Commissioner of the Australian Federal Police v Fysh (No 2) [2013] NSWSC 105

Supreme Court New South Wales

Medium Neutral Citation: Commissioner of the Australian Federal Police v Fysh (No 2) [2013] NSWSC 105 Hearing dates: 21 February 2013 Decision date: 21 February 2013 Before: McCallum J Decision: Plaintiff to pay the costs of the defendant in connection with the determination of quantum of the penalty; defendant to pay the plaintiff's costs of proceedings but for the costs of the plaintiff in connection with the determination of the quantum of the penalty. Catchwords: PROCEDURE - Costs - general rule costs follow the event - where relevant "event" arises from accrual of cause of action triggered by defendant's criminal activity. Legislation Cited: Corporations Act 2001 (Cth) Proceeds of Crime Act 2002 (Cth) Cases Cited: Commissioner of the Australian Federal Police v Fysh [2013] NSWSC 81 Category: Costs Parties: The Commissioner of the Australian Federal Police (plaintiff) Stuart Alfred Fysh (defendant) Representation: Counsel: D Staehli SC (plaintiff) I Pike SC (defendant) Solicitors: Commonwealth Director of Public Prosecutions (plaintiff) Gilbert & Tobin Lawyers (defendant) File Number(s): 2010/208464 Publication restriction: None

Judgment - ex tempore 1HER HONOUR: These are proceedings commenced by the Commissioner of the Australian Federal Police against Dr Stuart Fysh under Proceeds of Crime Act 2002 (Cth). The Commissioner sought a pecuniary penalty order pursuant to s 116 of the Act arising out of Dr Fysh's offending conduct in the commission of two insider trading offences contrary to the Corporations Act 2001 (Cth). Dr Fysh was found guilty by a jury of those two offences in separate criminal proceedings. 2On 11 December 2012, following the criminal trial, I heard, on the same day, the proceedings on sentence in the criminal proceedings and argument as to the only dispute between the parties in these proceedings. The dispute in short was whether Dr Fysh was liable to be ordered to pay the whole of the proceeds received by him upon sale of the relevant shares or only the net amount after deduction of the amount he paid from his own assets in purchasing the shares. 3I determined that issue in favour of Dr Fysh, publishing my reasons on 15 February 2013: Commissioner of the Australian Federal Police v Fysh [2013] NSWSC 81. 4The only outstanding issue in the proceedings is the question of costs. The parties are agreed that the Commissioner should pay Dr Fysh's costs in connection with the determination as to quantum which I have just explained. Otherwise, however, there is a dispute. The Commissioner contends that Dr Fysh should otherwise pay the Commissioner's costs of the proceedings whereas Dr Fysh contends that the Commissioner should pay Dr Fysh's costs or else that there should be no order as to those costs. 5It is common ground that the proceedings are civil proceedings and that the issue of costs is governed by the provisions dealing with costs for civil proceedings in this Court. Mr Staehli SC, who appears for the Commissioner, pointed out that there are some specific provisions as to costs in the Proceeds of Crime Act. However, none of those deals with the present issue. 6The critical question is, in circumstances where the ordinary rule is that costs follow the event, what is the relevant event? Mr Pike SC, who appears for Dr Fysh, noted that the only issue in dispute was the quantum in which the pecuniary penalty order should be made. He submitted that, had there been no dispute as to that issue, and had the Commissioner accepted Dr Fysh's offer to pay a pecuniary penalty in the amount I ultimately ordered, the appropriate order would have been that there be no order as to costs or that each party bear his own costs. 7Mr Staehli submitted, conversely, that the relevant "event" arises from the accrual of a cause of action under the Proceeds of Crime Act upon Dr Fysh's embarking on the illegal activities which ultimately resulted in his being convicted. The Commissioner's costs were properly incurred in the prosecution of that cause of action. I would respectfully agree with Mr Staehli's analysis. The Commissioner was entitled (indeed probably required in the proper discharge of his functions) to prosecute that cause of action. In my view, the relevant event is Dr Fysh's amenability to a pecuniary penalty order which arose upon his offending conduct. That gave rise to a cause of action under s 116 of the Act, prompting the need for the Commissioner to commence proceedings and ultimately resulting in his being successful in that event, namely, the application for a pecuniary penalty order. 8Dr Fysh's co-operation in the proceedings has, no doubt, reduced the remaining costs but in my view he remains liable to pay them, bearing in mind costs are compensatory, not punitive. 9For those reasons I would make both orders sought in the Short Minutes of Order handed up by Mr Staehli. I grant leave to the Crown to uplift the exhibits in the criminal proceedings noting that the integrity of the exhibits will be maintained pending any notice of appeal being filed.