Young v State of New South Wales (No 2)
[2013] NSWSC 330
•11 April 2013
Supreme Court
New South Wales
Medium Neutral Citation: Young v State of New South Wales and Ors; Young v Young (No 2) [2013] NSWSC 330 Hearing dates: 2 April 2013 Decision date: 11 April 2013 Before: Adamson J Decision: (1) Direct the plaintiff to bring in short minutes of order to reflect these reasons and to adduce such evidence as is relied upon as to the quantum of the costs discrepancy.
Catchwords: TORTS-malicious procurement of a search warrant-action established where the defendant's lies were actively instrumental in the issue of the search warrant
TORTS-malicious procurement of arrest- not made out when insufficient evidence to establish defendant actively instrumental
TORTS-malicious prosecution-party whose actions cause prosecution may be a prosecutor-falsity of accusations and collateral purpose demonstrate malice
FAMILY LAW-property settlement - interests of justice - significant non-financial contribution
DAMAGES-aggravated damages-awarded where plaintiff humiliated
DAMAGES-exemplary damages-awarded separately and in addition to aggravated damages where conduct warrants condemnationLegislation Cited: - Civil Procedure Act 2005, s 58, 64(1)(a)
- Crimes Act 1900, s 178BA, 300
- Family Law Act 1975 (Cth), s 74, 75, 79
- Uniform Civil Procedure Rules r. 7.29, 28.2Cases Cited: - A v State of New South Wales [2007] HCA 10; 230 CLR 500
- Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; 239 CLR 175
- Gibbs v Rea [1998] AC 786
- New South Wales v Ibbett [2006] HCA 57; 229 CLR 638
- In the Marriage of Kowalski (1992) 16 Fam LR 235
- Stanford v Stanford [2012] HCA 52; 87 ALJR 74
- State of New South Wales v Zreika [2012] NSWCA 37
- Young v Young [2012] NSWSC 1230Texts Cited: Carolyn Sapideen, Prue Vines (eds.), Fleming's The Law of Torts, 10th ed. (2011) Category: Principal judgment Parties: Common Law Proceedings (2007/265069)
Joanne Elizabeth Young (Plaintiff)
State of New South Wales (First Defendant)
Leslie James Young (Second Defendant)
Jetobee Pty Ltd (Third Defendant)
Family Law Proceedings (2008/286909)
Joanne Elizabeth Young (Plaintiff)
Leslie James Young (Defendant)Representation: Counsel:
D Campbell SC, J Sheller and WR Potter (Plaintiff)
No appearance for the Defendant
Solicitors:
Greg Walsh & Co (Plaintiff)
Legal Wisdom (Defendant)
File Number(s): 2007/265069; 2008/286909
Judgment
Introduction
Joanne Young, the plaintiff, has commenced two proceedings, which were heard together. In the first, the Family Court proceedings, she claims a property settlement against her former husband, Leslie Young. In the second, the Common Law proceedings, she claims damages against Mr Young and his company, Jetobee Pty Limited (Jetobee) for malicious procurement of a warrant, malicious procurement of arrest and detention and malicious prosecution.
On 28 April 2008, Jetobee filed a cross-claim in the Common Law proceedings in which it claimed damages in the order of $1.18m from the plaintiff for alleged conversion of cash from the Wiley Park Hotel. No evidence was adduced in support of the cross-claim, despite numerous directions that such evidence be filed. The cross-claim was struck out by order made on 7 March 2013 by reason of Jetobee's non-compliance with directions.
The Common Law proceedings originally included a claim against the State of New South Wales for damages for malicious procurement of a warrant, wrongful arrest and malicious prosecution. The proceedings between the plaintiff and the State of New South Wales have been resolved and accordingly do not fall for determination.
The Family Court proceedings were commenced in the Family Court on 12 March 2007 and were transferred to this Court by order made by the Family Court on 6 May 2008 that took effect on 24 July 2008 so that they could be heard together with the Common Law proceedings. On 12 July 2012 I ordered that four separate questions be answered by this Court pursuant to UCPR 28.2. The separate questions related, in broad terms, to the value of the matrimonial property.
In Young v Young [2012] NSWSC 1230, Harrison AsJ determined that:
(1) The plaintiff had no assets of any value either at 30 June 2000, being the approximate time from which she and Mr Young co-habited or as at 30 June 2012, being the date of assessment.
(2) No determination was made as to the value of Mr Young's assets as at 30 June 2000.
(3) As at 30 June 2012 Mr Young had assets of $19,607,726 and liabilities in the sum of $9,978,883 and accordingly his net assets were $9,628,843.
On 7 March 2013, I determined, subject to an inapplicable qualification, that the assessment of Mr Young's assets and their valuation determined by Harrison AsJ stand as the assessment of his assets for the trial commencing 2 April 2013.
On 7 March 2013, Mr McCowan who appeared on behalf of Mr Young sought an adjournment of the proceedings on the basis that Mr Young had given insufficient attention to the litigation because of his other commitments and that he was not prepared for the hearing. Having regard to Mr Young's numerous and consistent defaults in complying with directions I refused the application for adjournment. Mr McCowan foreshadowed that it was unlikely that he would appear on 2 April 2013 and there was some doubt as to whether Mr Young would appear.
When the matter was called on 2 April 2013, there was no appearance by or on behalf of Mr Young or Jetobee. Each was called three times outside the Court. Accordingly the matter proceeded without my hearing either from Mr Young or Jetobee.
Although Mr McCowan, on 7 March 2013, foreshadowed that he might withdraw from the proceedings, he did not apply for leave to do so or file the relevant documents. It appears from annexure "A" to the affidavit of Angela Skocic sworn 2 April 2013 that Mr McCowan's instructions were withdrawn on 28 March 2013. No notice of change was either served by Mr Young's solicitor on the plaintiff's solicitor or filed as required by UCPR 7.29.
Facts
The findings of fact set out below are derived from the plaintiff's unchallenged evidence, statements and medical reports tendered on her behalf, police records and documents tendered in the criminal proceedings in the Local Court at Burwood. Although the evidence tendered in these proceedings includes statements made by Mr Young, they were tendered by the plaintiff for the limited purpose of proving what Mr Young told police in order to procure a search warrant and take other action against the plaintiff which is the subject of the Common Law proceedings. I do not accept these statements as proving the truth of their contents except where they amount to admissions.
The commencement of the relationship between the plaintiff and Mr Young
Mr Young was born on 17 August 1944. He was married to a woman by the name of Caroline from whom he became divorced in 1987. The plaintiff was born on 13 May 1955. She had four children from a previous relationship who, by the time of these proceedings were adults. Her youngest child, Michael, was born on 30 August 1986.
The plaintiff and Mr Young met in 1989 when the plaintiff was working as a barmaid at the Wiley Park hotel which he owned and operated. They moved in together shortly afterwards and married on 9 April 1992. Michael, who was then five years old, was brought up by the plaintiff and Mr Young.
When they moved in together, Mr Young owned property that included: a residential property in Brisbane; the Wiley Park Hotel, including the business and freehold at 67 King Georges Road, Wiley Park; an interest in the Guildford Hotel and land at 62 King Georges Road, Wiley Park that was used as a car park.
From the commencement of their relationship the plaintiff was responsible for the day-to-day operation of the Wiley Park Hotel. She worked long hours, from 7 am until 10 or 11 pm. She served behind the bar, organised stock and supervised the staff. She obtained certificates referable to responsible service of alcohol (RSA) and responsible control of gambling (RCG). Mr Young provided her with a car, which she often used in the course of her work. She also looked after her son Michael.
In the early 1990's the plaintiff's daughters, Ebony and Erina, came from New Zealand to live with their mother and Mr Young at the Wiley Park Hotel. They attended St Ursula's Ladies College at Kingsgrove. Michael went to St Jerome's School at Punchbowl and later, from Year 7 onwards, to St Joseph's College, Hunters Hill. Mr Young paid the school fees for the three children.
Other ventures: the Riverside Tavern and the International Kiwi Club
In about 1993 or 1994 Mr Young purchased the lease of the Riverside Tavern in Queanbeyan, near Canberra. On Thursdays the plaintiff generally drove to Queanbeyan to work at the tavern from Thursday until Sunday evening, when she returned to the Wiley Park Hotel. The plaintiff found it difficult to cope with the demands of running two hotels. Ultimately, in about 1995 or 1996, she and Mr Young decided that it was too much and that he should sell the lease of the Riverside Tavern.
In 1995, Mr Young decided to open a club at Ashfield called the International Kiwi Club. He asked the plaintiff to be the licensee. Her role as licensee required her to attend the club every day which meant that she could no longer be responsible for operating the Wiley Park Hotel. The club closed after about six months, since approval for gaming machines was not forthcoming. The plaintiff returned to work full-time at the Wiley Park Hotel. As well as operating the hotel she undertook, at Mr Young's request, promotional work for the hotel which involved organising functions for charities and clubs.
In about the mid-1990's the plaintiff spent more time at the Guildford Hotel, which Mr Young also owned, although she continued to operate the Wiley Park Hotel. She continued to work long hours. She regularly liaised with Mr Young about day-to-day matters concerning the operation of the two hotels.
Improvements to the Wiley Park Hotel
At around this time, 1995, the plaintiff suggested to her husband that the Wiley Park Hotel ought be refurbished, a separate gaming room should be built and that he should apply for a 24-hour licence. Mr Young agreed with these suggestions and the hotel was renovated with a separate gaming room. These changes improved not only the general atmosphere within the hotel, but also its takings.
During this period the plaintiff lived with Mr Young in a two-bedroom unit in the upstairs section of the Wiley Park Hotel. This area, too, was renovated to make extra room for Michael, and also to provide rooms to permanent residents of the hotel which were rented out at the rate of $60 per week for a single room and $120 per week for a double room.
In 1999 the plaintiff and Mr Young moved to a unit at Cronulla, which they rented. It was the plaintiff's hope that, by moving away from the hotel, their relationship would improve. However, the plaintiff found it exhausting to have to commute from Cronulla to Wiley Park every day, particularly as she was working such long hours.
The separation
At about this time, the plaintiff discovered that Mr Young was having an affair with her best friend, Josephine Smith, who was born in 1968. She was devastated. She and Mr Young separated and she returned to live at the Wiley Park Hotel. Mr Young went to live with Ms Smith at the Guildford Hotel.
Notwithstanding the separation, Mr Young still wanted the plaintiff to continue to operate the Wiley Park Hotel as she had done successfully for about a decade. Mr Young had never paid the plaintiff either a salary or a share of the profits for her work at the various hotels for the last ten years since they began living together. He offered, after their separation, to pay her between $1000 and $1100 per week and asked her to draw a cheque on the bank account for the hotel for that sum every week.
The arrangement between separation and 17 July 2006
From the date of separation in 1999 the plaintiff drew a weekly wage in accordance with Mr Young's offer. She also became the acting licensee of the Wiley Park Hotel and dealt with the police and security issues that arose from time to time. During the period from their separation until 17 July 2006, Mr Young would visit the Wiley Park Hotel once or twice a month. He was, however, in a position to monitor how the hotel was trading since he received figures for daily takings, weekly banking and cheque listings and other financial information relevant to the hotel. There was an accountant, Joe Logue, who attended the hotel every week and reconciled the figures. There was also a full-time bookkeeper, Robyn Hape, who, in addition to her other responsibilities, calculated the wages for all staff members.
Shortly after the plaintiff and Mr Young separated, she raised with him the question of her authority to sign cheques. Mr Young was the sole signatory of the two Jetobee accounts at St George Bank at Kogarah, which were the operating accounts for the hotel. Mr Young kept the Jetobee 1 account cheque book with him but the Jetobee 2 account cheque book was kept on the hotel premises.
Because Mr Young rarely attended the hotel, there were many occasions when cheques were required to pay bills and meet expenses but he was unavailable to sign them. He would also travel overseas at short notice. In order to overcome the problem, Mr Young told the plaintiff that she was to sign cheques herself in his name. Following this direction, the plaintiff frequently signed cheques for the payment of such expenses. She was uncomfortable with the informality of this arrangement and asked him on several occasions to fill in a form that authorised her as a signatory on his account. Although Mr Young led the plaintiff to believe that he would attend to this, he did not do so.
In March 2005, there were further major refurbishments to the Wiley Park Hotel. The plaintiff made all necessary decisions regarding lighting, sound systems, furniture and so on, negotiated with the builders and sub-contractors and supervised the renovations. She was continually on-site: not only did she work at the hotel seven days a week, but she also lived there.
At about this time, Mr Young purchased a Nissan 350 for the plaintiff's use. It was initially registered in her name but in late 2006 he directed that it be registered in the name of Jetobee and the registration details were changed accordingly.
The events leading up to 17 July 2006
At 8.12 pm on 9 July 2006 Mr Young, using the internet banking facility to which he had sole access, withdrew $323,160 from the Jetobee 2 account, thereby reducing the balance to $61,574.60.
On 10 July 2006 at 6.28 pm, Mr Young received a facsimile from the Wiley Park Hotel setting out the cheque payments that had been made for that week in connection with the hotel.
On 13 July 2006 Mr Young, in his capacity as the licensee of Norton's Hotel on Norton Street, Leichhardt, contacted the police and arranged to meet them at Norton's the following morning. On 14 July 2006, Mr Young, his girlfriend, Ms Smith, and his solicitor, Stephen Alexander, met with police officers at Norton's. Mr Young told Detective Senior Constable Dunn that he had noticed a discrepancy on 10 June 2006 and had discovered that there was no money in the accounts. He told them that the balance of the accounts should average $100,000-$150,000 at any given time, the weekly takings being in the order of $40,000-$60,000. He told police that he needed the money to pay the poker machine tax and that he had raised the matter with the plaintiff who said that she would fix it up. He told police that the last day monies were banked was 10 July 2006 in the amount of $6900 only.
In the course of the meeting Mr Young showed police photocopies of cheques drawn on the operating account for the Wiley Park Hotel which had not been signed by him and which he alleged had been fraudulently presented.
Mr Young also told police that the plaintiff had a history of violence and had assaulted him and that it was possible that there was a firearm on the premises and drugs on the premises including cannabis and steroids. He told them that the plaintiff had a boyfriend called Tony Almoui and that she was a regular drug user.
Many of the statements made by Mr Young to police on 14 July 2006 were either false to his knowledge or had no basis whatever in fact. For example, Mr Young knew that Mr Almoui operated a service garage that services the motor vehicles used in the business of the Wiley Park Hotel. He also knew that, in so far as there was an apparent shortfall in the operating account of the hotel, it was a consequence of the substantial withdrawal he had made on 9 July 2006. He had no grounds to believe that the plaintiff was either in a relationship with Mr Almoui or that she took drugs. He also knew that there was no irregularity in the operation of the bank accounts of the hotel other than that for which he was responsible.
As a result of this interview Detective Senior Constable Dunn applied for a search warrant on 14 July 2006 and deposed that she had reasonable cause to believe that there would be, among other things, prohibited drugs on the premises of the Wiley Park Hotel. The search warrant was issued on Friday 14 July 2006 and expired at 3.45 pm on Monday 17 July 2006.
The plaintiff has identified the words "receipts of recent purchases" on the Occupier's Notice for the search warrant as being in Mr Young's handwriting. Although her evidence is unchallenged, I am not satisfied that her opinion is correct since I have not heard from the police, the proceedings against the State of New South Wales having been resolved.
The events of 17 July 2006
At about 7.45 am on Monday 17 July 2006 the plaintiff was asleep in her room in the upstairs unit at the Wiley Park Hotel when she heard a knock at the door. When she opened the door in her pyjamas she saw about ten people outside. One of the persons, a female, said:
"We have a search warrant to search your room."
No warrant was shown to the plaintiff. Nor were any of the people dressed in uniform or otherwise identified as police officers. One of the people had a video recorder which appeared to be operational. The persons, who turned out to be police officers, proceeded to search the plaintiff's bedroom. They pulled drawers out and threw clothing onto the floor. When the plaintiff asked what they were looking for, she was told that they were looking for evidence of larceny. The plaintiff was very upset.
The plaintiff heard a female police officer mention the word "drugs". The plaintiff informed them that there were no drugs there. She was then told that they were looking for receipts and other documents. The plaintiff told them that the office was downstairs. The following conversation took place.
Plaintiff: What are you looking for?
Police officer: Evidence of larceny.
Plaintiff: What's larceny?
Police officer: Theft.
Another police officer: You have to come with us.
The plaintiff then asked if she could get dressed. The police officers remained watching her while she changed out of her pyjamas and into her slacks. She found the experience humiliating. Three police officers escorted her downstairs to the dining area where her grandchildren were having breakfast. They took her to the gaming area of the hotel where two cleaners were working. Her daughter, Erina, was also there. Shortly afterwards, a police officer introduced a man in a suit, Mr Alexander, and told the assembled company that he wanted to address them.
Mr Alexander, who had been retained by Mr Young to act on his behalf, stepped forward and said:
"I am acting on behalf of the owner. You all will have to leave otherwise you will be arrested."
The police then directed everyone, including the plaintiff, to leave the hotel through the back door. The plaintiff was asked about the vehicle she used, a 350 Nissan car, which was being serviced at the time. One of the police officers said:
"If it is not here within 10 minutes it will be reported stolen."
When she was evicted from the Wiley Park Hotel which had been her home for over 16 years, the plaintiff took nothing but the clothes she was wearing. Apart from her personal possessions, she left behind her three dogs, a Staffordshire bull terrier and two Maltese terriers, who had lived with her at the hotel.
Following eviction
The plaintiff, her children and her grandchildren, who had been living in the hotel, went to live with her sister. She applied to a tribunal (the name of which does not appear from the evidence), presumably the Consumer Trader and Tenancy Tribunal.
There was a hearing before the Tribunal on 1 August 2006. Mr Alexander appeared on behalf of Mr Young. According to the plaintiff's unchallenged evidence, Mr Alexander, with whom the plaintiff communicated via a friend, Marcia Hau, undertook to return her belongings to her if she provided him with a list.
On 1 August 2006, Mr Young and Ms Smith met police at the Wiley Park Hotel and examined documents which were on the premises.
On 15 August 2006 Mr Young attended the Riverwood Police Station to make statements concerning the plaintiff: one entitled "Stealing" and the other entitled "Fraud".
In the statement entitled "Stealing", Mr Young deposed that he was the licensee of the Wiley Park Hotel which had been managed by his estranged wife, the plaintiff. He stated:
"As a result of some concerns I had with the running of the business by my former wife, Joanne YOUNG, I spoke to a solicitor, Stephen Alexander about this, I examined some dealings of the business and retained an accounting firm, Wappetts, to audit the records of the Wiley Park Hotel. I also spoke to police in Leichhardt about this matter."
The statement concluded:
"At this time, Jetobee Pty Limited has a deficiency in its accounts of . . . $40,759.75 for the day's trading, Sunday 16 July 2006. I am asking the police to investigate this matter as I believe Jetobee Pty Limited has been the victim of either stealing or fraud."
In the statement entitled "Fraud", Mr Young deposed to the financial arrangements for the Wiley Park Hotel. He stated that he appointed the plaintiff to manage the hotel in 2001. He deposed that he had never authorised her to sign his name on cheques and that he was the sole signatory. He described the practice that had developed of his signing cheques in blank and asking the plaintiff to fill them in so that jackpots from the gaming and various bills could be paid by her, as manager. He also deposed that in March 2006 he had received an assessment notice in relation to the hotel's poker machine duty but when he looked at the bank balance he realised that there might not be sufficient funds to meet the assessment.
On 16 August 2006, just over a month after the eviction, the plaintiff received an urgent message from Ms Hau that her three dogs had been delivered to a vet and that if she wanted to retrieve the dogs she would have to pay the veterinary fees. The plaintiff had no money to do so. As far as she is aware, the dogs were killed. She became very distressed as a result as she was very attached to her dogs.
On 17 August 2006 Ms Hau made enquiries about the plaintiff's possessions and was informed that there were four boxes which could be collected if a charge of $900 per box was paid. The plaintiff did not have sufficient resources to retrieve any of the boxes.
In about September 2006 the plaintiff successfully applied for a Newstart allowance of $480 per fortnight. At that time she was paying $80 per week in rent.
On 12 March 2007, the plaintiff commenced the Family Law proceedings in the Family Court.
In July and August 2007, the police made contact with the plaintiff's solicitor, Mr Walsh, about service of Court Attendance Notices (CANs).
The plaintiff's arrest and detention
On 27 September 2007 the plaintiff had helped one of her daughters move out of rented premises at Quakers Hill and had spent the night at a friend's house.
On the following morning, 28 September 2007, the plaintiff caught the train to Wiley Park which was close to where she lived with her sister, Dolly Ann. She had just got off the train at Wiley Park Railway Station and was leaving the station when she was arrested and charged by police.
She was charged with:
(1) Charge 001 of making a false instrument with intent contrary to s 300(1) of the Crimes Act 1900;
(2) Charge 002 of using a false instrument with intent contrary to s 300(2) of the Crimes Act; and
(3) Charge 003 of obtaining a financial advantage by deception contrary to s 178BA(1) of the Crimes Act.
She was then taken to Burwood Police Station where she was photographed, fingerprinted and taken to a custody cell. The plaintiff was anxious and scared and deeply distressed. Her solicitor, Greg Walsh, arrived within a short period of time and told her that she would be released on bail if she surrendered her passport.
The plaintiff rang Dolly Ann to ask her to bring her passport to the police station. Because she was so upset, the plaintiff could not remember where her passport was. Dolly Ann and another sister, Jessie, had to look through all of her belongings to find it. Jessie and her husband Brian delivered the plaintiff's passport to the police station so that she could be released on bail.
The plaintiff was released about six hours after her arrest. The conditions of bail included that she report daily to the Quakers Hill police station, which required her to travel from Wiley Park to Quakers Hill every day until her bail conditions were varied about three weeks later. She found the experience of being treated like a violent criminal extremely humiliating.
Interim orders made by the Family Court
On 2 May 2008, Le Poer Trench J, of the Family Court, heard the plaintiff's applications for:
(1) an interim spousal maintenance order pursuant to s 74 of the Family Law Act 1975 (Cth);
(2) an interim property order pursuant to s 79 of the Family Law Act to enable her to pay legal costs associated with the criminal proceedings and her Family Law proceedings; and
(3) an order that the Family Law proceedings be transferred to this Court.
By judgment delivered on 6 May 2008, Le Poer Trench J ordered that the proceedings be transferred to this Court and relevantly ordered Mr Young to pay to the plaintiff:
(1) $100,000 by way of interim property settlement for costs associated with the plaintiff's defence of the criminal charges;
(2) $100,000 by way of interim costs to be applied to funding her Family Law proceedings;
(3) Until further order, $1000 per week by way of interim spouse maintenance.
Further charges
On 30 January 2008 the plaintiff was charged with the following three further charges:
(1) Charge 004 of making a false instrument with intent contrary to s 300(1) of the Crimes Act;
(2) Charge 005 of using a false instrument with intent contrary to s 300(2) of the Crimes Act; and
(3) Charge 006 of obtaining a financial advantage by deception contrary to s 178BA(1) of the Crimes Act.
The Local Court proceedings
The hearing of the criminal prosecution of the plaintiff began in the Burwood Local Court on 13 May 2008. After some argument about the form of the CANs, the Magistrate struck out charges 001, 002, 004 and 005. The police prosecutor sought an adjournment of the matter, which was granted over the plaintiff's opposition.
The matter was stood over part-heard to 9 and 10 July 2008. On 19 June 2008 the plaintiff was charged with a further 40 charges numbered 007 to 046, charging offences against s 300(1) and (2) of the Crimes Act in respect of particular cheques.
The proceedings resumed on 9 July 2008. Police officers gave evidence on 9 July 2008 and Mr Young was called and cross-examined on 10 July 2008.
In his evidence in chief in the Local Court proceedings, Mr Young swore that he adopted a practice of signing blank cheques and leaving them at the Wiley Park Hotel for the plaintiff to fill out in order to pay expenses and gambling pay-outs from time to time. He swore that he would never give up the right to sign cheques and denied that he ever told the plaintiff that she could sign cheques.
In his cross-examination, Mr Young reiterated his evidence in chief that he had never given up the right to sign cheques in respect of the trading operations of the Wiley Park Hotel. He said that every cheque drawn on the Jetobee accounts 1 or 2 ought bear his signature because he was the only signatory.
He agreed that, from the time of the plaintiff's appointment as manager of the hotel, he received weekly cheque listings from her that recorded the cheques that had been generated by the business. Mr Young was shown such a weekly cheque listing for the week ended 9 July 2006, which bore a facsimile imprint recording that it was sent from the Wiley Park Hotel on 10 July 2006 at 6.28 pm. The document recorded that there had been a gaming profit in that week of $97,925.98 and total cheques drawn of $41,000.62. Mr Young refused to confirm that he had received the document and said that at that time he was about to go into hospital, was suffering extreme pain and that his recollection of that period was extremely poor.
Mr Young was cross-examined about the weekly cheque listing for the week ended 9 July 2006 and agreed that there was nothing unusual about the listing. He admitted in cross-examination in the Local Court proceedings that he trusted the plaintiff and that she had considerable latitude in writing out cheques, including to herself.
Mr Young agreed that he was the only person who could access the internet banking facility for the Jetobee accounts. He admitted that at 8:12 pm on 9 July 2006 he had withdrawn $323,160 from the Jetobee 2 account, thereby reducing the balance to $61,574.60. He said in evidence that he could not remember what happened to the money.
The Local Court proceedings were adjourned to 27 October 2008. On that day Mr Young agreed that none of the 200 cheques that were produced for the period of ten weeks from May until July 2006 bore his signature. There were only three cheques that bore his signature and they were post-dated and had been filled out by him. He was taken at length to various cheques in the weekly cheque listing which he agreed were referable to the normal running of the hotel's business.
The Local Court proceedings continued on 28 October 2008. At the close of the prosecution case, the plaintiff successfully applied for all remaining charges to be dismissed. She then applied for a costs order against the prosecution, which was granted.
The tax invoices rendered by Mr Walsh, Mr Campbell SC, Ms Moididis and Mr Sheller are in evidence. I am informed that the total of these fees is greater than the amount recoverable under the costs order and that the discrepancy is claimed by way of damages in the Common Law proceedings.
Divorce
A divorce order was made by the Federal Magistrates Court of Australia on 15 November 2012 to take effect on 16 December 2012.
The plaintiff's mental and physical health
The plaintiff attended Ross Colquhoun, psychologist, for medicolegal assessment on 29 April 2008 and 21 April 2010. He considered that she had deteriorated significantly since the events of 17 July 2006. She no longer cared for her appearance or bought new clothes. She dressed casually, had put on weight and felt "unpresentable". The report of 29 April 2008 said:
"Following the incident, Mrs Young has virtually ceased all social and recreational activities. She is embarrassed about what she has become and how her reputation has been destroyed. She reported that for some time now her whole life has consisted of doing very little and rarely going out or associating with anyone, although she feels angry and resentful about this."
"She feels she has let her family down especially those she has employed in the hotel and that she is embarrassed and shamed by the circumstance of her loss of role and eviction."
Of the plaintiff's earning capacity, Mr Colquhoun said:
"In Mrs Young's current mental, and emotional state, she is unlikely to gain employment. While she says that if she could return to her role as if the incident had never happened she would be able to resume her role, however her appearance, age and ability to trust anyone again would limit to a substantial degree the type of job she could do and her psychological symptoms, such as her depression and thought disorder, would make it virtually impossible for her to hold any full-time job for any length of time."
In the second of the two reports, Mr Colquhoun recorded that the plaintiff presented as "casually attired and presentable". She was controlled and unemotional during the initial stages of the consultation but she became more emotional and teary when talking about the eviction, the allegations of fraud made by Mr Young and the subsequent police inquiry. He also recorded:
"Mrs Young described her relationship with Les [Mr Young] prior to the incident [on 17 July 2006] as being good, having stated that she believed their professional relationship to have been better than their intimate relationship. She reported feeling no anger towards Les for his involvement in her suffering but indicated that she felt betrayed and hurt given such actions seemed so inconsistent with the man she had come to know."
Mr Colquhoun opined that the plaintiff's mental condition had deteriorated and that she also suffered from post-traumatic stress disorder. He also opined that she would find it very difficult to obtain employment, particularly in her former occupation as hotel manager.
In her evidentiary statement of 30 April 2010 the plaintiff deposed that her symptoms have improved although she still takes Effexor for her anxiety. She feels more in control although she is still anxious and, for that reason, does not go out much in public.
The plaintiff's claim under s 79 of the Family Law Act
Section 79(1) of the Family Law Act relevantly provides that a court may make such order as it considers appropriate altering the interests of the parties to the marriage in property, including requiring a transfer of property for the benefit of either or both of the parties to the marriage. Section 79(2) provides that a court shall not make such an order:
"unless it is satisfied that, in all the circumstances, it is just and equitable to make the order."
Section 79(4) lists the mandatory relevant considerations required to be taken into account in deciding what order should be made under s 79(1).
In Stanford v Stanford [2012] HCA 52; 87 ALJR 74 (Stanford), French CJ, Hayne, Kiefel and Bell JJ said at [35]-[40] that it is necessary to begin consideration whether an order should be made under s 79 by identifying the existing legal and equitable interests of the parties and to consider the question whether an order is just and equitable under s 79(2) separately to a consideration of the mandatory relevant considerations in s 79(4).
The identification and value of the existing legal and equitable interests of the parties was determined by Harrison AsJ. In light of the order I made on 7 March 2013 referred to above, I find that Mr Young presently has $9,628,843 worth of net assets and the plaintiff has no assets of any value.
The threshold question is whether I am satisfied, in all the circumstances, that it is just and equitable to make an order under s 79(1). In deciding this question I am required to disregard moral considerations. As the plurality said in Stanford at [52] this question is not to be answered by reference to moral obligations since such a reference is "at the very least apt to mislead".
In Stanford the plurality said at [42]:
"In many cases where an application is made for a property settlement order, the just and equitable requirement is readily satisfied by observing that, as the result of a choice made by one or both of the parties, the husband and wife are no longer living in a marital relationship. It will be just and equitable to make a property settlement order in such a case because there is not and will not thereafter be the common use of property by the husband and wife. No less importantly, the express and implicit assumptions that underpinned the existing property arrangements have been brought to an end by the voluntary severance of the mutuality of the marital relationship. That is, any express or implicit assumption that the parties may have made to the effect that existing arrangements of marital property interests were sufficient or appropriate during the continuance of their marital relationship is brought to an end with the ending of the marital relationship. And the assumption that any adjustment to those interests could be effected consensually as needed or desired is also brought to an end. Hence it will be just and equitable that the court make a property settlement order. What order, if any, should then be made is determined by applying s 79(4)."
While the plaintiff and Mr Young were living as man and wife, the plaintiff lived at the Wiley Park Hotel with some members of her family, including Michael. She had the use of a car that was provided for her by Mr Young or Jetobee. Her expenses were met. She was financially secure as long as the marital relationship continued or as long as Mr Young wanted her to remain living and working at the hotel.
However, on 17 July 2006, the principal, if not all of the, assumptions that underpinned the existing property arrangements were destroyed. The plaintiff would have been, but for the charity of her family, destitute. She had neither income nor assets and she had lost the equanimity and self-esteem that might have permitted her to be financially self-sufficient in the future. She is now dependent on social security benefits and the assistance of her family. By contrast, Mr Young still has title to, and the benefit and use of, the property identified by Harrison AsJ which has a substantial net value.
In these circumstances I consider it to be just and equitable to make an order under s 79.
I turn now to the considerations that I am required by s 79(4) to take into account to determine what order ought be made under s 79(1). Section 79(4) relevantly provides:
(4) In considering what order (if any) should be made under this section in property settlement proceedings, the court shall take into account:
(a) the financial contribution made directly or indirectly by or on behalf of a party to the marriage . . . to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(b) the contribution (other than a financial contribution) made directly or indirectly by or on behalf of a party to the marriage . . . to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(c) the contribution made by a party to the marriage to the welfare of the family constituted by the parties to the marriage and any children of the marriage, including any contribution made in the capacity of homemaker or parent; and
(d) the effect of any proposed order upon the earning capacity of either party to the marriage; and
(e) the matters referred to in subsection 75(2) so far as they are relevant; and
(f) any other order made under this Act affecting a party to the marriage or a child of the marriage;
. . .
Section 79(4)(a): financial contributions to property
The evidence does not reveal any financial contribution made by the plaintiff to Mr Young's property. I infer that Mr Young acquired the assets under his control through his own efforts and financial resources.
Section 79(4)(b): non-financial contributions to property
I have made findings set out above as to the duties performed by the plaintiff, the hours she worked, the responsibility she had for the conduct of the hotel and the trust that was reposed in her to safeguard and manage the finances of the hotel with the assistance of an accountant and book-keeper. She made a substantial non-financial contribution to the operation of Mr Young's various businesses and accordingly to the maintenance, conservation and improvement of Mr Young's assets. Her contribution was made not only during the period of co-habitation from 1989 until 2000 but also for the six years post separation until 17 July 2006. Her contribution during this latter period is also relevant: In the Marriage of Kowalski (1992) 16 Fam LR 235 at 243.
For the period of co-habitation the plaintiff received no monetary remuneration. For the period from their separation in 2000 until July 2006 she received a "salary" of about $1000 per week. There was no superannuation paid in respect of this salary. Having regard to her substantial non-financial contribution, her "salary" did not in any way represent the true value of her contribution. All of her work from 1989 until 2006 went towards increasing Mr Young's wealth, to which she had some access and which she, to a limited extent, shared until she was evicted in July 2006. At the commencement of this period she was 34. When she was evicted she was 51. A large proportion of her active working life was devoted to the improvement of Mr Young's assets.
Section 79(4)(c): contributions to the welfare of the family
The plaintiff and Mr Young did not have children together. Nonetheless three of the plaintiff's children became part of their household. Mr Young regarded Michael as his own son. Mr Young made a financial contribution to the well-being and education of at least three of the plaintiff's children. In addition to her long working hours, the plaintiff also contributed in the role of homemaker.
Section 79(4)(d): the effect of any proposed order upon the earning capacity of either party to the marriage
There is no evidence before the Court as to the effect of any order on the plaintiff's or Mr Young's earning capacity. Since the order I propose to make will involve the payment of a sum of money to the plaintiff, rather than the transfer of an interest in, for example, one of the hotels, there is no reason to consider that the proposed order will have a discernible effect on Mr Young's earning capacity, except to the extent that it will deplete his capital resources.
Section 79(4)(e): relevant matters under s 75(2)
Section 79(4)(e) requires me to consider relevant matters under s 75(2). The additional matters referred to in subsection 75(2) that are potentially relevant are the following:
(a) the age and state of health of each of the parties; and
(b) the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment; and
(c) ...
(d) commitments of each of the parties that are necessary to enable the party to support:
(i) himself or herself; and
(ii) a child or another person that the party has a duty to maintain; and
(e) the responsibilities of either party to support any other person; and
(f) subject to subsection (3), the eligibility of either party for a pension, allowance or benefit ...and the rate of any such pension, allowance or benefit being paid to either party; and
(g) where the parties have separated or divorced, a standard of living that in all the circumstances is reasonable; and
(h) ...
(ha) the effect of any proposed order on the ability of a creditor of a party to recover the creditor's debt, so far as that effect is relevant; and
(i) ...
(k) the duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration; and
(j) ...
(o) any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account.
Section 75(2)(a): the age and state of health of each of the parties
The plaintiff is now almost 58 years old. She is still suffering from anxiety and has not regained her self-confidence since her eviction. Mr Young is 68. There is no evidence as to the state of his health. In his evidence in the Local Court proceedings he complained that he had been in pain and was indisposed but I could not reasonably infer that his complaints were other than self-serving assertions designed to deflect attention from inconsistencies in his evidence.
Section 75(2)(b): the income, property and financial resources of each of the parties and their capacity for appropriate gainful employment
The respective property and financial resources of the parties have already been noted.
I do not consider the plaintiff to have any capacity to earn a substantial income. At best she might be capable of part-time work, although not in her former occupation as a hotel manager. Her loss of confidence and anxiety has reduced, if not destroyed, her prospects of obtaining employment, except in a family business or one where allowances were made for her diminished state. There is no evidence before me as to Mr Young's capacity for employment, aside from his ownerships of income-generating properties.
I should note for completeness that on 7 March 2013 when the matter came before me for orders relating to the striking out of the cross-claim and confirmation of the findings of Harrison AsJ, Mr Young's then solicitor, Mr McCowan said from the bar table:
"Circumstances have sort of overtaken this matter. In the sense, the assets have largely disposed of, further assets have been disposed of and the asset pool is shrinking dramatically. At this stage I am instructed Mr Young's finance position is just solvent."
. . .
"My instructions are, if the receivers moved in there is no asset, full stop. The debts, on my instructions, are at least equal to depending on the order of sale may well exceed any asset. The proceedings may well be a nullity. My instructions are, there is no point in proceeding. I will be withdrawing today because Mr Young is not in a position to make any further payments. His financial position is, it is desperate."
He also read an affidavit sworn by Mr Young on 6 March 2013 in which Mr Young deposed to his parlous financial circumstances and his need for an adjournment of the proceedings.
As referred to above, Mr Young did not appear at the hearing of this matter. The evidence adduced on his behalf on 7 March 2013 was not tested on that day or read in opposition to the plaintiff's case before me on 2 April 2013. Accordingly I do not place any weight on either his affidavit evidence or the statements made by his solicitor from the bar table on 7 March 2013.
Section 75(2)(d) and (e): Commitments of each of the parties that are necessary to enable the party to support himself or herself and a child or other person that the party has a duty to maintain
The plaintiff's children are now adults. Her financial statement was made on 22 February 2007 and is, accordingly, out of date. However I infer that her lack of assets, her incapacity to work and her mental state have necessarily had the effect that her standard of living is modest. There is no evidence as to Mr Young's present commitments or capacity to support himself or others, save for the findings of Harrison AsJ which establish that he is a very wealthy man.
Section 75(2)(f): the eligibility of either party for a pension, allowance or benefit and the rate of any such pension, allowance or benefit being paid to either party
The evidence establishes that the plaintiff received a Newstart allowance in 2007. There is no current evidence of either the plaintiff's or the defendant's eligibility. It would be reasonable to infer that the defendant would not be eligible for any social security benefit that was subject to an assets test.
Section 75(2)(g): where the parties have separated or divorced, a standard of living that in all the circumstances is reasonable
After separation both parties to a marriage are normally entitled to enjoy the same standard of living to which they had become accustomed during co-habitation, if it is both possible and reasonable in the circumstances. The evidence referred to above established that the plaintiff did enjoy a similar standard of living post-separation to that which she had enjoyed during co-habitation. She continued to live at the Wiley Park Hotel with at least one of her children and her three dogs. She also continued to have access to a motor vehicle provided by Mr Young or Jetobee. However, after 17 July 2006, her standard of living dropped substantially when she was evicted from the hotel and moved in with her sister. She could no longer make ends meet.
I do not have evidence as to Mr Young's present living arrangements.
The standard of living that the plaintiff enjoyed while cohabiting with Mr Young and until 17 July 2006, while adequate, was not ostentatious. She is entitled to enjoy at least the same standard of living to which she had become accustomed during co-habitation. The evidence establishes that Mr Young has the means to enable such provision to be made.
Section 75(2)(ha): the effect of any proposed order on the ability of a creditor of a party to recover the creditor's debt, so far as that effect is relevant
The plaintiff has no substantial creditors. Mr Young has substantial creditors, as found by Harrison AsJ, amounting to some $9,978,883. However the total value of Mr Young's assets is substantially greater than the sum of the liabilities. Accordingly an order under s 79(1) can be made without compromising the legal rights of his creditors to payment of their debts.
Section 75(2)(k): the duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration
The period of co-habitation was 11 years. The period during which the parties were financially involved was 17 years. The plaintiff's earning capacity was, in a real sense, enhanced by the marriage since she was given the opportunity of becoming a hotel manager rather than a barmaid and proved herself to be both competent and trustworthy in this role. However the earning capacity which she demonstrated, albeit it that her actual earnings did not reflect it, was effectively destroyed by the events on 17 July 2006 and subsequently. In these circumstances she has lost the capacity to provide for herself from her own labour and efforts.
Section 75(2)(o): any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account
The plaintiff submitted that the "other matter" to which I might have regard is the abruptness of the plaintiff's dismissal at the Wiley Park hotel and eviction from her lodgings there which contributed to her present financial position.
I do not consider that this is a separate matter to which I should have regard in light of my findings set out above, which already take into account the plaintiff's present mental health and incapacity for work which are a result of those events. Were I to take these matters into account as a separate matter, it might be thought, incorrectly, that I was taking into account matters of morality which are irrelevant considerations in the exercise of this jurisdiction: Stanford at [52].
Section 79(4)(f): any other order made under this Act affecting a party to the marriage or a child of the marriage
I am obliged to take into account the spouse maintenance orders and interim property order made by Le Poer Trench J on 6 May 2008. It is desirable that the spouse maintenance order continue only up until the order for property settlement is made. I propose to give credit for the payments already made under the interim property order and the spouse maintenance order, and also for the interim costs order.
Conclusion: order for property settlement
The relationship between the plaintiff and Mr Young lasted for 17 years, although for the last six of that period it was principally a continuation of the professional relationship between them that had started from the time of their co-habitation in 1989. The evidence does not enable me to quantify the extent to which the plaintiff's labour and skills contributed to the value of Mr Young's assets. However, her contribution was, in qualitative terms, a very substantial one.
Mr Campbell SC, who appeared for the plaintiff, suggested that if one were to consider that the plaintiff ought receive a capital sum which would yield an income of $1000 a week for the rest of her life, a capital sum of $1,070,000 would be required. This figure is calculated by reference to a life expectancy of 31.5 years and applies a 3% discount rate. This capital sum does not take any particular account of the substantial contributions the plaintiff made from 1989 until 2000 for which she received no financial remuneration.
Mr Campbell SC also submitted that if one had regard to the total net value of Mr Young's property, being approximately $9.6m, it would be reasonable to make an award of, say 25%- 35% of that sum, being $2.5m- $3m, having regard to all the factors referred to above, including the length of the relationship, the post-separation relationship and the substantial contribution made.
In all the circumstances, I propose to make an order pursuant to s 79(1) that Mr Young pay the plaintiff $3m, with credit to be given for payments already made pursuant to the spouse maintenance and interim property orders.
Common Law Proceedings: the plaintiff's claim for damages for malicious procurement of a warrant, malicious procurement of arrest and detention and malicious prosecution
The plaintiff, in the Further Amended Statement of Claim, claims against the State of New South Wales damages for malicious procurement of warrant, wrongful arrest and false imprisonment and malicious prosecution. By contrast, the plaintiff claims, as against Mr Young, damages for malicious procurement of warrant and malicious prosecution. The arrest and detention of the plaintiff are part of the narrative of material facts but they are not expressly pleaded against Mr Young by way of a separate claim in tort. However the plaintiff at all times conducted her case on the basis that she claimed damages against Mr Young for malicious procurement of arrest and detention as well as for the other two torts.
In these circumstances I propose to order pursuant to s 64(1)(a) of the Civil Procedure Act 2005 that the plaintiff to amend the Further Amended Statement of Claim to clarify that she seeks damages for malicious procurement of arrest and detention against Mr Young. I regard such an amendment as necessary to ensure that the pleadings accurately reflect the substance of the case that the plaintiff put to me by way of opening, evidence and submissions: Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; 239 CLR 175. at [14] per French CJ. Further I regard the making of such an order as in accordance with the dictates of justice, as required by s 58 of the Civil Procedure Act.
The plaintiff claims compensatory damages, aggravated damages and exemplary damages for each of these torts.
The basis of the plaintiff's claims against Mr Young is that he, either on his own behalf or on behalf of Jetobee, gave false information to the police which caused, inter alia:
(1) The execution of the search warrant on the plaintiff's residence at the Wiley Park Hotel on 17 July 2006;
(2) The plaintiff's arrest and detention on 28 September 2007; and
(3) The laying of charges against her, all of which were ultimately dismissed which culminated in the Local Court proceedings.
The principles that apply to the plaintiff's claims in the Common Law proceedings are set out in Gibbs v Rea [1998] AC 786 (Gibbs v Rea) and A v State of New South Wales [2007] HCA 10; 230 CLR 500.
In Gibbs v Rea the Privy Council said at 797, of the torts of malicious procurement of a warrant, malicious procurement of arrest and malicious prosecution:
The true foundation of each is intentional abuse of the processes of the court. Malice in this context has the special meaning common to other torts and covers not only spite and ill-will but also improper motive. In the present context the requirement of improper motive would be satisfied by proof of intent to use the process of the court for granting a warrant for a purpose other than to search in the permitted circumstances.
There is an additional factor in the instant case that arises from the fact that Mr Young did not himself apply for the search warrant and did not himself initiate the prosecution since the police were ultimately responsible for these two matters. The liability of a private person, such as Mr Young, in these circumstances was addressed in Fleming The Law of Torts, 10th ed,, (2011) (Fleming) at [27.30] in the following passage:
"The defendant must have been "actively instrumental" in setting the law in motion. Merely supplying information, however incriminating, to the police on which they eventually decide to prosecute is not the equivalent of launching a prosecution; the critical decision not being the defendant's, [the stone set rolling] is simply a stone of suspicion. These days one should hesitate to credit an informant with having overcome the scepticism of a police trained to test the reliability of complaints. On the other hand, an informant may be regarded as a prosecutor if the information given virtually compels the police to prosecute, even more where the defendant deliberately deceives the police by supplying false information without which they would not have proceeded."
For the reasons that follow I consider that Mr Young deliberately deceived the police by supplying false information without which they would not have proceeded. The false information he provided to the police virtually compelled them to apply for a search warrant because of the allegations concerning drugs. The false information regarding the procedure for the signing of cheques virtually compelled the police to charge the plaintiff with offences relating to fraud.
It is not to the point that the police, had they approached the matter more sceptically, might have been more diffident about applying for, and executing, the search warrant or arresting and charging the plaintiff. I consider Mr Young to have been at least "actively instrumental" in setting the law in motion.
Malicious procurement of a search warrant
For the plaintiff to establish a malicious procurement of a search warrant against Mr Young, she must establish, relevantly, the following:
(1) Mr Young caused a successful application for the search warrant to be made.
(2) Mr Young did not have "reasonable and probable cause" to cause the application to be made.
(3) Mr Young lacked any bona fide belief that he was providing to the police material sufficient to meet the conditions for issue of the warrant sought.
(4) Mr Young acted with malice, and
(5) The damage resulted from the issue or execution of the warrant.
The first requirement is established since Mr Young's conduct was, to borrow the words from the passage from Fleming set out above, "actively instrumental" in the search warrant being applied for, granted and executed. It is apparent from the notes taken by Detective Senior Constable Dunn when she met with Mr Young and Ms Smith at Norton's early on the morning of Friday 14 July 2006, that the police would not have applied for a search warrant had it not been for Mr Young's lies. Nor would they have taken such drastic steps to execute it they had they not been misled by Mr Young into believing that the plaintiff was dangerous, potentially violent and armed, and engaged in a serious criminal enterprise, involving fraud and drugs.
The plaintiff's ignominious treatment at the hands of the police on Monday 17 July 2006 was a direct result of Mr Young's malicious falsehoods.
The second requirement is also established. By reason of the factual findings I have made above, I am satisfied that Mr Young did not have a "reasonable and probable cause" to cause the police to make the application. The evidence establishes that there was, to Mr Young's knowledge, a system in place which he had authorised, whereby the plaintiff signed cheques in his name in connection with the operation of the Wiley Park Hotel. This system was well known not only to Mr Young, who was responsible for it, but also to Ms Hape, the book-keeper and Mr Logue, the accountant. When Mr Young told the police that he had never given up the right to sign cheques or authorised the plaintiff to sign cheques in his name, he was lying. Nor was there any basis for the allegation that there were drugs on the premises.
At no time did Mr Young have any basis for any concern about the way the plaintiff was running the Wiley Park Hotel on his behalf or the way funds derived from the hotel were applied, banked or dealt with.
In this case the relevant conditions include reasonable suspicion that the specified person has carried on or has benefited from drug trafficking and that material valuable to the investigation might be on the designated premises. This encompasses the subjective belief in good faith that material grounds for suspicion exist and the objective requirement that the belief is reasonably held. The falsity of Mr Young's statements to police belies any reasonable and probable cause on his part in causing the search warrants to be obtained.
The third requirement is also satisfied. Mr Young lacked any bona fide belief that he was providing to the police material sufficient to meet the conditions for issue of the warrant sought. At no time did he have any basis for saying that the plaintiff had been violent towards him, that she took or dealt in drugs or that she was in a relationship with Tony Almoui.
The fourth requirement of malice is also satisfied. Mr Young had, with good reason, trusted the plaintiff for several years, to run the hotel as if it were her own. The only possible motive for his lies was that he wanted to evict the plaintiff from the Wiley Park Hotel and, possibly, thereby to destroy her chances of obtaining a substantial Family Law settlement by reason of the end of their marriage. The requirement of improper motive is accordingly satisfied since the plaintiff has proved that Mr Young intended to use the processes of the court for granting a warrant for a purpose other than to search in the permitted circumstances.
Damage in the form of the eviction and subsequent events has been amply established.
Malicious arrest and detention
The plaintiff's dramatic and disturbing arrest at a railway station on 28 September 2007 can only be regarded as a result of the lies that the police had been told by the defendant. To be apprehended without warning, arrested at a suburban train station and taken to a police station and be photographed and fingerprinted as if she were a violent criminal caused her substantial mental anguish and trauma.
However the evidence surrounding the decision by police to arrest the plaintiff on 28 September 2007 rather than to serve her solicitor Mr Walsh with the CANs is sparse. Although it can be inferred that the plaintiff would not have been arrested but for the false statements made by Mr Young that caused the application for the search warrant, no closer nexus between Mr Young's conduct and the arrest and detention on 28 September 2007 has been established. The lengthy period between execution of the search warrant and the plaintiff's arrest does not support the contention that Mr Young's falsehoods virtually compelled the police to arrest her.
The plaintiff's arrest does not appear to be justified by the objective circumstances. However more is required to establish that Mr Young was "actively instrumental" in the plaintiff's arrest and detention, than satisfaction of the 'but for' test.
I do not consider that the plaintiff has discharged the onus of proving that Mr Young was "actively instrumental" in her arrest and detention. Accordingly her claim for damages for the tort of malicious procurement of her arrest fails.
Malicious prosecution
For Mrs Young to establish the tort of malicious prosecution against Mr Young she must establish the following:
(1) Mr Young was relevantly a prosecutor ;
(2) there was an absence of reasonable and probable cause for bringing and/or maintaining the charges which is to be tested both subjectively and objectively;
(3) the bringing and/or maintenance of the charges was affected by malice;
(4) she achieved a favourable outcome in relation to the prosecutions.
The question of who is a prosecutor is not limited to the informant. Anyone responsible for initiating the prosecutions can be relevantly regarded as a prosecutor: see Fleming, at [27.30] pages 696-697. In the instant case Mr Young, in substance, was responsible for initiating the prosecution by reason of what he told Detective Senior Constable Dunn and his subsequent signed police statements.
Absence of reasonable and probable cause is, as set out above, measured objectively and subjectively. The only basis for the numerous charges laid against the plaintiff was the false statements made by Mr Young to the police. Their falsity was exposed in the Local Court by reason of meticulous preparation and cross-examination by the legal representatives retained by the plaintiff.
Their falsity also demonstrates the element of malice. In addition, the timing of the laying of charges in connection with the Family Law proceedings tends to prove that they were laid so as to intimidate the plaintiff and prevent her from asserting her rights to spouse maintenance and a property settlement under the Family Law Act.
The final criterion, that the proceedings be terminated in favour of Mrs Young, is readily demonstrated by the dismissal of the charges on 28 October 2008 and the order for costs in her favour.
Damages in the Common Law proceedings
The effect of the events that followed the execution of the warrant is the subject of findings made above. These events have transformed the plaintiff from a gregarious, competent, independent businesswoman and hotel manager to a marginalised, depleted, dependent person who lacks confidence, self-esteem and the ability to earn any substantial income.
It is important not to double-count the loss of earning capacity which has already been taken into account in determining the order that should be made in the plaintiff's favour under the Family Law Act. The plaintiff has claimed a buffer for loss of earning capacity arising from Mr Young's tortious conduct. But for the s 79 order in the Family Court proceedings, I would have ordered a substantial buffer for the effect of the torts on the plaintiff's capacity to earn. However I have taken into account the effect of the conduct in the assessment of the plaintiff's capacity to support herself in the context of determining the amount of the order under s 79 of the Family Law Act. Accordingly I do not propose to make a separate award referable to loss of earning capacity in the Common Law proceedings.
The basis for an award of general damages for pain and suffering as a result of these torts is amply established on the evidence. The plaintiff is also entitled to an award of interest.
The plaintiff also claims exemplary and aggravated damages. Aggravated damages are a form of general damages, given by way of compensation for injury to the plaintiff, which may be intangible, resulting from the circumstances and manner of the wrongdoing: New South Wales v Ibbett [2006] HCA 57; 229 CLR 638 at [31] (Ibbett). Aggravated damages are assessed by reference to the plaintiff's point of view, whereas exemplary damages involve a punitive and deterrent element.
I am satisfied that the plaintiff feels, understandably, that she has been deprived of her home, dignity and reputation by Mr Young's conduct towards her. To be required to disrobe and change in front of several police officers and to be banished, empty-handed, from the premises that had been not only her home and her workplace but also the home and workplace of several members of her family and extended family for years was both devastating and humiliating. The highly invasive and humiliating way in which her home was searched pursuant to the warrant was a direct result of the falsehoods Mr Young had fabricated.
The plaintiff suffered substantial distress and expense when she was charged with numerous charges, including fresh charges, which were based on a premise which the informant, Mr Young, knew to be false. The circumstances and manner of the wrongdoing aggravated the harm suffered by the plaintiff
The plaintiff is also entitled to damages to compensate her for the discrepancy between the costs recoverable pursuant to the costs order made in her favour in the Local Court and the costs actually incurred. I do not have evidence of the quantum of this head of damages, although I have evidence of the total amounts charged by the plaintiff's legal representatives. It will be necessary for the plaintiff to adduce evidence of the shortfall and bring in short minutes to reflect the amount of the discrepancy.
The Court of Appeal in State of New South Wales v Zreika [2012] NSWCA 37 summarised the principles governing awards for damages that might include both aggravated and exemplary damages in the following terms at [63] per Sackville AJA with whom Macfarlan and Whealy JJA agreed:
In a frequently cited passage, Brennan J in XL Petroleum (NSW) Pty Ltd v Caltex Oil (Aust) Pty Ltd[1985] HCA 12; 155 CLR 448, at 471, observed that the considerations that enter into the assessment of compensatory damages are quite different from those that govern the assessment of exemplary damages and that there is no necessary proportionality between the assessment of the two categories. Nonetheless, in NSW v Ibbett, at 647 [34], the plurality endorsed the proposition that it is necessary to determine both heads of compensatory damages before deciding whether or not a further award is necessary to serve the objectives of punishment, deterrence or condemnation. Their Honours also said (at [35]) that where the same circumstances increase the hurt to the plaintiff and also make it desirable for the court to mark its disapprobation of the conduct, a single sum may be awarded. Such an award would represent both heads of damage and ensure that no element is compensated more than once.
There is authority to support the proposition that a global award including both aggravated and exemplary damages may be made: see cases referred to in Ibbett at [35]. However, I consider it to be desirable in the instant case for the court to mark the extent of its condemnation of Mr Young's conduct by a separate award for exemplary damages.
I am satisfied that an award of exemplary damages is necessary to serve the objectives of punishment, deterrence and condemnation of Mr Young's conduct.
I award damages to the plaintiff as follows:
Malicious procurement of warrant
Compensatory damages
- pain and suffering, including interest $50,000
Aggravated damages $20,000
Exemplary damages $25,000
Malicious prosecution
Compensatory damages
- pain and suffering, including interest $25,000
- discrepancy between costs recovered from the
police informant and costs incurred to be calculated
Aggravated damages $20,000
Exemplary damages $25,000
The plaintiff is entitled to an order that Mr Young and Jetobee pay her costs of the Common Law proceedings and that Mr Young pay her costs of the Family Law proceedings, with credit to be given for the interim costs order made by Le Poer Trench J. If costs are sought on any higher basis than the usual, she is at liberty to apply for such an order any order for costs is made.
I direct the plaintiff to bring in short minutes of order to reflect these reasons and to adduce such evidence as is relied upon as to the quantum of the costs discrepancy and order accordingly.
Orders
I make the following orders:
(1) Direct the plaintiff to bring in short minutes of order to reflect these reasons and to adduce such evidence as is relied upon to establish the quantum of the costs discrepancy.
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Decision last updated: 11 April 2013
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