FEDERAL COURT OF AUSTRALIA Bou-Simon v Attorney-General of the Commonwealth of Australia [2003] FCA 1303 Practice and Procedure - costs - security for costs - application for payment out - Litigants Fund - discretion under O 63 r 4 of the Federal Court Rules - payment out - where extradition has taken place and prosecution subsequently abandoned Federal Court Rules O 63 r 4 Corporations Law s 232(6) Judiciary Act 1903 (Cth) s 39B Financial Management and Accountability Act 1997 s 47 Stabilad Ltd v Stephens & Carter Ltd [1999] 1 WLR 1201 followed Council of Civil Service Unions v Minister for the Civil Service [1985] 1 AC 374 referred to ROBERT ANTHONY BOU-SIMON v ATTORNEY-GENERAL OF THE COMMONWEALTH OF AUSTRALIA AND DIRECTOR OF PUBLIC PROSECUTIONS (COMMONWEALTH) NG 961 of 1998 TAMBERLIN J SYDNEY 14 NOVEMBER 2003 IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NG 961 OF 1998 ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA BETWEEN: ROBERT ANTHONY BOU-SIMON APPELLANT AND: ATTORNEY-GENERAL OF THE COMMONWEALTH OF AUSTRALIA FIRST RESPONDENT DIRECTOR OF PUBLIC PROSECUTIONS (COMMONWEALTH) SECOND RESPONDENT JUDGE: TAMBERLIN J DATE OF ORDER: 14 NOVEMBER 2003 WHERE MADE: SYDNEY THE COURT ORDERS THAT: The sum of $9,500 held as security for costs in the Litigants' Fund in this matter, be paid out to the appellant, or to any person duly authorised by him to receive that money. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NG 961 OF 1998 ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA BETWEEN: ROBERT ANTHONY BOU-SIMON APPELLANT AND: ATTORNEY-GENERAL OF THE COMMONWEALTH OF AUSTRALIA FIRST RESPONDENT DIRECTOR OF PUBLIC PROSECUTIONS (COMMONWEALTH) SECOND RESPONDENT JUDGE: TAMBERLIN J DATE: 14 NOVEMBER 2003 PLACE: SYDNEY REASONS FOR JUDGMENT 1 This is an application by Notice of Motion by the first respondent ("the Attorney-General") for an order under O 63 r 4 of the Federal Court Rules ("the FCR"), that an amount of $9,500 in the Litigants' Fund be paid out in favour of the Attorney-General. That sum was paid in on behalf of the appellant ("Bou-Simon") as security for the costs of the Attorney-General in appeal proceedings, which have been heard by the Full Court. 2 Order 63 of the FCR is concerned with the administration of money paid into court. By O 63 r 3(3), money paid into court must be paid to the credit of a Litigants' Fund. Order 63 r 4 is concerned with the payment out of money from a Litigants' Fund and reads as follows: "Order 63 4 Payment out of a Litigants' Fund (1) Money may be paid out of a Litigants' Fund: (a) for money paid under Order 64 paragraph 46(3)(d): (i) in accordance with an order of the Court or a Judge; or (ii) in accordance with a direction by the Registrar under Order 62 paragraph 46 (6A)(d); or (b) in any other case. in accordance with an order of the Court or a Judge. (2) An order that directs that money in Court be paid out of a Litigants' Fund, or otherwise dealt with, must state the particulars of the payment out, the manner in which the money is otherwise to be dealt with and any other action to be taken by the Registry." background 3 In December 1995, warrants were issued in Australia for the arrest of Bou-Simon, pursuant to informations laid by the second respondent ("the DPP"). The warrants allege that Bou-Simon, while working in Australia as an employee of Faye Ridgewhite Futures Australia Ltd ("FR Futures"), engaged in unauthorised trading in breach of s 232(6) of the Corporations Law, which prohibits an employee making improper use of his or her position to gain an advantage, or to cause detriment to a specific corporation. 4 By the time the warrants were issued, on 1 December 1995, Bou-Simon had left Australia and was working in France. As a result, the warrants could not be executed. Twenty-one months later, in September 1997, the Attorney-General applied to the French Government to have the appellant extradited to Australia to face criminal prosecution for the charges particularised in the warrants. That application was made pursuant to the Treaty on Extradition Between the Government of Australia and the Government of the Republic of France of 31 August 1988. It was accompanied by an affidavit. Following receipt of the application, the French authorities arrested the appellant at his home in Paris on 29 November 1997, and took him before a magistrate in chambers, where he was informed of the request for his extradition. He was remanded in custody to appear before the French court on 17 December 1997, for the hearing of the extradition application. That hearing was adjourned until 21 January 1998, on which date the appellant was granted bail. He was released from custody the following day. 5 The extradition application came before the French court on 24 June 1998. The initial application in this proceeding came before Emmett J. It was brought pursuant to s 39B of the Judiciary Act 1903 (Cth) seeking, in substance, a declaration that material relied on by the Attorney-General in support of the extradition was misleading, and that its submission to the Court of Criminal Appeal of the Appeal Court of Paris was an abuse of process. Other orders were sought to restrain the Attorney-General from continuing the extradition proceedings, and to restrain the DPP from continuing the criminal proceedings. Emmett J, on 8 September 1998, dismissed the application by Bou-Simon and subsequently, ordered Bou-Simon to pay the costs of the Attorney-General and the DPP. 6 An appeal was lodged by Bou-Simon from the judgment of Emmett J to the Full Court. Subsequently, an application was made by the Attorney-General and the DPP for security for costs of the appeal. Emmett J made an order requiring the lodgement of security for costs in a total amount of $19,000, being attributable as to half of that amount to each of the respondents. The sum of $19,000 was duly paid into the Litigants' Fund of the Court. On 21 January 2000, the Full Court dismissed the appeal, and ordered costs to be paid by the appellant, including any reserved costs. 7 On 17 May 2001, a Certificate of Taxation was issued from this Court in relation to the costs of the Attorney-General. This Certificate was for $10,200. The DPP's costs were taxed at $13,674, pursuant to a Certificate of Taxation dated 19 December 2001. No application was made for payment out of the $19,000 held by the Court in the Litigants' Fund by either the Attorney-General or the DPP, until the Attorney-General filed the application now before me. This was filed on 10 December 2003. The DPP has now made a decision not to seek payment of the sum of $9,500 attributed to its costs, and has consented to an order of payment out of that sum to the appellant's mother. The Attorney-General, however, has decided to seek payment out of the $9,500 paid into Court in respect of its costs on the unsuccessful appeal by Bou-Simon. Bou-Simon requests payment out of this amount, having regard to the dropping of charges against him that were the reason for his extradition. history of litigation 8 The basis of the appellant's application before Emmett J to challenge the extradition was that the affidavit material placed before the French court in relation to the extradition was misleading, and did not disclose important material facts and events. Therefore, the extradition proceedings were said to be an abuse of process and should be set aside. 9 The essential complaint in respect of the affidavit material was that (i) it did not disclose to the French court that the deponent of the affidavit was not independent, but had the conduct and carriage of the prosecution; (ii) it did not disclose that charges against another party, which were relevantly identical to the charge against Bou-Simon, had been dismissed as not disclosing the name of the correct employer, and that the magistrate hearing those charges had held that an amendment could not be made in respect of the prosecution of that party; (iii) it wrongly stated that Bou-Simon acted with a "dishonest intent" when no such allegation was made in the charge, (iv) it was wrongly stated that another party had been prosecuted for being "knowingly concerned", when she was in fact prosecuted for having "aided and abetted" in the offence; (v) there was no disclosure of the reasons why the DPP did not appeal the Magistrate's decision against the other party; and (vi) it wrongly expressed the relevant legal principles. 10 The Full Court upheld the decision of Emmett J, because it was not satisfied that there had been any deliberate attempt by Australian authorities to mislead the French court. The Full Court also placed considerable emphasis on the undesirability of fragmentation of the criminal process. 11 The Notice of Motion seeking payment out from the Litigants' Fund by the Attorney-General was supported by an affidavit sworn on 10 October 2003 by a solicitor in the employ of the Australian Government Solicitor. This affidavit simply stated that the amount of $9,500 had been paid into court as security for the costs of the Attorney-General, and that an order was made on 10 October 2000 for Bou-Simon to pay the Attorney-General's costs in the appeal. A photo-copy of those orders was annexed. There was also an annexure of a copy of a Certificate of Taxation. The affidavit requested the release of the amount of $9,500. 12 As noted, after Bou-Simon had been extradited to Australia, a decision was made by the DPP not to proceed with the prosecution against him. Counsel for Bou-Simon, Mr Rushton SC, had communicated with, and requested the Attorney-General in writing, to forgo any right to enforce the orders for costs made in the Federal Court proceedings. Mr Rushton SC sought consent to the payment out to Bou-Simon of the sum of $9,500 held by the Court as security, because of the DPP's decision to drop the charges against Bou-Simon, due to lack of evidence. An initial request to this effect was made in a letter dated 24 October 2000. Despite numerous and regular follow up correspondence from Mr Rushton SC seeking a decision on this matter, no effective decision was made by the Attorney-General until 14 October 2003, when a letter from the Australian Government Solicitor advised that the Minister for Justice and Customs had refused to waive or write off the entitlement to legal costs. No satisfactory explanation has been proffered by the Attorney-General for this delay. 13 When the matter came before me on 16 October 2003, I made an order that the amount be paid out to the first respondent. No disclosure was made in the Attorney-General's application of the DPP decision not to prosecute. Nor was any mention made of the numerous requests on behalf of Bou-Simon for payment out to him of the funds. The Order was entered on 17 October 2003. However, in the light of further important information and material furnished to me by Mr Rushton SC after that order was made, I have decided to set aside that order and consider the matter anew. 14 It is submitted for Bou-Simon that, in view of the fact that a determination had been made by the DPP not to prosecute him after he had been extradited to Australia, and the fact that the DPP has agreed to forego enforcement of the sum of $9,500 owing to it under the costs orders made by Emmett J, the appropriate order as to payment out in the exercise of my discretion should be that the balance of $9,500 be paid to Bou-Simon. 15 In the letter from Mr Rushton SC, of 24 October 2000, it was pointed out to the solicitors for the Attorney-General that, upon arrest in Paris, Bou-Simon was incarcerated for fifty-five days. When bail was ultimately granted, the conditions were such that Bou-Simon was unable to travel, which was an integral part of his employment in France at the time. Accordingly, he was placed on "restricted duties" which caused a significant drop in income. He arrived in Sydney in May 2000. He was unemployed after his arrival and was not, at the early stages at least, in receipt of any income, and was without funds. The letter points out that the extradition proceedings and the criminal proceedings have caused Bou-Simon general substantial hardship, and that in substance the criminal proceedings were misconceived, and that this was acknowledged by the DPP decision. 16 In support of his submission that the amount of $9,500 should be paid out to, or on behalf of, Bou-Simon, Mr Rushton SC referred me to a decision of the Court of Appeal in Stabilad Ltd v Stephens & Carter Ltd [1999] 1 WLR 1201. In that case, the Court held that there was power to direct a stay of execution of an order made by a court below, including an order for payment out of a sum lodged in court by way of security for costs, and that whether such an order to be made was a matter of discretion and balance. The Court considered that the simple fact of the plaintiff's success in the court below was not enough to outweigh the result for the defendant of being unable to recover any of its costs of the trial should it proceed to appeal, and accordingly, that there should be a stay. As Sir Richard Scott V-C said at 1206: "… where a discretionary power has been conferred on a court, although authoritative guidance may be given by decisions of superior courts as to the manner in which the discretion should be exercised, it is not possible, in my opinion, for the exercise of the discretion to be limited and confined within rigid boundaries by the authorities. The exercise of the discretion must always take account of the particular circumstances of the particular case and judicial guidance as to how the discretion should be exercised is always capable of yielding to the particular requirements of a particular case." 17 It is submitted for the Attorney-General that this case is distinguishable because it involved an application by an unsuccessful defendant to prevent payment out of court to the plaintiff of money lodged as security. It is, of course, correct to say that the circumstances were not identical to those in the present case. However, the above statement of principle, in my view, is pertinent for present purposes. 18 The Attorney-General's case on the application for payment out is effectively that, like any successful litigant who has the benefit of a costs judgment where security for costs has been paid in, the Attorney-General is entitled to enforce the judgment debt against the Litigants' Fund paid in for the purpose of ensuring that its costs would be paid in the event that the Attorney-General was successful on the appeal. 19 In support of this submission, the Attorney-General refers to s 47 of the Financial Management and Accountability Act 1997 ("FMA Act"), and contends that this imposes an obligation on those who use and manage public property and Commonwealth resources to collect debts due to the Commonwealth, and is, accordingly, a relevant factor to take into account. In terms, the section provides: "s 47 Recovery of debts (1) A Chief Executive must pursue recovery of each debt for which the Chief Executive is responsible unless: (a) the debt has been written off as authorised by an Act; or (b) the Chief Executive is satisfied that the debt is not legally recoverable; or (c) the Chief Executive considers that it is not economical to pursue recovery of the debt. (2) For the purposes of subsection (1), a Chief Executive is responsible for: (a) debts owing to the Commonwealth in respect of the operations of the Agency; and (b) debts owing to the Commonwealth that the Finance Minister has allocated to the Chief Executive." 20 It should be noted that there is power under the FMA Act (s 34(1)(a)), which permits the Finance Minister to "waive" the Commonwealth's right to payment of an amount owing to the Commonwealth. This provision does not mandate payment out by the Court, or otherwise control the discretion of the Court, but it imposes a duty on the executive to pursue debts. It is a relevant consideration for the Court to take into account. 21 The Attorney-General submits that the language and context of O 63 r 4 of the FCR suggest that the Court or a Judge have a very limited discretion when considering whether to make an order for payment out where the conditions precedent are met. It is said that the language of this rule suggests that its purpose is "proper accountability" for the monies in the Litigants' Fund, rather than the existence of a general discretion. 22 I do not accept that the discretion under O 63 is to be read as limited in this vague and unspecified way. There are no specific factors which are mandated to be taken into account. Nor are any matters expressly excluded from consideration in the terms of O 63 r4. The Court's discretion is a wide one and it is entitled to take into account any circumstances relevant to the exercise of its discretion in a proper and judicial manner. There is no specification as to the basis on which the Court is to exercise the discretion, apart from a requirement that the Order must state particulars of payment out, the manner in which the money is to be dealt with, and any action to be taken by the Registry. 23 I do not agree with the submission for the Attorney-General that the circumstances subsequent to the making of the Order and the dismissal of the appeal, together with the fact that Bou-Simon was extradited to Australia where a decision made not to continue with the prosecution, are not relevant factors to take into account when considering the question whether funds should be paid out to either the Attorney-General or to some other person from the Litigants' Fund. In my opinion, the decision not to prosecute is a subsequent event of importance in this case, which must be assigned substantial weight when exercising the Court's discretion. It is necessary, of course, to take into account the consideration that the Attorney-General was successful on both the hearing before Emmett J, and on the appeal, and to bear in mind the requirements of the FMA Act and the public interest in ensuring that monies payable to the Commonwealth are duly collected. 24 Weighing these considerations, the proper decision, in my view, is to order payment out of the amount in question to the appellant, having regard to the fundamental consideration that the extradition to Australia served no useful purpose, and appears, on the face of the material before me, to have been ill-founded. There was a suggestion made on behalf of the Attorney-General that this decision may create a precedent which could result in further applications of this type, which could lead to some unspecified adverse consequence. The answer to this is that, in the circumstances of the present case, the interests of justice properly call for the payment out to Bou-Simon. Any future cases must be considered on their individual circumstances. The present case is a strong example of an instance where the extradition was wrongly pursued. This is not merely a case where Bou-Simon succeeded in a defence as the result of some unforeseen circumstances. Rather, it is case where the proposed prosecution was completely abandoned. 25 Counsel for Bou-Simon submitted before me that in the present circumstances considerable injustice had been visited on Bou-Simon, and that the Court processes were being used unfairly so as to constitute oppression and injustice. It was said that the Commonwealth has held itself out to the world as a "model litigant". He pointed out that there had been a delay of three years in reaching a decision, without any credible explanation being advanced. He submitted that the decision of the Attorney-General was entirely inconsistent with the decision made by the DPP. It was also said that the decision of the Attorney-General was perverse, in the sense that it was so outrageous in its defiance of logic or accepted moral standards that no sensible person who had applied his or her mind to the question to be decided could have arrived at it: see Council of Civil Service Unions v Minister for the Civil Service [1985] 1 AC 374 at 410. 26 In view of the conclusion that I have reached as to the central importance of the decision by the DPP not to proceed with the prosecution, and the width of the discretion given to me, it is not necessary for me to express any conclusion in terms of these submissions. Suffice it to say that, in my view, having regard to all the circumstances, there is ample reason to pay the monies paid as security for costs to Bou-Simon, or to any person or corporation duly authorised by him. 27 I wish to record that this is a case where senior counsel has appeared throughout without fee, to the great credit of himself and the Bar, in order to vindicate the interests of his client. The Court is appreciative of his assistance and his strenuous efforts in this regard. No application was made for any order for the costs of the counsel in this matter. 28 Accordingly, the orders which I make are that the earlier Order made on 16 October 2003 is set aside and that the sum of $9,500 paid in the Litigants' Fund as security for the costs of the Attorney-General on 15 January 1999, pursuant to an order of the Court of 10 December 1998, be released to the appellant or to any person duly authorised by him to receive those moneys. That sum is to be released pursuant to O 63 r 4 of the FCR. I make no order as to costs in view of the fact that no application is made by appellant's counsel for costs. I certify that the preceding twenty- eight (28) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Tamberlin. Associate: Dated: 14 November 2003 Counsel for the Appellant: S J Rushton, SC Solicitor for the Respondent: Australian Government Solicitor Date of Hearing: 19 October 2003 Date of Judgment: 14 November 2003