Whitby v Stockair Pty Ltd[2015] QDC 79

DISTRICT COURT OF QUEENSLAND

1. [1]
   Each respondent was acquitted after trials which, with the consent of all parties, were conducted simultaneously, in the Brisbane Magistrates Court over a period of four days on 12 and 13 June 2014 and 13 and 16 July 2014. After they were each acquitted, the learned magistrate ordered the complainant to pay the costs of the defendants fixed at $100,000 within two months.^[1]

2. [2]
   This is an appeal against that order pursuant to s 222 of the Justices Act 1886 (“the Act”).

Grounds of appeal

3. [3]
   The grounds of appeal are^[2]:

1. The matter did not involve “special difficulty, complexity or importance”, costs should have been limited in accordance with the scale prescribed in Schedule 2 of the Justices Regulation 2004 (Qld);

2. The material before his Honour did not provide a proper basis to identify which costs, if any, ought to be included in the award;

3. The order for costs should not have included any award in favour of Stockair Pty Ltd in respect of costs incurred in defending another charge against Simon Jackson.

Proceedings at first instance

4. [4]
   The proceedings were commenced by two Complaints and Summons issued under the Act. Each was signed by Allan Matthew Whitby as complainant. Mr Whitby is an officer with the Commonwealth Department of Agriculture (as it is now called).

5. [5]
   Simon Jackson was charged with one count of contravening s 135.1(7) of the Criminal Code (Cth) (acting to dishonestly influence a Commonwealth public official) and Stockair Pty Ltd with one count of contravening s 9(1) of the Export Control Act 1982 (Cth) (failing to comply with a condition to which a permission granted under the Export Control (Animals) Order 2004 was subject).

6. [6]
   The matter concerned the transport by truck of 249 breeding cattle from Mundoona Park in Numurka, Victoria to Mascot Airport, Sydney, on 14 May 2012, and events at that airport on 15 May 2012. Simon Jackson was the managing director of Stockair Pty Ltd, which at that stage held an export licence permitting livestock to be exported by air. Evidence was presented over the first three days of the trial whilst written and oral submissions were presented on the morning of the fourth. The learned magistrate delivered judgment and reasons that morning.^[3]

7. [7]
   The prosecution called 13 witnesses and the defence called 5, including a handwriting expert and two character witnesses. There were 80 exhibits tendered during the course of the proceedings and the defence had prepared a chronological bundle of documents relied on by the prosecution, which ran to several hundred pages. Similarly, documents delivered by the Department of Agriculture on subpoena were likewise paginated by the defence. The defence also provided the court with copies of the relevant Commonwealth legislation and regulations applicable to the export of livestock from Australia by air. The magistrate observed that the defence solicitors had prepared the case “efficiently”, and said that “the prosecution (was made) easier through the work that’s been done by the defence”.^[4]

8. [8]
   After hearing the evidence and receiving detailed written and oral submissions from the prosecution and defence, the learned magistrate dismissed both charges. Extensive ex tempore reasons were provided.^[5]

9. [9]
   In dismissing the charge against Stockair Pty Ltd, the learned magistrate considered that the prosecution had not negatived the defence that arose pursuant to s 10.1 of the Criminal Code (Cth). In respect of the charge against Mr Jackson, the learned magistrate was not satisfied that he had made the false entry in the document in question.

10. [10]
    There were several features of the trial that are said to be relevant to the issue of costs. In order to understand these, it is necessary to briefly explain the charges and how the trial unfolded.

11. [11]
    Mr Jackson was charged with having dishonestly falsified a document called a “National Vendor Declaration” (“NVD”)^[6] by writing “6 00” over the numbers “2 30” on the NVD to record the time that movement of the cattle commenced. He was alleged to have done this on 15 May 2012 at Mascot Airport in order to conceal the fact that something called a “permission to leave for loading” had not been granted by the Department before the cattle were loaded onto trucks at Mundoona Park, at Numurka in rural Victoria, and sent to Mascot Airport.^[7] It was alleged that Mr Jackson had falsified the document so as to dishonestly influence the Department’s vet at the airport (Dr Hunter) into granting export documents for the shipment.^[8]

12. [12]
    It was common ground that the time on the NVD had been altered. The question was whether the prosecution could prove beyond reasonable doubt that Mr Jackson had altered it and with the relevant intention. Despite being dealt with summarily, this charge constitutes an indictable offence which has a maximum penalty of 5 years imprisonment when dealt with on indictment.

13. [13]
    The charge against Stockair Pty Ltd was that it contravened a condition to which a condition granted under the Export Control (Animals) Order 2004 was subject, in that the loading and transport of the cattle occurred before permission to leave was sought.^[9] This is a summary offence and punishable by a maximum fine of $27,500.

14. [14]
    The following matters emerged at the trial:

1. (a)
   The cattle were carried from Mundoona Park to Mascot Airport on three trucks. The drivers of these trucks were Glen Viney, Martin Pratt and Kevin Caccianiga;

2. (b)
   Three months before the trial (on 1 April 2014), the defence had served an expert report from a handwriting expert (later called in the defence case) who expressed the view that the alteration to the NVD was more consistent with the writing of Glen Viney than Simon Jackson, and that both the original and altered entry were written by ballpoint pen, and recommended that further testing be carried out;^[10]

3. (c)
   The prosecution did not carry out the testing recommended by the expert;

4. (d)
   The alleged offence was investigated by an employee of the Department of Agriculture, Phillip Oldfield, a former police officer based in Perth, who compiled an investigation log^[11] and then a brief of evidence for the Commonwealth Director of Public Prosecutions;

5. (e)
   The investigation log recorded (on p 5) that “it is recommended that statements be obtained from the below list of witnesses … Kevin Caccianiga”;

6. (f)
   Mr Oldfield interviewed truck drivers Glen Viney and Martin Pratt and obtained statements from them, and they were called by the prosecution. Mr Oldfield did not question or obtain a statement from Kevin Caccianiga;

7. (g)
   The defence located and interviewed Mr Caccianiga and subsequently flew him from Victoria to Brisbane to give evidence on the third day of the hearing;

8. (h)
   Mr Caccianiga’s evidence exculpated Mr Jackson. He recalled the consignment and said that Glen Viney told him during that journey that he, Viney, had changed the time written on the NVD on instruction from Robert Lawless, the owner and operator of Mundoona Park.^[12] In dismissing the charge against Simon Jackson, the learned magistrate found Mr Caccianiga to be an impressive and honest witness, who became more believable and reliable as the cross-examination of him progressed;^[13]

1. (i)
   When giving reasons for ordering costs, the learned magistrate observed that Mr Caccianiga was “the key dramatic” witness in the proceedings, and that “the whole case changed dramatically because of his evidence”;^[14]

10. (j)
    The principal witness called by the prosecution was Robert Lawless, the owner and operator of Mundoona Park;

2. (k)
   Mr Lawless gave unchallenged evidence on oath that after he had been interviewed by Phillip Oldfield in September 2012 and had provided a statement, Mr Oldfield returned to Numurka in January 2013 and demanded that he (Mr Lawless) change his signed statement, which he refused to do;^[15]

3. (l)
   When asked by the court whether he ever considered any other person to be a suspect, the investigator failed to provide a responsive answer;^[16]

4. (m)
   Insofar as the charge against Stockair Pty Ltd was concerned, the relevant physical element was the failure to comply with a condition of the NOI approval. The respondents’ submission was that the failure to comply was “brought about by” Mr Lawless, and that Mr Lawless was a “person over whom the defendant had no control”;

5. (n)
   In dismissing the charge against Stockair Pty Ltd, the learned magistrate considered that the prosecution had not negatived the defence provided by s 10.1 of the Criminal Code (Cth).^[17]

Application for costs

15. [15]
    After judgment was delivered on the morning of the fourth day, there was discussion of the defendants’ proposed applications for costs.

16. [16]
    The learned magistrate indicated that if applications for costs above scale were to be made, significant case authority would need to be considered, and factors taken into account, and he indicated that although he had an open mind on the question, he would be reluctant to make such an order.^[18] In particular, his Honour said “I’m not, at this stage, favourably inclined because of the fast and loose manner that your client conducts his business”.^[19] That was a reference to the magistrate’s finding that Mr Jackson had failed to take sufficient steps to arrange for a Departmental vet to inspect the cattle at Mundoona Park in the three days before the shipment was to depart for the airport.^[20]

17. [17]
    The application for costs was then heard over a period of two hours and the argument extended to some 40 pages of transcript.^[21] The learned magistrate was referred to ss 158, 158A and 158B of the Act as well as several decisions that were relevant to the topic. He also considered the evidence regarding the defendants’ costs as detailed in an affidavit of their solicitor, Trent Thorne, sworn 16 July 2014, and he received submissions from all parties regarding that document.

18. [18]
    At the end of the argument, the magistrate ordered that the complainant pay the defendants’ costs fixed at $100,000 within two months which was less than one‑third of the extraordinary amount of $327,350 actually incurred by the defendants in defending the charges.

Reasons for the costs order

19. [19]
    In light of the matters noted earlier, the learned magistrate found that there had clearly been a failure in the investigation.^[22] He went on to conclude that because of that failure and the general failure of the prosecution, it was an appropriate case for the award of costs.^[23]

20. [20]
    The appellant has conceded that the magistrate’s decision to award costs was correct, taking into account the requirements of s 158A of the Act.

21. [21]
    In considering the issue of costs, the magistrate correctly held that in order to award costs above the Justices Act scale, he had to be “satisfied that the higher amount is just and reasonable, having regard to the special difficulty, complexity or importance of the case”.^[24]

22. [22]
    His Honour then addressed in some detail why, in his opinion, the matter was one of special difficulty, complexity and importance, and why, in his judgement, it was just and reasonable for costs to be ordered in excess of the Justices Act  scale.^[25]

23. [23]
    He held as follows:

1. (a)
   that the matter was one of special importance to Stockair and Mr Jackson. He found that they had “a lot at stake here”^[26], and placed emphasis on the fact that a show cause letter had been issued as to why Stockair’s licence should not be cancelled, and that the allegations made in the letter were the subject of the prosecution.^[27] His Honour held that the matter was of special importance to Stockair and Mr Jackson because of its importance to their reputation, which his Honour found was “at stake” and “on the line”;^[28]

2. (b)
   that for Mr Jackson to have been found guilty “would have done immeasurable damage to his and the company’s reputation”,^[29] and that it was “reasonable that a considerable amount of effort was put into defending the matter” notwithstanding that the company had since surrendered its export licence;^[30]

3. (c)
   that the impact of a prosecution on an individual was a factor that could be taken into account in assessing whether the matter was of special importance;^[31]

4. (d)
   the matter was also one of special public importance, being concerned with the treatment of animals for export, about which there has been public controversy, and because of the importance to the community of the proper treatment of animals, the prosecution revolving around whether the complex regime for animal welfare was complied with;^[32] and

5. (e)
   the matter was also one of special complexity, with 80 exhibits, and was a complex area of much federal regulation.^[33]

24. [24]
    The magistrate did not accede to the defendants’ application that the complainant pay half of the $327,350 costs incurred by the defendants, and said that because Mr Jackson had to a certain extent brought the prosecution upon himself (by failing to organise a vet inspection at Mundoona Park in a timely way^[34]) in the general exercise of his discretion, he would fix costs at the lesser sum of $100,000.

25. [25]
    He considered whether an assessment should be ordered of a bill of costs, and noted that this would involve having the bill set out in detail, the bill assessed, and submissions by both sides, and that this would have the effect that “the costs would blow out even more” and would be “a lot higher”. His Honour concluded that this was not the appropriate course in the circumstances.^[35]

Nature of the appeal

26. [26]
    Pursuant to s 223 of the Act, this appeal is by way of rehearing on the evidence (original evidence) given in the proceeding below. The nature of such an appeal was considered in White v Commissioner of Police [2014] QCA 121. At [8], Morrison JA, with whom Muir JA and Atkinson J agreed, noted that:

“In the appeal to the District Court, s 223 of the Justices Act provides for a rehearing on the evidence given at trial, and any new evidence adduced by leave. That is a rehearing, in the technical sense consisting of a review of the record of the proceedings below, rather than a completely fresh hearing. To succeed on such an appeal an appellant must establish some legal, factual or discretionary error.” (footnote removed)

Preliminary issue

27. [27]
    One issue that requires resolution is whether Stockair Pty Ltd is the only respondent to this appeal or whether both defendants are respondents. The Notice of Appeal nominates both defendants as parties, although, if the appellant’s submissions are accepted, there would be no order relevant to Steven Jackson against which an appeal could be lodged. It seems to me that resolution of this issue will very much depend on the resolution of the substantive grounds of appeal. Accordingly, I will return to this issue later, but for ease of reference, I will, until then, refer to both defendants as being the respondents to the appeal.

Ground 1 – did the case involve special difficulty, complexity or importance?

Legislation

28. [28]
    Section 158 of the Justices Act 1886 states^[36]:

158 Costs on dismissal

1. (1)
   When justices instead of convicting or making an order dismiss the complaint, they may by their order of dismissal order that the complainant shall pay to the defendant such costs as to them seem just and reasonable.

1. (2)
   When a complaint is before a Magistrates Court which the court has not jurisdiction to hear and determine the court shall order the complaint to be struck out for want of jurisdiction and may order that the complainant pay to the defendant such costs as to the court seem just and reasonable.

29. [29]
    Section 158A(1) relevantly qualifies s 158 to the extent that an order for costs should only be made against a public officer^[37] if the justices are satisfied that it is proper that the order for costs be made. Subsection (2) states that all relevant circumstances must be taken into account in determining whether it is proper that an order for costs is made and lists a number of considerations, whilst noting that the list non-exhaustive.

30. [30]
    In this matter the appellant has conceded that the making of costs orders in favour of the defendants was appropriate.^[38]

31. [31]
    Section 158B of the Act states:

158B Costs for division

1. (1)
   In deciding the costs that are just and reasonable for this division, the justices may award costs only—

1. (a)
   for an item allowed for this division under a scale of costs prescribed under a regulation; and

1. (b)
   up to the amount allowed for the item under the scale.

1. (2)
   However, the justices may allow a higher amount for costs if the justices are satisfied that the higher amount is just and reasonable having regard to the special difficulty, complexity or importance of the case.

Special importance

32. [32]
    In concluding that the case against each defendant was of special importance, the learned Magistrate concluded that:

1. (a)
   the defendants’ reputations “were on the line” and “at stake” and that a finding of guilt would have caused “immeasurable damage” to their reputations; and

2. (b)
   the matters were concerned with treatment of live animals for export and that considerable public interest presently exists in that topic.

33. [33]
    In support of his conclusion in [32](a) above, the magistrate relied on the decision of Samios DCJ in Power v Lewis [2007] QDC 188 where his Honour, in overturning the magistrate’s decision, found that the magistrate had failed to take into account the seriousness of the prosecution and its impact on the appellant.^[39]

34. [34]
    Similarly in Hickey v Crime and Misconduct Commission (unreported, file 2868 of 2006, 19 May 2008) (‘Hickey’), Shanahan DCJ allowed costs in excess of the scale for the summary trial and the appeal. In so doing, his Honour took into account the importance of the case to the accused, who was a solicitor. His Honour said:

“The importance to the appellant himself of the outcome, is also, in my view, relevant. Whilst it is trite to say that the outcome of a criminal trial is important for any accused, here the impact that a conviction for such an offence would have on the appellant’s profession, his business and his public reputation would be substantial. The importance of the appeal must be assessed in that regard.”^[40]

35. [35]
    The appellant has submitted that the magistrate erred in considering that the objective seriousness of the cases to each of the defendants amounted to special importance. The respondents have submitted that the magistrate was correct to conclude that the special importance of the case to them was a matter he could take in to account in determining the issue.

36. [36]
    Given the decisions in Power v Lewis and Hickey the respondent’s submission appears to be well founded.

37. [37]
    Comment should be made at this stage about another matter, Cullinane v McCahon [2014] QDC 120, in which I made this statement:

“In relation to the second point, I accept that this case was important to the appellant, as no doubt every criminal case is to every defendant. To invoke special importance however, the case must involve more than the charge merely relating to a defendant in his/her professional capacity. ‘Special importance’ is clearly a reference to the importance of the case generally, in terms of questions of law or public interest (this list is not exhaustive) and is not intended to refer to the subjective assessment of a defendant as to whether the case is important to him or her.”

38. [38]
    The learned magistrate in this matter, in the course of his reasons, said that the view that I expressed in that matter differed from that expressed by Samios DCJ in Power v Lewis. Both senior counsel for the appellant and the respondent have submitted however, that his Honour erred in drawing that distinction between the two matters. That submission is well-founded.^[41] The test of importance of a matter to a defendant, as identified by Samios DCJ in Power v Lewis, is an objective test. So too is the test referred to by Shanahan DCJ in Hickey. The statement in Cullinane v McCahon however, only negates the relevance of the subjective view of the defendant as to the seriousness of the case to him or her. That does not have any impact on an objective assessment of the issue. The distinction is important.

39. [39]
    In Interclean Industrial Services Ltd v Auckland Regional Council [2000] 3 NZLR 489, the Council sought higher costs after the defendant entered pleas of guilty. Costs in excess of the scale could only be ordered if the case involved “special difficulty, complexity or importance”. Randerson J said at pages 496-7:

“[32]  As observed by Tipping J in T v Collector of Customs (High Court, Christchurch, AP 167/94, 28 February 1995) at p 2:

‘The use of the word ‘special’ when applied to the concepts of difficulty, complexity and importance means that it is not enough simply to say that the case was difficult, complex or important. The necessary difficulty, complexity or importance must be such that it can be said to be significantly greater than is ordinarily encountered. Similarly the focus on the case itself means that it is not enough for the applicant to be able to say that by dint of its features the case had special importance to him.’

40. [40]
    In relation to paragraph [32](b) above, the appellant has submitted that the magistrate’s reliance upon his perception of public interest in matters involving the overseas export of live animals was impermissible. He submits the court was restricted when considering the issue of special importance, to matters that were in evidence. In that regard he relies on the following passage in Palmgrove Holding Pty Ltd v Sunshine Coast Regional Council [2014] QDC 77 by Long SC DCJ at [84]:

“In that context, the consideration as to the issue of the infringement notice does not mean that this case could not or should not have been regarded as one of special importance. By the time the Magistrate came to exercise his discretion as to costs, his concern was necessarily as to the costs that had been incurred in the proceedings before him and with the question of the extent of the indemnity to be allowed to the successful party. On the one hand, it is true that the incurrence of those costs may have been avoided, if the appellant had chosen to accept the effect of the infringement notice, but that is a consideration that does not avail the appellant’s contention. Notwithstanding this and as the Magistrate’s reasons indicate he was, the necessary concern is with assessment of the importance of the case from the perspective of what was revealed to the Court in the trial.”

41. [41]
    The respondents on the other hand submit that no such restriction applies and draw attention to the approach of Shanahan DCJ in Hickey, where his Honour paid judicial notice of the media attention that had been paid to the City Council election, behind which sat the charges that were before the court. That media attention was not something about which evidence had been received.

42. [42]
    The appellant can point to no definitive authority in support of its submission in this regard and I consequently find myself in agreement with the respondents’ submission. The fact that non-evidence-based decisions have been made in the past is a relevant consideration as is the maintenance of consistency of approach. Furthermore, it is common practice that when a court is determining a costs issue, it is not necessarily restricted to consider those matters about which evidence has been placed before the court. Many factual scenarios can be reasonably envisaged where judicial knowledge applies notwithstanding the absence of evidence on a topic. For instance, a Commissioner of Police on trial for an offence of dishonesty may well be a matter that is objectively considered one of special importance for that very reason, notwithstanding the absence of evidence to that effect.

43. [43]
    In my view, the learned magistrate has not erred in his approach in this regard.

44. [44]
    Finally, the determination as to special importance calls for the exercise of judicial discretion. Before an appellant court can interfere in the exercise of that discretion an error of the type referred to in House v The King^[42] is required. I can discern no such error on the part of the magistrate.

Special difficulty or complexity

45. [45]
    The appellant has submitted that, whilst the “factual framework” of the two cases involved technical matters that are “peculiar to the export industry, the issues for determination were unremarkable, save for those arguments that were presented by the defence and rejected by his Honour” and “ultimately the matter was determined by his Honour on a simple point that could have been argued more narrowly”.^[43]

46. [46]
    The respondents have submitted that the magistrate’s assessment once again involved the exercise of discretion and that the magistrate had many years of judicial experience and was uniquely placed to determine the issue having presided over the trial.

47. [47]
    The appellant’s submission that the conduct of the defence complicated the cases was also made before the magistrate and rejected.^[44] His Honour accepted that whilst the respondents advanced a construction argument (about the terms of the relevant export conditions) which was rejected, this did not prolong the proceedings unreasonably, and the prosecution’s argument to the contrary was “not relevant”.^[45]

48. [48]
    Ultimately, the magistrate concluded that given that 80 exhibits were tendered during the hearing and that the charges brought into relevance a complex set of “federal regulations”^[46] as well as the fact that the trials ran into four days despite the efforts of counsel to streamline the trial process by pre-trial endeavour, the cases were ones of special difficulty and/or complexity.

49. [49]
    Once again, given the discretionary nature of this decision, I can find no error on the part of the magistrate in reaching that conclusion – even if I might have decided it differently had I been looking at this issue in the first instance. Given that this trial involved a total of 18 witnesses, 80 exhibits, complex federal regulations, and ran into a fourth day are all matters which, when considered collectively, would justify and support the conclusion that the case was one of special difficulty and/or complexity.

Ground 2 – did the material provide a proper basis to identify which costs ought to be included in the award

50. [50]
    The issue which arises under this ground of appeal involves statutory interpretation of s 158B(2).

51. [51]
    The appellant has submitted that s 158B(2) allows for a higher amount for costs only in relation to the scale items prescribed in Schedule 2 of the Justices Regulations 2004 (“the Regulations”),  and then, only in accordance with clause 3 of regulation 2.

52. [52]
    Clause 3 states:

“3 Only necessary or proper costs may be allowed

A cost is to be allowed only to the extent to which—

1. (a)
   incurring the cost was necessary or proper to achieve justice or to defend the rights of the party; or

1. (b)
   the cost was not incurred by over-caution, negligence, mistake or merely at the wish of the party.”

53. [53]
    The appellant has submitted therefore that before higher than scale costs can be awarded, the costs being claimed must first be itemised to determine whether they fall within the scale categories and were necessary and proper. It follows, it is submitted, that as no such itemisation occurred in this matter, no proper basis was presented to allow the court to identify which costs ought be included in the award.

54. [54]
    In fact, the only material provided to the court was an affidavit of the respondents’ solicitor which had attached a copy of the spreadsheet of invoices and work in progress relating to the fees and disbursements incurred by the defendants in relation to the proceeding.^[47]

55. [55]
    The respondents have submitted that s 158B(2) does not say a “higher amount” must be limited by or having regard to, clause 3 of Schedule 2 of the Regulations. In support they submit that the matters that must be regarded (i.e. special difficulty, complexity or importance of the case) do not include clause 3 of Schedule 2. The respondents also submit that to award costs having regard to the special difficulty, complexity or importance of the case, is quite different from, and inconsistent with, awarding costs only in respect of expenses that are necessary or proper to achieve justice or to defend the rights of the party, and not by over-caution, negligence, mistake or merely at the wish of the party.

56. [56]
    In support of that submission, the respondents have referred to Lucy v OCC Holdings P/L & Ors (No 2) [2008] QDC 169 (“Lucy”), a case where the respondent argued that the appellant had not used any evidence supporting the making of an order under s 232A(2) of the Justices Act.^[48] Robin QC DCJ, in rejecting that submission said:

“… 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 that there is any need for precision. … the amount of costs incurred (or to be incurred) would exceed the Justices Regulation scale by orders of magnitude.”

57. [57]
    Later, his Honour said:

“… 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 … 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.”

58. [58]
    Similarly, in Morley v Senewiratne [2008] QDC 296, Robin QC DCJ again noted that the absence of an itemised account did not prevent a costs order being made, and underlined that:

“… it would be an indefensible imposition on the parties to require a conventional taxation or assessment.”^[49]

59. [59]
    Given the courts’ approach to this issue in those matters, the learned magistrate’s decision to avoid the imposition of further costs on the parties by not requiring an itemised bill of costs is understandable, reasonable and well within the exercise of his discretion.

60. [60]
    Those cases however do not address the primary issue that is in dispute in this matter – that is, whether the higher amount that may be awarded pursuant to s 158B(2) is restricted to those items in Part 2 of Schedule 2 of the Regulation and in accordance with the provisions of clause 3 of Schedule 2.

61. [61]
    Some limited guidance can be found from the nature of the order proposed by Robin QC DCJ in Lucy, where after determining that the matter was one in which a higher amount for costs was just and reasonable having regard to the special difficulty, complexity or importance of the case, his Honour opined that item 1 should be increased to $4,000. In that regard he seemed to be of the view that any higher award than that permitted by the scale was nevertheless restricted to the scale items. That inference however is not the only inference reasonably open and is not determinative of the issue.

62. [62]
    Similarly, in Morley v Senewiratne, Robin QC DCJ, whilst not expressly determining the issue, made comments that could only be consistent with the view that any amount awarded above the scale, was still to fall within the categories of the scale items. His Honour said that [35]:

“The appellant, as prosecutor cannot expect anything like a costs indemnity. Traditional practice precluded costs orders for or against the prosecution. The statutory in-roads are on the basis of a modest scale which imposes a cap. The discretion the court has to exceed that cap must still have regard to it as the starting point. In other words, I think the question comes down to one of by how much should the cap amount be increased.”

63. [63]
    Conversely in Hickey Shanahan DCJ considered the very point and said^[50]:

“The respondent also submits that the amount of costs be limited to the items set out in Schedule 2 of the Regulation. That may be so when the costs are awarded under s 158B(2)^[51] and s 232A(1) but I am of the view that no such limitation applies, when it is appropriate to award a higher amount under s 158B(2) or s 232A(2). In that regard, the note to paragraph 1 of the (sic) Schedule 2 of the Regulation recognises the discretion to allow a higher amount for costs which, in my view, qualified the limitation paragraph one.”

64. [64]
    However, in Merrin v Commissioner of Police; Merrin & Anor v Commissioner of Police [2012] QCA 181,^[52] North J said at [31]:

“Section 158B is important, it provides that costs that are just and reasonable may be awarded ‘only’ under a scale of costs prescribed under a regulation.”

65. [65]
    The footnote which accompanied that passage^[53] is relevant. It states:

“Section 158B also provides for an allowance for specific items that might be provided by a scale and also for a higher amount that may be just and reasonable ‘having the regard to the special difficulty, complexity or importance of the case’. This refers to items such as those set out in Part 2 of Schedule 2 to the Justices Regulation 2004 which makes provision for ‘legal professional work’.”

66. [66]
    The respondents have submitted that the contention that the magistrate was restricted to ordering costs in respect of scale items seeks to read restrictions into the statutory language that are not present, and is contrary to authority. As I have demonstrated however, there is potentially conflicting authority on the topic, with the case of Merrin being the most recent.

67. [67]
    The respondents have submitted that there is no justification for reading s 158B(2) as if it permitted the court to awards costs free of the second restriction (i.e. s 158B(1)(b)), but not the first restriction (i.e. s 158B(1)(a)). It is submitted that when s 158B(2) speaks of a “higher amount” than the amount allowed under s 158B(1), it means the whole of subsection (1), not only part of it. I have found this to be quite a perplexing issue. Section 158B can be read in ways that allow for equally competing interpretations. The use of the word “higher” connotes that it must be higher than some limited amount i.e. the amount set for the scale items and is therefore consistent with the “higher amount” being restricted to scale items. However, it may equally refer to the total amount allowed under the scale and is not only referrable to scale items. Similarly, had the legislature intended to restrict the higher amount to only refer to scale items it could easily and unambiguously have said so by simply inserting the word “such” in subsection (2): i.e. “However, the justices may allow for a higher amount for such costs…”. In fact, one can easily identify any number of ways that the section could have been worded that would have negated any ambiguity one way or the other.

68. [68]
    Equally, even if the words “for costs” were absent from the section there would be little doubt that the costs spoken of were those restricted to scale items. The words “for costs” however, must mean something and in the absence of clear authority to the contrary, in my view should not be read restrictively. In the circumstances, I am inclined therefore to the view consistent with that expressed by Shanahan DCJ in Hickey. That approach is not, in my opinion, necessarily inconsistent with the comments of North J in Merrin. In that regard I note that his Honour in that footnote, said that the sections reference to a “higher amount” refers to items such as those set out in Part 2 of Schedule 2 to the Justices Regulation …” (my underlining). The term “such as” does not of course mean “restricted to” and leaves open the interpretation that an award of costs under the subsection (2) is not necessarily restricted to scale items.

69. [69]
    It follows, that the court did not need to have before it a fully itemised statement of costs for each defendant before the issue of costs could be resolved, and the appellant’s argument in that regard fails.

70. [70]
    At the end of the day, probably little turns on the issue, given Item 1’s wide range of parameters (i.e. “work for hearing of complaint up to and including day 1

1. Instructions and preparation for the hearing, including attendance on day one of the hearing.”)

71. [71]
    That however is not the end of the matter. There is still the issue of whether the material provided a proper basis to identify which costs ought be included in the award.

72. [72]
    As I have said, the only material before the court was a one-page document headed “Invoices issued by matter” which merely summarised and totalled the amounts billed by reference to invoice number and date.

73. [73]
    Whilst it is true that the document lacks detail, in my view, it nevertheless serves a greater purpose as it provides proof of the total amount of legal costs that have accumulated in the preparation for and the conduct of these hearings. It demonstrates that the legal costs far exceed the maximum amounts that would have been allowable under s 158B(1) and perhaps even provides some further basis for the conclusion that the matter was of special difficulty or complexity.

74. [74]
    As Robin QC DCJ said in Morley v Senewiratne when confronted with a similar issue^[54]:

“I am in no doubt that the bulk of the costs has been properly and reasonably incurred – producing a sum so far in excess of any costs order the court is likely to make that it would be an indefensible imposition upon the parties to require a conventional taxation or assessment.”

75. [75]
    In Lucy his Honour relevantly said^[55]:

“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. …

…

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. …”

76. [76]
    These comments have application to this matter, with the qualification that under s 158B (2), the Justices in such circumstances must decide what costs it would be “just and reasonable” to allow.

77. [77]
    There is ample authority for the proposition that when determining what costs it would be just and reasonable to allow, “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”.^[56]

78. [78]
    Although it is not the subject of a specific ground of appeal, the appellant has nevertheless submitted, without objection, that the magistrate in this matter failed to give the scale sufficient consideration, as a starting point or as a guide, in the exercise of his discretion when determining the amount he considered to be just and reasonable.

79. [79]
    In that regard, in the course of his remarks, the magistrate said:

“There is a scale which seems hasn’t been changed since 1999. It’s clearly inadequate in this day and age to expect counsel to accept $875 for a subsequent day of a hearing and $1500 for the preparation of a matter such as this, so to be able to go outside the scale, it has be that I have to be satisfied that the higher amount is just and reasonable, having regard to the special difficulty, complexity and (sic) importance of the case. The discretion as to costs is very general as to what is just and reasonable.”^[57]

80. [80]
    Whilst I may not have reached the same conclusion as the Magistrate as to the amount considered to be just and reasonable, I nevertheless cannot conclude that his Honour, a very experienced magistrate, failed to use the scale amounts as a guide or starting point given his express reference to the provisions of Schedule 2 of the Regulation, including its maximum amounts. I note also that during the course of submissions the magistrate was taken to ss 158, 158A and 158B of the Act. Furthermore, several decisions relating to these sections were provided to him.

81. [81]
    When it comes to a request to interfere with a discretion exercised by the Court below regarding costs, I am reminded of the words of Nettle JA (as his Honour then was) in Daulizio v Trust Company of Australia [2005] VSCA 215 at [6] where his Honour said:

“The principles which govern an appeal against an order as to costs are clear. They proceed from the recognition that a trial judge has considerable latitude and individuality of choice in the formulation of orders for the payment of costs of the proceeding. In order for a party successfully to impugn an order as to costs, he or she must demonstrate that the judge erred in principle or took into account considerations which were irrelevant or left out of account considerations which were relevant or gave improper weight to some factors at the expense of others or too little weight to some factors relative to others or otherwise that the order was just so obviously unreasonable that the judge’s discretion must have miscarried. A court of appeal must keep a tight rein on interference with costs orders, and consequently, it has been said, it is extraordinarily difficult to show that a court of first instance has erred in its power to award costs.” (footnotes omitted)

82. [82]
    The appellant has not identified any particular error in the magistrate’s approach to the determination of the amount of costs, other than for those that I have already referred to and addressed (with one exception which will be dealt with when Ground 3 is considered).

83. [83]
    In the circumstances (and bearing in mind the qualification that I have not yet addressed the Ground 3 issue), I am not persuaded that the magistrate erred in his determination as to the appropriate amount of costs to award.

Ground 3 – the order for costs should not have included any award in favour of Stockair Pty Ltd in respect of costs incurred in defending another charge against Simon Jackson

84. [84]
    After providing his ex tempore reasons, the magistrate made the following order:

“that Allan Matthew Whitby pay the costs of the defendants fixed at one hundred thousand dollars, within two months.”

85. [85]
    In response to a question from the prosecutor asked during the delivery of the judgment,^[58] the magistrate made clear that the order was made in respect of the costs of both defendants.^[59]

86. [86]
    His Honour went on to say that the order would be made “on the Stockair file” but took pains to emphasise that the order remained one in respect of the costs of both defendants. The order could be said to be one in favour of the company only in the sense that it was made “on that file”. He made that order in recognition of the fact that Stockair had paid all of the legal bills including those that arose in relation to the representation of Steven Jackson.^[60] Both defendants were represented by the same firm of solicitors and the accounts generated as a consequence of the representation of both defendants were, at all times, addressed to Stockair.

87. [87]
    The appellant has submitted however that the magistrate, in effect, dismissed the application for costs made by Mr Jackson. That is not correct. The magistrate unambiguously accepted the submission made on behalf of Mr Jackson regarding costs, and made an order, relevant to that submission, on “the Stockair file”. He did not stipulate what percentage of the $100,000 applied to each defendant.

88. [88]
    The appellant has alternatively submitted that the order for costs should not have included any award in favour of Stockair Pty Ltd in respect of costs incurred in defending the charge against Mr Jackson. He further submits that Mr Jackson cannot claim costs when he has not incurred any, and that nothing in the terms of ss 158 to 158B of the Act or the prescribed scale provides for reimbursement of costs voluntarily incurred on behalf of another party. In response, the respondents have referred to Shaw v Yarranova Pty Ltd & Anor [2011] VSCA 55. In that matter the applicant’s primary argument was that as the respondents’ parent company, MAB Corporation Pty Ltd, had paid the respondents’ legal costs, the claim that the applicant should pay the respondents’ taxed costs offended the indemnity rule as they had no liability to their solicitors. In rejecting that argument, Redlich and Mandie JJA said^[61]:

“[19] Courts generally accept the existence of a contract of retainer when a solicitor has performed work on behalf of a person with his or her knowledge and assent, in circumstances which are consistent with that person being the solicitor’s client. The existence of a contract of retainer and the liability of the client for the solicitor’s costs will be presumed, and the party who challenges the existence of the retainer in such circumstances bears the onus of establishing the absence of it.

Failure to prove that there was no obligation to pay costs

[20] Where the party against whom the costs order has been made seeks to displace the rule, it is necessary to prove that under no circumstances does the client have any liability to pay costs to his or her solicitors. In Adams v London Improved Motor Coach Builders Ltd [1921] 1 KB 495 Bankes LJ found that although the plaintiff was represented by the solicitors for the union, he became liable to the solicitors for costs, and that liability was not excluded merely because the union also undertook to pay the costs. To displace the obligation to indemnify the plaintiff, Bankes LJ stated that it was necessary to go a step further and prove that there was a bargain, either between the union and the solicitors or between the plaintiff and the solicitors, that under no circumstances was the plaintiff to be liable for costs. Atkin LJ stated that the solicitors’ personal claim against the union could coexist with an obligation of the plaintiff to the solicitors. There was no doubt that a retainer, even if only implied, existed between the solicitors and the plaintiff. A similar situation arises in the case of a party who is insured and is represented by a solicitor engaged by the insurer.

[21] In Halliday v High Performance Personnel Ltd (in liq) (1993) 113 ALR 637 the applicant had also contended before Mason CJ that the judgments in Adams do not support the approach taken by Dawson J. Mason CJ was of the view that what his Honour said plainly accorded with the judgments of Bankes LJ and Atkin LJ in that case.

[22] Adams’ case has been cited and followed in numerous decisions in this country. The principle for which it stands has been consistently applied. In Victoria and elsewhere in Australia the indemnity rule has been treated as permitting recovery of costs from the party against whom the order is made, although a third party has indemnified the successful party or paid their costs.” (footnotes removed)

89. [89]
    Accordingly, the existence of a contract of retainer and the liability of Steven Jackson for his solicitors’ costs is presumed, unless the appellant meets the onus upon him of establishing its absence. In that regard the appellant has failed as there has been no evidence placed before the court, either direct or indirect, that could potentially establish that there had been a bargain, either between Stockair Pty Ltd and the solicitors or between Steven Jackson and the solicitors, to the effect that under no circumstances would Steven Jackson be liable for his costs.

90. [90]
    The final issue raised by the appellant is that the magistrate ordered the complainant to pay to Stockair Pty Ltd, in addition to an amount that was referable to its own legal costs, an undisclosed amount for the legal costs of Mr Jackson. The appellant has submitted that such an order is ultra vires, the magistrate’s power as the legislative authority to order costs in a matter such as this is that provided by s 158 of the Act, which specifically empowers justices to make a costs order against an unsuccessful complainant only in favour of a successful defendant – and not to a third party that has paid the defendant’s legal expenses.

91. [91]
    To assess this submission, one must first look at the terms of the order. His Honour said:

“So I order Allan Matthew Whitby pay to – pay the costs of the defendants fixed at $100,000 within two months. And that’s on the – I’ve done that on the Stockair file, but I’ve made it plural. Defendants.”

92. [92]
    The magistrate’s order is that the complainant pay a total amount of $100,000 to the defendants. The order itself does not offend s 158. As I understand it, his comment “I’ve done that on the Stockair file” does not constitute an order that Stockair be paid Mr Jackson’s costs, rather it is a statement of functionality, dictating for court records, on which file the order is to be placed. No doubt, his Honour considered this to be appropriate given the commonality of the proceedings regarding the two respondents and the fact that the one firm of solicitors and the same counsel represented both respondents. It appears to me to be a statement that sensibly and conveniently recognises these features without the necessity of having to examine a detailed costs statement to determine the precise percentage of the $100,000 that each respondent should receive, noting that such an exercise would have achieved an identical overall outcome at much greater expense to the parties.

93. [93]
    For these reasons, I conclude that there is no merit to this ground of appeal.

Are one or both defendants parties to this appeal?

94. [94]
    As I indicated earlier, I have referred to both defendants as being respondents to this appeal. Whilst the Notice of Appeal named both respondents as parties, the appellant’s Outline of Submissions seemed to be drafted on the basis that there was no appeal relating to Steven Jackson as no order was made relating to him against which an appeal could be lodged.^[62] In fact, the appellant, as I have already indicated, has submitted that the magistrate dismissed Steven Jackson’s application for costs. I note however that no Notice of Discontinuance has been filed in relation to the appeal insofar as it concerns Mr Jackson. Furthermore, unsurprisingly, the submissions in response have been made on behalf of both respondents. Given my conclusion that an order for costs in favour of Steven Jackson was made, I have proceeded, as did the respondents, on the basis that both respondents are parties in this proceeding.

Orders

1. The appeal is dismissed.

2. I will hear the parties as to costs.