Cost Orders in NSW Criminal Cases: The Legislation and Exerts from Case-Law

In certain circumstances, defendants in criminal proceedings may be able to have their legal costs reimbursed – relieving some of the financial burden associated with being the subject of a prosecution.

Two of the most common ways for a defendant to achieve costs in criminal cases are embodied in section 213 and 214 of the Criminal Procedure Act 1986 (‘CPA’) and section 2 of the Costs in Criminal Cases Act 1967 (‘CCC’).

Criminal Procedure Act

Sections 213 and 214 relate to ‘summary proceedings’, which are cases finalised in the Local Court.

Section 213 states that the court may, at the end of summary proceedings, order that the prosecutor pay professional costs of the defendant if the matter is dismissed or withdrawn.

The section stipulates that the amount of professional costs is to be just and reasonable.

Section 214 prevents the court from making such an order unless one or more of the circumstances listed in the subsections (a) to (d) apply.

Here is a list of those subsections as well as exerts from some of the cases that interpret their scope and meaning.

214 (a) – The investigation into the alleged offence was conducted in an unreasonable or improper manner

In determining whether proceedings were conducted in this way, the courts have found there is no requirement for an applicant to establish that the investigation “fell grossly below optimum standards”; JD v DPP and ORS [2000] NSWSC 1092.

The determination is based upon an assessment of facts which are relevant to ascertaining whether the prosecutor failed to have sufficient regard to, and that it it ought reasonably to have been aware, whether the proceedings should not have been brought or conducted in the way they were conducted; Kanan v Australian Postal & Telecommunications Union (1992) 43 IR 257 at 264.

The fact that a prosecution may be brought or continued where there is evidence to establish a prima facie case does not necessarily mean it is reasonable to bring or continue the prosecution, as:

“There may be cases where there is contradictory evidence and where it is reasonable to expect a Prosecutor to make some evaluation of that evidence”; McFarlane [Supreme Court of NSW 12 August 1994, unreported] Manley per Wood CJ at CL at [12].

In R v Pavy (1997) 98 A Crim R 396 at 401, the Court of Criminal Appeal (Hunt CJ at CL, Smart and Badgery-Parker JJ) unanimously held that:

“The legitimate interest which the community has in serious crimes being prosecuted by the Director of Public Prosecutions is not disputed. That cannot, in our judgement, make it reasonable as between the Crown and the accused/applicant to prosecute in the fact of significant weaknesses in the Crown case which the Crown acting reasonably, ought to have been aware” (Emphasis added).

An example of a situation where it might be successfully argued that the investigation was conducted in an unreasonable or improper manner is where police failed to interview witnesses to an event that they would reasonably have been expected to interview, which were later interviewed by the defence and produced exculpatory material.

In Cliftleigh Haulage Pty Ltd v Byron Shire Council [2007] NSWCCA 13, the Court of Criminal Appeal considered section 70 of the Crimes (Local Court and Appeal Review) Act 2001. Section 70 is in effect the same as sections 117 and 214 of the CPA but relates to appeals from the Local Court.

Hodgson JA found that the Council officers had failed to investigate the matter properly in that they failed to ask a relevant witness about their observations of the site and of any employees at the relevant times. His Honour’s comments [at 19] are apposite:

“Whether or not it was reasonable to rely on a circumstantial case before the appellant company’s assertion, it was arguably no longer reasonable after the assertion was made and there was a witness, not connected with the company, who may have been able to give direct evidence on the point”.

Hodgson JA went on to say [at 21]:

“I do not think it is necessary for the person seeking costs in every case to show that an investigation conducted in a reasonable manner would have suggested that the appellant might not be guilty or that the proceedings ought not to be brought. If a prosecutor knows there are five eye-­‐witnesses to an event, and interviews and calls only one of them, and the prosecution then fails, I think s.70(1)(a) may apply even if the person seeking costs does not prove what the other four witnesses would have said. Similarly,…if the prosecutor knows there is an eye-­‐witness to what happened, but does not interview this witness, and instead relies on a circumstantial case, in my opinion s.70(1)(a) may be satisfied even if the person seeking costs does not prove what the eye-­‐witness would have said.”

In Eslarn Holdings Pty Ltd v Tumut Shire Council (No 3) [1999] NSWLEC 163 the prosecution presented a circumstantial case alleging that the defendant had polluted waters contrary to the Clean Waters Act 1970. Lloyd J of the Land and Environment Court dealt with the matter as an appeal from the magistrate. His Honour determined that [at 8]:

“There were other rational inferences consistent with the facts and which were also consistent with the appellant’s innocence which the prosecution had not negatived, so that the guilt of the appellant was not the only rational inference to be drawn therefrom.”

This resulted in the defendant’s acquittal. His Honour identified a failure to investigate the other reasonable hypotheses which were available to explain the source of the pollution.

Accordingly, the test for costs had been satisfied.

214 (b) the proceedings were initiated without reasonable cause or in bad faith or were conducted by the prosecutor in an unreasonable manner

The Bench Book cites in Canceri v Taylor (1994) 123 ALR 667 at 676 (per Moore J). In Canceri v Taylor Justice Moore was required to determine whether the proceedings were instituted without reasonable cause. In determining that issue Justice Moore adopted the approach of Justice Wilcox in Kanan v Australian Postal and Telecommunications Union (1992) 43 IR 257 at 264. Justice Wilcox said;

“It seems to me that one way of testing whether a proceeding is instituted “without reasonable cause” is to ask whether, upon the facts apparent to the applicant at the time of instituting the proceedings, there was no substantial prospect of success. If success depends upon the resolution in the applicant’s favour of one or more arguable points of law, it is inappropriate to stigmatise the proceeding as being “without reasonable cause. But 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”.

The question whether the proceedings were initiated without reasonable cause is to be answered by “reference to the quality of the evidence which the police had gathered, with an eye not only to the enquiries which had been made but also to those which should have been made”: JD v DPP and Ors [2000] NSWSC 1092 (30 November 2000) per Hidden J at para. 28. Obiter).

The provisions referred to in 214(1)(b) contains no provisions that “exceptional circumstances” are required to making of an order for costs. The question of whether or not the proceedings were instituted without reasonable cause has to be answered by reference to the quality if the evidence which the police had gathered, with an eye not only to enquiries which has been made, but also to those which should have been made.

In DJ v DPP [2000] NSWSC 1092, Hidden J stated [at 28] that:

The question whether proceedings were initiated without reasonable cause was to be answered by reference to the quality of the evidence which the police had gathered, with an eye not only to the enquiries which had been made but also to those which should have been made. It turned upon considerations different from (although related) those to which Black AJ had regard in determining whether the prosecutions should be stayed as an abuse process. Quite apart from flaws in the investigation to which reference has been made, one can envisage other enquiries which should have been undertaken, preferably before a decision whether or not to lay charges was made.

As was said by the plurality (Gibbs, Stephen and Mason JJ) in Barca v R [1975] HCA 42; 133 CLR 82 at 104 -105:

“When the case against an accused person rests substantially upon circumstantial evidence the jury cannot return a verdict of guilty unless the circumstances are “such as to be inconsistent with any reasonable hypothesis other than the guilt of the accused”: Peacock v The King [1911] HCA 66; (1911) 13 CLR 619, at p 634. To enable a jury to be satisfied beyond reasonable doubt of the guilt of the accused it is necessary not only that his guilt should be a rational inference but that it should be “the only rational inference that the circumstances would enable them to draw.”

214 (c) 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.

In Halpin v Department of Gaming [2007] NSWSC 815 Hall J stated:

“The expression “exceptional circumstances” is a broad one. Without it being necessary to define its outer limits, the question essentially is whether or not there was any relevant conduct by the prosecutor which would make it “just and reasonable” to award costs in favour of the plaintiff.”

In Fosse v DPP [1999] NSWSC 367, Woods CJ at CL considered the “exceptional circumstances” criteria and said at [30]: “The defence had to establish something about the conduct of the proceedings being an ‘exceptional circumstance’ other than some matter mentioned in subs (a)(b) or (c)…to make it just and reasonable for the plaintiff to have his costs. In that regard the mere fact that the proceedings were resolved in his favour was not enough. There had to be something in relation to the manner in which the proceedings were conducted that led to it being just and reasonable for a costs order to be made.”

In R v Pavy (1997) 98 A Crim R 396 at 401, the Court of Criminal Appeal (Hunt CJ at CL, Smart and Badgery-Parker JJ) unanimously found that:

“The legitimate interest which the community has in serious crimes being prosecuted by the Director of Public Prosecutions is not disputed. That cannot, in our judgment, make it reasonable as between the Crown and the accused/applicant to prosecute in the face of significant weaknesses in the Crown case which the Crown acting reasonably, ought to have been aware”.

Costs in Criminal Cases Act

Section 2 of the CCC Act extends to criminal proceedings in any NSW court.

It empowers the court to issue a ‘certificate’ for costs.

The section states as follows:

(1) The Court or Judge or Magistrate in any proceedings relating to any offence, whether punishable summarily or upon indictment, may:

(a) where, after the commencement of a trial in the proceedings, a defendant is acquitted or discharged in relation to the offence concerned, or a direction is given by the Director of Public Prosecutions that no further proceedings be taken, or

(b) where, on appeal, the conviction of the defendant is quashed and:

(i) the defendant is discharged as to the indictment upon which he or she was convicted, or

 (ii) the information or complaint upon which the defendant was convicted is dismissed,

 grant to that defendant a certificate under this Act, specifying the matters referred to in section 3 and relating to those proceedings.

(2) For the avoidance of doubt, a certificate may be granted in accordance with subsection

(1) (a) following an acquittal or discharge of a defendant at any time during a trial, whether a hearing on the merits of the proceedings has occurred or not.

(3) In this section,

“trial” , in relation to proceedings, includes a special hearing conducted under section 19 of the Mental Health (Forensic Provisions) Act 1990 and also includes preliminary proceedings that form part of the trial, for example, a voir dire.

Section 3 provides that:

“(1) A certificate granted under this Act shall specify that, in the opinion of the Court or Judge or Magistrate granting the certificate:

(a) if the prosecution had, before the proceedings were instituted, been in possession of evidence of all the relevant facts, it would not have been reasonable to institute the proceedings, and

(b) that any act or omission of the defendant that contributed, or might have contributed, to the institution or continuation of the proceedings was reasonable in the circumstances.”

Section 3A(1) defines “all the relevant facts” as:

“(a) the relevant facts established in the proceedings, and

(b) Any relevant facts that the defendant has, on the application for the certificate, established to the satisfaction of the Court or Judge or Magistrate, and

(c) Any relevant facts that the prosecutor, or in the absence of the prosecutor, any person authorised to represent the Minister on the application, has established to the satisfaction of the Court or Judge or Magistrate that:

(i) relate to evidence that was in the possession of the prosecutor at the time that the decision to institute proceedings was made, and

(ii) were not adduced in the proceedings….”

In R v McFarlane (unrep, 12/8/94, NSWSC) Blanch J described the test as: “a hypothetical exercise in the sense that the question is whether it would have been reasonable to prosecute at the time of [the] institution [of the proceedings] if the hypothetical prosecutor had possession of evidence of all the relevant facts including those established even after the trial and on [the] application”: see also Allerton v Director of Public Prosecutions (NSW) (1991) 24 NSWLR 550.

The case of Beatson v R [2015] NSWCCA 17 dealt with a costs application that followed a charge of supplying a prohibited drug being dismissed. The drugs in that instance had been found in the motor vehicle and the case against the accused was a circumstantial one. Costs were awarded. Hoeben CJ held the following:

23 The Crown also submitted that the appellant’s shared interest in drugs with her co-accused implied, at the very least, comity with him insofar as the illicit possession and purchase of prohibited drugs was concerned. Drawing the necessary inferences, the circumstances favoured the hypothesis that the appellant was acting jointly with her co-accused rather than simply being his passenger, or indeed his customer. They remained in company with each other after the consumption of drugs. 

24 I do not accept this last submission as being the only hypothesis that was open to the jury to find. In my view a position to the contrary was an equally open hypothesis. At the very least, a hypothesis of equal strength was that the appellant was in the company of her co-accused simply because she was indeed his passenger and may have been his customer and he her supplier. The factors relied upon by the Crown could not, in my view, have led the jury to be satisfied beyond reasonable doubt that the only hypothesis open was that the appellant was in possession of the drugs in the relevant legal sense.

27 In my view the Crown’s contentions should be rejected. The circumstances proved by the Crown did not establish beyond reasonable doubt that the only rational inference to be drawn from the evidence by the jury was that the appellant was, to her knowledge, in possession of the drugs in that she intentionally exercised custody or control over them to the exclusion of all others except herself and her co-accused for the purpose of their supply.

The effect of the decision of the Court in Beatson is that upon the Crown case to be adduced at trial there was never going to be sufficient evidence to convict the applicant. As was said by the plurality (Gibbs, Stephen and Mason JJ) in Barca v R [1975] HCA 42; 133 CLR 82 at 104 -105:

“When the case against an accused person rests substantially upon circumstantial evidence the jury cannot return a verdict of guilty unless the circumstances are “such as to be inconsistent with any reasonable hypothesis other than the guilt of the accused”: Peacock v The King [1911] HCA 66; (1911) 13 CLR 619, at p 634. To enable a jury to be satisfied beyond reasonable doubt of the guilt of the accused it is necessary not only that his guilt should be a rational inference but that it should be “the only rational inference that the circumstances would enable them to draw.”