HALPIN v DEPARTMENT OF GAMING AND RACING - [2007] NSWSC 815 - NSWSC 2006 case summary — Zoe

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HALPIN v DEPARTMENT OF GAMING AND RACING

[2007] NSWSC 815

Supreme Court of NSW|2006-07-13|Before: Hall J

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Source facts

Court

Supreme Court of NSW

Decision date

2006-07-13

Before

Hall J

Source

Original judgment source is linked above.

Judgment (46 paragraphs)

[1]

CITATION : HALPIN v DEPARTMENT OF GAMING AND RACING [2007] NSWSC 815 This decision has been amended. Please see the end of the judgment for a list of the amendments.

[2]

DECISION : The conviction entered by the Licensing Court on 6 October 2005 against the plaintiff be set aside; The order made by the Licensing Court against the plaintiff for costs in the amount of $12,000 be set aside; The plaintiff's application for costs of the proceedings in the Licensing Court and in this Court is dismissed

[3]

CATCHWORDS : COSTS - Abatement of appeal proceedings - Appellant died after judgment but prior to pronouncement of final orders - Principles regarding effect of death of a party to incomplete proceedings - Judgment effect was that deceased's conviction had to be set aside - Rights of parties determined and merged in judgement - No basis in circumstances of case to prevent court from giving effect to its judgment given before death by making consequential orders - Nature of proceedings - whether criminal or civil - whether necessary for another party to be substituted in place of deceased party - STATUTORY INTERPRETATION - Principles in relation to power and limitation on costs order against a public prosecutor - s.70 Crimes (Appeal and Review) Act 2001 - whether investigation into the alleged offence was conducted in an unreasonable or improper manner - whether proceedings in Local Court were initiated without reasonable cause or in bad faith, or were conducted by the prosecutor in an improper manner - whether prosecutor unreasonably failed to investigate (or to investigate properly) any relevant matter - whether because of other exceptional circumstances relating to the conduct of proceedings by the prosecutor, it is just and reasonable to award costs

[13]

1 HIS HONOUR: On 6 October 2005, the Licensing Court determined that the plaintiff to the present proceedings had contravened the provisions of s.133(2) of the Gaming Machines Act 2001 (the Act). That provision imposed an obligation on a hotelier to ensure that gaming machines on licensed premises maintained by a licensee are connected to an authorised CMS. 2 The plaintiff died in October 2006, the month following judgment being given in this Court on an appeal brought by him pursuant to the provisions of the Act and s.52 of the Crimes (Appeal and Review) Act 2001. The late Mr Halpin appealed against his conviction and an order for costs made against him in the amount of $12,000 in favour of the prosecutor. 3 The issue determined in the judgment in this Court given on 5 September 2006 was concerned with the statutory concept of "connectivity" within the meaning of s.133(2) of the abovementioned Act. 4 The breach alleged in the Licensing Court was said to have occurred on 15 September 2005. In the judgment on appeal it was determined that the "Piñata Pays" machine was "connected" within the meaning of s.132(1) of the Act. Accordingly, there had been no breach of s.133(2) as alleged by the prosecution. 5 It was submitted that in light of the findings and determination of this Court in the appeal that the conviction against him should be set aside, the order for costs made by the Licensing Court should be set aside and that the defendant (the Department) should pay the costs of the present proceedings. 6 I have had the benefit of written submissions on behalf of the plaintiff dated 5 March 2007 and written submissions on behalf of the defendant dated 13 April 2007. 7 By reason of the death of the plaintiff, the initial question raised by the defendant is whether the appeal has abated in light of his death. The defendant made further submissions in relation to proposed orders, the question as to whether or not a costs order may be made against the defendant in the Supreme Court proceedings and the Licensing Court proceedings and other matters raised in the plaintiff's submissions. I will, accordingly, deal with each of these issues in turn.

[14]

Abatement of appeal 8 The plaintiff's solicitor has advised that he is now instructed by the plaintiff's estate. No application has yet been made by or on behalf of the estate to be substituted as plaintiff. 9 The defendant has submitted that until such application is made and granted, the estate has no right of appearance in the proceedings. In this respect, reliance was placed upon the decision of the Full Federal Court of Australia in Sen v R (1991) 102 ALR 71. 10 Section 187 of the Act provides that a person who is aggrieved by a decision of the Licensing Court in proceedings under the Act may appeal to the Supreme Court on a question of law. The defendant submitted that the reference to a person "aggrieved" must be construed in the context of the Act and that there is no provision in the Act dealing specifically with the situation, as here, where an appellant dies before formal orders are pronounced. 11 The defendant submitted that the proceedings were, in nature, criminal proceedings and that, in accordance with the common law, criminal proceedings abate on the death of a defendant (or in these proceedings, the plaintiff). Reliance was placed upon Sen (supra) and upon the decision in Regina v Rowe [1955] 1 QB 573; Regina v Jefferies [1969] 1 QB 120 and Re Collins (1973) 41 DLR [3d] 232. 12 Mr H F White of counsel for the defendant, in his submissions, contended that the proceedings in this Court are not civil proceedings and, accordingly, the Uniform Civil Procedure Rules do not apply. He contended that the proceedings were criminal proceedings. 13 In support of the submission, it was observed that the subject offence relates to an offence under s.133 of the Act which provides for a maximum penalty of $11,000. 14 Proceedings for such an offence may be taken before the Licensing Court or a Local Court (s.197(1)) of the Act). 15 It was, accordingly, submitted that proceedings taken before the Licensing Court are, for the purposes of any Act relating to summary proceedings before a Local Court, taken to be summary proceedings before a Local Court: s.197(2) of the Act. 16 Further, the Criminal Procedure Act 1986 relates to proceedings for summary offences before a Local Court and it is said that that Act applies to the subject offence: see s.7 of the latter Act. 17 The Criminal Procedure Act (s.3(1)) provides that "criminal proceedings" means proceedings against a person for an offence (whether summary or indictable), and includes the following:-

[23]

(d) The question as to whether or not proceedings instituted pursuant to a right created by statute have abated, must be determined by the statute itself: Kalejas (supra) at [18]. It was there held:- "… a Parliament that creates a cause of action may ordain as it pleases in relation to the cause of action's survival on death of a party. And the same principle applies in relation to a statutory entitlement that falls short of constituting a 'cause of action' .. or a statutory proceeding." 31 In Fines (supra), the Court of Appeal held that in the case of a statutory right of appeal to an administrative tribunal, in a disciplinary case, which was capable of affecting a deceased teacher's financial entitlement, the right was transmissible to his legal personal representative. The teacher having died in that case before the determination of the appeal, Mahoney JA) stated at 388-389:- "The question whether statutory rights of this kind are to survive death depends upon the intention of the legislature; there does not appear to be any general or presumptive rule … Although in terms the right granted by him by the Act may be merely a right of appeal, the grant of that right carried with it the substantive rights, to salary, wages or allowances and the like, referred to in the Act …" 32 In Fines (supra), Mahoney JA concluded (at 388-389):- "I see nothing in the terms of the Act or its purposes which leads to the conclusion that the legislature intended that, by the (accidental) fact of death pending the appeal, the right of a member of the teaching service and his family to have such remuneration should be taken away. An appeal might be pending for a significant time. During that time, he might not be able to derive income. If the legislative intention is to be inferred, it is, I think, that the right to claim the discretionary allowance of this should continue, notwithstanding his death." 33 In Kalejas (supra), the Court (Kenny J) similarly stated that whether or not a cause of action is transmissible is a question of statutory construction. That case concerned proceedings against the deceased for his extradition and in particular further proceedings by him seeking judicial review under s.39B(1) and s.39B(1A) of the Judiciary Act 1903 (Cth) of a decision by the relevant minister. It was held that the rights that he had invoked were not of a transmissible kind. The decisions under review were merely a stage in a statutory process by which it was to be determined whether or not he would be extradited from Australia to Latvia. With his death, the request for extradition, which began the process, necessarily lapsed. Kenny J stated:- "… when the request lapsed, then, for practical purposes at least, so did the administrative processes put in train under the Act in connection with it." 34 Where the death of a party to proceedings occurs following a decision or order which effectively determines the proceedings but in which further orders are outstanding, it will, in my opinion, often be the case that the proceedings have not abated or lapsed. A determination by judgment of the question of law raised in the appeal, which question was fundamental to the issue of the alleged contravention, meant that the aspect of the transmissibility of the statutory right of appeal had been overtaken and had merged in the judgment of 5 September. By that judgment, the conviction below had been wrongly entered. In those circumstances, the proceedings could not and did not abate. I will return to the issue of outstanding orders to give effect to the judgment below. 35 In Healey v Williams (1985) 64 ALR 140, the Federal Court (Bowen CJ) considered the power of a magistrate to make an order in respect of costs in circumstances in which the defendant was discharged in respect of the relevant informations upon which the proceedings were based. At the time of making the order, the magistrate stated that he would give reasons for his decision on 27 March 1985. However, the party against whom proceedings were brought died on 23 March 1985. On 27 March 1985, the magistrate gave his reasons for discharging the deceased and an application for costs was then made by counsel. On 4 April 1985, the magistrate ordered the applicant to pay the deceased's costs in the sum of $24,000, in default 12 months hard labour. 36 In the course of his decision, Bowen CJ stated (at 142):-

[24]

"It does not appear to me that the death of Ms Wall on 23 March terminated the power of the magistrate to complete his order. Her death did not affect the information nor in a practical sense did it render inoperative, as it were, the issue of costs. Ms Wong had, over lengthy proceedings, incurred indebtedness for legal costs. Any indebtedness in this respect would fall upon her estate. Her legal personal representative would have an obvious interest in the making of an order for costs." 37 It was held in that case that s.41A of the Justices Act 1902 (NSW) seemed to contemplate that in the case of any order discharging a defendant as to an information under inquiry in committal proceedings, the magistrate may by that order, adjudge the payment of costs. Bowen CJ stated that once the order discharging the defendant was made and the matter was still before the Justice, there seemed to be nothing in the words of the section to preclude the exercise of his discretion as to costs in the event of the defendant's death (at 142). 38 Finally, in that case, Bowen CJ stated (at 143):- "In the present case, as I have said, if the defendant had died during the committal proceedings before an order discharging her under s.41(6) had been made, the information would have lapsed by reason of the death. No order for costs could then have been made under s.41A. The administrative inquiry or proceedings would have come to an end." (emphasis added) 39 In the judgment of 5 September, I deferred making orders and permitted the parties the opportunity to make submissions upon the question as to whether or not the consequential order or orders should be made by this Court or whether the matter should be referred back to the Licensing Court. It was evident from the terms of the judgment that, upon the construction of the provisions of the Act, it necessarily followed that the deceased's conviction had to be set aside. 40 In the present proceedings the judgment given on 5 September 2006 determined the rights of the parties and, as indicated above, those rights were merged in the judgment. The plaintiff's subsequent death could not, of course, have the effect of impairing in an way that which had already been determined by the judgment. There is no basis, as a matter of statutory construction, for concluding that the death of a party could, in the circumstances of this case, prevent this Court from giving effect to its judgment given before death by making consequential orders.

[29]

(a) That the investigation into the alleged offence was conducted in an unreasonable or improper manner 46 This provision, like that in s.70(1)(c), is concerned with investigations and not proceedings. The provision is directed to determining whether the investigation into an alleged offence was conducted "… in an unreasonable or improper manner". 47 This provision, accordingly, requires the plaintiff to establish that the investigation into the alleged offence under s.132 of the Act was such as to fall within s.70(1)(a). 48 The failure of proceedings does not of itself mean that the proceedings fall within s.70(1)(a) on question of costs arises. In Regina v Moore; ex parte Federated Miscellaneous Workers' Union of Australia (1978) 140 CLR 470, (proceedings involving an unsuccessful challenge to the capacity of an industrial union to create an industrial dispute by service of a log of claims) Gibbs J (with whose reasons and conclusions Barwick CJ agreed) stated:- "The respondent … has applied for costs on the ground that the proceeding was instituted by the prosecutor 'without reasonable cause' within the meaning of s.197A of the Act. In my opinion a party cannot be said to have commenced a proceeding "without reasonable cause", within the meaning of that section, simply because his argument proves unsuccessful." 49 In general terms, the expression "unreasonable or improper manner" embraces the notion of the conduct of investigations in a way or by a method or a mode of procedure that grossly falls below the relevant standards applicable to the relevant type or class of investigation. In JD v DPP [2002] NSWSC 1092, a matter arising out of committal proceedings involving the alleged sexual abuse of young children, there had been a failure by police to conduct certain interviews of very young children according to established protocols which the Court determined had adversely effected the quality of police interviews. Hidden J, however, observed:- "I find it somewhat difficult to see that anything done by the police was unreasonable or improper as these words are commonly accepted to mean. The fact that an investigation does not come up to optimum expectations would not put it into a category of being unreasonable or improper unless it was grossly below optimum standards and I cannot say that that is the case here ." (emphasis added) 50 It is necessary to state in summary form the facts referred to in the judgment in the present case concerning the lack of "connectivity" in the "Piñata Pays" gaming machine, the subject of the alleged offence:-

[36]

(g) The evidence established, at least as a matter of inference, that there had been transmission of information to the GMIC but that the faulty GMIC prevented the transmission from it to the controller. 51 The effect of the interpretation of the provisions in s.132(1) and s.133(2) of the Act discussed in the judgment of 5 September 2006 was that the obligation imposed upon the hotelier to ensure the GMIC was properly passing on information to the CMS had been, on the proper interpretation of those provisions, fulfilled. On that interpretation, the hotelier could not be responsible for the CMS or any part it (including the faulty GMIC). 52 Accordingly, it was a relevant fact that the GMIC was part of the CMS. The statutory obligation of the hotelier (the plaintiff) did not extend to the operational capacity or integrity of the GMIC which was not his "domain" or in his sphere of operation. 53 The prosecution of the plaintiff, based upon the investigations carried out by Mr Fitzgerald, it may be reasonably inferred, failed to analyse the evidence in terms of the location and nature of the technical fault and to then assess the significance of that fact in light of the statutory provisions imposing obligations on hoteliers such as the plaintiff. The defendant Department appears to have proceeded upon the basis that there was an all encompassing obligation upon the plaintiff by reason of a very broad understanding or interpretation of the relevant provisions which, upon analysis, I determined was incorrect. 54 The appeal in these proceedings, accordingly, was successful by reason of a more restricted interpretation of those provisions and an application of them when so understood to the particular facts concerning the location of the fault in the GMIC. Although this involved partly a question of law (more particular of statutory construction), it also involved questions of fact, in particular, concerning the GMIC and the fault within it and its responsibility for the lack of "connectivity". 55 I do not, however, consider that the defendant's failure to fully analyse the facts and then apply a more limited interpretation of the relevant provisions could be said to render the investigation as one conducted "in an unreasonable or improper manner" as those expressions have been interpreted and applied in the relevant case law. The reasons stated below in relation to (b) applies equally here.

[37]

(b) The proceedings in the Local Court were initiated without reasonable cause or in bad faith, or were conducted by the prosecutor in an improper manner 56 The evidence does not establish that the defendant acted in bad faith. The evidence does not, in my view, support an inference of improper purpose. Nor is there any evidence that the proceedings were conducted by the defendant as prosecutor in an improper manner within the meaning of s.70(1)(b). 57 Further, I do not consider that it can be said that the proceedings were "initiated without reasonable cause". In Council of Kangan Batman Institute of Technology and Further Education v Australian Industrial Relations Commission (2006) 156 FCR 275, the Full Court of the Federal Court at [60] stated:- "The question therefore arises whether … the plaintiff instituted the proceeding vexatiously or without reasonable cause. A party does not institute proceedings without reasonable cause merely because that party fails in the argument put to the Court: Regina v Moore ; ; ex parte Federated Miscellaneous Workers' Union of Australia (1978) 140 CLR 470 per Gibbs J at 473. The section reflects a policy of protecting a party instituting proceedings from liability for costs, but that protection may be lost. Although costs will rarely be awarded under the section, and exceptional circumstances are required to justify the making of such an order … a proceeding will be instituted without reasonable cause if it has no real prospects of success, or was doomed to failure: Kanan v Australian Postal and Telecommunications Union (1992) 43 IR 257 per Wilcox J; see also Bostik (Australia) Pty Limited v Gorgevski (No 2) (1992) 36 FCR 439; Nilsen v Loyal Orange Trust (1997) 67 IR 180." 58 The question as to whether at the time the proceeding was instituted it had "no real prospects of success or was doomed to failure" is a question that is required to be determined as a matter of objective fact: Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v Nestle Australia Limited (2005) 146 IR 379 at [4] citing Spotless Services Australia Limited v Marsh SDP [2004] FCA FC 155 at [13]. 59 The Full Court in Kangan (supra) at [63] stated:- "[i]t is a matter of judgment, sometimes of fine judgment, in all the circumstances of a particular case whether a proceeding is brought without reasonable cause. The phrase 'vexatiously or without reasonable cause' was described by von Doussa J in Hatchett v Bowater Tutt Industries Pty Limited (No 2) (1999) 28 FCR 324 at 327 as 'similar to the one applied by a Court on an application for the exercise of summary power to stay or strike out proceedings." 60 In Canceri v Taylor (1994) 123 ALR 667, the Industrial Relations Court of Australia determined an application for costs by assessing whether or not at the time of instituting proceedings upon the facts apparent to the informant, there was no substantial prospect of success. The Court, per Moore J at 676, adopted the approach of Wilcox J in Kanan v Australian Postal & Telecommunications Union (1992) 43 IR 257 at 264:- "It seems to me that one way of testing whether a proceeding is instituted 'without reasonable cause' is to ask whether, upon the facts apparent to the applicant at the time of instituting the proceeding, there was no substantial prospect of success. If success depends upon the resolution in the applicant's favour of one or more arguable points of law, it is inappropriate to stigmatise the proceeding as being 'without reasonable cause'. But where, on the applicant's own version of the facts, it is clear that the proceeding must fail, it may properly be said that the proceeding lacks reasonable cause." 61 I do not consider in the present matter that it can be said that proceedings were doomed to failure or had no real prospects of success. The outcome of many proceedings turns upon the Court in question establishing the proper construction of statutory provisions and then applying them as so interpreted to the facts of a particular case. The fact that the defendant pursued the proceedings upon the basis of a broad interpretation of the legislation which was ultimately held to be incorrect, does not satisfy the requisite test in s.70(1)(b).

HALPIN v DEPARTMENT OF GAMING AND RACING

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