Lucy v OCC Holdings Pty Ltd (No 2)
[2008] QDC 169
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- Unreported Judgment
- Lucy v OCC Holdings Pty Ltd (No 2)[2008] QDC 169
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Lucy v OCC Holdings Pty Ltd (No 2)[2008] QDC 169
Lucy v OCC Holdings Pty Ltd (No 2)[2008] QDC 169
DISTRICT COURT OF QUEENSLAND
CITATION: | Lucy v OCC Holdings P/L & Ors (No 2) [2008] QDC 169 |
PARTIES: | PAUL LUCY (Appellant) v OCC HOLDINGS PTY LTD (First Respondent) and PELICAN LINKS PTY LTD (Second Respondent) and JACQUELINE MAREE CONNOLLY (Third Respondent) and JOHN CONNOLLY (Fourth Respondent) and KIERAN O'CONNOR (Fifth Respondent) |
FILE NO/S: | D360-364 of 2006, Maroochydore |
DIVISION: | Appellate |
PROCEEDING: | Costs ruling in successful prosecutor appeals under s 222 of the Justices Act 1886 against permanent stay of complaints with indemnity costs |
ORIGINATING COURT: | Magistrates Court at Maroochydore |
DELIVERED ON: | 10 July 2008 |
DELIVERED AT: | Brisbane |
HEARING DATE: | 1 July 2008 |
JUDGE: | Robin QC DCJ |
ORDER: | Appellant’s costs fixed at $5,350 in each appeal to be paid by the respondent in it |
CATCHWORDS: | Justices Act 1886, s 226, s 232A – Justices Regulation 2004 Schedule 2 – costs payable to successful prosecutor-appellant against Magistrate’s permanently staying complaints and awarding indemnity costs against him – those orders set aside on appeal and complaint remitted to Magistrates Court – appeals involved “special difficulty, complexity or importance” – schedule scale amounts increased. |
COUNSEL: | D O'Brien for appellant G Allan for respondents |
SOLICITORS: | Corrs Chambers Westgarth for the appellant IPA Law Planning Lawyers for respondents |
- [1]These are five appeals by the prosecutor under s 222 of the Justices Act 1886 against orders made by a magistrate permanently staying complaints and that he pay the respondent-defendant indemnity costs in which, following a four day hearing, this court published to the parties reasons for concluding that the appeals should be allowed and the prosecutions remitted to the Magistrates Court for further hearing. See Lucy v OCC Holdings Pty Ltd [2008] QDC 004. It was not possible to convene a hearing in respect of costs until 1 July 2008, although the court had offered a hearing about costs considerably earlier. The appellant seeks costs at a more generous level than that fixed by the scale referred to in s 232A of the Act which qualifies the court’s power under s 226 to order such costs “as the judge may think just”:
“232A Costs for division
- (1)In deciding the costs that are just for this division, the judge may award costs only –
- (a)for an item allowed for this division under a scale of costs prescribed under a regulation; and
- (b)up to the amount allowed for the item under the scale.
- (2)However, the judge may allow a higher amount for costs if the judge is satisfied that the higher amount is just having regard to the special difficulty, complexity or importance of the appeal.”
- [2]The scale is modest indeed. It is set by s 18 of the Justices Regulation 2004 and appears in schedule 2:
“Schedule 2 Scale of costs for Act, part 6,
division 8 and part 9,
division 1
section 18
Part 1 General
1 Scale sets out amounts up to which costs may be allowed
This scale sets out—
- (a)the only items for which costs may be allowed for part 6, division 8 and part 9, division 1 of the Act; and
- (b)the amount up to which costs may be allowed for each item.
Note—
A higher amount for costs may be allowed under section 158B(2) or 232A(2) of the Act.
2. Item of costs covers all legal professional work
An item in part 2 covers all legal professional work, even if the work is done by more than 1 lawyer.
3. Only necessary or proper costs may be allowed
A cost is to be allowed only to the extent to which—
- (a)incurring the cost was necessary or proper to achieve justice or to defend the rights of the party; or
- (b)the cost was not incurred by over-caution, negligence, mistake or merely at the wish of the party.
- Appeal to District Court judge—professional costs are 20% higher than for complaint
For an appeal to a District Court judge under part 9, division 1 of the Act, the amount up to which costs may be allowed for legal professional work is the amount that may be allowed under part 2, as if the work were for a complaint, increased by 20%.
Part 2 Amounts up to which costs may be allowed for legal professional work
Work for hearing of complaint up to and including day 1
- Instructions and preparation for the hearing, including attendance on day 1 of the hearing up to
$1500.00
After day 1
- For each day of the hearing after day 1 up to
$875.00
Other court attendances
- Court attendance, other than on the hearing of the complaint up to
$250.00”
A single set of costs for the four day hearing, inflated to the District Court level and including the attendance on 1 July 2008 (which occupied 2 hours and followed the submission of detailed outlines of argument) would amount to $1,800 under Item 1, $3,150 under Item 2 and $300 under Item 3, an aggregate of $5,250, as a maximum.
- [3]The appellant, although participating at first instance and on appeal (of necessity) personally, is the alter ego of the Council of the City of Caloundra, now the Sunshine Coast Regional Council. The Council has incurred costs far in excess of what the scale allows, indeed in excess of $200,000, according to the affidavit of Mr Loos filed on 30 June 2008. It tells of professional fees of the solicitors of “approximately $115,000”, of senior counsel’s fees of $76,000 “invoiced and paid” and of fees to junior counsel (invoiced and paid) aggregating $41,268. Mr O'Brien appeared for Mr Lucy as junior counsel at the hearing in November – December 2007 and again (alone) on 1 July 2008. His predecessor’s fees, inexplicably, are given as approximate; all amounts are said not to include GST. Mr Allan, for the respondents, objected to Mr Loos’ affidavit as being no evidence at all fit for the court to act on of the fees actually being invoiced and paid; he objected to Mr O'Brien’s offer to tender invoices. Mr O'Brien did not seek to rely on the affidavit as material on which the court could rely to assess costs; he made it clear that indemnity costs were not sought; I took the point of the affidavit as being to indicate to the court that the “just” course was to acknowledge (perhaps relying on the affidavit to that extent) the inappropriateness of the scale amount, so that the court would proceed under s 232A(2). Indeed, the outline provided last March opens by stating that the appellant applies for an order for costs of the appeals “to be assessed on the District Court Scale”. This contemplated future steps by way of assessment. The court was told that preparation of statements of fees for a conventional assessment process would itself cost some $15,000. Mr O'Brien hoped to obtain from the court some indication of ground rules, for example as to “appropriate allowances for both senior and junior counsel.” Mr Allan submitted that the appellant should succeed or fail on the material before the court on 1 July, alternatively, that if any further steps are necessary to get the costs issue concluded, the appellant should pay the costs of them. I took his argument to be that in s 222 appeals, costs are to be worked out solely under the Justices Act.
- [4]There is support for that approach in Gamble v Davidson [2000] 1 Qd R 510.
- [5]After preparing his written outline, Mr O'Brien became aware of Santosa v Guerin [2007] QDC 335 in which Judge Wall QC approached a similar costs issue in this way, in a successful appeal against conviction and sentence, at 14-15:
“… the appellant is, in my view, entitled to amounts higher than the scale amounts by reason of the issues of special difficulty, complexity and importance involved in the case.
…
Schedule 2 of the Justices Regulation does not appear to prescribe any limit on the higher amount for costs which may be allowed. Under sections 158B(2) and 232A(2) of the Justices Act the amount in each case appears to be discretionary but “the prescribed scale should be used as a guide to the proper exercise of the discretion” (Durrant v Gardner, unreported, District Court, [2000], QDC 198, paragraph 46, per McGill SC DCJ.) …
The appellant has not provided any submissions dealing with the various scale items claimed for costs and disbursements, including any higher amount of fees claimed because of complexity in both the Magistrates Court and this Court, and …
I think he should.
MR HUGHES: I appreciate that, your Honour. Would it be appropriate, given the costs regime, that it be referred to a costs assessor for agreement between the parties. Just to have those costs assessed independently and those costs be where they fall.
HIS HONOUR: Well, … do I have the power to make an order referring the matter to a costs assessor in a case like this? If so, where do I find that power? I mean, your submissions were inadequate to start with about costs, because they didn’t address the …
the scale items or the extra costs sought for the complex matters.
…
what I think you should do is prepare a document setting out what you claim. Give it to the other side. See what their attitude to it is. If you can’t reach any agreement – well, if you reach agreement, let me know and I’ll make appropriate orders for the costs in the Magistrates Court and the costs in this Court. If you can’t reach any agreement, let me know and I’ll hear further argument about what amounts should be ordered.”
- [6]I am no more able to locate a power to refer costs to a costs assessor than was his Honour; nor do I think there is any role for application of the District Court Scale, as contemplated in Mr O'Brien’s written outline. That is not to deny that there may be situations in which, for lack of anything else to make reference to, some guidance in particular respects may be found in that Scale. I doubt that it could ever properly be used to supplant the Justices Regulation scale in a s 222 appeal. The outline identified, but not exhaustively, some 9 “complex and difficult questions of statutory construction and various important principles of law”. The “catchwords” prepared for my published reasons indicate that the appeals undoubtedly involved “special difficulty, complexity or importance”, to quote section 232A(2):
“Justices Act 1886 s 47, s 48 s 222, s 225 – Integrated Planning Act 1997 s 4.3.3, s 4.4.3, s 6.1.35A, s 6.1.44 – Local Government (Planning and Environment) Act 1990 s 87 – complaint sworn by Council officer against company charging contravention of a condition of a development approval under s 4.3.3 – complaints against senior officers of failing to ensure compliance by company – whether complaint invalid for failure to state essential ingredients of offence – whether complaint should have indicated that s 4.3.3 definition of “development approval” was relied on rather than Schedule 10 definition – whether complaint should have set out facts and statutory provisions whereby new owner of development site became bound by rezoning approval granted to previous owner under the repealed Local Government (Planning and Environment) Act 1990 rather than simply call it “successor in title” – whether complaint should specify whether “rezoning approval” of 1996 was under s 4.4(5) or s 4.7(5) of the repealed Act – whether a delegation by Council to its Environment Branch occurred and should be alleged – condition forbade clearing of native vegetation without written approval of “Council’s Environment Branch” – in about 1998 Environment Branch subsumed in Council’s Growth Management Unit – complaints alleged clearing of native vegetation when approval had not been sought – whether allegation that approval was not obtained or granted was necessarily implied – whether complaints failed for uncertainty or for uncertainty of the condition – effect of Court of Appeal determination in proceedings between Council and company that the condition did not fail for lack of finality or for precluding the exercise of rights under the rezoning approval – condition did not fail for uncertainty – effect of change in Council’s administrative structures considered – defendants’ contention that condition ceased to have effect after the restructure rejected – whether reference in particulars to Environment Branch approval “or any approval at all” vitiated the complaint by introducing uncertainty or alleging an offence unknown to the law – defence counsel sought amendment to delete “or any approval at all” but Magistrate refused – prosecutor opposed any amendment – whether appellant bound by that opposition – whether, if amendment of complaint were appropriate, the Magistrate was obliged to amend – whether too late to amend – Magistrate held the defendants had a case to answer – whether Magistrate, taking the view he did that complaints was legally defective (and an abuse of process), should have dismissed, rather than permanently stay them – whether omission to allege abolition of Environment Branch amounted to abuse of process – “person” in s 4.3.3 held to apply generally, not limited to persons specifically identified in legislation as bound by development approval conditions.”
- [7]Mr Allan did not dispute that sub-section (2) potentially applied. The written response to Mr O'Brien’s outline began:
“Summary of respondent’s outline
- The application for an order for costs should be dismissed because:
- (a)There is no power in s 232A(2) of the Act for the Court to make an order for the payment of costs other than by specifying an “amount for costs”. An amount must be specified.
- (b)Moreover, there is no power in s 232A(2) for the Court to make an order for the payment of costs by reference to a particular scale of costs. The Appellant’s application is of this character.
- (c)In any event, on the assumption “District Court Scale” referred to in the Appellant’s outline is a reference to Schedule 2 of the Uniform Civil Procedure Rules 1990 (no greater particularity of what is meant by the term “District Court Scale” is given in the Appellant’s outline), the scale is of no application in this case in circumstances where the UCPR are limited in application to civil proceedings (s.3(1) UCPR), which this proceeding is not.
- (d)The Appellant has not adduced any evidence supporting the making of an order under s 232A(2).
- (e)To the extent that the Appellant seeks an order for costs by reference to s 232A(2), the Appellant’s application for an order for costs should be dismissed.”
I accept what is said in (a), (b) and (c), but (as things now stand) not what is said in (d). In my opinion, the court would not consider making an order under s 232A(2) unless satisfied that the party entitled to costs had paid or would have to pay substantially more than the Justices Regulation scale. I do not think there is any necessity for precision. I think that it is clear from Mr Loos’ affidavit that the amount of costs incurred (or to be incurred) would exceed the Justices Regulation scale by orders of magnitude. I agree with Judge Wall’s approach that indemnity costs (not claimed in any event) should not be considered. For present purposes, I think it matters little whether the appellant’s actual costs were Mr Loos’ sums or only half, say. In this context, the court was told, without objection (except to its relevance), that the respondents’ indemnity costs claimed for the 14 day trial were well in excess of $400,000.
- [8]A sufficient case for an order by reference to s 232A(2) has been made. The position reached is that the court, conscious that the successful party’s costs substantially outweigh those allowed by the scale must decide what costs it would be “just” to allow. Those may fall far short of the costs actually incurred, the precise amount of which may therefore be irrelevant. While I would have been willing to send the matter back to the parties, as Judge Wall did, had both sides been willing, Mr Allan opposed that; further, it is clear that considerable costs would be expended in that exercise, and very likely without obviating the need for further involvement by the court. Thus, the court now has to determine the “just” amounts.
- [9]There is a rough analogy with the situation in Greet v Logan City Council [2004] QPELR 113, in which the court’s power to award costs was by way of ordering “compensation” under s 45(3)(c)(i) of the Building Act 1975. In some ways, the case is close to the present, in which a prosecutor is seeking costs against defendants unsuccessful at this point. Logan City Council was pursuing Mr Greet for professional misconduct as a building certifier. His appeal proceedings were ultimately abandoned, but only after the Council had incurred costs in excess of $100,000 (allegedly), a substantial portion of which it sought to recover as compensation. The headnote records:
“Held that:
- Although the Appellant’s situation demanded sympathy, and his delinquency must be accounted minor, there was a tenable basis for holding him responsible and for the Council lodging the relevant complaint with the Building Services Authority.
- Although unusually expressed, s 45(3)(c) authorised the court to award as “compensation” the full amount of “any costs in bringing the complaint” actually incurred by “the complainant or another person”.
- Whether or not there be some analogy with the practice whereby costs were not commonly ordered in criminal matters, it may be that in the working out of s 45 the Court would be less solicitous to ensure that a complainant which is a local government is reimbursed fully for its costs than it might be in the case of a citizen funding successful proceedings privately.
- The Court did not accept the argument that it did not have jurisdiction to order compensation. It did agree, however, that assuming the Court had jurisdiction, its power under s 45(3)(c) must be exercised judicially.
- The present were circumstances in which, however much sympathy one might have towards the Appellant about the serious consequence of his defective performance of his function, once the complaint was made, rather than acknowledge it, he contested it at every point, putting the Council to considerable expense in the process.
- The Court did not detect in the Building Act anything resembling the policy of the Integrated Planning Act against the awarding of costs.
- The Court had regard to the well accepted understanding that the costs which courts were accustomed to award fell lamentably short of those which “successful” litigants had to pay. Colgate Palmolive Co. v Cussons Pty Ltd (1983) 118 A.L.R. 248.
- The Court was not persuaded that the aggressive way in which the Appellant had pursued his interests was improper or was obviously doomed to be unsuccessful, to the extent of justifying a costs order of a penal kind.
- In arriving at the sum to be fixed of a just compensation amount, the Court took into account recent experience in reviews under r 72 of the Uniform Civil Procedure Rules and otherwise of the level of costs charged by counsel and solicitors in litigious matters; the discount forced on “successful litigants” in assessments on the standard basis by Court officers; the previous engagement of senior counsel; the somewhat technical nature of the professional misconduct alleged; public interest aspects of the Council acting as prosecuting authority; the unjustifiable width of the grounds of appeal (many of which were abandoned after challenge); and, the Appellant having put the Council to much greater trouble and expense than one would normally expect in a relatively straightforward appeal.
- In all the circumstances, the Appellant should be ordered to pay as compensation the sum of $32,000 to the Council.
Greet v Logan City Council (2002) Q.P.E.L.R. 151; Kilmister v Gold Coast City Council (2002) Q.P.E.L.R. 269; Stacy Kennedy v Gold Coast City Council Unreported, 30 January 2002, Southport and Buckler v Council of the Shire of Albert (2001) Q.P.E.L.R. 12 referred to.
I would adhere to that general approach, acknowledging differences, such as the reliance in Greet on an assumed policy of costs being available without limit, and the regard had to the District Court scale and perceived charging levels in the legal profession. The circumstances may be considered more favourable for the respondents here, in that they have the protection of the scale specifically promulgated for the Justices Act, which has to be taken as the starting point.
- [10]Durrant v Gardner [2000] QDC 198; 21 Qd R 113, especially at 123 is a helpful local authority:
“I would not doubt the applicability of Keating v Kneipp – Townsville appeal 28/89 Judge Wylie 20.2.90 and the other decisions to s 157 as it stood prior to the commencement of the operation of s 158B. It seems to me however clear that s 158B does apply to the discretion to order costs under s 157, and both the imposition of a statutory scale and the terms of that scale are relevant to the way in which that discretion must be exercised. The effect of the section and the regulation is to limit the amount of costs that could have been awarded in the present case in respect of preparation and the hearing to $1500, unless a higher amount was just and reasonable, having regard to the special difficulty, complexity or importance of the case. It may be that such an approach is inconsistent with the assumption underlying the earlier authorities, that the legislative intention was that a complainant should receive an indemnity in respect of costs, on a party and party basis, by an order made under s 157. Plainly, in cases where the costs incurred by the complainant exceed $1500, but where there is no special difficulty, complexity or importance in the case, an indemnity cannot be provided. I do not consider that subs (2) comes into operation merely because it is necessary to award a higher amount in order to give an indemnity on a party and party basis to the complainant. Clearly, there was nothing in this case involving special difficulty, complexity or importance.
When a statutory scale is provided then the starting point is always that the amount of costs is to be in accordance with the scale prescribed, and even where there is a discretion to award a larger amount, the prescribed scale should be used as a guide to the proper exercise of the discretion: Washbourne v State Energy Commision (WA) (1992) 8 WAR 188 at 193-194; and see Nicholson v Milveskiy (unreported, QSC 20/84, Full Court, 6 December 1984).”
That case, like the present, concerns a complainant, unsuccessful at first instance. In recent times, legislation has changed in ways which favour defendants who defeat charges brought against them determined summarily. The more typical authorities concern applications by them for “above scale” costs under provisions like s 158B and s 232A. The passage from Washbourne was quoted in Haddon v Everitt (Full Court of the Supreme Court of Western Australia) BC 2001 08160 by Wallwork J at [14]:
“Accordingly, I consider that a magistrate, in awarding costs under s 5(5), should not merely ‘make a general discretionary award reflecting what is reasonable and proper in all the circumstances.’
The starting point is that the amount of the costs are to be in accordance with the scale prescribed. If, however, the special difficulty, complexity, or importance of the case leads the court to order higher costs than those laid down in the scale, the court is empowered to order costs in excess of the amount for scale items, nevertheless, the scale items are to be the basic guidelines in determining the amount of costs to be ordered.
The amounts reflected in the scale are substantially lower than the costs set out in the Supreme Court Costs scale. Plainly, the intention of the legislature is that the costs awarded under the Official Prosecutions (Defendants’ Costs) Act are to be lower generally, than the costs awarded in a Supreme Court action. The court, in ordering costs under s 5(5) therefore does not have a discretion limited only be considerations of reasonableness. Even if costs are awarded in excess of the scale, regard must be had to the scale as a guideline.”
The passage was referred to in what was effectively the judgment of the majority at [138]: “the starting point is that the scale items are to be the basic guidelines in determining the amount of costs to be awarded, but if the matter is one of special difficulty, complexity or importance, then the court can order higher costs than those laid down in the scale”. The magistrate had gone above the scale, awarding two defendants (separately represented) together $5,800. The “majority” judgment went on at [167]:
“I have already said that the scale still provides some guidance in respect of an appropriate starting point, notwithstanding that this matter was found to have been unusually difficult and complex. Any greater allowance than an additional sum of $2,000 would, in my respectful opinion, be over generous. It would also not sufficiently cater for … overlap …”
Wallwork J considered that all of their costs ($19,313.83) should be allowed, subject to reduction by $2,500. His Honour observed that this outcome exhibited some equivalence with Washbourne.
- [11]Some factors tending to favour and inflate the appellant’s claim are that the issues in the appeals were relatively novel, complex and difficult. Speaking generally, they were raised by the respondents by way of legal or technical defences, quite distinct from the factual issue of whether the physical acts alleged to constitute offences happened. At this stage in the saga, the respondents’ points (even those that persuaded the magistrate) have not been accepted. They were relied on in the appeals, and had to be confronted by the Council at considerable cost – all to remove an obstacle to the original charges advancing to a completed hearing on the merits. The case is a significant one, worthy of being pursued, not only because of the nature of the public interest sought to be vindicated (protection of important native vegetation) but because of the scale of the alleged offending. If Mr Allan is right, the maximum fines that might be ordered upon conviction would approach $1 million. Allegedly, almost 5 hectares were cleared without necessary authorisation.
- [12]Against the awarding of anything like full costs is the tradition against costs in criminal matters, now overturned to an extent for summary charges. We have here a public interest being pursued by a governmental body with recourse to revenue streams as necessary. There are at the present time some indications of a public policy approach that councils litigate in a regime where recovery of costs is exceptional under the Integrated Planning Act 1997. OCC Holdings was charged with contravening a condition of a development approval under s 4.3.3 of that Act, the individual respondents with failing to ensure compliance by the company (as executive officers of it). These matters are still to be completely heard. Although the magistrate held (and I would not disagree) that there is a case to answer, there has been no finding of commission of any offence.
- [13]This next observation does not necessarily apply to the respondents, but the test being what is just, in the context of a modest fixed scale, the court should avoid a costs outcome which might be crushing to them or set a precedent which might encourage costs orders in the future crushing to others with limited resources. That the respondents sought and obtained below and defended in the appeals an order for indemnity costs against the appellant does not assist him, although the information tends to corroborate what Mr Loos says about costs. I think the general approach of the courts has been that the considerations are likely to be different for defendants resisting criminal charges.
- [14]In the view I take, namely that it is appropriate to pursue a broad brush approach, it is not necessary to get into particular detail, for example by making the order in Hobbs v Oil Drive Pty Ltd (No.2) [2008] QSC 52 “that the assessment of the defendant’s costs be made on the basis that, except so far as they are an unreasonable amount, the fees of senior counsel and junior counsel should be regarded as costs necessary and proper.” There was considerable reference to the leading case regarding engagement of senior counsel, Stanley v Phillips (1966) 115 CLR 470, in which there were seesawing outcomes at four levels of determination, and conflicting views in the High Court. While engagement of senior counsel here was reasonable, in part because of the attack on Mr Lucy’s probity, I cannot bring myself to the view that, within s 232A, it is “just” that the respondents should have to bear the additional cost incurred.
- [15]There being four appeals (the second respondent’s having been compromised), advantage can be taken of that by making costs orders in the appellant’s favour in each. There are precedents for allowing “full” costs for work that is largely repeated in a series of similar or associated matters; for example, Flower & Hart’s Bill of Costs [1969] QWN 41. Even that course would fail, in my opinion, to produce an aggregate costs award that could be seen as just. The typical Justices Act appeal requires a hearing of an hour or so; these occupied four very full days and generated hundreds of pages of submissions the court (and parties) had to come to grips with. In my opinion, in each appeal, item 1 should be increased to $4,000, so that in each appeal, the appellant recovers costs of $5,350 against the relevant respondent. It is probably appropriate to withhold the making of orders until the parties have the opportunity to make submissions about appropriate arrangements under s 232 of the Justices Act and other costs, if any, not alluded to by Mr Loos or referred to by counsel which may need to be taken into account. There was a mention on 21 February 2008 when Mr Loos appeared and formal orders were pronounced; it may attract costs under item 3.