Fred Saad & Ors v State of New South Wales; Ashley Saad v State of New South Wales (No 2) [2016] NSWSC 1482 (21 October 2016)

Last Updated: 21 October 2016

Supreme Court New South Wales

Case Name:	Fred Saad & Ors v State of New South Wales; Ashley Saad v State of New South Wales (No 2)
Medium Neutral Citation:	[2016] NSWSC 1482
Hearing Date(s):	30 September 2016
Date of Orders:	21 October 2016
Decision Date:	21 October 2016
Jurisdiction:	Common Law
Before:	R S Hulme AJ
Decision:	(1) Messrs Ashley Saad, Sam Kassas and Andrew Pound to pay 70% of the Defendant's costs of and incidental to proceedings numbered 2007/265173 and proceedings numbered 2008/289620. (2) Defendant to pay 75% of the costs of Mr Elwasfi, such costs to be limited in amount to 25% of the total costs of the 4 Plaintiffs who were parties in the said proceedings before me. (3) Direct that any moneys payable pursuant to these orders may be set off against any costs payable between the same parties pursuant to earlier orders in the said proceedings.
Catchwords:	PRACTICE – costs – multiple parties – varying degrees of success – offer of compromise
Legislation Cited:	Civil Procedure Act 2005, s 60 Uniform Civil Procedure Rules, s 20.26, s 42.15A
Category:	Costs
Parties:	James Elwasfi (First Plaintiff) Sam Kassis (Second Plaintiff) Andrew Pound (Third Plaintiff) Ashley Saad (Plaintiff) State of New South Wales (Defendant)
Representation:	Counsel: S Wheelhouse, SC, C Gregory (Plaintiffs) D Villa (Defendant) Solicitors: Margiotta Solicitors (Plaintiffs) Lea Armstrong Crown Solicitor (Defendant)
File Number(s):	2007/265173; 2008/289620
Publication Restriction:	No

JUDGMENT

Introduction

1. HIS HONOUR: These reasons relate to claims for costs in proceedings numbered 2007/265173 and proceedings numbered 2008/289620 in which I delivered judgement concerning principal relief on 12 September last. The proceedings were heard together and all Plaintiffs were represented by one firm of solicitors and, at any one time, the same counsel.
2. A large part of the evidence, submissions and time related to the cases of all four plaintiffs. The claims were for malicious prosecution and false imprisonment and, irrespective of the onus of proof, as a practical matter necessarily involved the Plaintiffs showing what evidence the Defendant had at relevant times and endeavouring to demonstrate that that evidence was insufficient to justify the prosecutions and imprisonment that the Defendant inflicted on the Plaintiffs. Because the evidence was extensive and had been examined, re-examined and the subject of challenge or qualification on a number of bases and occasions during the Plaintiffs' prosecution, the material before me was voluminous. Much of the material was relevant to the claims of all Plaintiffs and except to a very limited degree it would not be a productive exercise to attempt to isolate particular portions as relevant to the case of only one or more plaintiffs.
3. In proceedings 2008/289620 the only claim pressed on behalf of the sole plaintiff Mr Ashley Saad was malicious prosecution. The charge against him had been for the offence, commonly known as of “conceal serious offence”. I found that there had been no reasonable and probable cause for his prosecution but that he had not established malice. I ordered that the suit be dismissed.
4. The particular reason for finding that there had been no reasonable and probable cause was that the statutory provision forming the foundation for the charge against Mr Ashley Saad required that the Crown establish that the failure to supply information was "without reasonable excuse" and, because of the possibility that he might be charged with murder, he had a reasonable excuse for not providing to the police whatever information he had.
5. "Without reasonable excuse" was in one sense a small issue but the evidence that demonstrated the existence of the possibility of the murder charge was a substantial portion of the evidence before me and which I do not think it would be productive to attempt to dissect. There was little evidence and time devoted during the hearing to the question of malice compared with the evidence and time devoted to the issue of reasonable and probable cause albeit it must be recognised that the absence of reasonable and probable cause was an significant argument in support of the existence of malice.
6. In proceedings 2007/265173 claims for malicious prosecution were pressed by Messrs Elwasfi, Kassas and Pound. Each of Messrs Kassas and Pound failed to establish both an absence of reasonable and probable cause and malice. Mr Pound also pressed a claim for false imprisonment and it failed. In the case of these Plaintiffs, I see no reason for departing from the general rule that the loser should pay the successful party's costs.
7. Mr Elwasfi sued for malicious prosecution and for false imprisonment. He succeeded in the latter claim, damages being assessed in the sum of $2,000. His claim for malicious prosecution was in respect of 2 charges, conceal serious offence and murder. He failed because he failed to establish malice although in the case of each prosecution he established that there had been an absence of reasonable and probable cause. So far as the concealment charge is concerned there was significant evidence that Mr Elwasfi had knowledge he could have revealed and did not but, as in the case of Mr Ashley Saad, the evidence demonstrated the possibility of him being charged with the murder and that therefore any failure to disclose what he knew or believed was not "without reasonable excuse". As in the case of Mr Ashley Saad, the evidence that demonstrated the existence of the possibility of the murder charge was a substantial portion of the evidence before me.
8. In the case of the murder charge that was brought against Mr Elwasfi, the Crown case was dependent on a witness Ms Holland whose evidence was unworthy of belief and there was nothing in the vast body of other evidence to show that Mr Elwasfi was a participant in the murder.
9. The extent of Mr Elwasfi's success means that there should be an order, or at least some allowance, for costs in his favour. The extent of his failure means that such costs should not be the whole of his costs and indeed argues for some order or allowance being made in favour of the Defendant. If the only parties to the proceedings had been Mr Elwasfi and the Defendants, and subject to the impact of matters referred to below, an appropriate order may well have been that Mr Elwasfi be awarded the general costs of the action possibly subject to some qualification concerning costs of both Mr Elwasfi and the Defendant referable only to his malicious prosecution claim, either in terms or dealt with by way of some percentage reduction.
10. It was submitted that the issue of without reasonable excuse was not articulated in any pleading or particulars and not until Sergeant McLennan's cross-examination, and that the vast majority of the hearing time and the whole of some 8 years preparation time was spent addressing factual and legal issues that had no bearing on Mr Elwasfi's successful award of $2,000. Attention was directed to s 60 of the Civil Procedure Act 2005 which provides:

Proportionality of costs
In any proceedings, the practice and procedure of the court should be implemented with the object of resolving the issues between the parties in such a way that the cost to the parties is proportionate to the importance and complexity of the subject-matter in dispute.

11. For the reasons set out in the second paragraph above, I do not agree with the rationale for that submission. Furthermore, the terms of Ms Holland's police statements, the circumstances in which they were made, her health and police dealings with Ms Holland and her partner were a major component of the evidence in the proceedings before me.
12. Before I further address the conclusions at which I have so far arrived there are some additional submissions meriting attention
13. One concerned the basis upon which any costs ordered against Messrs Saad, Kassas and Pound should be assessed. The Defendant seeks an order that they pay the Defendant's cost up to an including 8 December 2010 on the ordinary basis and thereafter on an indemnity basis. The foundation for the latter claim lies in the Rules and an offer made under cover of a letter of 8 December 2010. The terms of the offer were:

The defendant offers to compromise the fourth plaintiff’s claim in the following manner:
1. Verdict for the defendant.
2. The fourth plaintiff and defendant to each pay their own costs of the proceedings.
3. This offer is open for a period of 28 days only.
This offer is made in accordance with Rule 20.26 of the Uniform Civil Procedure Rules 2005.

14. Prior to that time a number of orders for costs had been made against the Plaintiffs and it was submitted that in not mentioning them, the offer left unclear what its impact on those orders, assuming the offer was accepted, was to be. It was further submitted that the offer contained no element of compromise and consequently no special costs order is warranted.
15. The Defendant's response was to maintain that the order for costs proposed in the offer would have had the effect of negating the earlier orders and therefore did amount to a compromise, that Rule 20.26(2) effectively precluded any greater reference to costs that was made in the offer, and in any event that the suggested doubt now relied on was not raised at the time.
16. So far as is presently relevant Rules 20.26 and 42.15A provide:

20.26
(1) In any proceedings, any party may, by notice in writing, make an offer to any other party to compromise any claim in the proceedings, either in whole or in part, on specified terms.
(2) An offer under this rule:
(a) ...
(b) ...
(c) must not include an amount for costs and must not be expressed to be inclusive of costs, and
(d) must bear a statement to the effect that the offer is made in accordance with these rules, and ...
42.15A
(1) This rule applies if the offer is made by the defendant, but not accepted by the plaintiff, and the defendant obtains an order or judgment on the claim no less favourable to the defendant than the terms of the offer.
(2) Unless the court orders otherwise:
(a) the defendant is entitled to an order against the plaintiff for the defendant’s costs in respect of the claim, to be assessed on the ordinary basis, up to the time from which the defendant becomes entitled to costs under paragraph (b), and
(s) the defendant is entitled to an order against the plaintiff for the defendant’s costs in respect of the claim, assessed on an indemnity basis:
(i) if the offer was made before the first day of the trial, as from the beginning of the day following the day on which the offer was made, and
(ii) if the offer was made on or after the first day of the trial, as from 11 am on the day following the day on which the offer was made.

17. Prima facie a verdict in favour of a Defendant carries with it an entitlement to have its costs paid by a Plaintiff. Even if one ignores the fact of earlier orders for costs having been made in favour of the Defendant, the term of the offer which provided that "the ...plaintiff and defendant to each pay their own costs of the proceedings" involved compromise by the Defendant.
18. Given the context of the Rules and the nature of the offer, I think that the better view is that if it had been accepted, it would have had the effect of negating the earlier orders for costs and for this reason also it did amount to an offer of compromise. That said, the matter is by no means clear and in those circumstances I believe it would be appropriate, as a matter of discretion to otherwise order as contemplated by Rule 42.15A.
19. It was further submitted on behalf of the Defendant that as Mr Elwasfi' damages were assessed in the sum of only $2,000, he was not entitled to an order for costs. Reliance was placed on Rule 42.34 which provides:

(1) This rule applies if:
(a) in proceedings in the Supreme Court, other than defamation proceedings, a plaintiff has obtained a judgment against the defendant or, if more than one defendant, against all the defendants, in an amount of less than $500,000, and
(b) the plaintiff would, apart from this rule, be entitled to an order for costs against the defendant or defendants.
(2) An order for costs may be made, but will not ordinarily be made, unless the Supreme Court is satisfied the commencement and continuation of the proceedings in the Supreme Court, rather than the District Court, was warranted.

20. However, I am of the view that commencement and continuation of the proceedings in the Supreme Court, rather than the District Court, was warranted. There were no complicated issues of law but the volume of evidence and which required detailed consideration was massive. I do not accept the submission that factually the claim was no more complex than other claims regularly brought and determined in the District Court. Furthermore, critical examination of rulings of Sully J was required and, as my principal reasons show, I take the view his Honour erred. A District Court judge may well not have felt able to take the view I did.
21. During the course of submissions it was submitted by Mr Villa on behalf of the Defendant that "what Mr Elwasfi succeeds on ... was not raised prior to Mr Wheelhouse's involvement". It was said from the bar table without dissent that Mr Wheelhouse first became involved in November 2014 but a claim by Mr Elwasfi for false imprisonment is included in paragraphs 15A et seq. of the Amended Statement of Claim filed on 17 November 2008. The original Statement of Claim was filed on 23 October 2007 and when regard is had to the time that elapsed between those two documents and the time that has elapsed since 17 November 2008, and the lack of information provided to me as to what occurred during those several periods and to the fact that there have been costs orders in the past (for reasons which were not stated or canvassed) I am not disposed to qualify any costs order by reference to date.
22. It was also submitted that an award of costs against the Defendant would undermine the practical effect of a costs award in favour of the Defendant against the Plaintiffs other than Mr Elwasfi and reward the legal representative of the Plaintiffs in circumstances where they overwhelmingly failed in pursuit of their clients' claims. It was submitted that as between Mr Elwasfi and the Defendant there should be no order as to costs.
23. Against the background of claims by 4 plaintiffs, the result of the case amounted to substantial success on the part of the Defendant and I accept that in that situation an order for costs against the Defendant which had the effect of completely or substantially nullifying the effect of an order or orders in the Defendant's favour would be unfair. However I do not regard such a result as a necessary consequence of an order in favour of Mr Elwasfi or one which flows from the order I propose to make.
24. I have no detailed knowledge as to the costs arrangements made between the individual plaintiffs and their solicitors. Mr Wheelhouse said that he regarded Mr Elwasfi as his "lead off plaintiff" and largely recorded his fees against Mr Elwasfi's name even though conscious that such work was of benefit to the other Plaintiffs. The matter is made, I suspect marginally, more complicated by the fact that Mr Ashley Saad had his own proceedings. Precision is impossible but is strikes me as likely to be substantially fair if, for the purposes of a costs order, I limit Mr Elwasfi's costs to one quarter of the costs of the four Plaintiffs with whom I have been concerned.
25. While I am of the view that Mr Elwasfi is entitled to some order or allowance for costs against the Defendant, given that Mr Elwasfi was not wholly successful any order in his favour should be for only a portion of his costs. What that portion should be is not easy to decide. He succeeded on the issues of false imprisonment and reasonable and probable cause although a significant part of the evidence on the latter issue was relevant to the cases of Messrs Kassas and Pound who failed on it. Malice, on which Mr Elwasfi failed leading to a failure of his malicious prosecution claim, occupied much less time except insofar as a lack of reasonable and probable cause bore on it. In this area also precision is impossible and I would assess the proportion of Mr Elwasfi's costs that the Defendant should be ordered to pay as 75%.
26. Somewhat similar considerations provide an argument that the liability of Mr Ashley Saad should also be limited in some way given that he also succeeded on the issue of the absence of reasonable and probable cause. Messrs Kassas and Pound are not entitled to the same concession but there are practical difficulties in making and implementing one order against them and a separate order against Mr Ashley Saad. But for some reduction in the case of Mr Ashley Saad (because of the extent of his success) I would have thought it appropriate to order that he and Messrs Kassas and Pound pay three-quarters of the Defendant's costs. Taking account of that reduction I think it appropriate that the order be limited to 70%.
27. In light of the above it seems to me that the appropriate orders are that, without prejudice to any previous orders for costs:
    • (1) Order Messrs Ashley Saad, Sam Kassas and Andrew Pound to pay 70% of the Defendant's costs of and incidental to proceedings numbered 2007/265173 and proceedings numbered 2008/289620.
    • (2) Order the Defendant to pay 75% of the costs of Mr Elwasfi, such costs to be limited in amount to 25% of the total costs of the 4 Plaintiffs who were parties in the said proceedings before me.
    • (3) Direct that any moneys payable pursuant to these orders may be set off against any costs payable between the same parties pursuant to earlier orders in the said proceedings.

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