Asset Loan Co Pty Ltd v Mamap Pty Ltd
[2005] QDC 295
To print this judgment please return to the case and click on the PDF icon
next to the
case name. For court use, a full PDF copy is required or preferred.
Exit Distraction Free Reading Mode
Please Note: You are about to print a copy of the onscreen
version of
this judgment. For court use, a full PDF copy of the judgment is required or preferred. Please
return to
the case for PDF printing options.
- Unreported Judgment
- Asset Loan Co Pty Ltd v Mamap Pty Ltd[2005] QDC 295
- Add to List
Asset Loan Co Pty Ltd v Mamap Pty Ltd[2005] QDC 295
Asset Loan Co Pty Ltd v Mamap Pty Ltd[2005] QDC 295
DISTRICT COURT OF QUEENSLAND
CITATION: | Asset Loan Co Pty Ld v Mamap Pty Ltd [2005] QDC 295 |
PARTIES: | ASSET LOAN COMPANY PTY LTD ACN 107 746 798 Appellant (Defendant) v MAMAP PTY LTD Respondent (Plaintiff) |
FILE NO/S: | Appeal 3 of 2005; MAG 91 of 2004 |
DIVISION: |
|
PROCEEDING: | Appeal |
ORIGINATING COURT: | Magistrates Court, Proserpine |
DELIVERED ON: | 14 October 2005 |
DELIVERED AT: | Brisbane |
HEARING DATE: | 27 September 2005 |
JUDGE: | McGill DCJ |
ORDER: | Appeal dismissed with costs |
CATCHWORDS: | CONTRACT – Construction and interpretation – incorporation of part of document by reference – commercial contract PRINCIPLE AND AGENT – Statutory provisions relating to agents – real estate agent - restriction on recovery of reward not stated in appointment in writing – provision incorporated by reference complies with Act COSTS – indemnity costs – can be ordered in Magistrates’ Courts Property Agents and Motor Dealers Act 2000 s 113(3), s 141(1) UCPR r 690, r 704 Anderson v Densley (1953) 90 CLR 460 – considered. Beardmore v Franklins Management Services Pty Ltd [2002] QCA 60 – considered. Skipper v Syrmis [1925] St R Qd 129 – considered. Upper Hunter CDC v Australian Chilling and Freezing Co (1968) 118 CLR 429 – applied. |
COUNSEL: | M.D. Martin of the appellant G.F. Crow for the respondent |
SOLICITORS: | McCullough Robertson solicitors for the appellant Macrossan and Amiet solicitors for the respondent |
- [1]This is an appeal against the decision of a magistrate who on 13 April 2005 gave judgment for the respondent plaintiff against the appellant for $20,000 together with interest and costs. The respondent was a real estate agent retained by the appellant, and claimed to be entitled to payment of $20,000 pursuant to the terms on which it was appointed as agent to sell certain land which the respondent was proposing to sell in exercise of its power of sale as mortgagee.
- [2]On behalf of the appellant it was argued that the provision for payment of the fee of $20,000 did not form part of the contract between the parties constituted by the appointment to act as agent, that in any event the fee was only payable in certain circumstances which the respondent had not proved to have occurred, and in the further alternative, that recovery of the fee in such circumstances was prohibited by the Property Agents and Motor Dealers Act 2000 (“the Act”), because there had not been compliance with section 133(3) of that Act in respect of such a fee. There was also an issue in relation to the question of indemnity costs, which can be left until later.
Background to the action
- [3]In 2003 the appellant had a mortgage over a property of about 40 acres of vacant land at Cannonvale which went into default during that year: p48. The appellant decided to exercise its power of sale, and for that purpose approached three real estate agents, including the respondent, seeking a marketing submission. The respondent prepared one, which was forwarded on 11 December 2003: Exhibit 6. Mr Leet on behalf of the respondent said that he was conscious of the risk with a mortgagee’s sale that the sale would not go ahead if the debt was satisfied: p9. Mr Percival for the appellant said that there were negotiations with the mortgagor, and he was also conscious of the possibility that the mortgagor might pay out the mortgage before the action, and wanted to avoid any additional fees if that occurred: p48.
- [4]The marketing submission Exhibit 6 dealt in section 11 with the rate of commission, which was to be at a rate of 2.5 per cent of the agreed sale price, together with GST on the commission. The submission then continued:
“We are mindful that the mortgage may either be sold or satisfied during the course of our agency. However, we also need to be 100 per cent committed to the professional marketing of the property to ensure the best possible price is obtained from the market. We suggest a reduced fee (as detailed following) be payable to our office should the mortgage over the property be discharged, extended or sold.
- (a)$1000 if the monies are received after preparation of all marketing material and prior to the conclusion of advertising.
- (b)$20,000 if the monies are received after marketing activities are completed.”
- [5]The submission proposed sale at auction, and set out a proposal for marketing costs including newspaper advertising and other costs which came to almost $13,000: Exhibit 6, section 7. The appellant evidently decided to retain the respondent, and after some oral advice, an email was sent on 18 December 2003 asking the respondent to forward a listing form for marketing the site to the appellant’s solicitor, whose details were provided: Exhibit 2. The form was completed and sent by facsimile to the solicitor on 18 December 2003: Exhibit 3. The form (Exhibit 4) is in the standard form approved under the Act, Form 22a. The form as completed provided for the appellant to appoint the respondent to perform the service of sale of land (section 4), and that the agency was exclusive for a period from 19 December 2003 to 23 March 2004: section 5. The agency did not continue as an open listing. One provision specifying whether or not the agent was to sell by auction was not completed, and no reserve or listing price was specified, but section 3 of the schedule authorised the respondent to sell the property by public auction. Section 6 headed Commission provided that the parties agreed that the total commission and GST payable for the service to be performed by the agent was:
“Total commission: 2.5 per cent of agreed sale price (refer section 11 of submission)
GST: 10 per cent
Total payment: refer section 11 of marketing submission.”
- [6]Section 6.2 provided for the commission to be payable at settlement. There was then section 7 which identified fees and charges chargeable, which were specified at nil except for reference to the termination penalty, which is not relevant to the matters in dispute in this action. Advertising expenses were authorised to be incurred on behalf of the appellant in the amount specified in the marketing submission “as per marketing submission”. The form provided for an acknowledgement by the appellant that the respondent had not given the appellant a market price in obtaining an initial listing for the property. The terms and conditions attached to the form provided, among other things, that:
“The client agrees to pay the agent commission as specified in the appointment if a contract of sale of the property is entered into with a buyer, whether within the term or after the term, where the relevant person is the effective cause of the sale within the term, provided that the contract of sale of the property is completed.”
- [7]This being an exclusive agency, the relevant person was any person. There was nothing set out in the document itself which dealt with the situation where, after the appointment of the agent but prior to the expiration of the agency, the appellant withdrew the property from sale without a sale having been effected.
- [8]In its original form as forwarded by the respondent, the conditions also provided for commission to be payable if the appellant defaulted under the contract of sale and the contract was terminated by reason of or following that default, the contract of sale was not completed and the whole or part of the deposit paid was liable to be forfeited, or the contract of sale was terminated by mutual agreement of the client and the buyer. These parts of the clauses were deleted by the appellant’s solicitor.
- [9]There was a follow up email on 22 December 2003 to the solicitor, which produced a request (Exhibit 18) to be faxed a copy of the advertising program, marketing program and marketing submission referred to in the form. That request continued:
“My instructions are that my client will only be liable for commission in accordance with the terms of the appointment document, and for expenses (advertising et cetera) actually incurred (for which my client may require copy invoices as evidence of actual cost).”
- [10]An amended marketing schedule was sent the same day by the respondent to the appellant, by facsimile: Exhibit 5. The reference to the marketing schedule is a reference to the advertising budget in section 7 of the marketing submission: p15. The respondent’s witness said she sent those documents to him the same day: p35. It seems that a further copy of Form 22a[1]was sent by the respondent to the appellant’s solicitor on 5 January 2004: Exhibit 7[2]. The following day the document was executed on behalf of the appellant, and returned to the respondent (p17), although before execution, section 6 was amended by the insertion of clause 6.3:
“No other amounts are payable to the agent other than set out in this agreement.”
- [11]The respondent then proceeded to market the property as contemplated. On 3 February there is an email sent to the appellant seeking the form of contract for sale: Exhibit 13. There is a response of 5 February 2004 promising to chase up the solicitor, and expressing some concern about the low price which was anticipated: Exhibit 14. The contract of sale was sent as an attachment to an email from the solicitor on 6 February 2004. The auction was proposed to be held on 12 February 2004: Exhibit 16.
- [12]Between 5 and 6 pm on the afternoon before the day of the auction, the appellant telephoned the respondent to advise that payment was received and that the auction would not be going ahead as the property was withdrawn: p43. Understandably, by that time the respondent had done virtually everything that would have to be done in order to sell the property, except conduct the auction. On the day of the auction the respondent sent a tax invoice for the amount of $20,000 payable pursuant to the provision in the marketing submission, together with GST of 10 per cent, a total of $22,000: Exhibit 17. That was not paid, hence the present action.
The pleadings
- [13]The statement of claim alleged the plaintiff was a licenced real estate agent and that the defendant had appointed the plaintiff as its agent for the purpose of selling certain lands. Paragraph 3 said:
“The written appointment contained in a Form 22a in clause 6 referred to section 11 of the plaintiff’s marketing submission to the defendant dated 11 December 2003 in which it was stated by the plaintiff that in the event that the property was withdrawn from auction after all marketing activities were completed then, a fee of $20,000 was payable by the defendant to the plaintiff.”
- [14]It was then alleged in paragraph 4 that the defendant withdrew the property from auction on the day before the auction date and after the marketing activities were completed, and in paragraph 5 that the plaintiff was entitled to the $20,000 fee which according to paragraph 6 the defendant had refused to pay. The plaintiff claimed the sum of $20,000; the pleading did not state whether this was sought as money payable under the contract or as damages for breach of contract, and it may not matter.
- [15]A notice of intention to defend and defence was filed on 28 May 2004. In that the defendant admitted paragraphs 1, 2, 4 and 6 of the statement of claim. As to paragraph 3 of the statement of claim the defendant pleaded that the plaintiff was estopped from asserting that section 11 of its marketing submission was incorporated in its appointment. It denied the conclusion asserted in paragraph 5 of the statement of claim. Subject to the estoppel that was pleaded therefore there was no plea taking issue with paragraph 3 of the statement of claim, and it was therefore taken to have been admitted if the estoppel were not made out: UCPR r 166(1). Significantly, the only matter raised on the pleading in response to the allegation in the statement of claim that section 11 of the marketing submission was incorporated in the appointment was the estoppel.
- [16]At the trial the magistrate, for reasons he gave, found that the defendant’s allegation of the estoppel was not made out. There was no challenge on appeal to that finding. On the face of the pleadings, that was the only matter in issue in the trial. None of the three matters now sought to be raised by the appellant were raised in the defence. Plainly all of them ought to have been. The first raises an issue as to the terms of the contract between the parties. The second really disputes that the statement of claim accurately stated the effect of the contract, assuming it incorporated section 11. It was in order for the plaintiff to plead the effect of the document as briefly as possible: r 152. If the defendant asserted that the document on its true construction did not provide to that effect, the defendant ought to have either pleaded the express words which were relevant, or pleaded the effect of the document alleged by the defendant. Neither course was followed. As to the third, this is a plea of illegality which is required to be specifically pleaded: r 150(1)(g).
- [17]At the beginning of the trial, there was some discussion between counsel and the magistrate as to just what was in issue, and as to whether the defendant would be raising matters not pleaded. I will not attempt to summarise the submissions made, which are not very edifying, but in the course of his reply counsel for the appellant said expressly that he did not want to amend the pleading, although he foreshadowed making a no case submission if the plaintiff did not prove its case: p6. In circumstances where the only facts in issue were facts the onus of proving which lay on the defendant, it is difficult to see how the defendant could have made such a submission; on the face of the pleadings, the plaintiff was entitled to call on the defendant to start.
- [18]In the event, the magistrate then said the trial should be confined to the issues raised in the pleadings. Counsel for the respondent then said that the plaintiff’s position was that it was here to fight the issue on estoppel, and counsel for the appellant, in response to a question from the magistrate, said that there was no problem with that, and that the magistrate repeated that the trial would be confined to the issues raised in the pleadings.
Effect on the appeal
- [19]That ought to be fatal to the matters now sought to be raised in the appeal. The matters sought to be raised are matters that ought to have been pleaded. They were not, and when the issue was raised at the trial, the appellant disallowed any desire to amend, and was apparently content to proceed on the basis that the trial would be confined to those issues raised on the pleadings. For the purposes of an appeal, a party is bound by the conduct of the case at the trial.[3] In my opinion, if the appellant wanted to raise any of these issues, there ought to have been an application at or before the trial to amend the pleading in order to raise them. That having not been done, it should not be permitted to raise them now.
- [20]The appellant sought nevertheless to bring the appeal within the exception to this rule, where a point is raised on appeal which, had it been properly raised at the trial, could not have been effectively met by the respondent.[4] Commonly, this depends on whether the matter could have been met by the calling of further evidence, but it may be that the point could have been met by some amendment in response. Counsel for the respondent suggested that there may have been a claim available under the Trade Practices Act which, if it were available, would override any restrictions in the Act, and in the alternative the respondent might have been prepared to take on the decision of the House of Lords in Luxor (Eastbourne) Ltd v Cooper [1941] AC 108, that there is no implied obligation on the vendor not to act so as to prevent the agent earning commission.
- [21]It would not be difficult to distinguish the particular circumstance of that decision on the facts. The present case involved an appointment for a specified term as an exclusive agent, and, at least arguably, provision for the agent to sell at auction during that time without a reserve price fixed by the agreement. It is obviously very likely that the agent would have earned a commission but for the withdrawal of the property from sale. The various matters referred to by the Lord Chancellor in Luxor pages 116 and following do not apply in such a situation. This was a case where commission was payable whether the sale was effected by the respondent, by another agent, or indeed by the appellant directly. This was not a case where there might be anticipated any concern about the personal identity of the purchaser. Although the decision in Luxor is commonly treated as though it was authority for the proposition that there can be no implied term in relation the employment of a real estate agent, the Lord Chancellor at page 120 himself contemplated that there was at least a class of case where there was an implied term that the principal will not withdraw the authority given after the agent had incurred substantial outlay, or, at any rate, after he has succeeded in finding a possible purchaser. I would not go so far as to decide that a claim based on such an implied term would have succeeded, but I think it may have been arguable, and that may be sufficient to make it unfair to allow the appellant to pursue now the matters which were not raised at the trial. If there were such an implied term, a claim fro damages for breach of it would not appear to be barred by the Act.
- [22]It is not entirely clear to me that the exception is a matter of right or a matter of discretion. If it is a matter of discretion, I would refuse to allow the appellant to raise the matter on appeal, in circumstances where not only were these issues not raised on the pleadings, but, the scope of the matters in issue at the trial having been touched on at the beginning of the trial, there was apparently a deliberate decision not to seek to amend the pleadings. I think that is a different situation from the mere failure to take a particular procedural step, which was considered by the High Court in Hampton Court Ltd v Crooks (1957) 97 CLR 367.
- [23]It may be, however, that there is no discretion in the matter, and that, if the issue is not one which could have been met by evidence, the appellant has a right to raise it. Assuming that that is the case, and that these three grounds of appeal fall into that category, I will deal with them on their merits.
Construction of the appointment
- [24]The first ground is really concerned with the question of construction of the written document[5]; does it on its true construction incorporate that part of section 11 on which the respondent sued? When interpreting this, it is important to bear in mind that it is the document in its final form which contains the terms of the contract. As signed and forwarded by the appellant, it was in truth a counter offer, since changes had been made to the document signed by the respondent; it was presumably accepted by the respondent acting pursuant to it. Clause 6.1 twice expressly referred to section 11 of the marketing submission. The document also expressly specified a commission of 2.5 per cent of agreed sale price, plus GST of 10 per cent, so it was unnecessary for there to be any further reference to section 11 of the marketing submission except in relation to the amount payable if the property were withdrawn from sale. Although the marketing submission in section 11 was consistent with what was expressly set out in clause 6.1, those words, which were in substance set out twice, became mere surplusage if the withdrawal payment was not taken into account, because otherwise section 11 merely provided for what was already stated expressly in clause 6.1.
- [25]It is significant that the marketing submission was provided to the appellant some time before this form was sent to the solicitor, and a copy of the marketing submission was also made available to the solicitor at least once, and apparently twice, before the form was signed on 6 January 2004. In these circumstances, the terms of section 11 of the marketing submission were well known to both parties at the time this contract was made. The subjective intentions of the parties are not what govern the situation; indeed, in the present case they could not do so, because on this topic they were plainly contradictory. The objective theory of contract must apply.
- [26]The appellant pointed to the inclusion of clause 6.3 excluding other amounts payable to the agent. If that clause did not have the effect of excluding the provision for a payment on withdrawal of sale, it is difficult to see what function it performed. It may be, however, that the objection that clause 6.3 is surplusage is of less significance in circumstances where the clause on its face is exclusionary in operation. If an agreement provides that amounts will be payable under certain circumstances, it would usually not add anything to the agreement to go on to provide that no other amounts are payable. Accordingly, I do not think that the argument that, unless clause 6.3 excludes payment if the property is withdrawn from sale, that clause is itself surplusage, is of the same force.
- [27]Of greater significance, perhaps, is that when clause 6.3 was included, the references to section 11 of the marketing submission were not struck out. Looked at objectively, if the intention was to exclude the provision for payment of those amounts if the property was withdrawn from sale, as set out in section 11, one would have expected the two references to section 11 to be themselves struck out from the agreement, and that did not occur.
- [28]There are aspects of the drafting of clause 6.1 as it currently stands which are inapt, but poor drafting is not a barrier to the operation of a document, particularly a commercial document. Indeed, as a general proposition, courts strive to give effect to the objective intent of a commercial document, even when it is poorly drafted[6]. Although the position is not as clear as it could be and there are some considerations each way, on balance, in my opinion the terms of clause 6.1 are sufficient to incorporate by reference into the contract the provision of section 11 of the marketing submission on which the respondent sued. In my opinion, the first ground of appeal is not made out on the merits.
Did the relevant event occur?
- [29]The second ground seizes upon particular words in that part of section 11 of the marketing submission which is relevant to this claim, but in my opinion, this part of section 11 needs to be read as a whole. The first sentence speaks about the possibility that the mortgage may be sold or satisfied, which suggests that that was the intended subject matter of this part of the section. The third sentence refers to a reduced fee being payable should the mortgage be discharged, extended or sold, and counsel for the appellant submitted that there was a distinction between a debt being satisfied and the mortgage being discharged, and although there was evidence by way of an admission from the appellant that the debt had been paid, there was no evidence that the mortgage had been discharged, or for that mater extended or sold, and therefore the respondent had not proved that the particular factual basis for this part of the agreed payment had actually arisen.
- [30]This is necessarily a matter which, at least potentially, could have been met by evidence had it been properly raised on the pleadings. At the very least, the respondent was entitled to investigate by an appropriate interlocutory process, such as disclosure, the true state of the mortgage; it may be that those processes would have revealed that the mortgage was discharged in a technical sense, or at least extended. The point is therefore not one which should be allowed on appeal. But in any case, there must have been at the very least a postponement of the exercise of the power of sale, and in circumstances where the debt is paid and the exercise of the power of sale is postponed, it is difficult to see why that should not amount to the mortgage being discharged or extended for the purposes of this contract. To draw such a distinction would involve in my opinion excessive technicality in the interpretation of the language used.
- [31]Apart from this, the subsequent clause (b) provided for the payment of $20,000 “if the moneys are received”, and that is precisely what occurred. The appellant’s argument has to be that the general words in clause (b) should be read down, or the obligation to pay should be confined by the limitation contained in the expression “should the mortgage…be discharged, extended or sold”. If I had to decide the point without evidence and as a question of construction, I would find that the true interpretation of section 11 in these circumstances was as pleaded in the statement of claim, namely that moneys were payable if the property was withdrawn from sale. That was clearly what the clause was concerned with, and in my opinion no narrow or technical interpretation of the words “discharged, extended or sold” should be adopted, so as to limit the scope of paragraph (b). In the present case, the moneys were received after the marketing activities were completed, and therefore on the face of the clause $20,000 became payable. This ground also fails on the merits.
Statutory prohibition
- [32]The third ground depends on the terms of the Act. Section 141(1) of the Act provides:
“A person is not entitled to sue for…a reward for the performance of an activity as a real estate agent that is more than the amount of the reward stated in the appointment given under section 133.”
- [33]Exhibit 4 was the appointment given under section 133, and what the respondent was seeking by this action was a reward for the performance of an activity as a real estate agent, namely the marketing of the property in question. Accordingly, the plaintiff was entitled to recover this payment only if it was “stated in” Exhibit 4. This complements the provision to section 133(3)(c)(i) of the Act, which provides the appointment must, for each service…state…the fees, charges and any commission payable for the service…”
- [34]The issue is whether the requirement that the appointment “state” something is satisfied if the appointment incorporates something by reference to another document. There is certainly no objection as a matter of contract to the incorporation by reference of part of the contents of another document, but it does not necessarily follow that the same applies to a statutory requirement that a document “state” something.
- [35]Under an earlier version of the legislation governing real estate agents, section 23 of the Auctioneers and Commission Agents Act 1922, there was authority that it was sufficient if the engagement had been evidenced in writing “whether contained in one document signed by the defendant or in several documents, sufficiently interconnected by internal reference either direct or inferential, one or more of which are signed by the defendant, manifesting such intention on his part.”[7]That proposition was accepted by the Full Court in Bennett and Co v Connors [1953] St R Qd 14 at 20 per Macrossan CJ, 23 per Philp J, and by the High Court in Anderson v Densley (1953) 90 CLR 460 at 468[8]. That Act required the engagement or appointment to act as agent to be in writing signed by the person to be charged, but the section did not expressly require anything in writing to “state” anything in particular. There the courts were influenced by the approach adopted with the similar provision in the statute of frauds, where it was established that reliance could be placed on a series of connected documents to satisfy the requirements of the statute[9].
- [36]The restriction in section 70(1)(c) of the 1971 Auctioneers and Agents Act was in similar terms to the restriction in the 1922 Act. The same approach was adopted in relation to the use of connected documents to satisfy section 70 of the 1971 Act[10]. Although the wording is different in the current Act, the outcome should not necessarily be different. There is nothing in the explanatory note for the 2000 statute dealing with section 133 or section 141 suggesting a narrower construction. The objects of the Act include (section 10) the protection of consumers, and the regulating of fees and commissions that can be charged for particular transactions. It is not apparent to me that those objects require that a purposive construction of the legislation would be to interpret these provisions so that they would not be satisfied by the contents of other documents incorporated by reference, at least in circumstances where the other documents were known to or at least available to the party signing the form at the time it was signed.
- [37]Counsel for the respondent drew attention to the fact that the approved Form 22a[11]makes provision for some relevant things to be set out in separate documents which are attached[12]: see section 4.1, section 8.1. Both of these relate to aspects of the approved form dealing with matters which section 133(3) requires the appointment to state. The difficulty with this argument, however, is that there is authority that a statute should not be interpreted by reference to subordinate legislation[13], and an approved form is at best something like subordinate legislation. Accordingly, I do not think I can give any weight to this consideration. It just means that, if the appellant’s argument is correct, the result would be exceedingly inconvenient for real estate agents in this state. The position may simply be that the approved form is not in accordance with the statute, in which case it is presumably invalid. That is not something I have to decide.
- [38]The Shorter Oxford English Dictionary gives a number of meanings for the verb “state” but the only current one is, “Set out fully or in the correct form; express clearly and properly, esp. in speech or writing; express in a manner or form allowing assessment of the content in terms of truth or validity; specify (a number, price et cetera).” It is not immediately obvious to me that any of these meanings would exclude the stating of something by means of incorporation by reference. If the legislature wanted all of this material to be stated in the appointment form and only there, it would have been easy enough to say so, as was done, for example, in relation to some material in an application for a licence in section 25(1)(a) of the Act. There is also no requirement in the Act that the appointment form “contain” the information required to be stated, as appears in relation to the warning statement in section 366(1).
- [39]In my opinion in all the circumstances something can be stated in the appointment for the purposes of section 141(1) if it is incorporated by reference in the appointment. That is what occurred in the present case, and therefore the requirements of section 141(1) were satisfied. The third matter argued therefore fails on the merits also.
Indemnity costs in the Magistrates’ Court
- [40]It was also submitted on behalf of the appellant that the magistrate erred in making an order that the respondent recover its costs on an indemnity basis, on the basis that costs on an indemnity basis were not available in the Magistrates’ Courts. The order for indemnity costs was made pursuant to r 360, which on its face applies to the Magistrates’ Courts as well as the other courts. The appellant submitted the effect of the decision of the Court of Appeal in Beardmore v Franklins Management Services Pty Ltd [2002] QCA 60 was that indemnity costs were not available in the Magistrates’ Courts. In that case the appellant complained, among other things, of an order for costs on the lower District Court scale in circumstances where the plaintiff recovered an amount of damages which was in excess of the amount she had offered to accept, but less than $50,000. It was submitted for the appellant that there were no grounds justifying departure from the ordinary situation under UCPR r 698 that costs be on the Magistrates’ Courts scale. It was suggested that this order had been made because on the face of r 360 the plaintiff was entitled to indemnity costs, but there were no such costs in the Magistrates’ Courts.
- [41]Ambrose J said at [95]:
“Under the Magistrates’ Court scale of costs, there is no provision for the awarding of indemnity costs. Costs are fixed according to the statutory scale contained in schedule 3 of the Uniform Civil Procedure Rules.”
- [42]His Honour at [101] repeated the proposition that the Magistrates’ Courts scale of costs makes no provision for the awarding of indemnity costs, but there was no further consideration of what appears to have been essentially an assumption that indemnity costs are not available under the Magistrates’ Courts rules. McMurdo P at [24] said simply:
“We are told that there is no difference in the Magistrates’ Courts scale of fees between indemnity and standard costs.”
- [43]This was not seen as a matter of judicial determination in that case. The third member of the court, McPherson JA, dissented in relation to liability, under which circumstances it was unnecessary for His Honour to consider the question of costs, and he did not do so. In these circumstances, I do not consider that there is any authoritative statement in this decision to the effect that there are no indemnity costs in the Magistrates’ Courts.
- [44]It is true that the scale of costs in the Magistrates’ Courts in schedule 3 to the UCPR contains no provision for indemnity costs. The same is true for schedule 1, dealing with costs in the Supreme Court, and schedule 2, dealing with costs in the District Court. The reason for this is found in r 690, which relevantly provides as follows:
“(1) For assessing costs on a standard basis under this part, a solicitor is entitled to charge and be allowed the costs under the scales of costs for work done for and in a proceeding in the court.
- (2)The scales of costs are in –
- (a)for the Supreme Court – schedule 1; or
- (b)for the District Court – schedule 2; or
- (c)for the Magistrates’ Courts – schedule 3.
- (3)For an assessment for Magistrates’ Courts on the standard basis, the scale in schedule 3 appropriate for the amount the plaintiff recovers applies.
- (4)For an assessment for Magistrates’ Courts on the indemnity basis, the scale in schedule 3 appropriate for the amount the plaintiff claims applies.”
- [45]It is apparent from the wording of sub-rule (1) that essentially the scale of costs are scales relevant to costs assessed on the standard basis. The qualification to that is that for an assessment in the Magistrates’ Courts on the indemnity basis, the scale appropriate to the amount the plaintiff claims applies. When assessing costs on the indemnity basis therefore, there may well be a difference between costs provided for by the scale and the costs which will be provided for by the scale if costs are being assessed on the basis, depending on whether the amount recovered falls into a different division of the scale from the amount claimed. There are no fewer than seven divisions of the scale, but the top division (over $20,000) is much wider than the others, covering amounts between $20,000 and $50,000, and presumably in Beardmore, both the amount claimed and the amount recovered fell into that division.
- [46]Apart from this, however, I do not consider that the effect of r 690(4) is that a magistrate in assessing indemnity costs is limited to applying the scale in schedule 3 appropriate for the amount the plaintiff claims. There is nothing to indicate that r 704 does not apply to the Magistrates’ Courts, or that its operation is modified by r 690(4). On its face, r 704 is of general application and therefore would apply to the Magistrates’ Courts as well as to the other two courts. Rule 704 provides:
“(1) The court may order costs to be assessed on the indemnity basis.
- (2)Without limiting sub-rule (1), the court may order that costs be assessed on the indemnity basis if the court orders the payment of costs –
- (a)out of a fund; or
- (b)to a party who sues or is sued as a trustee; or
- (c)of an application in a proceeding brought for non-compliance with an order of the court.
- (3)When assessing costs on the indemnity basis, the registrar must allow all costs reasonably incurred and of a reasonable amount, having regard to –
- (a)the scale of fees prescribed for the court; and
- (b)any costs agreement between the party to whom the costs are payable and the party’s solicitor; and
- (c)charges ordinarily payable by a client to a solicitor for the work.”
- [47]It is true that sub-rule (3) refers to the registrar allowing costs, whereas in the Magistrates’ Courts costs are commonly assessed by the magistrates. I do not, however, think that that has the effect that r 704 does not apply in the Magistrates’ Courts. In my opinion, the proper relationship between r 690 and r 704 is that, when costs are being assessed on an indemnity basis under r 704, the scale of fees to which regard is to be had under sub-rule (3)(a) in the case of the Magistrates’ Courts is the scale of fees identified by r 690(4)[14]. The amount recoverable under that scale is a relevant consideration, but it is not the only consideration. The magistrate is also entitled to have regard to the amount in fact paid. There is authority that that is an important consideration, although not without limits[15]. It seems to me that there is no reason in principle why the same approach cannot apply in the Magistrates’ Courts. The appellant’s argument was that there was no power to award indemnity costs in the Magistrates’ Courts, and the actual assessment of the indemnity costs in the present case was not challenged, if indemnity costs were available. In my opinion, they plainly are. In those circumstances, the appeal in relation to the question of costs is also not made out.
- [48]The appeal is therefore dismissed with costs.
Footnotes
[1]A copy of the marketing submission was faxed on 6 January 2004 also: Exhibit 24.
[2]This was in response to a request from the solicitor: Exhibit 23.
[3]Water Board v Moustakas (1988) 180 CLR 491 at 497; Liftronic Pty Ltd v Unver (2001) 75 ALJR 867 at 875 per McHugh J [44]; Whispran Pty Ltd v Dixon (2003) 77 ALJR 1598 at 1608.
[4]Hampton Court Ltd v Crooks (1957) 97 CLR 367.
[5]Cheshire and Fifoot’s Law of Contract, 8th Ed 2002, p401.
[6]Upper Hunter CDC v Australian Chilling and Freezing Co (1968) 118 CLR 429 at 437.
[7]Skipper v Syrmis [1925] St R Qd 129 at 134 per Lukin J with whom McNaughton J agreed.
[8]“It is sufficient if some writing or connected writings exist evidencing the creation of the relationship of principal and agent in respect of the transaction pursuant to an oral contract.”
[9]See the discussion in Voumard “The Sale of Land” (5th edition, 1995) para 2210, 2220 and authorities there cited, including Thomson v McInnis (1911) 12 CLR 562 at 569.
[10]Ross McCartin Realty v Chard Holdings Pty Ltd (1989) 2 Qd R 591 at 597. Appeal dismissed; [1991] 1 Qd R 182.
[11]Which is required to be used: s.134.
[12]The requirement that something be attached may itself give rise to difficulties: see MNM Developments Pty Ltd v Gerrard [2005] QCA 230.
[13]Great Fingall Consolidated Ltd v Sheehan (1905) 3 CLR 176 at 184; Department of Health v Kaderbhai (1994) 51 FCR 416 at 423.
[14]I note that this accords with the view expressed in the annotation to the UCPR in “Civil Procedure Queensland” volume 1, para [r 690.1] page 19,521-2.
[15]Bottoms v Reser [2000] QSC 413; Henley v State of Queensland [2005] QDC 94.