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Supreme Court 30 November 2005

Murdoch v Petterson

[2005] NSWSC 1359

Fraud & dishonesty
LOCAL COURT APPEAL REFUSAL OF COSTS OR RESTITUTION REMITTED FOR RECONSIDERATION

Citation: Murdoch v Petterson [2005] NSWSC 1359
Court: Supreme Court of New South Wales (Common Law Division)
Date: 30 November 2005
Judge(s): Michael Grove J

Background

A WorkCover Authority inspector prosecuted a defendant in the Local Court on eleven charges under section 178BB of the Crimes Act 1900, arising from allegedly false statements the defendant made in support of a workers compensation claim. The claim related to an employment injury said to have occurred in February 2001, but the prosecution alleged the defendant had in fact sustained her injury earlier in a fall at home and had misled multiple medical examiners.

The magistrate found eight of the eleven charges proved beyond reasonable doubt and sentenced the defendant to a two-year good behaviour bond on each offence. Following conviction, the prosecutor sought professional costs exceeding $23,000 and a restitution order of over $37,000 in favour of the insurer, Allianz Australia Workers Compensation, representing compensation payments made under the false claim. The magistrate declined to make either order.

The WorkCover inspector then appealed to the Supreme Court, challenging both refusals as errors of law.

  • Whether a prosecutor's appeal against a refusal to award costs falls within the appellate jurisdiction created by the Crimes (Local Courts Appeal and Review) Act 2001, specifically whether such a refusal constitutes a "sentence" or an "order" for the purposes of that Act
  • Whether the magistrate's refusal to order costs amounted to a constructive failure to exercise jurisdiction, entitling the prosecutor to relief in the nature of mandamus
  • Whether the magistrate's refusal to order restitution under section 43 of the Criminal Procedure Act 1986 similarly amounted to a constructive failure to exercise jurisdiction

Decision

Costs: No appeal right under the Appeal Act

Grove J held that a refusal to award costs in favour of a prosecutor does not constitute a "sentence" within the definition in section 3 of the Crimes (Local Courts Appeal and Review) Act 2001. In its natural and ordinary meaning, an "order" does not encompass a refusal to make an order. The definition of "sentence" in the Act does not extend to a prosecutor appealing against a denial of a costs award, and the statutory context reinforces this reading. The costs appeal under section 56 therefore did not lie.

Costs: Constructive failure to exercise jurisdiction

Turning to the alternative basis for relief, Grove J found that the magistrate had applied a wrong and inadmissible test when declining to award costs. The magistrate had taken into account extraneous considerations rather than properly engaging with the question the law required him to address. This misdirection constituted a constructive failure to exercise jurisdiction, and relief in the nature of mandamus was therefore available to require the Local Court to reconsider the application.

Restitution: Constructive failure to exercise jurisdiction

On restitution, Grove J was equally satisfied that the magistrate had fallen into jurisdictional error. The magistrate had refused to make a restitution order on the basis of speculation that the defendant might have some entitlement to a set-off arising from separate claims, without actually determining whether the compensation payments were unlawfully acquired property and who appeared lawfully entitled to them. That reasoning was impermissible. Grove J also noted that under section 43(2) of the Criminal Procedure Act, a finding of guilt is not a prerequisite for a restitution order, making the acquittals on three of the charges irrelevant to whether the order could be made. The prosecutor had established an entitlement to mandamus on this issue, though the ultimate exercise of discretion remained for the Local Court.

Orders Made

  • The proceedings were remitted to the Local Court for the applications for costs and restitution to be dealt with according to law.
  • The defendant was ordered to pay the plaintiff's costs of the summons.
  • A suitor's fund certificate was granted to the defendant in respect of those costs.

Key Takeaways

  • A refusal by a magistrate to award costs in favour of a prosecutor does not constitute a "sentence" or an appealable "order" under the Crimes (Local Courts Appeal and Review) Act 2001; the statutory appeal path on this basis was unavailable.
  • Where a magistrate applies a wrong or inadmissible test, or fails to engage with the question the law requires, the decision constitutes a constructive failure to exercise jurisdiction rather than a mere error within jurisdiction, opening the path to mandamus relief.
  • Relief in the nature of mandamus compels reconsideration by the lower court but does not dictate the outcome; the magistrate retains discretion to determine the applications on remittal in accordance with law.
  • Under section 43(2) of the Criminal Procedure Act 1986, a finding of guilt is not a prerequisite for a restitution order, and a magistrate's refusal based solely on speculative offsetting entitlements, without examining whether the relevant property was unlawfully obtained, amounts to jurisdictional error.
  • Statutory context is critical in construing costs and appeal provisions; the Court declined to follow earlier decisions under the repealed Justices Act 1902 that had treated refusals to award costs as appealable "orders," given the different legislative framework now in force.

Legislation and Cases Referenced

Legislation
- Crimes Act 1900 (NSW), s 178BB
- Crimes (Local Courts Appeal and Review) Act 2001 (NSW), ss 3, 56
- Criminal Procedure Act 1986 (NSW), ss 43, 173, 214

Cases
- DPP v Roslyndale Shipping Pty Ltd [2003] NSWCA 356
- Ex Parte Hebburn Ltd; Re Kearsley Shire Council (1947) 47 SR (NSW) 416
- Fosse v DPP [1999] NSWSC 367
- Miller v DPP [2003] NSWSC 66
- Palmer v Haddad [2000] NSWSC 545
- Regina v Blakely; Ex Parte The Association of Architects, Engineers, Surveyors and Draftsmen of Australia (1950) 82 CLR 54
- Saffron v The Director of Public Prosecutions (1989) 16 NSWLR 397
- Wentworth v Rogers (1984) NSWR 422