Campbell v Turner & Ors (No 2) [2008] QCA 189

SUPREME COURT OF QUEENSLAND CITATION: Campbell v Turner & Ors (No 2) [2008] QCA 189 PARTIES: WAYNE ALEXANDER CAMPBELL and MARY-ANNE MONICA CAMPBELL (plaintiffs/appellants) v LIONEL JOSEPH JAMES TURNER and ELSIE EDITH TURNER (first defendants/first respondents) BOHLE GRAZING PTY LTD ACN 010 552 762 (second defendant/second respondent) HERBERT SAMUEL TURNER (third defendant/third respondent) LYNDEL ISABEL OWENS (fourth defendant/fourth respondent) FILE NO/S: Appeal No 11272 of 2007 SC No 97 of 2004 DIVISION: Court of Appeal PROCEEDING: General Civil Appeal Miscellaneous Application - Civil ORIGINATING COURT: Supreme Court at Brisbane DELIVERED ON: 18 July 2008 DELIVERED AT: Brisbane HEARING DATE: Heard on the papers JUDGES: de Jersey CJ, Fraser JA and Douglas J Separate reasons for judgment of each member of the Court, each concurring as to the orders made ORDERS: 1. Vary order no. 2 made in this Court on 30 May 2008 so that it provides: “2. In lieu thereof order that: (a) the first defendants pay the plaintiffs $136,988.21; (b) the fourth defendant pay the plaintiffs $102,971.50; (c) the claim against the second and third defendants be dismissed.” 2. In lieu of the orders for costs made by the trial judge, order that: (a) The first and fourth defendants pay the plaintiffs' costs of and incidental to the -- 1 of 7 -- 2 proceedings to be assessed on the standard basis on the applicable District Court scale. (b) The plaintiffs pay the second and third defendants' costs of and incidental to the proceedings to be assessed on the standard basis on the Supreme Court scale (each of those defendants being entitled to one quarter of the whole costs of defending the proceeding on that scale). 3. The first and fourth respondents pay the appellants’ costs of the appeal to be assessed on the standard basis on the Supreme Court scale. 4. The appellants pay the second and third respondents' costs of the appeal to be assessed on the standard basis on the Supreme Court scale (each of those respondents being entitled to one-quarter of the whole costs of defending the appeal on the Supreme Court scale). CATCHWORDS: PROCEDURE – COSTS – JURISDICTION – GENERALLY INTEREST – WHERE EQUITABLE RELIEF OR FIDUCIARY RELATIONSHIP – where the appellant was awarded compound interest – where the award of compound interest constituted an equitable claim – whether the award of compound interest should be included in determining the applicable costs scale PROCEDURE – COSTS – SCALE OF COSTS – SCALE APPLICABLE – where the plaintiffs brought proceedings seeking relief based on various grounds – where the defendants contended that had the plaintiffs simply brought proceedings in equity for compensation the proceeding would not have been so complex – where the plaintiffs’ successful equitable claim involved quite an extensive review of factual and legal questions – whether the proceedings ought to have been brought in the Magistrates Court or District Court – whether costs should be awarded on the applicable Magistrates Court or District Court scale PROCEDURE – COSTS – GENERAL RULE – COSTS FOLLOW THE EVENT – COSTS OF ISSUES – where the defendants submitted that the plaintiffs should not have any of the costs of the appeal – where the defendants submitted that the plaintiffs failed on 11 other issues raised in their initial outline of argument – where the plaintiffs’ success required reference to much of the legal and factual substratum that underlay the unsuccessful claims – where the plaintiffs enjoyed substantial success on their appeal – whether that success should be reflected in the costs order -- 2 of 7 -- 3 District Courts Act 1967 (Qld), s 92 Magistrates Courts Act 1921 (Qld), s 4 Supreme Court Act 1995 (Qld), s 47 Uniform Civil Procedure Rules 1999 (Qld), r 681, r 697 Interchase Corporation Ltd (in liq) v Grosvenor Hill (Queensland) Pty Ltd (No 3) [2003] 1 Qd R 26; [2001] QCA 191, cited Johns v Johns [1988] 1 Qd R 138, cited Turley v Saffin (1975) 10 SASR 463, cited SOLICITORS: MacDonnells Law for the appellants Ruddy Tomlins & Baxter for the respondents [1] de JERSEY CJ: I have had the advantage of reading the reasons for judgment in relation to costs of Fraser JA. I agree with the orders proposed by His Honour and with his reasons. [2] FRASER JA: On 30 May 2008 the Court allowed the plaintiffs’ appeal, set aside orders made in the trial division, and instead ordered that: the first defendants pay the plaintiffs $145,759.81; the fourth defendant pay the plaintiffs $111,743.10; and the claim against the second and third defendants be dismissed. 1 The Court has since received the parties' written submissions as to costs made pursuant to leave granted for that purpose. Costs against the first and fourth defendants [3] The plaintiffs submit that the orders made on their successful appeal against the first and fourth defendants are more favourable to the plaintiffs than the offer jointly made by all defendants on 12 February 2007 to pay the plaintiffs $100,000 plus costs to be assessed on the District Court scale. They submit that they should recover their costs of the action below and of the appeal as against the first and second defendants to be assessed on the standard basis. [4] The submission on behalf of the defendants is that this Court should not disturb the decision of the trial judge2 that the plaintiffs’ trial costs should be assessed on the Magistrates Court scale. The plaintiffs submit that to the extent that it is necessary the Court should exercise its discretion under r 697 of UCPR to ensure that the costs recovered by the plaintiffs are not limited to the costs that would have been recoverable in the Magistrates Court. [5] The trial judge gave two reasons for limiting the plaintiffs’ costs to the Magistrates Court scale. The first was that the plaintiffs recovered only $30,000 pursuant to s 8 of the Land Sales Act 1984 (Qld), together with (simple) interest at nine per cent per annum from 21 March 1990 pursuant to s 47 of the Supreme Court Act 1995 (Qld). The second was that the successful claim was not complex or procedurally complicated. [6] In relation to the first of those reasons, her Honour concluded that although the total judgment including interest was about $78,000 the successful claim was 1 Campbell v Turner & Ors [2008] QCA 126 2 Campbell v Turner & Ors (No. 2) [2007] QSC 362 at [11]. -- 3 of 7 -- 4 nevertheless within the $50,000 monetary limit of the Magistrates Courts jurisdiction. Her Honour followed authorities to the effect that, in determining whether a plaintiffs action was one "in which the amount claimed is not more than $50,000" in terms of s 4 of the Magistrates Courts Act 1921 (Qld) the amount of interest awarded should be disregarded. 3 Her Honour referred to Turley v Saffin,4 where it was held that if interest were included when assessing the jurisdiction to award damages then the court's jurisdiction would be rendered uncertain and it would also have the effect of "lower[ing] the ceiling on a court's jurisdiction"; that could not have been parliament's intent. Her Honour also cited Johns v Johns5 in which Williams J adopted that reasoning in construing s 92 of District Courts Act 1967 (Qld), which provided for an appeal as of right against the judgment of the District Court "in an action or matter in which the sum sued for exceeds $5,000". [7] As her Honour also pointed out, the language of the jurisdictional limit is important: upon their proper construction, the expressions "the sum sued for"6 and "the sum claimed" 7 did not include the amount of interest awarded. [8] In my respectful opinion there was no error in the trial judge’s reasoning, but her Honour was concerned only with simple interest of about $48,000 pursuant to s 47 of the Supreme Court Act 1995 (Qld). In the appeal the plaintiffs succeeded in obtaining a judgement for compound interest of more than double that amount by way of equitable relief as a remedial response to the unconscientious conduct of the first and fourth defendants.8 [9] The relevant conferral of jurisdiction on the Magistrates Court is in s 4 of the Magistrates Courts Act 1921 (Qld). It provides, so far as relevant, that subject to that Act: "(c) every action in which a person has an equitable claim or demand against another person in respect of which the only relief sought is the recovery of a sum of money or of damages, whether liquidated or unliquidated, and the amount claimed is not more than $50000; may be commenced in a Magistrates Court …" [10] The claim for compound interest which succeeded on appeal was itself an equitable claim. The accumulation of compound interest upon the principal of $30,000 quickly took the total amount of the plaintiffs’ equitable claim above the monetary limit of the jurisdiction of the Magistrates Court. Because the successful claim for compound interest itself constituted an equitable claim, there was at least real doubt whether the Magistrates Court had jurisdiction to deal with the claim which ultimately succeeded on the appeal in this Court. [11] Furthermore, that claim was far from being a straightforward one. For the defendants it is submitted that, had the plaintiffs brought proceedings in equity seeking only repayment of the $30,000 together with compound interest, the 3 Campbell v Turner & Ors (No. 2) [2007] QSC 362 at [9]. 4 (1975) 10 SASR 463, 474 (Bray CJ). 5 [1988] 1 Qd R 138. 6 Johns v Johns [1988] 1 Qd R 138, 140. 7 Turley v Saffin (1975) 10 SASR 463, 475 (Wells J). 8 Campbell v Turner [2008] QCA 126 at [67]-[76]. -- 4 of 7 -- 5 proceeding would not have been complex. The trial judge’s view to that effect concerned the different claim for simple interest under the statute. The equitable claim for compound interest that succeeded on appeal involved a quite extensive review of factual and legal questions concerning the availability of equitable relief and the selection of the form of relief appropriate to the particular case. [12] Having regard to the doubt about the Magistrates Court jurisdiction and the complexity of the successful claim, the plaintiffs’ costs should not be limited to the Magistrates Court scale. [13] On the other hand, the amounts of the judgments given on appeal are far less than were sought by the plaintiffs. The claim that succeeded could have been brought in the District Court. The amount recovered was within that court’s jurisdiction. There was some complexity in this matter but it was not such as to justify any order other than that the costs be assessed on the applicable scale in the District Court. [14] The first and fourth defendants should be ordered to pay the plaintiffs' costs of and incidental to the proceedings in the trial division to be assessed on the standard basis on the applicable District Court scale. Costs of issues [15] The defendants submitted that the plaintiffs should not have any of the costs of the appeal. That was said to be justified by the fact that the plaintiffs failed on an issue central to the appeal, namely whether the expectations created by the conduct of the first and fourth defendants were unconditional in nature. It was submitted that the plaintiffs failed on 11 other issues raised in their initial outline of argument. It was further submitted that when deciding the issue of costs under r 681 the word "event" should be read distributively to mean the events of issues, if more than one, arising in the proceeding.9 [16] Although the plaintiffs succeeded on only one of their equitable claims, the litigation of that claim required reference to much of the legal and factual substratum that underlay the other claims: the various claims for equitable relief were not entirely separate and distinct from each other. Whilst some references were made in the written and oral arguments and in the appeal record to matters that were irrelevant in the result (such as the quantum of proprietary claims) these did not significantly increase the length of the hearing. The plaintiffs had a substantial success in their appeal and that should be reflected in the costs order. [17] In the particular circumstances of this case it is not appropriate to deny the successful plaintiffs any part of the costs of the appeal on the ground that they failed on one or more "events" or "issues". The first and fourth defendants should be ordered to pay the plaintiffs' costs of the appeal to be assessed on the standard basis on the Supreme Court scale. The assessor will no doubt take into account in making that assessment the fact that the eleven volumes of the appeal record far exceeded what was required for the disposition of the appeal.10 9 Interchase Corporation Ltd (in liq) v Grosvenor Hill (Queensland) Pty Ltd (No. 3) [2003] 1 Qd R 26 at 79-85; [2001] QCA 191. 10 Campbell v Turner [2008] QCA 126 at [78]. -- 5 of 7 -- 6 Costs of the second and third defendants [18] The decision on appeal did not vary the orders made in the trial division dismissing the plaintiffs' claims against the second and third defendants. The orders made by the trial judge that required the plaintiffs to pay the second and third defendants’ costs of and incidental to the proceeding to be assessed on the standard basis on the Supreme Court scale (each of those defendants being entitled to one quarter of the whole costs of defending the proceeding on that scale) should not be disturbed. [19] Similarly, because the appeal against the orders in favour of the second and third defendants failed, I would order that the plaintiffs pay the second and third defendants' costs of and incidental to the appeal to be assessed on the standard basis on the Supreme Court scale (each of those respondents being entitled to one-quarter of the whole costs of defending the appeal on the Supreme Court scale). Set off [20] The defendants also apply for orders that the balance of monies owing by them under the judgment be paid into court pending the assessment of a costs order made by Cullinane J in favour of the defendants and any costs order made in their favour on the appeal; that the judgment sums that they have been ordered to pay to the plaintiffs be set off against the costs owed to them under the order of Cullinane J and any entitlement they have to costs of the appeal; and that the judgment on appeal be stayed pending the assessment of or agreement as to the amount of any costs they are entitled to recover from the appellants. The suggested basis for these orders is that the amount of costs payable in favour of the defendants is likely to significantly exceed the amount of the judgment and costs payable by the first and fourth defendants to the plaintiffs. [21] A similar order was made in the trial division, but it was premised on the much more limited success the plaintiffs enjoyed at the trial both as to the quantum of recovery and as to the costs orders. It might also be relevant to this application that the plaintiffs succeeded on appeal in establishing that two of the defendants were guilty of unconscientious conduct justifying equitable relief. In these circumstances, the plaintiffs seek an opportunity to be heard in response to this application in light of the Court's ultimate determination as to the costs of the appeal and in the trial division. [22] I would accede to that submission. If the matter cannot be resolved between the parties in light of the orders for costs of the trial and the appeal that are now made by this Court, then any such application should be brought in the usual way in the trial division. Amount of the judgment [23] The defendants apply under the slip rule to vary the judgment of this Court of 30 May 2008. They contend that there is a calculation error in the figure for compound interest and that their calculations are not in dispute between the parties. The plaintiffs’ submissions in reply do not take issue with those contentions. On that basis the judgement should be varied in the manner proposed by the defendants. Orders [24] For these reasons I would make the following orders: -- 6 of 7 -- 7 1. Vary order no. 2 made in this Court on 30 May 2008 so that it provides: "2. In lieu thereof order that: (a) the first defendants pay the plaintiffs $136,988.21; (b) the fourth defendant pay the plaintiffs $102,971.50; (c) the claim against the second and third defendants be dismissed." 2. In lieu of the orders for costs made by the trial judge, order that: (a) The first and fourth defendants pay the plaintiffs' costs of and incidental to the proceedings to be assessed on the standard basis on the applicable District Court scale. (b) The plaintiffs pay the second and third defendants' costs of and incidental to the proceedings to be assessed on the standard basis on the Supreme Court scale (each of those defendants being entitled to one quarter of the whole costs of defending the proceeding on that scale). 3. The first and fourth respondents pay the appellants’ costs of the appeal to be assessed on the standard basis on the Supreme Court scale. 4. The appellants pay the second and third respondents' costs of the appeal to be assessed on the standard basis on the Supreme Court scale (each of those respondents being entitled to one-quarter of the whole costs of defending the appeal on the Supreme Court scale). [25] DOUGLAS J: I agree with the reasons for judgment and the orders proposed by Fraser JA. -- 7 of 7 --