Young v State of New South Wales and Ors; Young v Young - [2013] NSWSC 330 - NSWSC 2013 case summary — Zoe

NSWNSWSC

Young v State of New South Wales and Ors; Young v Young

[2013] NSWSC 330

Supreme Court of NSW|2013-04-02|Before: Adamson J

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At a glance

Source facts

Court

Supreme Court of NSW

Decision date

2013-04-02

Before

Adamson J

Catchwords

230 CLR 500 - Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27
239 CLR 175 - Gibbs v Rea [1998] AC 786 - New South Wales v Ibbett [2006] HCA 57
229 CLR 638 - In the Marriage of Kowalski (1992) 16 Fam LR 235 - Stanford v Stanford [2012] HCA 52
2008/286909

Source

Original judgment source is linked above.

Catchwords

230 CLR 500 - Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27239 CLR 175 - Gibbs v Rea [1998] AC 786 - New South Wales v Ibbett [2006] HCA 57229 CLR 638 - In the Marriage of Kowalski (1992) 16 Fam LR 235 - Stanford v Stanford [2012] HCA 522008/286909

Judgment (40 paragraphs)

[1]

Introduction 1Joanne Young, the plaintiff, has commenced two proceedings, which were heard together. In the first, the Family Court proceedings, she claims a property settlement against her former husband, Leslie Young. In the second, the Common Law proceedings, she claims damages against Mr Young and his company, Jetobee Pty Limited (Jetobee) for malicious procurement of a warrant, malicious procurement of arrest and detention and malicious prosecution. 2On 28 April 2008, Jetobee filed a cross-claim in the Common Law proceedings in which it claimed damages in the order of $1.18m from the plaintiff for alleged conversion of cash from the Wiley Park Hotel. No evidence was adduced in support of the cross-claim, despite numerous directions that such evidence be filed. The cross-claim was struck out by order made on 7 March 2013 by reason of Jetobee's non-compliance with directions. 3The Common Law proceedings originally included a claim against the State of New South Wales for damages for malicious procurement of a warrant, wrongful arrest and malicious prosecution. The proceedings between the plaintiff and the State of New South Wales have been resolved and accordingly do not fall for determination. 4The Family Court proceedings were commenced in the Family Court on 12 March 2007 and were transferred to this Court by order made by the Family Court on 6 May 2008 that took effect on 24 July 2008 so that they could be heard together with the Common Law proceedings. On 12 July 2012 I ordered that four separate questions be answered by this Court pursuant to UCPR 28.2. The separate questions related, in broad terms, to the value of the matrimonial property. 5In Young v Young [2012] NSWSC 1230, Harrison AsJ determined that: (1)The plaintiff had no assets of any value either at 30 June 2000, being the approximate time from which she and Mr Young co-habited or as at 30 June 2012, being the date of assessment. (2)No determination was made as to the value of Mr Young's assets as at 30 June 2000. (3)As at 30 June 2012 Mr Young had assets of $19,607,726 and liabilities in the sum of $9,978,883 and accordingly his net assets were $9,628,843. 6On 7 March 2013, I determined, subject to an inapplicable qualification, that the assessment of Mr Young's assets and their valuation determined by Harrison AsJ stand as the assessment of his assets for the trial commencing 2 April 2013. 7On 7 March 2013, Mr McCowan who appeared on behalf of Mr Young sought an adjournment of the proceedings on the basis that Mr Young had given insufficient attention to the litigation because of his other commitments and that he was not prepared for the hearing. Having regard to Mr Young's numerous and consistent defaults in complying with directions I refused the application for adjournment. Mr McCowan foreshadowed that it was unlikely that he would appear on 2 April 2013 and there was some doubt as to whether Mr Young would appear. 8When the matter was called on 2 April 2013, there was no appearance by or on behalf of Mr Young or Jetobee. Each was called three times outside the Court. Accordingly the matter proceeded without my hearing either from Mr Young or Jetobee. 9Although Mr McCowan, on 7 March 2013, foreshadowed that he might withdraw from the proceedings, he did not apply for leave to do so or file the relevant documents. It appears from annexure "A" to the affidavit of Angela Skocic sworn 2 April 2013 that Mr McCowan's instructions were withdrawn on 28 March 2013. No notice of change was either served by Mr Young's solicitor on the plaintiff's solicitor or filed as required by UCPR 7.29.

[7]

The arrangement between separation and 17 July 2006 24From the date of separation in 1999 the plaintiff drew a weekly wage in accordance with Mr Young's offer. She also became the acting licensee of the Wiley Park Hotel and dealt with the police and security issues that arose from time to time. During the period from their separation until 17 July 2006, Mr Young would visit the Wiley Park Hotel once or twice a month. He was, however, in a position to monitor how the hotel was trading since he received figures for daily takings, weekly banking and cheque listings and other financial information relevant to the hotel. There was an accountant, Joe Logue, who attended the hotel every week and reconciled the figures. There was also a full-time bookkeeper, Robyn Hape, who, in addition to her other responsibilities, calculated the wages for all staff members. 25Shortly after the plaintiff and Mr Young separated, she raised with him the question of her authority to sign cheques. Mr Young was the sole signatory of the two Jetobee accounts at St George Bank at Kogarah, which were the operating accounts for the hotel. Mr Young kept the Jetobee 1 account cheque book with him but the Jetobee 2 account cheque book was kept on the hotel premises. 26Because Mr Young rarely attended the hotel, there were many occasions when cheques were required to pay bills and meet expenses but he was unavailable to sign them. He would also travel overseas at short notice. In order to overcome the problem, Mr Young told the plaintiff that she was to sign cheques herself in his name. Following this direction, the plaintiff frequently signed cheques for the payment of such expenses. She was uncomfortable with the informality of this arrangement and asked him on several occasions to fill in a form that authorised her as a signatory on his account. Although Mr Young led the plaintiff to believe that he would attend to this, he did not do so. 27In March 2005, there were further major refurbishments to the Wiley Park Hotel. The plaintiff made all necessary decisions regarding lighting, sound systems, furniture and so on, negotiated with the builders and sub-contractors and supervised the renovations. She was continually on-site: not only did she work at the hotel seven days a week, but she also lived there. 28At about this time, Mr Young purchased a Nissan 350 for the plaintiff's use. It was initially registered in her name but in late 2006 he directed that it be registered in the name of Jetobee and the registration details were changed accordingly.

[8]

The events leading up to 17 July 2006 29At 8.12 pm on 9 July 2006 Mr Young, using the internet banking facility to which he had sole access, withdrew $323,160 from the Jetobee 2 account, thereby reducing the balance to $61,574.60. 30On 10 July 2006 at 6.28 pm, Mr Young received a facsimile from the Wiley Park Hotel setting out the cheque payments that had been made for that week in connection with the hotel. 31On 13 July 2006 Mr Young, in his capacity as the licensee of Norton's Hotel on Norton Street, Leichhardt, contacted the police and arranged to meet them at Norton's the following morning. On 14 July 2006, Mr Young, his girlfriend, Ms Smith, and his solicitor, Stephen Alexander, met with police officers at Norton's. Mr Young told Detective Senior Constable Dunn that he had noticed a discrepancy on 10 June 2006 and had discovered that there was no money in the accounts. He told them that the balance of the accounts should average $100,000-$150,000 at any given time, the weekly takings being in the order of $40,000-$60,000. He told police that he needed the money to pay the poker machine tax and that he had raised the matter with the plaintiff who said that she would fix it up. He told police that the last day monies were banked was 10 July 2006 in the amount of $6900 only. 32In the course of the meeting Mr Young showed police photocopies of cheques drawn on the operating account for the Wiley Park Hotel which had not been signed by him and which he alleged had been fraudulently presented. 33Mr Young also told police that the plaintiff had a history of violence and had assaulted him and that it was possible that there was a firearm on the premises and drugs on the premises including cannabis and steroids. He told them that the plaintiff had a boyfriend called Tony Almoui and that she was a regular drug user. 34Many of the statements made by Mr Young to police on 14 July 2006 were either false to his knowledge or had no basis whatever in fact. For example, Mr Young knew that Mr Almoui operated a service garage that services the motor vehicles used in the business of the Wiley Park Hotel. He also knew that, in so far as there was an apparent shortfall in the operating account of the hotel, it was a consequence of the substantial withdrawal he had made on 9 July 2006. He had no grounds to believe that the plaintiff was either in a relationship with Mr Almoui or that she took drugs. He also knew that there was no irregularity in the operation of the bank accounts of the hotel other than that for which he was responsible. 35As a result of this interview Detective Senior Constable Dunn applied for a search warrant on 14 July 2006 and deposed that she had reasonable cause to believe that there would be, among other things, prohibited drugs on the premises of the Wiley Park Hotel. The search warrant was issued on Friday 14 July 2006 and expired at 3.45 pm on Monday 17 July 2006. 36The plaintiff has identified the words "receipts of recent purchases" on the Occupier's Notice for the search warrant as being in Mr Young's handwriting. Although her evidence is unchallenged, I am not satisfied that her opinion is correct since I have not heard from the police, the proceedings against the State of New South Wales having been resolved.

[9]

The events of 17 July 2006 37At about 7.45 am on Monday 17 July 2006 the plaintiff was asleep in her room in the upstairs unit at the Wiley Park Hotel when she heard a knock at the door. When she opened the door in her pyjamas she saw about ten people outside. One of the persons, a female, said: "We have a search warrant to search your room." 38No warrant was shown to the plaintiff. Nor were any of the people dressed in uniform or otherwise identified as police officers. One of the people had a video recorder which appeared to be operational. The persons, who turned out to be police officers, proceeded to search the plaintiff's bedroom. They pulled drawers out and threw clothing onto the floor. When the plaintiff asked what they were looking for, she was told that they were looking for evidence of larceny. The plaintiff was very upset. 39The plaintiff heard a female police officer mention the word "drugs". The plaintiff informed them that there were no drugs there. She was then told that they were looking for receipts and other documents. The plaintiff told them that the office was downstairs. The following conversation took place. Plaintiff: What are you looking for? Police officer: Evidence of larceny. Plaintiff: What's larceny? Police officer: Theft. Another police officer: You have to come with us. 40The plaintiff then asked if she could get dressed. The police officers remained watching her while she changed out of her pyjamas and into her slacks. She found the experience humiliating. Three police officers escorted her downstairs to the dining area where her grandchildren were having breakfast. They took her to the gaming area of the hotel where two cleaners were working. Her daughter, Erina, was also there. Shortly afterwards, a police officer introduced a man in a suit, Mr Alexander, and told the assembled company that he wanted to address them. 41Mr Alexander, who had been retained by Mr Young to act on his behalf, stepped forward and said: "I am acting on behalf of the owner. You all will have to leave otherwise you will be arrested." 42The police then directed everyone, including the plaintiff, to leave the hotel through the back door. The plaintiff was asked about the vehicle she used, a 350 Nissan car, which was being serviced at the time. One of the police officers said: "If it is not here within 10 minutes it will be reported stolen." 43When she was evicted from the Wiley Park Hotel which had been her home for over 16 years, the plaintiff took nothing but the clothes she was wearing. Apart from her personal possessions, she left behind her three dogs, a Staffordshire bull terrier and two Maltese terriers, who had lived with her at the hotel.

[10]

Following eviction 44The plaintiff, her children and her grandchildren, who had been living in the hotel, went to live with her sister. She applied to a tribunal (the name of which does not appear from the evidence), presumably the Consumer Trader and Tenancy Tribunal. 45There was a hearing before the Tribunal on 1 August 2006. Mr Alexander appeared on behalf of Mr Young. According to the plaintiff's unchallenged evidence, Mr Alexander, with whom the plaintiff communicated via a friend, Marcia Hau, undertook to return her belongings to her if she provided him with a list. 46On 1 August 2006, Mr Young and Ms Smith met police at the Wiley Park Hotel and examined documents which were on the premises. 47On 15 August 2006 Mr Young attended the Riverwood Police Station to make statements concerning the plaintiff: one entitled "Stealing" and the other entitled "Fraud". 48In the statement entitled "Stealing", Mr Young deposed that he was the licensee of the Wiley Park Hotel which had been managed by his estranged wife, the plaintiff. He stated: "As a result of some concerns I had with the running of the business by my former wife, Joanne YOUNG, I spoke to a solicitor, Stephen Alexander about this, I examined some dealings of the business and retained an accounting firm, Wappetts, to audit the records of the Wiley Park Hotel. I also spoke to police in Leichhardt about this matter." 49The statement concluded: "At this time, Jetobee Pty Limited has a deficiency in its accounts of . . . $40,759.75 for the day's trading, Sunday 16 July 2006. I am asking the police to investigate this matter as I believe Jetobee Pty Limited has been the victim of either stealing or fraud." 50In the statement entitled "Fraud", Mr Young deposed to the financial arrangements for the Wiley Park Hotel. He stated that he appointed the plaintiff to manage the hotel in 2001. He deposed that he had never authorised her to sign his name on cheques and that he was the sole signatory. He described the practice that had developed of his signing cheques in blank and asking the plaintiff to fill them in so that jackpots from the gaming and various bills could be paid by her, as manager. He also deposed that in March 2006 he had received an assessment notice in relation to the hotel's poker machine duty but when he looked at the bank balance he realised that there might not be sufficient funds to meet the assessment. 51On 16 August 2006, just over a month after the eviction, the plaintiff received an urgent message from Ms Hau that her three dogs had been delivered to a vet and that if she wanted to retrieve the dogs she would have to pay the veterinary fees. The plaintiff had no money to do so. As far as she is aware, the dogs were killed. She became very distressed as a result as she was very attached to her dogs. 52On 17 August 2006 Ms Hau made enquiries about the plaintiff's possessions and was informed that there were four boxes which could be collected if a charge of $900 per box was paid. The plaintiff did not have sufficient resources to retrieve any of the boxes. 53In about September 2006 the plaintiff successfully applied for a Newstart allowance of $480 per fortnight. At that time she was paying $80 per week in rent. 54On 12 March 2007, the plaintiff commenced the Family Law proceedings in the Family Court. 55In July and August 2007, the police made contact with the plaintiff's solicitor, Mr Walsh, about service of Court Attendance Notices (CANs).

[14]

The Local Court proceedings 65The hearing of the criminal prosecution of the plaintiff began in the Burwood Local Court on 13 May 2008. After some argument about the form of the CANs, the Magistrate struck out charges 001, 002, 004 and 005. The police prosecutor sought an adjournment of the matter, which was granted over the plaintiff's opposition. 66The matter was stood over part-heard to 9 and 10 July 2008. On 19 June 2008 the plaintiff was charged with a further 40 charges numbered 007 to 046, charging offences against s 300(1) and (2) of the Crimes Act in respect of particular cheques. 67The proceedings resumed on 9 July 2008. Police officers gave evidence on 9 July 2008 and Mr Young was called and cross-examined on 10 July 2008. 68In his evidence in chief in the Local Court proceedings, Mr Young swore that he adopted a practice of signing blank cheques and leaving them at the Wiley Park Hotel for the plaintiff to fill out in order to pay expenses and gambling pay-outs from time to time. He swore that he would never give up the right to sign cheques and denied that he ever told the plaintiff that she could sign cheques. 69In his cross-examination, Mr Young reiterated his evidence in chief that he had never given up the right to sign cheques in respect of the trading operations of the Wiley Park Hotel. He said that every cheque drawn on the Jetobee accounts 1 or 2 ought bear his signature because he was the only signatory. 70He agreed that, from the time of the plaintiff's appointment as manager of the hotel, he received weekly cheque listings from her that recorded the cheques that had been generated by the business. Mr Young was shown such a weekly cheque listing for the week ended 9 July 2006, which bore a facsimile imprint recording that it was sent from the Wiley Park Hotel on 10 July 2006 at 6.28 pm. The document recorded that there had been a gaming profit in that week of $97,925.98 and total cheques drawn of $41,000.62. Mr Young refused to confirm that he had received the document and said that at that time he was about to go into hospital, was suffering extreme pain and that his recollection of that period was extremely poor. 71Mr Young was cross-examined about the weekly cheque listing for the week ended 9 July 2006 and agreed that there was nothing unusual about the listing. He admitted in cross-examination in the Local Court proceedings that he trusted the plaintiff and that she had considerable latitude in writing out cheques, including to herself. 72Mr Young agreed that he was the only person who could access the internet banking facility for the Jetobee accounts. He admitted that at 8:12 pm on 9 July 2006 he had withdrawn $323,160 from the Jetobee 2 account, thereby reducing the balance to $61,574.60. He said in evidence that he could not remember what happened to the money. 73The Local Court proceedings were adjourned to 27 October 2008. On that day Mr Young agreed that none of the 200 cheques that were produced for the period of ten weeks from May until July 2006 bore his signature. There were only three cheques that bore his signature and they were post-dated and had been filled out by him. He was taken at length to various cheques in the weekly cheque listing which he agreed were referable to the normal running of the hotel's business. 74The Local Court proceedings continued on 28 October 2008. At the close of the prosecution case, the plaintiff successfully applied for all remaining charges to be dismissed. She then applied for a costs order against the prosecution, which was granted. 75The tax invoices rendered by Mr Walsh, Mr Campbell SC, Ms Moididis and Mr Sheller are in evidence. I am informed that the total of these fees is greater than the amount recoverable under the costs order and that the discrepancy is claimed by way of damages in the Common Law proceedings.

[16]

The plaintiff's mental and physical health 77The plaintiff attended Ross Colquhoun, psychologist, for medicolegal assessment on 29 April 2008 and 21 April 2010. He considered that she had deteriorated significantly since the events of 17 July 2006. She no longer cared for her appearance or bought new clothes. She dressed casually, had put on weight and felt "unpresentable". The report of 29 April 2008 said: "Following the incident, Mrs Young has virtually ceased all social and recreational activities. She is embarrassed about what she has become and how her reputation has been destroyed. She reported that for some time now her whole life has consisted of doing very little and rarely going out or associating with anyone, although she feels angry and resentful about this." "She feels she has let her family down especially those she has employed in the hotel and that she is embarrassed and shamed by the circumstance of her loss of role and eviction." 78Of the plaintiff's earning capacity, Mr Colquhoun said: "In Mrs Young's current mental, and emotional state, she is unlikely to gain employment. While she says that if she could return to her role as if the incident had never happened she would be able to resume her role, however her appearance, age and ability to trust anyone again would limit to a substantial degree the type of job she could do and her psychological symptoms, such as her depression and thought disorder, would make it virtually impossible for her to hold any full-time job for any length of time." 79In the second of the two reports, Mr Colquhoun recorded that the plaintiff presented as "casually attired and presentable". She was controlled and unemotional during the initial stages of the consultation but she became more emotional and teary when talking about the eviction, the allegations of fraud made by Mr Young and the subsequent police inquiry. He also recorded: "Mrs Young described her relationship with Les [Mr Young] prior to the incident [on 17 July 2006] as being good, having stated that she believed their professional relationship to have been better than their intimate relationship. She reported feeling no anger towards Les for his involvement in her suffering but indicated that she felt betrayed and hurt given such actions seemed so inconsistent with the man she had come to know." 80Mr Colquhoun opined that the plaintiff's mental condition had deteriorated and that she also suffered from post-traumatic stress disorder. He also opined that she would find it very difficult to obtain employment, particularly in her former occupation as hotel manager. 81In her evidentiary statement of 30 April 2010 the plaintiff deposed that her symptoms have improved although she still takes Effexor for her anxiety. She feels more in control although she is still anxious and, for that reason, does not go out much in public.

[17]

The plaintiff's claim under s 79 of the Family Law Act 82Section 79(1) of the Family Law Act relevantly provides that a court may make such order as it considers appropriate altering the interests of the parties to the marriage in property, including requiring a transfer of property for the benefit of either or both of the parties to the marriage. Section 79(2) provides that a court shall not make such an order: "unless it is satisfied that, in all the circumstances, it is just and equitable to make the order." 83Section 79(4) lists the mandatory relevant considerations required to be taken into account in deciding what order should be made under s 79(1). 84In Stanford v Stanford [2012] HCA 52; 87 ALJR 74 (Stanford), French CJ, Hayne, Kiefel and Bell JJ said at [35]-[40] that it is necessary to begin consideration whether an order should be made under s 79 by identifying the existing legal and equitable interests of the parties and to consider the question whether an order is just and equitable under s 79(2) separately to a consideration of the mandatory relevant considerations in s 79(4). 85The identification and value of the existing legal and equitable interests of the parties was determined by Harrison AsJ. In light of the order I made on 7 March 2013 referred to above, I find that Mr Young presently has $9,628,843 worth of net assets and the plaintiff has no assets of any value. 86The threshold question is whether I am satisfied, in all the circumstances, that it is just and equitable to make an order under s 79(1). In deciding this question I am required to disregard moral considerations. As the plurality said in Stanford at [52] this question is not to be answered by reference to moral obligations since such a reference is "at the very least apt to mislead". 87In Stanford the plurality said at [42]: "In many cases where an application is made for a property settlement order, the just and equitable requirement is readily satisfied by observing that, as the result of a choice made by one or both of the parties, the husband and wife are no longer living in a marital relationship. It will be just and equitable to make a property settlement order in such a case because there is not and will not thereafter be the common use of property by the husband and wife. No less importantly, the express and implicit assumptions that underpinned the existing property arrangements have been brought to an end by the voluntary severance of the mutuality of the marital relationship. That is, any express or implicit assumption that the parties may have made to the effect that existing arrangements of marital property interests were sufficient or appropriate during the continuance of their marital relationship is brought to an end with the ending of the marital relationship. And the assumption that any adjustment to those interests could be effected consensually as needed or desired is also brought to an end. Hence it will be just and equitable that the court make a property settlement order. What order, if any, should then be made is determined by applying s 79(4)." 88While the plaintiff and Mr Young were living as man and wife, the plaintiff lived at the Wiley Park Hotel with some members of her family, including Michael. She had the use of a car that was provided for her by Mr Young or Jetobee. Her expenses were met. She was financially secure as long as the marital relationship continued or as long as Mr Young wanted her to remain living and working at the hotel. 89However, on 17 July 2006, the principal, if not all of the, assumptions that underpinned the existing property arrangements were destroyed. The plaintiff would have been, but for the charity of her family, destitute. She had neither income nor assets and she had lost the equanimity and self-esteem that might have permitted her to be financially self-sufficient in the future. She is now dependent on social security benefits and the assistance of her family. By contrast, Mr Young still has title to, and the benefit and use of, the property identified by Harrison AsJ which has a substantial net value. 90In these circumstances I consider it to be just and equitable to make an order under s 79. 91I turn now to the considerations that I am required by s 79(4) to take into account to determine what order ought be made under s 79(1). Section 79(4) relevantly provides: (4) In considering what order (if any) should be made under this section in property settlement proceedings, the court shall take into account: (a) the financial contribution made directly or indirectly by or on behalf of a party to the marriage . . . to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and (b) the contribution (other than a financial contribution) made directly or indirectly by or on behalf of a party to the marriage . . . to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and (c) the contribution made by a party to the marriage to the welfare of the family constituted by the parties to the marriage and any children of the marriage, including any contribution made in the capacity of homemaker or parent; and (d) the effect of any proposed order upon the earning capacity of either party to the marriage; and (e) the matters referred to in subsection 75(2) so far as they are relevant; and (f) any other order made under this Act affecting a party to the marriage or a child of the marriage; . . .

[24]

Section 75(2)(b): the income, property and financial resources of each of the parties and their capacity for appropriate gainful employment 99The respective property and financial resources of the parties have already been noted. 100I do not consider the plaintiff to have any capacity to earn a substantial income. At best she might be capable of part-time work, although not in her former occupation as a hotel manager. Her loss of confidence and anxiety has reduced, if not destroyed, her prospects of obtaining employment, except in a family business or one where allowances were made for her diminished state. There is no evidence before me as to Mr Young's capacity for employment, aside from his ownerships of income-generating properties. 101I should note for completeness that on 7 March 2013 when the matter came before me for orders relating to the striking out of the cross-claim and confirmation of the findings of Harrison AsJ, Mr Young's then solicitor, Mr McCowan said from the bar table: "Circumstances have sort of overtaken this matter. In the sense, the assets have largely disposed of, further assets have been disposed of and the asset pool is shrinking dramatically. At this stage I am instructed Mr Young's finance position is just solvent." . . . "My instructions are, if the receivers moved in there is no asset, full stop. The debts, on my instructions, are at least equal to depending on the order of sale may well exceed any asset. The proceedings may well be a nullity. My instructions are, there is no point in proceeding. I will be withdrawing today because Mr Young is not in a position to make any further payments. His financial position is, it is desperate." 102He also read an affidavit sworn by Mr Young on 6 March 2013 in which Mr Young deposed to his parlous financial circumstances and his need for an adjournment of the proceedings. 103As referred to above, Mr Young did not appear at the hearing of this matter. The evidence adduced on his behalf on 7 March 2013 was not tested on that day or read in opposition to the plaintiff's case before me on 2 April 2013. Accordingly I do not place any weight on either his affidavit evidence or the statements made by his solicitor from the bar table on 7 March 2013.

[33]

Common Law Proceedings: the plaintiff's claim for damages for malicious procurement of a warrant, malicious procurement of arrest and detention and malicious prosecution 118The plaintiff, in the Further Amended Statement of Claim, claims against the State of New South Wales damages for malicious procurement of warrant, wrongful arrest and false imprisonment and malicious prosecution. By contrast, the plaintiff claims, as against Mr Young, damages for malicious procurement of warrant and malicious prosecution. The arrest and detention of the plaintiff are part of the narrative of material facts but they are not expressly pleaded against Mr Young by way of a separate claim in tort. However the plaintiff at all times conducted her case on the basis that she claimed damages against Mr Young for malicious procurement of arrest and detention as well as for the other two torts. 119In these circumstances I propose to order pursuant to s 64(1)(a) of the Civil Procedure Act 2005 that the plaintiff to amend the Further Amended Statement of Claim to clarify that she seeks damages for malicious procurement of arrest and detention against Mr Young. I regard such an amendment as necessary to ensure that the pleadings accurately reflect the substance of the case that the plaintiff put to me by way of opening, evidence and submissions: Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; 239 CLR 175. at [14] per French CJ. Further I regard the making of such an order as in accordance with the dictates of justice, as required by s 58 of the Civil Procedure Act. 120The plaintiff claims compensatory damages, aggravated damages and exemplary damages for each of these torts. 121The basis of the plaintiff's claims against Mr Young is that he, either on his own behalf or on behalf of Jetobee, gave false information to the police which caused, inter alia: (1)The execution of the search warrant on the plaintiff's residence at the Wiley Park Hotel on 17 July 2006; (2) The plaintiff's arrest and detention on 28 September 2007; and (3) The laying of charges against her, all of which were ultimately dismissed which culminated in the Local Court proceedings.

[34]

122The principles that apply to the plaintiff's claims in the Common Law proceedings are set out in Gibbs v Rea [1998] AC 786 (Gibbs v Rea) and A v State of New South Wales [2007] HCA 10; 230 CLR 500. 123In Gibbs v Rea the Privy Council said at 797, of the torts of malicious procurement of a warrant, malicious procurement of arrest and malicious prosecution: The true foundation of each is intentional abuse of the processes of the court. Malice in this context has the special meaning common to other torts and covers not only spite and ill-will but also improper motive. In the present context the requirement of improper motive would be satisfied by proof of intent to use the process of the court for granting a warrant for a purpose other than to search in the permitted circumstances. 124There is an additional factor in the instant case that arises from the fact that Mr Young did not himself apply for the search warrant and did not himself initiate the prosecution since the police were ultimately responsible for these two matters. The liability of a private person, such as Mr Young, in these circumstances was addressed in Fleming The Law of Torts, 10th ed,, (2011) (Fleming) at [27.30] in the following passage: "The defendant must have been "actively instrumental" in setting the law in motion. Merely supplying information, however incriminating, to the police on which they eventually decide to prosecute is not the equivalent of launching a prosecution; the critical decision not being the defendant's, [the stone set rolling] is simply a stone of suspicion. These days one should hesitate to credit an informant with having overcome the scepticism of a police trained to test the reliability of complaints. On the other hand, an informant may be regarded as a prosecutor if the information given virtually compels the police to prosecute, even more where the defendant deliberately deceives the police by supplying false information without which they would not have proceeded." 125For the reasons that follow I consider that Mr Young deliberately deceived the police by supplying false information without which they would not have proceeded. The false information he provided to the police virtually compelled them to apply for a search warrant because of the allegations concerning drugs. The false information regarding the procedure for the signing of cheques virtually compelled the police to charge the plaintiff with offences relating to fraud. 126It is not to the point that the police, had they approached the matter more sceptically, might have been more diffident about applying for, and executing, the search warrant or arresting and charging the plaintiff. I consider Mr Young to have been at least "actively instrumental" in setting the law in motion.

[35]

Malicious procurement of a search warrant 127For the plaintiff to establish a malicious procurement of a search warrant against Mr Young, she must establish, relevantly, the following: (1)Mr Young caused a successful application for the search warrant to be made. (2)Mr Young did not have "reasonable and probable cause" to cause the application to be made. (3)Mr Young lacked any bona fide belief that he was providing to the police material sufficient to meet the conditions for issue of the warrant sought. (4)Mr Young acted with malice, and (5)The damage resulted from the issue or execution of the warrant. 128The first requirement is established since Mr Young's conduct was, to borrow the words from the passage from Fleming set out above, "actively instrumental" in the search warrant being applied for, granted and executed. It is apparent from the notes taken by Detective Senior Constable Dunn when she met with Mr Young and Ms Smith at Norton's early on the morning of Friday 14 July 2006, that the police would not have applied for a search warrant had it not been for Mr Young's lies. Nor would they have taken such drastic steps to execute it they had they not been misled by Mr Young into believing that the plaintiff was dangerous, potentially violent and armed, and engaged in a serious criminal enterprise, involving fraud and drugs. 129The plaintiff's ignominious treatment at the hands of the police on Monday 17 July 2006 was a direct result of Mr Young's malicious falsehoods. 130The second requirement is also established. By reason of the factual findings I have made above, I am satisfied that Mr Young did not have a "reasonable and probable cause" to cause the police to make the application. The evidence establishes that there was, to Mr Young's knowledge, a system in place which he had authorised, whereby the plaintiff signed cheques in his name in connection with the operation of the Wiley Park Hotel. This system was well known not only to Mr Young, who was responsible for it, but also to Ms Hape, the book-keeper and Mr Logue, the accountant. When Mr Young told the police that he had never given up the right to sign cheques or authorised the plaintiff to sign cheques in his name, he was lying. Nor was there any basis for the allegation that there were drugs on the premises. 131At no time did Mr Young have any basis for any concern about the way the plaintiff was running the Wiley Park Hotel on his behalf or the way funds derived from the hotel were applied, banked or dealt with. 132In this case the relevant conditions include reasonable suspicion that the specified person has carried on or has benefited from drug trafficking and that material valuable to the investigation might be on the designated premises. This encompasses the subjective belief in good faith that material grounds for suspicion exist and the objective requirement that the belief is reasonably held. The falsity of Mr Young's statements to police belies any reasonable and probable cause on his part in causing the search warrants to be obtained. 133The third requirement is also satisfied. Mr Young lacked any bona fide belief that he was providing to the police material sufficient to meet the conditions for issue of the warrant sought. At no time did he have any basis for saying that the plaintiff had been violent towards him, that she took or dealt in drugs or that she was in a relationship with Tony Almoui. 134The fourth requirement of malice is also satisfied. Mr Young had, with good reason, trusted the plaintiff for several years, to run the hotel as if it were her own. The only possible motive for his lies was that he wanted to evict the plaintiff from the Wiley Park Hotel and, possibly, thereby to destroy her chances of obtaining a substantial Family Law settlement by reason of the end of their marriage. The requirement of improper motive is accordingly satisfied since the plaintiff has proved that Mr Young intended to use the processes of the court for granting a warrant for a purpose other than to search in the permitted circumstances. 135Damage in the form of the eviction and subsequent events has been amply established.

[38]

Damages in the Common Law proceedings 145The effect of the events that followed the execution of the warrant is the subject of findings made above. These events have transformed the plaintiff from a gregarious, competent, independent businesswoman and hotel manager to a marginalised, depleted, dependent person who lacks confidence, self-esteem and the ability to earn any substantial income. 146It is important not to double-count the loss of earning capacity which has already been taken into account in determining the order that should be made in the plaintiff's favour under the Family Law Act. The plaintiff has claimed a buffer for loss of earning capacity arising from Mr Young's tortious conduct. But for the s 79 order in the Family Court proceedings, I would have ordered a substantial buffer for the effect of the torts on the plaintiff's capacity to earn. However I have taken into account the effect of the conduct in the assessment of the plaintiff's capacity to support herself in the context of determining the amount of the order under s 79 of the Family Law Act. Accordingly I do not propose to make a separate award referable to loss of earning capacity in the Common Law proceedings. 147The basis for an award of general damages for pain and suffering as a result of these torts is amply established on the evidence. The plaintiff is also entitled to an award of interest. 148The plaintiff also claims exemplary and aggravated damages. Aggravated damages are a form of general damages, given by way of compensation for injury to the plaintiff, which may be intangible, resulting from the circumstances and manner of the wrongdoing: New South Wales v Ibbett [2006] HCA 57; 229 CLR 638 at [31] (Ibbett). Aggravated damages are assessed by reference to the plaintiff's point of view, whereas exemplary damages involve a punitive and deterrent element. 149I am satisfied that the plaintiff feels, understandably, that she has been deprived of her home, dignity and reputation by Mr Young's conduct towards her. To be required to disrobe and change in front of several police officers and to be banished, empty-handed, from the premises that had been not only her home and her workplace but also the home and workplace of several members of her family and extended family for years was both devastating and humiliating. The highly invasive and humiliating way in which her home was searched pursuant to the warrant was a direct result of the falsehoods Mr Young had fabricated. 150The plaintiff suffered substantial distress and expense when she was charged with numerous charges, including fresh charges, which were based on a premise which the informant, Mr Young, knew to be false. The circumstances and manner of the wrongdoing aggravated the harm suffered by the plaintiff 151The plaintiff is also entitled to damages to compensate her for the discrepancy between the costs recoverable pursuant to the costs order made in her favour in the Local Court and the costs actually incurred. I do not have evidence of the quantum of this head of damages, although I have evidence of the total amounts charged by the plaintiff's legal representatives. It will be necessary for the plaintiff to adduce evidence of the shortfall and bring in short minutes to reflect the amount of the discrepancy. 152The Court of Appeal in State of New South Wales v Zreika [2012] NSWCA 37 summarised the principles governing awards for damages that might include both aggravated and exemplary damages in the following terms at [63] per Sackville AJA with whom Macfarlan and Whealy JJA agreed: In a frequently cited passage, Brennan J in XL Petroleum (NSW) Pty Ltd v Caltex Oil (Aust) Pty Ltd[1985] HCA 12; 155 CLR 448, at 471, observed that the considerations that enter into the assessment of compensatory damages are quite different from those that govern the assessment of exemplary damages and that there is no necessary proportionality between the assessment of the two categories. Nonetheless, in NSW v Ibbett, at 647 [34], the plurality endorsed the proposition that it is necessary to determine both heads of compensatory damages before deciding whether or not a further award is necessary to serve the objectives of punishment, deterrence or condemnation. Their Honours also said (at [35]) that where the same circumstances increase the hurt to the plaintiff and also make it desirable for the court to mark its disapprobation of the conduct, a single sum may be awarded. Such an award would represent both heads of damage and ensure that no element is compensated more than once. 153There is authority to support the proposition that a global award including both aggravated and exemplary damages may be made: see cases referred to in Ibbett at [35]. However, I consider it to be desirable in the instant case for the court to mark the extent of its condemnation of Mr Young's conduct by a separate award for exemplary damages. 154I am satisfied that an award of exemplary damages is necessary to serve the objectives of punishment, deterrence and condemnation of Mr Young's conduct. 155I award damages to the plaintiff as follows: Malicious procurement of warrant Compensatory damages - pain and suffering, including interest $50,000 Aggravated damages $20,000 Exemplary damages $25,000 Malicious prosecution Compensatory damages - pain and suffering, including interest $25,000 - discrepancy between costs recovered from the police informant and costs incurred to be calculated Aggravated damages $20,000 Exemplary damages $25,000 156The plaintiff is entitled to an order that Mr Young and Jetobee pay her costs of the Common Law proceedings and that Mr Young pay her costs of the Family Law proceedings, with credit to be given for the interim costs order made by Le Poer Trench J. If costs are sought on any higher basis than the usual, she is at liberty to apply for such an order any order for costs is made. 157I direct the plaintiff to bring in short minutes of order to reflect these reasons and to adduce such evidence as is relied upon as to the quantum of the costs discrepancy and order accordingly.

Young v State of New South Wales and Ors; Young v Young

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