Sutherland Shire Council v Benedict Industries Pty Ltd (No 5)
[2015] NSWLEC 103
•26 June 2015
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New South Wales |
Case Name: | Sutherland Shire Council v Benedict Industries Pty Ltd (No 5) |
Medium Neutral Citation: | [2015] NSWLEC 103 |
Hearing Date(s): | 22 June 2015 |
Date of Orders: | 26 June 2015 |
Decision Date: | 26 June 2015 |
Jurisdiction: | Class 5 |
Before: | Pepper J |
Decision: | Application for reasonable loss and expenses in complying with subpoena dismissed. Exhibits returned. |
Catchwords: | COSTS: whether prosecutor entitled to its reasonable loss or expenses complying with a subpoena in criminal proceedings in the Court’s summary jurisdiction – whether “reasonable loss or expenses” includes “costs” and vice versa – whether loss or expenses “reasonable” in light of alleged disentitling conduct by prosecutor – whether if loss and expenses reasonable, prosecutor nevertheless to be denied payment due to alleged disentitling conduct – loss and fees reasonable in all the circumstances – alleged disentitling conduct not material or sufficient to preclude award. |
Legislation Cited: | Criminal Procedure Act 1986, ss 257B, 257C |
Cases Cited: | Associated Minerals Consolidated Ltd v Wyong Shire Council [1975] AC 538 |
Category: | Costs |
Parties: | Sutherland Shire Council (Prosecutor) |
Representation: | Counsel: |
File Number(s): | 12/50921, 12/50923, 13/50100 |
JUDGMENT
The Prosecutor Claims its Reasonable Loss and Expenses for Compliance with Subpoena Issued by Defendant
By notice of motion filed on 5 June 2015, the prosecutor, Sutherland Shire Council (“the council”), seeks an order that the defendant, Benedict Industries Pty Limited (“Benedict”), pay its reasonable losses and expenses incurred in compliance with a subpoena issued to it on 26 May 2015 (“the subpoena”) by Benedict.
It should be recalled by way of factual background to the application that in three separate proceedings the council charges Benedict with five offences against s 125(1) of the Environmental Planning and Assessment Act 1979 (“the EPAA”).
Two charges allege that Benedict injured bushland vegetation without prior written consent contrary to the provisions of Sutherland Shire Tree and Bushland Vegetation Preservation Order (“TPO”) made under the provisions of the Sutherland Shire Local Environmental Plan 2000. Two further charges allege that Benedict injured trees without consent, again contrary to the provisions of the TPO. The fifth charge alleges that Benedict constructed an earth bund which constituted prohibited development, with the result that it contravened s 76B of the EPAA. A central element of all five charges is the absence of consent.
The dates between which these offences are alleged to have occurred are 1 August 2010 to 25 May 2012. The offences are alleged to have occurred on land at Menai on which Benedict operates a quarry. Benedict has pleaded not guilty to each charge.
The notice of motion had originally sought to set aside paragraph 10 of the subpoena, but on the day of the hearing of the motion, production in response to the paragraph was no longer pressed by Benedict.
The council now seeks its reasonable losses and expenses totalling $5,245.00, the calculation of which was detailed in two affidavits sworn by Ms Roslyn McCulloch (the council’s legal representative) on 5 and 9 June 2015.
Those affidavits disclose that the losses and expenses claimed arise out of compliance with paragraphs 4 and 11 of the subpoena. Those paragraphs respectively sought production of the following documents:
Council’s minute books for the period 1930 to 1996 as referred to in paragraph 14(a) of the affidavit of Ellen Whittingstall sworn 22 May 2015.
…
All Council files (including all development control files, development application files, audit files, compliance files, permissive occupancy files, historical files or any other file) that relate in any way to Lots 1 and 2 in Deposited Plan 1176153, otherwise known as 14309 Heathcote Road, Sandy Point (and also known and described as the Sandy Point Quarry, Walker Quarry, Readymix Quarry and/or White Rock Quarry) for the period 1930 to present.
The quantum of the loss and expenses was not challenged by Benedict. Rather, Benedict submitted that, first, the Court had no power to award the amount by reason of s 257B of the Criminal Procedure Act 1986 (“the CPA”), and second, even if it did, the losses and expenses were unreasonable in light of the conduct of the council necessitating the issuing of the subpoena.
In my view, the council is not entitled to its losses and expenses in the amount claimed due to the application of s 257B of the CPA. My reasons for this finding are below.
Does the Court Have the Power to Award the Prosecutor its Reasonable Losses and Expenses?
The council relied on r 33.11 of the Uniform Civil Procedure Rules 2005 (“the UCPR”) as the source of its entitlement to reimbursement for its expenses and losses incurred in complying with the subpoena.
Rule 33.11 states that:
33.11 Costs and expenses of compliance
(1) The court may order the issuing party to pay the amount of any reasonable loss or expense incurred in complying with the subpoena.
(2) If an order is made under subrule (1), the court must fix the amount or direct that it be fixed in accordance with the court’s usual procedure in relation to costs.
(3) An amount fixed under this rule is separate from and in addition to:
(a) any conduct money paid to the addressee, and
(b) any witness expenses payable to the addressee.
Rule 33.11 applies in this way. Under r 5.2(1) of the Land and Environment Court Rules 2007, Pt 75 (Criminal proceedings) of the Supreme Court Rules 1970 (“the SCR”) apply, so far as applicable, to proceedings to which Div 2 of the SCR applies. Division 2 of Pt 75 is concerned with “summary jurisdiction” and applies to proceedings conducted under Pt 5 of Ch 4 of the CPA. Chapter 4 of Pt 5 of the latter Act regulates proceedings in Class 5 of the Court’s jurisdiction.
Part 75 r 3(1)(g) of the SCR states that Pt 33 (subpoenas) of the UCPR applies unless, relevantly, the Crown is the issuing party. In the present case, it is Benedict who is the issuing party. Thus, the council submitted, r 33.11(1) applied to the proceedings.
However, as alluded to above, Benedict argued that r 33.11 has been supplanted by s 257B of the CPA which limits the circumstances in which an accused can be ordered to pay the costs of the prosecutor in the following way:
257B When costs may be awarded to prosecutor
A court may, in and by a conviction or order, order an accused person to pay to the registrar of the court, for payment to the prosecutor, such costs as the court specifies or, if the conviction or order directs, as may be determined under section 257G, if:
a) the court convicts the accused person of an offence, or
(b) the court makes an order under section 10 of the Crimes (Sentencing Procedure) Act 1999 in respect of an offence.
Benedict submits that Pt 75 of the SCR is therefore not “applicable” because the intention of s 257B of the CPA is to oust r 33.11 of the UCPR in the present case. Because neither of the two limbs in s 257B of the CPA have been satisfied, the Court has no power to order that Benedict pay the council’s costs of complying with the subpoena.
In Environment Protection Authority v Truegain Pty Ltd [2013] NSWCCA 204; (2013) 85 NSWLR 125 the Court of Criminal Appeal held that s 68 of the Land and Environment Court Act 1979 was not a separate head of power to order costs and that it was inconsistent with s 257C (when professional costs may be awarded to an accused person). Relevantly for the present purposes, in that case the Court of Criminal Appeal opined (at [75] and [97] - [98]):
75 It will be recalled that in his Third reasons the primary judge ordered that the summons be amended by deleting the particulars on which the EPA could not rely, and made a costs order against the EPA based on s 68 of the LEC Act.
…
97 Sixthly, the foregoing accords with principle. Where a prosecutor invokes the judicial power of the State in order to punish a wrongdoer, it has long been the case that costs are addressed separately. "Different considerations arise in criminal proceedings which are brought, not for private ends, but for public purposes": Latoudis at 557 (Dawson J). Although one must be cautious of arguments based upon a classification of proceedings as either "civil" or "criminal" (cf Chief Executive Officer of Customs v Labrador Liquor Wholesale Pty Ltd [2003] HCA 49; (2003) 216 CLR 161 at [114]), it is plain that for many years, in relation to the question of costs, the legislature has enacted different regimes turning upon that classification.
98 For those reasons, in my respectful opinion, the primary judge was wrong to conclude that s 68(1) was a separate head of power to order costs (at [18]), and wrong to say that it was not inconsistent with s 257C (at [22]). When the question is one of inconsistency of powers in separate statutes, the first question is one of construction, and not lightly will an earlier, generally worded power be held to cut across a specific, qualified and later power. In my opinion, such statutory power as the Land and Environment Court has to order costs in respect of proceedings in Class 5 of its jurisdiction is regulated by the Criminal Procedure Act. The costs order made in Wakool Shire Council v Garrision Cattle Feeders Pty Ltd is to be regarded as being made per incuriam, as was that made Sutherland Shire Council v Benedict Industries Pty Ltd [2013] NSWLEC 121 at [35] in reliance on the decision the subject of this appeal: [2012] NSWLEC 78.
Were r 33.11 of the UCPR unequivocally concerned with the power to award “costs” consequent upon compliance with a subpoena, the reasoning in Truegain would, in my opinion, as was submitted by Benedict, apply by analogy. However in my opinion, that decision is of limited assistance in this application. Unlike Truegain, this is not an instance of an earlier generally worded power purporting to cut across a specific, qualified subsequent power. Rather, resolution of this matter involves almost the converse of Truegain and gives rise to a consideration of the rule of construction which presumes that a later general enactment is not intended to interfere with an earlier, specific provision unless it manifests that intention very clearly (expressed as the maximum generalia specialibus non derogant: see Commissioner of Police v Eaton [2013] HCA 2; (2013) 252 CLR 7 at [46] per Crennan, Kiefel and Bell JJ). In my opinion, such an intention is manifested when regard is had to the proper construction of both provisions.
In essence, the question is one of inconsistency or repugnancy of powers in separate enactments – one beneficial and contained in earlier delegated legislation (r 33.11(1)), and the other power containing a prohibition enacted in a subsequent statute (s 257B) where the latter does not expressly repeal or override the earlier (Associated Minerals Consolidated Ltd v Wyong Shire Council [1975] AC 538 at 553 cited in Eaton at [45] per Crennan, Keifel and Bell JJ). The issue is whether s 257B of the CPA has impliedly repealed r 33.11 insofar as it applies to proceedings to which Div 2A is applicable (Kartinyeri v Commonweath [1998] HCA 22; (1998) 195 CLR 337 at [8] - [10], Ferdinands v Commissioner for Public Employment [2006] HCA 5; (2006) 225 CLR 130 at [18] and [49], Eaton at [48] and Commissioner of Police New South Wales v Gray [2009] NSWCA 49; (2009) 74 NSWLR 1 at [109] per McColl JA).
It is generally presumed that where there is more than one applicable law that there is no contradiction, and therefore no repeal (partial or in full), and that both affirmatively expressed laws can operate, unless actual contrariety or irreconcilable conflict is apparent (Butler v Attorney-General (Vic) [1961] HCA 32; (1961) 106 CLR 268 at 275 per Fullagar J, South Australia v Tanner [1989] HCA 3; (1989) 166 CLR 161 at 171, Minister for Immigration and Multicultural and Indigenous Affairs v Nystrom [2006] HCA 50; (2006) 228 CLR 566 at [2] per Gleeson CJ and [48] per Gummow and Hayne JJ, Eaton at [98] per Gageler J and Gray at [109]). This is because there is a “very strong presumption” that the legislature did not intend to contradict itself and intended that both laws should operate (Butler at 276, Ferdinands at [18], Eaton at [98] and Gray at [110]).
Determination of whether there is irreconcilable conflict requires the construction and close analysis of the particular provisions in question (Ferdinands at [18] and Eaton at [49]).
In this regard, two observations should be made of the text of the two provisions. First, r 33.11(1) of the UCPR speaks not of “costs”, but of “loss and expenses”. It may be presumed it does so deliberately given that Pt 42 of the UCPR is devoted, in its entirety, to awards of “costs”.
This assumption is reinforced by the language of r 33.11(2) which makes specific reference to a regime to fix any amount to be directed to be paid under sub-rule (1) “in accordance with the court’s usual procedure in relation to costs”. This suggest that the “loss and expenses” referred to in sub-rule (1) are not “costs” but are something else.
But having said this, there are a number of cases that have held that the cost of legal advice incurred in determining questions of privilege and confidentiality in respect of the production of subpoenaed documents are included within the ambit of “loss and expenses” (Hadid v Lenfest Communications Inc (1996) 65 FCR 350, Marsden v Amalgamated Television Services Pty Ltd [2001] NSWSC 77 and Franklins Pty Ltd v Endeavour Holdings Pty Ltd [2013] NSWSC 1204). This indicates that the phrase “loss and expenses” encompasses elements of the concept of “costs” found elsewhere, including in the UCPR and the CPA.
And having regard to the purpose underpinning r 33.11 of the UCPR, that it is couched in the language of “loss and expenses” and not “costs” is explicable on the basis that the provision applies to third parties in addition to the parties to the proceedings. The rule provides third parties with a mechanism to recoup their reasonable losses and expenses, including legal costs, immediately, and not at the end of the proceedings.
Second, the word “costs” is not defined in s 257B of the CPA, but given the Parliament’s deliberate choice of this term rather, than “professional costs” - which is expressly defined and employed in other provisions within Div 4 (which deals with “Costs”), it may be assumed that “costs” in s 257B includes more than “professional costs”. It is therefore arguable that such “costs” would include, in addition to professional costs, the losses and expenses associated with having to comply with a subpoena.
In my opinion, in light of the textual and contextual indicators discussed above, and as a matter of construction of both provisions, the “losses and expenses” referred to in r 33.11(1) of the UCPR readily fall within the concept of “costs” contained in s 257B of the CPA. This means that to the extent that a prosecutor seeks an order that the accused pay its reasonable loss and expenses of answering a subpoena issued to it by the accused, these losses and expenses fall within the ambit of “costs” for the purpose of s 257B of the CPA, and a prosecutor will be precluded from seeking payment of such an amount until such time as either of the preconditions mandated by that section have been met.
The council is unable to comply with both provisions in this instance and to the extent of the inconsistency, r 33.11 must cede to the prohibition contained in s 257B of the CPA. Put another way, r 33.11 of the UCPR has been impliedly repealed by s 257B of the CPA insofar as a prosecutor seeks to recover its reasonable loss or expenses incurred in the course of complying with a subpoena issued to it by an accused.
This conclusion does not, of course, prevent a prosecutor from seeking its reasonable loss and expenses at the conclusion of a trial should it be successful in the manner contemplated by s 257B(a) and (b). Nor will it preclude a third party in criminal proceedings from recovering its reasonable loss and expenses pursuant to r 33.11 of the UCPR.
The conclusion above is consistent with principle. As was discussed above in Truegain (at [96]), there are sound policy reasons for implementing different cost considerations where a public entity invokes the judicial power of the State in order to prosecute a party for criminal wrongdoing. These policy reasons have given rise to the explicit enactment of different costs regimes for criminal and civil proceedings which should not be lightly ignored.
Accordingly, in my view, the Court has no power at this stage of the proceedings to make the order sought in the council’s notice of motion and the application must be dismissed.
However, in case I am wrong in my analysis, I shall address the remaining arguments raised by the parties during the course of the hearing of the motion.
Are the Losses and Expenses Claimed by the Council Unreasonable?
As to the merits of the council’s claim, Benedict’s submissions may be summarised as three-fold:
(a)first, when regard is had to the documents sought in the subpoena, the loss and expenses were unreasonable;
(b)second, when regard is had to the disentitling conduct by the council occasioned by the late service of Ms Ellen Whittingstall’s affidavit (see Sutherland Shire Council v Benedict (No 3) [2015] NSWLEC 97), the loss and expenses could not be characterised as “reasonable”; and
(c)third, the discretion afforded to the Court pursuant to r 33.11(1) was at large, and therefore even if the Court found that the loss and expenses claimed by the council were “reasonable”, the council’s disentitling conduct meant that the Court should not exercise its discretion in the council’s favour.
In support of its contentions, Benedict relied on the affidavit of Ms Whittingstall sworn 22 May 2015, select paragraphs of Mr Luke Walker’s affidavit (Benedicts’ legal representative) sworn 9 June 2015, and an email passing between two council officers on 4 September 2012, which stressed that more than an electronic search was required to prove the absence of any consent to the activity giving rise to the prosecutions, including a search of the council’s “card system” and “records of minutes”.
All three contentions should be rejected. First, as the two affidavits of Ms McCulloch and the affidavit of Mr Walker make plain, Benedict was informed of the difficulty and expense of complying with, in particular, paragraphs 4 and 11 of the subpoena (which, it must be recalled, is the basis of the council’s claim).
In respect of paragraph 4, Ms McCulloch informed Benedict that the production of the minute books would incur costs levied by the New South Wales Government Repository, where they were stored and queried the relevance of the production of minute books as far back as 1930. Mr Walker confined the period covered by the minute books from 1940 to 1946, but nevertheless sought their production. The applicability of the recovered fees charged was not contested by him. The fees now sought to be recovered by the council only cover those files not held by the council and that were therefore required to be sourced from the Repository. On any basis, these fees are not unreasonable.
In respect of paragraph 11, the subpoena sought “all council files…(including…any other file)” that related to the land the subject of the charges from “the period 1930 to the present”. This description encompassed all legal files, including material over which a claim for privilege was likely to be made. It also sought documents post-dating the making of Ms Whittingstall’s affidavit. Suffice it to say, given the voluminous nature of the material sought, much of which would be subject to legal professional privilege, Benedict was requested to narrow the ambit of production. It did not. This therefore necessitated the council’s in-house and external solicitors to review the material and make the appropriate claims for privilege. While this work was undoubtedly undertaken with extreme urgency given the late service of Ms Whittingstall’s voluminous and technically complex affidavit, and the imminent hearing date, it was work that was nevertheless required to be undertaken. There is no evidence that costs were incurred only by reason of the late service of Ms Whittingstall’s affidavit. In my opinion, the fees incurred were, again, entirely “reasonable” for the purposes of r 33.11.
It is convenient to deal with the second and third contentions of Benedict together. From the outset, it should be noted that I do not accept that the discretionary power conferred on the Court in r 33.11(1) is as plenary as that described by Benedict in its oral submissions to the Court. It is axiomatic that all discretionary power, including the power contained in r 33.11(1) of the UCPR, will be coloured by the terms of its statutory grant and the subject-matter of its dominion. Having said this I accept that the exercise of the power in r 33.11 is predicated upon the Court having first determined that the loss and expenses were “reasonable”.
In any event, the outer limits of the discretion conferred upon the Court by r 33.11(1) need not be determined in this application. This is because I do not accept as material the disentitling conduct relied upon by Benedict as the basis for arguing that either the loss and expenses were not reasonable, or if reasonable, that considered in its totality, the unmeritorious conduct of the council precludes the Court making the order sought by it.
There were two aspects of the council’s conduct that were said to give rise to a claim of disentitling or unreasonable conduct warranting no order being made under r 33.11. First, the failure of the council to properly search paper records, including records of minutes, earlier, in order to prove an absence of consent granted to Benedict to conduct the activity the subject of the charges. And second, the delay in serving the affidavit of Ms Whittingstall.
In my opinion, for the purpose of this exercise, neither aspect, whether viewed severally or jointly, is sufficient. In short, the disentitling conduct does not bear upon either the need to issue the subpoena, or the reason why the loss and expenses were incurred by the council.
For example, in contrast to paragraphs 1 to 10, the legal files caught by paragraph 11 of the subpoena giving rise to almost all of the loss and expense incurred by the council in answering it, were not the subject of Ms Whittingstall’s affidavit. Furthermore, the fees claimed for the retrieval of the minute books were fees that were passed on to the council by the Repository, and in the absence of any explanation from Benedict, it is difficult to understand how minute books from 1940 to 1946 were relevant. That the council did not seek to set aside either paragraph 4 or paragraph 11 of the subpoena is irrelevant. The test of reasonableness in r 33.11(1) cannot, as a matter of logic, be predicated upon an application to have all or part of the subpoena set aside.
The council’s entitlement to its loss and expenses under r 33.11 was equally not extinguished by reason of the late service of Ms Whittingstall’s affidavit (the reason for which, namely, illness necessitating surgery, was not unreasonable). The subpoena was issued because of the content of the affidavit, not because of when it was served.
The same reasoning applies to the complaint by Benedict that the council was aware much earlier than June 2015 that some of the searches in fact undertaken by Ms Whittingstall were required to be carried out, as evidenced by the email dated 4 September 2012. Assuming for present purposes that is so, there is no evidence that had these searches occurred earlier it would have obviated the need for the subpoena to be issued, and therefore for the expenses to be incurred in answering it. Benedict did not argue to the contrary.
As was observed by Benedict, r 33.11 is not to be construed in “any narrow fashion” (J Aron Corporation v Newmont Yandal Operations Pty Ltd [2004] NSWSC 996 at [22] per Campbell J, Re Dovico; Ex Parte Mayne Wetherall [2012] NSWSC 822; (2012) 265 FLR 445 at [40] per Young AJ and Franklins at [12] per Pembroke J), yet this is precisely what Benedict attempts to do. The function of r 33.11 is to compensate applicants for actual loss or expense incurred provided that loss or expense is reasonable. On any view, the council has incurred loss and expense in complying with the subpoena issued by Benedict, and its conduct in incurring those expenses has been reasonable. While it is true that the subpoena was issued as a consequence of the service of Ms Whittingstall’s affidavit, the circumstances giving rise to the necessity for, and timing of, that affidavit are not sufficiently material, in my opinion, to render the expenses properly incurred by the council unreasonable permitting the Court to deny the council’s claim.
Conclusion and Orders
Because I do not consider that the Court presently has the power to make the order sought by the council for the reasons given above, the application must be dismissed and the exhibits returned.
But this will not preclude the council from renewing its request for these expenses and losses if either of the criteria in s 257B of the CPA are met. Were it not for the absence of power, I would have ordered Benedict to pay the sum sought by the council. In my view, this sum is a reasonable loss or expense incurred by the council in complying with the subpoena issued by Benedict. I do not consider that the conduct of the council the subject of reprobation in Benedict (No 3) would justify, for the purpose of this application, as an exercise of the Court’s discretion, the refusal to order the payment.
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Amendments
02 November 2015 - formatting edits
Sutherland Shire Council v Benedict Industries Pty Ltd (No 5) [2015] NSWLEC 103
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