Citation: CEO Customs v Afiouny & Anor [2004] NSWSC 162
Court: Supreme Court of New South Wales (Common Law Division)
Date: 4 March 2004
Judge(s): McDougall J
Background
The plaintiff, the Chief Executive Officer of Customs, commenced proceedings under the Customs Act 1901 (Cth) against two defendants. The proceedings were, in substance, a criminal prosecution conducted under civil procedure rules. In late November 2002, the plaintiff filed a notice of motion for summary judgment, prompted by the defendants' original defences, which were conceded to be defective in form as they did no more than decline to admit or deny the allegations in the statement of claim.
Before the summary judgment motion was heard, the defendants filed amended defences in a form acceptable to the plaintiff. The plaintiff then did not press the motion and consented to its dismissal. McDougall J had dealt with the defendants' separate notice of motion in a judgment dated 25 February 2004, but reserved the question of costs on the plaintiff's abandoned motion.
The parties returned before McDougall J to argue how those costs should be dealt with. The plaintiff sought its costs of the motion. The defendants did not seek costs against the plaintiff but argued for either no order as to costs, reserved costs, or an order that the costs be the plaintiff's costs in the proceedings.
Legal Issues
- Whether it was appropriate to decide costs on the basis that the summary judgment motion would likely have succeeded had it been pressed.
- Whether the defendants' failure to test or answer the plaintiff's evidence should inform any costs order at this interlocutory stage.
- Whether summary judgment was, in principle, an appropriate procedural remedy in a Customs prosecution conducted under civil procedure rules.
- Whether the costs question should instead be left to the trial judge.
Decision
McDougall J proceeded on the basis that, had the motion been heard with the plaintiff's evidence untested, it would likely have succeeded. This conclusion rested on a concession by defence counsel, made solely for costs purposes, that the brief of evidence exhibited in the supporting affidavit was capable of establishing the material allegations to the requisite standard. The Judge was careful to note that this concession did not bind the defendants for any other purpose.
Despite that finding, McDougall J declined to award costs to the plaintiff outright. His Honour expressed concern that requiring a defendant in a criminal prosecution to test or respond to interlocutory evidence, merely to avoid an adverse costs order, sat uncomfortably with the nature of criminal proceedings. He noted that where civil procedures are applied to criminal prosecutions, any obligation on a defendant to take an affirmative position should arise from a deliberate and considered direction, not as a by-product of a summary judgment application.
His Honour also declined to express any concluded view on whether summary judgment was an appropriate mechanism in Customs prosecutions of this kind. He acknowledged that it was at least arguable that, where case-by-case management was required, summary judgment might be inappropriate when the real objective was simply to compel proper pleading. He was unwilling to resolve that question in a costs argument where it had not been fully argued, so as not to create a poorly-reasoned precedent in an already complex area of law.
The appropriate order, in the Court's view, was that the costs of the notice of motion be the plaintiff's costs in the proceedings. This outcome tied the costs to the ultimate result: if the plaintiff succeeded at trial, it would recover those costs; if the plaintiff failed, it would not be required to pay the defendants' costs of the motion.
Orders Made
- The costs of the plaintiff's notice of motion filed on 26 November 2002 are the plaintiff's costs in the proceedings.
Key Takeaways
- McDougall J confirmed it is possible, in appropriate circumstances, to assess costs on the hypothesis that an unargued motion would likely have succeeded, provided the evidentiary basis for that conclusion is sufficiently established.
- Costs in proceedings of this nature need not be resolved at the interlocutory stage; an order that costs be "costs in the proceedings" is available to avoid burdening the trial judge with separate retrospective cost assessments.
- Where civil procedure rules apply to what is in substance a criminal prosecution, a court will be cautious about imposing costs consequences on defendants who did not test or answer interlocutory evidence, given the inherent tensions with criminal procedure principles.
- The appropriateness of summary judgment as a remedy in Customs prosecutions was left expressly open; McDougall J treated it as a live and unresolved question requiring full argument before any authoritative answer could be given.
- Under the Customs Act 1901 (Cth), the intersection of civil procedures, averment provisions, and criminal standards of proof continues to raise complex management questions that the Supreme Court indicated should be resolved on a case-by-case basis.
Legislation and Cases Referenced
Legislation:
- Customs Act 1901 (Cth), including s 255 (averments)
Cases:
- Chief Executive Officer of Customs v Labrador Liquor Wholesale Pty Ltd (2003) 78 ALJR 1629 (High Court)
- CEO Customs v Afiouny & Anor [2004] NSWSC 79 (earlier judgment of McDougall J in the same proceedings)