CEO Customs v Afiouny & Anor

The application by the first defendant for costs 22 Mr Thomas submitted that the plaintiff should be ordered to pay the first defendant's costs of the proceedings against him since the plaintiff was unsuccessful as against the first defendant. Mr Roberts opposed an order for costs in favour of the first defendant and submitted that it would be inappropriate to make such an order having regard to the nature of the proceedings. Alternatively, Mr Roberts submitted that if the first defendant was to have an order for costs, that order should be made as against the second defendant since it was the conduct of the second defendant which pointed to the first defendant's involvement in the commission of the offences alleged. 23 Whilst the standard of proof in these proceedings is the criminal standard of proof beyond reasonable doubt (see Chief Executive Officer of Customs v Labrador Liquor Wholesale Pty Ltd & Ors (2004) 216 CLR 161), the proceedings were proceedings brought in the civil jurisdiction of the court as contemplated by s 247 of the Customs Act: The plaintiff proceeded by way of statement of claim and the proceedings are proceedings to which the Uniform Civil Procedure Act 2005 and the Rules under that Act are attracted. Part 42 r 42.1 of the UCP rules contemplates that costs will ordinarily follow the event "unless it appears to the court that some other order should be made as to the whole or any part of the costs." Mr Thomas submitted that since the first defendant had incurred costs in resisting the unsuccessful prosecution the rule referred to should apply. 24 Mr Roberts submitted that that rule should not apply as these were proceedings brought against the first defendant which were in the nature of a prosecution and consequently costs should not be ordered against the plaintiff. Mr Roberts was invited to refer me to authority to support that proposition but I have been referred to no authority for the approach he submitted I should take. 25 The rule that the Crown or a government instrumentality ought not be ordered to pay costs has been displaced, as was recognised in Latoudis v Casey (1990) 170 CLR 534: see in particular the judgment of Mason CJ at 538. The court was there concerned with the liability of an informant to pay costs in summary proceedings for a number of criminal offences. The statute in question authorised the court to make an order for costs against the informant. 26 In his judgment Mason CJ said (at 544): "Nevertheless, I am persuaded that, in ordinary circumstances, an order for costs should be made in favour of a successful defendant. However, there will be cases in which, when regard is had to the particular circumstances, it would not be just and reasonable to order costs against the prosecutor or to order payment of all the defendant's costs. If, for example, the defendant, by his or her offence, brought the prosecution upon himself or herself, then it would not be just and reasonable to award costs against the prosecutor." 27 Toohey J said (at 565): "…it is enough to say that ordinarily it would be just and reasonable that the defendant against whom a prosecution has failed should not be out of pocket…" 28 Having instanced circumstances in which the defendant should not have his costs, his Honour went on: "These illustrations are in no way exhaustive but what they point up is that a refusal of costs to a successful defendant will ordinarily be based upon the conduct of the defendant in relation to the proceedings brought against him or her." 29 McHugh J said (at 567): "The rationale of the order is that it is just and reasonable that the party who has caused the other party to incur the costs of litigation should reimburse that party for the liability incurred. The order is not made to punish the unsuccessful party. Its function is compensatory." 30 In Ohn v Walton (1995) 36 NSWLR 77 the Court of Appeal was concerned to address the question of costs where a complaint following an inquiry under the Medical Practitioners Act had not been established. Gleeson CJ had occasion to refer to Latoudis v Casey (at 79): "The point of Latoudis v Casey is that the purpose of an order for costs is to indemnify or compensate the person in whose favour it is made, not to punish the person against whom it is made. When legislation confers a power to order costs it is, in the absence of any contrary indication, to be understood as conferring a power to be exercised for that purpose. Two things follow: 1. The usual rationale of making a costs order is that it is just and reasonable that the successful party should be reimbursed for costs incurred, in the absence of grounds connected with the charge or the conduct of the proceedings which make it unjust or unreasonable that there should be such reimbursement. 2. The test of whether an order for costs should be made against an unsuccessful plaintiff or complainant is not whether he or she has done anything to warrant punishment. It is whether, in the circumstances, the defendant or respondent should be compensated." 31 The Customs Act contemplates that costs may be awarded against the plaintiff (see [16] above for the terms of the section). The section contemplates that a court "may award costs against a party". It then goes on to provide the machinery for the recovery of a pecuniary penalty where the party against whom costs were ordered is not the prosecutor. 32 It does not seem to me that the first defendant is disqualified from having a costs order made in his favour simply because the prosecution considered that there were reasonable grounds for proceeding against him. Consistently with the authorities to which I have referred, a costs order is intended to reimburse the successful party and not to punish the unsuccessful party. Moreover, I discern nothing in the manner in which the first defendant conducted the defence of these proceedings such as ought to deprive him of the opportunity of a reasonable level of reimbursement for his costs in resisting the prosecution. 33 In my opinion, the first defendant is entitled to an order for costs. 34 Mr Roberts submitted that if I came to this conclusion, responsibility for the first defendant's costs should be visited upon the second defendant. It was submitted that it was appropriate that there be an order in the nature of a Bullock order (see Bullock v London General Omnibus Co (1907) 1 KB 264) or a Sanderson order (Sanderson v Blyth Theatre Co (1903) 2 KB 533). It was argued that it was the conduct of the second defendant that prompted the plaintiff to pursue the first defendant as well as the second defendant because the circumstantial case against the first defendant depended upon the conduct of the second defendant. 35 What the plaintiff would be required to show in order to obtain a Bullock order is that the second defendant so conducted himself as to make it reasonable as between the plaintiff and the second defendant that he should pay the first defendant's costs: see Gould v Vaggelas (1983-85) 157 CLR 215 and in particular the judgment of Gibbs CJ at 229-230; of Wilson J at 246-247 and of Brennan J at 260; see also Almeida v Universal Dye Works Pty Ltd & Ors [2001] NSWCA 156; and Roads and Traffic Authority & Ors v Palmer [2005] NSWCA 140. 36 The plaintiff brought a prosecution against the first defendant concerning both the first and the second shipments whilst the case against the second defendant was limited to the second shipment. The reason for this is not altogether clear, but I am not satisfied that the circumstances of this matter call for the making of an order which not only imposes the burden of the plaintiff's costs upon the second defendant but the costs of the first defendant as well. 37 I consider that the first defendant should have his reasonable costs as against the plaintiff.