Neutral Citation Number:  IECCC 2
CENTRAL CRIMINAL COURT
Bill No. CC0057 / 10
THE PEOPLE AT THE SUIT OF
THE DIRECTOR OF PUBLIC PROSECUTIONS
JOHN JOE McNICHOLAS
TRADING AS JOHN JOE McNICHOLAS PLANT HIRE,
OLIVER DIXON AND
OLIVER DIXON (HEDGE CUTTING AND PLANT HIRE) LIMITED
JUDGMENT of Mr. Justice Cooke delivered the 20th day of December 2011
1. On the 27th May, 2011, at the conclusion of an eight day trial, the jury returned a not guilty verdict on each of the charges preferred against the above defendants. In plain terms the first-named defendant had been charged with entering into an anti competitive agreement under s. 3 of the Competition Act 2002, (as amended) by agreeing a minimum tender price to be submitted for an Iarnrod Eireann/Irish Rail tender No. 2060 contrary to s. 4(1) and s. 6 of the Act, an offence to which s. 8(1) of the Act applied. Oliver Dixon (Hedge Cutting and Plant Hire) Limited, had similarly been charged with entering into that anti competitive agreement. The second defendant, Oliver Dixon, had been charged in respect of the same agreement as a director of Oliver Dixon (Hedge Cutting and Plant Hire) Limited with having authorised or consented to that company as an undertaking entering into the anti competitive agreement in question contrary to s. 8(6) of the Act of 2002.
2. At the close of the trial, counsel for the defendants applied for an order directing that the Director of Public Prosecutions (DPP) bear the costs of the proceedings. The application was opposed by the DPP. Following an exchange of written legal submissions, the arguments of the parties were heard by the Court on 19th July, 2011.
3. It is now well settled that a judge of the High Court exercising its jurisdiction in the Central Criminal Court has power under O. 99 of the Rules of the Superior Courts, to award costs in criminal cases either to the prosecutor against the accused or in favour of an acquitted accused against the prosecutor. The route through the case law by which this conclusion has been reached has been traced in a number of judgments and notably in the learned exposé of the legislative and regulatory history in the judgment of Kenny J. in The People (AG) v. Bell  I.R. 24, as subsequently approved by the Supreme Court on appeal in that case. The position can be summarised as follows:-
4. Accordingly, the current state of the law is that the rule presently in force, namely, rule 1 of Order 99 (as amended) applies so that “the costs of and incidental to every proceeding in the Superior Courts” include costs in criminal proceedings and these are, accordingly, “in the discretion of the Court”.
- Prior to the enactment of the English Judicature Act of 1873 and the Supreme Court of Judicature Act (Ireland) 1887, it had been assumed or accepted that one of the incidents of the royal prerogative was that the Crown and officers prosecuting on behalf of the Crown could not be ordered to pay costs.
- Section 53 of the Act of 1877 introduced in Ireland a rule making power which might provide that the costs of and incident to every proceeding in the High Court of Justice and the Court of Appeal ‘shall be in the discretion of the Court’.”
- The English Act of 1873 did not contain a corresponding provision with the result that English case law in the latter half of the 19th century became authority for the proposition that a court had no power to order costs to be paid by a person who before the Act of 1873, could not have been ordered to bear costs because the effect of the English Act was not to create any new jurisdiction in costs, but only to regulate the mode by which Courts dealt with costs.
- Rules made in 1891 and new rules made in 1905 for this jurisdiction did not contain any provision relating to the award of costs in criminal proceedings.
- S.14 (2) of the Courts (Supplemental Provisions) Act 1961 provided that the jurisdiction vested by that act in the courts newly established by the Constitution (including the High Court and the Central Criminal Court ) was to be exercised, “so far as regards pleading, practice and procedure generally, including liability as to costs, in the manner provided by rules of court…”.
- This accordingly was the position on the coming into operation of O. 99 of the new Rules of the Superior Courts adopted in 1962. Until then the High Court had no power to award costs in criminal cases because, although the rule making power for the purpose existed, no rules had been made.
- In The People v. Bell it was it was held that O. 99, r. 1, of the 1962 Rules did not exclude the exercise of the jurisdiction as to liability to costs from application in criminal cases.
5. The provisions of the current rules as most recently amended by the Rules of the Superior Courts (Costs) 2008, (SI No. 12/2008) and so far as relevant to the present issues are as follows:-
6. In the present applications for costs, the issue between the parties has not been directed at the question as to whether these rules apply, but as to the approach which ought to be adopted by the Court in their application. In particular it was sought to be suggested that in its consideration of the issue the starting point for the Court ought to be that the defendants, having been acquitted by a jury verdict, ought to be awarded their costs unless there was good reason not to do so. Counsel for the first named defendant submitted that (a) the usual rule is that costs follow the event, namely the acquittal; (b) this rule can be departed from but only in exceptional circumstances; and (c) any departure from the rule must be reasoned and based on the overall circumstances of the case.
“(1) The costs of and incidental to every proceeding in the Superior Courts shall be in the discretion of those Courts respectively.
(2) No party should be entitled to recover any costs of or incidental to any proceeding from any other party to such proceeding except under an order or as provided by these Rules.
(3) Subject to sub- rule (4A) the costs of every action, question or issued tried by a jury shall follow the event unless the Court, for a special cause, to be mentioned in the order, shall otherwise direct.
(4) Subject to sub rule (4A) the costs of every issue of fact or law raised upon a claim or counterclaim shall unless otherwise ordered, follow the event.”
In The People v Bell it was held that sub rules 1) and 2) apply to criminal cases but that sub rules 3) and 4) do not because the former apply to “proceedings” which includes by definition criminal proceedings, whereas the words employed in the latter sub rules do not.
7. Similarly, relying on the judgments of Charleton J. in The People (DPP) v. Kelly  IEHC 450 and of McKechnie J. in The People (DPP) v. Bourke Waste Removal Limited,  IEHC 122, counsel for the second and third named defendants submitted that the basic starting point was the assumption that, all other things being equal, costs should follow the event.
8. It was pointed out that in both the Kelly case and the Bourke Waste case reliance had been placed upon the judgment of Murray C.J. in Dunne v Minister for the Environment  2 I.R. 775: “the rule of law that costs normally follow the event, that the successful party to proceedings should not have to pay the costs of those proceedings, which should be borne by the unsuccessful party, as an obvious equitable basis”. McKechnie J. acknowledged that “this normal rule” applied primarily to similar actions, but drew upon the Dunne case as one dealing with the principles for adjudicating on costs in “public law litigation” involving “public law challenges”.
9. The Bourke case is said to particularly apt as it was a prosecution in the Central Criminal Court on charges arising under the same provisions of the Act of 2002, where the accused had been acquitted by jury verdict.
10. At para. 35 of this judgment McKechnie J. after reviewing the case law, set out 11 points or factors which constituted the basis of the approach he then adopted. At point (4) he acknowledges that the “normal rule” of subrules (3) and (4) of O. 99 does not apply to criminal cases, so that an acquitted person “does not have the benefit of the presumptions therein contained”. He added nevertheless:
He later confirmed this at para. 39 of the judgment:
“However, the most significant event in my view is and remains the outcome/ conclusion of the case. On the criminal side this is straightforward: guilty or not guilty. An acquittal, in my opinion, is therefore a highly significant factor which, when appropriately weighted, should be measured as being closely akin to the position of an applicant to whom subrules (3) and (4) apply. Without in any way restricting the discretion involved, the primary approach should be result driven. If this is correct there cannot be any question of weighing up the various factors and whoever tips the scales gets the costs. The starting question must be: why should an acquitted person not get his costs?”
11. These judgments are thus relied upon in support of the submission that the Court should effectively start from the position that the defendants are entitled to their costs unless there is a substantial reason for not awarding them. The Court is urged to follow the approach of McKechnie J. in the Bourke case in particular.
“From the principles outlined above, the starting point in my opinion is that each of the acquitted persons should be entitled to their costs unless substantial reason can be found to the contrary.”
12. The judgment in that case, however, is under appeal to the Court of Criminal Appeal so that this proposition cannot yet be said to have been definitively adopted. Furthermore, contrary to the suggestion made in the present case, there appears to this Court to be a material distinction between the approaches adopted respectively by McKechnie J. in Bourke and Charleton J. in Kelly. If the Court is obliged to choose between those approaches, that of Charleton J. would appear to be most consistent with the effect of the sub-rules as considered in the earlier case law.
13. The Court has difficulty in accepting the fact of acquittal by jury verdict as an appropriate starting point for a number of reasons. In particular, to do so would appear to give insufficient recognition to the fact that this jurisdiction in costs in criminal cases derives from O. 99, r. 1 and is based on the distinction made between sub-rules (1) and (2) as compared with sub-rule (3).
14. If it is the case that by virtue of sub-rule (1) there is power to award costs in criminal cases because they come within the term “proceedings” but that the “normal rule” is deliberately disapplied to criminal cases by the wording of sub-rule (3), it must necessarily follow in the view of the Court that there can be no starting point based upon any factor attributable to the “normal rule” that costs follow the event. To argue that the event, namely the acquittal, must be treated as a “starting point” because it is a highly significant factor closely akin to the position in which sub-rule (3) applies would appear to deprive sub-rule (1) of the distinguishing effect intended by the disapplication of the “normal rule” to criminal cases.
15. Insofar as it may be difficult to conceive of a situation in which a convicted accused could apply to be awarded costs against the prosecutor, it may be that an acquittal is a sine qua non of an entitlement to apply for costs, but that does not, in the view of the Court, mean an acquittal of itself confers on the accused a prima facie entitlement to an award so as effectively to pass to the prosecutor the onus of showing cause as to why the award should not be made.
16. The proposition that the acquittal, as such, creates a form of presumption or starting point in favour of the accused would also appear to blur the distinction between the public character of a criminal prosecution at the suit of the State as compared with the private interests that are the subject of other forms of litigation including “public interest litigation” such as actions brought by citizens seeking declarations of unconstitutionality or proceedings by way of judicial review of administrative or quasi judicial decisions such as in the Dunne case. It would seem to the Court to be well settled that the public interest in the administration of criminal justice and the investigation and prosecution of crimes would militate against the introduction of factors or influences which might weigh against the diligent and efficient investigation of crimes and against objective, impartial and honest decision making in the commencement and pursuit of prosecutions. By the same token, of course, there must also be a public interest in the fact that the possibility of an award of costs against a prosecutor may be made where the investigation of an alleged offence, the initiation of a prosecution or its pursuit is found to have been tainted by some material failure to measure up to those standards.
17. The Court does not consider that Charleton J. in the Kelly case treated the fact of acquittal as creating any prima facie entitlement to an award of costs in favour of the accused or as a starting point which had the effect of passing the onus of resisting the award to the prosecutor.
18. As the Court reads that judgment, where Charleton J. sets out at para. 21 a series of ten questions which a trial judge might pose when dealing with an application for costs, his starting point is the exercise of the discretion and the fact that it will only arise to be exercised where there has been an acquittal. Thus, all of the questions are directed in one way or another at possible aspects of the conduct of each side, prosecution and accused, as factors which might weigh in favour or against the award. Question (4) asks whether the accused was acquitted by direction of the trial judge or by verdict of the jury. The approach based on these questions is clearly consistent with the learned judge treating the existence of the discretion as the starting point such that the fact of acquittal is entirely neutral in its significance. It only attains some weight as one of the factors to be weighed in the balance in the exercise of the discretion and its significance would then weigh differently depending on whether the acquittal is by jury or by direction and in the latter event depending upon the reason for the direction. (See questions 4 and 5).
19. In practice, therefore, an application for an award of costs will only fall to be made by an acquitted accused. Thereafter, however, the application for costs is entirely a matter for the discretion of the Court and the exercise of that discretion will turn upon an appraisal of all the relevant factors arising in the particular circumstances of each case. In the judgment of the Court there is no basis for presuming that the applicant will have an entitlement to the award because there has been an acquittal; nor is there any basis for a presumption that costs ought not be awarded because it is a criminal case.
20. Because sub-rule (1) places the costs in a criminal case in the discretion of the court uninfluenced or directed by the “normal rule” of sub-rule (3), the judge may obviously award costs; or award some but not all costs; or make no award of costs. As with any discretion conferred by statute, rule or regulation however, it must be exercised judicially that is, for the purpose and within the limitations with which it conferred; and reasonably, on the basis of an objective evaluation and weighing of all factors properly before the court and which are relevant to the circumstances of the particular case. (See in that regard the judgments of the Supreme Court in Shelly-Morris v Bus Atha Cliath  1 I.R. 232, and particularly that of Denham J (as she then was,) at paragraph 10.) These factors will include, obviously, at least those identified as potentially relevant at paragraph 21 of the judgment of Charleton J in the Kelly case.
21. It is necessary, therefore, to consider the various factors that have been relied upon on behalf of the defendants in the present case as to why costs should be awarded. As they are factors which arise out of the background to the charges and the course and conduct of the prosecution, is necessary to summarise briefly that background.
22. In 2006, Iarnród Éireann was considering the reopening of the Ennis to Athenry railway line and for that purpose the clearance of trees, undergrowth and other vegetation which had accumulated during the period of disuse of the line. It accordingly issued invitations to tender for the work involved to appropriate contractors, some of whom had previously worked for the company. The first offers disclosed such large variations in price, that it was thought there might have been some divergence in understanding as to the nature and extent of the work required, such that it would be necessary to re-tender the contract. In these circumstances the contractors concerned were invited to a meeting at Athenry railway station on the 15th January, 2007, to have the project explained to them by an engineer and to walk part of the line. Eight contractors attended. The infringements of the Competition Act were alleged to have occurred when the group of contractors in question returned to the station car park at Athenry after walking the line and the engineer had left. It was alleged that the defendants, Mr McNicholas and Mr Dixon, had instigated a proposal and persuaded other contractors to agree that no tender would be submitted below a figure of €50,000 per twelve mile stretch of the line and that they should all shake hands at the meeting to confirm this agreement.
23. It was said that within days Iarnród Éireann had learned of this development and had instigated an inquiry, interviewed some of the contractors who had been present at the meeting and then reported the matter to the Competition Authority and thus set in train the initiation of the criminal proceedings.
24. In the course of the trial, cross examination elicited information to the effect that, following the meeting in the car park, a number of the contractors had gone to lunch in the same public house in Athenry. It was robustly suggested that during that lunch, the contractors in question had discussed what had happened in the car park and, in effect, then conspired to implicate the defendants in the anti competitive agreement in order to eliminate them from the proposed contracts.
25. In support of their submissions that costs ought to be awarded, counsel for the defendants both addressed the questions suggested by Charleton J in the Kelly case. Most of those questions have little or no relevance to the circumstances of the present case but counsel submitted that there had been particular lapses of conduct on the part of the Competition Authority and the Director of Public Prosecutions in the manner in which the original complaints had been investigated and subsequently prosecuted. It was submitted that the prosecution had taken no steps the test the credibility of the five witnesses upon whose testimony the price fixing agreement was alleged to be based. It was argued that the prosecution had not sought full access to or disclosure of the relevant procurement files held by Iarnród Éireann. It was also submitted that the Director of Public Prosecutions ought not to have proceeded against a prosecution on indictment, when it had become apparent that a summary trial ought not to have been precluded by the District Court.
26. So far as concerns, first, the submission that the investigation of the offences and the evaluation of the evidence as warranting the prosecution were flawed because there was a failure to test the credibility of the five witnesses upon which the evidence as to the events in the car park depended, the Court is satisfied that the submission is unfounded. Quite clearly, the prosecution was properly brought. The Director of Public Prosecutions was provided with direct evidence from the five persons present at the meeting in the car park testifying to the facts relevant to the alleged making of the anti competitive agreement. Detailed statements had been taken from those witnesses which were consistent in their accounts of what had happened. In the view of the Court there was no obvious reason why a prosecutor should have questioned the reliability of that evidence nor was there any factor which could be said to have created a need for further or more extensive investigation.
27. In the course of cross examination of witnesses from the procurement section of Iarnród Éireann, information was elicited to the effect that some notes had been kept and put on the procurement file of meetings which the witnesses had had with one of the contractors Edward Garry of Abbey Contractors Limited, two days after the car park meeting. On the demand of the defendants, the notes in question were furnished to them. Amongst the notes of the interview with Mr. Edward Garry and his nephew John Garry (who had represented that company at the car park meeting,) was the following: “A number of them met for lunch afterwards and John heard from the others about the bad treatment of Peter Dalton by Oliver Dixon and McNicholas”. (Peter Dalton was the engineer in Iarnród Éireann who conducted the car park meeting.)
28. As they were entitled to do, counsel for the defendants relied upon these notes in vigorously cross examining the contractors present at the meeting and subsequently to robustly press upon the jury the implication that three of the contractors had gone together to have lunch in a pub in Athenry and had there collusively discussed the tenders. It is now argued that there was failure on the part of the Competition Authority in investigating the alleged cartel to procure these notes. Nothing was done, he said, to explore this collusion between the prosecution witnesses. Although statements were taken from them and the witnesses were asked about their movements after the car park meeting, “all failed to mention the meeting that had taken place over the course of lunch on that date”.
29. The arguments advanced on this point, however, all presuppose that such a collusive meeting did in fact take place over lunch on that day between the three contractors in question. In spite of robust cross examination, however, the witnesses in question denied that they had met in the pub and categorically rejected the suggestion that they had had any discussion about the tenders over what had happened in the car park. In particular John Garry who was presumably, the source of the notes at the interview on the 17th January, denied having had lunch with the other contractors and said that he had sat in the pub alone at the bar. He said all three were in separate parts of the pub.
30. Accordingly, while the defendants were undoubtedly entitled to exploit to the full during the course of trial, the alleged significance and possible implication of the disclosed notes, the issue did not, in the judgment of the Court, raise a culpable failure of the investigation or of the evaluation of the evidence such as would constitute in itself a consideration warranting an award of costs against the prosecution.
31. Having regard to the evidence which each of the witnesses present in the pub gave and stood over in cross examination, it is clear that even if the investigators had been alerted to the presence of the notes on the file and enquired further on the point when taking the statements, there would still have been no evidence from those witnesses of collusive discussions which would have justified discounting the statements as they were given.
32. There is, however, one further factor in the case which can be considered in the judgment of the Court as weighing in the defendants favour in this application for costs. It concerns the length of time the defendants had the charges pending against them before the issues were finally resolved together with the fact that they were put to the test of a jury trial in the Central Criminal Court.
33. As mentioned, the offences were alleged to have occurred on the 15th January, 2007. The matter first came before the courts upon the application for issue of a summons at Athenry District Court in October 2008. At that point the Competition Authority indicated that it intended to prosecute the case in the District Court and it then applied on the 14th October, 2008, for the case to be tried summarily. It appears that having regard to the facts, the nature of the charges and the likely length of the hearing at one and half days, the District Judge declined to accept jurisdiction.
34. Shortly afterwards the Authority confirmed that the Director of Public Prosecutions consented to a return for trial in the Central Criminal Court and on the 11th November, 2008, a book of evidence was served and the case was sent forward for trial.
35. There then intervened a procedural and jurisdictional complication arising out of a Supreme Court decision in Reade v. District Judge Reilly and Director of Public Prosecutions,  IESC 66, as a result of which in January 2010 a nolle prosequi was entered on behalf of the Director of Public Prosecutions. In June 2010, application for issue of a summons was made to Athenry District Court and the book of evidence was formally served and the case sent forward for trial. It was first listed for mention in the Central Criminal Court in June 2010, and as indicated, the trial before a jury commenced in May 2011, with a verdict being reached on the 27th May, 2011.
36. While, in the judgment of the Court, these charges were properly laid and the prosecution justifiably brought and fairly conducted, the Court considers that the imbalance between the length of time taken (for which the defendants are not in any way accountable) together with the formality, stress and expense of a jury trial in the Central Criminal Court on the one hand and the essential character of the events out of which the charges arose on the other, justifies the exercise of the Court’s discretion towards a partial acceptance of the defendants’ application. In the judgment of the Court the initial assessment of the case by the Competition Authority as one to be dealt with by summary trial was correct. While any infringement of s. 4 of the Competition Act 2002 is potentially serious this was not what is often referred to as a “hard core cartel” in the sense of a premeditated and organised attempt at price fixing. This was, on the evidence originally provided, something of an ad hoc or spontaneous attempt which, in the event, came to nothing apart from the collapse of the procurement process underway at the time.
37. Having regard to these factors, the Court considers that it would be a just and proportionate exercise of its discretion under the rule to award the defendants John Joe McNicholas trading as John Joe McNicholas Plant Hire and Oliver Dixon (Hedge Cutting and Plant Hire) Limited 50% of the costs incurred.