Ayers v Police [2012] NZHC 822 (30 April 2012)

Last Updated: 23 May 2012

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

CRI-2011-425-000041 [2012] NZHC 822

DANIEL FRANCIS SYDNEY AYERS

Applicant

v

POLICE

Respondent

Counsel: JHM Eaton for Applicant

C Butchard for Respondent

Judgment: 30 April 2012

JUDGMENT OF HON JUSTICE FRENCH

_{on Application for Costs}

Introduction

[1] Mr Ayers has incurred significant legal costs in defending a charge brought against him under the Land Transport Act 1988. He was convicted in the District Court, but on appeal the conviction was quashed.[1]

[2] Mr Ayers now seeks to recover his legal costs under the Costs in Criminal

Cases Act 1967.

[3] The police accept that I have jurisdiction to award costs in respect of both the

_{District and High Court hearings.}[2] _{However, they oppose any award of costs and in}

the alternative contend that if there is to be a costs award then it should be scale costs only.

[4] One of the key issues for determination is whether the police acted in bad faith or were negligent.

Factual background

[5] On 7 January 2011, a police officer, Sergeant Pirovano, received information regarding the driving of a blue Landcruiser BZP850 in the Queenstown area. Members of the public described the driver making a dangerous overtaking manoeuvre on double yellow lines on a state highway.

[6] Sergeant Pirovano was unable to locate the vehicle. Subsequent enquiries confirmed that it was registered to an Auckland-based company, Elementary Solutions Limited.

[7] Mr Ayers is the sole director and shareholder of Elementary Solutions

Limited.

[8] Sergeant Pirovano made contact with Mr Ayers, and there were a number of communications. Mr Ayers variously advised that he was making enquiries but would not or could not give details of the driver, that he might need legal advice, that the driver was a client and information about that person was privileged.

[9] On 22 March 2011, Sergeant Pirovano sent a formal written request pursuant to s 118 of the Land Transport Act 1998. It was addressed to Mr Ayers, care of Elementary Solutions Limited. Section 188 relevantly provides that if an enforcement officer has reasonable cause to believe that the driver of a vehicle has committed an offence while in charge of a vehicle, the officer may request the owner to give all information in his or her possession or obtained by him or her which may

_{lead to the identification and apprehension of the driver. A request may be made}

orally or in writing, and the owner must comply with the request within 14 days. Otherwise, the owner commits an offence under s 52 of the Land Transport Act.

[10] Mr Ayers did not provide the required information, and subsequently the police laid a charge against him for failing to provide it.

[11] The Land Cruiser had previously been owned by Mr Ayers personally, but it had been transferred to his company, Elementary Solutions Limited, in March 2007.

[12] At the hearing in the District Court, counsel for Mr Ayers argued that because

Mr Ayers was not the owner of the vehicle, he could not be guilty of any offence.

[13] Ownership of the vehicle is a necessary ingredient of the offence with which Mr Ayres was charged, and he was not the owner. The company was the owner and the company was in law a distinct and separate entity.

[14] Two Justices of the Peace, however, found the charge proved, stating that no real attempt had been made to comply with the statute and that the documentary evidence showed Mr Ayers was the registered owner of the vehicle. They fined Mr Ayers $750 and disqualified him from driving for one month.

[15] Mr Ayers then appealed that decision.

[16] On appeal, police conceded that contrary to the Justices’ decision, the documentary evidence in fact shows Mr Ayers was not the registered owner at the relevant time.

[17] While conceding the Justices had made an error, the police nevertheless submitted the decision could still stand, albeit on a different basis, namely that the company was the principal offender and Mr Ayers was a secondary party, he having procured the company’s offending.

[18] I did not, however, accept that analysis. Mr Ayers could only be liable as a secondary party if the company had committed the offence, and in order for it to have committed the offence, Sergeant Pirovano’s request would have had to have

been addressed to the company. It was not. It was addressed to Mr Ayers personally. This was a fundamental flaw that, in my view, could not properly be salvaged on appeal. I did not consider it was open to me to treat the other informal communications between Sergeant Pirovano and Mr Ayers collectively as amounting to a request of the company. The law requires precision as to the identity of the person of whom the request has been made. Further, the fact remained that Sergeant Pirovano herself identified the relevant request as being the request in her formal notice, which was defective.

[19] I therefore quashed the conviction.

_{[20] Mr Ayers’ legal costs amount to $16,485.25, comprised as follows:}

District Court hearing:

July $1259.25

August $1552.50

September $3852.50

Appeal:

19 December $5980.00

20 December $391.00

$6664.25

_$6371.00

_{Estimate for costs application: $3450.00}

Total (GST inclusive) $16,485.25

[21] Mr Ayers seeks full indemnity costs.

Grounds of application for costs

[22] Counsel, Mr Eaton, contends that the prosecution approach in this case was seriously flawed, that there was an abuse of prosecutorial powers, and that Mr Ayers should not have had to incur any legal costs.

[23] In support of those submissions, Mr Eaton relies heavily on the fact that before the defended hearing took place Mr Ayers contacted the police pointing out that the prosecution could not succeed because he was not the owner of the vehicle. Mr Ayers put the police on notice that if it continued with the prosecution, he would seek costs. Yet despite this, and despite acknowledging the issue required research, the police persisted. Police resisted Mr Ayers’ application to transfer the proceeding to his place of residence in Auckland, insisting the hearing be heard in Queenstown on a spurious pretext; conducting the hearing itself in an overly zealous fashion and then opposing the appeal, raising new arguments.

[24] Mr Eaton further submits that the forceful stance adopted by the police invites a finding that it abused its position as a prosecuting agency to cause cost and inconvenience to a defendant whom it regarded as uncooperative and failing in his civic duty.

[25] At one point, Mr Ayers himself went further. He was convinced that the police had singled him out for special treatment because of what he describes as a strained relationship arising out of work he has done as a computer forensic expert.

[26] For their part, the police deny any bad faith.

[27] Counsel, Ms Butchard, has provided me with a report form written by Sergeant Pirovano to the prosecuting sergeant the month before the hearing. In the report form, Sergeant Pirovano says:

_{RECOMMENDATION}

The “company” “Elementary Solutions Limited” is the legal entity that owns the vehicle and in hindsight I should have laid the Information against the company or at least one along side the other Information (statute of limitations has passed now though!) However, I still believe we have a case after speaking to 2 other Prosecutors and reading case law. More importantly at the time I researched the owner of the vehicle it was apparent he himself knew that information I was seeking and would not disclose it. Also he is the only Director/Shareholder of the company.

I have attached some case law that does not entirely fit these circumstances, also emails sent recently between myself, Graeme Evans (Dunedin Prosecutor) and AYERS.

I have also attached the definition of “owner” LTSA 1989, it appears we are

covered.

[28] In the report form, Sergeant Pirovano refers to the statutory definition of “owner” under the Land Transport Act 1998. Under that Act, “owner” in relation to a motor vehicle is defined as meaning “the person lawfully entitled to possession of the vehicle”.

Discussion

Statutory framework

[29] The power to award costs in criminal cases to a successful defendant is derived from s 5(1) of the Costs in Criminal Cases Act. The Court has a wide discretion. However, s 5 does contain a number of directives, including a directive that no defendant shall be granted costs by reason only of the fact that he has been acquitted.[3] Section 5(2) also states that, in deciding whether to grant costs and the amount of those costs, the Court must have regard to all relevant circumstances including, in particular, the following criteria:

(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 information was dismissed on a technical point:

(f) Whether the information 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.

Applying the statutory criteria to the facts of the present case

[30] Having carefully reviewed the Court file and all the material provided by counsel, I am satisfied that at all times the police acted in good faith. There is no evidence that anyone making the decisions in this prosecution was aware of any past dealings with Mr Ayers in his work capacity.[4] It is also clear that both Sergeant Pirovano and the prosecuting sergeant were imbued with the idea that because Mr Ayers was the sole director and shareholder, he was for all intents and purposes the

company, and it was contrary to common sense to suggest otherwise. The company owned the vehicle and he owned the company. The company could only act (ie provide information) through him. He must be a person who was lawfully entitled to possession of the vehicle, and by his own admission he did have the relevant information.

[31] Their view of the law was mistaken, but I am satisfied it was genuinely held.

[32] In coming to this conclusion, I have not overlooked Mr Eaton’s further point that Sergeant Pirovano’s report form shows the prosecution were aware prior to the hearing that the information had been laid against the wrong party. Mr Eaton submits that to continue a prosecution in the knowledge that the proceedings have been issued against the wrong defendant simply because the appropriate prosecution was out of time is quite inappropriate. However, that is a somewhat unfair paraphrase of the report form. Sergeant Pirovano says in hindsight that the information should have been laid against the company or at least one alongside the other information.

[33] As for the appeal, I accept that although I ultimately rejected the police case, the submission that Mr Ayers was liable as a secondary party and that the various

_{informal communications between him and Sergeant Pirovano could collectively}

amount to a request of the company was arguable, particularly in light of case law that the request under s 118 can be made in any way,[5] and in light of the Court’s powers of amendment on appeal.

[34] I also accept that the police did consider the matter of ownership raised by

Mr Ayers, and that the officer in charge took some steps to investigate the issue.

[35] I further consider there is merit in Ms Butchard’s submission that the behaviour of Mr Ayers in relation to the investigation is a factor counting against costs.[6] As I commented in the course of the appeal hearing, his conduct did not impress me. There had been a potentially serious driving incident, sufficiently serious to prompt more than one member of the public to contact the police. Mr Ayers did have the information but he obfuscated and then failed to provide it. It was that refusal that led to the charge before the Court. There is the further point

made by Ms Butchard that these communications where Mr Ayers was effectively speaking on behalf of the company must have cemented in the prosecution mind that Mr Ayers and the company were one and the same, and that to obtain details of the driver, the police had to contact Mr Ayers.

[36] On the other hand, while the police may have acted in good faith, the fact remains they did not have sufficient evidence to convict Mr Ayres. The prosecution was doomed to fail for a reason which Mr Ayers had expressly drawn to the police’s attention in advance of the hearing, while the sufficiency of the steps taken by Sergeant Pirovano to investigate the ownership issue is questionable. This is also obviously not a situation where an adverse costs award could have the unintended consequence of acting as a disincentive for police to bring a similar prosecution in

_{the future.}

[37] As has often been said, ultimately, the decision to award costs involves a balancing exercise requiring the Court to stand back and ask itself whether it is just and reasonable that costs should be awarded to a successful defendant.[7]

[38] Weighing up the various factors, and having regard to all the relevant circumstances in this case, I am satisfied it is just and reasonable that costs should be awarded to Mr Ayers.

Should the amount of any award exceed the scale?

[39] The maximum amount of costs payable under the Costs in Criminal Cases regulations is $226 per half-day.

[40] The costs sought by Mr Ayers clearly exceed that sum.

[41] Section 13(3) of the Costs in Criminal Cases Act provides:

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.

[42] In contending that this case does meet the threshold for an award of costs beyond scale, Mr Eaton submits that the police embarked on an aggressive and erroneous course to extend the legitimate bounds of culpability pursuant to s 118. That, he contends, amounts to a test case, and in the event of failure justifies a finding of special importance.

[43] In my view, for the reasons I have already given, the police’s actions cannot be characterised in that fashion. I am satisfied the police genuinely considered they were applying existing law and were not purporting to bring a test case.

[44] The phrase “special difficulty” as it appears in s 13 is not limited to difficulty

_{in the sense of special complexities. It has been held that for the purposes of s 13 a}

case may be one of special difficulty where there has been bad faith or negligence on the part of the prosecution.[8]

[45] I have already found that the police did not act in bad faith but I have also said that the sufficiency of the steps taken by Sergeant Pirovano is questionable. But was it negligent?

[46] The meaning of “negligence” in the context of the Costs in Criminal Cases Act was considered in Ham v The Queen.[9] There, it was said that negligence would lie in doing or omitting to do something which a reasonable and fair-minded prosecutor would have done or refrained from doing. It is clear that Sergeant Pirovano’s research was not particularly well directed. A fundamental legal point having arisen, more, in my view, should have been done.

[47] That said, indemnity costs would not be appropriate. Although I have held Sergeant Pirovano could have done more, some steps were taken. Police acted in good faith and were not guilty of any gross misconduct.

[48] Having regard to the comparable scale of costs payable to counsel for the Crown and all the relevant circumstances, I consider that a global award in the sum of $5000 is just and reasonable.

Outcome of application

[49] Mr Ayers’ application for an award of costs under the Costs in Criminal Cases

Act is granted.

[50] I award him costs in the sum of $5000.

Solicitors:

MacTodd, Queenstown

Counsel: JHM Eaton, Christchurch

Crown Solicitor’s Office, Christchurch

---

[1] _{Ayers v Police HC Christchurch CRI-2011-425-000041, 12 December 2011.}
[2] See Field v New Zealand Police HC New Plymouth CRI-2007-443-000010, 12 February 2010.

[3] Costs in Criminal Cases Act 1967, s 5(4).

[4] In reply submissions, Mr Eaton advises that Mr Ayers accepts the assurances of the Crown solicitor in this regard.
[5] _{J Duncan Ltd v Auckland City Council HC Auckland M1621/80, 12 December 1980.}

[6] There is a conflict in the authorities as to whether s 5(2)(g) is limited solely to behaviour justifying an award, or whether it applies to disqualifying behaviour as well. See the discussion at Adams on Criminal Law [CC5.13]. I prefer the latter view, but in any event, unhelpful behaviour by an accused must be part of all relevant circumstances and therefore able to be taken into account under that head.

[7] See R v Margaritis HC Christchurch T66/88, 14 July 1989.

[8] Field v Police HC New Plymouth CRI-2007-443-000010, 12 February 2010. See Adams on

_{Criminal Law [CC13.02].}

[9] Ham v The Queen [1998] 16 CRNZ 199.