Cramp Pty Ltd v Jongkind[2018] QDC 144

DISTRICT COURT OF QUEENSLAND

1. The respondent brought proceedings under ss 143 and 144 of the Property Law Act 1974 in the Magistrates Court at Roma by way of complaint seeking a warrant for possession of shop premises owned by the defendant.  The proceedings were by way of complaint and summons under the Justices Act 1886 against the appellants who were the tenants of the premises in question.  The proceedings were heard in the Magistrates Court on 18 August 2017, there was one day of hearing but before the next adjournment date the respondent applied for dismissal of the complaint.  The learned Magistrate dismissed the complaint and awarded costs in favour of the appellant in accordance with the scale provided in Schedule 2 of the Justices Regulation 2014 (“the Regulation”).

2. This appeal against that order for costs is brought under s 222 of the Justices Act 1886. 

Grounds of Appeal

3. The grounds of appeal are set out in the Notice of Appeal as follows:

“1. The Magistrate erred in finding that s 158B(2) of the Justices Act 1886 (Qld) did not apply despite finding that the case was of “extreme importance” to both parties.

2. The Magistrate misdirected himself by finding that s 158B(2) of the Justices Act 1886 (Qld) required the case to be of “public importance” in circumstances where that section does not so require.

3. The Magistrate erred in failing to take into consideration the merits of the complaint and conduct of the complainant as a relevant consideration in respect of the defendant’s application for costs.

4. The Magistrate erred in failing to admit into evidence the affidavit of Edward Amos sworn on 22 September 2017.”

4. The defendant seeks an order that the respondent pay its costs of the proceedings fixed at $15,926.00 or such other amount as the court deems appropriate.  The appellant also seeks costs of the appeal.

The legislation - Section 158(1) of the Justices Act 1886

5. Section 158(1) of the Act provides:

“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.”

6. Section 158B qualifies the power extended in s 158(1).  It reads as follows:

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

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

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

2. (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.”

7. The relevant scale of costs is provided for in Schedule 2 of the Regulation.^[1]Schedule 2 relevantly provides as follows:

“1. A scale sets out amounts up to which costs may be allowed

This scale sets out—

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

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

2. Item of costs covers all legal professional work

An item in Part 2 covers all legal professional work even if the work is done by more than one lawyer.

3. Only necessary or proper costs may be allowed

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

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

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

4. Appeal to District Court Judge — professional costs at 20 per cent higher than for complaint

For an appeal to a District Court Judge under Part 9, Division 1 of the Act, the amount up to which costs may be allowed for legal professional work is the amount that may be allowed under Part 2, as if the work were a complaint, increased by 20 per cent.”

Part 2 of the Schedule provides for costs including preparation and attendance at Day 1 of a hearing, being costs up to $1,500.  Allowance is also made for costs to be claimed for court fees, allowances to witnesses to attend, and for travelling and accommodation expenses of lawyers.

The proceedings

8. The proceedings were brought by way of a complaint under the Justices Act 1899 requiring the appellants to “quit and deliver up possession” of the premises as their tenancy had been “determined by notice to terminate or demand possession on the 24^th day of February, 2017”.

9. The notice to quit read as follows:^[2]

“TO: CRAMP PTY. LTD,

Level 3, 167 Eagle Street,

Brisbane, Qld 4000.

Whereas:

• On 4 March 2015, William Michael Barker and Catherine Anne Barker granted a lease to Cramp Pty. Ltd.
• By clause 10.1 of the lease, Clause 2.1 is an essential term of the lease;
• Pursuant to clause 2.1 Cramp Pty Ltd was required to pay the rent for the month commencing on 8 January, 2017, on 1 January, 2017, that rental being $2,678.50;
• Cramp Pty. Ltd. failed to pay the rental on 1 January, 2017 and on 3 January, 2017 paid only $975.28 leaving a balance of $1,703.28 owing;
• On 20 January, 2017 a Notice to Remedy Default was sent by prepaid post to the registered office of Cramp Pty. Ltd. at Level 3, 167 Eagle Street, Brisbane allowing 5 business days to remedy the default by paying the balance rental of $1,703.28; and
• The default has not been remedied;

Notice

We hereby give you notice to deliver up possession of the premises described as Shop C on Lot 2 on R.P. 73123 and being the land in Title Reference 14617069 50 which you hold of us as tenant on 10 March, 2017 or 14 days after service of this Notice on you whichever shall be the later.

DATED 24 February, 2017

William Michael Barker and Catherine Anne Barker by their Solicitor.”

10. The Notice to Remedy Default dated 20 January, 2017 and referred to in the Notice to Quit read:^[3]

“With reference to the lease of the premises, dated 4^th March 2015 for a term of three years commencing on 8^th April, 2015 and:

1. the covenant by the lessee to pay rent at $28,600 per annum by monthly payments to be made on the first day of each month in advance and a breach by you of that covenant by not paying the whole of the rental due on 1 September, 2016,

2. I give you notice and require you to remedy the breach by paying the outstanding rental totalling $1,703.28 for the month commencing 8^th January, 2016.

Within five working days after receipt of this notice. 

Dated 20^th day January, 2017.”

11. The respondent, Mr Jongkind, a solicitor gave evidence before the magistrate.  He was the complainant in his capacity as agent for William Barker and Catherine Barker, the owners of the premises.  Under cross-examination Mr Jongkind agreed that the respondent’s case was “about the failure to comply with the Notice to Breach.”^[4]Mr Barker also testified and explained that the nature of the breach was that:

“The rent – the rent for January was paid less 17 - short of $1703.”^[5]

12. In the course of his evidence-in-chief Mr Jongkind produced a document. He said:

“Your Honour, the item that I have in my hand is an envelope containing the notice to remedy defect, dated 20^th January 2017 and this envelope was returned to me.

OK.  Thank you? --- It was sent to Cramp Pty Ltd, Level 3, 167 Eagle Street, Brisbane on the 20^th January 2017.

This is the notice to remedy breach? … It appears –

It’s a breach of covenant? … Yes, your Honour.

Right.  Sent to Cramp on 20^th of the first,.2017?… Answer yes.

And you are saying it was returned? --- It was returned and received at my office on 9^th February 2017.”^[6]

13. Under cross-examination Mr Barker gave the following evidence^[7]

“Now you complain about arrears of rent for January 2017.  That’s your complaint? --- Yes.

OK.  And that amount is in the amount of $1,703.28? --- I believe so.  Yes.

Now you accept that that amount was paid by Cramp on 27^th February 2017? --- Yes.  A Notice to Quit was delivered on 25^th and that money was paid on – that was the Saturday the money was paid in on the following Monday, yes, which I – 27^th.  Yes.

OK.  So its paid in full.  And, in fact, the rent in its entirety has been paid up to date hasn’t it? --- As we stand at this stage, yes.

Question: as we stand right here, its been paid up to date? ---

Answer: Yes.

So there are no arrears? --- Not at this point that I’m aware of.  No.”

14. Mr Jongkind submitted before the Magistrate that although there was acceptance of the rent when it was paid late, the failure to pay on time nevertheless constituted a breach of a term of the lease.^[8]

15. Mr Jongkind admitted on behalf of the complainant that at the time the Complaint and Summons were sworn there was nothing owing.^[9]That was received as an admission under s 48A of the Justices Act 1886.  In the course of his evidence-in-chief, Mr Barker was invited to open the envelope which had been tendered by Mr Jongkind as Exhibit 13.  The envelope contained the Notice to Remedy Breach of Covenant.  On its face, the envelope was addressed to Cramp Pty Ltd, Level 3, 167 Eagle Street, Brisbane Qld 4000.  In pen, someone had crossed out that address and overwritten RTS.  In a different pen someone had written 1114 on the face of the envelope. The envelope bore a printed impression “processed 532 23 January 17” and a receipt stamp dated 9 February 2017.

16. The matter came to trial in August 2017 in the third year of a three year lease.  Mr Barker was referred to the lease document and agreed that the lease was for three years with two options to renew of three years each.^[10]  He also agreed that the premises were rented as vacant retail office and that they had been fitted out by the appellants as a café which would have involved significant expenses.

17. The appellants called Rebecca Cannon as a witness.  She gave evidence that the start-up of the cafeteria business involved an additional investment of over $200,000 which included fit-out costs of $117,765.69.^[11]  Her evidence was that if evicted the appellant would lose over $200,000 they had invested in the business.^[12]

18. The appellants called as a witness Vanessa Youngberry, a partner in the accounting firm, Dimension Accounting.  It appears to be common ground that this accounting firm was the registered office of the company, Cramp Pty Ltd.  Ms Youngberry testified that she personally received mail for that business.  She was shown for the purpose of her evidence, a copy of the envelope which is part of Exhibit 13.  Her evidence in respect of it was as follows:^[13]

“Ms Youngberry, have you seen that envelope before? - - - No.

Ms Youngberry, there is markings on the envelope.  Could you offer any explanation as to what they are? - - - Sure.  There was RTS written on it, which means return to sender.  And it was 1114.  Triple one, four is the GPO box of the tenant next door to us.  There’s two tenancies on the floor.  It’s their PO Box.  They received it and they wrote RTS on it.

When was your first knowledge of this envelope? - - - When it was emailed to me earlier this week.”

19. In cross-examination it was put to Ms Youngberry that the envelope was received by someone at her office and that the written RTS was put there either by her or one of her staff.  She disagreed with that suggestion.^[14]

20. Following the taking of evidence on 18 August 2017, the hearing was adjourned.

21. On 6 September 2017, Mr Jongkind sent an email to solicitors for the appellant in which he advised:^[15]

“We completed our enquiries in relation to the evidence called from Ms Youngberry and concluded that the court is likely to accept her evidence.  It follows that the complaint would fail.”

22. The barrister for the appellants responded in an email to the court which stated in part:

“My instructing solicitors have received the attached email from the solicitors for the complainant.  The defendant neither consents nor opposes the complainant’s application to dismiss the complaint.

…

In the event that the Magistrate dismisses the complaint, I am instructed that the defendant will be seeking its costs on the indemnity basis.”

Magistrate’s reasons for decision

23. On 22 September 2017 the learned magistrate delivered his decision in the matter of costs.  His Honour first acknowledged submissions made on behalf of the appellant:

“It is self-evident that these proceedings are extremely important to both the principals of the agent on behalf of – well, Mr Jongkind, the complainant and, no doubt, extremely important to those of the human agents of Cramp Pty Ltd.

There was evidence at the day of hearing of this matter that the potential was that the business, The Tasting Co, would have to file (STT) after a considerable amount of capital having been expended to set up the business itself.

…

It is noted that the counsel for the defendant in these proceedings has made the submission and has tendered a number of quite cogent authorities, saying that indemnity costs should be awarded for a number of reasons that has been gone into, particularly the defect in relation to the notices, as well as a defect in service, as well, too.  In addition, the correspondence that has been exchanged between the parties prior to the date of trial.”

24. The learned magistrate then referred to ss 158 and 158B of the Justices Act 1886 and went on to hold:

“In assessing the appropriate amounts before the court today to be awarded as costs and disbursements here today, the court is of the view that it is bound by the provisions of s 158B of the Justices Act in awarding costs.  Again, whilst I accept that the case was extremely important to both of the parties before the court, I am not satisfied on the evidence that was adduced on day one of the trial, the submissions of the parties and the evidentiary affidavit material placed before the court today that there was any complex factual situation that had to be considered by the court, that there was the application of any difficult or complex legal principle or, indeed, any matter of public importance arising out of the court of general application that the court would need to consider today, and I am of the view that it is inappropriate to award indemnity costs, and the court intends to award costs in accordance with the scale provided in Schedule 2 to the Justice Regulation 2014 on the – on the basis of s 19 of the Justice Regulation 2014…

It is for those reasons that the court will award costs in accordance with the scale of costs set out in Schedule 2 to the Justice Regulation 2014…”

25. His Honour awarded costs in the total amount of $3,077 calculated in accordance with the scale provided in the Regulation.

Appeal Principles

26. An appeal to the District Court under s 222 of the Act is an appeal by way of rehearing.  The task of an appellate court in conducting an appeal by way of rehearing was recently explained by the High Court in Robinson Helicopter Co Inc v McDermott as follows:

“A Court of Appeal conducting an appeal by way of rehearing is bound to conduct a ‘real review’ of the evidence given at first instance and of the judge’s reasons for judgment to determine whether the judge erred in fact or law.”^[16]

27. The judge should consider the evidence led before the Magistrate:

“Paying due regard to the advantage the learned Magistrate had in seeing the witnesses give evidence, to determine for himself the facts of the case and the legal consequences that follow from such findings of fact.”^[17]

28. Ordinarily, to succeed on such an appeal an appellant must establish some legal, factual or discretionary error by the sentencing court.^[18]These principles are consistent with those adopted by the Court of Appeal in Teelow v Commissioner of Police^[19]as applying to an appeal to the District Court against the exercise of discretion.^[20]

Submissions

29. It is convenient to put ground 4 aside for the moment and first address the submissions of both parties in regard to grounds 1 to 3.

30. The appellant submits the learned Magistrate erred in failing to exercise his discretion under s 158B(2) of the Act to award a “higher amount for costs” on the basis that such higher amount is “just and reasonable having regard to the special difficulty, complexity or importance of the case.”

31. In this regard it is submitted the Magistrate failed to consider whether the case was one of “special importance” but rather limited his assessment to whether there was “any matter of public importance arising out of the Court of general application that the court would need to consider.”  It is argued the Magistrate imposed his own criteria quite separate to the wording of s 158B(2).  It is submitted that as his Honour found the case was “extremely important to both of the parties before the court” then the threshold of “special importance” in s 158B(2) was met and his Honour’s discretion should have been exercised to award a higher amount of costs.

32. The respondent argues to the contrary that the learned Magistrate did not demonstrate any error in his exercise of the discretion.  It is submitted that on a proper construction of the Magistrate’s reasons for decision it could not be concluded that his Honour’s understanding of “special importance” was limited to matters of public importance.

33. The appellant argues further that the learned Magistrate failed to accept as relevant to whether special importance was established the following matters:

- considerations as to an alleged ulterior motive;

- the respondent proceeding in alleged disregard to known facts or established law; and,

- the respondent’s alleged imprudent refusal of an offer to compromise.

34. The respondent submits that no concession or finding was made as to the existence of an ulterior motive.  Further, it is submitted the respondent was entitled to test the claim of failure of service at trial.

The meaning of “special importance”

35. An award of costs under the Justices Act is generally limited to the scale amounts.  The Act only permits a higher amount to be awarded where that is “just and reasonable having regard to the special difficulty, complexity or importance of the case.”  It may be readily accepted that the word ‘special’ qualifies each of the terms ‘difficulty’, ‘complexity’ and ‘importance’.^[21]A number of decisions of the District Court have considered the meaning of the term ‘special importance’.  That body of case law concludes that determining whether special importance has been established involves an objective test.

36. In Allison v Channel Seven Queensland Pty Ltd^[22]Morzone QC DCJ held with reference to the phrase “special difficulty, complexity or importance”:

“These are relative terms in relation to the particular case.  That is, in my view the test is an objective one of whether the difficulty, complexity or importance of the particular case at hand surpasses what is common or usual in an ordinary case.  The inquiry ought not to be directed to subjective importance of the case to the respective parties.”

37. His Honour went on to cite judicial consideration of an analogous provision by a Justice of the New Zealand High Court.  In T v Collector of Customs^[23]Tipping J stated:

“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 as ordinarily encountered.  Similarly, the focus on the case itself means that it’s not enough for the applicant to be able to say that by dint of its features the case had special importance to him.  The fact that the scale is miserable, indeed insultingly so, naturally leads a judge to strain to find sufficient cause to exceed the scale.  Any such tendency must be resisted, albeit with little enthusiasm.”

38. The view of the law adopted by Morzone DCJ has been cited with approval by Robertson DCJ in Senior Constable Sheehan v Leo^[24]and is consistent with the comments of Farr SC DCJ in Whitby v Stockair Pty Ltd & Anor.^[25]

39. That body of authority supporting an objective test should be followed.  This is not to say that the impact of the matter upon a party is irrelevant to the exercise of discretion.  In the earlier decisions of Power v Lewis^[26] and Hickey v Crime and Misconduct Commission^[27] the impact of prosecution on the career and public standing of the defendants was taken into account.  However, as explained by Farr DCJ in Whitby v Stockair Pty Ltd it was the objective assessment of the impact upon the defendant which was relevant in each of those cases, not the defendant’s subjective response to the impact.

Consideration

40. The respondent’s action seeking a warrant for possession was terminated at his request, no determination having been reached on the substantive matters in issue.  The principles applicable to awarding costs where there has been no determination on the merits were explained by Hill J in Australian Securities Commission v Aust-Home Investments Ltd & Ors:^[28]

“It will rarely, if ever, be appropriate, where there has been no trial on the merits, for a court determining how the costs of the proceeding should be borne to endeavour to determine for itself the case on the merits or, as it might be put, to determine the outcome of a hypothetical trial: Stratford supra.  This will particularly be the case where a trial on the merits would involve complex factual matters where credit could be an issue.”

41. That observation is applicable here.  It is not possible on appeal to seek to resolve issues of credit which weren’t fully litigated in the proceedings below.

42. However, the appellant raises as a further consideration the respondent’s disregard of advice provided to him that the notice to remedy breach forwarded by ordinary mail had not been received by the appellant.  In addition it is submitted that service by ordinary mail was not in accordance with the requirements of clause 15.3(b) of the lease.  That clause relevantly provides:

“To be valid or effective a notice or document must be:

1. (a)
   in writing and

2. (b)
   left at, posted by registered post or sent by facsimile number to the landlord or tenant at the address last notified by the receiving party.”

The respondent seeks to justify service of the relevant notice by ordinary post by reliance on the provisions of s 347(1)(d) of the Property Law Act 1994 which allows service by ordinary post on a corporation.  However, that sub-section is qualified by s 347(6) which reads:

“This section applies unless a contrary method of service of a notice is provided in the instrument or agreement or by this Act.”

The respondent contends that sub-section (6) should be construed as being inclusive.  That submission cannot be accepted.  The sub-section holds that the section “applies unless a contrary method of service” is provided.  The plain meaning of those words is that where a contrary method of service is provided then sub-section (1) does not apply.  It follows that the respondent proceeded on a flawed understanding of the type of service required in law.  The notice was not served in accordance with the requirements of Clause 13.3(b) of the lease.  Indeed, the respondent in requesting that the complaint be dismissed, in effect acknowledged that the court would hold there had not been service of the notice.  The respondent’s correspondence dated 6 September 2017 said:

“We completed our enquiries in relation to the evidence call from Ms Youngberry and concluded that the court is likely to accept her evidence.  It follows that the complaint would fail.”^[29]

Ms Youngberry gave evidence of non-receipt of the letter containing the notice.  The view of the law now advanced by the respondent on the appeal is flawed.  Accordingly, the respondent’s initial conclusion that the complaint would fail was well-advised.

43. Following dismissal of the complaint costs on the scale were awarded in favour of the defendant in accordance with s 158(1) of the Act.  At issue is whether the costs awarded should have been higher and not limited to scale costs. 

44. Section 158B requires costs to be in accordance with the scale unless the court is satisfied a higher amount is just and reasonable having regard to the special difficulty, complexity or importance of the case.  It is not argued that the case fell within a category of special difficulty or complexity.  The appellant contends that the learned magistrate should have found the case was one of “special importance” because “on an objective test the case was of extreme importance to both parties”^[30]and because of three circumstances which it was contended warranted an award of indemnity costs.^[31]

45. The concept of indemnity costs is not one to be found in the Justices Act or the Justices Regulation.  It is unhelpful to seek to rely upon concepts arising from the provisions of the Uniform Civil Procedure Rules when construing the words of different legislation.

46. In my view s 158B introduces a threshold test for determining whether a higher amount than scale costs may be awarded.  The test is whether “the higher amount is just and reasonable having regard to the special difficulty, complexity or importance of the case”.  A higher than scale amount may only be allowed if justified under that test.  No features of special difficulty and complexity are relied upon or apparent in this case.  At issue is whether there are features such that the special importance of the case makes the awarding of higher costs just and reasonable.

47. What makes a case one of special importance?  Viewed objectively the importance of the particular case at hand must surpass “what is common or usual in an ordinary case”.^[32]

48. A case which raises an important point of law or question of public importance may more readily be characterised as one of “special importance”.^[33]However, categories of special importance are not limited to those.  The seriousness of the impact of the prosecution on a party may also be taken into account.^[34]In Power v Lewis a further relevant consideration was that the prosecution had prior notice of the determinative issue.

49. The appellant here submits that the learned magistrate applied an incorrect test by limiting his consideration of what might give rise to special importance.  In his reasons for decision the learned magistrate correctly summarised the defendant’s submissions but went on to state that in his view the court was bound by the provisions of s 158B.  His Honour then gave as his reasons for only awarding scale costs. His Honour held that he was not satisfied:

“there was any complex factual situation that had to be considered by the court, that there was the application of any difficult or complex legal principle or, indeed, any matter of public importance arising out of the court of general application that the court would need to consider today…”.^[35]

50. It appears from these reasons that his Honour limited his consideration to the categories he mentioned.  In so doing he fettered his discretion by failing to have regard to other categories of matters which may cause a case to be of special importance.  Here the appellant relies upon the potential impact of the proceedings on its business and upon the alleged deficiency in the plaintiff’s conduct of its case.

51. Those are matters which may, but not must, cause a case to be one of special importance in that they alone or in combination may take the importance of the case outside what is ordinarily encountered. It was necessary that they be given proper consideration in the exercise of the discretion.

52. As the magistrate’s reasons disclose there was failure to have regard to those relevant considerations, in my view that constituted an error in the exercise of the Court’s discretion.^[36]It therefore falls to this Court to exercise the discretion afresh on the material before the magistrate. 

Exercise of discretion

53. The legislation sets a demanding standard before costs in excess of the scale may be awarded.  Ordinarily, to satisfy the requirement of “special importance” a case will need to involve an important point of law or a question of public importance.  Only occasionally will other factors be sufficient to make a case one of special importance.  I am persuaded that the circumstances of this case do place it in that category.

54. The proceedings, although civil in nature, were commenced by way of complaint and summons under the Justices Act 1886.  Although the basis for the action was the late payment of rent in the relatively small sum of $1,703.28, the order sought was for the eviction of the tenant.  There was evidence that eviction would result in a loss of over $200,000 to the appellant.  Rebecca Cannon and Anthony Cannon both gave evidence that eviction from the premises would result in failure of their business.^[37]Neither witness’s evidence in this regard was effectively challenged.

55. The jurisdiction of the Magistrates Court in a money action is limited to $150,000.  This matter, although civil in nature did not fall in the category of a money action.  Nevertheless, the potential loss to the appellant was well in excess of the jurisdictional limit of proceedings for money matters in the Magistrates Court.  The potential impact upon the appellant as a party to civil litigation in the Magistrates Court was therefore exceptional.

56. Furthermore, the respondent proceeded with this litigation in the face of a warning that it was doomed to failure because of non-service of an essential notice.  The appellants wrote on 27 February 2017 advising that:

“…the purported Notice to Remedy Breach allegedly posted on 20 January 2017 to our client’s registered office had not been delivered by Australia Post to our client’s registered office.”^[38]

57. The respondent submits that he was entitled to test this assertion by the appellant.  I do not find that he deliberately proceeded knowing that service had not been achieved.  At the time of hearing he clearly was proceeding on the suspicion that the appellant had deliberately avoided service. However, the appellant’s correspondence should have put him on notice, at the very least, that careful attention needed to be given to the validity of service of that notice.  If the appellant’s assertion was correct then the respondent would be forced to rely upon deeming provisions in law.  The respondent having been alerted to the issue, it is not unreasonable to expect that he should have given careful attention to the legal basis of service.  That did not happen.  The lease required service by registered post.  That did not occur.  In the circumstances it was reckless of the respondent to proceed in the face of the warning he had received when proper attention to the provisions of his own lease document would have alerted him to the fact that the proceedings had no prospect of success.  The impact of this failure was all the more significant given the dire consequences for the appellant should it be evicted.

58. These two factors in combination are sufficient, in my view, to mark this case as one of special importance.  Viewed objectively, these factors cause the importance of this case to surpass what is common or usual in an ordinary case.  It follows that the condition precedent for the award of costs in excess of scale has been satisfied.

Assessment of Costs

59. I now turn to the assessment of those costs.

60. The appellant has characterised its claim as being one for an award of indemnity costs.  This claim for indemnity costs adopts the terminology found in r 703 of the Uniform Civil Procedure Rules 1999 which defines indemnity costs as being all costs “reasonably incurred and of a reasonable amount” in contrast to the standard basis of assessment which is for “all costs necessary or proper” for conduct of the proceedings.  As discussed above, it is not helpful to introduce concepts from the Uniform Civil Procedure Rules which do not apply here.  Section 158B of the Justices Act applies a different test. Where an amount higher than the scale is contemplated, the Justices Act provides for the award of costs that are “just and reasonable” having regard to the “importance of the case”. 

61. Here the claim for indemnity costs has been made with the apparent expectation that once the condition precedent for award of costs above the scale was satisfied, then all costs reasonably incurred should be granted.  In my view that expectation does not give sufficient regard to the terms of the Justices Act provision.

62. While it may be acknowledged that the Magistrate’s Court scale provides for awards that are indeed meagre, that cannot justify the court ignoring the statutory requirements.  As observed by Farr SC DCJ in Whitby v Stockair Pty Ltd,^[39]there is ample authority for the proposition that when determining what costs it is just and reasonable to allow, the scale is a relevant guide:

“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.”^[40]

63. As explained by Robin QC DCJ in Lucy v OCC Holdings P/L & Ors (no. 2),^[41]the task for the court is to decide what costs would be ‘just and reasonable’ to allow.   His Honour said:

“… the court, conscious that the successful party’s costs substantially outweigh those allowed by the scale must decide what cost 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. …. thus, the court has now to determine the ‘just’ amounts.”

64. The appellant seeks an award of $15,926.00^[42]comprised of:

65. The amount for airfares differs from what was before the learned Magistrate due to an error in the original affidavit. His Honour refused to receive further material in a mistaken reliance on s 83A of the Justices Act. As that section applies only to proceedings for an offence it could not have any application to this matter. Accordingly this Court should receive and act on the affidavit of Edward Amos and substitute the correct flight cost information.

66. Costs as calculated on the Magistrate’s Court scale would amount to $3,676. That consists of $1,500.00 for the trial day, $1000.00 for four telephone appearances and disbursements of $976.00.

67. The fees and expenses claimed are not challenged and would be appropriate for payment if an award of indemnity costs were being made under the Uniform Civil Procedure Rules.  However, my task is to make an award under the Justices Act that is just and reasonable having regard to the importance of the case. In doing so I should be guided by the prescribed scale.  

68. Having regard to the circumstances described above which caused this matter to be categorised as important, I consider a significant uplift above the scale costs for legal work should be allowed. In addition the appellant should have the full amount for disbursements. Legal costs of $10,000.00 and disbursements of $976.00 will be allowed.

Appeal costs

69. The appellant submitted that I should make an order that costs of the appeal be as assessed.  The power by which this court could order the assessment of costs was not stated.  There is District Court authority to the effect that no power can be identified to allow this court to make an order referring a matter such as this to a costs assessor.^[43] It is appropriate that I make an order for fixed costs of the Appeal.

70. The appellant submits, without any supporting documentation, that costs in the vicinity of $20,000.00 have been incurred for the appeal but seeks only an award of $10,000.00 in costs. That estimate may be accepted as accurately representing costs actually incurred but that is not the basis for the award of costs under the Justices Act. The considerations I earlier referred to in assessing costs in the Magistrates Court are equally applicable in making an award for costs of the appeal. My earlier finding that the importance of the case justifies an award of costs higher than the scale amounts is relevant to the award of costs on this appeal.

71. Costs on the appeal, as assessed under the scale, total $1,800.00, bearing in mind the 20% increase provided for in Schedule 2. In my view a substantial uplift on the scale amount is appropriate taking into account the factors relevant to the importance of the case. I assess costs of the appeal at $6,000.00.

Orders

72. The orders of the Court will be:

1. The appeal is allowed.

2. The order for costs made in the Magistrates Court is set aside.

3. The respondent pay the appellant’s costs of the hearings below pursuant to s 158 of the Justices Act fixed in the sum of $10,976.00.

4. The respondent pay the appellant’s costs of the appeal fixed in the sum of $6,000.00.