NEW SOUTH WALES v RADIO 2UE SYDNEY PTY LTD

Mahoney JA This proceeding is before the court to consider what order should bemade in respect of costs. Proceedings were brought by the Attorney General against the defendants charging them with contempt of court: the charge arose out of statements made by Mr Alan Jones on the company's radio station 2UE on 29 July 1991.

On 28 August 1992 this Court held that the charge had not been established and dismissed the summons. In respect of the costs of proceedings the view of the court was expressed by Priestley JA: "If before 11 September 1992 any party seeks to argue for an order for costs, liberty is granted to re-list the summons upon three days notice for argument on the question of costs; otherwise no order as to costs."

The defendants have indicated that they desire to argue the question of costs. Mr Nicholas QC, for the defendants, has submitted that the court should order that the Attorney General pay their costs of the proceeding.

The defendants' submission has been, in substance, that they succeeded in the proceeding, that there is no reason why they should not have their costs and that accordingly the order they seek should be made.

Subject to what I shall say, the principles by reference to which costs are to be dealt with are well established. The argument has proceeded upon the basis that the principles are to be derived from the Supreme Court Act 1970 and that, notwithstanding the criminal nature of a proceeding for contempt, the provisions of and derived from the Supreme Court Act apply: cf Supreme Court Act 1970, s17; Fraser v The Queen (1984) 3 NSWLR 212; Adler v District Court of New South Wales (1990) 19 NSWLR 317.

"76 (1) Subject to this Act and the rules and subject to any other Act:

(b) the Court shall have full power to determine by whom and to what extent costs are to be paid; and

(c) the Court may order costs to be taxed or otherwise ascertained on a party and party basis or on any other basis."

Pt52 of the Supreme Court Rules makes general provision in relation to costs.

"52 (4)(1) The powers and discretions of the Court under s76 of the Act (which relates to costs generally) shall be exercised subject to and in accordance with this Part.

(2) Save as mentioned in subR(1), this Part has effect subject to the Act and the tules and subject to any other Act."

"52 (11) If the Court makes any order as to costs, the Court shall, subject to this Part, order that the costs follow the event, except where it appears to the Court that some other order should be made as to the whole or any part of the costs."

Mr Nicholas QC has submitted that there is, in a sense, a prima facie entitlement in the defendant to the costs of these proceedings by reason of Pt52 R11 and that, though the court has a discretion to order otherwise, no circumstances exist which would warrant the making of an order other than that the Attorney General pay the defendants' costs of the proceedings.

It is not clear whether PtS1 R11 applies in this case. The rule applies "if the Court makes any order as to costs...". In this case, the order proposed was: "... otherwise no order as to costs". It is arguable that "no order as to costs" does not involve the making of an order as to costs within Pt52 R11. However, it is not necessary to pursue that question. It is to be accepted that, although costs are in the discretion of the court, the ordinary principle is that costs should follow the event in proceedings subject to the Supreme Court Act: see generally Donald Campbell and Co Ltd v Pollak (1927) AC 732; Hally v Dennis (1955) 95 CLR 661; Latoudis v Casey (1990) 170 CLR 534. It has been said, in various ways, that under the general law a successful party does not have the right to an order for costs but "in the absence of special circumstances, a reasonable expectation of obtaining an order for the payment of his costs by the plaintiff': Donald Campbell and Co Ltd v Pollak: at 811, per Viscount Cave LC. If Pt52 R4 and R11 create in a successful defendant something beyond such an expectation, the matter is in the end subject to the discretion of the court to make "some other order": see also Ptl R12. It is the exercise of the court's discretion which is in issue in this application.

As I understand the submissions made, it is the position of the Attorney General that the award of costs, including the refusal of costs to either party, is within the discretion granted by and under the SuPreme Court Act and that the refusal to award costs to the successful defendants may be justified by, as it has been described, the "brought it upon himself" factor.

In Donald Campbell and Co Ltd v Pollak, Viscount Cave LC, with whom at least the majority of their Lordships agreed, said: at 811-2:

"A successful defendant in a non-jury case has no doubt, in the absence of special circumstances, a reasonable expectation of obtaining an order for the payment of his costs by the plaintiff; but he has no right to costs unless and until the Court awards them to him, and the Court has an absolute and unfettered discretion to award or not to award them. This discretion, like any other discretion, must of course be exercised judicially, and the judge ought not to exercise it against the successful party except for some reason connected with the case....But when a judge, deliberately intending to exercise his discretionary powers, has acted on facts connected with or leading up to the litigation which have been proved before him or which he has himself observed during the progress of the case, then it seems to me that a Court of Appeal, although it may

WHER MAJESTY'S ATTORNEY GENERAL IN AND FOR THE STATE OF NEW SOUTH WALES v RADIO 2UE SYDNEY PTY LTD (Mahoney JA)

deem his reasons insufficient and may disagree with his conclusion, is prohibited by the statute from entertaining an appeal from it."

"Tt was, therefore, fully before the learned judge, and he was entitled to take it into account in considering whether the defendant had brought this litigation upon himself and to decline on that ground to give him the costs of the action." It is the extent of the "brought it on himself" factor which is essentially in question in this regard.

Two main questions have been considered: what is the ambit of this factor; and whether, having proper regard to it, the court should make the order forecast in the judgment of Priestley JA in this proceeding.

In the House of Lords, their Lordships discussed the nature of the conduct of the successful defendant which the trial judge, Branson J, had taken into account in depriving the successful defendant of his costs. It was referred to by Lord Atkinson: at 823-4. The proceeding was one against Pollak and Said claiming an account of transactions between Said and the company upon the basis that Pollak was liable as partner of Said: at 733. Pollak had been charged, in the proceeding, with fraud and he had succeeded. But the trial judge deprived him of his costs.

In the report: (1927) AC 732 at 734; the reporter summarised what the judge had said as follows:

"This action was retried by Branson J without a jury. Branson J gave judgment for the respondent, but without costs, mainly on the ground of the misconduct of the respondent in the action by the firm in concealing his partnership with Said. That misconduct was, in his view, the real reason why the second action was brought by the liquidator and the real reason which forced him into the proper execution of his duty to bring the action, because, when once it was shown that the respondent had concealed his partnership with Said in respect of certain transactions, the liquidator could not discover from the books of the company when that partnership ceased."

"T think it is sufficient for me to say this, that in my view the real reason why the action was brought by the liquidator, and the real reason which forced him, in my view, in the proper execution of his duty, and also the creditors of the company, to bring the action, was the fact that Mr Pollak had, in his dealings with Said, begun with a concealed partnership with Said, of which every trace was kept out of the books, and that so far as anybody looking at the books is concerned, once it appears that Pollak was a partner with Said in the first of the transactions in which Said took part, there is nothing to show when he ceased to be a partner. I think a man who puts himself into that position has only himself to blame if anybody who is concerned to make him liable on the contracts with Said which follow brings an action against him in respect of them. That is the main ground put forward by the liquidator for the course which he asks me to take in the matter, and it is the main ground upon which I accede to the request that he makes. The real reason why I am doing what I propose to do in this case is, as I have stated, the fact that I believe that if it had not been for Pollak entering into this partnership with Said in the way in which he did, and keeping all the record out of the books which would lead anybody to know it, and keeping the knowledge of it from his subordinates in the department, this action need not have been brought. It was his fault that it was brought, because his conduct, and guilty conduct, in a matter which is outside the immediate cause of action which is being brought against him here, and so satisfies every one of the limitations

which are stated by Lord Justice Atkin is the real cause of the initiation and the prosecution of this litigation. The result is that I think this is one of those cases in which it is clear that the defendant has brought the litigation upon himself, and by the way in which he has behaved himself, and consequently is an appropriate case in which, in the exercise of the discretion which in such cases I possess, I should say that I make no order for costs."

The decision of the House of Lords has been applied by the High Court and this Court. In Latoudis v Casey (1990) 170 CLR 534 at 569, McHugh J, with whose judgment Mason CJ: at 544; agreed, cited relevant portions of the speech of Viscount Cave LC: at 569.

In Latoudis v Casey, the High Court considered the exercise by a magistrate of the discretion to order an unsuccessful informant to pay the successful defendant's costs. Statutory authority was given to the magistrate to make an order for costs against the informant. He refused to do so on the ground that the informant had acted reasonably in instituting the proceeding and that the defendant had caused suspicion to fall on himself by failing to seek proof of the ownership of the goods the subject of the charges.

McHugh J: at 568-570; after referring to distinctions between criminal and civil proceedings, said: "Nevertheless, it needs to be stressed that, subject to any contrary legislative indication, costs in summary proceedings do not follow the event and that a successful defendant in such proceedings, like a successful party in civil proceedings, has no right to an order for costs.... Likewise, a successful defendant in summary proceedings has a reasonable expectation of obtaining an order for the payment of his or her costs because it is just and reasonable that the informant should reimburse him or her for liability for costs which have been incurred in defending the prosecution. Consequently, a magistrate ought not to exercise his or her discretion against a successful defendant on grounds unconnected with the charge or the conduct of the litigation. The fact that the informant has acted in good faith in the public interest or may have to meet the costs out of his or her own pocket is not a ground for depriving the defendant of his or her costs. Speaking generally, before a court deprives a successful defendant in summary proceedings of his or her costs, it will be necessary for the informant to establish that the defendant unreasonably induced the informant to think that a charge could be successfully brought against the defendant or that the conduct of the defendant occasioned unnecessary expense in the institution or conduct of the proceedings... Thus, non-disclosure to investigatory police of a tape recording later successfully used in cross examination of the informant's witnesses may be a relevant matter to be taken into account in determining whether the defendant should be awarded costs: cf Reg v Dainer: Ex parte Milevich (1988) 91 FLR 33. A successful defendant cannot be deprived of his or her costs, however, because the charge is brought in the public interest or by a public official, because the charge is serious or because the informant acted reasonably in instituting the proceedings or might be deterred from laying charges in the future if he or she was ordered to pay costs. Nor can the successful defendant be deprived of his or her costs because the conduct of the defendant gave rise to a suspicion or probability that he or she was guilty of the offence the subject of the prosecution. Hence, in most cases, the successful defendant in summary proceedings, like the successful party in civil proceedings, should obtain an order for costs in respect of those issues on which the defendant succeeds."

WHER MAJESTY'S ATTORNEY GENERAL IN AND FOR THE STATE OF NEW SOUTH WALES v RADIO 2UE SYDNEY PTY LTD (Mahoney JA)

McHugh J was, in Latoudis v Casey, considering the position in summary criminal proceedings. The present is a criminal proceeding the relevant incidents of which are governed by the Supreme Court Act. It should, in my respectful opinion, be assumed that what his Honour said is applicable in its terms to the present case.

In argument, reliance was placed upon his Honour's statement that "... it will be necessary for the informant to establish that the defendant unreasonably induced the informant to think that a charge could be successfully brought against the defendant...".

In the present case, the defendants did not act with the intention of inducing the Attorney General to think the charge could successfully be brought against them. But the cases in which a defendant can properly be said to have brought the litigation on himself are not limited to those in which there is such an intention. Mr Pollak did not act with such an intention. In my opinion, the factor extends to cases in which, though having no such intent, what the defendant did "unreasonably induced the informant to think" that the charge could successfully be brought. In speaking "generally" in relation to summary proceedings, McHugh J did not, I think, intend what he said to be an exhaustive statement of the circumstances in which a successful defendant could be deprived of costs. But I shall, for present purposes, deal with the matter by reference to the terms of the portion of his Honour's judgment on which reliance was placed.

I come therefore to consider what was done in the present case. The conduct was that of Mr Alan Jones. The details of it are referred to in the judgment of Priestley JA in the present proceeding. Mr Jones made statements on his radio programme which could have interfered with a criminal trial then proceeding and were apt to do so. They were directed to what was occurring in that trial. They went to the heart of one at least of the issues in the trial, the effect which the jury should give to the evidence of one of the important prosecution witnesses. Mr Jones knew that the trial was proceeding. He was or should have been aware that, if his remarks had been made to the jury or conveyed to them, there would have been a direct and significant interference with the progress of the trial. That would have established the charge brought against the defendants.

The reason why, notwithstanding this, the court was not satisfied that the charge had been established was referred to by Priestley JA. His Honour said:

"In doing what he did, Mr Jones was, knowingly or unknowingly, running a very considerable risk of committing contempt of court. The circumstances needed only to be slightly different for what happened to have been a contempt of court. If he had made his comments either at greater length so that their tendency as a matter of practical reality to prejudice the fairness of the current trial had been greater, or at a different time in relation to the trial, for example just before it began, I might well have been satisfied that contempt was committed..."

His Honour was not satisfied "that the tendency of the broadcast to interfere with the fairness of the current trial was sufficient to warrant the conclusion that the broadcast constituted a contempt". His Honour saw "the additional element, Mr Jones's own disapproval of the use of such witnesses" as "in this programme indicated very briefly and rather obscurely". His Honour was therefore not satisfied that what happened "as a matter of practical reality" had "a tendency either to interfere with the due course of justice, or to interfere substantially with a fair trial, or to create a substantial risk of serious interference with a fair trial'.

I do not think that this is a case where the Attorney General merely "acted reasonably in instituting the proceedings". What Mr Jones did was, in my opinion, "dangerous" and it was plain that it was. It was, if on one side of the line, barely so. If he had thought about the matter, he would have concluded that there was a real likelihood, not merely a possibility, that proceedings would be taken. In the relevant sense, he acted unreasonably in doing something likely to provoke action against him and the other defendant.

Considering what he did in its context, and the relationship which, as he was apt to know, it had to the bringing of the proceedings, I think that there is a proper cause for making the order which, in his judgment, Priestley JA foreshadowed. I would order that each party should bear his or its own costs of the proceeding.

Priestley JA I agree with Mahoney JA. Handley JA I agree with Mahoney JA.

Each party to bear his or its own costs of the proceeding. Counsel for the Claimant: K MASON QC/PJ LAKATOS Instructed by: HK ROBERTS, STATE CROWN SOLICITOR Counsel for the Opponent: WH NICHOLAS QC