Dong v Hughes

[2005] NSWSC 84

CITATION:	DONG v HUGHES [2005] NSWSC 84
HEARING DATE(S):	7 May 2003, 30 May 2003, 25 June 2003, 13 October 2003, 11 December 2003
JUDGMENT DATE :	24 February 2005
JUDGMENT OF:	Levine J
DECISION:	1 Plaintiff granted leave to prosecute the appeal as set out in the Amended Summons seeking leave to appeal and appeal; 2 Plaintiff's Notice of Motion filed on 20 June 2003 is dismissed; 3 The Amended Summons is dismissed; 4 Plaintiff is to pay the defendant's costs of the Amended Summons and of the plaintiff's Notice of Motion.

CATCHWORDS:

Appeal from Local Court - no evidence proffered by Commonwealth DPP - application for costs - Justices Act s 41A

LEGISLATION CITED:

Bail Act 1978
Costs in Criminal Cases Act 1976 (Tas)
Evidence Act 1995
Justices Act 1902

CASES CITED:

Brown v Bessell (unreported, TAS SC, Zeeman J, 4 May 1994)
Coleman & Wholgemuth v Harper (unreported, Full Court TAS SC, 1 June 1993)
Fosse v DPP & Anor [1999] NSWSC 367
Jones v Dunkel (1959) 101 CLR 298
Latoudis v Casey (1990) 170 CLR 534
Michael v Thompson (1894) 20 VLR 548
R v Williamson [1972] 2 NSWLR 281
Ramirez v Sandor's Trustee (unreported, NSWSC, Young J, 23 April 1997)
Spautz v Williams (1983) 2 NSWLR 506

PARTIES:

CHUAN QIANG DONG
(Plaintiff)

v

MARK HUGHES
(Defendant)

FILE NUMBER(S):

SC 11809 OF 2002

COUNSEL:

C Steirn SC / T Hall
(Plaintiff)

M Cinque / M Allnutt
(Defendant)

SOLICITORS:

David Kam & Co
(Plaintiff)

Commonwealth Director of Public Prosecutions
(Defendant)

LOWER COURT JURISDICTION:

[2005] NSWSC 84

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

JUSTICE DAVID LEVINE

THURSDAY 24 FEBRUARY 2005

11809 OF 2002

CHUAN QIANG DONG
(Plaintiff)

v

MARK HUGHES
(Defendant)
JUDGMENT (Appeal from Local Court – no evidence proffered by Commonwealth DPP – application for costs – Justices Act s 41A)

1 By an Amended Summons, the plaintiff seeks the following substantive orders:

“3. An order pursuant to section 109(a) of the Justices Act 1902 quashing the orders of Magistrate Dillon dismissing the Plaintiff’s application for orders for costs pursuant to Section 41A of the Justices Act 1902 .

4. A declaration that the Magistrate erred in law in determining that the Plaintiff did not discharge his onus of proof in accordance with Section 41A of the Justices Act as was reasonably required by the Plaintiff.

5. A declaration that the Plaintiff was entitled to costs on the Plaintiff’s costs application before the Local Court, subject of these appeal proceedings.

6. An order that the matter be remitted to the Local Court to be dealt with according to law.

7. Costs.”

2 Pursuant to SCR Part 51B r 8, the grounds are stated as follows:

“1. This is an appeal against orders of Magistrate Dillion in the Local Court at Sydney on 4 June 2002 in which the learned Magistrate made orders dismissing the Plaintiff’s application for orders for costs pursuant to Section 41A of the Justices Act 1902 .

2. In August 2001, following a lengthy investigation by the National Crime Authority (“NCA”), the Plaintiff was charged under s 29D and Section 86 of the Crimes Act 1914 (Cth) with an offence of having conspired between 1995 and 2000 with others to defraud the Commonwealth by avoiding taxation personally in respect of a company of which he was a director and also in respect of another company in which he and a fellow director had allegedly also conspired to defraud the Commonwealth. The Defendant was the informant and the arresting police officer.

3. On 20 March 2002, the proceedings against the Plaintiff concluded with the Commonwealth Director of Public Prosecutions (“CDPP”) offering no evidence.

4. In dismissing the information before the Court, the matter was then subject to a costs application heard before the Local Court on 17 May 2002.

5. The decision of the learned Magistrate in respect of the costs application, wherein he dismissed the Plaintiff’s application for costs, is the decision subject of appeal in these proceedings.

6. At the hearing of the costs application, the Defendant adduced no evidence other than the prosecuting authorities statement of facts prepared by the Defendant for the purposes of bail proceedings at the time that the Plaintiff was charged.

7. The Plaintiff, in respect of the costs application adduced evidence inter alia to the effect that:

i. he had at all times co-operated with the prosecuting authorities,
ii. he had prior to the laying of charges against him, assisted the prosecuting authorities in a record of interview and in providing a comprehensive statement under caution,


iii. the record of interview gave an exculpatory version of events that the prosecuting authorities were required to investigate and never did,
iv. the Defendant prosecuting authority had repeatedly breached its own undertakings to the court below in respect of its provision of particulars,


v. the Defendant prosecuting authority had sought to withdraw its case in the days preceding the expiry of an order requiring the provision of those particulars.


On the hearing of this Summons, it will be contended that the learned Magistrate erred in law in respect of grounds including those as to the following: -

1. That the learned Magistrate was entitled to find and should have found as a matter of law, that the evidence relied upon by the Plaintiff upon the hearing of the Plaintiff’s costs application, was sufficient to discharge and had in fact discharged the Plaintiff’s onus in respect of the Plaintiff’s application for costs arising under Section 41A of the Justices Act 1902.

2. That the learned Magistrate was entitled to find and should have found as a matter of law that in the circumstances of this particular case, that where the Defendant offered no evidence other than the prosecuting authorities statement of facts prepared for the purposes of the prior bail proceedings at the time that the Plaintiff was charged, that the Plaintiff was entitled to the benefit of the inference that nothing that the Defendant could have said in respect of the Plaintiff’s costs application proceedings would have helped them.

3. That the learned Magistrate should have found as a matter of law that the tendering of the “Statement of Facts” by the prosecuting authority served as nothing other than evidence of the fact that on the date of its preparation the prosecuting authorities prepared such a document.

This appeal is from the whole of the decision of the Court below.”

3 The disposition of the essential matter, both before the Magistrate and before myself, has been somewhat protracted.

4 After the conclusion of the hearing before me, I was requested to “stay” the delivery of a judgment pending a formal application by the plaintiff by Notice of Motion with accompanying affidavits, seeking leave to reopen on the basis of fresh evidence. Naturally, I was only too pleased to accommodate the parties in this regard. Unfortunately, it took from May until October 2003 for the parties to bring the matter back before me to hear the argument as to the admissibility of “fresh” evidence. One factor that intruded upon the listing of the matter again was the desirability of the counsel, who appeared before me when the plaintiff’s Summons was heard, to be available to appear when the matter of the Notice of Motion to reopen was heard. To the best of my recollection, the last mentioned date was fixed to accommodate counsel. However, whether or not that is in fact the case, counsel who appeared before me on the Summons did not appear before me on the Motion to reopen. I mention this merely to explain what, on its face, would appear to be one reason for the rather protracted disposition of an appeal from a Magistrate.

5 The evidence read in support of the plaintiff’s Summons was constituted by affidavits sworn 1 July 2002, 22 October 2002 and 4 February 2002 by David Kam, the plaintiff’s solicitor.

6 To the first affidavit is annexed the text of the decision of the Local Court by his Honour Local Court Magistrate Dillon of 4 June 2002 from which the appeal is brought.

7 The affidavit of 22 October 2002 annexes transcript from various stages of the proceedings in the Local Court, including the transcript of 11 August 2001 which was marked as exhibit A. The annexure of the transcript in its completeness was necessary to determine whether any concession had been made in relation to what became exhibit 4 before the Magistrate, a “Statement of Facts”.

8 To the last of Mr Kam’s affidavit is annexed a chronology of the progress of the matter in the Local Court, which was handed up to the Magistrate. Annexure B is a copy of the plaintiff’s “exculpatory” statement, dated 4 July 2001; in exhibit C is a request for particulars dated 22 October 2001 from counsel from the plaintiff, as I read it, to counsel for the DPP. In this affidavit, Mr Kam deposes to certain exhibits that have been placed before the Magistrate. Exhibit 1 was made up of volumes 1 to 23 of the Crown brief; exhibit 2 was an affidavit from Mr Kam enclosing the chronology to which I have referred; exhibit 3 were volumes 4 and 7 of the Crown brief tendered for the plaintiff; exhibit 4 was the Statement of Facts to which I have referred; exhibit 5 was the letter of particulars; and exhibit 6 was a letter from the Commonwealth DPP, tendered by the DPP before the Magistrate.

9 For the defendant before me in these proceedings, there was read an affidavit of Penelope Mary Musgrave sworn 28 January 2003. To that affidavit is annexed what was exhibit 4 before the Local Court, namely a Statement of Facts, which, and I gather it is not in dispute, was prepared for the purposes of a bail application. Also annexed is a letter dated 26 October 2001 from the DPP to the then counsel for the plaintiff purporting to respond to the earlier letter in connection with the particulars. This letter contains an undertaking to “articulate and particularise the conspiracy” prior to the committal hearing.

10 Relevant legislation is as follows. Section 41A of the Justices Act 1902:

“ 41A Payment of costs by informant
(1) The Justice or Justices:
(a) when making an order discharging a defendant as to the information then under inquiry, or
(b) when committing a defendant for trial for an indictable offence which is not identical in all respects to the indictable offence with which the defendant was charged,
may, in and by an order made by the Justice or Justices (which, in the circumstances referred to in paragraph (a), may be the same order as the order discharging the defendant) adjudge that the informant shall pay to the clerk of the court to be paid to the defendant (or, if the informant so elects, directly to the defendant) such costs as to the Justice or Justices seem just and reasonable.
(2) The amount so allowed for costs shall in all cases be specified in the order requiring payment.
(2A) Costs are not to be awarded in favour of a defendant unless the Justice or Justices is or are satisfied as to any 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 prosecution in an improper manner,
(c) that the prosecution 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 defendant 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 prosecution, it is just and reasonable to award costs.

…”

Section 140 of the Evidence Act 1995 is as follows:

“ 140 Civil proceedings: standard of proof
(1) In a civil proceeding, the court must find the case of a party proved if it is satisfied that the case has been proved on the balance of probabilities.
(2) Without limiting the matters that the court may take into account in deciding whether it is so satisfied, it is to take into account:
(a) the nature of the cause of action or defence, and
(b) the nature of the subject-matter of the proceeding, and
(c) the gravity of the matters alleged.”

11 Section 32(3) of the Bail Act 1978 is as follows:

“ 32 Criteria to be considered in bail applications
…
(3) For the purposes of this section, the authorised officer or court may take into account any evidence or information which the officer or court considers credible or trustworthy in the circumstances and, in that regard, is not bound by the principles or rules of law governing the admission of evidence.”

“Statement of Facts” – exhibit 4

12 At the conclusion of submissions before the Local Court, it seems to me that some confusion, to say the least, attended the precise status in the proceedings below of exhibit 4. Objection was taken to the tender on 17 May 2002, at p 4 of the transcript annexed to Mr Kam’s affidavit of 22 October 2002.

13 At p 7, the following exchange took place between his Honour the Magistrate and Mr Steirn:

“STEIRN: …I’d ask your Worship to read these facts, so your Worship can inform yourself as to my next submission but I’ll make the submissions now, so your Worship better understands why I make it. This statement of facts, which was brought into being at the time of the defendant’s initial arrest, was a statement of what the DPP believe the evidence was going to be. One assumes, and your Worship will need to read it, that the statement of facts will illustrate a prima facie case but we now know that is wrong because the DPP offered no evidence. Therefore, this statement of facts cannot be the proposed evidence the DPP was to lead because this document, although it discloses the prima facie case, the evidence, as it turned out, did not match the facts. My friend is seeking to tender this document as its case but that is not so. That is not its case.

BENCH: I don’t think Mr Staley has said that. He’s attempted to tender it to say why the case was started, not what its case ultimately ended up being.

STEIRN: If it’s put on the basis that’s why the case started –

BENCH: It’s like a policeman arresting somebody on reasonable cause, isn’t it?

STEIRN: Yes, all right.

BENCH: You might find out that, for all sorts of reasons, you can’t proceed.

STEIRN: Your Worship, if it’s tendered on that limited basis, then I have no objection, providing my friend concedes that, on every occasion up and until the matter was set down for hearing, there was a request for particulars of the overt acts, and they’re referred to in my chronology, the Crown continued to agree – and I tender the Court record on this point.”

14 Just before the document was formally marked as exhibit 4, the following exchange took place (TS 17/5/02 at 9):

“STEIRN: …Your Worship is entitled to infer, absent evidence to the contrary, that the Crown case did not support a prima facie case, ab initio. On that basis, I have no objection to the tender of facts but on that limited basis only, your Worship.

BENCH: I think it’s tendered for that limited purpose.

STALEY (sic) : Can we just clarify what the agreement was about the limited purpose –

BENCH: As I understand it, Mr Staley, you were tendering it to show what the Crown case was when Mr Dong was – when proceedings were first taken against him.

STALEY: Yes, and there’s no concession, by the way, in case your Worship might have implied that. My friend says some things are common ground but there’s no concession that, in fact, the Crown case has changed at any relevant time and, no doubt, we’ll come to that in the course of what follows hereafter.”

15 It is a little uncertain, to me in any event, as to what the “concession” was to which Mr Staehli was referring.

16 At p 10, Mr Staehli refers to Mr Steirn as having conceded that the Statement of Facts reveals “a prima facie case”. Then at pp 46-47 of the transcript of the same day, the following exchange takes place between the Bench and Mr Steirn:

“BENCH: …But on my reading of the prosecution version of the facts it’s not clear that the prosecution must fail.

STEIRN: No with respect your Worship, that’s the fundamental point. I knew this would cause a problem. The facts are advanced on a bail application pursuant to section 32(3) of the Bail Act. They are entitled to put before you reasonable material. I don’t have the section in front of me but the Bail Act is a creature of statute and totally different to the Justices Act. What my friend was putting – was tendering on the facts were, that at the time of the bail application that was a case it hoped to prosecute.

BENCH: I understand that.

STEIRN: What in fact happened was when the matter came before you last, the case which the prosecution hoped to prosecute wasn’t available to them. In other words, if they had tendered all the evidence your Worship would have been able to see that there was no reasonable cause for the proceedings in the first place. The Court has to draw a distinction between an application under the Bail Act or facts tendered under the Bail Act and facts tendered under the Justices’ Act because in my submission they had different ramifications and different purposes. As I keep saying –

BENCH: But now this statement of facts is tendered under the Justices Act. It might have been produced in the first place under the Bail Act but it’s now tendered –

STEIRN: I objected to these facts because, and I thought your Worship said so, they came in on a limited purpose.

BENCH: Yes.

STEIRN: To show what the Crown had as at August 2001. What the Crown has now is nil. There is no evidence before you. No evidence. Therefore the Court can infer on the basis of Cancerie that there was no case to prosecute. In Cancerie there was a set of facts which disclosed no case it would appear.

BENCH: Say there are no facts before the Court now, how can I infer anything from that? It’s just a vacuum.

STEIRN: You can infer because there is evidence of innocence.”

17 The statement by Mr Steirn of the “limited purpose” was to show that the Crown had a case as at August 2001. In context, it could be predicated on exhibit 4’s evidence of the facts constituting the Crown case as at August 2001, not least because of the assertion by Mr Steirn that by reason of the Crown offering no evidence, what the Crown case now has is “nil”. Whether that inference is always available from a proffering of no evidence is no doubt open to argument.

18 What is equally clear with respect, in my view, is that his Honour the Magistrate in his reasons treated exhibit 4 as evidence of the facts within it, no matter how much he tried to identify the limited basis on which it was admitted. In paragraph 31 of his reasons, his Honour said:

“ 31. The applicant’s submissions overlook the fact that the statement of facts, which was tendered to show the basis on which Mr Dong was originally charged, outlines a circumstantial case against him. True it is that Mr Steirn complained, before the statement was admitted into evidence, that it was a sort of prosecution “wish list” prepared for a bail hearing and that not only could no particular conclusions be drawn from it, but that it was positively contradicted by the fact that no evidence was ultimately offered against Mr Dong. The document was, however, admitted on the limited basis that it would evidence the grounds upon which the proceedings were initiated. (The alternative, I suppose, would have been to tender the entire police brief, all 23 volumes of which I would have had to read.)”

and in paragraph 32 said:

“32. …The statement of facts seem to me to demonstrate that the prosecution had a reasonable, but not overwhelming, prima facie case against Mr Dong. And indeed, in his initial remarks in his oral submissions, Mr Steirn appeared to me to concede that, although as his thoughts on the subject developed during the course of argument he appeared to withdraw that concession.”

19 Out of this rather confusing array of material, I can only come to this conclusion: that the document, which was marked as exhibit 4, had an existence independent of the basis upon which it was created, namely s 32(3) of the Bail Act 1978. In the written submissions, the plaintiff says that the document was tendered “in breach” of that section. That is incorrect. The document had an existence independent of that section under which it was originally created. It was not inadmissible because it was originally prepared under s 32(3) of the Bail Act.

20 It not having been admitted by consent as evidence of the truth of the facts contained within it, and there being apparently no agreement as to the “limited basis”, nor any discernible “limited basis”, in the end it ended up only as evidence of the words on the pages themselves. His Honour the learned Magistrate, while alive to the difficulties attending the admission of the document, does, as I have said, seem to have proceeded on the basis, and I say this notwithstanding his attempts to limit that basis, that it was in reality evidence of the truth of its contents. In the circumstances in which it was admitted overall, that was in error. That erroneous admission, on the basis I have identified, led his Honour to use the document as evidence of the truth of its contents.

21 This error is established clearly in my view. However, it does not necessarily vitiate his Honour’s ultimate conclusion.

22 The balance of his Honour’s reasons must be viewed absent the approach he took to exhibit 4 before him.

The matter of “further and better particulars”

23 This matter was agitated before his Honour the Magistrate, no doubt in some way to bring the case within one of the subparagraphs of s 41A(2A).

24 As I have referred to above, there appears to have been an undertaking given. Further, the transcript annexed to Mr Kam’s affidavit of 22 October 2002 (of the proceedings in the Local Court, dated 29 January 2002) disclose an order (p 3), as I construe it, that the particulars be supplied by 6 March 2002.

25 The Commonwealth DPP did not supply particulars. At the end of the day, whilst it is a fact that the Commonwealth gave an undertaking, and that an order was made for the provision of particulars, that order and undertaking became otiose upon the Commonwealth DPP proffering no evidence. For myself, I am not persuaded that this “conduct” on the part of the Commonwealth DPP, to be taken to be a “model” litigant in circumstances where there was a brief of multi-volumes (not surprising given the nature of the charges), was acting otherwise than reasonably, or was acting unreasonably, within any of the criteria in s 41A(2A). Whilst it might have been, perhaps from the perspective of the plaintiff as the person charged, a little discommoding given the outcome of which the plaintiff is clearly the beneficiary, this “conduct” is quite insufficient to attract, by itself, any one of the relevant criteria.

Discharge of onus of proof under s 41A

26 It is the plaintiff’s position that having tendered before the Magistrate the exculpatory material, there thereupon shifted to the defendant an evidentiary burden to establish that it had not conducted itself in a way to which the Justices Act referred, and to rebut a presumption, presumably, or an inference, said to flow from the tender of the plaintiff’s exculpatory material, that there must have been “exceptional circumstances”, all the more so given the Crown’s silence as to why it proffered no evidence.

27 It was common ground that the section was enacted after the decision of the High Court in Latoudis v Casey (1990) 170 CLR 534 at 543. The decision pointed the way to persons in the position of the plaintiff being effectively eligible to an award of costs in his favour in cognate circumstances.

28 Section 41A of the Justices Act must be understood as restricting the circumstances in which a defendant can apply successfully for costs, and thus must be viewed in a different way to s 4 of the Costs in Criminal Cases Act 1976 (Tas), which was a facultative provision that was under consideration by the High Court (see below, paragraphs 34-43).

29 That consideration is important bearing in mind the provision of s 140 of the Evidence Act. This is a civil case. The onus of proof is upon the party seeking the order for costs. That which that party has to prove are the matters that would trigger the criteria in the section.

30 The plaintiff advanced his argument, inter alia, on the basis of a decision of Young J (as his Honour then was) in Ramirez v Sandor’s Trustee (unreported, NSWSC, 23 April 1997). In that case, his Honour, after referring to s 140 of the Evidence Act, considered that where the facts are mainly in the camp of the opponent, the position still remained that “a very slight degree of proof should be sufficient to shift that burden”, citing Madden CJ in Michael v Thompson (1894) 20 VLR 548 at 552.

31 I am of the view that the terms of s 41A provide a basis for departing from what Young J said as to there still operating the principle of common law in relation to evidence as referred to by Madden CJ. When one reflects upon it, the plaintiff’s proposition seems to be that in circumstances where the plaintiff has tendered an exculpatory statement, the ball is thrown into the defendant’s court. This would almost render the policy behind the enactment of s 41A of the Justices Act nugatory. I am of the view that there is a positive onus of proof on the plaintiff to lead evidence of substance that is more than “a slight degree of proof”.

32 Young J describes s 140 as “imperious”. That may be one way of viewing it, but adopting that word it makes all the more compelling an outcome, given the history of the section, which requires the plaintiff to do more than produce “a very slight degree of proof”.

33 No comfort in my view can be found in Jones v Dunkel (1959) 101 CLR 298. It will be purely speculative to draw an adverse interest against the Commonwealth DPP merely by reference to the evidence, such as it was, tendered by the plaintiff, namely the exculpatory statements and matters of history. Nor of course can Jones v Dunkel be used to “fill in gaps” (not in the Commonwealth’s case) in the plaintiff’s case.

34 The plaintiff sought to rely upon two decisions from the Supreme Court of Tasmania: Brown v Bessell (unreported, 4 May 1994); and Coleman & Wholgemuth v Harper (unreported, Full Court TAS SC, 1 June 1993). In Brown v Bessell, Zeeman J said (at 4.7):

“The matters which militate in favour of the making of an order are the fact that the complainant offered no evidence and the fact that such reasons as were advanced by the complainant for taking that course suggest that had the prosecution proceeded it would have failed. I do not consider that there are any matters which militate against making the order.”

35 His Honour, sitting in the Full Court in Coleman, said (at 11.5):

“[T]he matters…which were relevant to the exercise of the discretion were the following: 1. that the complaint had been dismissed by reason of the respondent having put no evidence before the Court; 2. that the respondent did not oppose the making of orders under the Act; and 3. that the respondent offered no reason for having chosen to offer no evidence.”

His Honour went on to say (at 11.7):

“As the respondent chose not to inform the court of those reasons, it ought to be inferred that those reasons would not have assisted the respondent in resisting the making of the orders. Whilst the appellants carried the overall burden of persuasion, each party carried the burden of proving matters militating in favour of making the orders on the one hand and militating against the making of the orders on the other hand. The three matters to which I have referred either militated in favour of the making of the orders or indicated an absence of factors militating against the making of the orders.”

36 Contrary to the submission by the plaintiff, the provision under consideration in both Brown v Bessell and Coleman is not “similar” to the provisions of s 41A of the Justices Act. Section 4(1) of the Costs in Criminal Cases Act (Tas) is reproduced in full in Coleman (at p 2) and is as follows:

“ 4. Costs of successful defendant
(1) Subject to this Act, where a person having been charged with an offence is discharged from the proceedings in respect thereof, that is to say, where –
(a) he is acquitted of the offence;
(b) the complaint charging him with the offence is dismissed or withdrawn; or
(c) he is discharged upon an indictment for the offence –
the court having the conduct of the proceedings may, upon the application of the defendant, order that he be paid in respect of his defence such costs as it thinks just and reasonable.
(2) The court, in deciding whether to grant costs and the amount of any costs granted, shall have regard to all relevant circumstances and in particular to the following:
(a) Whether the proceedings were brought and continued in good faith;
(b) Whether proper steps were taken to investigate any matter coming to, or within, the knowledge of any person responsible for bringing or continuing the proceedings;
(c) Whether the investigation into the offence was conducted in a reasonable and proper manner;
(d) Whether the evidence as a whole would support a finding of guilt but the defendant is discharged from the proceedings on a technical point;
(e) Whether the defendant is discharged from the proceedings because he established (either by the evidence of witnesses called by him or by cross examination of witnesses for the prosecution or otherwise) that he was not guilty.
(3) No defendant shall be granted costs by reason only of the fact that he is acquitted of an offence, the complaint charging him with an offence is dismissed or withdrawn, or he is discharged upon an indictment.

(4) No defendant shall be refused costs by reason only of the fact that the proceedings were properly brought and continued.

(5) No defendant shall be refused costs by reason only of the fact that in the investigation of the offence with which he had been charged he remained silent or refused to assist in respect thereof.” (emphases added)

37 Unlike section 41A of the Justices Act 1902, subsection (2A) of which is intended to limit the circumstances in which a defendant can apply successfully for costs, s 4 of the Costs in Criminal Cases Act 1976 is facultative, as was that under consideration by the High Court in Latoudis v Casey (1990) 170 CLR 534 at 543. Subsection (2A) of 41A of the Justices Act 1902 was, of course, enacted to overcome the effect of that decision. The nature of the discretion available to a Magistrate under s 4 is dealt with by Zeeman J at p 9 of Coleman where he adopts as the appropriate construction of the words “shall have regard to” given to them by Somers J in R v CD [1976] 1 NZLR 436 at 437:

“The first question, is what is meant by the words ‘shall have regard to’.

I do not think they are synonymous with ‘shall take into account’. If the appropriate matters had to be taken into account, they must necessarily in my view affect the discretion under s 5(1) and it is clear from s 5(2) that the matters to be regarded are not to limit or affect that discretion. I think the legislative intent is that the court has a complete discretion but that the seven matters, or as many as are appropriate, are to be considered. In any particular case, all or any of the appropriate matters may be rejected or given such weight as the case suggests is suitable.” (emphasis added)

38 I am of the view that the legislative intent behind s 41A(2A) of the Justices Act was to severely restrict the discretion to award costs against the prosecution.

39 The view which Zeeman J indicated in the paragraph cited by the plaintiff must be seen in the light of the facts known to the Court regarding the course of the prosecution and the attitude of the prosecution on the application for costs, that is, not to oppose it. The proceedings had been on foot for over a year, the prosecution had declined when requested to discontinue the proceedings and gave no advance notice of the fact it would offer no evidence on the day listed for the summary hearing of the matter.

40 In any event, it was not a view endorsed by Wright J, who said (at p 5):

“I think the omission of the prosecutor to provide this information cannot sustain an argument for the kind advanced by the appellants viz that in the absence of any evidence from the prosecutor, a Jones v Dunkel inference may be drawn by the court to the effect that proper steps had not been taken to investigate the matter or that the investigation of the offence was not conducted in a reasonable or proper manner, or indeed that the evidence as a whole would not support a finding of guilt. Any such conclusion would be merely speculative in my view.”

41 Wright J found the fact that the prosecution had not opposed the application for costs to be the decisive factor (at pp 5 and 6).

42 There is no statement of principle in the paragraph quoted by the plaintiff from Brown v Bessell. It is also apparent from it and the judgment that it was known to the Court that the prosecution had expressed to the plaintiff, on the very day that the Summons against him was issued, a view that the proceedings would fail.

43 I reject the propositions advanced for the plaintiff, that there was an error in his Honour’s approach to the operation of the section in terms of the discharge of onus of proof. The learned Magistrate made no error in that regard.

44 I add I do not see the passage in R v Williamson [1972] 2 NSWLR 281 at 294-296 (esp at 295D-F) adding anything to the resolution of this matter. What the Court was there concerned with was a jury determining a question of guilt or innocence, neither of which had anything to do with the operation of s 41A. Spautz v Williams (1983) 2 NSWLR 506 was a case concerned with the then s 50 of the Defamation Act 1974, and lends itself easily to being distinguished.

Section 41A Justices Act , generally

45 I gather that it was sought to be argued in the Court below that in circumstances where the plaintiff had given an exculpatory version, where no explanation is offered for the proffering of no evidence, it can be inferred that the investigation into the alleged offence was conducted in an unreasonable or improper manner (s 2A(a)); it can be inferred that proceedings were initiated without reasonable cause or in bad faith, or were conducted by the prosecution in an improper manner (subsection (b)); it can be inferred that the prosecution 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 suggests that either that the plaintiff might not be guilty, or that for any other reason the proceedings should not have been brought (subsection (c)). It seems to me that in the course of submissions, whilst having some regard to the requirement of the plaintiff to prove a case, ultimately the plaintiff relied on subsection (d), where the reference is to there being “exceptional circumstances relating to the conduct of the proceedings by the prosecution”.

46 Here one does not look at the evidence tendered by the plaintiff in the Court below, namely the exculpatory statements, nor to the fact that there was no evidence called by the defendant as to why it was that it proffered no evidence. Here, one is constrained to view the “conduct of the proceedings by the prosecution” as a whole.

47 I agree with the Magistrate’s conclusion as to subsections (a), (b) and (c). In Fosse v DPP & Anor [1999] NSWSC 367, Wood CJ at CL said (at 30):

“30. Similarly in relation to S 81(4)(d) she correctly identified that the defence had to establish something about the conduct of the proceedings being an “exceptional circumstance” other than some matter mentioned in subsections (a)(b) or (c) of S 81(4) , to make it just and reasonable for the plaintiff to have his costs. In that regard the mere fact that the proceedings were resolved in his favour was not enough. There had to be something in relation to the manner in which the proceedings were conducted that had led to it being just and reasonable for a costs order to be made.” (emphasis added)

48 The phrase “exceptional circumstances” means what it says as a matter of ordinary English I would have thought. Subsections (2A)(a), (b) and (c) not having been made out, something of substance is required for (d). Mere proffering of no evidence is not enough. Nor is mere reliance on exculpatory statements of the plaintiff. Neither is remarkable in itself nor in combination. Here there is nothing more that does constitute “exceptional circumstances”.

Conclusion

49 Thus, whilst I am of the view that exhibit 4 before the Local Court was wrongly admitted and wrongly dealt with by the learned Magistrate, that error did not vitiate his ultimate conclusion.

50 To the extent that any leave is required to appeal, I would grant that leave, but the ultimate outcome is that the appeal should be dismissed.

51 I come now, before making final orders, to the Notice of Motion filed by the plaintiff on 20 June 2003 for leave to file fresh evidence. That was ultimately heard on 11 December 2003, on which occasion Mr T Hall for the plaintiff appeared and Mr M Allnutt appeared for the defendant.

52 The Notice of Motion was supported by an affidavit sworn 19 June 2003 by Mr Kam, solicitor for the plaintiff. An earlier affidavit of Mr Kam, sworn 23 May 2003, was also relied upon.

53 Essentially, the new material is made up of a letter dated 30 August 2001 from the Australian Taxation Office to the plaintiff, which enclosed an adjustment sheet notifying the particulars of the taxable income that had been assessed. The next document was a document dated 11 July 2002, in an application to the Administrative Appeals Tribunal by the plaintiff for a review of the decision of the Commissioner to disallow an objection. It is a statement of findings, dated 11 July 2002, consequent upon another document lodged with that Tribunal dated 5 June 2002, being an application for a review of decision. The final document is a Taxation Assessment dated 14 May 2003, which discloses a small refund.

54 I gather that the purpose of the tender was to show the resolution of the matter as between the plaintiff and the Australian Taxation Office. That would amount to some evidence of the plaintiff’s “innocence”.

55 For the defendant, an affidavit of Penelope Mary Musgrave (affirmed 27 August 2003) was read. It usefully sets out the historical aspect of this matter.

56 The relevant section of the Justices Act s 104(3), which provides:

“ 104 When an appeal can be made by a defendant or other person
…
(3) Appeals in relation to committal proceedings
A defendant or an informant may appeal under this Division to the Supreme Court against any order that is made in relation to committal proceedings, on a ground that involves a question of law alone, but only with the leave of the Supreme Court.”

57 There was hardly anything in issue between the plaintiff and the defendant as to the general principles as to fresh evidence.

58 What was asserted by the defendant, which I accept, is that this was not new evidence, save for the Assessment dated 14 May, namely three days before the commencement of the substantive application for costs in the lower Court on 17 May 2003. All of the other documents antedate that. On its face, it seems clear that the material was available to the plaintiff’s solicitors on or shortly after 2 April 2003. I am not satisfied that the material sought to be tendered on reopening can properly be characterised as new or fresh evidence.

59 In any event, even if it were, it is irrelevant. The plaintiff makes no submission on the basis on which this material, arising as between the plaintiff and the Australian Taxation Office, without (and it would seem to me substantial) additional material to place it in context, was relevant to the discretion the Magistrate had to exercise under s 41A. I am not persuaded that this material, even if admissible, was such that “there must be a high degree of probability that there would be a different verdict” – that is, his Honour the learned Magistrate would have made an order awarding costs.

60 I make the following orders:

1. The plaintiff is granted leave to prosecute the appeal as set out in the Amended Summons seeking leave to appeal and appeal.

2. The plaintiff’s Notice of Motion filed on 20 June 2003 is dismissed.

3. The Amended Summons is dismissed.

4. The plaintiff is to pay the defendant’s costs of the Amended Summons and of the plaintiff’s Notice of Motion.

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