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Nolan Meats Pty Ltd v Waltisbuhl[2017] QDC 57

Nolan Meats Pty Ltd v Waltisbuhl[2017] QDC 57

DISTRICT COURT OF QUEENSLAND

CITATION:

Nolan Meats Pty Ltd v Waltisbuhl [2017] QDC 57

PARTIES:

NOLAN MEATS PTY LTD

(appellant)

v

WAYNE RICHARD WALTISBUHL

(respondent)

FILE NO/S:

4229/14

DIVISION:

Civil

PROCEEDING:

Appeal

ORIGINATING COURT:

Magistrates Court at Brisbane

DELIVERED ON:

20 March 2017

DELIVERED AT:

Brisbane

HEARING DATE:

30 July 2015

JUDGE:

Sheridan DCJ

ORDER:

  1. The appellant have leave to appeal and the respondent have leave to cross-appeal.
  2. The appeal be allowed and in lieu of paragraphs 2 and 3 of the order of the learned Magistrate there will be the following orders:
    1. Judgment for the plaintiff in the sum of $23,189.47;
    2. The defendant pay the plaintiff the costs of the proceedings on a standard basis to be assessed.
  3. The cross-appeal be dismissed.
  4. The appellant is to file its submissions on costs of the appeal by 27 March 2017.
  5. The respondent is to file its submissions on costs by 3 April 2017.

 

APPEAL AND NEW TRIAL – PROCEDURE – QUEENSLAND – WHEN APPEAL LIES – FROM MAGISTRATES COURT – BY LEAVE OF COURT – where the appellant and the respondent entered into an agreement for the supply of goods – where the agreement provided that the appellant reserved the right to charge the respondent all costs associated with the collection of overdue accounts including the appellant’s legal costs on a solicitor/own client basis – where the appellant sought its legal costs to be paid by the respondent on a solicitor/own client basis – where the learned Magistrate found the court had no evidence the costs fell within the description solicitor/own client costs – where the learned Magistrate performed an assessment of costs – where the appellant seeks judgment for the entire amount of its claim and an order that it recover its costs on an indemnity basis – whether some important principle of law or justice is involved – whether leave to appeal should to be granted

Magistrates Courts Act 1921 (Qld), s 45(2)

Uniform Civil and Procedure Rules 1999 (Qld), r 703(1) and r 703(3)

Abigroup Limited v Sandtara Pty Limited [2002] NSWCA 45, considered

American Express International Inc v Hewitt [1993] 2 Qd R 352, [1992] QCA 107

American Express International Inc v Hewitt [1993] 2 Qd R 352, cited

Bottoms v Reser [2000] QSC 413, considered

EMI Records Ltd v Ian Cameron Wallace Ltd [1983] Ch 59, considered

Henley v State of Queensland [2005] QDC 94, cited

House v The King (1936) 55 CLR 499, followed

Johansen v City Mutual Life Assurance Society Ltd (1904) 2 CLR 186, cited

Port of Melbourne v Anshun Pty Ltd (1981) 147 CLR 589, followed

Ramzy v Body Corporate for GC3 CTS 38396 and Anor [2012] QDC 397, considered

Rumball v Mortimore [2000] WASC 126, considered

Wanstall v Burke [1925] St R Qd 295, applied

COUNSEL:

S J Webster for the appellant

M K Callanan for the respondent

SOLICITORS:

James Conomos Lawyers for the appellant

S.J. Gurnsey & Company for the respondent

  1. [1]
    The claim by the appellant, Nolan Meats Pty Ltd (Nolan Meats) against the respondent, Mr Waltisbuhl, was for the costs of collecting monies owing pursuant to the terms of a contract.

Contract

  1. [2]
    A written ‘credit application’ was entered on 6 February 2013 between Nolan Meats and Mr Waltisbuhl, pursuant to which Nolan Meats was to supply meat to Mr Waltisbuhl (the agreement). Nolan Meats was a provider of wholesale meats and Mr Waltisbuhl was a butcher on-selling meat to the public through a business known as Ningi Highway Meat Specialist.
  1. [3]
    Relevantly, the agreement provided that:
  1. The applicant hereby charges in favour of the company all property both real and personal with the amount of its indebtness to the company until discharged.
  1. The company reserves the right to charge:
  1. (a)
    interest on any overdue accounts at the rate of 2% per month until payment calculated on monthly balances;
  1. (b)
    all costs associated with the collection of overdue accounts including but not limited to legal fees (on a solicitor/own client basis) and collection agent fees.
  1. [4]
    In February and March 2013, meat was provided and invoices issued. The initial invoices issued were paid in accordance with the terms of the agreement.

Non-payment for goods

  1. [5]
    As early as 11 March 2013, invoices were issued which were not paid. A further 5 invoices were issued in March 2013. Those invoices became the subject of proceedings between the parties. A sum of some $11,278.07 became outstanding.
  1. [6]
    A letter of demand was written on 2 May 2013, claiming an amount of $12,514.18, being the amount of $11,278.07 as debt owing on the outstanding invoices, contractual interest of $676.70 and an amount of $559.41 for costs. In that letter, it was stated that:

If the sum of $12,514.18 is not paid to our client in the manner and within the time stipulated above, our client will:

  1. lodge a caveat in the Department of Environment and Resource Management for registration against the property against your interest,
  1. file a ‘CLAIM’ in the Magistrates Court of Queensland Brisbane registry to commence proceeding against you to recover the debt together with interest and costs on a full indemnity basis pursuant to the agreement,

without further notice to you.

Rights were reserved to claim additional interest and additional costs pursuant to the agreement if the sum owing was not paid.

Claim issued

  1. [7]
    There was no response from Mr Waltisbuhl to the letter of demand nor any payment made. On 10 May 2013:
  1. (a)
    a statement of claim was filed by Nolan Meats in the Magistrates Court claiming an amount of $13,227.97, made up of $11,278.07 as principal plus contractual interest and costs; and
  1. (b)
    a caveat was lodged in the Department of Environment and Resource Management against the property.

Default Judgment

  1. [8]
    Mr Waltisbuhl did not file a notice of intention to defend the Magistrates Court proceedings. Nolan Meats applied for and obtained default judgment in those proceedings on 26 June 2013 in an amount of $15,072.67 inclusive of interest and costs.
  1. [9]
    The solicitors for Nolan Meats sent a further letter of demand dated 26 June 2013 to Mr Waltisbuhl which required payment of the judgment sum and stated that, unless the sum was paid enforcement steps in the nature of an originating application in the District Court would be taken. No response was received to this letter of demand.

Enforcement of charge in District Court

  1. [10]
    On 16 July 2013, an originating application was filed in the District Court seeking a declaration that Nolan Meats had an equitable charge over land owned by Mr Waltisbuhl and his wife, and an order under s 38 Property Law Act 1974 (Qld) for the appointment of a statutory trust deed for sale and other orders based on the charging clause in the agreement. When the application first came on for hearing in the District Court on 15 August 2013, on the basis of statements made by Mr Waltisbuhl that the debt was going to be paid, the proceedings were adjourned to a later date. Subsequently, by consent, the proceedings were adjourned to the registry.

Default Judgment set aside

  1. [11]
    On 16 September 2013 an email was sent on behalf of Mr Waltisbuhl by his wife to the solicitors for Nolan Meats inquiring as to the total amount payable. In the email it was said the advice was being sought “in preparation for making payment to your client today…”. A detailed response was provided setting out the total amount owing and providing bank details for payment. No payment was made but rather proceedings were brought to set aside the default judgment.
  1. [12]
    At the hearing of that application on 30 September 2013, the solicitors for Mr Waltisbuhl produced a bank cheque for the amount of the principal sum of $11,278.07. No amount was paid for interest and costs. Nevertheless, the learned Magistrate set aside the default judgment but granted leave to Nolan Meats to pursue its claim for payment of the outstanding interest and costs pursuant to the agreement. Such claim was required to be filed within 21 days. In making the final orders, the learned Magistrate who heard the application included in the order an amount of $1,926.64 for scale costs pursuant to the Magistrates Court scale and an amount for interest under the Civil Proceedings Act 2001 (Qld) from the date of commencement of the proceedings, together with an amount of $1,500.00 for costs thrown away.

Amended Claim for indemnity costs

  1. [13]
    The solicitors for Nolan Meats wrote to the solicitors for Mr Waltisbuhl under cover of a letter dated 14 October 2013 stating they held instructions to proceed to bring a claim for payment of the outstanding interest and costs. It was said an amount of $22,607.23 was owing for interest and costs on an indemnity basis pursuant to the terms of the agreement. The letter detailed the calculation of the quantum and enclosed the itemised invoices. The letter contained an offer to settle, correctly described in oral submissions as a modest discount,[1]open for acceptance for 7 days.
  1. [14]
    The solicitors for Mr Waltisbuhl responded by letter dated 18 October 2013. The letter contained no response to the offer to settle but rather stated:

As you clearly intend to proceed, the file needs to be assessed and any and all your indemnity costs related to the District Court matter only. However if you persist in your claim for indemnity costs for the Magistrates Court matter this is a matter for yourselves.

The letter confirmed Mr Waltisbuhl’s position that there was never a basis for the lodgement of the caveat and that the District Court proceedings should be dismissed with costs.

  1. [15]
    In response, Nolan Meats filed in the Magistrates Court an amended claim and amended statement of claim (Amended Claim) arising from the order of the learned Magistrate allowing Nolan Meats to pursue interest and costs. The amount ultimately claimed was an amount of $23,189.47 pursuant to the agreement, including an amount of $21,994.80 for legal costs and an amount of $1,194.67 for interest; the principal debt of $11,278.07 having been paid at the hearing of the application to set aside the judgment. The claim for legal costs was the sum total of six invoices and one pre-billing report of the solicitors for Nolan Meats less the amount of $3,426.14 already paid for costs pursuant to the order of the learned Magistrate on 30 September 2013. Attached to each of the invoices was a schedule itemising the work performed. The invoices included the non-litigation costs, the additional non-recoverable costs of the Magistrates Court proceedings and all costs of the District Court enforcement proceedings.
  1. [16]
    No application was made by Mr Waltisbuhl for an assessment of legal costs either under the Legal Profession Act 2007 (Qld) (Legal Profession Act) or otherwise.

Trial of Amended Claim

  1. [17]
    The Amended Claim was heard in the Magistrates Court over two days commencing on 10 September 2014. The position taken by Nolan Meats at the hearing was that the invoices having issued, it was a “pure contractual claim”. It was said, Nolan Meats had a contractual right to recover the amount claimed in the solicitor invoices as a debt being the legal costs of enforcement, and interest. Initially, Nolan Meats did not call any person to give evidence in relation to its costs; relying rather on the proof of the issue of the solicitor invoices as proof of its claim.
  1. [18]
    After the learned Magistrate indicated that proof of the costs might be necessary, Nolan Meats applied for leave to re-open its case to call the partner from the solicitors firm for Nolan Meats to give evidence in support of the invoices.
  1. [19]
    Counsel for Mr Waltisbuhl said that his client’s position was that costs must be assessed, and that, in any event, the court should not make any order for the recovery of costs incurred in the District Court proceedings.

Decision of the learned Magistrate

  1. [20]
    Adopting the submissions made by counsel for Mr Waltisbuhl, the learned Magistrate held that Nolan Meats ought to have obtained an assessment of its solicitor and own client costs or indemnity costs as part of the proof of its claim. The learned Magistrate held that the solicitor who gave evidence of the costs did not give evidence of the costs fitting within that description. The learned Magistrate held that only a costs assessor was qualified to give evidence about solicitor and own client costs.[2]
  1. [21]
    The learned Magistrate decided, however, that she could perform the assessment of costs.
  1. [22]
    The learned Magistrate excluded from her assessment of costs the costs incurred by Nolan Meats in relation to the District Court proceedings and any additional costs associated with the Magistrate Courts proceedings.[3]It was agreed by the parties that the amount of $17,700 represented the amount of the excluded items, leaving an amount of $7,413.90. From that amount, the amount of $1,619.10 was to be deducted, being the amount already paid for the costs of setting aside the default judgment, leaving then an amount of $5,794.80. The learned Magistrate allowed an amount of 75% of $5794.80, namely $4344.80.
  1. [23]
    No reasons for judgment were delivered. Instead the learned Magistrate enunciated a number of decisions ex tempore during the course of proceedings.

Grounds of appeal

  1. [24]
    Nolan Meats appeals the decision on grounds including that the learned Magistrate:
  1. (a)
    Erred in law in holding, in substance, that on a proper construction of Clause 5(b) of the agreement, the appellant could only recover costs comprising legal fees if the appellant first had its costs assessed;
  1. (b)
    Erred in law in holding that the appellant failed to discharge its onus in establishing on the balance of probabilities that sums on account of legal costs fell within the description “all costs… including but not limited to legal fees (on a solicitor/own client basis)”;
  1. (c)
    Erred in law in holding that the appellant had the evidential onus of proving that the sums on account of legal fees met the description of costs on a “solicitor/own client basis”; and
  1. (d)
    Erred in law in making the assessment herself in determining not to include any costs potentially recoverable of the District Court proceedings nor the earlier interlocutory application in the Magistrates Court.
  1. [25]
    Nolan Meats seeks judgment for the entire amount of its claim and an order that it recover its costs of the trial and this appeal on the indemnity basis.
  1. [26]
    Mr Waltisbuhl has cross-appealed. The grounds of cross-appeal included that the learned Magistrate:
  1. (a)
    Erred by finding that clause 5(b) of the agreement ousted the court’s discretion in respect of an award of costs;
  1. (b)
    Erred in not allowing documents referred to in cross examination to be produced; and
  1. (c)
    Erred in allowing Nolan Meats to recover any costs in circumstances where it was found that Nolan Meats had failed to adduce sufficient evidence.

Approach to appeal

  1. [27]
    Given the quantum of the amount in dispute, Nolan Meats as appellant requires leave of the court to appeal.[4]The Magistrates Courts Act 1921 (Qld) provides that leave shall not be granted unless the court is satisfied that “some important principle of law or justice is involved.”[5]
  1. [28]
    The Court of Appeal in Wanstall v Burke,[6]referred to the test applied by the High Court under s 35(1)(b) of the Judiciary Act 1903 (Cth) in relation to applications for special leave. MacNaughton J 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.[7]

MacNaughton J, with whom O'Sullivan J agreed, observed “[t]his, in our opinion, really expresses in an expanded form the meaning of the words “that some important principle of law or justice is involved…”[8]

  1. [29]
    Subsequently, it has also been said that an important principle of justice requires that there be questions going beyond the consequence of the decision for the immediate parties to the proceedings.[9]Counsel for Nolan Meats referred to the approach taken by McGill DCJ in Ramzy v Body Corporate for GC3 CTS 38396.[10]In that case, one of the questions to be considered was the way in which body corporates can recover costs and a penalty payable under the regulations made under the Body Corporate legislation as a debt. In determining whether to grant leave to appeal, His Honour found that the question raises “matters of general importance in relation to the conduct of proceedings of this nature… which must be quite common, in respect of which there is relatively little authority at the present time.”[11]On that basis, His Honour considered that the proposed appeal on this issue raised some important principle of law or justice.[12]
  1. [30]
    Both parties agreed that it was appropriate to deal with the question of leave to appeal and the substantive matters at the same time.
  1. [31]
    It was submitted by counsel for Nolan Meats that the appeal raises a question of general importance to commercial contracts. In oral submissions, Counsel for Nolan Meats said the questions concerned the interaction between costs assessment and a right to be paid an overdue account. Counsel identified three questions; the first question being, given the scheme of the Legal Profession Act, is there an obligation as a condition precedent on a creditor to obtain a cost assessment; the second question being, does a debtor disputing a cost debt have to raise a defence in which it contends costs were unreasonably incurred; and the third question being, may a creditor rely on evidence of a solicitor to establish costs on a solicitor/own client basis.
  1. [32]
    No written submissions were made on behalf of Mr Waltisbuhl on the issue of the granting of leave to appeal. The grant of leave was opposed at the hearing; it being accepted that if leave was not granted on the appeal then leave would also not be granted in relation to the cross-appeal. In opposing the grant of leave, counsel for Mr Waltisbuhl submitted that the question before the court was simply a fight about costs between two parties.
  1. [33]
    The resolution of the issues between the parties seems to have a much broader application. The determination of this matter may well impact how trade creditors approach the collection of overdue accounts from trade debtors.

Requirement to obtain a costs assessment

  1. [34]
    In this court, the submission made on behalf of Mr Waltisbuhl in relation to the issue of an assessment changed from the submissions made before Her Honour. In this court, it was not argued that an assessment was a pre-condition to proceedings by Nolan Meats to recover any legal costs, but rather that an assessment was necessary before it could be said that Nolan Meats had proved that it had incurred costs matching the description in clause 5(b).
  1. [35]
    The Amended Claim made by Nolan Meats was a claim in contract. It sought, pursuant to the terms of the agreement, to recover the interest and legal costs incurred in collecting monies owing on an overdue account. It was accepted on behalf of Mr Waltisbuhl that the monies claimed by way of interest were due and owing. The dispute related to the claim for legal costs.
  1. [36]
    There was no dispute between the parties and Her Honour (correctly in my view) proceeded on the basis that the words “on a solicitor/own client basis” as used in the agreement were synonymous with “indemnity costs”.[13]Such an approach was consistent with a number of past authorities[14]and consistent with the language used in the Uniform Civil Procedure Rules 1999 (Qld) (UCPR).[15]
  1. [37]
    There was also no dispute between the parties and Her Honour (again correctly in my view) held that the additional words “all costs” as used in clause 5(b) could not be interpreted as broadening the expression “legal fees on a solicitor/own client basis”.
  1. [38]
    The learned Magistrate proceeded on the basis that the agreement between the parties gave to Nolan Meats a contractual entitlement to its costs on that basis. Her Honour treated it as a debt claim rather than as being an exercise of discretion as to costs.[16]In the cross-appeal filed on behalf of Mr Waltisbuhl, it was said that a contractual claim in debt for the payment of costs does not oust the Court’s discretion in respect of an award of costs.
  1. [39]
    This question has been addressed in a number of cases. Stein JA in Abigroup Limited v Sandtara Pty Limited,[17]in considering the issue of a costs clause in a lease, described it this way:

It is, of course, correct that a court is not bound to give effect to any extra curial contract as to costs when exercising its discretion to award costs. It does not follow, however, that the discretion takes over from the contract and the exercise of discretion against giving effect to the contract precludes enforcement of the contract as to costs. As Salter J said in Mansfield v Robinson [1928] 2 KB 353 at 359, agreements as to costs are common practice and perfectly valid and enforceable… The contractual right simply stands independently of the curial power and order.[18]

  1. [40]
    However, the cases make clear that, for the court to exercise its discretion to give effect to the contractual provision, the terms used in the agreement must “plainly and unambiguously” provide for the payment of costs on a particular basis.[19]
  1. [41]
    Here, the learned Magistrate considered that the words used in the agreement “plainly and unambiguously” gave to Nolan Meats an entitlement to its legal costs on a solicitor/own client or indemnity basis. That was undoubtedly right.
  1. [42]
    The real contention is whether Her Honour was right in interpreting those words as requiring Nolan Meats to either obtain an assessment of costs or lead expert evidence from a costs assessor in order to prove its costs fell within the expression solicitor/own client or indemnity costs.
  1. [43]
    Counsel for Nolan Meats submitted that the obligation (if any) to obtain an assessment was on the debtor and not the creditor. In making this submission, counsel relied on the provisions of the Legal Profession Act. No application had been made by Mr Waltisbuhl for an assessment, despite the provision to him of the itemised invoices under cover of the letter to his solicitors dated 14 October 2013.
  1. [44]
    It was acknowledged by counsel for Nolan Meats that its position as to the relevance of the Legal Profession Act had changed since the initial hearing. It was also accepted by counsel that the fact that Mr Waltisbuhl could have made an application under that Act for a costs assessment did not provide a complete answer. It was accepted that it was still necessary to consider what the terms used in the contract meant.
  1. [45]
    In discussing terms which allowed a creditor to recover indemnity costs from a defaulting party, Megarry VC in EMI Records Ltd v Ian Cameron Wallace Ltd said that the test gave “the litigant a complete indemnity, shorn only of anything that is seen to be unreasonable… In a word, the difference is between including only the reasonable and including everything except the unreasonable.”[20]In referring to the approach taken in EMI, de Jersey CJ stated, “in determining reasonableness, ‘the receiving party will be given the benefit of any doubt.’ In other words, considerable liberality should ordinarily be extended in assessing reasonableness.”[21]
  1. [46]
    In the initial hearing, following various tentative views expressed by Her Honour as to the approach being taken on behalf of Nolan Meats, the solicitors for Nolan Meats sought leave to re-open their case in order to lead evidence as to the reasonableness of their costs. In my view, that was clearly a necessary step.
  1. [47]
    Mr Yam, the solicitor with the carriage of the matter for Nolan Meats who did the majority of the work on the file himself, swore that when issuing the invoices all costs included in them were reasonably incurred and of a reasonable amount. This evidence was not challenged in cross-examination. Her Honour accepted Mr Yam as being a person of ability and integrity and of having worked in a manner that was cost effective.
  1. [48]
    Her Honour found that the evidence of Mr Yam did not prove that the costs incurred were solicitor/own client costs or indemnity costs and that accordingly the court had no evidence that the costs fell within those expressions. Her Honour found that such a conclusion led to an unsatisfactory outcome and chose to conduct her own assessment. In doing so, Her Honour disallowed the portion of the costs that related to the District Court application and the interlocutory applications in the Magistrates Court and only granted 75 per cent of the remaining costs.
  1. [49]
    During cross-examination of Mr Yam, counsel for Mr Waltisbuhl made a call for invoices referred to by Mr Yam and which were not in evidence. The invoices related to costs not claimed in the statement of claim. That call was renewed in this court through the cross-appeal. The documents were irrelevant to the debt claim and for that reason, like Her Honour, I did not require Nolan Meats to produce the invoices.

District Court Costs

  1. [50]
    In considering the costs disallowed, the first question is whether the learned Magistrate was correct in excluding from her assessment the costs said to have been incurred by Nolan Meats in its District Court proceedings.
  1. [51]
    No reasons were given by the learned Magistrate for that decision. The decision seems to have followed from submissions on behalf of Mr Waltisbuhl that the conduct in issuing proceedings in two courts was not reasonable and that to grant those costs would deprive the District Court of its discretion to deal with the matter.
  1. [52]
    During argument before the learned Magistrate it was put that the unreasonableness arose under the principles stated in Port of Melbourne v Anshun Pty Ltd.[22]The Magistrates Court proceedings were for recovery of the debt and the District Court proceedings related to the charge. The District Court proceedings could not have been brought in the Magistrates Court.[23]
  1. [53]
    Proceedings in the District Court were brought as a means of enforcing the judgment obtained in the Magistrates Court following the absence of any response by Mr Waltisbuhl to the demands for payment. By the terms of the agreement the parties had agreed to the charging of the property of Mr Waltisbuhl to discharge the debt. No challenge was made to the validity of those terms.
  1. [54]
    There is no basis for defending the Amended Claim on the basis of any Anshun estoppel, and indeed, whilst it was raised before the learned Magistrate, the issue was never pleaded. There is only passing reference to the point in the written submissions filed on behalf of Nolan Meats before this court.
  1. [55]
    At the time the matter was being determined by the learned Magistrate, the District Court proceedings had been adjourned to the registry by consent. Rather than bring that application on again before the District Court to have that court determine the issue of costs, it would seem that Nolan Meats decided to add any costs it incurred in those proceedings to the claim made in the Magistrates Court.
  1. [56]
    The entitlement to make a claim for costs of earlier proceedings in subsequent proceedings was a matter considered by the court in Abigroup[24]and in an earlier Western Australian Supreme Court decision of Rumball v Mortimore[25].
  1. [57]
    In Rumball, the mortgagee had sought declarations in respect of the mortgagor’s liability to pay, pursuant to the terms of the mortgage, the remainder of the costs on an action and its non-litigation costs arising from the mortgagor’s default. The terms of the mortgage entitled the mortgagee to legal costs on a solicitor and own client basis. In earlier proceedings before a Master of the Court, an order had been made with respect to the costs of the action. The Master had not awarded costs on an indemnity basis.
  1. [58]
    Owen J held that the Master’s order had taken account of the mortgagees’ rights under the mortgage to indemnity costs, and must be regarded as having finally determined the mortgagor’s liability as regards the costs of the action. His Honour held that:

If, as I have found, the costs of the Action were finally determined by Master Ng’s order, then the plaintiffs [mortgagees] cannot recover their remaining costs arising from the Action. The plaintiffs applied for, but were not granted, costs on an indemnity basis…This must be given some meaning. If the plaintiffs were now permitted to recover their remaining solicitor and client costs arising in and from the Action, it would give no substance to the Master’s refusal to grant indemnity costs.[26]

  1. [59]
    His Honour held, however, that the mortgagees were entitled to their non-litigation costs incurred as a result of the mortgagor’s default; having decided there was nothing in the exchanges with the Master to suggest that those costs had been dealt with.
  1. [60]
    Relevantly, there was no suggestion that a court could not deal with the issue of the costs incurred in earlier distinct proceedings.
  1. [61]
    In Abigroup, Abigroup had guaranteed the obligations of a tenant of commercial premises and, in particular, had guaranteed to pay all costs and expenses which the landlord may suffer arising out a breach by the tenant of the lease. Numerous proceedings were conducted by the lessor in the Supreme Court of New South Wales in relation to the breach; and in respect of some it received an order for party and party costs and in others no order was made as to costs. By separate proceedings in the New South Wales District Court against Abigroup, Sandtara sought to recover on a solicitor/client basis its costs incurred by it in the Supreme Court proceedings. Sandtara was successful and Abigoup appealed.
  1. [62]
    The principle arguments for Abigroup were that the statutory provisions as to costs overrode any contractual right as to costs, any right of a party to payment of costs merged in any final order as to costs, it was an abuse of process for a party in one court to reverse the effect of a decision of another court and the lessor was obliged to bring forward in proceedings all claims which it ought reasonably be expected to raise.
  1. [63]
    These arguments were rejected by all members of the New South Wales Court of Appeal. The court held that there was no basis to consider that the power to make an order for costs or the making of an order for costs in a court extinguished or overrode a contractual right to costs, nor any basis to consider that the lessor’s rights merged into the judgments given in the Supreme Court. The court rejected the idea that there was any res judicata, that any Anshun estoppel arose or that there was any abuse of process. Stein JA, in a judgment with whom other members of the court relevantly agreed, held that:

The authorities discussed earlier make it clear that Sandtara’s right of indemnity for all costs remains independently of the court’s orders. By seeking costs in the Supreme Court, the respondent did not lose or surrender its contractual rights.[27]

  1. [64]
    It is correct, as counsel for Mr Waltisbuhl submits, that a court is not bound to give effect to a contractual provision as to costs in making an order as to the costs of proceedings. There was, and is, however, in this case, no reason why it should not do so. Indeed, no substantive argument was made to the contrary.
  1. [65]
    Mr Waltisbuhl failed to pay for goods ordered. Nolan Meats made demand for payment. When payment was not made, Nolan Meats filed proceedings. Those proceedings were not defended and judgment by default was obtained. Nolan Meats demanded payment of the judgment and no response was received so Nolan Meats then filed proceedings in the District Court. Those proceedings were adjourned after a promise was made by Mr Waltisbuhl to pay the debt. The debt was not paid and instead an application was brought to set aside the judgment. At the hearing of that application, eventually the principal amount of the debt was paid. It is difficult in those circumstances to see why Nolan Meats should not get its costs of those proceedings on the basis agreed by the parties.
  1. [66]
    The result in this case is that Nolan Meats were entitled to proceed in the Magistrates Court for the costs incurred in the District Court pursuant to its contractual right to costs. Although a costs order could have been sought in the District Court, it was not. That court has not considered the matter and the application remains adjourned to the registry.
  1. [67]
    In my view, the learned Magistrate erred in not allowing Nolan Meats to recover the costs it incurred in the District Court proceedings.
  1. [68]
    In the proceedings before the learned Magistrate, the parties had agreed that the amount relating to the costs of both the District Court and Magistrates Court was an amount of $17,700.

Costs of default proceedings in the Magistrates Court

  1. [69]
    Similar considerations apply to the claim by Nolan Meats for the costs incurred by it and not dealt with in the earlier Magistrates Court proceedings.
  1. [70]
    In the earlier proceedings, no order was in fact made as to whether it was appropriate to order costs on an indemnity basis. At all times during those proceedings, Nolan Meats made it clear that it was not abandoning its claim for solicitor/own client costs. The learned Magistrate who allowed Nolan Meats to amend its claim made it clear that no determination was being made on that issue. It is clear that there was some confusion at that time as to the actual amount which remained in dispute but that cannot effect the clear terms of the order made and rights which were preserved.
  1. [71]
    Therefore, given the unchallenged evidence of Mr Yam as to the reasonableness of those costs, there was no proper basis for those costs being refused.

Other costs

  1. [72]
    The third category of costs claimed by Nolan Meats were the additional costs not directly related to the proceedings in the District Court or Magistrates Court.
  1. [73]
    Counsel for Mr Waltisbuhl submitted both before the learned Magistrate and in this appeal that Nolan Meats had failed to prove that the costs met the description of solicitor/own client costs. The basis for this submission appears to be that Nolan Meats should have had its costs assessed.
  1. [74]
    Rather than adopt that course, Her Honour decided to “assess” these costs and did so by allowing 75 per cent of them. There will be occasions when the exercise of a broad discretion in making an order that one party pay a portion of the money claimed is appropriate. Having accepted the evidence of Mr Yam, however, there was no proper basis for limiting the amount of those costs.

Costs of the hearing in the Magistrates Court

  1. [75]
    At the end of the proceedings before the learned Magistrate, Nolan Meats did not seek its costs in the Magistrates Court. It does so now.
  1. [76]
    Nolan Meats also appeals the decision of the learned Magistrate ordering Nolan Meats to pay the costs of the proceedings to Mr Waltisbuhl.
  1. [77]
    The award of costs to Mr Waltisbuhl was based on the fact that the amount recovered by Nolan Meats only represented 25 per cent of the sum claimed.
  1. [78]
    An award of costs is discretionary at the end of proceedings and such an order shall not be disturbed on appeal unless the court is satisfied of one of the matters referred to in House v The King.[28]In this case, the stated reasons shows that the discretion miscarried. The low amount recovered could easily have been dealt with by assessing the costs on the scale appropriate for the amount recovered and by refusing to make an order that it be on an indemnity basis.
  1. [79]
    In any event, in my view, Nolan Meats was entitled to the whole amount of its claim and there was no proper basis for denying its costs.
  1. [80]
    The level and basis of those costs is a matter worthy of further consideration.
  1. [81]
    It would appear that Nolan Meats approached the hearing before the learned Magistrate on the basis that it was sufficient in the proof of its claim to tender its invoices. It was only after extensive argument that occupied much of the first day that it accepted an invitation from Her Honour to reopen its case and call Mr Yam to prove the reasonableness of its cost. The reopening of its case resulted in a second day of hearing; albeit that it would seem that the adjournment was requested by those acting for Mr Waltisbuhl.
  1. [82]
    At the same time most of the issues raised at the hearing on behalf of Mr Waltisbuhl were not clearly the subject of his defence. Only two issues were raised by way of defence. In response to the allegation that the Magistrates Court Brisbane registry had jurisdiction to decide the claim, Mr Waltisbuhl said he “does not agree the Magistrates Court has jurisdiction to decide this Claim as the Plaintiff’s claim appears to be in relation to costs not yet ordered in the District Court.” In response to the allegation that Mr Waltisbuhl was liable to pay the legal costs in an amount alleged, Mr Waltisbuhl alleged only that, “no Tax Invoices have been assessed and the Plaintiff’s Claim is for damages and has not been pleaded as such.”
  1. [83]
    The costs of the Magistrates Court proceedings were incurred by Nolan Meats to recover costs associated with the collection of the overdue account. In my view, Nolan Meats are sufficiently compensated by an award of costs incurred in the Magistrates Court proceedings on a standard basis.

Costs of Appeal

  1. [84]
    I will allow time to make written submissions limited to three pages as to the costs of this appeal.

Footnotes

[1]Transcript of Proceedings (Magistrates Court, 5604/13, 10 September 2014) 1-16, L16.

[2]Transcript of Proceedings (Magistrates Court, 5604/13, 1 October 2014) 2-19, L15; 2-38, L30-L35.

[3]Transcript of Proceedings (Magistrates Court, 5604/13, 1 October 2014) 2 -43, L46.

[4]Magistrates Courts Act 1921 (Qld), s 45(2).

[5]Ibid.

[6][1925] St R Qd 295.

[7]Ibid, 297 (MacNaughton J), quoting Johansen v City Mutual Life Assurance Society Ltd (1904) 2 CLR 186, 188 (Griffith CJ).

[8]Wanstall v Burke [1925] St R Qd 295, 297.

[9]American Express International Inc v Hewitt [1993] 2 Qd R 352, [1992] QCA 107.

[10][2012] QDC 397.

[11]Ibid [43].

[12]Ibid.

[13]Transcript of Proceedings (Magistrates Court, 5604/13, 10 September 2014) 1-25, L41.

[14]Bottoms v Reser [2000] QSC 413; Henley v State of Queensland [2005] QDC 94.

[15]r 703(1) and r 703(3).

[16]Transcript of Proceedings (Magistrates Court, 5604/13, 10 September 2014) 1-28, L18-L19; Transcript of Proceedings (Magistrates Court, 5604/13, 1 October 2014) 2-19, L8-L10.

[17][2002] NSWCA 45 (Abigroup).

[18]Ibid [9].

[19]Re Adelphi Hotel (Brighton) Ltd; District Bank Ltd v Adelphi Hotel (Brighton) Ltd [1953] 1 WLR  955; Gomba Holdings UK Ltd v Minories Finance Ltd [1992] 4 All ER 588; Platinum United II Pty               Ltd v Secured Mortgage Management Ltd (in liq) [2011] QCA 229; Chen v Kevin McNamara &               Son Pty Ltd [2012] VSCA 229.

[20]EMI Records Ltd v Ian Cameron Wallace Ltd [1983] Ch 59, 71 (EMI).

[21]Bottoms v Reser [2000] QSC 413 (citations omitted).

[22](1981) 147 CLR 589.

[23]District Court of Queensland Act 1967 (Qld), s 68; Magistrates Courts Act 1921 (Qld), s 4.

[24][2007] NSWCA 45.

[25][2000] WASC 126 (Rumball).

[26]Ibid [33].

[27]group [2002] NSWCA 45, [12].

[28](1936) 55 CLR 499.

Close

Editorial Notes

  • Published Case Name:

    Nolan Meats Pty Ltd v Waltisbuhl

  • Shortened Case Name:

    Nolan Meats Pty Ltd v Waltisbuhl

  • MNC:

    [2017] QDC 57

  • Court:

    QDC

  • Judge(s):

    Sheridan DCJ

  • Date:

    20 Mar 2017

Appeal Status

Please note, appeal data is presently unavailable for this judgment. This judgment may have been the subject of an appeal.

Cases Cited

Case NameFull CitationFrequency
Abigroup Ltd v Sandtara Pty Ltd [2002] NSW CA 45
4 citations
Jump To
Cite 1 - [2002] NSW CA 45
Cite 2 - [2002] NSW CA 45
Cite 3 - [2002] NSW CA 45
Cite 4 - [2002] NSW CA 45
American Express International Inc v Hewitt [1992] QCA 107
2 citations
Jump To
Cite 1 - [1992] QCA 107
Cite 2 - [1992] QCA 107
American Express International Inc v Hewitt [1993] 2 Qd R 352
3 citations
Jump To
Cite 1 - [1993] 2 Qd R 352
Cite 2 - [1993] 2 Qd R 352
Cite 3 - [1993] 2 Qd R 352
Bottoms v Reser [2000] QSC 413
3 citations
Jump To
Cite 1 - [2000] QSC 413
Cite 2 - [2000] QSC 413
Cite 3 - [2000] QSC 413
Chen & Anor v Kevin McNamara & Son Pty Ltd & Anor (No 2) [2012] VSCA 229
1 citation
Jump To
Cite 1 - [2012] VSCA 229
Deveigne & Anor v Askar [2007] NSWCA 45
1 citation
Jump To
Cite 1 - [2007] NSWCA 45
District Bank Ltd. v Adelphi Hotel (Brighton) Ltd. (1953) 1 WLR 955
1 citation
Jump To
Cite 1 - (1953) 1 WLR 955
EMI Records Ltd. v Wallace (1983) Ch 59
2 citations
Jump To
Cite 1 - (1983) Ch 59
Cite 2 - (1983) Ch 59
Gomba Holdings UK Ltd v Minories Finance Ltd [1992] 4 All ER 588
1 citation
Jump To
Cite 1 - [1992] 4 All ER 588
Henley v State of Queensland [2005] QDC 94
2 citations
Jump To
Cite 1 - [2005] QDC 94
Cite 2 - [2005] QDC 94
House v The King (1936) 55 CLR 499
2 citations
Jump To
Cite 1 - (1936) 55 CLR 499
Cite 2 - (1936) 55 CLR 499
Johansen v City Mutual Life Assurance Society Ltd. (1904) 2 CLR 186
2 citations
Jump To
Cite 1 - (1904) 2 CLR 186
Cite 2 - (1904) 2 CLR 186
Mansfield v Robinson [1928] 2 KB 353
1 citation
Jump To
Cite 1 - [1928] 2 KB 353
Platinum United II Pty Ltd v Secured Mortgage Management Ltd (in liq) [2011] QCA 229
1 citation
Jump To
Cite 1 - [2011] QCA 229
Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589
2 citations
Jump To
Cite 1 - (1981) 147 CLR 589
Cite 2 - (1981) 147 CLR 589
Ramzy v Body Corporate for GC3 CTS38396 [2012] QDC 397
3 citations
Jump To
Cite 1 - [2012] QDC 397
Cite 2 - [2012] QDC 397
Cite 3 - [2012] QDC 397
Rumball v Mortimore [2000] WASC 126
3 citations
Jump To
Cite 1 - [2000] WASC 126
Cite 2 - [2000] WASC 126
Cite 3 - [2000] WASC 126
Wanstall v Burke [1925] St R Qd 295
4 citations
Jump To
Cite 1 - [1925] St R Qd 295
Cite 2 - [1925] St R Qd 295
Cite 3 - [1925] St R Qd 295
Cite 4 - [1925] St R Qd 295

Cases Citing

Case NameFull CitationFrequency
Nolan Meats Pty Ltd v Waltisbuhl [2018] QDC 391 citation
1

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