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District Court of New Zealand |
Last Updated: 13 August 2021
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IN THE DISTRICT COURT AT BLENHEIM
I TE KŌTI-Ā-ROHE
KI TE WAIHARAKEKE
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CRI-2018-006-1008 [2021] NZDC 15892
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AARON YEALANDS
Applicant
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v
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THE QUEEN
Respondent
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Hearing:
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At Auckland and by AVL on 15 July 2021
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Appearances:
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F Pilditch for the Applicant J Webber for the Respondent
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Judgment:
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6 August 2021
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DECISION OF JUDGE D A KIRKPATRICK ON APPLICATION FOR COSTS
[1] In a decision dated 27 May 2020, all ten charges against Mr Yealands were dismissed under s 147 of the Criminal Procedure Act 2011 by her Honour Judge Harland (as she then was).1 The background to the matter, including the nature of the charges and the basis on which they were dismissed, is fully set out in that earlier decision and need not be rehearsed here.
[2] Mr Yealands now applies for costs against the Crown. A principal issue in relation to this application is Mr Yealands’ submission that the prosecutor (initially,
1 R v Aaron Yealands [2020] NZDC 2526.
AARON YEALANDS v R [2021] NZDC 15892 [6 August 2021]
Marlborough District Council and then, after Mr Yealands elected trial by jury, the Crown) had insufficient evidence to support the charges against him. A further issue, if I should determine that costs should be awarded to Mr Yealands, is what the quantum of those costs should be.
Costs in criminal cases
[3] The Costs in Criminal Cases Act 1967 relevantly provides:
5 Costs of successful defendant
(1) Where any defendant is acquitted of an offence or where the charge is dismissed or withdrawn, whether upon the merits or otherwise, the court may, subject to any regulations made under this Act, order that he be paid such sum as it thinks just and reasonable towards the costs of his defence.
(2) Without limiting or affecting the court’s discretion under subsection (1), it is hereby declared that the court, in deciding whether to grant costs and the amount of any costs granted, shall have regard to all relevant circumstances and in particular (where appropriate) to—
- (a) whether the prosecution acted in good faith in bringing and continuing the proceedings:
- (b) whether at the commencement of the proceedings the prosecution had sufficient evidence to support the conviction of the defendant in the absence of contrary evidence:
- (c) whether the prosecution took proper steps to investigate any matter coming into its hands which suggested that the defendant might not be guilty:
- (d) whether generally the investigation into the offence was conducted in a reasonable and proper manner:
- (e) whether the evidence as a whole would support a finding of guilt but the charge was dismissed on a technical point:
- (f) whether the charge was dismissed because the defendant established (either by the evidence of witnesses called by him or by the cross-examination of witnesses for the prosecution or otherwise) that he was not guilty:
- (g) whether the behaviour of the defendant in relation to the acts or omissions on which the charge was based and to the investigation and proceedings was such that a sum should be paid towards the costs of his defence.
(3) There shall be no presumption for or against the granting of costs in any case.
(4) No defendant shall be granted costs under this section by reason only of the fact that he has been acquitted or that any charge has been dismissed or withdrawn.
(5) No defendant shall be refused costs under this section by reason only of the fact that the proceedings were properly brought and continued.
[4] Section 5 confers a general discretion on the Court, listing seven particular circumstances to which regard must be had but not restricting the Court’s consideration to those. Section 5 also makes it clear that there is no presumption to be applied. As Hardie Boys J observed in R v Margaritis2 the section really means that the Court is to do what it thinks is right in the particular case and that its consideration should include whether the prosecution was reasonably and properly brought and pursued and whether the accused brought the charge on their own head.
[5] Endorsing that approach, Panckhurst J in Cavanagh v Police3 added that it is helpful to note the difference between civil proceedings where costs normally follow the event and criminal proceedings where there is no such presumption, citing as a statement of principle the observation of Devlin LJ in Berry v British Transport Commission:4
A plaintiff brings an action for his own ends and to benefit himself; it is therefore just that if he loses he should pay the costs. A prosecutor brings proceedings in the public interest, and so should be treated more tenderly.
It has been noted that some care should be exercised in applying this dictum to the circumstances in New Zealand given that an indemnity regime generally applies to civil litigation in England and does not here.5
[6] A scale of costs is prescribed by the Costs in Criminal Cases Regulations 1987 as amended in 2013. The maximum fees allowed in Schedule 1 to those regulations for trials are $226 for each half day or part half day occupied in court for conducting a prosecution or defence in a case and $113 for each half day or part half day occupied
2 R v Margaritis HC Christchurch, T66/88, 14 July 1989, Hardie Boys J.
3 Cavanagh v Police [2013] NZHC 2332 at [16] – [19].
4 Berry v British Transport Commission [1962] 1 QB 306 at 327.
in court where for any reason the charge is withdrawn or dismissed without a trial. Section 13(3) of the Act provides, however:
Where any maximum scale of costs is prescribed by regulation, the court may nevertheless make an order for the payment of costs in excess of that scale if it is satisfied that, having regard to the special difficulty, complexity, or importance of the case, the payment of greater costs is desirable.
[7] What is “special” for the purposes of that provision has been held to mean difficulty, complexity or importance which is significantly greater than is ordinarily encountered.6 The volume of evidence or the number and length of pre-trial applications do not, alone, attest to a degree of complexity that is significantly greater than ordinarily encountered.7
[8] Where s 13(3) of the Act applies, there is no maximum level of costs that may be awarded.8 Hardie Boys J said that the existence of the scale makes it clear that there is no intention that a successful applicant should receive a full indemnity,9 but that general statement has been said not to be of invariable application and held not to apply where the court found that the prosecutor ought to have known that the defendant was innocent of wrongdoing and should never have been charged.10 There are other decisions where an indemnity award has been considered without any doubt as to the jurisdiction to do so.11
[9] The cases are similarly in tension as to whether a relevant factor is the adequacy of the scale amounts or, perhaps, the disparity between those amounts and both the civil scale of costs12 and the market rates for legal services. There are authorities that an award of costs above the scale cannot be justified on grounds of the level of costs actually incurred,13 or the perceived inadequacy of the scale,14 or the subjective or personal importance of the case to the defendant.15 There are also
6 T v Collector of Customs HC Christchurch, AP 167/94, 28 February 1995, Tipping J.
7 Purcell v R [2015] NZHC 531 at [9].
8 Ham v R (1998) 16 CRNZ 199 at 205.
9 R v Margaritis, above n 2.
10 Reriti v Police DC Christchurch, CRN 3009023671, 18 April 1994, DCJ Erber.
12 District Court Rules 2014, Part 14 and Schedule 5.
13 Bennett v MacDonald HC Auckland, A76-02, 13 August 2002, Rodney Hansen J at [14].
14 Solicitor-General v Moore [1999] NZCA 269; [2000] 1 NZLR 533 (CA) at [29].
15 R v Rust [1998] 3 NZLR 159 (CA).
authorities which state that the amount of costs actually incurred is undoubtedly a relevant factor16 and that the scale is “obsolete”17 and “hopelessly out of date”.18 While these comments may pre-date the 2013 replacement of the schedule, a daily rate of
$452 is still substantially below the lowest daily recovery rate of $1,270 for costs in category 1 civil proceedings as set out in Schedule 5 to the District Court Rules 2014.
[10] There are also cases which touch on the issue of whether a defendant has incurred costs as a result of their own lack of openness or co-operation with the prosecutor. A defendant has the right to silence and to put the prosecutor to proof beyond a reasonable doubt. Acknowledging those fundamental rights, where there is legitimate suspicion with an evidential basis on which to proceed against the defendant, then doing nothing to assuage that will be a relevant factor in the exercise of the discretion to make any award.19
[11] A summary of the relevant principles is set out in Banks v R:20
- (a) while success in the proceeding is a jurisdictional prerequisite to an application, the fact of success is neutral when the discretion whether or not to award costs is exercised;21
- (b) the Court has a broad discretion;22
- (c) the seven matters set out in s 5(2), or as many as are appropriate, are to be considered;23
- (d) the expression “shall have regard to” contained in s 5(2) is not synonymous with the expression “shall take into account”;24
- (e) the matters set out in s 5(2)(a) to (e) refer in a general way to the
16 Registrar of Companies v Feeney, above n 5 at [29].
18 Morris v Police, above n 11.
20 Banks v R [2016] NZHC 1596 at [41] and [42].
21 McLeod v R [2016] NZHC 221 at [10].
23 R v CD [1976] 1 NZLR 436 (SC) at 437; R v Connolly [2006] NZCA 338; (2007) 23 NZTC 21,172 (CA) at [11]-
[17]; Delamere v Serious Fraud Office [2009] NZCA 142, [2009] 3 NZLR 94 at [27].
24 R v CD, above n 23 at 437.
propriety, conduct and strength of the prosecution case. Affirmative answers might tend to inhibit or weigh against an award of costs or diminish the quantum of the same;25
(f) the terms “proper steps” and “in a reasonable and proper manner” in s 5(2)(c) and (d), respectively, mean something less than would be adopted by a reasonably prudent prosecutorial authority. It is a difficult burden to surmount;26
(g) the fact that a prima facie case is established at a preliminary hearing, or that a Judge refuses a discharge, is likely to support the conclusion that there was sufficient evidence at the commencement of the proceeding;27
(h) the matters set out in s 5(2)(g) are concerned with behaviour justifying an award, and not with behaviour disqualifying an award;28
(i) the factors set out in s 5(2) are qualified by the words “without limiting
... the Court’s discretion”. Regard should be had to all relevant circumstances, and not simply those set out in s 5(2)(a) - (g).29 There is a danger in narrowing relevant considerations by reference to the wording of s 5(2) or in trying to fit particular circumstances into one of its subparagraphs;30
(j) costs are not to be awarded only because the defendant has been acquitted. An applicant must be able to point to some relevant circumstances, either within the criteria, or otherwise, that justify an award.31
25 R v CD, above n 23 at 437.
26 Long v R [1996] 1 NZLR 377 (HC) at 381.
27 R v Sotheran HC Palmerston North, T31/00, 2 May 2002, Gendall J at [34].
28 R v AB [1974] 2 NZLR 425 (SC) at 432; R v CD, above n 23 at [438].
29 Cavanagh v Police [2013] NZHC 2232 at [19].
30 Solicitor-General v Moore, above n 22 at [32]-[33].
The application
[12] Mr Pilditch, for the applicant, places particular reliance on the factors in s 5(2)(b), (c) and (d) of the Act. These matters concern the sufficiency of the evidence at the commencement of the proceedings, the steps taken to investigate any suggestion that the defendant might not be guilty and, generally, whether the investigation into the offence was conducted in a reasonable and proper manner.
[13] The evidential basis for the charges was comprehensively traversed by her Honour Judge Harland in the decision dismissing the charges32 and I respectfully rely on the findings in that decision. Her Honour concluded that there was insufficient evidence for the case against the defendant to proceed.33
[14] Referring to a report to the Enforcement and Prosecution Committee of the District Council, counsel for the applicant pointed to a passage which stated that as the defendant was a co-director of the company involved in the offending, he was “therefore liable for the alleged offences committed”. As counsel submitted, and as her Honour Judge Harland found in dismissing the charge,34 this statement is wrong in law. Section 340 of the Resource Management Act 1991, dealing with the liability of a principal for the acts of agents, includes the following:
- (3) If a person other than a natural person is convicted of an offence against this Act, a director of the defendant (if any), or a person involved in the management of the defendant, is guilty of the same offence if it is proved—
- (a) that the act or omission that constituted the offence took place with his or her authority, permission, or consent; and
- (b) that he or she knew, or could reasonably be expected to have known, that the offence was to be or was being committed and failed to take all reasonable steps to prevent or stop it.
[15] Thus, although s 341(1) of the RMA states that in any prosecution for an offence of contravening or permitting a contravention of any of sections 9, 11, 12, 13, 14, and 15, it is not necessary to prove that the defendant intended to commit the
32 R v Aaron Yealands, above n 1 at [38] – [53].
33 At [59].
34 At [55].
offence, where the prosecutor relies on s 340(3), then the knowledge of the defendant is an issue.
[16] The investigator’s report went on to assert that as a director, the defendant was fully aware of the environmental issues surrounding the company’s activities. Counsel for the defendant submits that there was no evidence available to the Council to show that Mr Yealands was fully aware of anything. As noted in the decision dismissing the charges,35 this defendant was charged together with other defendants being the company of which he was a director and Mr Peter Yealands, his father who was also a director during the period to which the charges relate. The activities of those other defendants and the state of knowledge of the other individuals charged could therefore also be relevant to determining whether this defendant in fact knew what was occurring. Counsel also submits that the formal written statements prepared by the Crown did not contain evidence to support the charges against this defendant.
[17] In response, the Crown submits that there was sufficient evidence at least to commence the prosecution. Acknowledging that the charges were dismissed following a contested application and not seeking to challenge that decision, counsel for the Crown argues that in the context of what was known at the time, it was not unreasonable for the District Council to commence the prosecution of this defendant, together with the company of which he was a director and his father as a co-director.
[18] Counsel for the Crown notes that there is no assertion of bad faith in the commencement of proceedings. He submits that the construction of the works to which the charges relate must have been done with the defendant’s knowledge and consent and therefore it was not unreasonable for the prosecutor to regard him as a party.
[19] The Crown also challenges the assertion that this case meets the threshold set by s 13(3) of the Act. Counsel submits that the relevant evidence was not complicated and did not require detailed analysis, and that the defendant was not in jeopardy of a prison sentence.
35 At [58].
Evaluation of whether to award costs
[20] The decision of whether to commence a prosecution is a serious one. The Solicitor-General’s Guidelines require a careful consideration of the evidence available as well as whether the prosecution is necessary in the public interest. Where charges are to be brought under the RMA, that decision must be made within the constraint of the limitation in s 338(4) of the RMA which, at the relevant time for these charges, was within six months after the date on which the contravention giving rise to the charge first became known or should have become known to the local authority. While that restriction does not justify a “charge first – ask questions later” approach, it does provide some context for the practical reality that a local authority which is concerned to ensure that contraventions of the RMA are properly prosecuted may need to lay charges before all of its investigations have been completed.
[21] Even so, in a case where further investigations establish that not all of the requisite elements of an offence can be proved beyond reasonable doubt, then a timely decision should be made by the prosecutor either to seek leave to withdraw a charge or to indicate that it will offer no evidence and allow the charge to be dismissed. The proximity of Mr Aaron Yealands to his co-defendants indicates why the District Council could consider him to be a possible defendant and why he might be charged. The cases against the other defendants remain on foot. To that extent, the commencement of the proceedings may be said to have been appropriate.
[22] In the absence of any evidence of either offending by the defendant or of his knowledge of offending by others in the formal written statements filed by the Crown, however, a question arises as to why the original decision to prosecute was not reviewed in the light of those statements at least by the time such statements were obtained. That apparent omission engages the principles in s 5(2)(c) and (d) of the Act in combination.
[23] I am satisfied that there is a basis in the evidence on which an award of costs is appropriate in this case in terms of s 5(2)(c) and (d). I turn now to consider what the appropriate quantum of costs should be.
Quantum
[24] Counsel for the applicant presented a table of costs based on the District Court Rules. Treating this case as being in category 2 of Schedule 5 to the Rules (being proceedings of average complexity requiring counsel of skill and experience considered average in terms of Rule 14.3) with a daily recovery rate of $1,910 per day, and applying that to total time of 9 days (based on time allocations in band B of Schedule 4 to the Rules), the total would be $15,280.
[25] Counsel for the Crown observed that Schedule 4 to the Rules, being about civil litigation, is ill-suited to the structure of criminal litigation. It is certainly true that the bases of the two jurisdictions are fundamentally different and that they operate in quite different ways so that it would be wrong simply to apply a civil scale to criminal proceedings.36 But in the absence of any better guidance in the Regulations and in light of the principles of the Act, a comparison with the civil scale is at least a “useful check”.
[26] Counsel for the applicant did not undertake a similar calculation using the scale in the Regulations. Applying the maximum fee of $226 for each half day for conducting a defence and treating time spent preparing as time occupied in court, I calculate that the total that could be awarded according to that scale would be $4,068.
[27] Mr Pilditch’s actual fees for attendances in the defence of the charges amounted to $28,860.07 (including GST). Disbursements of $1,411 are added to that.
[28] Counsel for the Crown noted that the total costs of the Crown for this proceeding will be in the order of $14,000 for all matters for all defendants (including a two week trial). Counsel observed that the bulk funding arrangements that the Crown has with its solicitors dictates that sum according to its own scale which is not based on actual time and attendances involved.
[29] It is difficult to avoid forming a strong impression that, notwithstanding the clear principles set out in s 5 of the Act, the costs regime for criminal cases as set out
36 Registrar of Companies v Feeney, above n 5.
in the Regulations derives little benefit from any considerations that might encourage good behaviour and deter or penalise bad behaviour.
[30] As counsel for the Crown submits, the scale in the Schedule to the Regulations may only be exceeded pursuant to s 13(3) of the Act if the court is “satisfied that, having regard to the special difficulty, complexity, or importance of the case, the payment of greater costs is desirable.” Acknowledging that statutory threshold, and mindful of the senior judicial dicta criticising this scale to which I have already referred, the degree of specialness needed to meet the threshold of desirability may be assessed in the context of the scale’s relationship to real rates and the statutory principle that the sum of costs should be just and reasonable. An award of $4,000 to the defendant in this case would not be a just and reasonable contribution to the costs of the defence.
[31] In any event, I am satisfied that this case does have special features of sufficient importance to justify awards of greater costs than allowed by the scale. In particular, it is important that prosecutors review the evidence that they gather after charges have been laid to check whether that evidence confirms or displaces the initial basis on which such charges were laid. Not to do so would be contrary to the principles in s 5(2)(c) and (d) of the Act. In this case, the defendant’s proximity to the offending by virtue of his position as a director of the company which allegedly committed the offences was not a sufficient basis for the charges against him once it became apparent that there was insufficient evidence to meet the threshold for the liability of a director set by s 340(3) of the RMA.
[32] I do not consider that an indemnity award would be appropriate in this case. While I have found a basis for an award of costs in terms of s 5(2)(c) and (d) of the Act, I do not find any bad faith on the part of either the Council or the Crown in the conduct of the prosecution or any other reason to require the defendant’s actual expenditure to be met on an indemnity basis.
[33] In considering what an appropriate award might be, I am assisted by the approach to costs in civil proceedings in terms of the District Court Rules to provide a basis for an award that is reasonable. In all the circumstances I consider that an award
of $14,000 to the defendant Aaron Yealands would be just and reasonable, plus the disbursements of counsel totalling $1,411.
Decision
[34] I award to the defendant Aaron Yealands costs under ss 5(1) and 13(3) of the Costs in Criminal Cases Act 1967 in the sum of $15,411.
Judge D A Kirkpatrick
District Court Judge
Date of authentication: 06/08/2021
In an electronic form, authenticated pursuant to Rule 2.2(2)(b) Criminal Procedure Rules 2012.
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