(a) Folio 9/245290 - a former fuel depot (which he cannot mortgage due to issues raised by the Environmental Protection Agency) estimated to be worth $200,000;
(b) Folio 9/261766 - the family home (mortgaged for $430,000 to pay Mr Hitchcock's legal costs) estimated by Mr Hitchcock to be worth $400,000. I note that the mortgagor evidently considered the property to be worth at least $430,000;
(c) Folios 20/248211, 21/248211, 22/248211 and 23/248211 - four properties which have been on the market for 18 months (which secure an overdraft to the National Australia Bank - amount unspecified) estimated by Mr Hitchcock to have a combined worth of $800,000 but in the immediate short-term market only $300,000 - $350,000 due to oversupply;
(d) Folios 6/245290, 7/245290 and 8/245290 worth $1,400,000 (mortgaged for $840,000) but with an immediate market value of $750,000 due to oversupply; and
(e) Folio 1/810026 - apparently unencumbered, and valued by Mr Hitchcock at between $650,000 and $300,000.
18 It is apparent that, if Mr Hitchcock's evidence is accepted, even on the lowest valuations his net assets are worth approximately $510,000 less any amount due to the National Australia Bank for his overdraft (which, as I have noted, was not included in Mr Hitchcock's affidavit).
19 Despite the extent and diversity of Mr Hitchcock's real estate portfolio, and his success over many years as a hard-nosed business man (according to numerous character testimonials admitted in the sentencing hearing) there was no evidence of any rental income or other revenue from these holdings. On the contrary, Mr Hitchcock deposed that he had no income.
20 According to Mr Hitchcock's affidavit, he has four companies: Jim Hitchcock Haulage; South Star Trucks Pty Limited; Saxini Pty Ltd and Satilux Pty Ltd. The latter two were described as shelf companies with no assets although the financial records showed that in the financial year ended 30 June 2004 Saxini Pty Ltd recorded a total income of $1,034,000; gross income of $278,301; and a net profit of $15,376.
21 Mr Hitchcock deposed that Jim Hitchcock Haulage had suffered significant losses in the wake of his prosecution and he expected that company to record a loss of $500,000 for the financial year ending 30 June 2005. The company's long distance haulage section ceased business in November 2004 and the three remaining trucks in the short haul section were sold in May 2005. No financial records for this company were produced, nor does the court have any information concerning the proceeds of the sale of the long-haul trucks and excess equipment in November 2004 or the sale of the three short-haul trucks in May 2005.
22 Mr Hitchcock further deposed that his mechanical repair business, South Star Trucks Pty Limited, had assets of $1000 only and operated at a loss (having lost 70% of its business due to the demise of Jim Hitchcock Haulage) and would have to close - thereby retrenching five employees - in the event that he was ordered to pay all of the prosecution's costs. The financial records produced for South Star Trucks Pty Limited show net losses of $15,290 and $22,303 for the financial years ended 30 June 2002 and 2003 respectively; a net profit of $10,474 for the financial year ended 30 June 2004; and accumulated losses of $32,029, $44,418, and $33,721 for those respective financial years. A loan of $214,518 in favour of "Hitchcock Service Trust" was recorded in the year ending June 2004, but there was no further evidence concerning this trust.
23 Mr Hitchcock concluded his affidavit by deposing that if he was ordered to pay the prosecution's costs in full he would need two years to pay. I note that, under the Fines Act, the question of whether a costs order may be paid by instalments is a matter for the Registrar, not for this decision.
24 The evidence does raise questions about the extent of Mr Hitchcock's financial difficulties, particularly in the light of his failure to plead impecuniosity in the sentencing hearing (although I note that he faced a maximum total fine of $110,000, significantly less than a potential costs order of $415,000). However, in the absence of any cross-examination or alternative evidence in chief, I am inclined to take the evidence at its highest: although Mr Hitchcock has significant assets, it appears that he would not be able to realise their value easily. Furthermore, he has no income; his two companies are operating at substantial losses; he is maintaining an overdraft; and he has significant mortgage repayments to make.
Submissions
25 In the sentencing hearing (where he faced two maximum fines of $55,000), Mr Hitchcock did not raise any submission under the Fines Act questioning his capacity to pay the penalty to be imposed by the Court. Similarly, in the costs hearing, Mr Moses stated that he could not submit in any way that Mr Hitchcock was impecunious. Rather, Mr Moses submitted that a costs order of $415,000 would have a dramatic impact upon Mr Hitchcock's financial circumstances and asked the court to take into account his financial means when exercising its discretion. Mr Moses relied upon the court's finding at [37] in the sentencing decision that Mr Hitchcock had suffered significant adverse changes to his personal, business and professional circumstances.
26 Although Mr Hitchcock undoubtedly had property assets, Mr Moses submitted that the evidence indicated that he had been unable to sell them at a value that would enable him to meet the costs sought by the prosecution. Mr Moses further submitted that if Mr Hitchcock was required to pay the prosecutor's total costs it was likely that he would have to sell his family home.
27 On behalf of the prosecutor, Mr Skinner of counsel submitted that the evidence in support of Mr Hitchcock's assertion of financial hardship was "completely inadequate"; it was clear that he had substantial assets and there was no evidence to support Mr Moses's written submission that Mr Hitchcock may be forced to sell his family home.
28 Mr Skinner further contended that the defendant should not be entitled to incur very high costs in his defence at the hearing (including counsel's fees of $7000 per day); commence proceedings in the New South Wales Court of Appeal seeking prerogative relief; and then claim that he does not have the means to pay the prosecution's costs at first instance incurred at a much lower rate.
29 Mr Skinner submitted that, in this jurisdiction, Parliament has decided that defendants are at risk of costs. There was always a risk that Mr Hitchcock would be required to pay a fine and the prosecution's costs, in addition to his own legal costs, and this should have informed his choices as to how he conducted his defence. The Court should consider Mr Hitchcock's financial means without taking into account his legal fees. Moreover, if the Court follows its usual practice in awarding the full amount of the prosecutor's costs, and Mr Hitchcock cannot pay it, he has other remedies under the Fines Act 1996 or, ultimately, other statutes.
30 In conclusion, Mr Skinner submitted that the defendant had not established any basis for the Court to depart from the usual practice of awarding the prosecutor full costs.
Inspector Yeung v Donald Wilson t/as Wilson's Tree Service
31 Both parties agreed upon the relevance of Inspector Yeung v Donald Wilson t/as Wilson's Tree Service [2004] NSWIRComm 346, which, at the time of the hearing on costs in this matter, was reserved under appeal. After oral submissions, judgment on costs was reserved pending the Full Bench's decision in Wilson's Tree Service, and subject to any further written submissions following that decision.
32 On 24 June 2005, the Full Bench handed down its decision in Inspector Yeung v Donald Edwin Wilson t/as Wilson's Tree Service [2005] NSWIRComm 158.
33 The decision at first instance involved the sentencing of Mr Wilson (who pleaded guilty to charges under the Occupational Health and Safety Act 2000 following a fatal accident in the course of work removing trees and chipping wood) and the exercise of discretion in relation to the prosecutor's costs. In relation to costs, Boland J held at [51]:
51 The prosecutor sought costs and a moiety of the fine. The defendant accepted that the usual order as to costs was that the defendant be required to pay the prosecutor's costs in an amount as agreed or assessed. However, it was submitted, costs were ultimately in the Court's discretion and the Court must exercise its discretion as to costs in accordance with what is just and reasonable.
52 The defendant contended that this was an appropriate case in which to make an order that the parties bear their own costs for the following reasons:
(a) The defendant has, from the date of the accident, throughout the investigative process and throughout the course of proceedings done his level best to assist the prosecutor.
(b) An order as to costs is intended to be compensatory in nature rather than punitive.
(c) The defendant is relatively impecunious. Any penalty imposed is likely to have a significant impact on the financial capacity of the defendant. Any order as to costs is likely to result in further financial hardship for the defendant and his family, rendering it more likely that he will be required to sell his family home.
(d) In all the circumstances, it is a more just outcome for the prosecutor to bear the entirety or a substantial portion of its costs in the proceedings to date.