Murdoch v Petterson

DPP v Roslyndale Shipping Pty Ltd [2003] NSWCA 356 Ex Parte Hebburn Ltd; re Kearsley Shire Council 1947 47 SR(NSW) 416 Fosse v DPP [1999] NSWSC 367 Miller v DPP [2003] NSWSC 66 CASES CITED : Palmer v Haddad [2000] NSWSC 545 Regina v Blakely Ex Parte The Association of Architects, Engineers, Surveyors and Draftsmen of Australia 1950 82 CLR 54 Saffron v The Director of :Public Prosecutions 1989 16 NSWLR 397 Wentworth v Rogers 1984 NSWR 422

PARTIES : Phillip Murdoch v Karen Lee Petterson

M. Buscombe (Plaintiff) COUNSEL : L. McManus (Defendant)

WorkCover Authority of NSW (Plaintiff) SOLICITORS : Ellicott & Westwood (Defendant)

IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

1 HIS HONOUR: At Common Law in criminal proceedings the rule was that the Crown neither obtained nor received costs. In various situations Parliament has altered this situation. 2 This is an appeal by a prosecutor concerning costs and restitution which is governed by the Crimes (Local Courts Appeal and Review) Act 2001 which I will refer to as "the Appeal Act". 3 The defendant appeared before Mr Dillon, Local Court Magistrate, charged with offences contrary to section 178BB of the Crimes Act 1900. The prosecutor is an inspector of the WorkCover Authority and no issue is raised concerning his authority or status as a public officer within the meaning of section 173 of the Criminal Procedure Act 1986 (which I will refer to as "the Procedure Act") in commencing proceedings for alleged offences against the Crimes Act. 4 The charges arose out of representations made by the defendant in support of a claim for workers compensation for an employment injury said to have occurred on 1 February 2001. In short, it was alleged that statements concerning the injury were false because the defendant had been injured prior to that date in a fall at her home and that she had made misleading statements to various medical examiners who saw her in relation to the compensation claim and an allied action which she had commenced in the District Court. 5 Of the eleven charges the learned magistrate held that eight had been proved beyond reasonable doubt. Upon conviction she was sentenced on each offence to enter a recognizance to be of good behaviour for a period of two years. 6 The plaintiff sought an order for professional costs in a sum in excess of $23,000 to be paid by the defendant and an order that the defendant make restitution to an insurer, Allianz Australia Workers Compensation (NSW) Ltd, in an amount of over $37,000 being payments made by it pursuant to the claimed work injury. 7 The magistrate declined to make either of these orders and this summons challenges his refusals. The prosecutor in any appeal under the Appeal Act is limited to grounds involving questions of law alone (see section 56). 8 Different considerations apply to the issues concerning costs and restitution and I will deal firstly with those relating to the refusal to order costs. The threshold question is whether the appeal lies. Section 56 of the Appeal Act provides: "56(1) The prosecutor may appeal to the Supreme Court against: (a) a sentence imposed in any summary proceedings, or …………… (e) an order for costs made by a Local Court against the prosecutor in any summary proceedings".

Conversely to section 56(1)(e) the prosecutor challenges the failure to make an order for costs in his favour. 9 Reliance is placed upon the jurisdiction vested by 56(1)(a) and the definition of "sentence" in section 3 of the Appeal Act; namely: "sentence means: (a) any order made by a Local Court in respect of a person as a consequence of its having convicted the person of an offence, including: (i) any sentence of imprisonment (including any sentence of imprisonment the subject of a periodic detention order or home detention order), and (ii) any community service order, good behaviour bond or fine, an (iii) any order suspending execution of a sentence of imprisonment under section 12 of the Crimes (Sentencing Procedure) Act 1999, and (iiia) any non-association order or place restriction order under section 17A of the Crimes (Sentencing Procedure) Act 1999, and (iv) any direction for compensation under section 71 or 77B of the Victims Support and Rehabilitation Act 1996, and (v) any order or direction with respect to restitution, compensation, forfeiture, destruction, disqualification or loss or suspension of a licence or privilege, or (b) any order made by a Local Court in respect of a person under section 10 or 11 of the Crimes (Sentencing Procedure) Act 1999 on finding the person guilty of an offence, or (c) any order for restitution made by a Local Court in respect of a person under section 43 of the Criminal Procedure act 1986, or (d) any order for costs made by a Magistrate against a person in connection with committal proceedings taken against the person, or (e) any order for costs made by a Local Court against a person in connection with summary proceedings taken against the person."

10 The plaintiff submits that the refusal to award costs was "an order refusing to award costs to the prosecution". Decisions in Fosse v DPP [1999] NSWSC 367 and Miller v DPP [2003] NSWSC 66 are pointed to, where refusals to award costs or to annul a conviction were treated as "orders" for the purpose of founding jurisdiction pursuant to the now repealed Justices Act 1902. 11 The present issue must be determined in the context of the Appeal Act. It is submitted that the definition of "sentence" therein is an inclusive provision but although that expression is found in sub-paragraph (a), none of the sub-subparagraphs - that is(i) to(v) - relate to costs. The express element of definition in sub-paragraph (e) refers to order against a person and the refusal to order that person to pay costs is not accommodated within the notion of costs against him or her. 12 In its natural and ordinary meaning "order" does not encompass a refusal to make an order: Regina v Blakely ex parte The Association of Architects, Engineers, Surveyors and Draftsmen of Australia 1950, 82 CLR 54. 13 It is acknowledged that in Palmer v Haddad [2000] NSWSC 545, s 104(2)(c) of the Justices Act which permitted appeal against "orders for costs made by magistrates in summary proceedings" was construed as wide enough to permit appeal against refusal to order costs. However, as recognised in DPP v Roslyndale Shipping Pty Ltd [2003] NSWCA 356, statutory context is of considerable significance. 14 On the assumption that the prosecution was brought by the plaintiff as a public informant, there are limitations upon the award of costs against him (see section 214 of the Procedure Act). A notion of imbalance can be detected and was regarded as significant in Palmer and is, in the present context, sanctioned by statute. I do not construe the definition of "sentence" in the Appeal Act and hence the availability of appeal pursuant to section 56 to extend to appeal by a prosecutor against a refusal to make an order for costs in his favour. 15 Such conclusion is compatible with the concept that a sentence involves an imposition on a defendant and it would in my view require clear statement for the expression "a sentence imposed" within a statute to include a meaning of denial of an order for costs in favour of a prosecutor. 16 In the alternative, the plaintiff seeks relief in the nature of mandamus on the basis that there was a constructive failure by the magistrate to exercise his jurisdiction to award costs. The plaintiff needs to show that the decision to decline to order costs was a purported and not a real exercise of jurisdiction because the magistrate has applied a wrong and inadmissible test or misconceived his duty or did not apply himself to the question which the law proscribes or misunderstood the nature of the opinion which he was required to form: ex parte Hebburn Ltd; re Kearsley Shire Council 1947 47 SR (NSW) 416. 17 Of these alternatives the plaintiff principally submits that the magistrate applied a wrong test in refusing the order for costs because he took into account extraneous consideration about the practice of the Director of Public Prosecutions and the defendant's failure to obtain a grant of legal aid. 18 After finding the eight offences proved, the magistrate engaged in some exchange with counsel which included an application for costs as scheduled in a tendered document. I note that not everything said appears to have been transcribable, however, it was said that some different legal aid test was applied because it was not "a police matter or the normal DPP matter" with the apparent result that legal aid was refused. 19 It is also recorded that the DPP - although I believe this is a transcript error and should read Legal Aid - came to the view that there was no real possibility of a gaol sentence "and declined to grant legal aid". This led to a later remark that his Honour thought it unjust that legal aid was withheld and he commented "had you been (granted legal aid) you would not be facing a costs order". 20 It appears that the qualification now legislated in s 47(3)(a) of the Legal Aid Commission Act was overlooked. In a criminal matter the legally aided person is expressly made liable for the burden of any adverse costs order where he or she is the accused person. The plaintiff points to the magistrate's express observation that, whilst it was appreciated that WorkCover was a different entity from the DPP and the police "and so forth" and the DPP "never" asked for costs, he was not sure why a different regime should arise at least for alleged offences against the Crimes Act. 21 Beyond these exchanges there was little elaboration of any other reason and his Honour said "I don't propose making either order (for costs or restitution) frankly". In his remarks on sentence to the defendant he summarised his views thus: "As I think you should have been entitled to legal aid, why you should now - just because of the vagaries of the legal aid system - have to bear a costs order and as I think you have a very good chance of being compensated - maybe not the full amount but certainly compensated - I'm not going to make a restitution order either".

22 It is clear, having regard to the reference to the legal aid legislation above, that his Honour erred in law in believing that a grant of legal aid would immunise the defendant against meeting a costs order. I am also persuaded, in reaching the decision to decline to order costs, the magistrate allowed himself to be guided and affected by his knowledge and experience of the practice of the Director of Public Prosecutions and the police but their practices were irrelevant and extraneous to the issue of whether order should have been made in this instance. 23 Discretionary power to award costs is vested by s 215 of the Procedure Act although it must be observed that the provision offers no guide for the exercise of that discretion. The distinction between an actual and constructive failure to exercise jurisdiction has been said to be easier to state than to apply: Wentworth v Rogers 1984 NSWR 422. I respectfully agree. 24 Matters must be determined in their own contexts (see Saffron v The Director of Public Prosecutions 1989, 16 NSWLR 397). As is noted in the foregoing, determination of how the learned magistrate exercised or failed to exercise his jurisdiction needs to be gleaned to a significant extent from the transcription of exchanges with counsel. I am satisfied that a determinative factor in coming to the decision to decline costs was derived by a form of test involving a notional enquiry as to whether legal aid should have been granted. That was an erroneous test and the error compounded by a mistake as to the immunity of the defendant if legal aid had been granted and, further, by contrast with the conduct of other prosecutions by bodies other than that which instituted these proceedings. 25 In the event of my finding in the plaintiff's favour on the issue, the defendant has given notice of contention relying upon the requirement in the Fines Act 1996 to consider the means of the defendant in fixing the amount to be paid. For the purposes of that Act costs fall within the definition of "fine". It is contended that there was evidence of the defendant's means (or lack of them) before the Court and it was within discretion to refuse the order or, as I understand the contention, at least to fix the amount at or near to nil. 26 It is to be noted that section 6 of the Fines Act to which the notice refers obliges consideration of means when fixing the amount. In its terms it operates on the assumption that an amount is to be fixed and thereby assumes the existence of some order. The provision does not express a power to decline to make an order. In my view the contention does not negative the plaintiff's claim to relief. 27 The plaintiff has established an entitlement to an order in the nature of mandamus in respect of the declining to make an order for costs. It will of course be appropriate for the magistrate to make findings inter alia concerning the defendant's means for the purpose of fixing any amount of costs. 28 The order which I propose to make does not inhibit the ability of the magistrate to receive relevant material on the issue and, by reference to relevant matters, to reach such conclusion as he finds appropriate to the circumstances. The order in this Court does not imply that an order for costs must inevitably be made in any specific sum. 29 I turn to the issue of the refusal of the order for restitution. Again the jurisdiction of this Court to hear an appeal is dependent upon the refusal of an order being an appeal against sentence imposed within the meaning of section 56 of the Appeal Act. I note in the definition of "sentence" above quoted the presence of the word "restitution" in sub-subparagraph (a)(v). Whilst the expression is not without possible ambiguity I consider the better construction is to regard the word in that context as related to "licence" or "privilege". That view is fortified by the express reference to a restitution order pursuant to section 43 of the Procedure Act, the relevant order sought in these proceedings in sub-paragraph (c). 30 Section 43 provides: (1) In any criminal proceedings in which it is alleged that the accused person has unlawfully acquired or disposed of property, the court may order that the property be restored to such person as appears to the court to be lawfully entitled to its possession. (2) Such an order may be made whether or not the court finds the person guilty of any offence with respect to the acquisition or disposal of the property. (3) Such an order may not be made in respect of: (a) any valuable security given by the accused person in payment of a liability to which the person was subject when the payment was made, or (b) any negotiable instrument accepted by the accused person as valuable consideration in circumstances in which the person had no notice, or cause to suspect, that the instrument had been dishonestly come by."

31 In order to found jurisdiction it is necessary for the plaintiff to construe "any order for restitution" in sub-paragraph (e) of the definition of "sentence" in the Appeal Act as extending to "refusing to make an order for restitution". Whilst viewed in isolation that has attraction towards the construction of the provision in the Justices Act favoured in Palmer, it is not compatible with the fundamental prescription in 56(1)(a) that the appeal be against "a sentence imposed". 32 There has been no imposition of sentence related to the issue of restitution in any sense; quite the contrary. If, as contended by the plaintiff, 'sentence' means failure to make an order for restitution, then section 56(1)(a) would have to be read "a failure to make an order for restitution imposed", the articulation of which exposes the inherent contradiction. An appeal pursuant to the Appeal Act does not lie against the refusal to order restitution. 33 The plaintiff alternatively seeks an order in the nature of mandamus. I need not repeat what I have said concerning constructive failure to exercise jurisdiction. I have already set out some final remarks of the magistrate which made reference to his reasons for declining to make this order. What he there said was consistent with what had earlier passed in exchanges between counsel and the bench. I believe I do no disservice to his reasons in summarising that he had formed the view that, although the defendant had made false and misleading statements about her work injury, it was likely that what happened at work amounted to aggravation of the undisclosed previous home injury and the aggravation would found some entitlement for compensation and possibly also damages in any event. 34 Although his Honour did not use this expression, I understand him to have notionally set-off this hypothetical entitlement against the payment in fact received from the insurer in respect of the whole of which restitution was sought. He recognised that, even assuming the correctness of the hypothesis of entitlement for aggravation of previous injury or condition, the entitlement may fall short of what had been received in respect of the tainted claim. 35 So far as can be gauged from the transcript, the notion of inchoate entitlement as a set-off was the exclusive consideration which was undertaken in the determination of the plaintiff's application for the order for restitution. The denial of an order for restitution on the basis of what can be accurately categorised as speculation that the defendant may have some entitlement to set-off aliunde, plainly derives from an impermissible approach and falls well within the ambit of the application of wrong test so as to found a constructive failure to exercise jurisdiction. 36 Counsel has drawn attention to some evidence concerning the possibility of entitlement for aggravation of existing injury. It was required that his Honour determine whether the compensation payments in fact received amounted to property unlawfully acquired, and if so, the identity of who appeared lawfully entitled to it. He does not appear to have engaged in that exercise at all but, as I have said, contented himself with the determination that the defendant had some different claim which could be, to an unestimated extent, set off against what she had received. 37 The notice of contention recites the acquittal of the defendant on three of the eight charges. As section 43(2) of the Procedure Act provides that a finding of guilt is not a pre-requisite for the making of an order for restitution to a person who appears to be lawfully entitled to possession of property, the plaintiff has established an entitlement to an order in the nature of mandamus. That entitlement does not mandate the outcome of the exercise of discretion by the magistrate which, upon return to the Local Court, must be determined in accordance with material then before the Court and due deliberation in accordance with lawful exercise of jurisdiction. 38 On this issue the paucity of the content of the plaintiff's application was pointed to and there is force in the defendant's observation. However, the learned magistrate made his conclusion clear almost at the outset of proceedings after conviction and I do not consider that, where an entitlement to relief for jurisdictional error of some magnitude has been established, it should be withheld in the exercise of discretion by this Court. 39 The formal order of the Court is that the proceedings are remitted to the Local Court for the applications by the plaintiff for costs and for restitution to be dealt with according to law. MR BUSCOMBE SOUGHT COSTS FOR THESE PROCEEDINGS; DISCUSSION AS TO COSTS

40 HIS HONOUR: I order the defendant to pay the plaintiff's costs of the summons. The defendant should have a suitor's fund certificate in respect of those costs.

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