Consideration
48 The effect of Rule 42.19 is that unless the Court orders otherwise, the plaintiff must bear the defendant's costs if the proceedings are discontinued. The onus falls on the plaintiff to show that there should be a departure from the ordinary position. The reason for the discontinuation is a relevant, but not determinative matter. Where the discontinuance follows a plaintiff achieving practical success in the proceedings, that outcome may properly result in such a departure.
49 There is no question here that the plaintiff achieved practical success in the proceedings. The two single page authorities produced by the defendant, on which the certificates in issue rested, showed that there was no basis for the plaintiff further pursuing the jurisdictional argument. Had the documents been provided in the proceedings below, as they were in the Coles litigation, not only these proceedings, but the subpoena and its resistance, and part of the jurisdictional argument advanced below, would have been avoided.
50 The attitude taken by the defendant in relation to the production of the documents, rested in part on the argument put below that the certificates could not be challenged. In these proceedings, it was conceded that this was not the effect of s 61L. Plainly, that concession was properly made and helped explain the voluntary disclosure of the authorities, once these proceedings were commenced.
51 There is no question that it was known to the defendant that jurisdictional arguments similar to those taken in the Coles litigation would be taken in the Woolworths' prosecution. That is what the Crown Solicitor advised the Local Court in June. Presumably the prosecutor had provided the authority which underpinned the certificate in the Coles prosecution, because the view was there taken that it was relevant to the issue of the validity of the certificate in that case. Why a different view was taken in the Woolworths' prosecutions, was not apparent. How Woolworths came to be provided with the Coles authorisation was not clear.
52 The argument as to the validity of the certificates was not finally dealt with in the Coles litigation, because that prosecution was withdrawn in December, other difficulties with the certificate in that case having been identified by the prosecutor. Those difficulties apparently did not exist in relation to the certificates relied on in the Woolworths' prosecutions.
53 That the defendant was aware that Woolworths wrongly understood that the certificates relevant to its prosecution rested on the Coles authorisation, was also apparent on the face of the correspondence. The advice given by the defendant in December, that this understanding was wrong, could certainly have been expressed in less cryptic terms. Had it been clearly advised that there were other authorisations, in different terms, on which the certificates rested, the whole difficulty might have been avoided. Once the authorities were provided, the accuracy of the certificates was accepted.
54 Undoubtedly, the case put for Woolworths in the Local Court in relation to the subpoena, and for that matter, the jurisdictional argument, would have been strengthened, had any evidence been put forward to show that the authority on which the prosecution was understood to have rested, cast doubt on the accuracy of the certificates on which the defendant relied. That could easily have been done, by an affidavit being sworn, explaining how that understanding had been reached and annexing a copy of the document.
55 Had that occurred, it is difficult to see that it would not have been open to conclude that it was 'on the cards', that the production of that authority and any other upon which the certificates were said by the prosecutor to rest, might have assisted Woolworths' case. The defendant would have had difficulty, in those circumstances, it seems to me, in simply asserting from the bar table that the certificates rested on other authorities, which it declined to produce. As his Honour observed, however, no evidence was led to support Woolworths' case. Unsurprisingly, in those circumstances, Woolworths' case failed.
56 Woolworths now argues, however, that it ought never to have been put to the trouble of issuing a subpoena. The prosecutor had an obligation to disclose the underpinning authorities, once it understood that the question of the authority to prosecute was in issue. Woolworths had no obligation to establish any forensic purpose in the production of the authorities.
57 As I have observed, the defendant certainly understood in June that authority to prosecute was in issue. That was confirmed on 1 December, when the defendant was asked to provide the authorities at the jurisdictional hearing. There was no suggestion that there was any practical difficulty in doing so. The prosecutor's resistance appeared to rest on an understanding of s 61L, which was acknowledged in these proceedings to be wrong.
58 Did the defendant have an obligation to produce the authorities? It was common ground that the defendant's obligation was that discussed in R v Livingstone [2004] NSWCCA 407; 150 A Crim R 117, where Simpson J observed at [44]:
44 The extent of the prosecution's undoubted duty of disclosure has become something of a recurring theme in recent times: see, for example, Grey v The Queen [2001] HCA 65; 75 ALJR 1708; R v Reardon [2004] NSWCCA 32, unreported, 20 February 2004. In the last-mentioned case, I specifically agreed that a test, originally derived from a 1993 UK decision in a matter identified as Melvin and Dingle (20 December 1993) and adopted by the English Court of Appeal in R v Keane [1994] 2 All ER 478, ought also to be adopted by this Court. That test is in the following terms:
"I would judge to be material in the realm of disclosure that which can be seen on a sensible appraisal by the prosecution:
(1) to be relevant or possibly relevant to an issue in the case;
(2) to raise or possibly raise a new issue whose existence is not apparent from the evidence the prosecution proposes to use;
(3) to hold out a real (as opposed to fanciful) prospect of providing a lead on evidence which goes to (1) or (2)."
59 What was at issue was whether the authorities fell into any such category. Given that the authorities were relevant to the question of the prosecutor's authority to prosecute, there can be no question that they fell within (1), that being known to be in issue between the parties.
60 What authorities underpinned the certificates and whether they supported what the certificates contained, was known only to the prosecutor. As a matter of fact, the authorities did not support Woolworths' challenge to the prosecutor's authority to prosecute, but that was not, and could not have been known to it or its legal advisers, who were acting on a misapprehension. When that misapprehension became apparent, in my view, the defendant was obliged to disclose the documents. There is no question that there was then an issue between the parties as to the authority to prosecute, even if the basis for it arising had no foundation. Provision of the documents would have resolved the issue. That cannot be a basis for a refusal to provide the documents. Nor can a concern that provision of the authorities might have led Woolworths to other reasons upon which the certificates might have been challenged.
61 This was not a situation such as that considered in R v H at [35], where the defence was making general and unspecific allegations and seeking far reaching disclosure, in the hope that something might turn up. Nor was it a situation such as that dealt with in DPP v Zhang, where a defendant was seeking to put the defendant to 'strict proof', of formal matters. Instead, there was a known issue lying between the parties as to the prosecutor's authority to bring the proceedings. The defendant had the documents which were relevant to a determination of that issue in its possession; it could easily have provided the documents and should, undoubtedly, have done so.
62 The failure to disclose would have been resolved, had an objection not then been taken to access to the documents being granted, when they were produced to the Local Court in response to the subpoena. Why that objection was maintained was difficult to see, but the reasonableness of the defendant's attitude was not the issue to be decided in determining whether access was to be granted. Nor did that question turn on whether the prosecutor had satisfied the obligations of disclosure. Any failure in that obligation, might, in a proper case, lead to a conviction being set aside, but was not open to review during the course of the trial. (See Mallard v The Queen [2005] HCA 68; (2005) 224 CLR 125 at [81] - 84]).
63 Thus it was that what was advanced for Woolworths in relation to the subpoena which led, understandably, it seems to me, to its case failing. In these proceedings, had they not been resolved, Woolworths would have had to establish that his Honour erred on a question of law, in coming to the conclusions which he reached in relation to the subpoena. That was not established on the argument advanced by Woolworths. His Honour was not concerned with the question of whether the defendant had a prosecutorial obligation to disclose the documents, but rather with whether Woolworths had established that it should be given access to the documents. His Honour was bound to apply the approach adopted in the relevant authorities such as Chidgey and Saleam. Thereby Woolworths had to establish a legitimate forensic purpose for the access which it sought and that it was 'on the cards' that the documents would materially assist its case.
64 It is difficult to see that there was an error of law in the approach adopted by his Honour to the resolution of that issue. He could find no direct link between the documents to which access was sought and the material referred to in Woolworths' submissions, which concerned authorisations in other proceedings. Nor could he find it established to be 'on the cards', that the documents would assist Woolworths' case and so access was denied.
65 That view, it seems to me, was open on the case advanced below. That the defendant ought to have earlier provided the documents, as it did in the Coles prosecution, cannot show any error of law on his Honour's part in refusing to grant access to the documents sought on subpoena.
66 Undoubtedly, Woolworths later achieved practical success in these proceedings, when the documents were provided. That was a proper, if belated acceptance, it seems to me, that the documents should have been provided, albeit not a concession that the decision appealed against was wrong. Were practical success all that was to be considered, a costs order in favour of Woolworths would fairly follow. There are, however, other matters which must be considered. That Woolworths is unlikely to have succeeded in the appeal, is one. That the defendant's conduct, so far as these proceedings are concerned, may not be criticised is another. They are both reasons for refusing the course urged for Woolworths. (See Newcastle Wallsend Coal Co Pty Ltd at [23].)
67 For its part, the defendant also relied upon the refusal of its offer as to costs. The defendant had offered that each party bear its own costs. The usual order, if proceedings resolve without a hearing, is that the plaintiff bears the defendant's costs. Given the terms of the offer which was refused and the conclusions which I have reached on the question of whether Woolworths could have established an error of law, in the decision below, it seems to me that the offer was one which Woolworths ought to have accepted, notwithstanding the practical success it had achieved. Its refusal, together with the other matters I have mentioned, makes it inappropriate for there to be any departure from the usual order, that the plaintiff bear the defendant's costs.
68 I am not convinced, however, that the refusal of the offer may fairly result in an indemnity costs order in favour of the defendant, as it urged. Practical success in the proceedings is a basis for departure from the usual costs order, in circumstances such as this. I have concluded that a costs order may not be made in favour of Woolworths, in the circumstances, but its success may not be overlooked, in considering the defendant's argument that there should be an indemnity costs order in its favour. The parties' conduct in the proceedings must be considered.
69 For its part, the defendant accepted that all of the circumstances in which these proceedings came before the Court, were relevant to a consideration of whether there should be any departure from the usual order in its favour, but argued that the reasonableness of its conduct in the Local Court proceedings, could not be determinative of the question of the costs of these proceedings.
70 In my view, in considering whether an indemnity costs order should be made in favour of the defendant, some attention must be paid to what brought the parties here and the fact that the pursuit of a costs order in its favour and the rejection of the defendant's offer, flowed from Woolworths' practical success, once the documents in issue were provided. Undoubtedly, the defendant was the author of what was ultimately an unnecessary and costly exercise, which flowed from its refusal to provide the underlying authorisations, until these proceedings were commenced. That, it seems, flowed in part from an approach adopted to the interpretation of s 61L, resiled from in these proceedings. The defendant adopted an entirely different course in the Woolworths' prosecutions, to that adopted in the Coles prosecution, even in the face of a known misunderstanding about the authority underpinning the certificates on which it relied in the Woolworths prosecutions. That misunderstanding was entirely within its hands to resolve both quickly and cheaply. When the documents were provided in these proceedings, as they ought to have been, given what was in issue between the parties, namely the issue in relation to the authority to prosecute that issue, was resolved.
71 In all of those circumstances, I take the view that justice requires that there be no indemnity costs order made in favour of the defendant, notwithstanding the refusal of the defendant's offer. The fundamental principal underpinning costs orders is one of fairness, 'having regard to what the court considers to be the responsibility of each party for the incurring of the costs' (see Commonwealth v Gretton [2008] NSWCA 117 at [121]). In this case, there can be no question that the defendant had a large measure of responsibility for the costs incurred in bringing these proceedings.
72 The refusal of a costs order in favour of the plaintiff, notwithstanding its practical success and a refusal of an indemnity costs order in favour of the plaintiff, notwithstanding the refusal of the offer it made as to costs, in my view achieves a just balance between the parties' respective positions, so far as the costs of these proceedings are concerned.