Schepis v Commonwealth of Australia

[2013] NSWCA 354

Court of Appeal

Supreme Court

New South Wales

Medium Neutral Citation:

Schepis v Commonwealth of Australia [2013] NSWCA 354

Hearing dates:

18 September 2013

Decision date:

25 October 2013

Before:

Beazley P at [1];
Leeming JA at [2]

Decision:

Leave to appeal refused, with costs.

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

Catchwords:

PRACTICE - application for leave to appeal - proposed challenges to factual findings - proposed challenge to costs discretion based on "walk-away" offer by defendant - no substantial prospects of success - leave refused

Legislation Cited:

Criminal Code (Cth)
Federal Court Rules 1979 (Cth)
Federal Court Rules 2011 (Cth)
Uniform Civil Procedure Rules 2005

Cases Cited:

A v State of New South Wales [2007] HCA 10; 230 CLR 500
Alpine Hardwoods (Aust) Pty Ltd v Hardys Pty Ltd (No 2) [2002] FCA 224; (2002) 190 ALR 121
Australian Competition & Consumer Commission v Universal Music Australia Pty Ltd (No 2) [2002] FCA 192; 201 ALR 618
Australian Winch and Haulage Company Pty Ltd v Collins [2013] NSWCA 327
Commonwealth Life Assurance Society Ltd v Brain (1935) 53 CLR 343
Fyna Foods Australia Pty Ltd v Cobannah Holdings Pty Ltd (No 2) [2004] FCA 1212
Roads and Traffic Authority of NSW v Refrigerated Roadways Pty Ltd (No 2) [2009] NSWCA 336
Seven Network Ltd v News Ltd [2007] FCA 1489; (2007) 244 ALR 374
Vasram v AMP Life Ltd [2002] FCA 1286
Whitney v Dream Developments Pty Ltd [2013] NSWCA 188

Category:

Principal judgment

Parties:

Anthony Demetrius Schepis (applicant)
Commonwealth of Australia (respondent)

Representation:

Counsel:
Applicant (in person)
M Fisher (respondent)
Solicitors:
Australian Government Solicitor (respondent)

File Number(s):

2013/128951

 Decision under appeal 

Jurisdiction:

9101

Date of Decision:

2012-06-01 00:00:00

Before:

Balla DCJ

File Number(s):

2010/100590

Judgment

1. BEAZLEY P: I have had the advantage of reading in draft the reasons of Leeming JA. I have also viewed those portions of the video to which his Honour refers in his judgment. I agree with his Honour's observations as to the CCTV footage and with his understanding of the judgment of Balla DCJ. I agree with his Honour's reasons as to why leave to appeal should be refused and with his costs order.

1. LEEMING JA: This application for leave to appeal arises out of unusual factual circumstances, and has had a relatively complex procedural history. For those reasons, it has been appropriate to review the material more carefully, and to give reasons which are more detailed, than ordinarily would be the case.

1. The applicant was subjected to a bag search at Brisbane International Airport on 16 May 2008 upon his arrival from Fiji. The customs officer who conducted the search was Mr Sanchez. During the search there was an incident, which led to officers of the Australian Federal Police being called to the customs hall. The applicant was charged with obstruction of a Commonwealth public official pursuant to s 149 of the Criminal Code (Cth), which was eventually amended to intimidation of such an official, pursuant to the same section. On 29 April 2009 Magistrate Cull in the Queensland Magistrates Court dismissed the charge. Thereupon, the applicant brought a civil claim in the District Court in Sydney alleging malicious prosecution. That action was heard by Balla DCJ over five days in April and May 2012, at which the applicant was represented by counsel, and the defendant by senior counsel. On 25 May 2012, her Honour handed down judgment in the proceedings. Her Honour was not persuaded that there was a dominant purpose which was other than the proper invocation of the criminal law, nor that there was an absence of reasonable or probable cause. After receiving further submissions on costs, her Honour made an order that the applicant pay the defendant's costs until 16 April 2012 on an ordinary basis, and on an indemnity basis thereafter, in light of an offer of compromise.

1. A notice of intention to appeal was filed on 22 June 2012. The applicant purported to appeal as of right, but without complying with Uniform Civil Procedure Rules 2005 (UCPR), r 51.22. The matter came before Campbell JA on 19 November 2012 on the application of the Commonwealth to dismiss the appeal as incompetent. For reasons given on 5 December 2012, the appeal was dismissed: [2012] NSWCA 398. No attempt was made to review that decision (in so saying, I should not be taken to be suggesting that any review would have enjoyed reasonable prospects of success). Accordingly, the applicant requires leave to appeal.

The CCTV footage

1. The balance of the application focussed on whether the applicant (who appeared in person) had demonstrated some prospects of setting aside Balla DCJ's factual findings as to the absence of malice and the want of reasonable and probable cause. At the forefront of the applicant's submissions was the proposition that her Honour had misconstrued what could be seen on the CCTV. It was said, repeatedly, that her Honour had not been able to see the CCTV footage as clearly as Magistrate Cull ("the TV screens, you couldn't see anything, we couldn't get the computer running properly, her Honour couldn't actually see what really happened"). That material was not available to this Court prior to or during the hearing. The CCTV footage which was in evidence before the primary judge was subsequently provided, and with the consent of the parties, I have reviewed it.

1. Three pieces of CCTV footage capturing the search from different angles were in evidence before Balla DCJ. None contains audio. Each piece of footage bears a stamp in its bottom left-hand corner, which includes (what appears to be) an identifying description of the camera taking the footage, the date (ie 16 May 2008) and the time. Footage stamped with the identifier "C200 SEARCH BENCH 21 22" (Side View Footage) is taken from one end of the bay where the search was conducted (Mr Schepis and Mr Sanchez face one another across one of the bay's two metal benches, and the footage is taken from Mr Schepis' right and Mr Sanchez' left). It commences with a frame bearing the time stamp 12:05:41. Mr Schepis appears on-screen at 12:07:10 and arrives at the bench with Mr Sanchez at 12:07:44.

1. A second piece of footage commences at time stamp 12:13:40 and displays a number of unrelated views of Brisbane airport before, at 12:18:16, switching to footage stamped "260 BENCHES 22-21" (Closer Side View Footage) (this footage therefore does not capture the first ten or so minutes of the search). This viewpoint is very similar to that of the Side View Footage, but slightly lower and closer to the bench. The time stamped on this footage is not precisely synchronous with the time stamped on the other two pieces of footage; it appears to be about two minutes behind.

1. Finally, footage stamped "C267 BAG EXAM EXIT" (Front/Back Footage), commencing at 12:07:29, is taken from behind Mr Sanchez and so captures Mr Schepis front-on, as well as activity at search bays behind Mr Schepis. The Front/Back Footage captures the movements of the family at the search bench behind Mr Schepis referred to in proposed appeal ground 9.

The challenge to factual findings to which the CCTV footage is relevant - proposed grounds 5-9

1. Critical to Magistrate Cull's decision to dismiss the charge against Mr Schepis in the Magistrates Court was her Honour's conclusion that Mr Sanchez "exaggerated his complaint" and that while he may have been apprehensive that the situation with Mr Schepis "might escalate", that was the highest his reaction rose and she was "not satisfied, even on balance, that Sanchez was intimidated by Schepis' conduct." In the context of summarising the CCTV footage, her Honour also rejected the following statements made by Mr Sanchez in his evidence:

(1)   That Mr Schepis was initially obstructive and opened his bags against Mr Sanchez' instructions.

(2)   That a family at the search bench immediately behind Mr Schepis was scared.

1. Before Balla DCJ Mr Schepis relied on the fact that those rejected statements (including statements to the effect that the officer felt intimidated) were in Mr Sanchez' statement, signed the day of the incident, which, along with the CCTV footage, formed part of the brief of evidence provided to the prosecutor. That is, Mr Schepis argued that the prosecutor, acting reasonably, on reviewing the footage should have come to the same conclusions about Mr Sanchez' evidence as Magistrate Cull.

1. If Mr Schepis were granted leave to appeal to this Court, he would essentially be challenging Balla DCJ's failure to uphold that argument. Mr Schepis' draft notice of appeal contains five grounds complaining about Balla DCJ's findings concerning the CCTV evidence. First, and most generally, proposed appeal ground 5 is that:

"Her Honour erred both in fact and in law by ignoring, disagreeing with and contradicting the findings of Magistrate Cull in the criminal proceedings particularly as there were difficulties in viewing the CCTV footage evidence in Court and certain views of the important parts of the CCTV footage evidence were not viewed by her Honour."

1. Proposed grounds 6, 7, 8 and 9 in effect are aspects, or particulars, of proposed ground 5. Proposed appeal ground 6 is that Balla DCJ erred in finding that Mr Sanchez was intimidated during the search when her Honour had found (as had Magistrate Cull) that "Sanchez was smiling in the course of the baggage search." Related to this is proposed ground 7, that she erred "in [not] finding that Mr Sanchez' demeanour could not have been consistent with his claim that he felt intimidated by [Mr Schepis]". Proposed ground 8 is that her Honour erred in finding that Mr Schepis performed a "strangling motion" with his hands. Finally, proposed ground 9 is that her Honour incorrectly found that "the family behind [Mr Schepis] moved their children away because of [Mr Schepis'] alleged behaviour."

A "strangling motion" - proposed ground 8

1. Magistrate Cull found that Mr Schepis "displayed aggressive behaviour for about two minutes halfway through the 30 minute search" and during that period said words to the effect of "I'll knock your block off" to the customs officers. This incident occurred in the context of Mr Sanchez commencing to search what was described by the magistrate as "a small bag of aged brittle cloth", which Mr Schepis told the officer was a family relic. The magistrate described the evidence of what followed:

"Sanchez said that Schepis then said 'If you fucking open the pouch I will smash your block off.' Sanchez said 'I seriously thought he was going to strike me.' He said that Schepis said 'Don't you look at me like that,' and was staring directly at him, and had his hands clenched in a strangling gesture. In the next few minutes Schepis is seen to tip the contents of his cabin bag on the bench and to bang his fist once on the steel bench. Clearly he is angry. The gesture described by Sanchez is not recorded." (emphasis added)

This episode, including the "strangling gesture", was described by Mr Sanchez in his 16 May 2008 written statement (at [12]).

1. Balla DCJ referred to the finding of Magistrate Cull italicised above and then made these observations about the footage (at p 14):

"Mr Schepis does put his two arms out in front of his body with his elbows bent, his hands outstretched, with his knuckles facing Mr Schepis and his fingers curled in a motion which I would describe as the same as if he were holding a glass in each hand. Whether this is a strangling gesture is a matter of opinion. It does mean that there is evidence on the footage consistent with the statement of Mr Sanchez."

1. The inspection of the small bag and the "display of aggressive behaviour" it precipitated is captured on the CCTV footage at 12:18:23-12:21:20 on the Side View and Front/Back Footage. (Only the last few seconds of this episode are captured by the Closer Side View Footage. It appears that one of the customs officers left during the episode to request CCTV be recorded, and that it is only upon this request being made that the camera which captured the Closer Side View Footage commenced recording.) The gesture described by Balla DCJ is captured by the Side View Footage at 12:20:18-22. Her Honour's description of the gesture is plainly accurate.

1. To the extent proposed appeal ground 8 suggests Balla DCJ found that Mr Schepis performed a strangling motion with his hands, the ground misapprehends her Honour's reasons. Balla DCJ expressly does not make a finding as to whether Mr Schepis made a strangling motion; rather, her Honour describes the motion appearing on the footage and states that whether it is a "strangling gesture" is "a matter of opinion". Mr Sanchez was of the opinion, set out in his written statement, that it was a strangling gesture. Magistrate Cull was of the opinion that it was not. Balla DCJ concluded that both interpretations of the gesture were open on the CCTV footage, and that therefore it was not unreasonable for a prosecutor to conclude the footage was evidence consistent with Mr Sanchez' description. Having reviewed the footage, there is no reason to doubt the correctness of that conclusion.

Family moving children away - proposed ground 9

1. Mr Sanchez' statement (at [10]) included the observation that he "saw a male passenger who was standing at examination bench 23 move his children away from Schepis." Magistrate Cull found that "the suggestion that a family was scared is without substance".

1. A family comprising mother, father and two young boys can be seen arriving at the search bay immediately behind Mr Schepis on the Front/Back Footage at 12:13:25. Their bags are searched and, once the search is complete, they leave, moving off-screen from about 12:22:25. At about 12:14:28, the smallest boy moves away from the immediate vicinity of the search bench to wait by a wall that is about 2-3 metres away from the end of the bench. At four points during the search (about 12:16:02, 12:18:37, 12:20:37 and 12:21:41), the boy returns to the search bench and then appears to be sent back to wall by one or other of his parents. On the final occasion on which he is sent back to the wall, at about 12:21:57, it appears that the mother tells both brothers to move away from the search bench (prior to this, the older boy had stood at one end of the bench for the duration of the search).

1. Balla DCJ made the following observations about this footage (at p 15):

"The CCTV footage does show a family at a nearby search station. The father does move a child away. The footage does not have any audio. They do not move away at the time that the pouch was being opened and their reason for moving is not explained."

That is the highest Balla DCJ's findings go in relation to the actions of the family. Balla DCJ did not, as proposed appeal ground 9 suggests, find that the family moved their child or children away because of Mr Schepis' behaviour. Rather, her Honour found that it is not possible to tell from the CCTV footage why the family made the movements it did; that is, the CCTV footage, if it did not corroborate Mr Sanchez' account, at least did not contradict it. That finding was plainly open on a review of the footage.

Demeanour - proposed grounds 6 and 7

1. Proposed appeal ground 6 refers to both judicial officers who have previously reviewed the CCTV footage having found that Mr Sanchez was smiling "in the course of the baggage search". Magistrate Cull found that "[o]n occasional views that catch the officer's face, he appears relaxed, and on one brief side view, he is smiling." In relation to the period during which the small pouch was searched, Magistrate Cull found that "[o]n a limited view Sanchez is smiling and unconcerned."

1. Balla DCJ referred to difficulties viewing the footage in Court, and noted that those difficulties may explain why counsel for Mr Schepis did not take her to the parts of the footage where Mr Sanchez is shown smiling. Her Honour then observed (at pp 13-14):

"I have viewed the footage. It is difficult to see Mr Sanchez' face. He did smile once when he looked in the direction of Mr Prieto [another customs officer] before he started opening the pouch. I had an overall impression that he remained impassive and that little, if any, emotion can be seen on his face."

1. Proposed ground 6 proceeds on the assumption that Balla DCJ found that Mr Sanchez was intimidated, and that that finding was inconsistent with findings at the Magistrates and District Courts that the officer was smiling. First, the findings that Mr Sanchez smiled or was smiling are expressed in qualified terms and relate to limited periods of time. Secondly, and more importantly, Balla DCJ did not find that Mr Sanchez was intimidated. Her Honour rather found that the CCTV evidence was not such as to compel a reasonable prosecutor to conclude that Mr Sanchez was not intimidated (at p 14).

1. Having closely reviewed all three pieces of footage, that conclusion is plainly open. The same may be said of her Honour's conclusion that she did not "consider that a reasonable prosecutor must have decided, from the whole of the evidence, that Mr Sanchez's demeanour could not have been consistent with his feeling intimidated by Mr Schepis" (the finding complained of in proposed ground 7). The footage is not crisp, shows the officer predominantly in profile or from behind and does not allow for more than approximate and qualified observations of his demeanour. Moreover, the footage was to be viewed in light of the corroborating witness statements of other customs officers at the scene.

1. The result is that having accepted the applicant's invitation to review, at length, the CCTV footage, there do not appear to be substantial prospects of his establishing proposed grounds 5-9.

Proposed grounds 1-4 and 10-12

1. Proposed ground 10 asserts that there were "glaring inconsistencies" between the CCTV footage and the evidence of the customs officers. It appears that this is a reference to the three pages listing 21 discrepancies annexed to the applicant's District Court pleadings. It is not necessary to address them individually. Some overlapped with what has been addressed above (for example, grounds 8 and 9 were the 17th and 20th alleged inconsistencies). Some (for example, "Mr Schepis was becoming increasingly anxious and agitated") were said not to be on the recording. On my review, a conclusion that he appeared to becoming increasingly anxious and agitated was open - for example, although initially Mr Schepis' demeanour did not disclose emotion, at 12:19:46-55 he can be seen looking around, stepping backwards and extending his hands in a way which, to my eyes, is consistent with his appearing irritated. Others were said to be mischaracterisations of what could be seen. For example, the applicant took issue with the evidence of Messrs Sanchez and Prieto that he violently shook his bag and tipped its contents on the bench. On reviewing the CCTV (Side View Footage at 12:20.05), it is clear that he emptied his bag with such force that when it landed, upside down, on the bench, it bounced upwards. Other errors were said to be that "Mr Prieto had Ms Wilson arrange CCTV coverage"; as noted above, this is consistent with the Closer Side View Footage, not inconsistent with it. Other complaints are as to the language used (the third, sixth, twelfth, fourteenth, sixteenth and nineteenth "glaring inconsistency" are based on or include such complaints). But there is no recording of any sound at all.

1. The point of proposed ground 10 is to seek to support a conclusion that the customs officers deliberately overstated their recollection so as to amount to malice and absence of reasonable and proper cause, which is the point of grounds 1-3, and to conclude that the officers within the Australian Customs Service were the "real prosecutor" (see eg Commonwealth Life Assurance Society Ltd v Brain (1935) 53 CLR 343). This likewise is also the point of proposed grounds 11 and 12 (so as to engage the decisions where a maliciously motivated private informant causes a public prosecution to be commenced).

1. But only if he could establish both malice and absence of reasonable and proper cause on behalf of either the actual prosecutor or customs officers could the applicant succeed in his civil claim: A v State of New South Wales [2007] HCA 10; 230 CLR 500 at [1]. My review of the submissions advanced by the applicant and the material to which they refer does not lead me to conclude that there is any material prospect of the applicant doing so, if he were granted leave.

1. The applicant pointed, repeatedly and perhaps understandably, to his success before Magistrate Cull, which he claimed to be inconsistent with the decision the subject of his application for leave to appeal. However, it is one thing for charges to be dismissed because the prosecutor has failed to prove the elements of the offence beyond reasonable doubt. It is quite different where the onus lies upon the plaintiff in civil proceedings to establish elements of the tort of malicious prosecution. There is no inconsistency with the outcome whatsoever; indeed, only if a prosecution fails can there be an action for malicious prosecution, and many actions fail because of the different elements of the tort.

1. Proposed ground 4 was that her Honour erred in failing to consider that there was no evidence in relation to the alleged intimidation of Mr Sanchez. Mr Sanchez gave testimonial evidence of precisely that ("I became concerned the [Mr Schepis] might physically strike me"; "The tone and aggressiveness of voice used by [Mr Schepis] caused me to fear for my safety"). It is also consistent with his calling other officers to attend on the bag search with him, and (as I infer) the decision to turn on another CCTV camera. There is nothing in proposed ground 4.

Proposed ground 13 - costs

1. Finally, a separate proposed ground of appeal, ground 13, challenges her Honour's decision, on 1 June 2012, to order indemnity costs, pursuant to a letter dated 16 April 2012 described as a "Calderbank offer and offer under rule 20.26 UCPR". Notwithstanding the recent decision of this Court in Whitney v Dream Developments Pty Ltd [2013] NSWCA 188, which is apt to impact upon earlier offers of compromise (see, for example, Australian Winch and Haulage Company Pty Ltd v Collins [2013] NSWCA 327 at [57]), it is plain that the Commonwealth's offer complied with the Rules, so long as the time within which the offer was left open was "reasonable in the circumstances": see UCPR, r 20.26(7)(b).

1. The letter was served seven days before the hearing was listed to commence and was open for acceptance until 5pm on Friday 20 April 2012. The "offer" made by the Commonwealth was:

"(a) Verdict and judgment be entered for the Defendant on the Second Further Amended Statement of Claim dated 2 June 2011 and served on 20 July 2011; and

(b) That the parties bear their own costs in the Proceedings."

1. The Rules require, in order for the letter to comply, that the offer be left open for a time which was "reasonable in the circumstances. Her Honour recorded that "there was no submission that it was not open for a reasonable time". That accurately reflects what occurred in the brief hearing on 1 June 2012, where the lawyer appearing for Mr Schepis advanced a single submission, namely, that there was no genuine offer. The lawyer provided her Honour with Fyna Foods Australia Pty Ltd v Cobannah Holdings Pty Ltd (No 2) [2004] FCA 1212, where Kenny J (at [10]) doubted that an offer to discontinue with no costs order being made would amount to a genuine offer of compromise, and referred to Vasram v AMP Life Ltd [2002] FCA 1286 and Australian Competition & Consumer Commission v Universal Music Australia Pty Ltd (No 2) [2002] FCA 192; 201 ALR 618 where Stone and Hill JJ respectively made statements to similar effect.

1. For present purposes, it is sufficient to note that the Federal Court authorities on which the applicant relied and relies are inapplicable. The (former) Federal Court Rules (cf Federal Court Rules 2011, r 25.14) did not address the case where an applicant rejected an offer made by the respondent and is wholly unsuccessful, as Weinberg J noted in Alpine Hardwoods (Aust) Pty Ltd v Hardys Pty Ltd (No 2) [2002] FCA 224; (2002) 190 ALR 121 at [16] and as Sackville J noted in Seven Network Ltd v News Ltd [2007] FCA 1489; (2007) 244 ALR 374 at [32], and so the letters were treated as Calderbank offers. The position under the UCPR is different. What the Commonwealth did was expressly authorised under the applicable rules, which specifically contemplate a "walk-away" offer made by a defendant: r 20.26(2), and which contain an entitlement to an order for indemnity costs unless the court otherwise orders: r 42.15A. Those rules were applied in Roads and Traffic Authority of NSW v Refrigerated Roadways Pty Ltd (No 2) [2009] NSWCA 336, where Campbell JA noted at [17] (with the agreement of McColl JA and Sackville AJA) that the "walk-away" offer contained an element of compromise, reflecting the preparation for, and running of the first four days of the hearing of, the trial. Similar considerations apply to the present case. It follows that there is no realistic prospect of success in the proposed challenge to her Honour's exercise of the discretion as to costs.

1. For those reasons, I propose that leave to appeal be refused, with costs.

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Decision last updated: 25 October 2013