Costs Orders in Unsuccessful Regulatory Prosecutions

In Quickcell Technology Products Pty Ltd v Bell (No 2) [2023] QDC 52 the court addressed the circumstances in which orders for costs would be made against a public officer upon an unsuccessful regulatory prosecution.  His Honour Judge Horneman-Wren SC, DCJ, in a fairly wide ranging decision, makes a number of salutary comments in respect of costs to be awarded against prosecution where it is unsuccessful, finding that appropriate where the expert evidence adduced in the prosecution case “was formed on inappropriate, inadequate and unscientific bases”.  In addition, His Honour characterises the fees charged by junior counsel below in the Magistrates Court, in 2017, as “eye watering”. 

His Honour wrote:

[1] The appellant, Quickcell, having succeeded on the appeal seeks costs in respect of both the appeal and the original proceeding in the Magistrates Court.

[2] When successful at first instance, the respondent sought and obtained an order allowing an amount for costs higher than the amounts prescribed under the Justices Regulation 2014.1 He had, successfully, argued that a higher amount was just and reasonable having regard to the special difficulty, complexity, or importance of the case. On that basis, he was awarded costs in the sum of $189,941.49.

[3] Separately to its appeal against conviction, Quickcell appealed the costs order on the basis that the matter was not of such difficulty, complexity, or importance as to warrant an award of costs above scale. On the appeal, counsel for Quickcell conceded that its contention in that regard applied as much to its case as it did to the respondent’s case. That is, that there was nothing about the difficulty, complexity or importance of the case which would warrant it receiving an order of costs above scale for the proceeding below in the event that it was successful on the appeal.

[4] Notwithstanding his submissions at first instance to the contrary which resulted in such a larger order of costs in his favour, the respondent now endorses the view that the exceptional qualities which resulted in such a favourable costs order do not exist.

[5] Notwithstanding its concession that the proceeding lacked the complexity, difficulty or importance which might found an award of costs above scale, in an affidavit filed on behalf of Quickcell, a solicitor deposes to the overall costs of the original and appellate proceeding having exceeded $500,000.00. In light of the concession, those actual costs are of no relevance. However, the evidence of them having been adduced some observations may be made about them.

[6] $133,299.55 is deposed to as having been paid to junior counsel in respect of the proceeding below. It can be accepted, as the reasons on the appeal decision reflect, that the proceeding in the magistrate court occupied 12 days over a very long period of time interrupted with the kinds of adjournments unavoidable in the jurisdiction which is the busy Magistrate’s Court. Notwithstanding that, the eyewatering figure for counsel’s fees must be viewed in the context that, as explained at paragraphs [179]-[200] of the appeal judgment, counsel at first instance, having not objected to the admission of exhibit 4.73 (an objection which, if taken, for reasons explained would have been unsuccessful) sought to argue all sorts of reasons as to why the court could not act upon the evidence contained within that document. The submissions were repeated on the appeal. The submissions were, for reasons explained entirely incorrect.

[7] However, for reasons explained in the appeal judgment, exhibit 4.73 was, of itself, when properly understood, sufficient to establish reasonable doubt as to the prosecution case such that Quickcell should be acquitted.

[8] Quickcell’s solicitors’ affidavit deposes to the same junior counsel having been paid $37,600.00 in respect of the appeal. As I have said, the same arguments concerning exhibit 4.73 were advanced by counsel on appeal – this time with a leader. Still the evidentiary value of exhibit 4.73 was missed. Still its relevance was disputed. From this it can be observed that junior counsel charged fees in excess of $180,000.00 and, quick literally, missed the single point most favourable to Quickcell. Furthermore, the appellant’s grounds of appeal and written submissions raised and advanced issue, such as a constructive failure, on the part of the magistrate to exercise jurisdiction which were entirely misconceived as a matter of legal principle and which were duly abandoned when this was exposed by the court in the course of hearing the appeal.

[9] The respondent is a public officer.2  Before the court may order the respondent to pay costs, the court must first be satisfied that it is proper that the order for costs should be made.3 The appellant’s written submissions, prepared by the same junior counsel, acknowledge that.4 The appellant’s further submission,5 that the court, by operation of s 158(1), must also be satisfied  “that it is just and reasonable to make such an order” is incorrect. It misstates s 158(1) and its effect. S 158(1) provides:

“158 Costs on dismissal

(1) When justices instead of convicting or making an order dismiss the complaint, they may by their order of dismissal order that the complainant shall pay to the defendant such costs as to them seem just and reasonable.”

[10] The words “just and reasonable” qualify the extent of the costs which the court is permitted to order the complainant to pay. They do not qualify the circumstances in which the power may be exercised. The appellant’s submissions directed towards establishing “that it is just and reasonable to make an order for costs”6 are misplaced.

[11] The appellant’s submission that “s 158A(2) of the Justices Act identifies the matters the court must take into account in deciding whether is it proper that the order for costs should be made”7 is also incorrect as it misconstrues the legislative provision.

[12] S 158A(2) requires the court, in deciding whether it is proper to make the order for costs, to take into account all relevant circumstances. It then provides a non-exhaustive list of examples of circumstances which may be taken into account if relevant in a particular case.

[13] Of the circumstances set out in s 158A(2), the appellant submits that subsection (2)(d) is of particular relevance. That circumstance is “whether the order was made on technical grounds and not on a finding that there was insufficient evidence to convict or make an order against a defendant”. The appellant submits, correctly, that the dismissal of the complaint on the appeal was made on the evidence and not technical grounds, the court having identified a number of issues of failure of proof in the prosecution case.

[14] The respondent submits that the court would not be satisfied that it is proper that an order for costs should be made. By reference to matters set out in s 158A(2) he submits, particularly, that the proceedings were brought and continued in good faith after a Workplace Health and Safety Queensland investigation into a dangerous event determined that the appellant owed health and safety duty pursuant to s 23 of the Work Health and Safety Act 2011 and had contravened s 32 of that Act.8

[15] Furthermore, the respondent submits that the investigation into the event was conducted in an appropriate manner.9  To that end, he submits “given the technical nature of the issues relevant to the alleged breach, expert opinion was sought at an early stage from an experienced professional with relevant qualifications to determine the cause of the incident”.

[16] As to the submission that the investigation determined that the appellant contravened s 32 of the Act, it should be said that it was not the purpose of the investigation to determine that there had been a contravention; that was the matter to be determined by the court. However, taken with the further submission as to the early engagement of a professional “to determine the cause of the incident”, it serves to highlight that the whole prosecution came to centre around and rest upon the opinion of Professor Dux that the cause of the incident was that the failed panel was manufactured too thinly. For reasons explained in the appeal judgment, that opinion of Professor Dux was formed on inappropriate, inadequate, and unscientific bases. Properly analysed, together with all the evidence even the prosecution case, it could not support the prosecution. In my view, that alone satisfies me that is it proper that a costs order should be made against the respondent even though a public officer.

[17] The respondent further submits that the manner in which the defendant conducted its defence served to prolong the proceedings.10 To that end, it submits that no assistance was provided to narrow the trial issues and that significant time was spent crossexamining witnesses about uncontested matters or issues not the subject of the charge. The respondent does not expand upon those submissions or illustrate them by reference to particular parts of the record. To the extent that this criticism may be valid, which is difficult to determine in the abstract, it is to be considered in light of the conduct of the prosecution. For reasons set out in the appeal judgment there was a lack of particularity which bedevilled the prosecution.11 That lack of particularity and the change in focus by counsel for the prosecution caused considerable court time to be consumed. For those reasons, I would not conclude the appellant’s conduct of the case was such as to alter my opinion that it is proper that a costs order should be made.

[18] The appellant’s submissions as to particular scale items for professional costs under Sch 2, Pt 2 of the Justices Regulation 2014 are uncontroversial save for the number of item 3 court attendances, although it seems uncontentious that there were 10 mentions and one pre-trial hearing. Beyond those professional costs, it also seeks $82,483.55 for disbursements. Of that sum, $23,872.72 is sought for “disbursements other than witnesses attending”. That figure comprises:

(a) $21,331.55 for transcript fees;

(b) $1,322.00 for outsourced photocopying fees;

(c) $114.02 for a copy of the relevant Australian Standards; and

(d) $1,105.15 for colour copying, travel to Ipswich for court appearances, company search fees and courier fees.

[19] Disbursements, other than to witnesses for attending are allowable under Sch 2, Pt 3, Item 5 of the Regulation. The relevant allowable disbursements are court fees and other fees and payments (other than allowances to witnesses to attend proceedings) including allowances to interpreters, and travelling, accommodation and other expenses of a lawyer acting as advocate, may be allowed to the extent that it had been reasonably incurred and are paid or payable”.

[20] In my opinion, the case simply could not have been conducted by the parties without access to the transcript. This is particularly so given the disjointed nature of the hearing with lengthy periods of adjournment between blocks of hearing days. I consider the claim for the costs of transcript just and reasonable.

[21] The claim for “outsourced photocopying fees” is not supported by any explanation or quantification. It is simply a bare dollar amount. I cannot conclude it is just and reasonable. Nor would I consider the claim for the costs of a copy of the relevant Australia Standard just and reasonable. It amounts to claiming the cost of obtaining the applicable law.

[22] While the further claim for colour copying, travel to Ipswich for court appearances, company search fees and courier fees is unparticularised, the amount of $1,105.15 appears just and reasonable. I would allow that amount.

[23] The appellant also claims $57,136.83 for expert witness expenses paid to structural engineer Michael Fordyce and $1,474.00 for witness expenses paid to Osborn Lane Consulting.

[24] “Disbursements as allowance to witness for attending- defendant’s witnesses” are allowable under Sch 2, Pt 3, Item 6. It provides:

“An allowance paid, payable or that will be paid by the defendant to a witness to attend a proceeding may be allowed up to an amount equal to the amount of any comparable prosecution witness allowance that would be payable to the witness if the witness were a prosecution witness attending court to give evidence in a criminal proceeding.”

[25] Any allowance which may be the subject of the costs order is that paid to a witness to attend a proceeding to give evidence. The costs claimed for these witnesses is again unexplained and unquantified beyond a bare dollar amount.

[26] I could not conclude that $57,136.83 was just and reasonable as an allowance paid to Mr Fordyce to attend the proceeding to give evidence. Some allowance would seem reasonable. Based upon that paid to Osborn Lane Consulting, which I do consider just and reasonable, I would allow the sum of $1,500.00 as an allowance to Mr Fordyce.

[27] On that basis, I would allow the following costs for the Magistrates Court proceeding:

(a) 10 mentions at $250.00 = $2,500.00

(b) 1 pretrial hearing at $250.00 = $250.00

(c) First day of trial = $1,500.00

(d) 11 subsequent days at $875.00 = $9,625.00

(e) Appearance on sentence hearing = $250.00

(f) Appearance on sentence decision = $250.00

(g) Transcript fees = $21,331.55

(h) Witness expenses Mr Fordyce = $1,500.00

(i) Witness expenses Osborn Lane Consulting = $1,474.00

Total = $39,785.70

[28] The costs of the appeal are less controversial. Sch 2, Pt 1, Item 4 of the Justices Regulation provides that for an appeal under the Act, the amount up to which costs may be allowed for legal professional work is the amount under Pt 2, increased by 20 percent.

[29] There was one pre-appeal appearance. Costs for it should be allowed at $300.00. The appellant’s submissions claim $312.50, however, that is an increase of 25 percent of $250.00 not 20 percent.

[30] Costs for the appeal hearing should be allowed at $1,800.00.

[31] The appellant also claims for transcript fees in an amount of $1,232.66. Unlike for the hearing, there was no necessity for the appeal transcript to conduct the appeal proceedings. It was only available after its conclusion. The claim for those fees is not just reasonable.

[32] The costs of the appeal will be allowed in the sum of $2,100.00.

(emphasis added)

1. S 158B(2) Justices Act 1886.
2. S 158A(1) Justices Act 1886 as defined in s 4 of the Justices Act 1886.
3. S 158A(1) Justices Act 1886.
4. At paragraph 4(b).
5. At paragraph 4(a).
6. Paragraph 5.
7. Paragraph 6.
8. S 158A(2)(a).
9. S 158A(2)(c).
10. S 158A(2)(h).
11. Appeal judgment at [29].