DWD Project Pty Ltd v McKenzie
[2022] NTSC 8
•25 January 2022
CITATION:DWD Project Pty Ltd & Anor v McKenzie & Anor [2022] NTSC 8 Decision on Costs
PARTIES:DWD PROJECT PTY LTD (ACN 601276108)
AND
ANTHONY, Michael Adrian
v
MCKENZIE, Chantal
AND
NORTHERN TERRITORY ENVIRONMENT PROTECTION AUTHORITY
TITLE OF COURT: SUPREME COURT OF THE NORTHERN TERRITORY
JURISDICTION: SUPREME COURT exercising Territory jurisdiction
FILE NO:2020-01907-SC
DELIVERED: 25 January 2022
HEARING DATE: 20 November 2020
JUDGMENT OF: Blokland J
CATCHWORDS:
PRACTICE AND PROCEDURE – Costs order – litigation futile – whether costs order should be made – no order for costs made.
PRACTICE AND PROCEDURE - Costs order – fragmentation of litigation – consequences for the parties – review of conduct of litigation – if both parties have acted reasonably – no order for costs made.
Waste Management and Pollution Control Act 1988 (NT)
Local Court (Criminal Procedure) Act 1928 (NT)
ASIC v GetSwift LTD [2020] FCA 504; The Queen v Baker [2021]
Peter Vasel v Michael Anthony and DWD Project Ltd No’s 21916221 and 21916218, Local Court, 13 October 2020
REPRESENTATION:
Counsel:
First Plaintiff: D Robinson SC
Second Plaintiff: D Robinson SC
First Defendant: T Moses
Second Defendant: T Moses
Solicitors:
First Plaintiff: Clayton Utz
Second Plaintiff: Clayton Utz
First Defendant: Hutton McCarthy
Second Defendant: Hutton McCarthy
Judgment category classification: C
Judgment ID Number: BLO2201
Number of pages: 15
IN THE SUPREME COURT
OF THE NORTHERN TERRITORY
OF AUSTRALIA
AT DARWINDWD Project Pty Ltd & Anor v McKenzie & Anor
Decision on Costs [2022] NTSC 8
No. 2020-01907-SC
BETWEEN:
DWD PROJECT PTY LTD (ACN 601276108)
First Plaintiff
AND:
MICHAEL ADRIAN ANTHONY
Second Plaintiff
AND:
CHANTAL MCKENZIE
First Defendant
AND:
NORTHERN TERRITORY ENVIRONMENT PROTECTION AUTHORITY
Second Defendant
CORAM: BLOKLAND J
Decision on Costs
(Delivered 25 January 2022)
Background
This is a ruling on costs following the dismissal of an action on the basis of futility. At its core the action concerned the validity of notices issued by the defendants pursuant to s 74 of the Waste Management and Pollution Control Act 1998 (NT) (“the Act”).
The plaintiffs sought costs for the conduct of the matter up until the proceedings were dismissed. The defendants submitted there should be no award for costs and if no award was made the defendants would not press an application for costs over two discrete parts of the proceedings.
Each of the plaintiffs were charged with an offence under s 83(1) of the Act. At the relevant time, the prosecution was being dealt with in the Local Court. The s 74 notices required the recipients of the notices to provide certain information stated to be reasonably necessary for the administration or enforcement of the Act. The plaintiffs claimed material sought under the s 74 notices, could be subject to legal professional privilege and/or the notices were not valid.
By originating motion the plaintiffs sought declaratory relief to the effect that the notices were not authorised by law and were an abuse of process and/or contempt of Court. Further, the plaintiffs sought a declaration that a claim for legal professional privilege was available in answer to a request for information under s 74 of the Act. Additionally, the plaintiffs applied to have the decision to issue the notices quashed by an order in the nature of certiorari and prohibition.
Following initial directions, the matter was mentioned in this Court on 15 June 2020. The issues ventilated at that time included the question of how to deal appropriately with the materials which might be the subject of a claim for legal privilege. Additionally, the notification on behalf of the plaintiffs that the first defendant would be required for cross examination. The practicalities of how to deal with the material that may be subject to the privilege claim were not resolved.
At that time counsel for the defendants advised the Court that the first defendant, who was required by the plaintiff to be cross examined, would need to give evidence remotely as she was in Western Australia. A Notice of Intention to adduce evidence via video-conferencing was filed on 23 June 2020. At a mention of the matter on 15 June 2020, no final order was made on the question of evidence by audio-visual link as the solicitor appearing for the plaintiffs did not have instructions on that point, although the indication was that it was not contentious in the context of border restrictions which would prevent or interfere with travel.[1] The matter was listed for hearing on 20 July 2020 on the understanding the parties would attempt to resolve practical issues relevant to dealing with the privilege claim.
Prior to 20 of July 2020, the second defendant filed an affidavit annexing the email correspondence between the parties which overall indicated there was no clear agreement expressed by the plaintiffs in relation to the first defendant giving evidence via a video link from Western Australia. At a mention on 13 July 2020, the solicitor appearing for the plaintiffs told the Court the plaintiffs had previously agreed to the first defendant giving evidence by video-link. However that was partially contingent on whether the Western Australian border would still be closed at the time of hearing. The Court was told that while the border remained closed due to Covid-19 restrictions, the plaintiffs would not require the first defendant to fly to Darwin for the purpose of giving evidence. At that time, she would have been required to self-isolate upon her return to Western Australia. The solicitor for the plaintiffs told the Court the reasons for their position were as follows; there were certain factual matters attested to by the first defendant in her affidavit which were not accepted by the plaintiffs. Senior counsel would cross examine the first defendant on those matters. Additionally, there were issues of credibility with her evidence. He argued the Court would be better placed to assess the evidence of the first defendant if she was present in person.
Aside from credit and factual disagreements, there was no particular issue the Court was informed of that may have had a bearing on whether the first defendant should be required to give evidence in person rather than by video link or other remote mechanism.
The correspondence between the parties which was drawn to the Court’s attention showed the first defendant resided in Western Australia and was looking after her three children. At that time, to travel to Darwin, the first defendant would have been required to quarantine in the Northern Territory and isolate or quarantine upon return to Western Australia. She apprehended that in any event she may be stranded in the Northern Territory and be unable to return to her children.
It seemed likely that issues of credibility and contentious factual issues could be dealt with appropriately by taking the first defendant’s evidence through an audio-visual link; WebEx or Teams. At that time many courts in Australia were beginning to take evidence, including contentious evidence by audio-visual or digital means. A number of contentious cases had been heard via alternative modes for remote witnesses.[2]
At the time of the argument, I indicated my general preference was for witnesses to appear in person. However, there were many other considerations, especially when there were barriers to appearance. It was unusual in a case of this kind for a witness, effectively the decision maker for the second defendant, to be subject to cross-examination at all. The proper administration of justice including cost efficiency weighed heavily in favour of the first defendant giving evidence by remote means. It would have been unfair and stressful in the circumstances of this witness to require her to wait until the border situation clarified before a decision was made. This may not have been until immediately before the hearing.
Although there was some disagreement between the parties about the plaintiffs’ initial position on whether the witness giving evidence via video link was contingent on a hard border continuing or not, the plaintiffs’ objection to the witness giving evidence from Western Australia via video link or other means had no merit. An order was made permitting the second defendant to give evidence, primarily cross-examination by audio-visual link. The question of costs was reserved.
The relief sought in relation to the relevance of legal professional privilege was to first seek the Court’s determination about whether legal professional privilege could apply to certain parts of the materials sought in the notices. The plaintiffs were not seeking a determination over any particular documents, but more generally to documents caught by the notice. The plaintiffs argued that the defendants should have availed themselves of subpoenas in the Local Court which would then have been subject to the usual processes in the Local Court.[3] If that primary argument of the plaintiffs were successful, it was said there would be no need for production of any documents. As the argument was that the s 74 notices were not themselves valid, the Court would effectively be undermining legal professional privilege by requiring production of the documents.
Submissions were made on a general basis on the nature of the documents. After being informed that the third parties in possession of the documents would likely voluntarily lodge these, it was directed that the Court Registry receive any documents produced on a confidential basis. At the final hearing of the matter, it was anticipated further rulings would be required and the Court would then be in a position to review the materials in the usual course to determine privilege of particular documents, if necessary.
On 17 July 2020 the matter was listed again at the request of the plaintiffs as a result of a lockdown in the Northern Territory which prohibited people from greater Sydney to enter the Northern Territory. The lockdown would have prevented senior counsel for the plaintiffs to attend the hearing in person. The Court was informed certain proposals had been discussed between the parties, indicating settlement of some issues. However, senior counsel had not been able to see certain sites relevant to the subject of the charges, and not been able to discuss the matter in person further with the plaintiffs. The plaintiffs sought a fresh date for hearing given the logistical difficulties engendered by the lockdown.
Given that at that time there were problems with the reliability of some of the technology and that efforts were being made to settle certain issues, the defendants did not object to vacating the hearing date of 20 July 2020 and setting the matter for hearing on 7 October 2020, with liberty to apply to the defendants over counsel’s availability.
At the mention on 17 July 2020, counsel for the defendants foreshadowed that given the delay he may be instructed to summons the relevant material in the Local Court and use the ordinary Local Court summons procedures to gather the material in dispute, rather than reliance on s 74. Counsel indicated consideration had been given to obtaining instructions to summons the material in the Local Court. If the defendants successfully accessed the material in that manner, the summons procedures may obviate the hearing in this Court and the defendants may apply to vacate the matter altogether.
On 5 October 2020, on the basis of continued similar restrictions and difficulties due to senior counsel being in an area subject to hotspot declarations, the hearing scheduled for 7 October 2020 was vacated over the defendant’s objection and the matter was re-listed to commence 20 November 2020. Counsel for the defendants pointed to the delay and that the matter should be heard over a video link or by remote means. Given the complications of the hearing possibly being conducted from three locations (Darwin, Western Australia, Greater Sydney), which depended on all equipment operating properly and the plaintiffs’ obvious difficulties being unable to readily instruct senior counsel during the hearing, the adjournment was granted. The question of costs thrown away was reserved.
On 20 November 2020, counsel for the defendants told the Court that the materials which they had previously sought under s 74 notices would no longer be required via the s 74 process. Save for documents where legal professional privilege was claimed, the defendants now had access to the relevant materials, and residual legal professional privilege arguments would be dealt with in the Local Court. Any decision made by the Local Court would be accepted, or appealed in the ordinary course.
As the proceedings had become futile, which was effectively conceded by the plaintiffs, notwithstanding a stay of proceedings may have been an available remedy, a stay was not considered appropriate while proceedings were underway in the Local Court. As no hearing on the merits had commenced in this Court, there was no question of res judicata or double jeopardy arising. There is no estoppel in criminal law. Counsel for the defendants stated it was the defendants’ intention to proceed only in the Local Court. Given the clearly stated position of the defendants, the plaintiffs would have an available remedy of a stay of proceedings for abuse of process if s 74 notices over the same material were to be issued again.
The plaintiffs’ action was dismissed on 20 November 2020.[4] Arguments were heard on costs of the proceedings in this Court.
Consideration of the arguments on costs
Senior counsel for the plaintiffs emphasised the plaintiffs had expended funds to agitate their position before this Court. The following submissions were made on behalf of the plaintiffs; the defendants elected to proceed in the Local Court by subpoena for the same documents and for the same purpose as the documents in the s 74 notice. Although the prosecution of proceedings in this Court had become futile, the proceedings became futile as a result of the actions and the election by the defendants.
Both parties relied on the principle in Ex parte Lai and Quinn,[5] as stated by McHugh J:[6]
If it appears that both parties have acted reasonably in commencing and defending the proceedings and the conduct of the parties continued to be reasonable until the litigation was settled or its further prosecution became futile, the proper exercise of the cost discretion will usually mean that the Court will make no order as to the cost of the proceedings. This approach has been adopted in a large number of cases.
The plaintiffs did not argue it was necessarily unreasonable to resort to a subpoena issuing in the Local Court given unforeseeable delays in this Court, rather the critical question was whether the defendants invited the commencement of the plaintiffs’ litigation by failing to act reasonably at an earlier time. The defendants then abandoned the course which they had elected to take. As a result there were two courts dealing at the same time with the same documents.
In support of this submission counsel relied on the fact that the solicitor for the plaintiffs wrote to solicitors for the defendants on 4 April 2020 in the following terms:[7]
Further, the procedures for obtaining documents for the purposes of the prosecution are governed by the rules of court and the attendant processes administered by the court to ensure fairness and the protection of privilege. Having regard to the availability of these processes to the prosecution, it cannot be said that the information sought by the notices is reasonably necessary for the administration or enforcement of the Act (even if there were power to issue them).
For the above reasons we seek you confirmation that the notices will be withdrawn forthwith. If the notices are not withdrawn, we will need to seek instructions to bring an application to have them set aside.
As the defendants did not take up the course suggested on behalf of the plaintiffs and elected to contest the point for which the initiation of litigation was contemplated, the defendants bear responsibility for the litigation. The defendants’ position lasted only as long as it suited their case. When it did not suit their case, the defendants abandoned the s 74 notices. It was by those actions that the defendants were said to have brought the proceedings to a futile state.
By comparison it was submitted the plaintiffs conduct was commendable. The plaintiffs wrote to the defendants before instituting proceeding. The plaintiffs continued to apply for a hearing date until unforeseen circumstances leading to adjournments developed. Once the defendants joined issue in this Court the plaintiffs sought to keep the issue in this Court for resolution. Although the defendants joined in obtaining fresh hearing dates, they took collateral action in the Local Court obtain the documents to avoid a hearing in this Court. Consequently, the question of whether an authorised officer has the power to issue the notices and conduct interviews after a charge has already been laid has not been determined. For those reasons, it was argued, the plaintiffs should be entitled to costs.
Counsel for the defendants relied in large part on the material in Thomas Hutton’s affidavit dated 18 November 2020 which set out a detailed history. Mr Hutton’s affidavit, including the annexed correspondence makes it clear the decision to issue summonses in the Local Court for the material caught by the notices was not made until after the contested adjournment of 7 October 2020.[8]
Mr Hutton’s affidavit then sets out in some detail the orders made and later vacated in the Local Court by McDonald LCJ as well as His Honour’s decision on the validity of the summonses.[9]. Solicitors for the plaintiffs were granted first access to the documents to advise of any privilege issues. No privilege was initially claimed in respect of documents produced by one of the recipients of the s 74 notice. On 22 October 2020 the relevant documents produced by the first recipient had not been made available to plaintiffs. The plaintiffs requested the defendants not view those documents until they had been reviewed by solicitors for the plaintiff. On 23 October 2020 solicitors for the defendants confirmed they would not take any steps in relation to the documents produced as requested and further advised that given McDonald LCJ’s orders, their clients no longer pressed compliance with the s 74 notices. My associate was informed by Mr Hutton on 28 October 2020 that the documents had been produced by both recipients of the Local Court summonses and that those parties had been advised to disregard s 74 notices.[10] The documents were released to the solicitors for the defendants. As at the date of Mr Hutton’s affidavit, the privilege claims remained outstanding.
The principle drawn from ex parte Lai Quinn, is that if it appears that both parties acted reasonably in commencing and defending proceedings and the conduct of the parties continues to be reasonable, then the parties should bear their own costs or there should be no order as to costs.
I do not think that the decision to issue the summonses was unreasonable given the change of circumstances in this Court. The matter was initially given an expedited date. The hearing was vacated on two occasions. This meant that the critical question under s 74 would not be resolved in an expedited fashion as anticipated. Just as the plaintiffs at the time of listing the matter in this Court could not have anticipated the extent of delays due to covid restrictions, neither could the defendants have foreseen the same difficulties. Once the matter was adjourned on the second occasion I did advise counsel that I may be unable to complete a decision until the New Year given circuit work following shortly after the proposed hearing in November. Although the defendants obviously continued to hope for an expedited hearing, after the second adjournment, the relevant questions before the Court would not be answered in a timely fashion, bearing in mind the public interest in concluding a prosecution.
The defendants did indicate at an early time they were looking to proceed in the Local Court by way of summons. The plaintiffs had initially opposed the defendants seeking information by way of summons in the Local Court. That question required a contested hearing and a subsequent decision. The appropriateness of the summons was the subject of proceedings before McDonald LCJ. When that part of the proceedings in the Local Court is considered, the claim of unreasonableness on the part of the defendants as suggested by the plaintiffs is significantly diminished.
The challenge to the s 74 notices was entirely at the election of the plaintiffs. The question raised by the plaintiffs is interesting. However, having elected to proceed in this Court, placing the Local Court proceedings on hold, the approach taken to privilege, namely whether it could be available at all meant the claim with respect to particular documents may not have finally been resolved in this Court in any event. The fragmentation of proceedings is risky because of the type of problem that has arisen. These problems can be avoided by concluding criminal proceedings in the jurisdiction they were initiated in.
I do not think it was unreasonable of the defendants to continue with the s 74 notices, even though there was a warning in Mr Spain’s letter of 4 April 2020 that there may be a challenge. It cannot be unreasonable to pursue a statutory process just because an opponent threatens litigation, in circumstances where the regulator believes the process is appropriate. The commitment by the defendants to pursue the s 74 process in this Court was evident until by virtue of the number of adjournments it was clear that the matter would not be resolved until November 2020 or for decision in the New Year of 2021. In the end it appears it was more efficient to utilise the summonses, although the questions the parties would like resolved may not finally be resolved in the Local Court.
In my view both parties have acted reasonably in the course of these proceedings, save for the opposition by the plaintiffs to the second defendant giving evidence by remote means. I have set out what happened on that occasion already. The unreasonable nature of the opposition is plain.
At the time of the proposed hearings in this Court, covid measures were changing rapidly. I do not think, as suggested by counsel for the defendants that the plaintiffs should be penalized for briefing interstate counsel, making practical difficulties for the hearing. I do not find the second adjournments application was unreasonable given all of the uncertainties at the time.
There will be no order for costs.
By prior arrangement these reasons will be forwarded to solicitors for the parties.
----------------------
[1] Transcript 1-6; 15 June 2020.
[2] For example see, ASIC v GetSwift Ltd [2020] FCA 504; since this matter was heard, Brownhill J has set out the relevant considerations dealing with an ultimately successful contested application where the Crown were seeking a large number of witnesses to give evidence by audio-visual link in a contentious criminal case: The Queen v Baker [2021] NTSC 1.
[3] The Local Court process compelling documents or persons to appear is a “summons” not “subpoena”, although here the terms will be used interchangedly as was the case during argument: Local Court (Criminal Procedure) Act 1928 (NT), s 23.
[4] T 1-12; 20 November 2020.
[5] Re The Minister for Immigration and Ethnic Affairs of the Commonwealth of Australia; Ex-parte Lai Quinn [1977] HCA; 186 CLR 662.
[6] Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Quinn 186 CLR 622 at 625.
[7] Affidavit of Mark Spain dated, 1 May 2020, MCS-7.
[8] Affidavit, Thomas Alexander Hutton, dated 18 November 2020 at [17]-[20].
[9]Peter Vasel v Michael Anthony and DWD Project Pty Ltd, Nos 21916221 and 21916218, Local Court, 13 October 2020.
[10] Affidavit Thomas Alexander Hutton, dated 18 November 2020 at [20]-[35].
0