The Director of Public Prosecutions v Petropoulos No. Sccrm-96-1643 Judgment No. S6601

[1998] SASC 6601

THE DIRECTOR OF PUBLIC PROSECUTIONS V PETROPOULOS

Application

LANDER J

On 17 June 1996 the defendant was charged with three other persons with a number of offences relating to the sale of cannabis, a prohibited substance, between 12 April 1996 and 17 June 1996.

The plaintiff applied for a restraining order pursuant to s6 of the Crimes (Confiscation Of Profits) Act 1986 prohibiting the defendant from dealing with property which included four items of cash: a sum of $2,416 seized from the defendant at the time of his arrest; the sum of $63,350 located in the defendant’s personal hand luggage at the time of his arrest; the sum of $33,050 cash located in the floor safe at the defendant’s home address at the time of his arrest; and the sum of $1,000 which was found in an envelope in the floor safe at the defendant’s home address at the time of his arrest.

On 2 August 1996 I made an order prohibiting the defendant from dealing with his interest in forfeitable property including the four items of cash to which I have referred.

There were other assets which became the subject of the order but they are unimportant for the purpose of a consideration of this matter.  At the time I made that order I also gave the plaintiff leave to add a further defendant, Adam Petropoulos, a son of the first defendant.  He was added as a defendant because the evidence disclosed he was the owner of a motor cycle which became subject to the order.  His presence in the action is not relevant for the purpose of a consideration of this application.  The order was varied by Matheson J on 11 July 1997, but those variations are unimportant.

On 22 October 1997, the first defendant applied for an order that sufficient monies be released from the restraining order to be applied towards legal costs.  At that time he filed two affidavits purportedly in support of that application. 

In the first affidavit sworn on 29 September 1997, he said that he was charged with two other persons of knowingly taking part in the sale of cannabis.  Those charges are in fact the charges which supported the original application for forfeiture under the Crimes (Confiscation Of Profits) Act.  He said that the charges were set for trial in the District Court to commence on 17 November 1997.  His evidence was that he had instructed D’Angelo Kavanagh solicitors to act on his behalf, and to engage such counsel as they might advise to represent him on his plea of not guilty. 

He said that the charges were serious and would require a good deal of pre-trial preparation for a trial which he estimated would last three weeks.  He further deposed that he had no assets other than the assets the subject of the restraining order, and no income except from a social security pension.  He said he would be unable to pay for the costs of his legal representation unless the funds, the subject of the restraining order, were made available to his solicitors for the purpose of legal representation.  He then identified the sums of money to which I have referred, which he said were his, and to which he was solely entitled.  Lastly he said in that affidavit that he had been advised by his solicitor that the Legal Services Commission would not fund his defence because he had sufficient assets, namely the assets the subject of the confiscation order, to fund his own defence.

His fiance also filed an affidavit in which she denied any entitlement to the sum of $33,050 to which I have referred.

On 31 October 1997 the order of 2 August 1997 was varied by Debelle J to allow the defendant access to the sum of $33,050.  The terms of the order were that that sum be deposited into the trust account of his solicitor and that the solicitor be at liberty to draw from the trust account subject to the following conditions:

“(1)The legal expenses be paid to the solicitor for the respondent at the rate of $130 per hour and fees to counsel for trial at the rate of $1,000 per day.

(2)That the expenses be paid only in concurrence (sic) of the Crown Solicitor or his delegate.

(3)That the Crown Solicitor or his delegate not be at liberty to disclose the content of any account for legal costs and disbursements to any other person.”

Subsequently another application was made to further vary the original order.  The defendant filed a further affidavit in which he stated that he had been informed that a preliminary issue of some complexity ought to be argued and because of its complexity senior counsel ought to be retained.

Perry J made an order further varying the order of 2 August 1996 to allow for payment (out of the sum of $33,050 held in the trust account of D’Angelo Kavanagh) of fees for senior counsel to argue the preliminary question of jurisdiction at a rate of $2,000 on brief and one refresher of $1,500 with the intent that senior counsel would be paid for a maximum of two days in court.  Allowance was also made for senior counsel to be paid a fee of $250 per hour for the time actually spent in preparation for that preliminary question.  Again the order was subject to the concurrence of the Crown Solicitor or his delegate.

I am informed that those charges have still not gone to trial.

At the same time as application was made to vary the order for the purpose of obtaining access to the sum of $33,050 in relation to the cannabis charge, the first defendant also filed an affidavit in relation to a further application for variation.

In that affidavit, sworn on 21 October 1997, he said that he had been charged with the rape of a female.  He sought an order that sufficient moneys be released from the restraining order to be applied towards his legal costs in respect of the rape charge. On 2 February 1998 the first defendant made an application that additional moneys be released to be applied towards his legal costs.  This matter first came before Bleby J on 6 February 1998 and was adjourned until 20 February 1998 to allow the defendant to file a further affidavit in support of the application. 

During the period of the adjournment a further affidavit was filed in which the applicant said his financial position had not changed since his previous affidavit and he had no assets apart from the assets subject to the restraining order and no income apart from a social security pension.

He said that the charges of rape were proceeding by way of criminal proceedings against him in the Adelaide Magistrates Court but he had no funds at all to defend the charges which he denied.

The matter first came before me on 20 February 1998.  At that time the first defendant sought to pursue his application. The first defendant indicated that the matter was one of urgency because the committal hearing in the Magistrates Court was to take place on the next Monday and the first defendant required funds for the purpose of defending himself. 

The plaintiff indicated that he objected to the making of any order for further variation of my order of 2 August 1996 because the charges which had given rise to the making of the original order had still not been disposed of and still required funding.  The prospects of those charges being heard and disposed of should not be jeopardised by dissipation of the assets on the defence of the rape charge.

The first defendant, however, had not served the Attorney-General with the affidavit in support of the application and Ms De Palma, who appeared on behalf of the Attorney-General, who had previously been given leave to intervene, indicated that she was not in a position to argue the matter which she believed had been listed for mention only.  In those circumstances she sought an adjournment of the proceedings so that she might consider the evidence which had been adduced by the first defendant.

I thought I was obliged to adjourn the matter for two reasons. First, as a matter of fairness to the Attorney-General, who had not been served with the evidence upon which the application relied; but secondly, because s20(3) of the Criminal Assets Confiscation Act 1996 requires that before the court allows property subject to any restraining order be applied towards legal costs the court must allow the Attorney-General an opportunity to appear and be heard on the matter.  That injunction, it seemed to me, required the granting of an adjournment because otherwise the Court would not have allowed the Attorney-General an opportunity to appear and be heard on the matter which, as the Act provides, is mandatory.

The matter was therefore adjourned until 24 February for argument.  Prior to allowing the adjournment I was assured by Mr Kavanagh, who appeared for the first defendant, that he would appear for the first defendant at the committal and continue to act for him notwithstanding the uncertainty about fees.  If I might say, with respect, that is very much to the credit of Mr Kavanagh.

When the matter resumed I was told that the Crown intended to enter a nolle prosequi in respect of that rape charge.  In those circumstances the Crown no longer opposed the variation of the order of 2 August 1996 to allow for payment of legal fees in respect of that charge of rape.  However the plaintiff and the Attorney-General indicated that those legal costs should be limited to reasonable legal costs.

The relevant statutory provision dealing with the application of funds subject to a restraining order is contained in s20(2) of Criminal Assets Confiscation Act 1996. It reads:

“(2).. Property subject to a restraining order may only be applied towards legal costs on the following conditions-

(a)     the court must be satisfied that-

(i)it is unlikely a person other than the person who wants the property applied toward legal costs could (assuming the property were not forfeited) establish a lawful claim to the property; and

(ii)the person who wants the property applied towards legal costs has no other source of funds (within or outside the State) that could reasonably be applied towards legal costs; and

(b)  the court may only authorise application of property towards the payment of legal costs on a reasonable basis approved by the court.”

........................... A person whose property is subject to a restraining order is only entitled to have that property applied towards legal costs if that person can satisfy the court that it is unlikely that any other person could establish lawful claim to the property subject to forfeiture, and the applicant who seeks the property to be applied towards legal costs has no other source of funds that could reasonably be applied towards legal funds.

........................... If those pre-conditions are met then the court may allow property, subject to a restraining order, to be applied towards legal costs. However, the Court is enjoined from authorising application of property towards the payment of legal costs except on a basis which is approved by the court. Section 20(2)(b) therefore only allows the court to authorise the application of property towards the payment of legal costs on a reasonable basis approved by the court. Two matters are contemplated. First, that the legal costs proposed are on a reasonable basis; and secondly, that they will be approved by the court.

........................... The Attorney-General and the plaintiff argued that the section contemplated that costs would only ever be allowed upon the same basis that the Legal Services Commission of South Australia allows for payment of legal costs in criminal cases in which it gives aid.  The Legal Services Commission of South Australia issues guidelines to costs in criminal cases effective from different dates.  Those guidelines indicate the amount the Commission will allow for a guilty plea in the Supreme Court, District Court and Magistrates Court, and the amount which will be allowed for both solicitor and counsel in relation to defended matters in each of these courts.  The guidelines also include fees for cases requiring two counsel in the High Court and for each of senior counsel and junior counsel.

........................... The guidelines contemplate an hourly rate for practitioners on defended matters of $90 per hour.

........................... The guidelines contemplate there will be special cases in which cases the standard rates will be varied either above or below depending on the degree of preparation and/or the complexity involved in the case.

........................... The guidelines, while specifying the appropriate rate for each of the items to which I have referred (and other items not relevant here) provide that a legal practitioner will only be entitled to receive 80 per cent of the fees within the guidelines.  The explanatory notes state that practitioners are reminded that they will not be paid the full fees but the dividend (currently 80 per cent) payable at the time of certification.  Counsel fees are treated as fees and not disbursements and so counsel receive only a dividend of 80 per cent at the time of certification.  In those circumstances it can be seen that the present rate provides for a practitioner to be paid, after taking into account the dividend, at the hourly rate of $72 per hour.

........................... The Attorney-General and the plaintiff both argued that fees fixed by the Legal Services Commission were the only fees that could come within the expression “legal costs on a reasonable basis” provided for in s20(2)(b).

........................... On the other hand Mr Kavanagh, who appeared for the first defendant, argued that the only appropriate rate for approval by the Court under s20(2)(b) was that contained in the Supreme Court scale of costs which appears in the Fourth Schedule to the Rules of Court; which rate is presently in the order of $125 per hour. He said that this Court could not fix any other fees which this Court could describe as reasonable except the fees provided for in the Supreme Court scale of costs.

........................... I do not agree with either argument.  If the Attorney-General and the plaintiff are correct in their contention that the only fees which could fit the description of ‘reasonable basis’ were those contained in the guidelines to costs in criminal cases issued by the Legal Services Commission of South Australia it would have been easy enough for Parliament to say so.  If Parliament wanted to ensure that no costs, except those costs which were equivalent to the costs which would be payable by the Legal Services Commission of South Australia, could be approved by the Court as coming within the description of legal costs on a reasonable basis then Parliament would have said so.  In any event I do not think that the fees which are encompassed in the guidelines to costs in criminal cases could be described as legal costs on a reasonable basis.  That is because the very guideline itself contemplates that whatever the appropriate rate the practitioner will only be paid 80 per cent of that rate.

........................... Of course it is the case that many practitioners accept assignments from the Legal Services Commission to act for persons upon that rate not only in criminal but in other matters.  Some do, I assume, because they are motivated by a sense of duty.  Some others do so for the purpose of obtaining experience.  Others accept the assignments because that would be a significant source of their work.  Others do because, notwithstanding the scale, they are able, through efficiencies, to make the work profitable.

........................... I venture to suggest, however, that none accept the work upon the basis that the Legal Services Commission of South Australia guidelines to costs in criminal cases could be described as costs which are fixed on a reasonable basis. 

........................... I reject the first defendant’s argument for three reasons.  The first reason is the same as the first reason for rejecting the Attorney-General and plaintiff’s argument.  That is, if Parliament intended that the Supreme Court always fix the Supreme Court scale of costs as legal costs on a reasonable basis it would have said so.  It would have been easy enough to say that the Court could only authorise the application of property towards a payment of legal costs if those costs were in accordance with the Supreme Court scale of costs.  It did not do so because it left the court to determine, on a case by case basis or a group by group basis, what would amount to legal costs on a reasonable basis. 

........................... Secondly, the scale of costs to which Mr Kavanagh says this Court must have regard under this section is a scale of costs which has been developed for civil matters.  That scale cannot be used for criminal matters except as a general guide. 

There is, however, a Guide to Counsel Fees which is issued by the Court to provide an indication of the range of counsel fees which taxing officers will regard as being within reasonable limits.  That does not discriminate, at least for trials, between civil and criminal matters.  It is possible to compare that scale with the Guidelines offered by the Legal Services Commission.  The Supreme Court Guidelines allow for a counsel fee at the rate of $650 - $1,350 per day for junior counsel.  The Legal Services Commission Guidelines provide for a counsel fee of $820 on brief and $550 per day.  Those figures are of course to be reduced by 80 per cent.

The third reason for rejecting the argument advanced by the first defendant is that it is not appropriate to prescribe a charge for work done in the Magistrates Court, for which the Magistrates Court prescribes a scale, upon the Supreme Court scale as a charge “on a reasonable basis”.  What will amount to legal costs on a reasonable basis will depend upon the court in which the work is to be performed.  Ordinarily the performance of legal tasks in the Magistrates Court involve matters of less complexity than in the District Court or the Supreme Court.  Usually work done in the Magistrates Court is done by persons more junior than those who would appear in the District Court or the Supreme Court.  Ordinarily the degree of responsibility in the Magistrates Court is less than that in the District Court or Supreme Court. 

The scale of costs in civil matters for the three courts reflect those matters and so it is that the guidelines in each of the Courts recognise a charge rate higher in the Supreme Court and District Court than in the Magistrates Court.

Similar legislation was considered by the Court of Appeal in New South Wales in New South Wales Crime Commission v Fleming (1991) 24 NSWLR 116. The legislation under consideration there allowed for a restraining order to be varied to make provision for meeting:

“... the reasonable legal expenses of any person whose interest in property subject to the restraining order...”

It was put in that case that the scale of reasonable legal expenses envisaged in the Act could be derived from the scale in the Supreme Court Rules.  Kirby P believed that would be a misuse of statutory power to use that scale.  The Supreme Court scale, he said, was designed to apply to costs incurred in relation to proceedings commenced in the Supreme Court and it would therefore be inappropriate to use it to control costs incurred in relation to proceedings in other courts.  I agree with that.  The Supreme Court scale of costs applies to civil proceedings commenced in the Supreme Court.  It is therefore not an appropriate scale for civil proceedings in the Magistrates Court, let alone criminal proceedings in that court. 

Gleeson CJ said (at 124) that a primary factor affecting reasonableness of the legal expenses for which provision is sought would be the market for legal services in which the client as a consumer is obliged to seek such services.

It seems to me that costs on a ‘reasonable basis’ for work done in a committal in the Magistrates Court would ordinarily be assessed by having regard to costs usually charged in the market place by those who appear in the Magistrates Court in committal proceedings and, although the scale of costs in the Magistrates Court has also been designed for actions commenced in the civil jurisdiction of that court, by general reference to the scale of costs in that court.  The scale cannot be used for the purpose of consideration of the appropriate costs in criminal proceedings in that court without modification but it is a guide, albeit imprecise, to the level of costs in the Magistrates Court across jurisdictions. 

Counsel Fees in the civil jurisdiction of the Magistrates Court are allowed at a rate of between $500 - $800 on brief and $300 - $500 for each subsequent day’s attendance.  The top end of that range is very near the amount that the Legal Services Commission Guidelines suggest for counsel fees in the Supreme Court.  The Legal Services Commission suggests a rate of $660 for counsel fees in the Magistrates Court for a full day trial or oral committal.  That is within the range and very near the midpoint of the range for counsel fees in that court in its civil jurisdiction.  I would have thought a daily fee of that amount would be a charge on reasonable basis.

I think therefore that the counsel fees provided for in the civil jurisdiction of the Magistrates Court do indicate an appropriate level of charging for an appearance in the criminal division of that court.  A figure of about $650-$700 would be a reasonable daily charge.  I think a daily charge is more appropriate than a fee on brief and refresher basis.

Of course one cannot be absolute about these matters. Sometimes it is the case that a matter before the Magistrates Court will be very important and will involve quite serious and complex issues. In those circumstances if a party was seeking an order under s20(2) that party would no doubt bring forward evidence to establish that some higher rate than the ordinary rate would be appropriate.

I think s20(2)(b) contemplates that the court, in considering whether to give approval to the legal costs charged or sought to be charged, must have regard to the charges prevailing in the market place which is, of course, where the applicant would be but for the restraining order. The applicant, by definition, would not be seeking assistance from the Legal Services Commission because he would be disqualified from obtaining assistance because his assets are subject to the restraining order. As well as considering the question of the charges prevailing in the market place, the court will have regard in a general way to the scale of costs in the court in which the legal work is to be performed. It is that scale of costs and those hourly charges which ordinarily the court assumes is an appropriate rate for a solicitor or barrister to charge, and for a person to be charged, at least in civil matters. There are, of course, circumstances whereby that rate becomes inappropriate because of the complexity of the work which is to be performed, but ordinarily that will provide a reasonable guide for determining whether the legal costs charged or to be charged are upon a “reasonable basis”.

In my opinion, therefore, it would be appropriate to allow out of the $33,050 a sum to be applied towards legal costs on a reasonable basis which, in the circumstances of this case, would be by reference to costs usually charged in committal proceedings in the Magistrates Court and by reference in a general way to the scale of costs in the civil jurisdiction of the Magistrates Court.

I will hear the parties as to the order.