My Cash Base Pty Ltd v Intercontinental Shelf No. 193
[2010] QDC 492
•14 December 2010
DISTRICT COURT OF QUEENSLAND
CITATION:
My Cash Base Pty Ltd & Anor v Intercontinental Shelf No. 193 [2010] QDC 492
PARTIES:
MY CASH BASE PTY LTD ACN 123 320 203
(First Appellant)AND
ROBERT BOU-HAMDEN
(Second Appellant)AND
INTERCONTINENTAL SHELF NO. 193 PTY LTD ACN 010 636 138
(Respondent)FILE NO/S:
D230/10
DIVISION:
Civil
PROCEEDING:
Appeal
ORIGINATING COURT:
District Court, Southport
DELIVERED ON:
14 December 2010
DELIVERED AT:
Brisbane
HEARING DATE:
26 November 2010
JUDGE:
Reid DCJ
ORDER:
1. That the appeal be dismissed.
2. That the appellants pay the respondent’s costs of and incidental to the appeal up to receipt of the Notice of Discontinuance on 19 October 2010, to be assessed on a standard basis.
3. That thereafter the appellants pay the respondent’s costs fixed in the sum of $750.
CATCHWORDS:
APPEAL – PROCEDURE – where appellant filed a notice of discontinuance – where question of costs had not been resolved
Uniform Civil Procedure Rules – rr 764, 785
Colgate Palmolive Co v Cussons Pty Ltd & Ors 1993 FCA 536; 46 FCR 225
Supreme Court Practice Direction no. 5 of 2001
COUNSEL:
Appellant self-represented
D. W. Dickie for the respondent
SOLICITORS:
Appellant self-represented
Carter Lester for respondent
In this matter the defendants in proceedings before the Magistrates Court (hereinafter “the appellants”) appeal from a decision of a learned acting magistrate made on 31 March 2010. The effect of the order of the court was that an application by the appellants for an order remitting the respondent’s claim to Queensland Civil and Administrative Tribunal (“QCAT”) be dismissed. Instead, the court ordered that the appellants file a defence to the statement of claim, which sought arrears of rental against the first appellant, and money owing under a related guarantee against the second appellant, within 21 days and that, if no defence was filed, the respondent was given liberty to enter judgment against the appellants.
Subsequently the appellants appealed from the decision but did not enter any defence as required. On the appeal, Mr Bou-Hamden, who appeared in person, told me that he had thought, incorrectly, that the filing of the appeal acted as a stay with respect to the order requiring the appellants to file the defence and otherwise giving the respondent liberty to enter judgment.
Because no defence was filed, the respondent, in circumstances where it knew the appeal was on foot, nevertheless entered judgment against the appellants. There was no application made to set aside this judgment obtained on 29 April. The appeal before me was confined to a consideration of the order of 1 April 2010 decling to remit the matter to QCAT.
It appears that the claim was based, generally, on the following assertions:
(i) the respondent owned premises at Nerang Street, Southport;
(ii) on 12 October 2007 the respondent leased the premises to the first appellant, and the second appellant entered into a guarantee of the first respondent’s obligation to pay rent and various outgoings;
(iii) on 23 May 2008 the respondent entered into deeds with the second appellant and Oxyprint Solution (Qld) Pty Ltd (“Oxyprint”), whereby the respondent consented to the assignment of the lease to Oxyprint, and the lease was assigned;
(iv) pursuant to those arrangements the appellants remained liable to indemnify the respondent with respect to any failure of Oxyprint to meet its obligations under the assigned lease;
(v) on 28 February 2009 Oxyprint vacated the premises and from about that time made no payments under the lease;
(vi) the respondent sought, and eventually obtained as I have previously indicated, an order that the appellants pay some $15,768.47 said to be owing under the lease, deed and guarantee together with interest and costs.
The argument before the learned acting magistrate on 31 March 2010 concerned a contention by the appellants that the premises fell within the definition of a retail business as defined in the Retail Shop Leases Regulation. If that was so, as I understand the appellants to have argued, the matter should have been transferred to QCAT and the Magistrates Court did not have jurisdiction to determine the matter. It is not, however, necessary for me to consider the merits of the appeal. I might say, however, that my preliminary view was that the learned acting magistrate’s decision was probably correct.
The reason it is not necessary to consider the merits of the appeal is that when the matter came on before me the appellants indicated that they did not wish to proceed with the appeal. Mr Bou-Hamden appeared in person. He said, quite correctly, that he had on 12 October 2010 executed a notice of discontinuance and delivered it to the respondent’s solicitors. That does not appear to be in contention.
Mr Bou-Hamden said that those solicitors thereafter argued with him about the question of costs of the appeal although he did not wish to proceed with the appeal. He said the reason for his decision was not because he did not think there was some merit in his argument, but because his father was seriously ill and so he did not want to be involved in a protracted appeal.
The respondent’s solicitors have filed an affidavit of Tanya Marie Atwell, which sets out the nature of discussions between the parties from the date of the notice of discontinuance.
Before referring to that correspondence, it is necessary to refer to the procedure with respect to the appeals to the District Court from a Magistrates Court. Such appeals are governed by part 3 of Chapter 18 of the Uniform Civil Procedure Rules (covering rules 782-792).
R 785 provides so far as relevant:
“(1)Part 1, other than rules 746, 753, 758, 766(3), 767, 776 and 777, applies to appeals under this part, with necessary changes, and subject to any practice direction of the court in which the appeal is brought.”
This rule therefore directs attention to both Part 1 (other than the specific rules referred to in r 785) of Chapter 18 of the UCPR, and Practice Direction No. 5 of 2001. Rule 762, which is contained within Part 1 of the chapter, provides so far as relevant:
“(1)The parties may agree an appeal should be dismissed by consent.
(2)If the parties agree to dismissal of the appeal, a memorandum in the approved form must be filed.
(3)the memorandum may provide that:
(a)an amount secured for the costs of the appeal be paid to all parties specified in the memorandum; or
(b)the appellant pay the respondent’s costs of the appeal to be assessed; or
(c)the appellant pay the respondent’s costs of the appeal set by consent as a specified amount; or
(d)the appellant pay the respondent’s costs of the appeal, to be satisfied from an amount secured for the costs of the appeal with any balance to be paid to a specified party or to the party’s solicitors; or
(e)there be no order for the costs of the appeal.”
Rule 764, which is also in Part 1 of Chapter 18, provides:
“(1)If the parties to an appeal agree as to the orders the Court of Appeal will be asked to make by consent, the appeal may be listed for hearing by the Court of Appeal even though a directions conference has not been held.
(2)If the parties agree as to the substantive orders the Court of Appeal will be asked to make by consent but are in dispute as to the order for costs, the appeal may be listed for hearing even though no record has been prepared and no directions conference has been held, unless the Court of Appeal otherwise orders.”
In my view, this last sub-rule of r 764 was at all times of critical importance in the disposition of this appeal.
It is also apparent that there is no procedure for appeals to be disposed of by way of the filing of a notice of discontinuance, as the appellant attempted to do in this case.
The procedure is, however, also dealt with by Practice Direction No. 5 of 2001. So far as relevant, the practice direction provides:
“1. Introduction
…
(b)This Practice Direction applies to all Appeals to the District Court of Queensland under any legislation including a situation where there is a right to have a matter heard and determined de novo by a District Court; it applies to Applications for Leave to Appeal or Notices of Appeal subject to Leave as if they were Appealed.
(c)This Practice Direction operates except where any Act or Regulation or Rule in relation to a particular Appeal or category of Appeals to the District Court provides to the contrary.
…
(g)When a Notice of Appeal is filed in the District Court or lodged with the Magistrates Court under s 222 of the Justices Act 1886, by a person who is not legally represented, the Registrar of the Court where the Appeal is filed or lodged, must provide at once a copy of this Practice Direction.
…
7.Consent Orders
(a)Where the parties agree that the Appeal should be dismissed by consent, they should file a Memorandum of Dismissal in the District Court Registry in approved Form 68 of the Rules.
(b)Otherwise, if the parties agree, in writing to resolve the appeal, they may file a consent order in the registry under r 666 of the Rules.”
In my view, on any reasonable reading of the rules and the practice direction, in circumstances where the parties were agreed that the appeal should be dismissed, but the question of costs had not been resolved, then the appeal ought to have been listed for hearing before me without the need for having any record prepared, and that question of costs could have been determined. In my view it is not necessary that the question of costs be resolved in order to obtain an order that the appeal be dismissed. Orders in respect of that substantive matter could have been made, and the minor matter of the costs of the appeal could then have been determined by me.
I shall in that circumstance return to a discussion of what occurred between the parties.
Upon receipt of the notice of discontinuance executed and signed by Mr Bou-Hamden on behalf of both appellants, the respondent’s solicitors sent an email to Mr Bou-Hamden of 13 October 2010, which referred to the Notice of Discontinuance. The email then referred to r 307 of the Uniform Civil Procedure Rules and continued:
“We have received instructions from my client that it would be prepared to consent to the discontinuance on the basis that you pay its costs of and incidental to the appeal.
We enclose for your information a draft Costs Statement detailing these costs in the sum of $2,578.95.
To avoid the additional cost of having the costs assessed by a Costs Assessor, we propose that the costs be fixed in the sum of $2,000 and that a Consent Order be executed and filed by the parties to this effect.
If you agree to the proposal, we would ask you to confirm same in writing. Upon receipt of which we shall forward a Draft Consent Order for your perusal and execution.
Upon receipt of the signed Consent Order we will:
(i)sign the Notice of Discontinuance and forward a copy of the same to you;
(ii)sign the Consent Order and forward a copy of the same to you; and
(iii)attend the mention of the matter on 26 November 2010 to hand up the original Notice of Discontinuance and Consent Order requesting that the judge make orders in accordance with these documents.”
The next correspondence referred to in the affidavit is an email from the respondent’s solicitor to the appellant at 3.17 pm on 9 November 2010. It confirmed receipt, on 19 October, of the original Notice of Discontinuance and confirmed instructions to countersign the Notice of Discontinuance on the appellants’ agreeing to pay the respondent’s costs of and incidental to the appeal. It referred also to an apparent email of 13 October from the appellants to the respondent’s solicitors advising that the appellants did not intend to appear at the hearing date on 26 November. The email continued:
“We advise that unless the issue of costs can be resolved between us, we are required to appear.
If we appear, we shall advise the court of the status of the matter and ask for the following orders to be made:
1. That the appeal be struck out;
2.That you pay the respondent’s costs of and incidental to the application, including our costs of appearing on 26 November 2010.
If you wish to avoid additional costs of our attending at the hearing on 26 November 2010, we suggest that you reconsider our invitation to sign a consent order addressing costs.
We have taken the liberty of attaching a draft Order for your consideration. Our client is prepared to offer to accept a discounted sum for costs at the fixed amount of $2,000.
If this offer is not accepted, the costs awarded to our client will have to be assessed, incurring a costs assessor’s fee together with the additional costs of our appearing on 26 November 2010.”
The draft order attached to that email provided:
“1.That the appeal hearing date of 26 November 2010 be vacated.
2.That the appeal be discontinued.
3.That the first and second appellants pay the respondent’s costs of and incidental to the appeal fixed in the sum of $2,000.”
Following receipt of that email it appears that the appellant, Mr Bou-Hamden directly contacted Mr Rob Rollington, said to be a director of the respondent company. An email from Mr Bou-Hamden referred to an earlier phone call and to an offer by Mr Bou-Hamden to pay off the debt owing by him to the respondent. It would seem clear that the debt referred to related to more than just the costs of the appeal and was effectively an offer to pay off the judgement debt over a period of time. There must also have been some discussion between them about security, because Mr Bou-Hamden wrote in the email that although he felt insulted he had “no objection to my vehicle being taken as security” but did not agree to “pay any costs associated with encumbering the vehicle”. It seems therefore there must have been discussions between Mr Bou-Hamden and Mr Rollington about the possibility of securing the debt owed pursuant to the judgment of the Magistrates Court.
Mr Rollington replied to Mr Bou-Hamden in an email of 16 November. The email stated:
“I spoke to my solicitor. She said this automatically goes across and can be taken off if proper security can be arranged. I will accept time payment with no extra interest charged excluding the good judgment amount or of course full payment with 20% discount will be acceptable.”
It is not clear to me what Mr Rollington meant in this email, but in any case I can be satisfied that there were negotiations between Mr Bou-Hamden and Mr Rollington about the possible payment of the judgment debt.
On 23 November at 2.43 pm the respondent’s solicitors again emailed the appellants, indicating they had been instructed by their client to withdraw all offers of settlement previously tendered and to attend at the hearing on Friday 26 November. The email said:
“We hereby notify you of our intention to seek costs against the appellant on an indemnity basis.”
Apparently in response to this email Mr Bou-Hamden emailed the respondent’s solicitors at 8.06 pm on 23 November stating:
“I was told it was resolved and the offer of payments was accepted. Now, a few days before the hearing date, while I am in Sydney where my father is in hospital and very ill, you do this.”
Immediately afterwards, at 8.15 pm on 23 November, Mr Bou‑Hamden emailed Mr Rollington and said:
“What is your solicitor doing now?
I am in Sydney where my father is seriously ill in hospital. He is the reason why I made the offer to pay off a debt I don’t even believe I owe and the reason why I attempted to withdraw the action.
I just saw an email from your solicitor saying court is back on. I thought we’d agreed on security and payments.”
On 24 November Mr Rollington responded:
“I heard nothing from you since the 16th of November. Everything is still proceeding court wise. You did not respond to my email on this on the 16th. If you want to settle this prior to court, an agreement in writing is required with clear payment details amounts, dates and proper registered security on real estate and motor vehicle as required. This can be done through my solicitor. If you genuinely want to resolve this, act quickly as we are proceeding as previously discussed.
Please make contact with my solicitor. She will explain to you what is needed.”
It appears clear from the correspondence that the parties unfortunately engaged in dual negotiations – in respect of costs of the appeal, and in respect of the whole of the judgment debt - and that this was conducted on two levels, between Mr Bou-Hamden and Mr Rollington, and also between Mr Bou-Hamden and the respondent’s solicitors.
In my view, the appropriate course of conduct, if the parties were agreed, as appears reasonably clear that the appeal was to be dismissed but had not agreed on costs, was to proceed under UCPR r 764(2). In my view the court ought to have been advised that there was agreement about the substantive order, that the appeal was to be dismissed, but that the question of the costs of the appeal had not been resolved.
In my view, both parties are to blame for not proceeding appropriately. The respondent’s solicitors ought to have been aware of the rules or, if they were not, have considered them, and in that way the matter could have been appropriately resolved without recourse to the argument that developed over securing the judgement debt.
In the circumstances, it is my view that the respondent should be entitled to its costs of the appeal up to its receipt of the appellant’s signing of the Notice of Discontinuance. While, as I said, there is no procedure for filing a Notice of Discontinuance in an appeal, in my view the solicitors ought have been able to explain the correct procedure. I am sure if that had been done the matter would have been resolved subject to any argument about costs. In the circumstances I will order:
1. That the appeal be dismissed.
2. That the appellants pay the respondent’s costs of and incidental to the appeal up to receipt of the Notice of Discontinuance on 19 October 2010, to be assessed on a standard basis.
3. That thereafter the appellants pay the respondent’s costs fixed in the sum of $750.
In making the order fixing costs after 19 October, I am conscious there would have been some work involved in arranging for formal orders to have been made and in the costs argument, but in my view they were minimal and certainly there was no requirement to prepare for the substantive issues on the appeal.
In my view there is also nothing to indicate that prior to 19 October there was any basis for claiming indemnity costs, having regard to principles applicable to such matters referred to in Colgate Palmolive Co v Cussons Pty Ltd & Ors 1993 FCA 536; 46 FCR 225.
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