Woollahara Municipal Council v Kincorp

Criminal Procedure Act 1986 LEGISLATION CITED: Environmental Planning and Assessment Act 1979 Woollahra Local Environmental Plan 1995

Baulkham Hills Shire Council v Naklicki (No.2) [2008] NSWLEC 317 Castlebar Holdings v Riley (2005) 138 LGERA 338 Commercial Union Assurance Company of Australia Ltd v Ferrcom Pty Ltd & Another (1991) 22 NSWLR 389 Council of Kangan Batman Institute of Technology and Further Education v Australian Industrial Relations Commission (2006) 156 FCR 275 Fosse v DPP & Anor [1999] NSWSC 367 Giorgianni v R (1985) 156 CLR 473 Halpin v Department of Gaming and Racing [2007] NSWSC 815 JD v DPP [2000] NSWSC 1092 CASES CITED: Kanan v Australian Postal and Telecommunications Union (1992) 43 IR 257 Latoudis v Casey (1990) 170 CLR 534 Morrison v Defence Maritime Services Pty Ltd & Others (2007) 156 LGERA 365 Mosman Municipal Council v Waratah Village Partners Pty Ltd and Another [2002] NSWLEC 19, (2002) 118 LGERA 460 Port Macquarie-Hastings Council v Lawlor Services Pty Ltd ; Port Macquarie-Hastings Council v Petro (No.7) [2008] NSWLEC 75; (2008) 159 LGERA 87 The Queen v Moore and others; Ex parte Federated Miscellaneous Workers' Union of Australia (1978) 140 CLR 470 R v O'Neill [1979] 2 NSWLR 582 Wollongong City Council v Ensile Pty Ltd; Wollongong City Council v Hogarth (No.9) [2008] NSWLEC 248 Woollahra Municipal Council v JPS Development and Construction Pty Ltd [2007] NSWLEC 595 Woollahra Municipal Council v Kincorp (NSW) Pty Ltd and Terence John Daly [2008] NSWLEC 218

PROSECUTOR Mr P Clay SOLICITORS HWL Ebsworth LEGAL REPRESENTATIVES: DEFENDANT Mr M Gracie SOLICITORS Dennis & Co

JUDGMENT: THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES

50027 of 2006 Woollahra Municipal Council v Kincorp 50029 of 2006 (NSW) Pty Ltd and Terence John Daly (No.2) Introduction 1 His Honour: The defendants in these proceedings seek an order that the Council should pay their costs. 2 On 31 July 2008 I dismissed charges which the Council had brought against the defendant company ("Kincorp"), in Matter No 50027, and its guiding mind, the defendant Daly, in Matter No 50029. See Woollahra Municipal Council v Kincorp (NSW) Pty Ltd and Terence John Daly [2008] NSWLEC 218. 3 The proceedings were commenced by summonses dated 7 September 2006, and concerned the demolition without consent of a part/remnant of a building at 52 Glenmore Road, Paddington (referred to in evidence as "terrace 4"). 4 Each defendant was charged "that between about 1 January 2006 and 31 March 2006 at 52 Glenmore Road Paddington … the Defendant committed an offence against s125(1) of the Environmental Planning & Assessment Act 1979…" ("EP&A Act") by carrying out "development on land, being development which required development consent under the Woollahra Local Environmental Plan 1995, otherwise than in accordance with the development consent DA 2001/691 granted by Woollahra Municipal Council, being a thing forbidden to be done by section 76A(1)(b) of the said Act". 5 I note that Pain J has already made a costs order in the defendants' favour in respect of costs "thrown away" as a consequence of an amendment Her Honour allowed to the council's summonses on 18 October 2007. Those amendments affected the first paragraph of the "Particulars of the manner of contravention by the Defendant" in each summons. In its original form the particular read: "The Defendant carried out the development on the land by engaging an agent Active Demolition to carry out the demolition of 'Terrace 4' upon instructions from the Defendant" (sic?). In its amended form it read: "The Defendant caused to be carried out the development on the land by instructing JPS Development & Construction Pty Ltd and Mr Jeffrey Sarkis to demolish Terrace 4". 6 Both defendants maintained their pleas of not guilty to the charges in the Amended Summonses. Mr Sarkis and his company ("JPS") were also charged over the demolition in parallel proceedings (Nos.50028 and 50030). JPS pleaded guilty and was fined $5,000, plus costs, by Lloyd J on 14 June 2007 (see Woollahra Municipal Council v JPS Development and Construction Pty Ltd [2007] NSWLEC 595). The prosecution of Sarkis personally was withdrawn by consent. 7 Counsel for these defendants contended that if the prosecutor succeeded, Kincorp rather than Daly should be convicted, as Daly acted only under the contractual authority enjoyed by Kincorp, which had been engaged on 12 May 2005, by the proponent of the development (JC & R Bourke Pty Ltd - "Bourke"), to manage the project. 8 The prosecutor's case relied upon the fact that the relevant part of the residential terrace involved was required by the development consent (DA2001/691) to be retained. That consent granted approval for "alterations and additions to 'terrace 4' only", and Council was very committed to retention of at least some particular walls of the terrace. 9 The Defendants contended that they at all times complied with the requirements of the development consent, which incorporated, among the construction certificate ("CC") plans, various engineering drawings (issued by BCA Logic Pty Ltd on 16 January 2004), notations on which, they say, permitted demolition of the relevant walls on the subject site to the extent determined on site by the structural engineer, Mr John Haymes (who had been involved in the project since April 2002). Those CC plans were prepared by Haymes' company, under his supervision. The questions posed 10 I identified the two questions the court had to answer: (1) Did a breach of the consent occur? (2) Did the/an instruction to demolish come from the defendants? 11 As the prosecutor identified in its costs submissions:

" 11. The answer to the first question turned upon the construction of the relevant consent and in particular a notation on plans which were incorporated within the consent. Either a question of law or a mixed question of law and fact. 12. The second question turned upon the construction of communications and contractual matter to determine what was the role of the variety of 'players' wherein the Court ultimately determined that notwithstanding the terms of a communication from the Defendants to the builder, that there was no instruction from them which was an instruction to demolish or which was causally linked to the construction. Again, truly either a question of law or a mixed question of law and fact ." The judgment summarised 12 During the demolition of buildings and parts of buildings after site works commenced on or about 12 November 2005, concerns arose and gradually increased regarding cracking in the walls of terrace 4. The evidence showed that Haymes consulted Mr Waddell of Coffeys Geotechnical Engineers and they jointly recommended the relevant demolition "as a matter of urgency" in mid December 2005. Both had consistently advocated more extensive demolition of terrace 4 prior to that date. By 16 December 2005 Sarkis was of the view that the remaining walls of terrace 4 constituted a danger. 13 On 16 December 2005 and again on 16 January 2006, Haymes instructed JPS to demolish, and the builder consulted him throughout the relevant demolition works, which commenced on 23 January and were completed by 21 March 2006. The Defendants' case was that they had no involvement in this aspect of the project at that stage; they merely, on 20 January 2006, "re-forwarded an earlier instruction issued by Mr Haymes to JPS". 14 The defence makes much of the Council's failure to prosecute Haymes or cross-examine him on some matters, and its failure to question the independent expert, Mr MacLeod, during his oral evidence, on the meaning of the notation on the plans. Counsel made submissions at the trial on the extension of the Jones v Dunkel principles to such situations. In coming to my decision I did not rely on any Jones v Dunkel inference. I accepted MacLeod as an eminent expert, but, compared to Haymes and Coffeys, he had no first-hand knowledge of terrace 4, and relied only on photographs. 15 I was not satisfied on the first question posed - and certainly not beyond reasonable doubt - that, upon the proper construction of the consent as a whole, the partial demolition of terrace 4 was in breach of it. I then turned my attention (commencing at [34]) to the second question, concerning the defendants' role in the instruction to demolish. 16 On 12 January 2006, Sarkis had emailed to Daly a request for his approval, as a contract variation, of the demolition works Haymes had instructed be done, and Daly declined the request. Neither email implicated Daly or Kincorp in the giving of the relevant instruction. Mr Daly and Kincorp neither had a role in, nor could have applied any expertise to, those works. They consistently claimed that they were engaged as a project manager, to act on behalf of a sick and absent client (the principal of Bourke), rather than as a construction supervisor. The responsibility to comply with the terms of the development consent lay upon the builder under the terms of its contract with the owner, entered on 6 October 2005. 17 On 19 January 2006 Sarkis asked Daly/Kincorp for "an instruction to demolish … along with an approval for this variation". On 20 January, Kincorp confirmed the Haymes-recommended level of demolition, and I was satisfied that it was Haymes, and not Daly or Kincorp, who oversaw, and gave all necessary instructions for, that job over the next few weeks. 18 Sarkis regarded Kincorp/Daly, rather than Haymes, as his principal, and Haymes had no direct contractual relationship with him as the builder. Haymes testified that he did not regard it as his "responsibility" to instruct the builder "directly". Yet Sarkis and JPS relied heavily on Haymes and acted readily on his instructions, before and after Daly's email of 20 January. JPS organised the demolition and carried it out with Haymes' on-going supervision. 19 In the end, I accepted Mr Daly's sworn evidence that he did not intend to do, nor do, any more than confirm the extent of works as a contract variation in accordance with the site instruction he understood Haymes had given to Sarkis. Kincorp/Daly merely confirmed that JPS/Sarkis should act on the Haymes instruction(s). The practical preparations for the demolition had commenced on 11 January 2006, with work to commence, ultimately, on 23 January 2006. None of the preparations sprang from any communication from Daly or Kincorp. No causal connection between that communication of 20 January and the commencement of works on 23 January 2006 was established. 20 Again I was not satisfied beyond reasonable doubt that either or both of the defendants authored or gave a relevant instruction. 21 Accordingly, the summonses and charges against both defendants were dismissed on 31 July 2008. 22 For completeness I should draw attention to what I wrote at [9] of my judgment: "Mr Sarkis gave evidence for the Prosecutor in these proceedings, but the defendants objected to the reading of an affidavit made by him in his company's proceedings. Reference was made before me to possible factual inaccuracies in the material placed before Lloyd J by way of agreed facts, so I have not had regard to His Honour's judgment in dealing with the present charges. In the result His Honour imposed a fine of $5,000 on JPS. See Woollahra Municipal Council v JPS Development & Construction Pty Limited [2007] NSWLEC 595. Mr Sarkis had every opportunity to give the Court in this matter his version of relevant events (see, especially, T4.02.08, pp47-57)." 23 It is clearly not appropriate in this costs application to go behind Lloyd J's decision in any way simply because it would appear that Sarkis may have agreed in his proceedings to "facts" to which Mr Daly would not subscribe in these proceedings. I accepted Mr Sarkis's evidence before me on its merits. Evidence on the issue of costs 24 Solicitors for each side have now put relevant correspondence before the court as annexures to their respective affidavits. The chronology of events is important, and can be gleaned by a perusal of those letters and the court's records. (a) Relevant history 25 The charges were initiated on 7 September 2006, and their case management (along with the JPS/Sarkis matters) commenced. In these matters, particulars were sought and provided, the expert MacLeod was brought into the matter, and directions were given on several occasions. 26 On 23 February 2007, JPS and Sarkis entered pleas of guilty and their cases were set down for a sentence hearing on 14 June 2007. On 13 April 2007, Kincorp and Daly entered pleas of not guilty, and the parties were directed to pursue agreement on a Statement of Facts. 27 Lloyd J disposed of the JPS matter on 14 June 2007, and the Sarkis matter did not proceed. 28 On 22 June 2007, Jagot J fixed the Kincorp/Daly matters for hearing on 22-26 October 2007. Negotiations continued, unsuccessfully, on draft statements of facts in those matters. The prosecutor complained in July/August that the defence was not responding to correspondence and not being reasonable in its approach to possible agreement on facts, to simplify the proceedings and keep costs and delay down. 29 On 28 September 2007, the prosecutor proposed what it described as a "minor amendment" to the particulars of charge. (The original and amended particular 1 are contrasted in [5] above). Pain J allowed the amendment, with costs "thrown away" awarded in favour of the defendants, on 18 October 2007. Her Honour also vacated the October hearing dates because of Haymes' absence overseas. 30 By 26 October 2007 the serious and detailed disagreements between the parties on a possible Statement of Facts had crystallised. Lengthy letters were exchanged, dated 11 and 26 October 2007 respectively, pointing to some 27 disputes on the facts. 31 On 9 November 2007, Jagot J fixed the hearing for 25-26 February 2008, and on 30 November 2007 Preston ChJ changed the hearing dates to 4-7 February 2008. (b) "Settlement" negotiations 32 Some "settlement" negotiations had commenced on 9 October 2007, when the prosecutor suggested the Kincorp/Daly matters be disposed of along the lines by which the JPS/Sarkis prosecutions had been concluded - Kincorp would plead guilty, and pay any fine and the prosecutor's costs, and the Council would withdraw the Daly matter. 33 On 22 October 2007, the defence asked the prosecutor to withdraw both matters and pay only the costs which Pain J had ordered. Over the next few days other options were canvassed, but the original offer of 9 October remained unacceptable to the defendants - if the hearing were to proceed with a plea of guilty by either defendant, the defence wanted there to be only a nominal fine imposed (with prosecutor's support) and no order as to costs, given that most of Council's costs, in the defence's view, "should" have been covered by the costs order made by Lloyd J against JPS. 34 No agreement was reached on either the final disposition of the matters, nor on a Statement of Facts. (c) The trial 35 The hearing ran for five days, 4-8 February 2008, on a defended basis, but without the benefit of an agreed Statement of Facts. 36 Emma Adams is incorrect when she says (in her affidavit 2 October 2008, par 37) that "two separate statement (sic) of facts [were] relied on at the hearing". I have now found in the court file two draft statements of facts, a defence version filed in court on 18 October 2007 and a prosecution version formally filed on 22 January 2008, but neither was placed in evidence before me at the substantive hearing, and I have had no regard to those filed documents, then or now. There was, however, as I noted in my judgment (at [10]), a fair amount of common ground at the hearing, which served to keep time and costs down. 37 Final submissions were made on 17 March 2008, and judgment in favour of the defendants was handed down on 31 July 2008. (d) Alternative conclusions reached by the parties 38 The prosecutor blames the defence for the delay in getting the matter on for hearing, and for adding to costs, by (1) not agreeing on a Statement of Facts, (2) not obeying the court's directions, (3) not appearing before the List Judge on several occasions, and (4) not answering several items of correspondence. 39 On the other hand, the defendants point to (1) the prosecutor's decision to amend its particulars 12 months after the charges were brought, and just prior to the then expected hearing dates, which had been set three months earlier, and (2) its "unreasonable" refusal to incorporate into its proposed Statement of Facts virtually all the matters raised by the defence as the available evidence unfolded. The statutory provisions 40 In criminal matters the normal civil rule that "costs follow the event" does not apply. In prosecutions (especially environmental prosecutions) the unsuccessful defendant is quite often ordered to pay the prosecutor's costs, but, where the defendant is successful, one has to look at and apply the statutory regime applicable to the court or to the specific area of law involved. 41 It is common ground that, in accordance with s41 of the Land and Environment Court Act 1974, the relevant statutory provisions regarding the making of an order for costs in favour of the defendants in this matter are ss 257C, 257D, and (perhaps) 257E of the Criminal Procedure Act 1986, the relevant parts of which provide: " 257C When professional costs may be awarded to accused person (1) A court may at the end of proceedings under this Part order that the prosecutor pay professional costs to the registrar of the court, for payment to the accused person, if the matter is dismissed or withdrawn. … (3) Without limiting the operation of subsection (1), a court may order that the prosecutor in proceedings under this Part pay professional costs if: (a) the accused person is discharged as to the offence the subject of the proceedings…

257D Limit on award of professional costs against a prosecutor acting in a public capacity (1) Professional costs are not to be awarded in favour of an accused person in proceedings under this Part unless the court is satisfied as to one or more of the following: (a) that the investigation into the alleged offence was conducted in an unreasonable or improper manner, (b) that the proceedings were initiated without reasonable cause or in bad faith or were conducted by the prosecutor in an improper manner, (c) that the prosecutor unreasonably failed to investigate (or to investigate properly) any relevant matter of which it was aware or ought reasonably to have been aware and which suggested either that the accused person might not be guilty or that, for any other reason, the proceedings should not have been brought, (d) that, because of other exceptional circumstances relating to the conduct of the proceedings by the prosecutor, it is just and reasonable to award professional costs. (2) This section: (a) does not apply to the awarding of costs against a prosecutor acting in a private capacity,…

257E Public officers and police officers not personally liable for costs (1) A public officer or a police officer is entitled to be indemnified by the State for any costs awarded against the officer personally as the prosecutor in any criminal proceedings in a court in which the officer is acting in his or her capacity as a public officer or a police officer. (2)In this section: "public officer" does not include a councillor or an employee of a council or any other person prescribed by the regulations for the purposes of this section." 42 Authorities relevant to the interpretation and application of these provisions have been thoroughly reviewed by two judges of this court in recent times - see Pain J's judgment in Port Macquarie-Hastings Council v Lawlor Services Pty Ltd; Port Macquarie-Hastings Council v Petro (No.7) ("Lawlor") [2008] NSWLEC 75, (2008) 159 LGERA 87, and Jagot J's judgment in Wollongong City Council v Ensile Pty Ltd; Wollongong City Council v Hogarth (No.9) ("Ensile") [2008] NSWLEC 248. 43 Those judgments drew on other judicial surveys of authorities involving these provisions, or provisions relevantly similar to s257D, such as Hidden J's decision in JD v DPP ("JD") [2000] NSWSC 1092, and Hall J's decision in Halpin v Department of Gaming and Racing ("Halpin") [2007] NSWSC 815. 44 The prosecutor in this case agrees that s257C is enlivened by the dismissal of the summonses, but relies on the limitations on the exercise of the court's costs power as imposed by s257D. Defendants' submissions 45 The defence sought initially to raise an argument that in bringing this prosecution the Council might be regarded as "acting in a private capacity". Success on that point would bring the case within s257D(2) and relieve the defence of the burden of bringing the case within s257D(1), but the prosecutor's submissions on the "private capacity" point are clearly correct. 46 The Council is a public corporate body and acts in that capacity when enforcing public laws and the duties they impose. In this respect I choose, without doubt or hesitation, to follow Pain J's decision on this point in Lawlor, and the Court of Appeal's decision (per Grove J) in Castlebar Holdings v Riley ("Castlebar") (2005) 138 LGERA 338. As Grove J said in Castlebar (at [28]) the contrary proposition is "unimaginable". Spigelman CJ and Bell J agreed with His Honour's judgment in that case, without adding any comments of their own. 47 The court's attention, therefore, turns to the grounds set out in s257D, with the onus falling on the defendants to bring themselves within them. Fosse v DPP & Anor [1999] NSWSC 367. 48 The defendants have sought to prove a "just and reasonable" entitlement to costs, on account of the allegedly "unreasonable" conduct (i) by the Council of the investigation (s257D(1)(a) and/or (c)), and/or (ii) in the initiation of the proceedings (s257D(1)(b)), and possibly also on account of, specifically, (iii) the "settlement" negotiations, (iv) the failure to agree on a Statement of Facts, and (v) the amendment of the particulars (as "exceptional circumstances" - s257D(1)(d)). The defendants specifically stopped short of any assertion that the prosecutor's conduct was "improper" or "in bad faith" (see T 12.11.08 p2, L42, and p3 LL6-10). 49 The defendants submit that it was unreasonable of the prosecutor to disregard admissions made by the structural engineer Haymes and by the builder Sarkis during the investigation, that each of them gave some relevant instruction, including Sarkis's to the relevant demolition contractor, to demolish the wall, in circumstances where neither witness implicated Kincorp/Daly in the actual demolition or in the instruction to do it. 50 Both those witnesses gave affidavit and oral evidence before me and were subjected to searching cross-examination, all after Sarkis's company JPS had pleaded guilty to the "development" (ie the demolition) done by the demolisher that JPS/Sarkis engaged, and after Sarkis had provided his affidavit and oral evidence before Lloyd J. 51 The defendants also submit that the prosecutor should have investigated, and explored at hearing, as a relevant matter suggesting the defendants were not guilty, the evidence available pre-trial from the expert witness MacLeod as to the proper reading of the plans and the consent, especially the notation upon which the defendants relied. At the hearing MacLeod was not asked about the interpretation Haymes placed on them in respect of possible demolition of walls otherwise designated to remain. As a result, the defendants submit, not all relevant and available expert evidence was placed before the court. Consideration 52 The court has to be careful not to apply to costs disputes regarding unsuccessful prosecutions in class 5 of the court's jurisdiction the principles regularly applied in this court to costs disputes in matters of a civil nature in class 4. In the criminal arena the court has to adhere strictly to the relevant statutory provisions, especially the precise terminology used in s257D(1). 53 In s257D(1)(a), on the submissions as confined by the defendants in this case, the investigation must be shown to have been "conducted in an unreasonable … manner". In s257D(1)(b), the proceedings must be shown to have been "initiated without reasonable cause". In s257D(1)(c) the prosecutor must have been shown to have "unreasonably failed to investigate (or investigate properly) any relevant matter …" etc. It is only when one comes to s257D(1)(d) that the actual "conduct of the proceedings by the prosecutor" is considered, and the court must conclude that there are "exceptional circumstances" in such conduct which render it "just and reasonable to award professional costs". Investigation 54 As I put to Mr Gracie (counsel for the defendants) during his submissions, he is not really suggesting that the investigation which led to this prosecution was "flawed" in some way. In fact his case on costs is that the investigation was actually "good", in the sense of "thorough", and his complaint is that the decision taken by the Council, on the basis of such investigation, to prosecute his clients was "flawed" (see T12.11.08, p3, LL11-21). 55 His submissions, therefore, rely on ground (b) rather than (a) in s257D(1). On the evidence he simply cannot succeed on ground (a). I, therefore, now turn to consider ground (b). Initiation 56 The defence says that the prosecutor knew from the beginning that the real culprits in this case were Haymes and Sarkis (and presumably their companies), plus whoever actually did the demolition, and the present defendants should not have been charged at all. 57 It is certainly not unusual in cases concerning illegal building/demolition for the/a principal to be charged as well as the/an agent, and it was within the proper discretion of the prosecutor to choose which entities out of the consent holder (Bourke), its agent (the project manger, Kincorp), the project engineer (Haymes), the builder (JPS) and the builder's contractor (Active Demolition), would/should be charged in this case. 58 Criticism of the bringing of a particular prosecution, and of some of the ways in which it was conducted, is not sufficient to justify a finding that its initiation was unreasonable. 59 The Full Federal Court said in Council of Kangan Batman Institute of Technology and Further Education v Australian Industrial Relations Commission ("Kangan") (2006) 156 FCR 275, at [63]: "It is a matter of judgment, sometimes fine judgment, in all the circumstances of a particular case whether a proceeding is brought without reasonable cause ". 60 Wilcox J observed in Kanan v Australian Postal and Telecommunications Union (1992) 43 IR 257 (at 264): "… 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 Actions taken must be objectively assessed, and, while the subjective views of a party about the chances of success may be relevant, they are not determinative (Kangan at [61]). 62 As Jagot J said in Ensile (at [9]): "One way to test if proceedings were initiated without reasonable cause is to ask whether the proceedings, objectively assessed on the facts apparent at the time of instituting the proceedings, had no real prospect of success or were doomed to failure". 63 Her Honour (at [8]) also relied on Hidden J (in JD at [28]) for the proposition that the question in ground (b) should be answered by reference to the evidence gathered "with an eye not only to the enquiries which had been made but also to those which should have been made". (In some matters it is very difficult to separate the consideration of grounds (a) and (b)). 64 Further, the fact that proceedings are unsuccessful does not lead to a conclusion that they were commenced "without reasonable cause". See The Queen v Moore & others; Ex parte Federated Miscellaneous Workers Union of Australia ("Moore") (1978) 140 CLR 470, per Gibbs J at 473, where His Honour went on to point out that "the argument presented on behalf of the prosecutor was not unworthy of consideration and it found some support in two decisions" which the court then distinguished in deciding the case. 65 In his closing submission Mr Gracie said of the Council/prosecutor (T 12.11.08, p30, LL1-11): "It did not particularise the correct breach of the Act. It initiated on its face a proceeding which was particularised on a wrong and factually incorrect premise and known to be incorrect. Particulars are the facts which enliven and define the ambit of a proceedings. They are not something that can just be ignored and changed willy nilly. They advise a defendant of the charge, of the nature of a charge being made against it. It is the nature of the case that the client, the defendant has to meet. And right up to the date of this matter being set down for hearing the particular was predicated upon a wrong factual, and knowingly wrong factual basis, and in my respectful submission that enlivens Section 257(d) (sic) that the proceeding on that basis, on that statural (sic?) basis, could not have been initiated with reasonable cause." 66 The fact that the prosecutor saw the need to amend particulars at some stage does not mean that the proceedings were initiated without reasonable cause. The charge itself remained unamended, and any prejudice caused by the amendment was cured by Pain J's costs order. 67 The successful conclusion of a related prosecution does not require that this one be withdrawn, even if it can be said that that success pointed out the need to amend it. 68 The prosecutor was entitled to initiate its prosecution of Kincorp/Daly, and to amend and continue it, after the JPS judgment, in reliance on the principles in Giorgianni v R (1985) 156 CLR 473, as applied in this court by Lloyd J in Mosman Municipal Council v Waratah Village Partners Pty Ltd and Another ("Waratah") [2002] NSWLEC 19, (2002) 118 LGERA 460 at [8]-[16]. 69 As His Honour noted in Waratah (at [16]), (1) summonses "identify the essential factual ingredients of the offence", (2) particulars "make plain the ways in which guilt is sought to be proved", and (3) "different considerations may arise on sentence depending on whether the defendant is guilty as a principal or an accessory" (or "secondary participant" - discussed by Lloyd J at [8]-[12]). See [57] above. 70 I will return to the significance of the amendment, but clearly the prosecution as particularised at the outset was "doomed to failure" and "had no real prospect of success" until and unless amended. 71 I cannot accept that the defence has made out its claims under s257D(1)(b) so far as the prosecution is assessed on the whole of its course from initiation to judgment. Conduct of the case 72 Again, failure to put particular questions to MacLeod (or indeed to Haymes) does not amount to an unreasonable failure to properly investigate a relevant matter of the type envisaged in s257D(1)(c), nor would it, I believe, amount to an "exceptional circumstance" in the conduct of the proceedings, under (d). 73 In my judgment (at p[29]) I noted the comments of Handley JA, on the principles of Jones v Dunkel, in Commercial Union Assurance Company of Australia Ltd v Ferrcom Pty Ltd & Another (1991) 22 NSWLR 389, at 418-419, in connection with these elements of the evidence. The prosecutor "investigated" that evidence and chose not to lead it. One can only speculate now as to what impact it would have had. In the end I did not find MacLeod's ex post facto evidence of much assistance to my consideration of the consent question (see [14] above). 74 I now turn to the other "exceptional circumstances" put by the defendants. "Settlement" discussions 75 The defendants concede that Calderbank principles do not operate here as they do in civil matters (see Morrison v Defence Maritime Services Pty Ltd & Others ("Morrison") (2007) 156 LGERA 365, at [32]), but they submit that the settlement discussions initiated by the prosecutor amount to a relevant "exceptional circumstance". 76 The strong comments of the High Court in Latoudis v Casey (1990) 170 CLR 534, at 543, 568, regarding there being no scope for "compromise" in criminal cases would appear to me to indicate that this court should not accede to that particular settlement-based submission as the only basis for making a costs order in this case. 77 It would seem reasonable in any event for a prosecutor to offer a defendant in this situation a "deal", once the JPS/Sarkis matters had been disposed of, and the defendants were apparently quite happy to embark on negotiations. I find none of that "exceptional". 78 I should respectfully add for completeness that in my view the statements in Latoudis v Casey about no compromising of criminal matters may have been accorded too much status as dogma, and may not always necessarily serve the interests of justice. In the exceptional circumstances confronting me in Baulkham Hills Shire Council v Naklicki (No.2) [2008] NSWLEC 317, counsel for the prosecution and defence agreed on a penalty they thought appropriate for me to impose on the defendant for contempt of court, as part of a package of orders necessary to conclude that rather extraordinary litigation, and I was content, after considering all the evidence, circumstances and submissions, to do so, in the interests of justice. 79 An "exceptional" feature of this case is that the prosecutor had achieved one conviction (of JPS) and been offered another (against Kincorp), yet the matter ran on, apparently because the prosecutor wanted a costs order against one or both of these defendants. The court should, however, not lightly go behind such discretionary decisions made by a public and accountable body. 80 The "settlement" attempts in this case are not sufficient to meet the test in s257(1)(d). I turn, therefore, to consider the unsuccessful attempts to agree upon a Statement of Facts. Failure to give ground in agreeing on facts 81 In Morrison the defendants pleaded guilty, convictions were entered, and fines were imposed. Pre-trial negotiations had taken place regarding particulars of the volume and location of the subject oil discharge to include in an agreed Statement of Facts. The prosecutor did not agree to the admissions offered, relying on its "strong" evidentiary basis for the charge as laid, but it then lost on some aspects at trial. 82 The prosecutor sought an order for costs and the defendants resisted a "full" order against them on the grounds that the prosecutor had caused unnecessary litigation and expense, and, in the end, had lost on a major issue. Biscoe J made an order that the defendants pay (except for two expert reports) only 50% of the prosecutor's costs. 83 Apart from His Honour's remarks about Calderbank principles (at [32]; see [75] above), I note what His Honour said about reasonable and unreasonable conduct by prosecutors (at [33]): "Nevertheless, it is in the interests of the efficient administration of justice if prosecutor and defendant agree facts for a sentencing hearing where it is reasonable to do so. Unreasonable failure to do so arguably may be a consideration that is relevant to costs. Assuming that to be so, in the present case, in my opinion, it was not unreasonable for the prosecutor not to accept any of the defendants' offers. The prosecutor had a public duty to put all material matters before the Court." 84 His Honour was not satisfied that the prosecutor in Morrison acted unreasonably (see his judgment at [35]). 85 In this case, having taken the decision to pursue the prosecution, the prosecutor was under no obligation to back off anything it thought it could prove, and the defendants likewise had no obligation to concede anything it thought could not be proven against them. 86 I agree with Biscoe J - while the failure to agree on a Statement of Facts might prove inconvenient for the parties and the court, and may involve additional costs and hearing time, it is not necessarily "unreasonable" conduct on the part of either side, nor an "exceptional" circumstance. 87 It seems to me that there were genuine attempts on both sides in this matter to reach agreement, and so facilitate the proceedings, possibly by securing a plea of guilty, and s257D(1)(d) is not satisfied. 88 I return, therefore, lastly, to the amendment. Amendment of particulars 89 The defendants contend that it was unreasonable of the prosecution, following the sentencing of JPS and the withdrawal of the charge against Sarkis, to continue with these proceedings at all, and unreasonable also to seek the amendment, but these are not questions posed by s257D(1)(b), and they fall to be considered under (d) as possible "exceptional circumstances". 90 Post-amendment the defendants were charged with "instructing JPS", which at the trial the prosecution could not prove beyond reasonable doubt, at least partly because Sarkis admitted in evidence before me that his plans for the demolition were underway before he liaised in any way with these defendants about it. 91 For twelve months the charge against these defendants was that they engaged the demolisher. Yet the Council officers in their recorded interview with Mr Sarkis had obtained an admission that it was he who had "a contractor come in and undertake the demolition … on an hourly rate". In their written submissions on costs (par 28) the defendants draw attention also to the proposal by the prosecutor to include that admission as a "fact" in its draft Statement of Facts for these proceedings. 92 The defendants entered pleas of not guilty at a fairly early stage, indicating a challenge to all elements of the offence charged. They maintained those pleas after the amendment of the particular. 93 A plea of guilty admits the "essential legal ingredients" of the offence "and no more" (R v O'Neill [1979] 2 NSWLR 582 at 588), and it is not "exceptional" for a defendant who is pleading guilty, to challenge at least some, if not many or most (or perhaps even all in some way), of the particulars pleaded in the charge. 94 These defendants clearly knew that they were charged with playing a role in the demolition. What changed with the amendment was the more accurate definition of the role with which they were charged. 95 There was and is no evidence at all that these defendants had any contractual relationship with the demolisher; indeed the contractual relationship under which JPS/Sarkis operated on the project was also not with these defendants, but with their principal (Bourke), and JPS/Sarkis had to observe the development consent requirement to retain the wall, regardless of anything the project manager might do or say. 96 Seeking and achieving an amendment before trial is not of itself "exceptional", but the particulars clearly needed amendment if this prosecution was to have any chance of success. The charge as initially particularised could not have succeeded. The prosecution was "doomed to failure" and "had no reasonable prospect of success" (see [62] above). 97 The amendment in this case fundamentally altered the prosecution, and could be considered to have amounted to a fresh "initiation" of it, on a basis upon which it could well succeed. In terms of the two questions at the heart of the matter (see [10]-[11] above), the prosecutor's contentions as to construction of the consent and/or of the key communications among those engaged on the project were open on the evidence, once the amendment had been made. The prosecution's case against these defendants was thereafter "not unworthy of consideration" (Moore - see [64] above). 98 I regard those circumstances as "exceptional", within the meaning of s257D(1)(d), and they make it "just and reasonable to award professional costs" to the defendants in respect of the prosecution as it stood prior to the amendment on 18 October 2007. 99 Pain J has already ordered the prosecutor to pay the defendants' costs "thrown away" in consequence of the amendment, and the defendants now say (submissions par 34) that Her Honour's order should be strengthened to require payment of all their costs to that date. I agree with that submission. Conclusions 100 The defendants brought this motion having already been granted by the court on 18 October 2007, an order that the prosecutor pay their costs "thrown away" as a consequence of the amendment allowed that day. 101 On that day the proceedings and their prospects of success were fundamentally altered in a way which brings them within the purview of s257D(1)(d) in one respect and for a defined period of time. 102 I believe that the authorities to which I have referred justify my vacating the order made by Pain J on 18 October 2007, in favour of an order that the prosecutor pay all the defendants' costs up to and including that date, on a party-party basis. There has been no justification made out for that order to be made on any higher basis than party-party. 103 I also consider that the defendants were perfectly entitled to make this application for costs. It has been largely unsuccessful, but I consider it "just and reasonable" that each party should pay its own costs of the determination of it. Orders 104 The orders of the court are:

(1) The defendants' Notice of Motion for costs is upheld in part. (2) The costs order made by Pain J on 18 October 2007 is vacated. (3) The prosecutor is ordered to pay the Registrar of the Court all the defendants' professional costs of proceedings 50027 and 50029 of 2006, as defined in s257A of the Criminal Procedure Act 1986, on a party-party basis for the period from 7 September 2006 to 18 October 2007 (both inclusive), in such amount(s) as are either agreed among the parties or, in the absence of agreement, determined according to the provisions of s257G(b) of that Act. (4) Each party is ordered to pay its own costs on the defendants' notice of motion for costs.

24/04/2009 - Typographical error - reference to s357 altered to s257 from par 43 onwards. - Paragraph(s) 43, 52, 53 x 4, 55, 71, 72, 80, 87, 89, 98, 101

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