Ramzy v Body Corporate for GC3 CTS38396
[2012] QDC 397
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- Unreported Judgment
- Ramzy v Body Corporate for GC3 CTS38396[2012] QDC 397
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Ramzy v Body Corporate for GC3 CTS38396[2012] QDC 397
Ramzy v Body Corporate for GC3 CTS38396[2012] QDC 397
DISTRICT COURT OF QUEENSLAND
CITATION: | Ramzy v Body Corporate for GC3 CTS38396 & Anor [2012] QDC 397 |
PARTIES: | TONY RAMZY v BODY CORPORATE FOR GC3 CTS 38396 (first respondent) and STEVEN JAMES JOHNSON |
FILE NOS: | Appeal 133/2012, Mag 52186/2010 |
DIVISION: | |
PROCEEDING: | Civil Appeal |
ORIGINATING COURT: | Magistrates Court, Southport |
DELIVERED ON: | 21 December 2012 |
DELIVERED AT: | Brisbane |
HEARING DATE: | 22 October 2012 |
JUDGE: | McGill SC, DCJ |
ORDER: | Leave to appeal against the order and judgment of the Magistrates Court of 7 February 2012 as against the first respondent granted. Leave to appeal as against the second respondent refused. Appeal allowed. Order and Judgment of Magistrates Court set aside. Judgment in lieu that:
Further orders to await further submissions. |
CATCHWORDS: | APPEAL AND NEW TRIAL – Appeal to District Court from Magistrates Court – whether leave to appeal required – whether amounts awarded by way of interest and costs relevant – whether leave to be granted. HOME AND COMMERCIAL UNITS – Body Corporate fees – recovery of unpaid contributions, penalty and recovery costs – how calculated – what must be proved – assessment of recovery costs other than legal costs cannot be referred to a costs assessor. INFERIOR COURTS – Magistrates Court – powers in civil proceeding – no power to refer assessment of anything other than legal costs to a costs assessor. Magistrates Courts Act 1921 s 45(1), (2)(a). Body Corporate and Community Management (Accommodation Module) Regulation 2008 ss 140, 142, 143. Aldrick v EM Investments (Qld) Pty Ltd [2000] 2 Qd R 346 – cited. American Express International Inc v Hewitt [1993] 2 Qd R 352 – applied. Bank of New South Wales v Owston (1879) 4 App Cas 270 – followed. Blair v Curran (1939) 62 CLR 464 – applied. Body Corporate for Sunseeker Apartments CTS 618 v Jasen [2012] QDC 51 – followed. Bond v Dawson [1923] St R Qd 63 – cited. Cameron v Nominal Defendant [2001] 1 Qd R 476 – cited. Campbell v Turner (No 2) [2007] QSC 362 – cited. Colburt v Beard [1992] 2 Qd R 67 – cited. Contor v Commercial Union Assurance Company of Australia Ltd [1996] 1 Qd R 604 – cited. Graham v Roberts & Muller [1956] Qd R 459 – followed. Re Green Global Technologies Ltd [2009] QSC 262 – distinguished. Johns v Johns [1988] 1 Qd R 138 – considered. Kneipp v Carne Reidy Herd Lawyers [2008] QDC 237 – followed. Potter v Dickenson (1905) 2 CLR 668 – applied. Praxis Pty Ltd v Hewbridge Pty Ltd [2004] 2 Qd R 433 – considered. Rains v Frost Enterprises Pty Ltd [1975] Qd R 287 – considered. Schiliro v Peppercorn Child Care Centres Pty Ltd [2000] 2 Qd R 83 – considerred. Smith v Ash [2011] 1 Qd R 175 – considered Woodman v Maher [2001] 1 Qd R 106 – cited. The Owners - Strata Plan No. 36131 v Dimitriou (2009) 74 NSWLR 370 – applied.. Van Riet v ACP Publishing Pty Ltd [2004] 1 Qd R 194 – considered. Wanstall v Burke [1925] St R Qd 295 – applied. Warren & Ors v Body Corporate for Buon Vista Community Titles Scheme 14325 [2004] QCA 104 - considered. Woodman v Maher [2001] 1 Qd R 106 – cited. |
COUNSEL: | S Shearer for the appellant |
SOLICITORS: | Romans & Romans, lawyers for the appellant |
- [1]This is an appeal from a decision of an Acting Magistrate at Southport who on 7 February 2012 gave judgment in the trial of a claim brought by the first respondent as plaintiff against the appellant as defendant. He also dismissed a third party proceeding brought by the appellant against the second respondent. In the notice of appeal the appellant sought both judgment against the first respondent and judgment against the second respondent. The proceeding has been bedevilled by formal deficiencies, not the least of which is there is some considerable ambiguity as to the terms of the judgment against which the appellant is appealing. In order to explain the decision and hopefully clarify the matter it is helpful to summarise the background to the proceeding.
Background
- [2]In June 2008 the appellant purchased a unit in the block for which the first respondent is the body corporate.[1] The second respondent acted as his solicitor for the purchase, and as part of that process sent to the first respondent a document “Form 8” he prepared which gave an address for service of the appellant, which was not the correct address for the appellant. The appellant had not previously owned a unit in a block of units or other property for which such bodies corporate exist, though he had been made aware that the body corporate for the unit would levy contributions from unit owners. Such levies were made and notices were sent out including to the address for service in the Form 8 which had been sent in, but these notices were not in fact received by the appellant, and the levies not paid.
- [3]Ultimately a Claim and Statement of Claim were filed in the Brisbane Magistrates Court and served on him; it may be that the first respondent in fact knew his correct address, but felt that they had to send the notices to the address notified in the Form 8 because of the terms of the legislation. That may have been correct, but if that was the situation it occurs to me that if they had bothered to send a copy of the notice to the address where the appellant actually was, all of the difficulties which have arisen in this litigation could have been avoided.[2] No notice of intention to defend and defence were filed by the appellant, but no judgment was ever signed against him. The proceeding was apparently discontinued.
- [4]Contact had however been made between the parties. The appellant did not dispute his liability to pay the contributions, though he did object to paying any amount by way of penalty interest on unpaid contributions, or by way of recovery costs, both of which were claimed by the first respondent in that proceeding. His attitude was that, in circumstances where they had not sent the notices to the correct address, in the sense of the address where he actually was, he should not have to pay these amounts. That is understandable, but it appears that in practice he approached the matter on the basis that he would not pay any contributions until the body corporate agreed to waive the other claims, which it never did.
- [5]What it did do ultimately was issue fresh proceedings out of the Southport Magistrates Court, on 7 December 2010. This claimed $8,672.86 for outstanding contributions, $2,804.56 as penalty interest to 30 November 2010 plus further interest on the outstanding contributions pursuant to s 142(2) of the Body Corporate and Community Management (Accommodation Module) Regulation 2008 (“the Regulation”) or in the alternative pursuant to the Supreme Court Act 1995 s 47, “costs”[3] reasonably incurred by the plaintiff in attempting to recover the outstanding contributions payable pursuant to s 143(1)(c) of the Regulation, and the reasonable recovery costs of and incidental to the proceedings. The Statement of Claim contained little more information about the amount sought than the Claim, but did allege that the plaintiff had incurred $2,672.28 in costs not including costs of and incidental to that proceeding, and sought that amount from the appellant. Presumably this reflected the fees charged by the management company for doing whatever it did.
- [6]The appellant filed a notice of intention to defend on 19 January 2011. The appellant denied the allegation that the plaintiff had given 30 days written notice to him of the contributions payable as required by s 140 of the Regulation, on the ground that he did not receive them. He admitted that he had failed to pay the contributions, but referred to his offer to pay them exclusive of interest or costs, alleged that the plaintiff was not entitled to recover penalty interest because the defendant did not receive the notice, and because the plaintiff had failed to mitigate its loss by not attempting to telephone the appellant at a telephone number which was available to it, and by not doing anything effective to chase him up over a period of two years, and on the ground that the rate of 2.5 per cent per month was a penalty and therefore unenforceable.[4] The point was also taken that the proceeding ought to have been commenced at Brisbane; that may be right, since the parties and the units were in Brisbane, but this point seems to have gone away. The defendant also disputed the quantum of the recovery costs claimed.
- [7]With the defence the appellant filed a third party notice and statement of claim against his solicitor. He alleged that the Form 8 had been defective as a result of which notices of body corporate contributions the plaintiff sent had not come to the defendant’s attention for a period of two years, and said that the plaintiff was claiming penalty interest and recovery costs against the defendant as a result of the defendant’s not paying the contributions, which was alleged to be “a direct consequence of the plaintiff sending the notices to an incorrect address provided by the third party without the authority of the defendant.” The defendant then claimed as relief from the third party:
“To be indemnified against the plaintiff’s claim and/or contribution to such extent as the court may think fit think and an order for costs.”
- [8]This claim against the third party was decidedly curious. Read generously the Statement of Claim might be alleging that there was negligence or breach of the contractual obligation to exercise reasonable care and skill in sending the Form 8 with an incorrect address, though strictly speaking all that was specifically alleged was that the Form 8 was sent without the authority of the appellant. The relief sought was an indemnity against the plaintiff’s claim, when all that was alleged by way of loss as a result of any negligence or breach of contract by the appellant was the penalty interest and the recovery costs; obviously any deficiencies in the Form 8 did not expose the appellant to the liability to pay contributions. Nevertheless the claim on its face was for an indemnity “against the plaintiff’s claim”. The reference to “contribution to such extent as the court may think fit” is very puzzling; it is the way one would plead a claim for contribution between tortfeasors. It would have been appropriate only if the appellant had been sued in tort by the first respondent (which he was not) and the second respondent was also liable in tort to the first respondent (which he was not). As a means of defining the issues in the third party proceedings, therefore, this document left almost everything to be desired.
- [9]The second respondent in his defence pleaded that as the appellant’s conveyancing solicitor he was authorised to complete the Form 8, denied that the Form 8 was defective, and alleged that the appellant was “a man of commerce with extensive experience in the purchase, sale and ownership of property such as” the relevant property and that as such knew or ought to have known that as owner of the property he was responsible and liable for the payment of body corporate contributions for the property. Accordingly it was alleged that “the defendant, by his own actions and by no fault of the third party neglected his obligation to pay body corporate contributions as the owner of the property.” The defence denied that the claim for penalty interest and recovery costs was as a direct consequence of the plaintiff’s sending the notices to an incorrect address, but otherwise does not seem to have said anything very sensible in response to the allegation that the claim for penalty interest and recovery costs were as a direct consequence of the notices being sent to the incorrect address provided by the second respondent.
- [10]The first respondent applied for summary judgment under r 292. On 24 May 2011 a judicial registrar in a reserved judgment ordered that judgment be entered for the plaintiff for $8,672.86, the unpaid contributions, but otherwise dismissed the application with no order as to costs, and directed that the claims in paragraphs 7 and 9 of the Statement of Claim be listed for trial. An “order” in those terms was signed and filed in the Registry on 2 June 2011. The “order” was inappropriate in its wording. The outcome of a successful or partially successful application under r 292 where the claim is a money claim is simply a money judgment. Rule 292 does not authorise the making of an order that judgment be entered in the Registry, but simply that judgment be given, and if the court is satisfied that the requirements of the rule have been made out the appropriate form of order is simply to give judgment, that is, judgment that the defendant pay the plaintiff $X: see Form 26. Once upon a time summary judgment rules did provide for an order in these terms, but not since 1999. Nevertheless, the effect of this judgment is clear enough.
- [11]The proceeding then came on for trial on 19 December 2011; a reserved decision was delivered on 7 February 2012. The Acting Magistrate published reasons at the end of which four paragraphs headed “order” were set out. They were not expressed in terms appropriate as the formal judgment to reflect the reasons published. Thereafter a formal “order” was signed in the Registry, which faithfully reflected those four paragraphs from the reasons, with all their deficiencies. Subsequently a further document headed “Judgment” was drawn up (by someone) and signed in the Registry, which was in somewhat different terms from the order, although to be fair it more closely approximated what ought to have been adjudged on the basis of the reasons published by the Acting Magistrate. At least it was correctly entitled “judgment” rather than “order”; the appropriate document to reflect the outcome of a trial of the proceeding was a judgment, not an order.
- [12]It is I think unhelpful in the circumstances for me to dwell on the precise terms of either the orders formulated by the Acting Magistrate or the judgment as signed in the Registry, and I will concentrate on the reasons. Essentially, he held that the plaintiff was entitled to recover the penalty interest claimed, and was entitled to the recovery costs although the amount of the costs reasonably incurred had not been proved before him; he sent off for determination by a costs assessor the amount of the recovery costs recoverable pursuant to the appropriate provision in the Regulation. He said in his reasons that it was not reasonable for the plaintiff to recover the costs of the proceeding in the Magistrates Court in Brisbane which did not lead to a judgment, but the plaintiff was entitled to recover the costs of the proceeding in the Southport Magistrates Court which costs were to be assessed on the indemnity basis. Nevertheless, he did not specifically mention assessment on the indemnity basis in the orders that he formulated at the end of his reasons, and this aspect of the matter was not reflected in either of the formal documents drawn up afterwards. It is clear that the Magistrate has in effect left the assessment or quantification of the recovery costs to the cost assessor. The third party claim was dismissed, and the appellant was ordered to pay the second respondent’s costs of that proceeding.
Preliminary point
- [13]Before me it was submitted on behalf of the second respondent that the appellant required leave to appeal insofar as the appeal was brought against the second respondent, because the amount involved in the proceeding so far as that respondent was concerned was the amount involved in the third party claim, and that amount was less than the minor civil dispute limit[5], so that the appellant had no right to appeal under s 45(1)(a) of the Magistrates Courts Act 1921. This raises the question of just what is meant by “an action in which the amount involved is more than the minor civil dispute limit”. In this context, where there is a third party proceeding, is the “amount involved” determined by reference to the amount involved in the proceeding overall between plaintiff and defendant, or the amount involved specifically in the third party proceeding. And what was the amount involved in each case?
- [14]Whether leave is necessary is an important question; if this Court purports to hear and determine an appeal in a matter where leave was necessary, but where leave to appeal has not been given, the court is acting without jurisdiction and as a result any order it makes is a nullity: Smith v Ash [2011] 1 Qd R 175 at [51].
- [15]Ordinarily by the time judgment has been delivered it is known what the amount involved in the proceeding was, but the difficulty here is that a significant part of the plaintiff’s claim has been sent off for determination or quantification by a costs assessor. That raises the question of whether the amount involved included the claim for interest and costs, which in turn gives rise to the question of whether it matters that the Regulation made the interest and costs recoverable as a debt rather than as interest and costs in the conventional sense, that is interest awarded as a matter of discretion pursuant to statute, and costs assessed in the usual way.
Authorities
- [16]There is authority that, for the purposes of s 118(2) of the District Court of Queensland Act 1967 as it then was, in determining the amount for which judgment had been given or the value of a matter in issue for the purposes of comparison with the Magistrate Courts jurisdiction limit, one did not have regard to any amount claimed or awarded for interest or costs: Van Riet v ACP Publishing Pty Ltd [2004] 1 Qd R 194 at [19]. That decision was arrived at by following an earlier decision in the Full Court in Johns v Johns [1988] 1 Qd R 138 concerning the then District Court Act 1967 s 92, where it was held that any amount awarded by way of interest or costs did not form part of “the sum sued for” for the purpose of determining whether that amount exceeded $5,000.
- [17]Interestingly, in Johns Williams J with whose decision the other members of the court agreed drew attention to the fact that the expression “the sum sued for” was used “in contrast to the expression ‘amount involved’ which is used in s 11 of the Magistrates Courts Act 1921”[6] and noted earlier decisions of the Full Court where that distinction had also been noted. In the more recent of those cases, Rains v Frost Enterprises Pty Ltd [1975] Qd R 287 Dunn J, with whom on this point the other members of the Court agreed, said at p 290:
“In relating the nature of the appeal to ‘the sum sued for,’ it seems to me, s 92(3) requires the amount of the plaintiff’s claim to be considered in isolation from the amount of the counterclaim, if there is a counterclaim. It would not have been difficult to relate the nature of the appeal to the total of the claim and any counterclaim, if that had been intended by the legislature, e.g. by using an expression with a well settled meaning, such as ‘the amount involved’ (cf Graham v Roberts & Muller [1956] Qd R 459).”
- [18]In Graham Hanger J, dealing with an appeal from a Magistrates Court which in those days went to the Supreme Court, held that “the amount involved” in an action for damages for negligence where there was a claim and a counterclaim arising out of the same accident was the total of the amounts involved in both the claim and the counterclaim. At p 462 his Honour said it was clear that what mattered was the amount involved in the action not the amount involved in the appeal. His honour at p 462 rejected the argument that an interpretation of the statute should be adopted which would prevent a plaintiff giving himself a right of appeal by inflating the amount of his claim so that it was in excess of the appeal limit, even if there was no prospect of recovering such an amount.
- [19]In circumstances where the Full Court in Johns effectively endorsed the approach in Rains v Frost Enterprises, which in turn endorsed Graham v Roberts, it would be somewhat ironic if the effect of the decision in Van Riet was that the court in following Johns had overcome or disregarded the very distinction which was emphasised in that case at p 140, by applying that approach to the different formulation in the section then under consideration. Ultimately however the Court in Van Riet approached the matter on the basis that the Magistrates Court jurisdictional limit was to be determined without regard to interest[7] and costs, so that where the amount of the judgment given, or the value of the matter in issue, had to be compared with that limit, the interest and costs had to be disregarded: [19]. In substance the test was whether the judgment given, or the judgment which would have been given if the plaintiff had been successful, was one which could have been given in the Magistrates Court within the limit of that Court’s jurisdiction.
- [20]However, s 45 does not relate the test for a right of appeal to whether the judgment is one which could be given by the Queensland Civil and Administrative Tribunal under its jurisdiction in respect of minor civil disputes, but rather relates the amount involved to the “minor civil dispute limit”, an amount defined in the other Act as a specific sum of money. In my opinion it follows that the approach adopted by the Court of Appeal in Van Riet is not applicable to the interpretation of s 45. On the other hand, there are numerous decisions which have treated the assessment of the amount involved as something done without regard to costs; indeed it seems to me that strictly speaking that was the approach in Graham v Roberts.
- [21]In Bank of New South Wales v Owston (1879) 4 App Cas 270 the Privy Council said that “it is plain from previous decisions of this tribunal that the costs may not be added to the amount recovered in estimating the appellable sum.”[8] That was concerned with the Order in Council governing appeals to the Privy Council, a provision which was said by the Court of Appeal in Praxis Pty Ltd v Huwbridge Pty Ltd [2004] 2 Qd R 433 at 435 to be the basis of s 35(1)(b) of the Judiciary Act 1903 (Cth), which in turn was the basis of s 118(2)(b) of the District Court of Queensland Act 1967 prior to an amendment in 2003, subject to one important difference noted below. Owston in turn was followed by the Full Court in Bond v Dawson [1923] St R Qd 63 at 68 in deciding that “the amount involved” in an item in the costs schedule in relation to the amount involved in the appeal was to be assessed without regard to costs payable in the judgment under appeal.[9] That decision in turn was followed in relation to s 45(1)(a) in Kneipp v Carne Reidy Herd Lawyers [2008] QDC 237 at [4] per Forde DCJ.
- [22]Cases involving s 118(2)(b) required consideration of whether the judgment from which the appeal was to be brought “involves directly or indirectly any claim … in relation to any property or right with a value equal to or more than the Magistrates Court jurisdictional limit.”[10] This involved a determination of the value of the right claimed in the proceeding, a formula similar to that considered by the Full Court in Johns v Johns (supra) which led to the conclusion that any amount claimed for costs should not be taken into account. But the Order in Council for appeals to the Privy Council and the Judiciary Act 1903 s 35(1)(a)(ii), did not relate the value of the right to the jurisdiction of a court, but to a specified amount. It is the same with s 45(1)(a).
- [23]In Colburt v Beard [1992] 2 Qd R 67, it held that there was a right of appeal in relation to an order as to costs so long as the order was made in an action or matter where the sum sued for exceeded $10,000, in terms of the test then in s 92 of the District Courts Act 1967. The court held at page 68 that an order directing the payment of costs by one party to another was a final judgment.[11] In Cameron v Nominal Defendant [2001] 1 Qd R 476 the Court of Appeal followed this decision but went on to hold at [6] that “as neither the amount of the judgment nor the amount of the costs order was for an amount equal to or of a value equal to or more than the Magistrates Court’s jurisdictional limit,” the test for a right of appeal under s 118(2) was not met, so that the proceeding was properly brought as an application for leave under subsection (3).[12]
- [24]This decision was referred to in Van Riet (supra) at [39] in relation to the question of whether the respondent should be given leave to cross-appeal in respect of the costs order made against it. The joint judgment of two judges confirmed the view that “an order as to costs is a final judgment and a right of appeal lies from a costs order which is equal to or more than the Magistrates Court jurisdictional limit.” The court held that leave was necessary on the basis of affidavit material suggesting that the third respondent’s liability for costs under the order would not be more than $25,000. The court does not seem to have noticed the anomalous situation produced by this approach, that the amount of costs was not taken into account when determining whether the jurisdictional limit was exceeded in relation to the substantive appeal, but was taken into account if the substance of the appeal (or proposed appeal) concerned only the question of costs. What if the appellant seeks to challenge both the substance of the judgment and (separately) the order for costs? That is the position here, insofar as the appellant challenges among other things the order for the assessment of recovery costs by a costs assessor.
- [25]That the assessment of whether a judgment was given for an amount equal to or more than the Magistrates Court jurisdictional limit for the purposes of s 118 should be undertaken excluding interest and costs was confirmed by the Full Court in Praxis Pty Ltd v Hewbridge Pty Ltd [2004] 2 Qd R 433 at 435. That case decided that as a result of an amendment in 2003 s 118(2)(b) no longer applied to money claims in personal actions. This produced the consequence that a defendant had a right of appeal if a plaintiff’s claim for an amount in excess of the Magistrates Court jurisdictional limit succeeded, but the plaintiff had no right of appeal if the claim failed, an outcome which seems to be particularly favourable to defendants.[13]
- [26]I suppose it is difficult to formulate a test which operates in an even-handed way, though the earlier version as interpreted by the Court of Appeal in Aldrick (supra) came pretty close. More recently, in Smith v Ash [2011] 2 Qd R 175 McMurdo P at [6] confirmed the approach in Cameron, although Chesterman JA at [88] said that leave is required to appeal from a costs order of the District Court to the Court of Appeal, citing Cameron, and adding that leave was required to appeal from a costs order of the Magistrates Court under s 45. That case concerned an appeal in relation to a question of costs under s 222 of the Justices Act, so that the decision did not reflect a considered view as to the operation of s 45.
- [27]In the light of all these authorities, I would conclude that, even though the comparison in s 45 is now to be made with a specific sum of money, costs are generally not to be taken into account when determining whether the “amount involved” in the action exceeds that amount.
- [28]The position in the present case however is I think a little different, because what was being sought was not costs in the ordinary sense, legal costs[14], but recovery costs. An important consideration here in my opinion is that, although it is clear that this includes legal costs of the proceedings in the conventional sense,[15] it is not confined to legal costs. It would include other costs incurred by the body corporate in recovering the amount such as fees charged by a management company, so long as they were reasonably incurred and reasonable in amount.[16] I think “the amount” in paragraph (c) is a reference to “the amount” in paragraph (a). Indeed at the stage when the claim was filed in the Southport Magistrates Court, the amount claimed as recovery costs other than legal costs was somewhat greater than the legal costs, which were claimed separately.
- [29]As well, the Regulation makes the recovery costs recoverable as a debt, and that also creates a somewhat different situation from the ordinary one where costs are fixed by a magistrate or assessed under the rules. The Regulation treats the recovery costs as a recoverable debt in the same way as the amount of the unpaid contributions and the penalty, and when such a claim is advanced it seems to me that the amount involved in the claim is the full amount of any debt payable pursuant to s 143(1) of the Regulation, including the recovery costs. In my opinion it has the effect that these costs are not to be treated as costs in the conventional sense, and are therefore not to be disregarded when determining the amount involved for purposes of s 45(1)(a).
- [30]A further question however is whether the “amount involved” is to be determined by reference to the situation when the proceeding is commenced, or whether it is to be determined by reference to the amount recoverable as at the date of judgment. It is clear that expressions such as “the amount claimed” or “the sum sued for” are to be assessed as at the time when the proceeding is filed, so that extra amounts which become payable thereafter are not taken into account. In Schiliro v Peppercorn Child Care Centres Pty Ltd [2000] 2 Qd R 83, Thomas JA at 87 noted that in Graham v Roberts (supra) Hanger J had construed the words “amount involved” in what is now s 45 “as referring to the amount in issue, that is to say the amount that one party claimed against the other.” His Honour however can hardly have been speaking of the claim as initially filed, because at that stage of course there was no counter-claim, and he held that in the circumstances of that case one took the counter-claim into account when determining the amount involved. His Honour therefore must have been speaking about the amount claimed in the sense of what was ultimately claimed in the proceeding, that is to say the situation at trial. That would also cover the possibility that the claim could be amended from time to time in the course of the proceeding. Accordingly in my opinion the amount involved is determined by reference to the amount ultimately claimed by the party or parties.
- [31]In the present case, by the time of the trial additional recovery costs had been incurred. The plaintiff was claiming (in addition to the unpaid contributions which had been the subject of the partial summary judgment) the penalty for late payment and the recovery costs. These were claimed as a debt, and in principle it ought to have been possible to quantify all the recovery costs so that the plaintiff was in a position to specify and prove what costs it had reasonably incurred in recovering the amount, and indeed provide a reasonable estimate of future costs. That it did not actually do so does not I think matter; that was the amount recoverable as a debt pursuant to s 143 of Regulation and that was therefore the amount which the plaintiff was claiming from the defendant in the proceeding.
- [32]It was submitted on behalf of the second respondent that the only amount covered by the claim for recovery costs demonstrated by the evidence at the trial was an amount of just under $2,000, so that on this basis the amount involved in the claim was still under $25,000. It is true that the first respondent did not at the trial either claim a specific amount as recovery expenses, or prove any particular amount, even the recovery costs up to a particular date. But there was some evidence that an estimate of the amount of recovery costs up to the date of the trial was about $15,000[17], and that is the best available evidence as to the quantification of the first respondent’s claim for recovery costs.
- [33]As to interest, the matter is a little more complicated. At the time when the Magistrates Courts Act was passed, and indeed up until 1972, a magistrate had no power to award interest: Johns v Johns (supra) at page 141. In those circumstances, it was held in that case that the statutory power to award interest conferred then by s 72 of the Common Law Practice Act 1867 was not to be treated as altering the jurisdiction of that court by reducing the quantum of claims which could be brought therein, so that such interest was not to be taken into account when considering if the jurisdictional limit had been reached. Of course prior to that time, if interest was payable under a contract, it would have been open to claim the amount payable by way of interest in the Magistrates Court, and for the magistrate to give judgment for that amount, and it is not obvious that this argument would prevent the Magistrates Court jurisdictional limit from applying to the amount of the judgment inclusive of interest payable on that basis.
- [34]The same might well apply if there were a statutory entitlement to interest, as in Owston (supra), although it has been held that s 68(3)(c) of the District Court Act 1967, which expressly provides that no account has to be taken of any amount awarded or liable to be awarded by way of interest when determining whether a claim is in excess of the monetary jurisdictional limit of the District Court, applies to a statutory provision for interest to be payable at a specified rate: Contor v Commercial Union Assurance Company of Australia Ltd [1996] 1 Qd R 604 at 606. The difference between this and the Privy Council decision in Owston (supra) is probably attributable simply to the absence of such a provision from the Order in Council.
- [35]The difficulty in the present case however is that by the Regulation the relevant amount is made payable as a penalty for not paying the contribution or instalment. This is the term used in s 143(1)(b), although s 142(2) provides that the penalty “must consist of simple interest at a stated rate (of not more than 2.5 per cent) for each month the contribution or instalment is in arrears.” The example given then makes it clear that this applies only to whole months, and the penalty would be payable at the specified rate in respect of each completed month regardless of the number of the days in that month. What is made payable is therefore different from interest in the conventional sense.
- [36]Bearing in mind that this is by the Regulation made recoverable as a debt, it is difficult to see why it should be disregarded when determining the “amount involved” in the action. In my opinion, the decision in Owston applies, the decisions in Johns and Van Riet are to be distinguished, and the penalty payable under the s 142 and recoverable as a debt under s 143(1)(b) is to be taken into account in determining the “amount involved in the action” for the purposes of s 45(1)(a) of the Magistrates Courts Act 1921.
- [37]It was submitted on behalf of the second respondent that the claim against the third party could not have been for an indemnity for the full amount of the plaintiff’s claim against the defendant, because there could be no entitlement to an indemnity in respect of the amount of the contributions which were payable anyway, and at some point any continuing loss suffered by the appellant was suffered because of his failure to pay the contributions rather than because of any deficiency in completing the Form 8. These propositions may well be correct, but they are not I think to the point when determining the “amount involved” for the purposes of s 45(1)(a). The position as explained in Graham v Roberts is that what matters is the actual amount claimed even if it was artificially inflated just to generate an entitlement to an appeal. It is certainly the same if it was too high through error. What the appellant in fact claimed in the third party notice, and the third party statement of claim, was an indemnity in respect of the plaintiff’s claim. Accordingly, the amount involved in the third party proceeding was the same as the amount involved in the plaintiff’s claim. In these circumstances, it is unnecessary for me to consider whether, for the purpose of determining whether there is a right of appeal in relation to a third party proceeding, what matters is the amount involved in the third party proceeding, or the amount involved in the proceeding as a whole.
- [38]One remaining argument advanced on behalf of the second respondent was that, once the judicial registrar gave judgment in respect of the amount claimed by way of contributions, that ceased to be part of the amount involved in the action. Reliance was placed on the proposition that at that point the right or cause of action in respect of the contributions merged in the judgment and no longer had an independent existence: Blair v Curran (1939) 62 CLR 464 at 532. From that point on, what was left in the proceeding was the claim for the penalty and the recovery costs, and that amount did not on any view of the matter total in excess of $25,000. Accordingly leave to appeal was required.
- [39]In my opinion this submission was correct. If the amount involved in an action can go up as a result of the enlargement of the claim because of the passage of time, or indeed for any other reason, the amount involved in an action could also go down. This could occur, for example, if the plaintiff abandoned part of the claim, or if part of the claim were formally compromised, and it seems to me that in principle the situation is no different if judgment is given in respect of part of the claim. Thereafter the amount involved in the action is the balance of the claim. This would be consistent with the practice that has been followed from time to time, where a proceeding is commenced in the Supreme Court seeking relief including relief which would not be within the jurisdiction of the District Court, and then partial summary judgment is given, and the only part of the relief claimed still in issue following the partial summary judgment is a claim which is within the jurisdiction of the District Court. In such circumstances, proceedings have been transferred from the Supreme to the District Court.
- [40]Accordingly I consider that the appellant did not have a right of appeal under s 45(1), and it was necessary for him to obtain leave to appeal under subsection (2)(a). The position is the same in relation to the appeal against the first respondent, although the point was not taken on behalf of the first respondent on the hearing; the matter goes to the jurisdiction of the court to hear and determine the appeal, as indicated earlier.
Whether to grant leave
- [41]Under this subsection I “shall not grant such leave to appeal unless [I am] satisfied that some important principle of law or justice is involved.” The leading authority on the application of this test is Wanstall v Burke [1925] St R Qd 295, a decision of the Full Court. MacNaughton J, with whom O'Sullivan J agreed, said that the effect of the test laid down by the statute was to adopt the practice applied by the High Court at that time under the Judiciary Act 1903 (Cth) s 35(1)(b) in relation to certain applications for special leave to appeal to that court. He quoted a passage where Griffith CJ said:
“The practice we have already laid down …[is] of not granting special leave to appeal unless we are of opinion that the case is one of gravity, or involving some important question of law, or affecting property of considerable value; or unless it is a case which is otherwise of public importance, or is of a very substantial character.”
- [42]The approach of the majority has been frequently followed by the Full Court and more recently the Court of Appeal. In Johns v Johns [1988] 1 Qd R 138 Williams J with whom the other members of the Court agreed, noted that the test had been followed by the Full Court in Kavanagh v Loch [1930] St R Qd 317, and in Scagliotti v Boyd [1962] Qd R 481. His Honour noted that attention had been drawn to the use in the similar expression then contained in s 92 of the District Courts Act 1967, dealing with appeals to the Court of Appeal from the District Court, of the word “question” rather than “principle”, which may have had a narrower connotation, but did not consider it necessary to decide that: p 141.[18] It has also been said that an important principle of justice requires that there be a question going beyond the consequence of the decision for the immediate parties to the proceeding: American Express International Inc v Hewitt [1993] 2 Qd R 352.[19]
- [43]So far as the appeal against the first respondent is concerned, the matters raised on the appeal concern the way in which a body corporate can recover costs and a penalty payable under the Regulation as a debt, in circumstances where there has been a failure to pay contributions in a timely way. In particular, it raises the question of whether the whole question of the assessment of the amount payable by way of recovery costs can be referred by a Magistrate to a costs assessor. These are matters of general importance in relation to the conduct of proceedings of this nature, arising under this Act and Regulation, which must be quite common, in respect of which there is relatively little authority at the present time. In my opinion therefore the proposed appeal against the first respondent does raise some important principle of law or justice, as that expression has been expounded in the authorities to which I have referred.
- [44]With regard to the appeal against the second respondent, counsel for the appellant when asked to identify the relevant principle of law or justice relied on, referred only to the requirement for the Magistrate to decide cases on the basis of the law and evidence, since the appellant would argue that the law was not applied correctly and that there was no evidence supporting the decision of the Magistrate. Apart from anything else, this on its face does not raise any issue extending beyond the consequences of the decision to the immediate parties to the proceeding. If there is an error of law by a Magistrate, that can be an important principle of law, but no principle of law of general application appears to have been raised by the approach of the Magistrate.
- [45]The question of the duties of a solicitor in these circumstances is I think straightforward enough, there was no dispute that the form did not state the correct address for the appellant, and the principles in relation to causation are also quite straightforward. The actual decision seems to be wrong, since the proposition that there would be no loss at all which was causally related to the failure to state the correct address on the Form 8 strikes me as quite surprising.[20] It is one thing to say that the owner of a home unit might expect to receive contribution notices from time to time, and might in time realise that the notices were not getting through and chase things up, but ordinarily people pay bills when they get them, and, unless the bill is quite regular, such as a monthly bill, do not necessarily become aware that a bill ought to have been received and has not been simply because one has not been received. Most bills which do not arrive are not missed.
- [46]It was not simply a question of concluding that he ought to have been aware that bills were being received, but a matter of deciding when that conclusion ought to have been reached, and identifying whether any and what loss had been incurred prior to that time. I think it is very likely that a proper application of principle would lead to some small liability of the part of the third party, but it is also quite likely that the amount of that liability would be quite small, and that is also a factor favouring the refusal of leave. Accordingly, although I think the Magistrate erred in the disposition of the third party proceeding, because there is no issue of general importance raised and because the amount involved as a consequence is quite small, it is not appropriate to grant leave to appeal in relation to the third party proceeding.
Appeal issues - Penalty
- [47]It was submitted on behalf of the appellant that there had been a failure to prove service by post under the applicable provisions of the Act and the Acts Interpretation Act 1954. Reference was made to the decision in Re Green Global Technologies Ltd [2009] QSC 262, where it was held that there had been a failure to prove due service of a statutory demand. In these circumstances it was submitted to have not been shown that the contribution notices had actually been sent to the plaintiff. The relevance of this does not immediately emerge. The obligation to send the notices was relevant to the liability to pay contributions but that liability had already been established by the judgment that the amount of the unpaid contributions be paid. All that was relevant in relation to penalty interest was to prove that the contributions had not been received by the body corporate by the date for payment fixed in notices for contribution given to the owners: Regulation s 142(1).[21]
- [48]The conclusion that the unpaid contributions were payable necessarily involved the proposition that the first respondent had given the appellant written notice in accordance with s 140(1) of the Regulation, so there would have been an issue estoppel for the purposes of a trial that the notices had been duly given.[22] Since the right to recover depends upon the contribution not being paid by the date for payment, under s 143(1), it also follows from the judgment in relation to the contributions that those contributions were not paid by that date, and an issue estoppel would arise in relation to that point for the purposes of the application of penalty under s 142. In these circumstances, in my opinion it was unnecessary to prove that the notices of contribution had been given, as the matter had been concluded by issue estoppels arising from the judgment of the judicial registrar.
- [49]It is perhaps somewhat ironic, but in keeping with the general level of efficiency in the conduct of these proceedings, that at the trial before the Acting Magistrate the first respondent called a whole lot of evidence which it did not need to call, but failed to call any evidence in relation to the other part of its claim, the recovery costs. However, in circumstances where in my opinion it was unnecessary for the first respondent to prove due service of the notices of contribution, I will not say much in relation to whether the Magistrate erred in finding that they had been served. That question had to be determined by reference of course to whether they had been given by service on the appellant at his address for service, that is to say at the address notified by the Form 8 referred to earlier. Whether he actually received the notice does not matter for the purpose of s 140.
- [50]In any case, the short answer to the submission on behalf of the appellant is that the decision in Re Green Global Technologies Ltd (supra) was clearly distinguishable. That was a case where the issue was whether the evidence contained in an affidavit by a solicitor for the applicant was sufficient to prove service of the statutory notice of demand. That affidavit said so far as was relevant:
“I did on the 13th of March 2009 cause a letter … enclosing the creditor’s statutory demand for payment of debt … to be forward by prepaid post pursuant to the provisions of the Corporations Act 2001 to the registered office of [the company].”
- [51]The affidavit also showed that the letter was addressed to the company at a particular address which Daubney J accepted was the registered office of the company at the date of the letter. His Honour approved the proposition that, in order to establish service by post, it was necessary to prove that the letter was properly addressed, prepaid, posted as a letter and sent to the registered office of the company: Dwyer v Canon Australia Pty Ltd [2007] SASC 100 at [6]. His Honour pointed out that there was no explicit statement that the letter was put into an envelope, or direct evidence of what appeared on the face of the envelope, no evidence of the value of any stamp or franking affixed to the envelope and no direct evidence that anyone lodged the envelope at any post office or in any post box.
- [52]His Honour also said at p 10:
“There is no evidence before me of any of the processes within the applicant’s solicitor’s office which would give me any proper basis for concluding that posting of the documents in question in an envelope addressed to the registered office of the respondent company actually occurred. Accordingly, I find that the applicant has not proved service of the statutory demand by post.”
- [53]In the present case each notice sent to the appellant was one of a large number of notices sent out by a contractor for the body corporate, or I suspect a number of bodies corporate managed by the same management company. The process was largely automated, so that there was no particular identifiable person who was responsible for taking the various steps referred to in that judgment specifically in respect of the notice sent to the appellant. There was on the other hand a good deal of evidence about the processes of that contractor, and some evidence about the process by which information was sent to the contractor which would give rise to appropriate notices. From that evidence it was open to the Magistrate to draw the inference on the balance of probabilities that a copy of the relevant notice had been inserted into an envelope which was addressed to the appellant at the address for service, that the envelope had been duly prepaid and that it was lodged at a post office.
- [54]In those circumstances, the decision in Re Green Global Technologies Ltd was distinguishable, and on the evidence properly distinguished. If it had been necessary for the first respondent to prove that the notices had actually been posted to the appellant, in my opinion on the evidence led at the trial the appropriate inference was that they had. On both of these bases therefore there is no substance to this ground of appeal.
- [55]This was the only basis upon which the amount claimed by way of penalty was challenged, but it emerged in the course of the hearing that the amount of the judgment for penalty interest was wrong, or at least the document headed “Judgment” referred to earlier included judgment for an amount which was supposed to be in respect of penalty interest, but was for the wrong amount. I was provided with a copy of a calculation which had been put before the Magistrate, which showed the amount as $4,492.80, calculated separately in respect of each contribution notice and payment due date, and the date for payment. However, the “judgment” did not reflect that amount, but had a figure of $5,454.35. I was told during the hearing that that figure had apparently been arrived at by “updating” the figures in the schedule to carry the interest in respect of some or all of the amounts up to the date of judgment, but that was plainly not appropriate as the penalty would only apply for the period up to the date on which the unpaid contributions were actually paid.
- [56]It was not disputed that the unpaid contributions were in fact paid on 6 June 2011, after the judgment for them was given by the judicial registrar. There was therefore no reason to be “updating” the amount in the calculation, and insofar as the formal judgment refers to a different amount, it was wrong, and indeed unjustified by the reasons of the Acting Magistrate, and probably included without legal authority. There is therefore plenty of reason for setting it aside.
- [57]What the Magistrate actually found was the defendant was liable to pay the plaintiff the whole of the penalty interest claimed, though he did not identify what that amount was. It is however obvious to me from an examination of the interest calculation document which was provided to me that the penalty interest calculated according to that document had not been properly calculated according to s 142(2) of the Regulation. As I mentioned earlier, this makes the penalty calculated by reference to a particular percentage for each whole month that the contribution was in arrears. The schedule calculated the penalty as something accruing from day to day, in respect of which interest was charged at one-365th of the annual equivalent of 2.5 per cent per day. That was wrong.
- [58]At the trial the first respondent proved the contribution notices which became Exhibit 18: these identified the amount payable, and the date for payment for each amount. That the contributions in respect of all of these except the last, in the notice dated 18 January 2011, had not been paid was established by the judgment of the judicial registrar of 24 May 2011. The defendant admitted that he did not pay the notice dated 18 January 2011, due on 1 March 2011: p 75. Accordingly it had been proved that none of the notices were paid when due. There was evidence that a payment of $2,500 had been received on about 30 June 2010: p 28. There was also evidence that a contribution due on 1 November 2011, which was not on the schedule, had been paid “a few weeks ago” and that there was a payment “following a decision by the Registrar awarding the body corporate I think just over $8,000 in unpaid contributions.”: p 28.
- [59]It may be that somewhere in the material there is evidence that the amount of the judgment was paid on 6 June 2011, as was assumed by the interest calculation, and that the amount of the contribution due on 1 March 2011, which does not seem to have been included in the claim and hence in the judgment of the judicial registrar, was also paid at the same time. It may be that at some point in the cross-examination of the appellant he had agreed with these times for payment, otherwise it is not at all clear that the one thing that the first respondent did have to prove in order to sustain the claim under s 142(2), namely the number of months the contribution was in arrears, had actually been proved at the trial.
- [60]There is the complication that the body corporate did not fix the penalty under s 142(1) until 1 April 2009, so the instalments which became payable prior to that time carried interest only from that date. This covered the first three instalments. Others carried interest of 2.5 per cent for each whole month the contribution was in arrears.
- [61]There is also the consideration that the payment of $2,500 made on 30 June 2010 was treated by the judicial registrar as a payment off the contributions, which was contrary to s 143(5) of the Regulation: it should have been applied first towards the penalty, and then in reduction of the outstanding contributions. That was an error of law on the part of the judicial registrar, but there was no appeal against that decision and the payment was in fact applied in that way. The rights of the parties having merged in the judgment, effect has to be given to that for the purposes of the subsequent judgment, which is under appeal. Accordingly I have to proceed on the basis that interest is to be calculated taking into account that payment. That payment on 30 June 2010 discharged the full amount of the payments due 1 July 2010 and 1 March 2010, and $176.30 of the payment due 5 December 2009.
- [62]It follows that penalty was payable for 26 months in respect of the contributions due 1 August and 1 December 2008 and 1 April 2009 in the sum of $2,444.07[23], and 23 months in respect of the contribution due 1 July 2009 in the sum of $921.64.[24] Penalty was due on the full amount of the payment due 5 December 2009 for seven months, and on the balance of $697.94 for a further 11 months, a total of $344.92.[25] Penalty was due on the contribution due on 1 March 2010 for three months, since this contribution was paid on 30 June 2010, a sum of $65.67.[26] No penalty is due for the contribution due 1 July 2010, since that was discharged by the payment made the previous day. Penalty was due on the contribution due 10 November 2010 for six months in the sum of $332.53[27], on the contribution due 1 January 2011 for five months in the sum of $49.39[28], and on the contribution due 1 March 2011 for three months in the sum of $166.26[29]. It follows that, if the penalty is calculated in accordance with s 142(2), the amount of penalty in respect of unpaid contributions comes to $4,324.48. Accordingly that figure should be substituted for the figure in the judgment paragraph 1, the wording of that paragraph being amended to provide that “the defendant pay the plaintiff $4,324.48 as penalty for unpaid contributions pursuant to s 143 of the Body Corporate and Community Management (Standard Module) Regulation 2008 (Qld).”
Recovery costs
- [63]The Acting Magistrate identified one of the issues before him as whether the defendant was liable to pay the plaintiff’s reasonable costs: [19]. In relation to this the Magistrate found that it was not reasonable that the plaintiff receive costs in relation to both the earlier proceeding in Brisbane and the second claim filed in the Southport Registry: [46]. The plaintiff’s claim for costs of the earlier matter was therefore not allowed: [47]. The Magistrate then went on at [48]:
“The plaintiff is entitled to costs only in relation to this claim Southport M52186/10. Those costs are to be on an indemnity basis.”
- [64]Two of the four orders made in [53] were:
- “2.The defendant pay to the plaintiff the whole of the recovery costs incurred by the plaintiff from and including the date of filing of Southport claim 52186/10, that is 7 December 2010.
- 3.In view of the decision of the Court of Appeal in Warren & Ors v Body Corporate for Buon Vista Community Titles Scheme 14325 [2004] QCA 104, I order the costs to be assessed and that the defendant pay the plaintiff’s costs of the assessment.”
- [65]It was submitted for the appellant that there was no basis in fact or law upon which the Magistrate could properly act to make the order he made in paragraph 2. It was submitted that in circumstances where there was no evidence before the court as to what recovery costs had been incurred, it was not open to the Magistrate to have made the implied findings that all of the costs in fact incurred were both reasonably incurred and reasonable in amount. It was also submitted that the Magistrate did not appear to have distinguished between “recovery costs” payable under the Regulation and the legal costs of the proceeding.
- [66]I think there is a good deal of force in that argument. There is nothing in the reasons to indicate that the Acting Magistrate was aware of the fact that the term “recovery costs” in s 143(1)(c) of the Regulation is wider than legal costs in the traditional sense.[30] The Magistrate appreciated that there was an issue as to the reasonableness of the costs, and excluded the costs associated with the earlier proceeding in the Brisbane court on the basis that it was not reasonable to allow costs for two separate proceedings. Such a view was understandable, but there are two problems with the step from that conclusion to the order that was made by the Magistrate.
- [67]The first is that the fact that legal costs are confined to the Southport proceeding does not mean that they would be confined to the costs incurred by the plaintiff on and from the date of filing of the Southport claim: I think it very likely that costs in relation to the Southport proceeding would have been incurred prior to that date, and there is no logical reason why those costs should be excluded. The second problem is that it assumes that all of the recovery costs in fact incurred were reasonably incurred and reasonable in amount. That issue was still open, and it was one that had simply not been litigated, the first respondent having called no evidence in relation to it. At the very least, if the legal costs were to be referred to a costs assessor, the issue of whether those legal costs in relation to the Southport proceeding were reasonably incurred and reasonable in amount ought to have been left to the costs assessor as well.
- [68]As to the order that the costs be assessed, presumably by a costs assessor, the problem here is related to the failure to appreciate that what was involved was more than the assessment of legal costs. If the first respondent at the trial had confined its claim to legal costs, then it would have been open for the quantification of those legal costs, on the proper basis, to have been referred to a costs assessor. The reference to the authority of the decision of the Court of Appeal in Warren v Buon Vista was misplaced; in that case the Court of Appeal did not decide anything other than that it was not appropriate to give leave to appeal, and accordingly it is not authority for anything.[31] Nevertheless, there was clear power to order that the costs be assessed by a costs assessor in UCPR r 683(3).
- [69]The difficulty which arises is in relation to matters other than legal costs in the ordinary sense. That rule permits “the costs of the proceeding” to be assessed by a costs assessor but would not give power for a reference to a costs assessor of any other “recovery costs” sought to be recovered by the first respondent.[32] Nor can I find any other power in the Magistrates Court Act 1921, or the UCPR. I am not aware of any other legislation which would have conferred such a power on the Magistrate and have not been referred to any.[33] Pt VII of ch 13 of the UCPR does not apply to a Magistrates Court (r 499) so the order cannot be supported on the basis that the costs assessor was in this respect appointed as a special referee under r 501, though in circumstances where there is nothing to suggest that the Magistrate was consciously purporting to exercise that power, the order could hardly be justified on that basis even if the power had existed. I therefore conclude that, insofar as the Magistrate has purported to refer to a costs assessor the quantification of any recovery costs other than legal costs, that order was made without power, and it ought therefore to be set aside.
- [70]In relation to the assessment of the legal costs, the Magistrate said that those costs should be on the indemnity basis. That aspect of his reasons however was not reflected in the formal “orders” at paragraph [53], nor was it incorporated in either the order or the judgment that were subsequently drawn up and signed. In these circumstances it is not at all clear that there is an order for assessment on the indemnity basis for me to set aside, but if there were such an order it would be wrong in law.
- [71]For reasons which I set out in Body Corporate for Sunseeker Apartments CTS 618 v Jasen [2012] QDC 51, in my opinion the entitlement to recover costs under the Regulation[34] is an entitlement which excludes the ordinary rules in relation to costs, including the power or discretion to award costs on the indemnity basis, and provides a basis of assessment which is different from the indemnity basis; I explained the differences, and the features of assessment in accordance with the Regulation, in that judgment. No party before me in this appeal submitted that I should depart from the conclusions arrived at in Jasen. One of the complications in Jasen was that what I was dealing with was a review of the assessment by the costs assessor of various orders which had been made, one of which was an order that the defendant pay certain costs to be assessed on the indemnity basis. As I mentioned in those reasons, I consider that that order was wrong, but it was not open to me to interfere with the order, against which no appeal had been brought, and the review in that matter in fact proceeded on the basis that the entitlement was to costs to be assessed on the indemnity basis.
- [72]That review followed a trial in this court of a claim by a body corporate for unpaid contributions, penalty and recovery costs: [2009] QDC 162. In that case, the only thing sought to be recovered by way of recovery costs was legal costs. At the trial evidence was called in order to quantify the legal fees which had in fact been charged by the solicitors for the body corporate, and to testify as to their reasonableness. Newton DCJ at [42] said:
“It remains a matter for the court to determine whether the amount claimed by the plaintiff for recovery fees reasonably incurred is reasonable in the circumstances.”
- [73]His Honour gave judgment for a specific sum by way of recovery costs up to a particular date, and ordered that the plaintiff also recover “ongoing legal fees in accordance with s 97 of the Module (to be assessed).”: [44]. I consider, with respect, that such an approach is open, in a case where the only assessment claimed as ongoing recovery costs is legal costs.
- [74]The position therefore in my opinion is that, insofar as the plaintiff seeks to recover as recovery costs costs other than legal costs in the traditional sense, it was necessary for the first respondent to prove at the trial what costs of this kind had in fact been incurred and to prove that they were reasonably incurred and reasonable in amount. There was no power in the Magistrate to refer that question to anyone else and it ought to have been decided in the trial. The Magistrate erred in failing to do so, though to be fair he was led into error by the way in which the first respondent ran its case.
- [75]Insofar as the legal costs claimed included costs other than costs of the proceeding in Southport, the same situation applied, but the Magistrate did find that it was not reasonable for any such legal costs to be recoverable, so that their quantification did not arise. In relation to the costs of the proceeding in Southport, it was I consider open to the Magistrate to order that those costs be assessed, but this should have followed a conclusion that the conduct of that proceeding had been reasonable, and to have been ordered to be in accordance with the test appropriate to the Regulation, namely such costs as were reasonably incurred and reasonable in amount.
- [76]To some extent therefore the orders made by the Acting Magistrate in relation to recovery costs require correction. What remains is to be determined what ought to be done at this stage. It seems to me that if the first respondent wants to pursue a claim for recovery costs other than legal costs of the proceeding in the Southport Magistrates Court, then there will have to be a rehearing at least of that aspect of the claim so that the first respondent can prove what amount was reasonably incurred and reasonable in amount in respect of such recovery costs. If however the first respondent is content to confine its claim for recovery costs to the legal costs incurred in relation to the Southport proceeding, the order for assessment can stand, though it needs to be made clear that this assessment is to occur on the basis stipulated by the Regulation. When these reasons are published, I will hear submissions as to whether it is open to the first respondent to elect between those two courses, and if so what the first respondent’s choice is to be.
- [77]The other consideration which arises is the appropriateness of the costs assessor’s order that the appellant pay the first respondent’s costs of the assessment in any event. The difficulty with that order is that ch 17A of the UCPR deals specifically with the costs of the assessment in r 734(3) and (4). These are concerned with the effect on the costs of the assessment of an offer to settle costs made under r 733. At least in the ordinary case, where there is no offer to settle costs under r 733, the consequence is that the party liable to pay the costs pays the costs of the assessment anyway. It is not immediately obvious why the appellant should be deprived of the opportunity in the present case of making an offer to settle costs under r 733, and the advantage in terms of the costs of the assessment if an offer made by the appellant, which ought to be accepted by the first respondent, is not accepted. I accept that the Magistrate had power to deal with the costs of the assessment in a way inconsistent with the provisions of r 734, but in circumstances where the Magistrate has given no reasons for doing so, or for depriving the appellant of the opportunity to make a well-advised offer to settle costs, which if accepted would avoid the necessity for and hence the costs of the assessment, I consider that the Magistrate also erred in making that order, and that should be set aside as well. There is no good reason why the ordinary rules in relation to the costs of the assessment should not apply, if the costs are to be a matter for assessment under the Rules.
Conclusion
- [78]Accordingly the formal order, and the formal judgment, which followed the trial before the Acting Magistrate should be set aside. In lieu thereof I substitute at least the following judgment:
- 1.The defendant pay the plaintiff $4,324.48 as a penalty for unpaid contributions pursuant to s 143 of the Regulation.
- 2.The third party claim is dismissed.
- 3.The defendant pay the third party’s costs of and incidental to the third party claim to be assessed.
- [79]The balance of the order will be finalised after hearing further submissions, as will the question of costs of the appeal.
Footnotes
[1]Under the Body Corporate and Community Management Act 1997 (“the Act”).
[2]If only for that reason, I have difficulty feeling the sort of sympathy for the first respondent that its counsel seemed to think his client was entitled to; at one point as I recall he described it as a voluntary organisation. In fact it appears to be managed by a professional management company, who ought to know what to do.
[3]The use of the term “costs” here was unfortunate, since it is not confined to legal costs, but that is the term in the Regulation.
[4]The rate is expressly allowed by the statute, so this argument was at best unpromising: Regulation s 142(2).
[5]Reference to s 45(5) and the Schedule to the Queensland Civil and Administrative Tribunal Act 2009 reveals that this means $25,000.
[6]This is the provision which is now s 45 of the Act.
[7]As to interest, see also Campbell v Turner (No 2) [2007] QSC 362 at [9].
[8]At 274. In that case the court held that interest payable at a fixed rate by statute between the date of verdict and the date of judgment, which in those days involved a further step of a successful motion for judgment, which amount was to be included in the judgment, was to be taken into account in determining the sum at issue in the appeal.
[9]Another aspect of this decision was not followed by the Full Court in Pettigrew v Klumpp [1942] St R Qd 131, but that does not affect the authority of this aspect of the decision.
[10]The provision has since been amended.
[11]The Court of Appeal has subsequently held that an order for costs made in relation to an interlocutory order is itself interlocutory.
[12]The court applied the test laid down by the Court of Appeal in Woodman v Maher [2001] 1 Qd R 106 at 112, following Aldrick v EM Investments (Qld) Pty Ltd [2000] 2 Qd R 346.
[13]It had previously been noted that the earlier version of s 118 was more favourable to plaintiffs than defendants: Woodman v Maher [2001] 1 Qd R 106 at [4] per Pincus JA.
[14]Potter v Dickenson (1905) 2 CLR 668 at 678-9.
[15]The Owners - Strata Plan No. 36131 v Dimitriou (2009) 74 NSWLR 370.
[16]At least, the contrary way was not argued before me. Most cases in this area focus on legal costs.
[17]McCann p 42.
[18]Citing Lauchlan v Hartley [1978] Qd R 1 at 9 per Kneipp J.
[19]The Court of Appeal spoke in favourable terms of this approach in Doyle v James [1993] QCA 332.
[20]On appeal this was presented as an example of 100% apportionment for contributory negligence, which is even more surprising, bearing in mind that contributory negligence was neither pleaded nor argued before the Magistrate.
[21]Not, as was submitted for the first respondent, 30 days after service of the notice.
[22]Indeed, at p 4 of the hearing counsel for the appellant said “it’s common ground among the parties that the contribution notices between June 2008 and June 2010 were sent to” the address in the Form 8.
[23]$3,760.11 x 2.5% x 26.
[24]$1,602.85 x 2.5% x 23.
[25]$874.24 x 2.5% x 7 = $152.99, + $697.94 x 2.5% x 11 = $191.93.
[26]$874.24 x 2.5% x 3.
[27]$2216.85 x 2.5% x 6.
[28]$395.10 x 2.5% x 5.
[29]$2,216.86 x 2.5% x 3.
[30]Assuming that that is the case: no party before me argued to the contrary, and I assume that recovery costs include costs other than legal costs if reasonably incurred and reasonable in amount.
*[31]That was an application for leave to appeal from a decision of this court, [2002] QDC 371, which was also a refusal of leave to appeal a decision of a Magistrate, which did assume that the assessment of costs other than legal costs could be referred to the registrar, a point which did not received any particular attention from Robin DCJ in refusing leave to appeal.
[32]There can be no doubt that this refers to legal costs in the Potter v Dickenson sense.
[33]The only other suggested source of power was UCPR rr 507 and 509, which in some circumstances permits damages to be assessed by a registrar. These apply only when, under some other provision, damages are to be assessed, and what was to be quantified here was a debt, not damages.
[34]I discussed the equivalent provision in the earlier Regulation, which was in the same terms.