Environment Protection Authority v The Shell Company of Australia Limited
[2001] NSWLEC 66
•04/12/2001
Reported Decision: 113 LGERA 463
Land and Environment Court
of New South Wales
CITATION: Environment Protection Authority v The Shell Company of Australia Limited [2001] NSWLEC 66 PARTIES: PROSECUTOR:
DEFENDANT:
Environment Protection Authority
The Shell Company of Australia LimitedFILE NUMBER(S): 50071 of 1997 CORAM: Bignold J KEY ISSUES: Costs :- successful Defendant in criminal proceedings - entitlement to costs - whether all or part only. LEGISLATION CITED: Land and Environment Court Act 1979, s 52 CASES CITED: Latoudis v Casey (1990) 170 CLR 534;
McDonagh v Birdon Dredging Pty Ltd (1998) 99 LGERA 198 at 206;
Owen v Willtara Construction Pty Ltd (unreported 11 December 1998)DATES OF HEARING: 3 April 2001 DATE OF JUDGMENT:
04/12/2001LEGAL REPRESENTATIVES: DEFENDANT:
PROSECUTOR:
Mr D Buchanan SC, with Mr D Jordan, Barrister
SOLICITORS
Solicitor Environement Protection Authority
Mr G Miller QC with Mr I Hemmings, Barrister
SOLICITORS
Coudert Brothers
JUDGMENT:
IN THE LAND AND
Matter No. 50071 of 1997
ENVIRONMENT COURT OF
Coram: Bignold J.
NEW SOUTH WALES
12 April 2001
ENVIRONMENT PROTECTION AUTHORITY
Prosecutor
v
THE SHELL COMPANY OF AUSTRALIA LIMITED
Defendant
JUDGMENT
Bignold J:
A. INTRODUCTION
1. The Defendant in a successfully defended prosecution charging it with an offence against the Environmental Offences and Penalties Act 1989, s 6(1) seeks by Notice of Motion filed 22 February 2001, an order that the Prosecutor pay the Defendant’s costs in the proceedings.
2. The Prosecutor resists the Defendant’s Motion but only insofar as it seeks an order for all of the Defendant’s costs. The Prosecutor submits that an appropriate costs order would be one that allows the Defendant only part of its costs incurred in proceedings that involved both an extended pre-trial history and a lengthy trial which commenced on 1 November 1999 and concluded on 4 February 2000 involving a total of 28 hearing days.
3. In essence, the Prosecutor submits that it would not be fair and reasonable for the Defendant to receive its costs in respect of (i) a number of interlocutory issues determined during the course of the proceedings upon which the Defendant wholly failed and (ii) a few discrete issues raised by the Defendant at the trial upon which issues the Defendant failed.
4. Accordingly, upon the parties’ common assumption that the Court will be disposed to exercise its judicial discretion in relation to costs in favour of the Defendant by making an appropriate costs order, the only issue between the parties is whether the costs order should be for all of the Defendant’s costs in the proceedings (as the Defendant contends) or for part only of the Defendant’s costs (as the Prosecutor contends), that part being delimited by excluding costs incurred in respect of specific interlocutory issues determined in the course of the proceedings and specific and discrete issues determined at the trial - in both cases where the determinations were adverse to the Defendant.
5. Before considering the competing cases, I should note with some precision the present state of the proceedings.
6. In my reserved judgment delivered on 30 June 2000, I gave reasons for my ultimate finding that the Prosecution had not proved the Defendant’s guilt beyond reasonable doubt.
7. As the Prosecutor had requested at the trial that if I were to, in my final judgment, make findings of law adverse to the Prosecution, I would afford the Prosecution the opportunity of considering whether it would request me to state a case to the Court of Criminal Appeal, when publishing my reasons on 30 June 2000 I stood the proceedings over for two weeks for the purpose of then making final orders disposing of the proceedings.
8. On 14 July 2000, the Prosecutor informed the Court that it did not wish to have a case stated to the Court of Criminal Appeal and the parties agreed to my making the following orders in the proceedings—
1. The Defendant is found not guilty of offence charged.
2. The questions of the formal disposal of the proceedings and of costs be reserved.
9. The reason why orders finally disposing of the proceedings were not made on that occasion was because the question of costs had not been resolved between the parties and because the Land and Environment Court Act 1979, s 52(1) (LEC Act) in terms requires any costs order to be made by the Court “in and by the conviction or order dismissing the charge”.
10. Since that time, the parties have been attempting to resolve the reserved question of costs, but without success—hence the present Motion before the Court.
11. It is also to be noted that if the Court were to accept the Prosecutor’s submissions on costs, the Prosecution would thereupon seek an adjournment to attempt to have the parties agree upon the quantum of the costs order without the need for the costs to be assessed in accordance with the provisions of Legal Profession Act 1987, Pt 11 Div 6.
C. THE RELEVANT PRINCIPLES FOR THE EXERCISE OF THE COURT’S DISCRETION ON COSTS
12. In Owen v Willtara Construction Pty Ltd (unreported 11 December 1998) I had occasion to consider in some detail the relevant principles upon which the statutory costs discretion conferred upon the Court by the LEC Act, s 52 is generally to be exercised.
13. I did so, principally by reference to the majority judgments given in the decision of the High Court of Australia in Latoudis v Casey (1990) 170 CLR 534, which is generally accepted as an authoritative exposition of relevant principles to be applied in the exercise of this Court’s statutory discretion on costs.
14. Latoudis did not directly concern either this Court or the LEC Act, s 52. However, it did concern a statutory costs power conferred in respect of criminal proceedings brought in summary jurisdiction.
15. It should also be noted that the clear result and settled authority yielded by decisions in this Court decided prior to Latoudis were entirely consistent with the majority judgments in Latoudis.
16. The relevant passages in my judgment in Willtara occur at par 27 to 33 inclusive (and which I understand the present parties to accept) are as follows:
27. What then, are the relevant principles? In my respectful opinion there are four important matters of general principle relevant to exercise of the type of costs discretion that is conferred by s.52 of the LEC Act, which are settled by the majority judgments in Latoudis—
(i) the unfettered nature and broad extent of the discretion;
(ii) the purpose of the discretion is to compensate the successful party and not to punish the unsuccessful party;
(iii) irrelevant considerations to the exercise of discretion are exposed most notably consideration of the reasonableness of the Prosecutor’s conduct in bringing the proceedings; and
(iv) principles governing the ordinary exercise of the discretion are approximated to the principles that have been held to be relevant to the exercise of discretion in respect of costs in civil proceedings.
28. It is only the last mentioned matter that is relevant to the adjudication of the present dispute and which requires elaboration.
29. The Chief Justice deals with the matter in the following passages at 543 and 544:
I am not persuaded that there is a complete analogy between the discretion to award costs in summary proceedings and the power to award costs in civil proceedings. For that reason I would not be prepared to accept that in summary proceedings there should be a general rule that costs follow the event. As I have noted, the making of separate provision in s.97(a) and (b) is not without significance. The differences between criminal and civil proceedings are substantial, not least of them being the absence of pleadings, the different onus of proof, the defendant’s inability in criminal proceedings to enter into a compromise and the possibility that the charge, if proved, may affect the defendant’s livelihood and reputation. These differences may possibly provide grounds in the circumstances of particular cases for refusing to order costs in favour of a successful informant which would have no application in civil proceedings.
Nevertheless, I am persuaded that, in ordinary circumstances, an order for costs should be made in favour of a successful defendant. However, there will be cases in which, when regard is had to the particular circumstances, it would not be just and reasonable to order costs against the prosecutor or to order payment of all the defendant’s costs. If, for example, the defendant, by his or her conduct after the events constituting the commission of the alleged offence, brought the prosecution upon himself or herself, then it would not be just and reasonable to award costs against the prosecutor.
I agree with Toohey J. that, if a defendant has been given an opportunity of explaining his or her version of events before a charge is laid and declines to take up that opportunity, it may be just and reasonable to refuse costs. Likewise, if a defendant conducts his or her defence in such a way as to prolong the proceedings unreasonably, it would be just and reasonable to make an award for a proportion of the defendant’s costs.
30. Toohey J deals with the matter in the following passages at 565/6:
If a prosecution has failed, it would ordinarily be just and reasonable to award the defendant costs, because the defendant has incurred expense, perhaps very considerable expense, in defending the charge. What Kirby P. said in Acuthan v. Coates (13) of defendants to committal proceedings is apposite:
- The section recognises that persons accused of criminal offences can be put to a great deal of expense in defending themselves. Unlike civil litigation, they cannot simply compromise the matter. Their liberty, reputation and pocket are, or may be, at risk
It is unnecessary to speak in terms of a presumption; it is enough to say that ordinarily it would be just and reasonable that the defendant against whom a prosecution has failed should not be out of pocket.
Now, in a particular case there may be good reasons connected with the prosecution such that it would not be unjust or unreasonable that the successful defendant should bear his or her own costs or, at any rate, a proportion of them. To return to the examples given earlier in this judgment, if a defendant has been given the opportunity of explaining his or her version of events before a charge is laid and refuses the opportunity, and it later appears that an explanation could have avoided a prosecution, it may well be just and reasonable to refuse costs: see, by way of illustration, Reg. V. Dainer; Ex parte Milevich (14). This has nothing to do with the right to silence in criminal matters. A defendant or prospective defendant is entitled to refuse an explanation to the police. But if an explanation is refused, the successful defendant can hardly complain if the court refuses an award of costs, when an explanation might have avoided the prosecution. Again, if the manner in which the defence of a prosecution is conducted unreasonably prolongs the proceedings, for instance by unnecessary cross-examination, neither justice nor reasonableness demands that the successful defendant be indemnified, at any rate as to the entirety of the costs incurred. These illustrations are in no way exhaustive but what they point up is that a refusal of costs to a successful defendant will ordinarily be based upon the conduct of the defendant in relation to the proceedings brought against him or her.”
(1986) 6 N.S.W. L.R. 472, at p. 480
(1988) 91 F.L.R. 33.
31. McHugh J deals with the matter somewhat more expansively at pp.566 to 570 (inclusive) which include the following passages commencing at 568:
It is true that the discretion to award costs in summary proceedings has to be exercised in circumstances which are not identical to those which exist in civil cases. For example, a criminal case cannot be settled, and the informant does not seek to vindicate any right or define any obligation of his or her own. Moreover, there are no written pleadings in criminal proceedings. The plea of not guilty in criminal proceedings, like its historic common law counterpart in civil proceedings, puts everything in issue. As Wells J. pointed out in Schaftenaar v. Samuels (22), `the issues, apart from the one joined on the plea of not guilty, can be identified only from the course of the evidence and the addresses’. But, despite the differences between civil and criminal proceedings, once the real issues in the summary proceedings are identified, there is no difficulty in applying in such proceedings principles akin to those applicable to the making or refusing of orders for costs in civil cases.
Nevertheless, it needs to be stressed that, subject to any contrary legislative indication, costs in summary proceedings do not follow the event and that a successful defendant in such proceedings, like a successful party in civil proceedings, has no right to an order for costs. As Viscount Cave L.C. pointed out in Donald Campbell & Co. v. Pollak (23):
- A successful defendant in a non-jury case has no doubt, in the absence of special circumstances, a reasonable expectation of obtaining an order for the payment of his costs by the plaintiff; but he has no right to costs unless and until the Court awards them to him, and the Court has an absolute and unfettered discretion to award or not to award them. This discretion, like any other discretion, must of course be exercised judicially, and the judge ought not to exercise it against the successful party except for some reason connected with the case.’
(22) (1975) 11S.A.S.R. 266, at p. 274
(23) (23) [1927] A.C. 732, at pp. 811-812.
(24) [1920] 2K.B. 47, at pp. 53, 54-60, 66
(25) (1933) 33 S.R. (N.S.W.) 371, at p.377
(26) (1949) 50 S.R. (N.S.W.) 24, at p.25
(27) (1975) 11 S.A.S.R., at pp. 274-275.
(28) (1972) 21 F.L.R. 131, at p. 136
(29) (1988) 91 F.L.R. 33.
32. Applying these principles for the exercise of the statutory discretion to the present case, the starting point of the process of reasoning is that the successful Defendant has a reasonable expectation of obtaining a costs order against the Prosecutor. The next question is whether there is anything in the conduct of the Defendant, either after the commission of the offence charged or in the course of the litigation which would disentitle the Defendant to the fulfilment of that reasonable expectation. This question can be further subdivided as follows:
(i) Is there anything in the conduct of the Defendant which justifies the conclusion that the Defendant brought the prosecution upon itself?
(ii) Did the Defendant conduct its defence in such a manner as to prolong the trial unreasonably?
(iii) Were there issues at the trial upon which the Defendant failed?
33. An affirmative answer to question (i) may justify withholding a costs order in favour of the Defendant and an affirmative answer to either question (ii) of (iii) may justify an award of only a proportion of the Defendant’s costs.
c. THE RELEVANT FACTS CONCERNING THE PROCEEDINGS
17. The relevant facts are compendiously detailed in the affidavits sworn by the parties’ respective instructing Solicitors—Mr Barley on behalf of the Prosecutor and Mr Massey on behalf of the Defendant. Mr Barley’s analysis of the course and outcomes of the various determinations made in the course of the proceedings—both in respect of interlocutory issues and the issues at trial—is in my respectful opinion a very fair and accurate survey and analysis which I gratefully adopt for myself.
18. Relevantly, it reveals that of the 28 hearing days for the trial, some 9 days were taken up on preliminary matters relating to the following motions brought by the Defendant—
(i.) to summarily dismiss the summons for the reason that either the offence charged was not a continuing offence, or the charge was duplicitous; and
(ii.) to summarily dismiss the summons for the reason that the proceedings were not commenced within the statutory limitation period.
19. Both these Motions were dismissed in separate reserved judgments.
20. Additionally, Mr Barley identifies 4 further hearing days dealing with interlocutory Motions brought by the Defendant in the course of the proceedings (but before the trial commenced) upon which the Defendant failed.
21. Finally, Mr Barley identifies a number of discrete issues determined at or in the course of the trial upon which the Defendant failed. These matters were (i) objection against the admissibility of certain documentary evidence as vicarious admissions; (ii) the no-case to answer submission made at the conclusion of the Prosecution evidence; and (iii) the issue whether the Defendant was the proper person to be charged with the offence (as opposed to other related or associated entities).
22. In respect of each of these issues, the Defendant wholly failed.
23. In par 15 of his affidavit, Mr Barley helpfully summarises the issues—both interlocutory and final— raised by the Defendant and upon which the Defendant wholly failed, including his conservative estimate that 1 1/2 days of the hearing were involved in the Defendant’s unsuccessful objection to the admissibility of the vicarious admissions and its unsuccessful defence that it (as opposed to related entities) was not the proper person to be charged with the offence charged in the present case.
D. THE COMPETING ARGUMENTS
24. The parties’ competing arguments can be very briefly summarised as follows—
(i.) The Defendant’s principal submission is that as the acquitted Defendant, it should receive its full costs by way of compensating it as the successful party. It claims costs on a solicitor / client or indemnity basis.
(ii.) It submits that it should not be denied its costs on issues—interlocutory or final—which it raised in the course of the proceedings, notwithstanding its failure in respect of such issues—because in raising those issues, it acted reasonably.
(iii.) In the alternative, the Defendant submits that it should receive an order for 80 per cent of its costs, and in so submitting, draws attention to the costs order I made in McDonagh v Birdon Dredging Pty Ltd (1998) 99 LGERA 198 at 206.
25. The competing submissions made by the Prosecutor are to the following effect—
(i.) A reduced costs order will produce a fair and reasonable costs result because on the facts of the present case, the Defendant’s unsuccessful raising of interlocutory or final issues involved a considerable amount of the overall hearing time, particularly since those matters were wholly unconnected with the ultimate ground for the Defendant’s success in defending the Prosecution.
(ii.) Indemnity costs have been held to be not recoverable pursuant to an order made under the LEC Act, s 52—see Willtara.
(iii.) The question of the reasonableness of the Defendant’s conduct in raising the several issues (but failing in respect of them) is not the relevant enquiry. “Reasonableness” is a relevant criterion to govern the outcome of the costs order. It is not reasonable that the Defendant should be compensated for discrete issues—interlocutory and final—it unsuccessfully raised in the proceedings in circumstances where such issues occupied a significant portion of the overall hearing time in the proceedings and were unrelated to the Defendant’s ultimately successful defence of the prosecution.
E. CONCLUSION AND ORDERS
26. In my respectful judgment, the Prosecution submissions are to be preferred to the competing Defence submissions.
27. Acceptance of the Prosecution submission will, in my judgment, yield a fair and reasonable costs result in the proceedings, having regard to its course and to its outcome —both ultimate insofar as the Defendant is to be acquitted of the charge, and intermediate and discrete insofar as the Defendant, though reasonably raising such issues, wholly failed in respect of them.
28. Accordingly, I am of the opinion that an appropriate costs order is that the Prosecution pay the Defendant’s costs of the proceedings, except the costs incurred in respect of each of the matters identified in par 15 of Mr Barley’s affidavit sworn 20 March 2001.
29. I request the parties to bring in short minutes to give effect to this judgment and to finally dispose of the proceedings.
30. Liberty to apply on three days notice is granted.
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