New South Wales Court of Appeal CITATION : MILLER v DIRECTOR OF PUBLIC PROSECUTIONS [NO 2] [2004] NSWCA 249 HEARING DATE(S) : 15 March 2004 JUDGMENT DATE : 18 August 2004 JUDGMENT OF : Sheller JA at 1; Beazley JA at 11; Young CJ in Eq at 19 DECISION : Order for costs made on 1 April stands without variation or added conditions. CATCHWORDS : COSTS - set off - where respondent has taken no action to recover costs for an extended period - where costs allegedly thrown away as a result of the failure of the appellant to comply with procedural directions - whether costs orders arose out of one set of proceedings LEGISLATION CITED : Crimes Act 1900 Justices Act 1902 Wentworth v Wentworth NSWSC 12 December 1994 CASES CITED : Thrustout v Crafter (1772) 2 Wm Blackstone 827; 96 ER 487 Re a Debtor [1951] 1 Ch 612 Brookes v Harris [1995] 1 WLR 918 PARTIES : Damon Charles Miller - Appellant Director of Public Prosecutions - Respondent FILE NUMBER(S) : CA 40193/03 COUNSEL : D B McGovern SC/A J O'Brien - Appellant R D Cogswell SC/J A Quilter - Respondent SOLICITORS : Appellant S C Kavanagh - Respondent LOWER COURT Supreme Court - Common Law Division JURISDICTION : LOWER COURT 10604/02 FILE NUMBER(S) : LOWER COURT Dowd J JUDICIAL OFFICER : IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40193/03 CL 10604/02 SHELLER JA BEAZLEY JA YOUNG CJ in EQ Wednesday, 18 August 2004 MILLER v DIRECTOR OF PUBLIC PROSECUTIONS [NO 2] Judgment 1 SHELLER JA: On 1 April 2004 the Court allowed the appellant, Damon Charles Miller's appeal, brought by him by leave of the Court, against a decision of Dowd J of 20 February 2003. The respondent was the Director of Public Prosecutions. The subject of the appeal was the refusal on 13 February 2002 by a magistrate in the Local Court to set aside, pursuant to s100D of the Justices Act 1902, an ex parte conviction entered on 10 December 2001 against the appellant by another magistrate in the Local Court. The charges against the appellant in the Local Court of making a false instrument and using a false instrument were made pursuant to s300(1) and s300(2) of the Crimes Act 1900. The Court on appeal set aside the Magistrate's order made on 13 February 2002 and in lieu thereof granted the appellant's application to annul the conviction entered on 10 December 2001 in relation to the charges against him. The respondent was ordered to pay the costs of the appeal and the costs of the proceedings before Dowd J. 2 As I observed in my reasons for judgment those proceedings had had a chequered history and were prolonged as a result of a lengthy dispute about the admissibility of evidence. In the course of that dispute an application was made by Mr Miller to the Supreme Court for declarations, a stay and orders in the nature of mandamus and certiorari. Newman J heard this application on 19 August 1999 and dismissed the summons with costs on that day. On 5 March 2001, this Court struck out as incompetent an appeal from Newman J's decision and ordered Mr Miller to pay the respondent's costs. 3 By written submissions filed on 2 April 2004, the respondent sought an order directing that any costs payable by the respondent to the appellant in respect of this appeal should be reduced by the amount of any costs thrown away by the respondent as a result of the appellant's conduct in prosecuting the appeal. The respondent also sought an order that the costs to be paid by the respondent to the appellant of the appeal be set off against the amount of costs payable by the appellant to the respondent pursuant to the order of the Court of Appeal of 5 March 2001. 4 The application is supported by an affidavit of Beatrice Carla Scheepers, a solicitor employed in the office of the respondent, who has the carriage of the matter on the respondent's behalf. 5 Ms Scheepers' affidavit, which is neither answered nor objected to, demonstrates a failure by Mr Miller to comply with various orders made and directions given by the Registrar of the Court of Appeal to facilitate the hearing of the appeal. For example an order that written submissions be filed by 29 August 2003 was not complied with. On 9 October 2003, the Registrar fixed the appeal for hearing on 15 March 2004 and made orders for service of a combined blue and black appeal book and an orange appeal book by 24 February 2004. This was not complied with. After the appellant failed to appear before the Registrar on 8 March 2004, the respondent filed a notice of motion that the appeal be dismissed for want of prosecution. An attempt to serve this at the appellant's address for service was unsuccessful. 6 In written submissions, the respondent points out that the appeal ultimately struck out in this Court as incompetent related to the same prosecution as the one the subject of these proceedings. I feel sympathy for the respondent in relation to the cavalier way in which the appellant appears to have treated orders and directions given by the Registrar of this Court. As to the costs of the appeal and the hearing before Newman J, there is evidence that on 21 March 2001 the solicitor for Public Prosecutions wrote to Mr Miller enclosing a copy of the sealed order of the Court together with a memorandum of costs and disbursements in the amount of $10,716 (inclusive of GST). The letter continued: "It would be appreciated if our costs and disbursements could be paid by Friday, 27 April 2001. If payment is not received by that date I will assume you are disputing the amount claimed and I will proceed to file a memorandum in assessable form for assessment in the Supreme Court." At the close of her affidavit, Ms Scheepers says no more about this letter than "To date I have not received a response to the letter of 21 March 2001". Apparently the steps threatened were not pursued. 7 In written submissions filed on behalf of Mr Miller, the comment is made that the respondent now seeks the assistance of the Court to "set off" the costs incurred as a result of the application to Newman J and the consequent aborted appeal in 2001 despite taking no action for some years to recover the costs. Reference is made to the unreported decision of Wentworth v Wentworth NSWSC 12 December 1994 in which Young J said that the allowance of a set off for costs was a matter for the Court's discretion to be exercised in the circumstances of the particular case and where the costs orders arose out of the "one set of proceedings". It was submitted on behalf of Mr Miller that the costs in question were incurred in proceedings which concluded with the striking out of the incompetent appeal (No 40699/1999) whereas this appeal, while having the same file number, related to a quite different matter, namely the obtaining of the ex parte conviction. 8 I am not persuaded that this is a point of distinction. However, I am persuaded that the respondent having taken no steps to file a memorandum for assessment of costs over the last three years should not now be able to claim a set off. Such delay should be discouraged. Therefore I would not, as a matter of discretion, allow the set off claimed. 9 The material before us does not indicate what, if any, costs were thrown away as a result of the failure of Mr Miller to comply with procedural directions given by the Registrar. 10 In the circumstances, I am not satisfied that the respondent's application on either basis should be allowed. Accordingly, the order for costs made on 1 April 2004 stands without variation or added conditions. 11 BEAZLEY JA: I have had the advantage of reading in draft the judgments of Sheller JA and Young CJ in Eq. 12 As their Honours' judgments indicate, the Court has a discretion to make an order setting off the costs order made in favour of Mr. Miller against the costs order made against him in earlier proceedings between the parties which related to the same subject matter. 13 The discretion with which the Court is invested is a broad one. Under it the Court is entitled to have regard to a variety of factors including the public interest, the efficient administration of justice, and the conduct of the parties. 14 In this case, the result of proceedings in the Court is that each party has costs orders in his and its favour. Each party is entitled to have the costs taxed and registered as a judgment in the Court. If the other party fails to pay the costs, the party in whose favour the order is made is entitled to take enforcement proceedings. 15 Given the existence of the two sets of costs and the legal right to setoff, the sensible and most efficient approach for the parties to take is for them to agree as to the costs each owes the other or if there is no agreement, to have the costs taxed and then the party in debit to pay the difference between the two sets of costs to the other. However, litigation is not always conducive to reason and one party may refuse to agree to a setoff. In that case, each party will be obliged to undertake the various steps involved in formally seeking the recovery of costs under the quasi-litigious processes of preparing a bill of costs and having the bill assessed. Enforcement proceedings will then be necessary if the other party does not pay as specified by the Supreme Court Rules. 16 It would be hoped, and even assumed, that the Director, as the holder of a public office, would not refuse or fail to pay the costs ordered against him. The same assumption cannot be made in respect of Mr. Miller. He may pay immediately. He may not. The Court simply does not know. If he does not pay, the Director will be required to take enforcement action. Any such enforcement action could be protracted. The history of proceedings between these parties would suggest that that is a possibility. Enforcement actions may or may not result in the recovery of the costs. The Court knows from the record of the proceedings that Mr. Miller spent in excess of $200,000.00 on his legal costs; at one stage applied for legal aid although with an unknown result; has health problems; and has appeared for himself both in the Local Court and before this Court. These matters would suggest that he may not be able to pay an order for costs, or that payment may not be readily forthcoming. 17 In my opinion, such a scenario is not desirable and the Court should not facilitate its potentiality. This potentiality would, in my opinion, contribute more to inefficiency in the administration of justice than does any delay by the Director in not seeking to pursue his costs order at an earlier point of time. I should add that I do not attach the same negative significance to the Director's delay as do Sheller JA and Young CJ in Eq. Given what is known about Mr. Miller's financial circumstances, it would have been reasonable for the Director to hold his hand in relation to costs and not expend legal time, which is costly in itself, and money to pursue a potentially worthless claim. 18 In my opinion, it is also reasonable that the Director should have his costs thrown away by the appellant's conduct in prosecuting the appeal. I am of this opinion, notwithstanding that the Director did not file evidence of those costs. I do not think it was necessary or appropriate to do so given the regulatory regime for assessing costs. Appropriate orders, in my opinion would be: 1. The costs payable by the respondent to the appellant in respect of this appeal to be reduced by the amount of costs thrown away by the respondent as a result of the appellant's conduct in prosecuting the appeal. 2. The costs to be paid by the respondent to the appellant in accordance with Order 1 to be set off against the amount of costs payable by the appellant to the respondent pursuant to the order of the Court of Appeal of 5 March 2001. 19 YOUNG CJ in EQ: The respondent Director of Public Prosecutions seeks to vary the cost orders pronounced on 1 April 2004: (a) by reducing the Director of Public Prosecutions' liability to pay the appellant's costs by the amount of costs thrown away by the appellant's conduct in prosecuting the appeal; (b) by setting off against that order for costs, the costs the appellant was ordered to pay the Director of Public Prosecutions in 40699 of 1999 including the appeal that was struck out as incompetent. 20 Although there is clear evidence of non-compliance by the appellant with procedural directions made in order to prepare the appeal properly, I agree with Sheller JA that there is no material before us that any costs were thrown away as a result of such non-compliance. 21 Accordingly I agree that application (a) should be refused. 22 As to application (b), the basal facts are set out in the judgment of Sheller JA; there is no need for me to repeat them. 23 I considered this point in my unreported judgment in Wentworth v Wentworth 12 December 1994. The authorities referred to in that case show that there is an inherent discretionary power in the Court to order set-off of costs orders when it is equitable to do so, even if the orders are made in different proceedings. 24 Montagu on Set-Off (1825) page 7 notes that the power extends "though the judgments are in different Courts and though the parties are not the same". This statement is, in part, based on the decision in Hall v Ody (1799) 2 P & B 28; 126 ER 1136. This is not a very sound base as Lord Eldon who gave the leading judgment when briefly Chief Justice of the Common Pleas said that the rule seemed to him contrary to the practice of any other Court at the time. The case was thought to be of such slight importance that it is not even reprinted in the Revised Reports print of 2 Pullar & Bosanquet. There is, however, other more reliable authority such as Thrustout v Crafter (1771) 2 Wm Blackstone 826; 96 ER 487. 25 Whatever be the scope of the power it certainly extends to cover the present situation where there have been two separate sets of proceedings based on the same factual matrix. 26 NSW did not include a power to set off costs in the same or associated proceedings by Act or Rule so that the inherent power still applies. In this one might contrast the position in England; see the Rule noted in Re a Debtor [1951] Ch 612. 27 The jurisdiction is discretionary and is to be exercised according to what is equitable in the particular circumstances of each case: Brookes v Harris [1995] 1 WLR 918. 28 A common reason for making an order for set-off is that because of insolvency, an unfair result will be reached unless an order for set-off is made. 29 That factor is not raised in the instant case. 30 The jurisdiction is discretionary as all the cases emphasise. 31 I agree with Sheller JA that insufficient material is raised by the Director of Public Prosecutions to justify exercise of the discretion in his favour. 32 I thus agree with Sheller JA's conclusion. ********** Last Modified: 08/26/2004 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. 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