Director of Public Prosecutions v Wilson - [2009] SASC 320

SUPREME COURT OF SOUTH AUSTRALIA
(Magistrates Appeals: Civil)
DIRECTOR OF PUBLIC PROSECUTIONS v WILSON
[2009] SASC 320
Judgment of The Honourable Justice David
15 October 2009
MAGISTRATES - APPEALS AND REVIEW - SOUTH AUSTRALIA - APPEAL TO SUPREME COURT - COSTS
PROCEDURE - COSTS - DEPARTING FROM THE GENERAL RULE - OTHER CASES - DISCONTINUANCE OR ABANDONMENT
Application by the Director of Public Prosecutions seeking permission to appeal against an order of a magistrate for costs to the respondent following the discontinuance of proceedings by the appellant - whether magistrate erred in making an order for costs following the discontinuance of proceedings by the appellant where the merits of the proceedings had not been argued and the court had not made any finding on the merits of the proceedings - whether the magistrate failed to exercise her discretion in considering whether an order for costs should be made against the appellant - whether the magistrate failed to apply considerations raised in relevant authorities.
Held: the magistrate has erred in that she has not properly considered the argument as to costs - permission to appeal granted - appeal allowed - matter remitted to the same magistrate.
Supreme Court Civil Rules 2006 r 281(b); Criminal Assets Confiscation Act 2005 (SA) s 95, s 227, referred to.
Director of Public Prosecutions v George (2008) 102 SASR 246, discussed.
Residential Property Conveyancers v Vincent Bagnato & Ors [2009] SASC 71, considered.

DIRECTOR OF PUBLIC PROSECUTIONS v WILSON
[2009] SASC 320
Magistrates Appeal

DAVID J This is an application by the Director of Public Prosecutions (“the appellant”) seeking permission to appeal against an order of a magistrate for costs to the respondent following the discontinuance of proceedings by the appellant. Permission to appeal is required by r 281(b) of the Supreme Court Civil Rules 2006:
281—Appeals requiring permission
Subject to any statutory provision to the contrary, an appeal to the Court lies by permission of the Court if—
…
(b) the appeal is limited to a question about costs.
Background
Proceedings were commenced against the respondent in the Magistrates Court of South Australia on 23 August 2006 under the Criminal Assets Confiscation Act 2005 (SA) ("the Act"). The application was for a restraining order over property owned by the respondent and another.
A restraining order was made on 15 September 2006. There was no attendance by the respondent or the other person and the matter was adjourned to await the outcome of criminal proceedings against the respondent and that person. The respondent was convicted of criminal charges on 5 March 2007. The charges against the other person were dismissed and he played no further part in the proceedings.
On 5 April 2007 the appellant filed an application for a pecuniary penalty order against the respondent, pursuant to s 95 of the Act. The matter was then adjourned.
By application filed on 22 August 2007, the respondent sought to exclude property covered by the restraining order from automatic forfeiture, pursuant to s 76 of the Act. The appellant consented to that application, and the property was excluded from automatic forfeiture.
The matter was then adjourned over a period of time, to await the decision of the Full Court of the Supreme Court of South Australia in the matter of Director of Public Prosecutions v George. [1] This was an appeal by the Director of Public Prosecutions against the decision of a magistrate and included a decision about the validity of the Act. The Full Court delivered its decision on 26 November 2008.
[1] Director of Public Prosecutions v George (2008) 102 SASR 246.
Following the handing down of that decision, this matter next came before the Magistrates Court on 20 March 2009, and the DPP advised the court that the proceedings under s 95 would be discontinued. At the time, the respondent’s solicitor sought an order for costs, and counsel for the appellant withdrew the discontinuance so that he could consider the matter. However, by written submissions dated 21 May 2009, the appellant finally discontinued the proceedings. The matter was then listed for argument on 10 June 2009, and finally argued on 18 June 2009, and that argument concerned the respondent’s application for costs.
It is to be noted that the decision in Director of Public Prosecutions v George[2] upheld the validity of the Act, but also held that upon an application by the DPP, a court has a discretion whether to make a pecuniary penalty order, and despite the wording of the section, it is not mandatory to make such an order. I am told that it was because of that, along with the validity of the Act being upheld, that the appellant discontinued.
[2] Director of Public Prosecutions v George (2008) 102 SASR 246.
When the matter of costs was argued before the magistrate, the appellant argued that no order for costs could be made, because that question was governed by s 227 of the Act, and there was no provision in that section for costs in relation to pecuniary penalty orders under s 95 of the Act.
It was also argued that, even if costs were available, because the proceedings had been discontinued before any argument on the merits had taken place and without any findings on the merits having been made, there should, as a matter of the magistrate’s discretion, have been no order as to costs. The appellant relied upon the decision of Residential Property Conveyancers v Vincent Bagnato & Ors.[3]
[3] Residential Property Conveyancers v Vincent Bagnato & Ors [2009] SASC 71 (Unreported, Layton J, 13 March 2009).
After hearing argument the magistrate gave short ex tempore reasons, and made an order that the appellant pay the respondent’s costs at the rate of 80 per cent of the Supreme Court Scale, to be agreed or taxed.
It is against that order that the appellant now appeals.
The appeal
The appellant now abandons the argument to the magistrate that a costs order could not be made under s 227 of the Act because of the construction of that section. The grounds of appeal now focus on the magistrate’s failure to exercise her discretion in considering whether an order for costs should be made against the appellant because these proceedings were discontinued, as distinct from a decision on the merits being made.
The grounds of appeal
The grounds of appeal are:
1.The Learned Magistrate erred in making an order for costs following the discontinuance of proceedings by the appellant, where the merits of the proceedings had not been argued, and the court had not made any finding on the merits of the proceedings.
2.The Learned Magistrate failed to exercise her discretion in considering whether an order for costs should be made against the appellant. The Learned Magistrate instead proceeded on the basis that because an order for costs could be made, then an order for costs must be made.
3.The Learned Magistrate failed to apply the considerations raised in Residential Property Conveyancers v Vincent Bagnato & Ors [2009] SASC 71, and erroneously treated the relevance of that case as going to the interpretation of section 227 of the Criminal Assets Confiscation Act 2005.
In short, the appellant argues that the decision of Layton J in Residential Property Conveyancers v Vincent Bagnato & Ors[4] supports the proposition that in civil proceedings (as these are) where there has been a settlement as distinct from a determination of fact, in normal circumstances there should be no order as to costs.
[4] Residential Property Conveyancers v Vincent Bagnato & Ors [2009] SASC 71 (Unreported, Layton J, 13 March 2009).
The respondent argues that there are differences between the settlement of a civil case and the discontinuance of an application pursuant to s 95 of the Act, as in the case at bar.
I am of the view that it is inappropriate for me to decide this matter. The magistrate has erred in that she has not dealt with the argument at all. It is clear that arguments both as to the power to order costs pursuant to s 227, and as to whether it is appropriate to order costs when there is a discontinuance, were put. However, in the magistrate’s reasons there is no reference to the alternative argument at all. It does not appear to have been considered and, indeed, does not appear to have been decided upon. I set out the magistrate’s short reasons in full.
I have reached the conclusion that the costs of these proceedings should be allowed in favour of the defendant. I am not persuaded that s 227 precludes such an order.
I have taken into consideration the submissions of counsel for the defendant and the associates that have been referred to in those submissions and, in particular, the New South Wales Court of Appeal decision of Diez v DPP. That decision considered an equivalent section to section 101 section to section 101 under the Proceeds of Crime Act and the court found that that section was not an exhaustive code and it did allow for civil litigation applied with respect to the issue of costs. Note that decision has been followed by other superior courts, including Victoria and Queensland in the matters of DPP v Le (No 2), and Commonwealth Director of Public Prosecutions v Garcia and Ors respectively.
In all the circumstances, I am not persuaded with the submissions of counsel for the plaintiff that s 227 precludes the defendant from a costs order and that the case of Residential Property Conveyancers v Vincent Bagnato & Ors is authority for that proposition.
The second issue for determination is whether the plaintiff should be ordered to pay the defendant's costs on an indemnity basis as sought by counsel for the defendant or on some other basis.
It is generally accepted that it is only in special or unusual cases that the court would consider costs on an indemnity basis. I do not consider that this matter has some special or unusual feature to justify the court in allowing costs on an indemnity basis. There can be no suggestion that the plaintiff's application is unmeritorious or that there was inappropriate conduct on behalf of the plaintiff.
Taking into account all that has occurred in this matter, I am not persuaded to exercise my discretion to order indemnity costs. However, having regard to the subject matter was before the court, I am satisfied that 80% of the Supreme Court scale is an appropriate measure of the defendant's costs. That is somewhere between what this court would allow [on] a party party basis and what would be allowed as a complex action.
I therefore order that the plaintiff pay the defendant's costs at the rate of 80% of the Supreme Court scale to be agreed or taxed.
As this matter has a complicated history, and as the question of costs involves the exercise of a discretion, I am of the view that the matter should be remitted to the magistrate in order to consider the alternative argument that was originally put to her.
I therefore grant permission to appeal and allow the appeal. I set aside the order for costs and remit the matter to the same magistrate.
Orders
1.Permission to appeal granted.
2.Appeal allowed.
3.Matter remitted to the same magistrate.