of Part 5, which is entitled "Appeals by prosecutors". It is as follows:

"56 Appeals as of right

(1) The prosecutor may appeal to the Supreme Court against:

(a) a sentence imposed by the Local Court in any summary proceedings, or

(b) an order made by the Local Court that stays any summary proceedings for the prosecution of an offence, or

(c) an order made by the Local Court dismissing a matter the subject of any summary proceedings, or

(d) an order for costs made by a Magistrate against the prosecutor in any committal proceedings, or

(e) an order for costs made by the Local Court against the prosecutor in any summary proceedings,

other than an order or sentence with respect to an environmental offence, but only on a ground that involves a question of law alone.

(2) An appeal must be made within such period after the date of the sentence or order as may be prescribed by rules of court."

1. Section 59 of the same Act is contained in the same Division. It is as follows:

"59 Determination of appeals

(1) The Supreme Court may determine an appeal against sentence:

(a) by setting aside the sentence, or

(b) by varying the sentence, or

(c) by dismissing the appeal.

(2) The Supreme Court may determine an appeal against an order referred to in section 56 (1) (b), (c) or (d) or 57 (1) (b) or (c):

(a) by setting aside the order and making such other order as it thinks just, or

(b) by dismissing the appeal."

It is worth noting at this stage that s 59(2) does not refer to appeals brought pursuant to s 56(1)(e).

Relevant parts of the Code

1. As noted above, the charge was brought pursuant to s 400.9(1A) of the Code. The whole of s 400.9 is as follows:

"400.9 Dealing with property reasonably suspected of being proceeds of crime etc.

(1) A person commits an offence if:

(a) the person deals with money or other property; and

(b) it is reasonable to suspect that the money or property is proceeds of crime; and

(c) at the time of the dealing, the value of the money and other property is $100,000 or more.

Penalty: Imprisonment for 3 years, or 180 penalty units, or both.

(1A) A person commits an offence if:

(a) the person deals with money or other property; and

(b) it is reasonable to suspect that the money or property is proceeds of crime; and

(c) at the time of the dealing, the value of the money and other property is less than $100,000.

Penalty: Imprisonment for 2 years, or 120 penalty units, or both.

(2) Without limiting paragraph (1)(b) or (1A)(b), that paragraph is taken to be satisfied if:

(a) the conduct referred to in paragraph (1)(a) involves a number of transactions that are structured or arranged to avoid the reporting requirements of the Financial Transaction Reports Act 1988 that would otherwise apply to the transactions; or

(aa) the conduct involves a number of transactions that are structured or arranged to avoid the reporting requirements of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 that would otherwise apply to the transactions; or

(b) the conduct involves using one or more accounts held with ADIs in false names; or

(ba) the conduct amounts to an offence against section 139, 140 or 141 of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006; or

(c) the value of the money and property involved in the conduct is, in the opinion of the trier of fact, grossly out of proportion to the defendant's income and expenditure over a reasonable period within which the conduct occurs; or

(d) the conduct involves a significant cash transaction within the meaning of the Financial Transaction Reports Act 1988, and the defendant:

(i) has contravened his or her obligations under that Act relating to reporting the transaction; or

(ii) has given false or misleading information in purported compliance with those obligations; or

(da) the conduct involves a threshold transaction (within the meaning of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006) and the defendant:

(i) has contravened the defendant's obligations under that Act relating to reporting the transaction; or

(ii) has given false or misleading information in purported compliance with those obligations; or

(e) the defendant:

(i) has stated that the conduct was engaged in on behalf of or at the request of another person; and

(ii) has not provided information enabling the other person to be identified and located.

(4) Absolute liability applies to paragraphs (1)(b) and (c) and (1A)(b) and (c).

(5) This section does not apply if the defendant proves that he or she had no reasonable grounds for suspecting that the money or property was derived or realised, directly or indirectly, from some form of unlawful activity.

Note: A defendant bears a legal burden in relation to the matter in subsection (5) (see section 13.4)."

1. The offence that had been under discussion in Chen v Director of Public Prosecutions (Cth) is contained in s 400.5(1) of the Code. The relevant portions of that section are as follows:

"400.5 Dealing in proceeds of crime etc.-money or property worth $50,000 or more

(1) A person is guilty of an offence if:

(a) the person deals with money or other property; and

(b) either:

(i) the money or property is, and the person believes it to be, proceeds of crime; or

(ii) the person intends that the money or property will become an instrument of crime; and

(c) at the time of the dealing, the value of the money and other property is $50,000 or more.

Penalty: Imprisonment for 15 years, or 900 penalty units, or both.

...

(4) Absolute liability applies to paragraphs (1)(c), (2)(d) and (3)(d).

Note 1: Section 400.10 provides for a defence of mistake of fact in relation to these paragraphs.

Note 2: Section 400.2A affects the application of this section so far as it relates to a person dealing with money or other property that:

(a) is intended by the person to become an instrument of crime; or

(b) is at risk of becoming an instrument of crime."

1. The phrase "proceeds of crime" is defined in s 400.1 of the Code as follows:

"proceeds of crime means any money or other property that is wholly or partly derived or realised, directly or indirectly, by any person from the commission of an offence against a law of the Commonwealth, a State, a Territory or a foreign country that may be dealt with as an indictable offence (even if it may, in some circumstances, be dealt with as a summary offence)."

1. The definition of "instrument of crime" contained in the same section is similar:

"instrument of crime: money or other property is an instrument of crime if it is used in the commission of, or used to facilitate the commission of, an offence against a law of the Commonwealth, a State, a Territory or a foreign country that may be dealt with as an indictable offence (even if it may, in some circumstances, be dealt with as a summary offence)."

1. Section 400.13 of the Code played an important role in Chen v Director of Public Prosecutions (Cth), and in the judgment of her Honour:

"400.13 Proof of other offences is not required

(1) To avoid doubt, it is not necessary, in order to prove for the purposes of this Division that money or property is proceeds of crime, to establish:

(a) a particular offence was committed in relation to the money or property; or

(b) a particular person committed an offence in relation to the money or property.

(2) To avoid doubt, it is not necessary, in order to prove for the purposes of this Division an intention or risk that money or property will be an instrument of crime, to establish that:

(a) an intention or risk that a particular offence will be committed in relation to the money or property; or

(b) an intention or risk that a particular person will commit an offence in relation to the money or property."

1. It is necessary to refer to a portion of Chapter 2 of the Code in order to determine the appeal. Part 2.6 of the Code specifies the default standard of proof and the party that bears the burden of it. The relevant portions are as follows:

"13.1 Legal burden of proof-prosecution

(1) The prosecution bears a legal burden of proving every element of an offence relevant to the guilt of the person charged.

Note: See section 3.2 on what elements are relevant to a person's guilt.

(2) The prosecution also bears a legal burden of disproving any matter in relation to which the defendant has discharged an evidential burden of proof imposed on the defendant.

(3) In this Code:

legal burden, in relation to a matter, means the burden of proving the existence of the matter.

13.2 Standard of proof-prosecution

(1) A legal burden of proof on the prosecution must be discharged beyond reasonable doubt.

(2) Subsection (1) does not apply if the law creating the offence specifies a different standard of proof."

The submissions of the parties in the Local Court

1. The submission of the defendant was a simple one. He submitted that the proceedings had been summary proceedings; that they had been withdrawn; and that the proceedings were initiated without reasonable cause. The latter submission was based upon the proposition that the principles enunciated in Chen v Director of Public Prosecutions (Cth) demonstrated that, on the evidence available to the prosecutor, the proceedings were always doomed to failure. That was because there was no evidence of an essential element of the offence. Therefore, he submitted, costs should be granted.

1. The prosecutor did not accept that Chen v Director of Public Prosecutions (Cth) meant that the proceedings were doomed to failure from the start. He submitted that analysis of that case demonstrates that it has no application to the offence under consideration.

1. He also submitted that each of the requirements contained in ss 214(1)(a) to 214(1)(d) of the Criminal Procedure Act was not met in this case. With regard to ss 214(1)(a) and 214(1)(c), it was submitted that there were no inadequacies nor improprieties in the conduct of the investigation which could found a costs order under those subsections. Regarding s 214(1)(b), the prosecutor relied on the statement of the defendant to the police to the effect that the moneys were the proceeds of a loan from an unnamed associate as a reasonable basis upon which to initiate the proceedings. Finally, in addressing s 214(1)(d), the prosecutor relied upon the failure of the defendant to assist the police as a circumstance which would disentitle the defendant from being awarded costs. Reliance was placed upon Latoudis v Casey [1990] HCA 59; (1990) 170 CLR 534.

The judgment of her Honour

1. The judgment under consideration is quite lengthy and it is not convenient to set it out in its entirety. I shall refer to the salient features of it when recounting the submissions of the prosecutor and in my determination.

1. In very broad summary, her Honour provided a conspectus of the competing submissions of the parties; made some remarks about the mental elements attaching to the physical elements of the offence in question; and rejected the proposition that the decision of Latoudis v Casey was of assistance. Her Honour ultimately found that the decision in Chen v Director of Public Prosecutions (Cth) was determinative as to what it was that the prosecutor needed to prove in support of the charge commencing the proceedings. Her Honour found that there was no evidence in support of an essential element, and never had been. In particular, her Honour accepted the submission of the defendant as to the degree to which it was incumbent upon the prosecutor to point with particularity to the criminality said to underpin the phrase of "proceeds of crime". Accordingly, her Honour determined that it had been unreasonable for the prosecutor to commence the proceedings, and therefore granted costs to the defendant.

Overview of submissions of the prosecutor in this Court

1. The prosecutor pointed to three broad asserted errors in the judgment.

1. The first submission was that her Honour had misconstrued the mental element that attached to the physical element of the offence contained in s 400.9(1A)(b). It was submitted that the Magistrate had found that the mental element of intention attaches to that physical element. To the contrary, it was submitted, absolute liability applies to that paragraph pursuant to s 400.9(4). Accordingly, it was submitted, far from intention being a matter that it was necessary for the prosecution to prove, in truth no mental element needed to be proven with regard to that element.

1. The second submission was that her Honour had fallen into error in determining that the reasoning in Chen v Director of Public Prosecutions (Cth), which is to do with the elements of the offence in s 400.5 and analogous offences, applies to the offence under consideration. That submission had a number of aspects, to which I shall turn in a moment.

1. The third submission was that her Honour had misapplied the test with regard to whether or not it was reasonable to commence proceedings. Reliance was placed upon Kanan v Australian Postal and Telecommunications Union [1992] FCA 539; (1992) 43 IR 257 and Nimmo, Re Application for an Inquiry relating to an Election for an Office in the Australian Education Union (NT Branch) (No 2) [2011] FCA 728. It was also submitted that her Honour had misinterpreted Latoudis v Casey.

1. It is convenient for me to deal in detail with the second submission first.

Submissions about Chen v Director of Public Prosecutions (Cth)

1. The prosecutor accepted that Chen v Director of Public Prosecutions (Cth) is an important decision for determining, in almost all of the offences contained in "Division 400 - Money Laundering" of the Code, the meaning of the phrases "proceeds of crime" and "instruments of crime". It was accepted before me that, in accordance with what was said by Basten JA at [27] - [33] and Garling J at [94] - [100] respectively, in order to prove that an item is proceeds of crime or (will become) an instrument of crime for the purposes of those offences, the prosecution must point to a particular indictable offence. By that I mean, the prosecutor did not concede that the prosecution must point to a particular criminal act, such as (for example) armed robbery committed by particular offenders on a particular bank at a particular time. But it was conceded that the prosecution must point to a particular offence such as armed robbery, as opposed to murder, or dealing in drugs, in proving those offences.

1. However, it was submitted that what was said in Chen v Director of Public Prosecutions (Cth) has no application to the offences under consideration, namely those contained in s 400.9 of the Act. That submission had three bases.

1. First, it was submitted that the decision in Chen v Director of Public Prosecutions (Cth) was really a consideration of how the definitions of "proceeds of crime" and "instrument of crime" in s 400.1 operate in combination with the provision in s 400.13. However, it was submitted that the opening words of s 400.13(1) talk of proof "for the purposes of this Division that money or property is proceeds of crime". The opening words of s 400.13(2) are relevantly identical. But the submission was that there is no requirement in the offence under consideration to prove that money or property is in fact proceeds of crime. As can be seen from paragraph s 400.9(2)(b), what needs to be established is that "it is reasonable to suspect that the money or property is proceeds of crime". Accordingly, it was submitted, s 400.13 has no application to the offences contained in s 400.9. Therefore, to the extent that Chen v Director of Public Prosecutions (Cth) is very much founded on an analysis of how s 400.13 operates with the rest of the Division, that decision has no application to this matter.

1. I queried whether, if s 400.13 has no application to the offences in s 400.9, that position has the potential to make things even more difficult for the prosecution with regard to particularity than they would be in accordance with Chen v Director of Public Prosecutions (Cth). I made that query of counsel for the prosecutor on the basis that it could be said that s 400.13 is a provision that is designed to assist the prosecution by reducing the degree of particularity that may otherwise be required. The response of the prosecutor was that one need not consider the effect of the operation or otherwise of s 400.13; the provision is simply inapplicable.

1. The second submission was related to the first. It was submitted that s 400.13 speaks of a necessity "to prove for the purposes of this Division". My attention was drawn to ss 13.1 and 13.2 of the Code, which I have already quoted. It was submitted that s 400.13 must be referring to proof by the prosecution of an element beyond reasonable doubt. However, with regard to s 400.9(1A), it was submitted that it is not the case that the prosecution is required to prove beyond reasonable doubt that "it is reasonable to suspect" the state of the affairs contained in that subsection. The prosecutor submitted that to speak of proof beyond reasonable doubt that it is reasonable to suspect that a state of affairs exists is a semantic absurdity. It was submitted that there is authority for the proposition that, in such a case, the prosecution is not so required: see R v Buckett (1994) 132 ALR 669 and R v Zotti [2002] SASC 164; (2002) 82 SASR 554. It was submitted that that is another basis upon which it can be demonstrated that s 400.13 does not apply to the offences contained in s 400.9. Again, it was submitted, the decision in Chen v Director of Public Prosecutions (Cth) is therefore not determinative.

1. The third submission was as follows. It is noteworthy that, in stark contrast to the other offence creating provisions contained in the Division, s 400.9 contains "deeming provisions" in s 400.9(2). It can be seen, it was submitted, that the element contained in s 400.9(1A)(b) is "taken to be satisfied" if one of a number of matters is established. The prosecutor submitted that many of those matters are inconsistent with proof of an offence with the particularity spoken of in Chen v Director of Public Prosecutions (Cth). My attention was particularly invited to ss 400.9(2)(b), (c) and (e).

1. The submission, in short, was that the offence creating provision contains deeming provisions that flatly contradict the degree of particularity called for in Chen v Director of Public Prosecutions (Cth) with regard to the phrase "proceeds of crime". Therefore it cannot be the case that the judgments in Chen v Director of Public Prosecutions (Cth), which are to do with the construction of s 400.5 and similar sections, can be binding with regard to the construction of s 400.9.

Consideration of the submission about Chen v Director of Public Prosecutions (Cth)

1. There were two issues in Chen v Director of Public Prosecutions (Cth). The primary issue was whether the dealing that founds the physical element contained in s 400.5(1)(a) can also be the source of the criminality that founds the mental element in 400.5(1)(b)(ii). Basten JA and Garling J held that it could not. Simpson J dissented and held that it could. That issue is not relevant to the determination of this appeal.

1. The secondary issue was as follows. In the trial that founded that appeal, the Crown had placed before the jury a nebulous theory about an alternative criminality that could found the mental element in 400.5(1)(b)(ii). Neither a particular criminal act (such as an armed robbery at a particular place and time) nor a particular offence (such as armed robbery as opposed to drug dealing) was properly identified. Basten JA and Garling J held that such evidence was insufficient, and was not made sufficient by the operation of s 400.13. Their Honours were of the view that that section only assists the Crown by dispensing with any requirement as to proof of a particular criminal act, but not as to proof of a particular offence, in the senses used by me above. Simpson J did not address the issue, in light of the minority position of her Honour with regard to the primary issue.

1. It follows that I would accept the concession of the prosecutor before me that Chen v Director of Public Prosecutions (Cth) is authority for the proposition that, with regard to the offences contained in ss 400.3 to 400.8, a particular offence must be identified, but not a particular criminal act. In the application for costs, it is clear from the judgment that her Honour was persuaded that that proposition in Chen v Director of Public Prosecutions (Cth) is binding with regard to the offence in s 400.9(1A). It was conceded before her Honour that the prosecutor could never point to an offence with such particularity. That was the simple basis, as I interpret the judgment of her Honour, upon which her Honour ordered costs. Her Honour found that it was not reasonable to commence the prosecution when there was no evidence available at any stage of an essential element of the offence.

1. The question of the effect, direct or indirect, that the majority position in Chen v Director of Public Prosecutions (Cth) has upon the interpretation of the offence under consideration is not an easy one to resolve. On the one hand, the fact is that the identical phrase "proceeds of crime" is used in the offence under consideration. That same phrase is used in s 400.5, and all of the other offence creating provisions. The definition contained in s 400.1 of that phrase, and of the phrase "instrument of crime", undoubtedly applies across the whole Division, pursuant to the opening words of that subsection. It would perhaps be a strange result if that identical phrase has a different meaning within the offence creating provision under consideration from that within all of the other offence creating provisions in the Division.

1. On the other hand, I respectfully consider that the submissions of the prosecutor before me have a deal of force. In particular, there seems to be a profound contradiction between the particularity required by the majority judgments in Chen v Director of Public Prosecutions (Cth), and the lack of particularity envisaged by s 400.9(2). As was pointed out before me, those deeming provisions would seem to permit the offence in s 400.9(1A) to be made out without the identification of any particular criminal act, or indeed particular offence. Considering ss 400.9(2)(b),(c) and (e) in isolation, it seems that they could perhaps be satisfied even in the case of proceeds of crime that are not founded on the concept of "an indictable offence" contained in the definition in s 400.1.

1. The true meaning of the phrase "proceeds of crime" in s 400.9(1A)(b) is not easy to discern. Nor is the effect of the majority judgments in Chen v Director of Public Prosecutions (Cth) on that question. However, I do not consider that, in order to determine this appeal, I must determine that question. That is because of my view about the question of the approach of her Honour to the question of whether costs should be granted. I turn to consider that aspect.

Reasonable to commence proceedings?

1. The defendant submitted in the Local Court that "the proceedings were initiated without reasonable cause". As I have said, his submission was that, because there was no evidence of an essential element of the offence (on the assumption that Chen v Director of Public Prosecutions (Cth) applied to the offence under consideration), it was not reasonable to commence the prosecution.

1. However, as my discussion above with regard to the very question of the applicability of the reasoning in Chen v Director of Public Prosecutions (Cth) to the offence in s 400.9 demonstrates, it is a matter for serious legal debate precisely what the phrase "proceeds of crime" in the offence under consideration encompasses.

1. As was said by Wilcox J in Kanan v Australian Postal and Telecommunications Union [1992] FCA 539; (1992) 43 IR 257 at 264:

"It seems to me that one way of testing whether a proceeding is instituted "without reasonable cause" is to ask whether, upon the facts apparent to the applicant at the time of instituting the proceeding, there was no substantial prospect of success. If success depends upon the resolution in the applicant's favour of one or more arguable points of law, it is inappropriate to stigmatise the proceeding as being "without reasonable cause". But where it appears that, on the applicant's own version of the facts, it is clear that the proceeding must fail, it may properly be said that the proceeding lacks a reasonable cause."

1. Furthermore, in Nimmo, Re Application for an Inquiry relating to an Election for an Office in the Australian Education Union (NT Branch) (No 2) [2011] FCA 728, it was said at [30]:

"Finally, the test to be applied in relation to the expression "without reasonable cause" is similar to that adopted in an application for summary judgment, viz "so obviously untenable that it cannot possibly succeed", "manifestly groundless" or "discloses a case which the Court is satisfied cannot succeed": see Heidt at 272-273; Geneff v Peterson (1986) 19 IR 40 at 87-88; Hatchett at 327 and Crozier at [12]. I might add that these statements express the test for a summary judgment before the introduction of s 31A of the Federal Court of Australia Act 1976 (Cth). However, I consider they are apt under s 329 of the Act because s 31A of the Federal Court of Australia Act 1976 (Cth) uses the expression "no reasonable prospects of success", rather than "no reasonable cause" and, more importantly, s 31A also contains an express statutory exclusion (not present in s 329) of the need to show the proceedings are hopeless or bound to fail: see s 31A(3)."

1. It seems to me that this case falls squarely within the test enunciated by Wilcox J. The question of precisely what is the subject matter of the state of affairs that the prosecution must show it is reasonable to suspect existed is, to my mind, a very "arguable point of law". As I have sought to show, the determination of that question will require a consideration of the interaction of a number of provisions of the Code, both within Division 400 and Chapter 2.

1. The fact that the true meaning of the offence contained in the section under consideration is a matter I find to be arguable demonstrates that the proceedings commenced by the prosecution in this case were not "without reasonable cause". The fact that, at some stage, a court will need to grapple directly and authoritatively with the question demonstrates that proposition.

1. It follows that the Magistrate was in error in finding that the proceedings had been instituted without reasonable cause. Accordingly the order for costs should be quashed.

Other submissions of the prosecutor

1. Because I have upheld the second submission, it is unnecessary to deal with the first, which is founded on the proposition that there was a misapprehension about whether a mental element attaches to the physical element of the offence contained in s 400.9(1A)(b).

1. Nor is it necessary to deal with the submissions founded on the proposition that her Honour misapplied what was said by Toohey J in Latoudis v Casey.

Orders Sought

1. The prosecutor did not seek to have the matter remitted to the Local Court for further consideration. He simply sought to have the order for costs quashed.

1. Nor did the prosecutor seek costs of the appeal against the defendant. It follows that the order that I should make is that the order for costs made by the Magistrate be quashed.

1. However, it is remarkable that, as can be seen from the legislation extracted by me, there is no explicit power so to order in the Crimes (Appeal and Review) Act. It seems strange that Parliament has provided the prosecutor in these circumstances with an explicit right of appeal without providing an explicit form of relief. It is especially strange in light of the fact that Parliament has, pursuant to s 59(2), provided for explicit relief with regard to costs orders made in committal proceedings, but not those made in summary proceedings. I understand that this seeming lacuna is currently being considered by Parliament.

1. In any event, I am content to follow the lead of Garling J in Director of Public Prosecutions (NSW) v Elskaf [2012] NSWSC 21 at [78] - [79] and make an order quashing the order for costs in the Local Court on the same basis as his Honour.

Orders

(1)   Appeal upheld.

(2)   The order for costs made by the Magistrate in the Local Court against the plaintiff and in favour of the defendant is quashed.

**********

Decision last updated: 10 December 2012