Rock Bottom Fashion Market Pty Ltd v Innes, Innes and HR and CE Griffiths Pty Ltd

[1998] QCA 123

IN THE COURT OF APPEAL	[1998] QCA 123
SUPREME COURT OF QUEENSLAND

Appeal No. 1341 of 1997.

Brisbane
[Rock Bottom Fashion Market P/L & Ors. v. HR & CE Griffiths P/L]

BETWEEN:

ROCK BOTTOM FASHION MARKET PTY LTD
(in liquidation) (ACN 010 888 141)

(First Defendant) First Appellant

AND:

DONALD JAMES INNES and
KATHY ADELE INNES

(Second Defendants) Second Appellants

AND:

H R & C E GRIFFITHS PTY LIMITED
(ACN 004 948 823)

(Plaintiff) Respondent

___________________________________________________________________________

Pincus J.A. Dowsett J. Helman J.

__________________________________________________________________________

Judgment delivered 6 March 1998
Further Order delivered 12 June 1998

Separate reasons for further order of each member of the Court, each concurring as to the orders made. ___________________________________________________________________________

1.          THE SECOND APPELLANTS PAY THE RESPONDENT’S COSTS OF THE PROCEEDINGS BELOW.

2.          THERE BE NO ORDER AS TO THE COSTS OF THE APPEAL.

3. DONALD JAMES INNES PAY THE RESPONDENT’S COSTS OF AND INCIDENTAL TO HIS APPLICATION PURSUANT TO S. 471A(1)(d) OF THE CORPORATIONS LAW.

___________________________________________________________________________

Counsel:	No appearance for the first appellant Mr D.J. Innes (not of counsel) for the second appellants Mr M. Gynther for the respondent
Solicitors:	No appearance for the first appellant Mr D.J. Innes for the second appellants McLaughlins as town agents for Sykes, Pearson & Miller for the second respondent
Hearing date:	3 December 1997

IN THE COURT OF APPEAL

SUPREME COURT OF QUEENSLAND

Appeal No. 1341 of 1997.

Brisbane

Before Pincus J.A.
Dowsett J.

Helman J.

[Rock Bottom Fashion Market P/L & Ors. v. HR & CE Griffiths P/L]

BETWEEN:

ROCK BOTTOM FASHION MARKET PTY LTD
(in liquidation) (ACN 010 888 141)

(First Defendant) First Appellant

AND:

DONALD JAMES INNES and
KATHY ADELE INNES

(Second Defendants) Second Appellants

AND:

H R & C E GRIFFITHS PTY LIMITED
(ACN 004 948 823)

(Plaintiff) Respondent

REASONS FOR FURTHER ORDER - PINCUS J.A.

Judgment delivered 6 March 1998

Further Order delivered 12 June 1998

I have read the reasons for judgment prepared by Dowsett J. relating to the question of costs.

I am in general agreement with his Honour’s reasons and agree that the orders proposed should be

made. My agreement is of course based on acceptance of the conclusions reached by a majority of the

Court on the question of the claim against the second appellants.

IN THE COURT OF APPEAL

SUPREME COURT OF QUEENSLAND

Brisbane

Appeal No. 1341 of 1997

Before Pincus JA.

Dowsett J. Helman J.

[Rock Bottom Fashion Market P/L & Ors v. H.R. &C.E. Griffiths P/L]

BETWEEN:

ROCK BOTTOM FASHION MARKET PTY LTD
(in liquidation) (ACN 010 888 141)

(First Defendant) First Appellant

AND:

DONALD JAMES INNES and
KATHY ADELE INNES

(Second Defendants)Second Appellants

AND:

H.R. & C.E. GRIFFITHS PTY LTD
(ACN 004 948 823)

(Plaintiff) Respondent

REASONS FOR FURTHER ORDER - DOWSETT J.

Judgment delivered 6 March 1998

Further Order delivered 12 June 1998

The court delivered judgment in this matter on 6 March 1998, giving leave to the

parties to make further submissions concerning the proposed costs orders. The matter

was re-listed, and the court has heard further argument. There are three different issues as

to costs, namely:-

(a)       Costs below;

(b)       Costs of the appeal;

(c)        Costs of an application made by Mr Innes for leave to prosecute the first appellant’s

appeal.

COSTS BELOW

The appeal was, in the end, prosecuted only by the second appellants. The

judgment against them was for an amount owing on their guarantee of the first appellant’s

performance of the terms of a lease granted to it by the respondent. The respondent’s

claim against the first appellant was for mesne profits accruing after the first appellant had

wrongfully failed to deliver up possession at the expiry of the lease. At the hearing below,

judgment was given in favour of the respondent on that claim. Judgment was also given

against the second appellants for the same amount pursuant to the guarantee. At the

hearing of the appeal, the second appellants argued that their liability under the guarantee

did not extend to a claim for mesne profits. The respondent argued that even if that were

so, the amount of its claim against the first appellant would also have been recoverable as

damages for breach of contract for which the second appellants were liable pursuant to the

guarantee. The second appellants did not, at that stage, object to the respondent’s

seeking to uphold its judgment on this alternative ground. As neither the second appellants’

argument nor the respondent’s reply was dealt with in the reasons given by the learned

Judge at first instance, it seems probable that neither was ventilated by the parties at that

time.

The majority of this court upheld both arguments. In those circumstances, I

proposed in my earlier reasons that the second appellants should pay the respondent’s

costs of proceedings below. The second appellants challenge that proposal, relying upon

a number of submissions, many of which simply re-canvass matters previously argued. I

do not intend to deal with all of those matters. It is sufficient to say that the costs below

should follow the event below, the outcome of which has not been upset on appeal. The

second appellants should pay the respondent’s costs of the action.

As to the appropriate scale, I have previously demonstrated that the claim against

the second appellants was not within the jurisdiction of a retail shop lease tribunal. I do not

propose to revisit that issue. The respondent was entitled to sue them in an appropriate

court. Their liability under the guarantee depended upon proof that the first respondent’s

claim to a renewal of the lease was not justified. This question was not within the

jurisdiction of a Magistrate’s Court. One aspect of that question, namely formal compliance

with the requirements for exercise of the option, may have been within the jurisdiction of a

District Court as there was a concession by the respondent that the value of the property

was within the relevant monetary limit. However, at the time when the action was

commenced in the Supreme Court, the appellants were also asserting that the first

appellant was entitled to relief against forfeiture. This claim was also relevant to any claim

against the second appellants. Although the matter is somewhat complex, it seems that a

District Court does not have jurisdiction to grant such relief. There is jurisdiction to award

relief against forfeiture pursuant to ss. 124, 125 and 127 of the Property Law Act 1974.

These sections relate to relief against forfeiture of a lease. They are not relevant for present

purposes as the first appellant was seeking relief against forfeiture of its option to renew.

Section 128 of the Property Law Act deals expressly with such relief, but the District

Courts Act does not confer jurisdiction under that section upon a District Court. Further, it

seems likely that the appellants would have had to rely upon the broader jurisdiction in

equity to grant relief from forfeiture as it is appears that it had not complied with the

procedural provisions of s.128. A District Court has no jurisdiction to grant such relief.

It is true that had the respondent sued in a District Court, the court might have acquired appropriate jurisdiction on a counter-claim by virtue of s.86 of the District Courts Act, but prima facie, such a court lacked that jurisdiction. It therefore was not unreasonable

for the respondent to commence proceedings in the Supreme Court. Costs should be

taxed in accordance with the usual practice in the Supreme Court, without any special

limitation as to amount or scale.

COSTS OF THE APPEAL

As to the costs of the appeal, the second appellants point to their success in

attacking the basis of the judgment against them, although that did not affect the outcome

of the action. I took those matters into account in proposing that there be no order as to the

costs of the appeal. I consider them to be cogent reasons for such an order. The second

appellants also point to the fact that they incurred the costs of preparing the appeal book.

It is said in reply by the respondent that such preparation was probably as much in

anticipation of Mr Innes being permitted to conduct the appeal on behalf of the first

respondent as in the expectation that the second appellants’ appeal would proceed.

Having considered the various aspects of this complex matter, I propose that there be no

order as to the costs of the appeal.

COSTS OF MR INNES’S APPLICATION

Mr Innes did little more than re-ventilate the arguments advanced in support of his

unsuccessful application. Costs should follow the event. He should pay the respondent's

costs of the application.

ORDERS

I therefore propose the following orders:-

1.         That the second appellants pay the respondent’s costs of the proceedings below;

2.         That there be no order as to the costs of the appeal;

3.         That Donald James Innes pay the respondent’s costs of and incidental to his

application pursuant to s.471A(1)(d) of the Corporations Law.

IN THE COURT OF APPEAL

SUPREME COURT OF QUEENSLAND

Brisbane

Appeal No. 1341 of 1997

Before Pincus JA.

Dowsett J. Helman J.

[Rock Bottom Fashion Market P/L & Ors v. H.R. & C.E. Griffiths P/L]

BETWEEN:

ROCK BOTTOM FASHION MARKET PTY LTD
(in liquidation) (ACN 010 888 141)

(First Defendant) First Appellant

AND:

DONALD JAMES INNES and
KATHY ADELE INNES

(Second Defendants)Second Appellants

AND:

H.R. & C.E. GRIFFITHS PTY LTD
(ACN 004 948 823)

(Plaintiff) Respondent

REASONS FOR FURTHER ORDER - HELMAN J.

Judgment delivered 6 March 1998

Further Order delivered 12 June 1998

I agree with the orders as to costs proposed by Dowsett J. and with his reasons.