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High Court of the Cook Islands |
IN THE HIGH COURT OF THE COOK ISLANDS
HELD AT RAROTONGA
(CRIMINAL DIVISION)
CR NOS: 286-289/08,
292/08 739-746108,
771108 334-336108,
257108 270-271/08,
736-738/08
R
V
NORMAN GEORGE
CHARLES KORONUI
CHRISTOPHER VAILE
Defendants
Crown: Mrs Kim Saunders
Defence: Mr Charles Little for Mr Norman George Mr Charles Koronui (not represented)
Mr Timothy Arnold for Mr Christopher Vaile
Date of Judgment 10 December 2010 (NZ time)
JUDGMENT (NO. 6) OF NICHOLSON J - COSTS JUDGMENT
Introduction
[1] Mr George is a prominent Cook Islands politician and lawyer. Mr Vaile is a prominent Cook Islands businessman. Mr Koronui was the Secretary of the Atiu Island Administration (Atiu Secretary). In March and April 2008 they were charged with fraud and secret commission offences. The charges, the background circumstances and the history of the Judge alone trial before me until the end of the Crown case are described in paragraphs [1] - [23] of my Judgment No. 4 of 24 February 2010 (NZ time).
[2] In that judgment I discharged Mr Vaile and Mr Koronui on all the charges against them. l discharged Mr George on 7 of the 14 charges against him. I ordered that all costs issues were to be dealt with after completion of the trial.
[3] When the trial resumed on 24 March 2010, Mr Arnold represented Mr George and called him and 13 other witnesses.
[4] In the week starting 26 April 2010, I heard final submissions and on 30 April 2010, delivered Judgment No. 5 in which I found Mr George not guilty on all of the remaining 7 charges and dismissed them. By consent I allowed time for counsel to canvas agreement on costs and timetabled the filing of written submissions should agreement not be reached. Lengthy submissions were filed.
Costs claimed by Mr George
[5] The costs claimed by Mr George are:
1. Fees & disbursements for P. Davison QC | $98,101.00 |
2. Fees & disbursements for Tim Arnold | $56,475.00 |
3. Fees for N. George (self representation) | $270,000.00 |
4. Investigation | $112,950.00 |
5. Stationery | $897.30 |
6. Courier | $93.36 |
7. Rental Car for P. Davison QC | $1,317.50 |
8. Accommodation for P. Davison QC | $7,920.00 |
TOTAL | $547,754.16 |
[6] Item 1 is evidenced by a written statement of Mr Davison showing a total fee of $90,000; the balance is disbursements, the main items of which are accommodation and travel costs and a fee of $1,470 paid to a document examiner. Mr Davison acted for Mr George and Mr Koronui on pre-trial matters and appeared at the trial in Rarotonga for the three part-heard stages which finished on Friday, 21 November 2008. Mr Davison's statement does not give details of how his fee of $90,000 was composed.
[7] Item 2 is evidenced by an invoice of Mr Arnold. Mr Arnold represented Mr George after the charges against Mr Vaile had been dismissed and when the trial against Mr George alone resumed on 24 March 2010. As stated Mr Arnold led the evidence of Mr George and 13 other witnesses. He made final submissions for Mr George. His stated fee is composed of preparation of 46 hours and trial time of 64 hours, each charged at $500 plus VAT.
[8] Item 3 is claimed by Mr George for self-representation, and is composed of 480 hours, each charged at $500.00 plus VAT. When the trial was due to resume on 29 July 2009, Mr George said that he could not afford to pay for continued representation by Mr Davison and sought an adjournment to seek further funding or substitute counsel. I declined the application and ordered that the trial resume the next Monday, 3 August 2009. I granted leave to Mr Davison and his junior, Ms Clarke to withdraw as counsel for Mr George. When the hearing resumed Mr George represented himself during the hearing of the balance of Crown evidence and prepared the submissions in support of his application for discharge.
[9] Item 4 is evidenced by an invoice of E & N Limited for research and investigations made by Mr George's son, Mr Brett George. It charges $100,000 plus VAT of $12,500 for 2,000 hours work at $50 per hour.
[10] Invoices and/or receipts were filed for the disbursement items 5, 6, 7 and 8.
[11] At the conclusion of his written submissions, Mr Little submitted that an award of 80% of Mr George's costs would constitute a just and reasonable payment towards the costs of his defence. 80% is $438,203.32.
Costs claimed by Mr Vaile
[12] The costs claimed by Mr Vaile are:
Costs: Claimed & | Hours | Rate ($ inc VAT) | Total claimed | Total defence- |
Allowable | | | ($) | related costs |
| | | | ($) |
Tim Arnold | | | | |
Preliminary Attendances | 10 | 393.75 = 350 | 3,937.50 | 0 |
(2006 - 2008) | | 43.75 VAT 12.5 | | |
| | 393.75 | | |
Pre-trial Attendances (April | 90 | 562.50 | 50,625.00 | 50,625.00 |
- Oct 2008) | | | | |
High Court trial | 336 | 562.50 | 189,000.00 | 189,000.00 |
appearances (40 days) | | | | |
Out of hours attendances | 80 | 562.50 | 45,000.00 | 45,000.00 |
Section 111 discharge | 50 | 562.50 | 28,125.00 | 28,125.00 |
application | | | | |
| 556 | | | |
Disbursements | | | | |
Photocopying (est) | | 300 | | |
Telecommunications (est) | | 500 | 800 | 800 |
Total - Chris Valle | | | 317,487.50 | 313,550.00 |
defence (inc VAT) | | | | |
Less: VAT (12.5) | | | 39,685.94 | 39,193.75 |
Total - Chris Valle defence | | | $277,801.56 | $274,356.25 |
exc VAT | | | | |
[13] In his written submissions Mr Arnold stated:
"An invoice has been raised by counsel in a sum of approximately $317,500 (inclusive of VAT), representing a time cost charge calculated at $562.50 per hour (VAT inclusive) over most of the time spent in this matter and, for the balance, a rate of $393.75 per hour (VAT inclusive) for work and attendances relating to Mr Vaile's statements to the police in the matter."
Mr Vaile exhibited a copy of this invoice in his affidavit sworn on 14 July 2010 in support of his application for costs.
[14] In response to a statement in the Crown's written submissions that it understood that Mr Vaile had not actually paid any of the sum claimed to Mr Arnold,
Mr Arnold sent an email to Mrs Saunders confirming that $70,000 relating solely to the trial had been transferred from his trust account to his general account over the past 2 years or so and that in addition Mr Vaile had proffered (and Mr Arnold confirmed that there remained in his trust account) a further sum of $17,632.64 that he has not applied towards costs at this stage "in anticipation of judicial consideration of the costs application". Mrs Saunders advises that the Crown accepts the position as stated by Mr Arnold.
Costs claimed by Mr Koronui
[15] A direct written application for costs has not been made by Mr Koronui. However Mr Arnold attached to his written submissions a letter dated 13 July 2010 from Mr Koronui to him stating:
"Please find as requested the court costs claim incurred during the Operation Slush Trial from 9 April 2008 to 10`h October 2009.
1. | Total Airfare travelling expenses (breakdown enclosed) | $3,381.00 |
2. | Living expenses whilst living on Rarotonga for 97 days | |
| >Accommodation @ $501day x 97 days = $4,850.00 | |
| >Food & Incidentals @ $45/day x 97 days= $4,365.00 | $9,215.00 |
3. | Transportation - Motorbike @ $251day x 97 days | $2,425.00 |
| Cost incurred | $15,021.00 |
The Legal fees is met by Norman George by mutual agreement but haven't sighted the full legal costs and I assume that Norman included them in his claims and perhaps your expert advice is required."
[16] Mr Arnold stated that a Ms Woods told him that she and Mr Davison had estimated that approximately 10% of their work was properly attributable to Mr Koronui's defence.
[171 Mr Koronui provided a schedule of his New Zealand/Rarotonga airfares totaling $3,381 which stated that he was in Rarotonga for 97 days during the trial period. He supplied some confirming airfare invoices.
Costs offered by Crown
[18] The Crown submitted that appropriate costs awards are:
(i) $16,500 for Mr George;
(ii) $35,000 for Mr Vaile;
(iii) $1,000 for Mr Koronui.
[19] In calculating these amounts, the Crown applied the costs limitations imposed by the New Zealand Costs and Criminal Cases Act 1967 (the New Zealand Costs Act) and its current regulations - the New Zealand Costs and Criminal Cases Regulations 1987 (the New Zealand Costs Regulations). These do not allow costs for preparation, restrict disbursements and impose a maximum fee of $226 for each trial half day. The Crown amounts were calculated on the basis of allowance of only 15.62% of the qualifying costs of the present applications, this being the median percentage of costs awarded in New Zealand for costs claimed in 112 New Zealand applications under the New Zealand Costs Act. From these median based calculations, the Crown deducted a 17.5% discount to "balance factors unique to the Cook Islands current social, economic and political climate ...".
Pertinent Law
[20] The applications rely on section 414(3) of the Cook Islands Crimes Act 1967 which states:
"(3) Where any person is acquitted by the Court of any offence, the Court may order the prosecutor to pay to that person such sum as it thinks just and reasonable towards the costs of his defence."
[21] Mrs Saunders submitted that the purpose and relevant underpinning policies and principles of the New Zealand Costs Act ought to apply when interpreting section 414(3) of the Cook Islands criminal costs legislation.
[22] However in my view, whereas it would be appropriate to have regard to factors stated in section 5(2) of the New Zealand Costs Act as providing part of a framework of factors to be considered in exercising the costs discretion granted by section 413(3) of the Cook Islands criminal costs legislation, it would be inappropriate to directly apply the New Zealand Costs Act and the New Zealand cases on it when exercising that discretion.
[23] Provisions of the New Zealand Costs Act relevant to costs of a successful defendant state:
"2. Interpretation
In this Act, unless the context otherwise requires,-
Costs means any expenses properly incurred by a parry... carrying on a defence....
5. Costs of successful defendant - (1) Where any defendant is acquitted of an offence or where the information charging him with an offence 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) of this section, 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 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.
(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 discharged or that any information charging him with an offence 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.
13(3) 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."
(Emphasis added by me)
[24] Provisions of the New Zealand Costs Regulations relevant to costs of a
successful defendant state:
"3. Subject to section 13(3) of the Act, the heads of costs and the maximum scales of costs that may be ordered to be paid under the Act shall be those set out in the Schedule to these regulations."
(Emphasis added by me)
.............
Schedule
.......
"Part 2
Fees payable to barristers and solicitors in respect of proceedings under the Crimes Act 1961
A. Trials
In proceedings in the High Court on trials of indictable offences –
(a) For conducting a prosecution or defence (including interlocutory or ancillary proceedings or matters) - For each half day or part half day occupied in Court, a maximum of $226.00
(b) In respect of arraignment where for any reason the trial does not proceed further, a maximum of $113.00"
Part 3
C. Travelling expenses and costs incidental to the proceedings
Expenses which may be ordered to be paid under the Act shall be -
(a) The reasonable traveling expenses and allowances of the parties to the proceedings and those of their counsel or solicitors:
(b) All other disbursements reasonably and properly incurred; including
(i) Fees, allowances, and expenses paid to witnesses and interpreters, which shall not exceed the fees, allowances, and travelling expenses prescribed by the Witnesses and Interpreters Fees Regulations 1974 (S.R. 19741124); and
(ii) The costs of enquiries and scientific and other investigations and tests."
[25] At common law costs were not payable in criminal cases either by the prosecutor or the defendant - Chitty on Criminal Law, 2nd Ed. Vol. 1, 825.
[26] This rule became qualified by statute in England and Commonwealth countries.
[27] The first such statutory provision in New Zealand was in the Justices of the Peace Act 1866. Then in the Appeals from Justices Act 1867. Those provisions were replaced by legislation allowing award of defendant's costs in summary proceedings.
[28] The first statutory provision for costs for indictable offences was Section 402 of the New Zealand Crimes Act 1961. Section 402(3) stated:
"(3) Where any person is acquitted by the Supreme Court of any crime, the Court may order the prosecutor to pay to that person such sum as it thinks just and reasonable towards the costs of his defence."
[29] That was considered and applied by Hutchison J in R v Goffe [1963] NZPoliceLawRp 7; [1963] NZLR 620. He referred to a recent statement by the Chief Justice of New Zealand on that provision and two statements by the English Court of Criminal Appeal on similar English legislation.
[30] In the second of the Court of Criminal Appeal Practice Notes issued on 19 October 1959, Parker LCJ said:
"The court's attention has been drawn to the difficult question as to the lines on which the discretion to award costs to an acquitted person should be exercised. This discretion, so far as the courts of assize and quarter sessions are concerned, is now given by section 1 (1) of the Costs in Criminal Cases Act, 1952, under which the court "may, if the accused is acquitted, order the payment out of local funds of the costs of the defence." The discretion is in terms completely unfettered, and there is no presumption one way or the other as to the manner of its exercise.
In a statement issued on March 24, 1952 (36 Cr.App.R. 18), this court, while emphasizing that every case should be considered on its merits, said that it was only in exceptional cases that costs should be awarded. That statement referred to a circular issued by the Lord Chief Justice (Lord Goddard), after consultation with the judges of the Queen's Bench Division, approving a Home Office circular issued in connection with section 44 of the Criminal Justice Act, 1948, now replaced by the section referred to above. While no attempt was there made to catalogue the exceptional cases in which costs might be awarded, such illustrations as were given were cases where the prosecution could be said to be in some way at fault. On the other hand a suggestion has been canvassed that the mere fact of an acquittal should carry with it the expectation that the discretion would be exercised in favour of the acquitted person. Were either of these views correct, the effect would be to impose a fetter upon the exercise of the absolute discretion conferred by the statute. As we have said, there is no presumption one way or the other as to its exercise. Each case must be considered on its own facts as a whole and costs may and should be awarded in all cases where the court thinks it right to do so. It is impossible to catalogue all the factors which should be weighed. Clearly, however, matters such as whether the prosecution have acted unreasonably in starting or continuing proceedings and whether the accused by his conduct has in effect brought the proceedings, or their continuation, upon himself are among the matters to be taken into consideration...." - 43 Or. App. R.219.
[31] In the Goffe case, Hutchison J agreed with the 1963 statement of the Chief Justice of New Zealand which ended:
"Counsel applying for costs on behalf of persons acquitted of any crime should therefore be prepared to show, if they can, that the case falls within the principles which govern the award of costs under the English Act upon which our own Act appears to have been modeled. The Court has a discretion in the matter and in each case good grounds must be shown for the exercise of that discretion in the applicant's favour." - at page 620
[32] Near the end of his judgment, Hutchison J said:
"As was pointed out both by the Lord Chief Justice in his statement reported at 43 Cr.App. 8.219 and by our own Chief Justice in the statement quoted above, the provision is one to be applied or not applied in the unfettered discretion of the Judge. 1 do not think that l can do better than adopt the sentence from the statement of the Lord Chief Justice: "Each case must be considered on its own facts as a whole and costs may and should be awarded in all cases where the Court thinks it right to do so. I think it right to award them in this case, and do so." - at page 621
[33] The Cook Islands Crimes Act was passed in 1967 and its costs provisions in section 414 replicated those of section 402 of the New Zealand Crimes Act 1961.
[34] Section 402 of the New Zealand Crimes Act 1961 was repealed and replaced by the New Zealand Costs Act in 1967 following an unpublished report of the Committee on costs in criminal cases dated 12 September 1966 (the New Zealand 1966 Committee). This Committee was composed of representatives of the Department of Justice, the Crown Law Office, the Police, and the legal profession.
[35] The Committee stated:
"25. We think everyone would agree that if a prosecution is brought either maliciously or unreasonably the defendant should receive his costs. On the other hand none of us consider that a defendant should expect costs merely by virtue of his acquittal; nor do we think this would commend itself to legal or public opinion generally. There is a substantial class of cases where in the popular phrase the accused is `lucky to get off' - the prosecution has not quite clinched the case or the exacting standard of proof in criminal cases is not quite satisfied. Alternatively the accused may by his misconduct or lack of candour contribute to his own misfortune - he has "brought it on himself". In our opinion it would ordinarily be wrong to award costs in these sorts of cases.
26. There is however a middle group and it is here that the application of the present law can give rise to criticism. We refer to cases where, although the police (if it is a case of police prosecution) were diligent and acted reasonably in bringing a charge in the light of the facts as they knew them, the defendant has nevertheless shown his innocence or the probability of his innocence. He has "cleared himself" either by discrediting the prosecution case or showing its insufficiency or by bringing credible witnesses of his own who have thrown a different light on the circumstances."
[36] After canvassing policy factors the New Zealand 1996 Committee
concluded:
"38. It is our view that the law and practice with regard to the award of costs to successful defendants in criminal cases should be based on the principle that ordinarily costs should be granted were in one way or another the defendant has shown his innocence, and of course in cases where the prosecution has for one reason or another been brought improperly or negligently. The most difficult part of our task however has been to suggest a way in which this principle can be accorded legal effect without making the award of costs an almost general consequence of acquittal. As we have said we think this would be undesirable.
40. What we recommend is that there should be written into the legislation some principles to guide Judges or Magistrates in determining applications for costs, and to encourage them to use their discretion more liberally."
[37] In repealing section 402 of the New Zealand Crimes Act 1961 and replacing it with the New Zealand Costs Act, the New Zealand Parliament followed the New Zealand 1966 Committee's recommendation in respect of successful defendant's costs but not in respect of costs of the successful prosecutor.
[38] In R v Ham (1998) 16 CRNZ 199 at 204 Hammond J said:
"The policy factors in this area of the law are difficult. In its 1996 report the Committee on Costs in Criminal cases concluded (at p 12):
'It is our view that the law in practice with regard to the award of costs to successful defendants in criminal cases should be based on the principal that ordinarily costs should be granted where in one way or another the defendant has shown his innocence, and of course in cases where the prosecution has for one reason or another been brought improperly or negligently.'
The Committee then went on to say, at pp 12 and 13, that the most difficult part of its task had been to find a way in which 'that principle could be afforded legal affect without making the award of costs an almost general consequence of acquittal'.
The central difficulty has always been the philosophical position articulated by Devlin LJ in Berry v British Transport Commission [1962] 1 QB 306, 327, viz that a prosecutor brings proceedings in the public interest and therefore ,should be treated more tenderly'. In Long, at p 381, I suggested that if the matter were ever to be subject to a review by a higher Court, or if the statute were to be reviewed, it was questionable `whether in today's context the state should remain privileged to the extent that it is, by the present policy'. Nevertheless, I went on to say that the present approach is well established and that it was not open to me, in this Court, to change it."
[39] In R v Connolly (2007) 23 NZTC 21, 172 Heath J in delivering the majority decision of the New Zealand Court of Appeal said:
"[27] In our view, there are two competing policy considerations that underlie the various factors identified in s 5(2). They are:
(a) First, a significant award of costs against a prosecution agency could have the unintended consequence of acting as a disincentive for that agency to bring similar prosecutions in the future.
(b) Second, the possibility of an adverse costs order being made is likely to operate as an incentive for prosecuting agencies to keep standards of investigation and prosecution at an appropriately high level."
[40] Section 618 of the Cook Islands Act 1915 states that save so far as otherwise expressly provided, the statute law of New Zealand, whether enacted before or after the commencement of that Act, shall not be in force in the Cook Islands. Therefore, none of the provisions of the New Zealand Costs Act and Regulations made pursuant to it, apply in the Cook Islands where the position regarding the award of costs to a successful defendant is governed by section 414(3) of the Cook Islands Crimes Act 1967.
[41] I do not accept Mrs Saunders' submission that the judgment of Williams CJ in Police v Burgess, HC Cook Islands, CR 606-61912004, 4 October 2006 at paras 6.33 - 6.47 is important as affirmation of the propriety of directly applying section 5 of the New Zealand Costs authorities in the present case.
[42] In the Burgess case, Williams CJ made statements on criminal costs only in the context of a submission by the prosecution that on sentence the guilty defendant should be ordered to pay full indemnity costs to the prosecution. He said:
6.33 As to costs there were two disputed legal issues. The first was whether there was jurisdiction to grant an order for the payment of full indemnity costs. Secondly, whether, even if as a general proposition, it was possible to recover indemnity costs, whether such costs were limited to those incurred after a decision to prosecute had been made."
[43] In considering those two legal issues in that context Williams CJ adopted the approach taken by New Zealand courts in interpreting and applying the provisions of section 4(1) of the New Zealand Costs Act which provided for ordering costs of the prosecutor and was similarly worded to the successful prosecutor costs provision in section 414(1) of the Cook Islands Crimes Act 1967.
144] Of relevance to Mr Vaile's claim for pre-prosecution costs is that since the decision in the Burgess case in para 6.47 that the expression "towards the costs of the prosecution" means only those costs incurred from the time the prosecution had commenced, the Supreme Court of New Zealand has decided in Barr v Police [2009] NZSC 109; [2010] 2 NZLR 1 that there was no temporal limit under section 4(1) of the New Zealand Costs Act preventing the recovery of expenses incurred prior to the decision to prosecute and such expenses were recoverable in the discretion of the Court, provided there is a sufficient nexus between the incurring of the expense and the prosecution.
[45] A statutory provision for the award of successful defendants' costs which had similar wording to that of section 414(3) of the Cook Islands Crimes Act 1967 was considered by the High Court of Australia in Lafoudis v Casey, [1990] HCA 59; (1990) 170 CLR 534. The report head note of that case states:
"The magistrate refused the defendant's application for costs on the ground that the informant had acted reasonably in instituting the proceedings and that the defendant had caused suspicion to fall on him by failing to seek proof of ownership of the goods when he acquired them.
Held, by Mason C.J., Toohey and McHugh JJ., Brennan and Dawson JJ. dissenting, that the magistrate's exercise of discretion had miscarried, and the defendant was entitled to his costs.
Per Mason C.J. and Toohey J. In ordinary circumstances an order for costs should be made in favour of a defendant against whom a prosecution has failed. The reasonableness of the informant's conduct in instituting the proceedings is not a basis for refusing an order. But the conduct of a successful defendant before the charge is laid or in defending the prosecution may justify a refusal of costs.
Per McHugh J. A successful defendant in summary proceedings has a reasonable expectation of obtaining an order for costs against the informant, and the discretion to refuse to make the order should not be exercised against him except for a reason directly connected with the charge or the conduct of the proceedings."
[46) Mason CJ said:
"In ordinary circumstances it would not be just or reasonable to deprive a defendant who has secured the dismissal of a criminal charge brought against him or her of an order for costs. To burden a successful defendant with the entire payment of the costs of defending the proceedings is in effect to expose the defendant to a financial burden which may be substantial, perhaps crippling, by reason of the bringing of a criminal charge which, in the event, should not have been brought. It is inequitable that the defendant should be expected to bear the financial burden of exculpating himself or herself, though the circumstances of a particular case may be such as to make it just and reasonable to refuse an order for costs or to make a qualified order for costs. As the Report of Committee on Costs in Criminal Cases (N.Z.) (1966), par 30, stated:
"Because we cannot wholly prevent placing innocent persons in jeopardy that does not mean that we should not as far as is practicable mitigate the consequences."
It will be seen from what I have already said that, in exercising its discretion to award or refuse costs, a court should look at the matter primarily from the perspective of the defendant. To do so conforms to fundamental principle. If one thing is clear in the realm of costs, it is that, in criminal as well as civil proceedings, costs are not awarded by way of punishment of the unsuccessful party. They are compensatory in the sense that they are awarded to indemnify the successful party against the expense to which he or she has been put by reason of the legal proceedings: Cilli v. Abbott (47). Most of the arguments which seek to counter an award of costs against an informant fail to recognize this principle and treat an order for costs against an informant as if it amounted to the imposition of a penalty or punishment. But these arguments only have force if costs are awarded by reason of misconduct or default on the part of the prosecutor. Once the principle is established that costs are generally awarded by way of indemnity to a successful defendant, the making of an order for costs against a prosecutor is no more a mark of disapproval of the prosecution than the dismissal of the proceedings.
The argument that police and other public officers charged with the enforcement of the criminal laws will be discouraged by the apprehension of adverse orders for costs from prosecuting cases which should be brought is without substance and is no longer accepted by the courts: see Ex party Hivis (48); Hamdorf v. Riddle; Puddy v. Borg, Barton v. Berman (49). The courts have rightly recognized that the Executive's practice of indemnifying police officers against payment of costs ordered against them undermines the argument which found favour so long ago in Ex party Jones (50)." - at pp 542 and 543.
[47] In similar vein, Toohey J said:
"If a prosecution has failed, it would ordinarily be just and reasonable to award the defendant costs, because the defendant has incurred expense, perhaps very considerable expense, in defending the charge. What Kirby P. said in Acuthan v. Coates of defendants to committal proceedings is apposite:
"The section recognizes that persons accused of criminal offences can be put to a great deal of expense in defending themselves. Unlike civil litigation, they cannot simply compromise the matter. Their liberty, reputation and pocket are, or may be, at risk."
It unnecessary to speak in terms of a presumption; it is enough to say that ordinarily it would be just and reasonable that the defendant against whom a prosecution has failed should not be out of pocket." - at p 565
[48] In his dissenting judgment, Dawson J expressed a contrary view concluding:
"For all of these reasons, a successful defendant in summary proceedings for an offence can, in my view, have no expectation as a general rule, unlike a successful party in civil proceedings, that costs will be awarded in his favour. The discretion conferred by s.97(b) of the Magistrates (Summary Proceedings) Act was unfettered, but the considerations which a magistrate ought to take into account in criminal proceedings require a particular approach. All other things being equal, the mere acquittal of a defendant ought not to result in an order for costs being made in his favour against a police informant...." - at p 561.
[49] Article 65 of the Constitution of the Cook Islands states:
"65. Construction Law
(1) Subject to subclause (2) of this Article and to subclause (2) of Article 64 hereof, every enactment shall be so construed and applied as not to abrogate, abridge, or infringe or to authorize the abrogation, abridgement, or infringement of any of the rights or freedoms recognised and declared by subclause (1) of Article 64 hereof, and in particular no enactment shall be construed or applied so as to –
(d) Deprive any person of the right to a fair hearing, in accordance with the principles of fundamental justice, for the determination of his rights and obligations before any tribunal or authority having a duty to act judicially; or...
(e) Deprive any person charged with an offence of the right to be presumed innocent until he is proved guilty according to law in a fair and public hearing by an independent and impartial tribunal; or
(2) Every enactment, and every provision thereof shall be deemed remedial, whether its immediate purpose is to direct the doing of anything that the enacting authority deems to be for the public good, or to prevent or punish the doing of anything it deems contrary to the public good, and shall accordingly receive such fair, large, and liberal construction and interpretation as will best ensure the attainment [of the object] of the enactment or provision thereof according to its true intent, meaning and spirit...."
[50] To have a fair hearing in a defended criminal trial, particularly if it is long and complex, generally requires that a defendant be represented by an experienced criminal lawyer. This is likely to be at considerable personal financial cost if the defendant is not granted legal aid. I agree with the rationale and current reality in a democratic society, such as the Cook Islands, of the quoted views of Mason CJ and Toohey J in the Latoudis case. A person who is deemed innocent by the law should generally not be substantially out-of-pocket for all the costs paid by him or her to successfully defend a criminal charge. I also agree with the view stated by Hammond J in the Ham case that in present society the State should not remain privileged to the extent that it was and that the prosecution should not be treated "more tenderly" to the considerable financial disadvantage of a successful defendant. Consequently, and applying the interpretation principles stated in Article 65 of the Constitution of the Cook Islands, I do not consider that in exercising the discretion given by section 414(3) of the Cook Islands Crimes Act 1967, the Court should apply or be strongly influenced by the New Zealand Costs Act and its Regulations and the New Zealand cases on them.
[51] The wide discretion granted by section 414(3) of the Cook Islands Crimes Act 1967 must be exercised judicially and not arbitrarily. As Lord Halsbury LC said in Sharp v Wakefield ( [1891] UKLawRpAC 8; 1891] AC 173 (H C):
"when it is said that something is to be done within the discretion of the authorities... that something is to be done according to the rules of reason and justice, not according to private opinion... according to law, and not humour. It is to be, not arbitrary, vague, and fanciful, but legal and regular."
[52] In the Latoudis case, Dawson J, starting at p 557, and Toohey J, starting at p 564 canvassed the vexing questions of the justification, substance and consequences of stating and applying principles or guidelines for the exercise of the costs for successful defendant discretion.
[53] In paragraph 42 of the New Zealand 1996 Committee Report, it suggested that in exercise of its discretion to award costs to a successful defendant the court should have regard to all relevant circumstances and in particular to seven factors which the Committee stated. Each of these factors was adopted in section 5(2) of the New Zealand Costs Act which l have quoted in paragraph [23].
[54] As in my opinion these factors still reflect current public notions of fairness and reasonableness to both the prosecutor and the defendant, l consider that a Cook Islands Court in deciding under section 414(3) of the Cook Islands Crimes Act 1967 whether to grant costs to a successful defendant and the amount of any costs granted, should in identifying and considering all relevant circumstances have regard to the framework of seven factors stated in section 5(2) of the New Zealand Costs Act.
[55] I believe that two further factors should be added to this framework. The eighth is whether the proceedings were lengthy, complex and/or of special difficulty. The ninth is the costs which the defendant has incurred with relation to the proceedings. These eighth and ninth factors may often be linked as a non legally aided defendant is likely to incur high costs for the defence of a lengthy, complex and/or special difficulty proceeding. A successful defendant should not receive more than the costs he or she has incurred. The amount of the defence costs that have been incurred by payment or assumption of legal obligation to pay, is relevant to the primary issue of deciding whether it is just and reasonable that the prosecutor be ordered to pay a sum towards them.
[56] For clarity and convenience, 1 state the principles that I find to apply to the exercise of the successful defendant's discretion under section 414(3) of the Cook Islands Crimes Act 1967. The Court may order the prosecutor to pay to the successful defendant such sum as it thinks just and reasonable towards the costs of his or her defence. In ordinary circumstances an order for costs should be made in favour of a defendant against whom a prosecution has failed. In deciding whether to grant costs and the amount of any costs granted, the Court should have regard to all relevant circumstances and in particular (where appropriate) to –
(i) Whether the prosecution acted in good faith in bringing and continuing the proceedings:
(ii) 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:
(iii) Whether the prosecution took proper steps to investigate any matter coming into its hands which suggested that the defendant might not be guilty:
(iv) Whether generally the investigation into the offence was conducted in a reasonable and proper manner:
(v) Whether the evidence as a whole would support a finding of guilt but the information was dismissed on a technical point:
(vi) 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:
(vii) 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.
(viii) Whether the proceedings were lengthy, complex and/or of special difficulty.
(ix) The costs which the defendant has incurred with relation to the proceedings.
General Decision
[57] Only one of the nine framework factors is not relevant to any of the present applications. That is whether the evidence as a whole would support a finding of guilt but the information was dismissed on a technical point. None of the informations were dismissed on a technical point.
[58] Consideration of many of the other eight guideline factors involves overlap. I have considered the criticism of the investigation and prosecution made both during the trial and in the costs applications. Many of the submissions made in the costs applications were put as points during cross-examination, and in Mr George's case, evidence during the trial.
[59] In their costs submissions, Mr Little and Mr Arnold were critical of the Police investigation in failing to analyse all the available documents, as was done by Mr Brett George, and to put together a version of Mr Areai's conduct which was in conflict with the version which he gave in his statements to the Police and in his pre-trial declared statements of evidence.
[60] Mr Arnold also criticised the Police for failure to investigate and understand the relative merit of different types of quarry crushers and systems. These criticisms have a strong element of hindsight and suggest that there should have been an investigation standard approaching perfection. In understanding issues of quarry crusher and systems merit, Mr Vaile had the advantage of considerable practical experience in that field and Mr Arnold the patent advantage of special interest and aptitude for things mechanical. Bearing in mind the ambit of the investigation which covered seven separate transactions and the practical difficulties of interviewing witnesses and obtaining documents from diverse geographic locations, I find that the investigation into each transaction was conducted in a reasonable, proper and fair manner.
[61] I am still of the view which I expressed on 30 April 2010 when I delivered by my decision and verdicts on the remaining charges against Mr George that:
"... from all that i have heard and read in this trial, I have formed the view that Detective Inspector Franklin conducted a very complicated and difficult investigation with limited resources in a competent, intelligent and fair manner."
[62] Judged by the contents of the pre-trial declared statements of evidence and the particulars of alleged conspiracy which were prepared by the prosecution and given to the defendants before the start of the trial, the prosecution had in my view at the commencement of the proceedings sufficient evidence to support the conviction of each defendant on each charge in the absence of contrary evidence. This view is consistent with the absence before the start of the trial of any application for discharge of a defendant on any of the informations that went to trial.
[63] The prosecution was represented before and throughout the trial by two very experienced and capable New Zealand prosecutors, Mr Ruffin and Mrs Saunders. Their conduct of the prosecution seemed fair, firm and competent. So far as 1 am aware, the prosecution took proper steps to investigate all matters coming into its hands which suggested that a defendant might not be guilty and indeed made concessions and did not pursue some aspects during the course of the trial.
[64] In essence, the cases against Mr Vaile and Mr Koronui were, in the words of Mr Arnold, "Undoubtedly ... dismissed as a result of the extensive cross-examination of Crown witnesses...." The informations charging Mr George were dismissed as a result of extensive cross-examination of Crown witnesses, particularly Mr Areai, and evidence given by Mr George and the other defence witnesses. I am not satisfied that the prosecution acted other than in good faith in bringing and continuing the proceedings.
[65] Mr George declined, as he was entitled to do, to make any statement to the Police during its investigation. He did not disclose exculpatory information until it was either elicited in cross-examination or given in evidence by him and the witnesses called by him. Had he earlier disclosed such information to the Police, the course of the investigation and decisions to prosecute may have been different.
[66] The conduct and behaviour of each defendant before the Police investigation started was, in the absence of the alleged criminal motives, the behaviour which could be expected in the case of Mr George of an industrious Minister of the Crown, in the case of Mr Vaile of an active, experienced and astute businessman and in the case of Mr Koronui of an Island Secretary.
[67] The proceedings were lengthy and complex. For Mr Vaile and Mr Koronui they involved 40 hearing days and the preparation of detailed and lengthy written submissions for discharge at the end of the Crown case. For Mr George there was a further 8 hearing days and preparation and delivery of final submissions. Mr George and Mr Vaile each incurred high costs in relation to the proceedings.
Decision on Mr George's Costs
[68] The number and nature of the charges, the pre-trial statements of evidence and the particulars of alleged conspiracy indicated that the trial was, as it turned out, going to be complex and lengthy. The consequence of conviction on any of the charges would have been very damaging to Mr George's reputation and would probably have meant the end of his career as a lawyer and grossly inhibited his activities as a successful politician. In light of the alleged context of abuse of trust as a Minister of the Crown, it is likely that had he been convicted he would have received a sentence of imprisonment. In these circumstances, he was fully justified in obtaining a high standard of legal representation which was not available from other Cook Islands resident lawyers and required the instruction of an overseas barrister of the criminal law experience and ability of Mr P Davidson QC. The prudence of having the services of Mr Davidson became apparent from the pre-trial stages and benefited not only the defence of Mr George and Mr Koronui but also Mr Vaile. I find that the amount of the costs offered to Mr George by the Crown based as it is upon a median success rate of New Zealand criminal costs claims which were determined according to the financial restrictions imposed by the non-applicable New Zealand legislation, does not give a just and reasonable result in this case. Similarly, I consider that a substantial discount of 17.5% to "balance factors unique to the Cook Islands' current social, economic and political climate" is not justified. In this regard, it should be borne in mind that the Crown engaged the services of two highly experienced and competent New Zealand prosecutors, one of whom commuted from New Zealand during the course of the trial. Total Crown costs for Mr Ruffin's services were $156,931.40. There was in addition the costs of the Cook Islands Crown Law Office which presumably would have included remuneration for Mrs Saunders.
[69] In light of the nature and amount of work done by Mr P Davidson QC, I consider that the quantum of his fees and disbursements of $98,101 is just and reasonable.
[70] Mr George has claimed fees of $270,000 for representing himself after he could no longer afford to pay for Mr Davidson and before Mr Arnold became available. He calculates this amount on the basis of 480 hours of his time charged at the rate of $500 plus VAT. Although Mr George did a skilled and effective job of cross-examination of remaining prosecution witnesses, particularly in the long and difficult cross-examination of Mr Areai, he nevertheless would probably have been engaged for about the same time by required attendance in Court as a defendant and out of Court assistance to Mr Davidson, had Mr Davidson continued to act. In the circumstances l do not consider that this is one of those exceptional cases in which the costs of a self-representing lawyer/defendant should be granted. I therefore do not allow any costs under this head.
[71] After Mr Vaile was discharged on all charges, Mr George wisely instructed Mr Arnold to act for him during the balance of the trial. This involved the calling of Mr George and other defence witnesses and the preparation and making of final submissions. This was of benefit not only to Mr George but also to the court in enabling the final stages of the trial to be heard on a structured, smooth and less emotional basis. Mr Arnold has charged Mr George $56,475 (including VAT) for preparation and appearance. In his invoice, Mr Arnold states total time spent of 110 hours at a rate of $500.00 an hour plus VAT. This results in a total fee of $61,875. There seems to be an arithmetical error in Mr Arnold's invoice which states the total as $56,475. In the circumstances, 1 consider that a fee for the claimed 110 hours but at the rate of $200 plus VAT per hour would be just and reasonable. $200 an hour is the rate which the prosecution paid Mr Ruffin for his work. 110 hours at $200 an hour totals $22,000. VAT at the rate of 12.5% on this is $2,750, giving a result of $24,750, including VAT. I find that the quantum of Mr Arnold's fee at $24,750 including VAT is just and reasonable.
[72] Mr George claims $112,950 for investigation. This is $450 above the amount of an invoice to Mr George by E & N Limited for examination and analysis of documents performed by Mr George's son, Mr Brett George. It is calculated for 2,000 hours worked at the rate of $50 per hour which totals $100,000, which with VAT of $12,500 gives a total of $112,500. Mr Brett George sat beside Mr Norman George throughout the trial and gave evidence for him. A bundle of documents which Mr Brett George prepared was used by Mr Norman George and Mr Arnold in their detailed cross-examination of Mr Areai and as the basis for discharge submissions by Mr Arnold and Mr George and final submissions by Mr Arnold. The work of Mr Brett George was clearly of significant assistance in the conduct of the defence. In the circumstances, l consider that an amount of $50,000 plus VAT of $6,250 totalling $56,250 for E & N Limited services is just and reasonable quantum.
[73] The further amounts claimed by Mr George for payment of disbursements are generally supported by invoices. I consider the quantum of each just and reasonable.
[74] Therefore, the total quantum of Mr George's claim which 1 consider just and reasonable is $189,329.16. Mr Little submitted that an award of 80% of Mr George's costs would constitute a just and reasonable payment towards the costs of his defence.
[75] Having regard to all the relevant circumstances, I think that an award of 66.66% is just and reasonable. 66.66% of $189,329.16 is $126,206.81. I order that the prosecutor pay $126,206.81 to Mr George towards the costs of his defence.
Decision on Mr Vaile's Costs
[76] As stated in paras 12 and 13 Mr Arnold has charged Mr Vaile fees and disbursements of $317,487.50 (VAT inclusive). I believe that there was sufficient nexus between the incurring of the 10 hours of preliminary attendances by Mr Arnold relating to Mr Vaile's statements to the police and the following prosecution to justify allowance of that work as being a just and reasonable part of Mr Vaile's defence costs. The interviews related to matters which later were the subject of charges against Mr Vaile.
[77] I consider that quantum based on the claimed 566 hours but at $200 per hour plus VAT, for Mr Arnold's work would be just and reasonable. This produces a figure of $127,350, including VAT. In addition the quantum of the estimated disbursements of $800 for photocopying and telecommunications is allowed as just and reasonable.
[78] Having regard to all the relevant circumstances and, in particular, that Mr Vaile co-operated fully with the Audit Department and the Police by volunteering and giving detailed statements of explanation whenever requested and that he was discharged at the close of the Crown case, largely as a result of the information which had been elicited by the skilful and detailed cross-examination of prosecution witnesses, I think that a sum based on 80% of the $128,150 quantum allowed, namely $102,520, would be just and reasonable. I order that the prosecutor pay $102,520 to Mr Vaile towards the costs of his defence.
Decision on Mr Koronul's Costs
[79] Mr Davidson's costs of appearing for Mr Koronui when he also appeared for Mr George are included in his fee to Mr George and allowance has been made for all Mr Davidson's fees in the costs awarded to Mr George. Therefore, Mr Koronui's claim is limited to expenses. The first amount claimed is for $3,381, being the total air fares which Mr Koronui paid to fly between New Zealand and Rarotonga for the trial. A schedule and some invoices for these fares have been produced and I allow the quantum of those air fares as claimed.
[80] Mr Koronui claims living expenses of $95 a day for accommodation and food and incidentals while living in Rarotonga for 97 days, presumably because of the trial. In addition, he claims for transportation at $25 a day for a motor bike for those 97 days. Mr Koronui would have incurred living and transportation expenses wherever he was living during that 97 days. He has not provided documents which support above the normal cost for such items. I consider them too remote and vague. I do not allow them.
[81] As with Mr Vaile, I think that a sum based on 80% of the $3,381 quantum allowed, namely $2,704.80, would be just and reasonable. I order that the prosecutor pay $2,704.80 to Mr Koronui towards the costs of his defence.
C. M. Nicholson J
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