Land and Environment Court of New South Wales CITATION: Eslarn Holdings Pty Ltd - v- Tumut Shire Council (No 3) [1999] NSWLEC 163 PARTIES APPELLANT: Eslarn Holdings Pty Ltd RESPONDENT: Tumut Shire Council NUMBER: 60001 of 1997 CORAM: Lloyd J KEY ISSUES: Costs :- appeal from magistrate - whether costs should follow the event. LEGISLATION CITED: Justices Act 1902 s 125(3) DATES OF HEARING: 05/28/1999 EX TEMPORE JUDGMENT DATE: 05/28/1999 Appellant:: A E Galasso (barrister) Solicitors: David Fletcher & Associates LEGAL REPRESENTATIVES: Respondent: G R Graham (barrister) Solicitors: Stacy & Nyman JUDGMENT: IN THE LAND AND Matter No: 60001 of 1997 ENVIRONMENT COURT Coram: Lloyd J OF NEW SOUTH WALES Decision date: 28/05/99 ESLARN HOLDINGS PTY LTD Appellant v TUMUT SHIRE COUNCIL Respondent JUDGMENT HIS HONOUR: 1. On 20 October 1998 I upheld an appeal under the Justices Act 1902, s 131AE, against the conviction of the appellant by a magistrate of the offence of pollute waters contrary to the Clean Waters Act 1970, s 16(1). The appeal was governed by the Justices Act 1902, Pt 5 Div 4 and was a rehearing. 2. In allowing the appeal I quashed the conviction and set aside the orders of the magistrate by which he imposed a fine, court costs, professional costs and witness' expenses. 3. The present application is a notice of motion by the successful appellant for an order that the respondent pay its costs of the hearing in this court and in the court below. 4. When the present hearing commenced, the respondent's counsel, Mr G R Graham, submitted that the court does not have the power to now make an order for costs. He referred inter alia to the Land & Environment Court Act 1979, s 69(9) and to the Justices Act , ss 41A, 81 and 125(1). 5. In a separate judgment I held, for the reasons given therein, that the Court has jurisdiction and I proceeded to hear submissions on the substance of the motion. 6. The parties accept that an order for costs cannot be made unless one or more of the hurdles presented by s 125(3) of the Justices Act are satisfied. That subsection provides: Costs are not to be awarded in favour of an appellant whose conviction is quashed or set aside unless the Court is satisfied as to any of the following: (a) that the investigation into the alleged offence was conducted in an unreasonable or improper manner, (b) that the proceedings were initiated without reasonable cause or in bad faith or were conducted by the prosecution in an improper manner, (c) that the prosecution 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 defendant might not be guilty or that, for any other reason, the proceedings should not have been brought, (d) that, because of other exceptional circumstances relating to the conduct of the proceedings by the prosecution, it is just and reasonable to award costs. 7. In allowing the appeal and quashing the conviction, I was prepared to draw the rational inference that the appellant's property may have been the source of pollution. 8. I found however, that there were other rational inferences consistent with the facts and which were also consistent with the appellant's innocence which the respondent, as prosecutor, had not negatived, so that the guilt of the appellant was not the only rational inference to be drawn therefrom. 9. As Pearlman J said in Environment Protection Authority v Munsters Pty Ltd (10 February 1998, unreported): The obligation of the prosecutor in a case of circumstantial evidence, is to exclude all reasonable hypotheses consistent with the innocence of the defendant - the guilt of the defendant should not only be a rational inference but it should be the only rational inference that could be drawn from the circumstances. 10. It is the failure of the respondent, as prosecutor, to exclude the other rational inferences that led to the ultimate finding that the charge had not been proved and to the finding that the appellant was not guilty. I referred in my judgment in the principal proceedings to other hypotheses consistent with the innocence of the appellant. As Mr Graham has submitted, the respondent's officer, Mr K J Fletcher, was not aware of some of them. On Mr Fletcher's own admission in evidence, the infringement notice which was issued on 5 October 1995 was issued on the basis of suspicion. That is not a basis upon which a serious allegation of pollution should be made. 11. It is the failure of the respondent to exclude other rational inferences which, in my view, brings this prosecution within subparagraph (c) of subsection 125(3) of the Justices Act . That is enough to give this court jurisdiction to entertain an application for costs and pursuant to s 125(1) to make any appropriate order as to costs. It is not necessary, therefore, for me to deal with subparagraphs (a) and (b) of s 125(3) of the Justices Act . 12. I can make, however, the following observations. In relation to subparagraph (a) of subsection 125(3), namely that the investigation into the alleged offence was conducted in an unreasonable or improper manner, it is my view that that subparagraph is also satisfied in this case. It is satisfied for the same reasons that paragraph (c) is satisfied. That is, there has been a failure to investigate the other reasonable hypotheses which were available to explain the source of pollution in this case. 13. The investigation into the offence also suffers from the shortcoming being the failure of Mr Fletcher to take samples of polluted water and samples of water which he found ponding at the rear of the subject premises with a view to having both samples analysed to see if there was a match. 14. As to subparagraph (b) of subsection 125(3), I have been referred by Mr Galasso, who appears for the appellant, to the case of Canceri v Taylor (1994) 12 ALR 667 at p 676 in which Moore J accepted the approach adopted by Wilcox J in Cannon v Australian Postal and Telecommunications Union (1992) 43 Industrial Reports 257 at 264, in which it was held 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. 15. I do not believe it can be said that this prosecution had no substantial prospects of success. 16. Nevertheless, the appellant has satisfied both subparagraphs (a) and (c) of subsection 125(3) and I therefore approach the matter on the basis that any order that should be made should be such as to the court seems just. 17. The proper approach in such a case as this is explained in Latoudis v Casey (1990) 170 CLR 534. In particular the Chief Justice in that case said, at 542: In ordinary circumstances it would not be just or reasonable to deprive a defendant who has secured the dismissal of a criminal charge brought against him or her of an order for costs. It is inequitable that the defendant should be expected to bear the financial burden of exculpating himself or herself, though the circumstances of a particular case may be such as to make it just and reasonable to refuse an order for costs, or make a qualified order for costs. Mason CJ further stated at 544: I am persuaded that in ordinary circumstances an order for costs should be made in favour of a successful defendant. However, there will be cases in which, when regard is had to the particular circumstances, it would not be just and reasonable to order costs against the prosecutor, or to order payment of all the defendant's costs. If for example the defendant, by his or her conduct, after the events constituting the commission of the alleged offence, brought the prosecution upon himself or herself then it would not be just and reasonable to award costs against the prosecutor. 18. I agree with Toohey J in the same case that if a defendant has been given an opportunity of explaining his or her version of events before a charge is laid and declines to take up that opportunity, it may be just and reasonable to refuse costs. 19. I observe that in the present case when the Council's officer, Mr Fletcher, visited the site, the defendant's officers willingly showed him around the property and showed him a possible source of water entering the water course, namely water emanating from the appellant's cooling tower, which was found not to be the source of the polluting event. 20. In Latoudis , Toohey J said at 565: If a prosecution failed it would ordinarily be just and reasonable to award the defendant costs because the defendant has incurred expense, perhaps very considerable expense in defending the charge. 21. Toohey J also referred to a situation where it may be just and reasonable to refuse costs. He said at 565: If a defendant has been given the opportunity of explaining his or her version of the events before a charge is laid and refuses the opportunity, and it later appears that an explanation could have avoided a prosecution, it may well be just and reasonable to refuse costs. 22. I observe again that that is not the case here. The defendant hid nothing from the prosecutor and willingly co-operated in the investigation of the offence. McHugh J said at 569: The fact that the informant has acted in good faith in the public interest, or may have to meet the costs out of his or her own pocket, is not a ground for depriving the defendant of his or her costs. Speaking generally, before a court deprives a successful defendant in summary proceedings of his or her costs, it will be necessary for the informant to think that a charge could be successfully brought against the defendant, or that the conduct of the defendant occasioned unnecessary expense in the institution or conduct of the proceedings . 23. Again, none of the disentitling conduct referred to byMcHugh J applies in the prsent case. 24. Needless to say Latoudis v Casey and the principles to which I have referred are binding upon me. Accordingly, it follows that there should be an order that the respondent pay the appellant's costs, including the costs of the hearing in the Local Court. I direct that the costs be paid to the Clerk of the Local Court at Tumut. 25. His Honour: Do you want time to pay Mr Graham? There has to be an assessment. Graham: Well your Honour it will have to be assessed and I think your Honour there would just be the normal course upon assessment. A certificate would issue. Perhaps 28 days after the issue of the certificate of assessment. Would your Honour just hear me on the question on the costs below very briefly. His Honour: Yes. Graham: Simply to say this your Honour that none of us are aware on the evidence, none of us appeared in the proceedings below as to the way they were conducted or the reasons for the magistrate reaching his view. In my submission your Honour, in those circumstances, we are not cognisant of whether there were differences or quite why the magistrate reached a view different to your Honour, that it would not be appropriate to deal with the costs of that hearing, there having been quite a different result. All I am saying your Honour is there may be different circumstances as to the conduct of the parties in it, I just don't know, your Honour, none of us know in a formal sense and none of us of course appeared. His Honour: It is usual when making orders for the costs of an appeal to include the costs of the hearing below. Graham: Your Honour, I am certainly cognisant of that, but in this situation where there has been - can I put it this way your Honour, in a situation where there might have been different conduct by the parties of the matter below, the way it was approached as being reasons why the magistrate came to the view he did, I would submit your Honour that your Honour would not order costs in respect of that. Obviously your Honour deals with the costs in court, but your Honour would not incorporate the costs below without knowing the precise circumstances that took place and I put it on the basis of the way it may have been conducted or the way the parties approached it your Honour. They are my submissions. Galasso: Does your Honour wish to hear from me? His Honour: No. I notice however that s 131 of the Justices Act requires the court, when it orders either party to pay costs, to state a time within which the costs shall be paid. What shall I do there? Graham: Your Honour, can I suggest the appropriate order would be within 28 days of the issue of the certificate of assessment. His Honour: Yes, all right. I so order. Graham: Yes, thank you. Orders 1. The respondent pay the appellant's costs including the costs of the hearing in the Local Court. 2. Costs be paid to the Clerk of the Local Court at Tumut. 3. The costs be paid twenty eight (28) days after the costs certificate has been issued. 4. The exhibits may be returned. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.