On 26 May 2015 I made orders setting aside a Subpoena issued on behalf of the accused Glen Patrick McNamara ("McNamara") and directed to the Australian Crime Commission ("the Commission"): R v Rogerson; R v McNamara (No 2) [2015] NSWSC 619. In circumstances where the Commission had foreshadowed that it would seek an order for costs if the Subpoena was set aside, I made further orders in relation to the provision of written submissions, which I have now received. This judgment deals with the question of whether an order for costs should be made in favour of the Commission. There is no dispute between the parties that I have the power to make such an order.
[2]
THE EVIDENCE IN SUPPORT OF THE APPLICATION FOR COSTS
The Commission's application was supported by an affidavit of Benjamin May, solicitor, of 1 June 2015 which was read without objection. That affidavit establishes (inter alia) the following.
On 29 April 2015, following service of the Subpoena on the Commission, Mr May wrote to Mr Lu who at that time was McNamara's solicitor. In doing so, Mr May highlighted s. 51(3) of the Australian Crime Commission Act 2002 (Cth) ("the Act") which confers, upon the Commission, immunity from production in certain defined circumstances. The correspondence also made reference to the necessity on the part of McNamara to establish a legitimate forensic purpose for seeking the documents set out in the Subpoena. Mr May concluded by inviting Mr Lu to provide (inter alia) particulars of that purpose. Mr Lu did not reply to that letter.
Mr May wrote to Mr Lu again on 5 May 2015, stating (inter alia) the following:
"2. In our letter (dated 29 April 2015) we noted that s. 51(3) of the Australian Crime Commission Act 2002 (Cth) may provide a complete answer to the subpoena.
3. We have now received instructions confirming that none of the exceptions set out in s. 51(3) apply in this matter. Accordingly, the ACC will submit that s. 51(3) provides it with an immunity from production of the requested documents in this matter."
Importantly, the letter went on to state the following:
"4. Please note that we propose to file a notice of motion to have the subpoena set aside on the basis of s. 51(3). In the alternative, the ACC will object to the subpoena on additional bases, including that the subpoena fails to disclose a legitimate forensic purpose and represents an impermissible fishing exercise.
5. The ACC will seek an order that your client pay its costs of the subpoena and the motion.
6. In light of the above, we invite you to consider withdrawing the subpoena."
Once again, Mr Lu did not reply.
On 7 May 2015 a Notice of Motion was filed on behalf of the Commission seeking an order that the Subpoena be set aside, along with an order that McNamara pay the Commission's costs. On the same day, after that Notice of Motion had been filed, Mr May again wrote to Mr Lu. In doing so he set out, in some detail, the position which would be taken by the Commission if the Notice of Motion were to proceed. Mr May explained the Commission's position by specific reference to the provisions of s. 51(3) of the Act. He also set out the evidence upon which the Commission would rely. He also referred Mr Lu to the decision of Slattery CJ at CL in R v Micalizzi (NSWSC 13 November 1987 unreported) which, he suggested, supported the Commission's position.
Mr May also drew Mr Lu's attention to the fact that the Notice of Motion sought an order for costs. He concluded by saying the following:
"Please note that the ACC will not press the motion (including the application for costs) if you indicate in writing prior to 2pm tomorrow, Friday 8 May 2015, that the subpoena is not pressed."
Once again, Mr Lu did not respond to Mr May's letter.
Finally, on 8 May 2015 Mr May again wrote to Mr Lu enclosing an affidavit of Warren Gray which, he foreshadowed, would be relied upon in support of the Notice of Motion. A copy of the decision in Micalizzi (supra) to which Mr May had referred in his letter of 7 May was also provided.
I draw the following conclusions from Mr May's evidence.
Firstly, Mr Lu was on notice of the Commission's position from an early stage.
Secondly, in the course of numerous letters, Mr May explained that position in some detail. Not only did he outline the basis upon which that position was taken, he went so far as to refer Mr Lu to authority which he suggested supported the Commission's position.
Thirdly, Mr May drew Mr Lu's attention, on more than one occasion, to the fact that the Commission would seek costs in the event that the Motion proceeded and the Subpoena was set aside.
Fourthly, before the Motion was heard, Mr May gave Mr Lu an opportunity to resolve the matter without having to pay costs. Mr Lu did respond to any of Mr May's correspondence.
It is also relevant to note that in setting aside the Subpoena, I accepted the position of the Commission as it had been outlined by Mr May in his correspondence. I also concluded that the decision in Micalizzi supported that position.
[3]
Submissions of behalf of the Commission
The Commission has sought an order for costs in a lump sum of $8,500.00, in circumstances where the solicitor/client costs are said to be more than $16,000.00. The Commission acknowledged the fact that McNamara has been charged with serious offences, and it did not dispute that in the defence of such charges McNamara was entitled to pursue such avenues as were reasonably open to him. However, quite apart from the fact that it was successful in having the Subpoena set aside, the Commission pointed to the evidence of Mr May in support of a submission that it had taken every possible step to avoid the need to bring any application. It was submitted that all of these matters supported the making of an order for costs, and that there was no conduct on the part of the Commission which operated to disentitle it to such an order.
[4]
Submissions on behalf of the accused McNamara
The written submissions of counsel for McNamara expressly acknowledged that Mr Lu was on notice (inter alia) of the fact that if the Subpoena was set aside, an order for costs would be sought. However, it was submitted that this consideration was "diminished in relevance" because of "the context of the trial". Counsel emphasised that my decision to set the Subpoena aside was not one which was made on the basis that the Subpoena was oppressive or vexatious, but was one which was made "on the question of public interest immunity". This, it was submitted, was a distinguishing factor which weighed against the making of an order for costs in the Commission's favour.
It was further submitted that the necessity for McNamara to be given a fair trial carried "significant weight" because in issuing the Subpoena, his representatives were doing no more than pursuing matters that they deemed to be relevant to his defence of the charges against him. It was submitted that in these circumstances, any application for costs was to be viewed in "a different light".
It was further submitted that the present case was not one in which two parties were involved in a civil dispute, but was "a situation of the resources of a public entity against the resources of a private individual (who was) not the beneficiary of Government resources or support".
Finally, counsel made a number of submissions concerning what I understood to be the suggested interplay between the right of an accused to a fair trial and the Court's power to award costs. In support of those submissions, counsel cited Article 14 of the International Covenant on Civil and Political Rights which makes reference to an accused's entitlement to have material disclosed to him which is helpful, either because it weakens the prosecution case or strengthens his own.
It was submitted that in the event that I came to the conclusion that the order sought was appropriate, the costs assessed by the Commission were "contested and should be subject to a discount in the interests of justice or should be nominal". It was submitted in the alternative that any order for costs should be stayed until further order of the Court.
[5]
CONSIDERATION
The effect of the general rule that costs follow the event is that the exercise of the power to award costs should normally require the unsuccessful party to pay the costs of the successful party, at least to the extent that those costs have been reasonably incurred in the conduct of the litigation. In Latoudis v Casey [1990] HCA 59; (1990) 170 CLR 534 McHugh J said (at 566-7, citations omitted):
"An order for costs indemnifies the successful party in litigious proceedings in respect of liability for professional fees and out-of-pocket expenses reasonably incurred in connection with the litigation. 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. Thus, in civil proceedings an order may, and usually will, be made even though the unsuccessful party has nearly succeeded or has acted reasonably in commencing the proceedings. It may, and usually will, be made even though the action has failed through no fault of the unsuccessful party. …. the object of costs is not to penalise; it is to indemnify the successful party in regard to expense to which he has been put by reason of legal proceedings."
In my view, there are a number of reasons in the present case which support the conclusion that an order for costs should be made in favour of the Commission.
Firstly, and fundamentally, the Commission was successful in its application to set the Subpoena aside. That result prima facie attracts application of the general rule.
Secondly, Mr May repeatedly spelled out the Commission's position to Mr Lu. In doing so, he went to some considerable lengths to articulate the basis upon which the Commission would argue that the provisions of s. 51(3) of the Act applied.
Thirdly, having explained the Commission's position in detail, Mr May offered Mr Lu the opportunity to, in effect, consent to an order setting the Subpoena aside, in which case no costs order would have been sought by the Commission.
In my view, all of those matters weigh in favour of an order for costs being made in favour of the Commission.
As I have already outlined, counsel for McNamara submitted that an order for costs was not appropriate because I had not determined that the Subpoena should be set aside on the basis that it was oppressive or vexatious. In support of this submission counsel cited a number of authorities.
Firstly, counsel referred me to the decision of E M Heenan J in R v Bartlett [2014] WASC 492 where his Honour, in reference to the decision of the Supreme Court of Western Australian in Carter v Managing Partner, Mallesons Stephen Jaques (1993) 11 WAR 159, said (at [35]):
"The Court decided (in Carter) that there was a clear distinction to be drawn between the payment of costs by an accused where a third party is caused to incur costs by the issuing of a subpoena which is later to be found oppressive, and the right of an accused to a fair trial."
His Honour was evidently referring to the judgment of Malcolm CJ in Carter where the Chief Justice had said the following (at 178):
"The question whether an accused who has unnecessarily caused a third party to incur costs by the issue and service of a subpoena later found to be oppressive seems, in principle, unaided by relevant authority, to have nothing to do with either the prerogative of the Crown or the right of the accused to a fair trial."
As I read that part of Malcolm CJ's judgment, his Honour concluded that questions arising from an accused having unnecessarily caused a third party to incur costs by issuing a Subpoena found to be oppressive have nothing to do with the right of an accused to a fair trial. In my view, for that purpose there is no relevant distinction to be drawn between a Subpoena which is set aside on the grounds that it is oppressive, and one which is set aside because the organisation to which it is directed has the benefit of a statutory immunity from production. In these circumstances, the decision in Bartlett does not support McNamara's position.
Counsel also relied on the following passage of the judgment of Miles CJ in R v Barbaro (1992) 108 ACTR 1 at [5]:
"Of course it is true that a person facing a criminal charge in entitled to use the processes of the court to the full extent that is legitimately possible in order to make answer to the charge and to maintain the presumption of innocence, but even in the defending of criminal charges there is a limit to which legal practitioners can lend their professional support to the obtaining of a preemptory court order when the process is vexatious or oppressive. When a subpoena is both vexatious and oppressive, I can see no reason why, other things being equal, the party causing it to issue should not pay the costs of an application to set it aside even when that party is defending a criminal charge or charges."
Counsel's submissions appeared to suggest that this passage of his Honour's judgment was authority for the proposition that it is only in cases where a Subpoena issued by an accused is found to be vexatious or oppressive that costs should be awarded. I am unable to accept that submission. To so conclude would be to impermissibly fetter the discretionary power to award costs.
I accept that the charges against McNamara are, as counsel submitted, of the utmost gravity. I similarly accept that McNamara is entitled to a fair trial. It may well be that in issuing the Subpoena, those representing him were, as counsel submitted, "pursuing evidence that they deemed relevant to their case by way of Subpoena". However, such submissions ignore the fact that there was a statutory immunity which operated in favour of the Commission. The terms of that immunity were drawn to the attention of Mr Lu on numerous occasions. In the end result, I found that the immunity applied and that the interpretation of s. 51 of the Act which was advanced on behalf of McNamara was not open. In these circumstances, and for the reasons previously stated, I am not able to accept the submission that the circumstances of the present case "raise questions" as to the right of McNamara to a fair trial. There is nothing, in my view, which weighs against an order for costs being made in the Commission's favour, and there is no utility in requiring that any such order, once made, be stayed.
That leaves the question of the terms of the order. The Commission seeks an order for a specified sum, namely $8,500.00. In support of that position, Annexure F to the affidavit of Mr May comprises timesheets setting out work done in relation to the Notice of Motion. Mr May calculated the Commission's total costs (on a solicitor/client basis) at $16,590.95.
It is apparent that two solicitors, Mr May and Mr Markus, carried out the majority of the work in relation to the matter on the Commission's behalf. Annexure F records that on 12 May both of them engaged in "preparation" for the hearing, incurring total costs of almost $4,500.00. In addition, costs were incurred as a result of both solicitors attending the hearing of the Notice of Motion, Mr May "instructing" Mr Markus who appeared on behalf of the Commission. The argument on the motion was confined and the hearing occupied, in total, less than two hours of court time. Whilst it is not a matter for me to determine, there appears to be some support for the conclusion that there has been a degree of duplication in the work carried out.
In all of these circumstances, and bearing in mind that this is not a case in which the assessment process is likely to be complex or lengthy, I consider that the most appropriate course is to order that McNamara pay the Commission's costs, as agreed or assessed.
[6]
CONCLUSION
For the reasons outlined above, I make the following order:
1. The accused Glen Patrick McNamara is to pay costs of the Australian Crime Commission of, and incidental to, the Notice of Motion dated 5 May 2015, as agreed or assessed.
[7]
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Decision last updated: 15 June 2016