Carpentaria Electrical P/L v a Stipendiary Magistrate at Southport - [1999] QSC 231

IN THE SUPREME COURT
OF QUEENSLAND

No 11472 of 1998

Brisbane
Before the Hon Justice White
[Carpentaria Electrical P/L v A Stipendiary Magistrate at Southport & Anor]
BETWEEN:

CARPENTARIA ELECTRICAL PTY LTD
  (ACN 071 876 910)  Applicant
AND:
A STIPENDIARY MAGISTRATE AT SOUTHPORT
  First Respondent
AND:
  BRUCE J MITCHELL
  TRADING AS BRUCE J MITCHELL CONSTRUCTION
  Second Respondent
REASONS FOR JUDGMENT - WHITE J
Judgment delivered 24 September 1999

CATCHWORDS: ADMINISTRATIVE LAW - judicial review - Small Debts Court - s 48(2) Magistrates Court Act 1921 - Part 5 Judicial Review Act 1991 - failure to accord natural justice - whether formation of contract within jurisdiction - whether legal costs and interest a debt or liquidated demand - s 2 of Magistrates Court Act 1921.

Alexander v Ajax Insurance Co Ltd [1956] VLR 437
Masters v Cameron (1954) 91 CLR 353
R v Small Claims Tribunal and Homewood; ex parte Cameron [1976] VR 427
Spain v Union Steamship Co of New Zealand Ltd (1923) 32 CLR 138
Civil Justice Reform Act 1998 (No 20 of 1998) - s 27
Judicial Review Act 1991 - Part 5
Magistrates Courts Act 1921 - ss 2, 13, 19 and 48(2)
Magistrates Courts Rules ss 14 and 155A

Counsel:Mr JP Murphy for the applicant
Mr LY Paranasivam for the first respondent
Mr B Mitchell (self-represented) second respondent

Solicitors:Barwicks Wisewoulds for the applicant
Crown Solicitor for the first respondent

Hearing Date: 6 September 1999

IN THE SUPREME COURT
OF QUEENSLAND

No 11472 of 1998

Brisbane
Before the Hon Justice White
[Carpentaria Electrical P/L
v A Stipendiary Magistrate at Southport & Anor]
BETWEEN:

CARPENTARIA ELECTRICAL PTY LTD
  (ACN 071 876 910)  Applicant
AND:
A STIPENDIARY MAGISTRATE AT SOUTHPORT
  First Respondent
AND:
  BRUCE J MITCHELL
  TRADING AS BRUCE J MITCHELL CONSTRUCTION
  Second Respondent
REASONS FOR JUDGMENT - WHITE J
Judgment delivered 24 September 1999

The applicant, Carpentaria Electrical Pty Ltd (“Carpentaria”) seeks review of a decision made by a Stipendiary Magistrate at Southport on 14 September 1998 wherein he awarded $599.40 in a small debt action in the Magistrates Court to the second respondent Bruce J Mitchell (“Mr Mitchell”) pursuant to s 48(2) of the Magistrates Court Act 1921 and Part 5 of the Judicial Review Act 1991. The Stipendiary Magistrate, who is the first respondent, appeared represented by the Crown Solicitor and abides the order of the court. No costs are sought by either party against him.
Carpentaria challenges the decision below on three bases
·there was failure to accord natural justice to the applicant;
·the action is not within the jurisdiction in the Southport Magistrates Court district; and
·the amount ordered to be paid by the applicant to the respondent is not a debt or liquidated demand within s 2 of the Magistrates Court Act 1921 and therefore not within jurisdiction.
Background
Mr Mitchell who appears on his own behalf, is a builder who won a tender to construct a retirement hostel on Mornington Island for the Mornington Shire Council. Carpentaria performed the electrical subcontract work on the building works in 1997 and 1998. By notices dated 8 April 1998 Carpentaria gave notice of claim to the Mornington Shire Council and Mr Mitchell in respect of a sum of $21,188.18 said to be moneys outstanding under the subcontract. The Mornington Shire Council paid the money into the Cairns Magistrates Court.
That sum was ordered to be paid out to Mr Mitchell by order of the Magistrate at Cairns on 23 December 1998, together with costs. Carpentaria is desirous of pursuing that amount by a common law action against Mr Mitchell but contends that it may not do so whilst the order of the Magistrate at Southport remains since it disposes of the dispute arising under the contract.
Small Debts Jurisdiction
The legislation relating to small debts has been amended by the Civil Justice Reform Act 1998 (No 20 of 1998) in s 27 and Schedule 2 but those provisions did not come into operation until 1 July 1999. Accordingly the provisions relevant to this application are ss 2, 13, 19 and 48 of the Magistrates Court Act 1921 in force prior to those amendments. Section 13(1) provides:
“An action in which a plaintiff seeks to recover a debt or liquidated demand in money payable by a defendant with or without interest which, inclusive of interest, does not exceed the sum of $5,000 ... may at the election of the plaintiff be heard and determined as an action for a small debt in accordance with this Act, and a Magistrates Court, within its district and otherwise in accordance with this Act, has power and authority to hear an determine such action.”
An “action for a small debt” defined in s 2 of the Act is to the effect as set out in s 13(1) “whether on a balance of account or after an admitted set-off, a reduction on account of any sum paid by or credited to the defendant ...” and which the plaintiff elects to have heard and determined as an action for a small debt. A magistrates court when hearing and determining an action for a small debt is called a “Small Debts Court”, s 13(2).
In an action for a small debt a magistrates court is not bound by the laws of evidence or procedure “usually applicable to court cases” and may inform itself of the facts in any way that it considers appropriate, s 19(2). A party may appear in person only and not be legally represented (without leave), s 155A(3) of the Magistrates Courts Rules 1960 (“the Rules”). A judgment of a magistrates court upon an action for a small debt is final and binding on all parties to the action. There is no appeal in respect of it save in the limited circumstances that a prerogative writ may issue where the magistrates court had no jurisdiction in respect of the action or there was a denial of natural justice to a party to the action, s 48 of the Magistrates Courts Act 1921. Where there is no appearance by a party and an order is made s 155A of the Rules provides for some procedural relief.
Denial of natural justice
Carpentaria filed a conditional appearance and defence to Mr Mitchell’s plaint and action for a small debt on 6 August 1998 objecting to the jurisdiction of the Magistrates Court at Southport to hear the action maintaining that the parties entered into contractual relations at Mornington Island, and, in effect, setting up a defence to the claim by pleading an amount of $21,188.18 as due and owing under the contract.
The applicant’s solicitors prepared a letter bearing date 11 September 1998 directed to the list clerk at the Magistrates Court at Southport at the court’s facsimile number. It noted that the firm acted for Carpentaria and that a conditional entry of appearance and defence had been filed objecting to the jurisdiction of the court to entertain the action. The message restated what was in the pleading, namely, that the contract had been executed on and the works carried out at Mornington Island and continued ...
“In order that Mr Tony Finn [a director of Carpentaria] may avoid the inconvenience of a six hour journey [he was said to be a resident of Hervey Bay] to the Southport Magistrates Court to answer a question of jurisdiction we have requested that our client provide us with further instructions in relation to a bundle of documents received by us from the plaintiff on 10 August 1998.
We are at present receiving these instructions from our client in relation to both the issue of jurisdiction and contractual liability and request that until such time as we are able to receive such instructions that the trial of the above action, listed to be heard on Monday 14 September 1998 be adjourned to a date to be fixed as notified by either party.
We request that you contact the writer on the above telephone number urgently to advise of the possibility of adjourning the forthcoming trial date on the papers, prior to the file being brought to the Magistrate.”
There is no evidence to indicate that the message was transmitted to the court prior to the morning of the hearing on 14 September. Mr P Voll, a solicitor employed by Carpentaria’s solicitors, deposes in paragraph 4 of his affidavit filed on 27 January 1999 that
“On or about 11 September 1998 a facsimile was forwarded to the Magistrates Court at Southport requesting an adjournment of the forthcoming trial.”
(Italics added)
No facsimile transmission sheet is included with the document exhibited to Mr Voll’s affidavit and neither has the copy received by the Magistrates Court been exhibited which might be expected to reveal when it was received. However a letter from the Deputy Registrar of the Southport Magistrates Court to Carpentaria’s solicitors dated 14 September 1998 allows a reasonable inference to be drawn that the transmission was not made until the morning of the hearing. The Deputy Registrar wrote
“Thank you for your facsimile transmission received today.
At the hearing of this action the Stipendiary Magistrate has noted on the file: ‘Fax received in Court at 9.15am. Plaintiff objects to any further adjournment. Judgment for plaintiff for claim and costs $599.40.’”
Mr Mitchell deposes in paragraph 4 of his affidavit filed by leave
“The Applicant did not attend the Court case before Judge Webber, even though extra time was allowed for the Applicant to appear.”
It is not, however, necessary for a party to appear in person to be heard. A party may be deemed to have appeared at the hearing if the party files in the court before the date of the hearing an affidavit deposing to the facts in issue or addresses to the court a letter signed by the party stating the party’s account of and submissions upon the facts in issue and provides documents which the party considers relevant, s 155A(7) of the Rules. There is no suggestion that the letter dated 11 September 1998 from Carpentaria’s solicitors would constitute such an appearance but the Rules did provide an opportunity for the applicant to be heard on the question of the appropriate court if he did not himself wish to attend.
Even if a judgment is given or order made in the absence of a party from the hearing it may be set aside by the court on application made “within a reasonable time of the fact of the judgment or order coming to the notice of the party upon the court being satisfied that there was sufficient reason for that party’s absence”, s 155A(8) of the Rules. Carpentaria did not avail itself of that procedure and filed this application a few days within time before the expiration of three months from the date of the decision, s 46 Judicial Review Act.
Where a tribunal such as a small debts court may be reviewed on appeal in such limited circumstances as appear in s 48 of the Magistrates Courts Act and where the parties in the ordinary course are not legally represented, and the rules of evidence need not be observed, it follows that the tribunal must take particular care to be fair to all parties concerned, see observations by Anderson J in R v Small Claims Tribunal and Homewood; Ex Parte Cameron [1976] VR 427 at 429. It is for the tribunal in the exercise of its discretion, taking into account all the relevant circumstances, to decide if an adjournment ought to be granted in the interests of justice.
Carpentaria contends that it was deprived of any opportunity to be fairly heard on the issues raised in its conditional entry of appearance and defence by the conduct of the Magistrate in not granting it an adjournment. That cannot be so. There is no suggestion that it was not notified of the date of the hearing in good time. It was represented by solicitors. To the extent that it is necessary to do so, I would conclude that the letter sent by facsimile transmission seeking the adjournment dated 11 September was not sent to the Southport Magistrates Court until the morning of the hearing on 14 September. The reason given seeking an adjournment was not compelling, namely, to avoid the inconvenience of a journey from Hervey Bay and there was a suggestion of lack of preparedness for the trial. There was no contact by Carpentaria or its solicitors with Mr Mitchell to ascertain his attitude to an adjournment. Finally it was hardly the responsibility of the list clerk of the court to telephone Carpentaria’s solicitors to advise whether an adjournment could be given “on the papers”.
Even if the letter had been sent prior to the hearing date, not to follow the letter up by a telephone call seems remarkably careless having heard nothing from the court. There was no reason why some agent could not have been instructed to appear before the Magistrate to seek leave to appear and argue for an adjournment. Neither was there apparently any reason why Carpentaria could not have availed itself of Rule 155A(7) and to have filed appropriate submissions in writing.
It is not to the point to submit that because Carpentaria’s pleading raised issues as to jurisdiction the Magistrate ought to have declined to hear the action in the absence of the defendant. Mr Mitchell asserted in his plaint that the contract was formed in his office within the district. Failure to appear or to pursue the adjournment appropriately could be taken as an abandonment of the stand taken on the pleading about jurisdiction. In any event I am not persuaded that the Magistrate failed to accord Carpentaria natural justice by proceeding to hear and determine the claim.
Was the action within the Southport Magistrates Court’s district?
Section 11 of the Rules gives jurisdiction to a magistrates court in a district to hear an action if
·the defendant resides or carries on business therein;
·if the “claim or cause of action either wholly or in some material point arose” therein;
·if by “an engagement or promise in writing given by the defendant a debt or sum of money is made payable” therein.
The applicant objected that the action had not been commenced in the proper court in its entry of appearance and defence, s 14(1) of the Rules. The applicant’s place of residence is at its registered office in New South Wales and its principal place of business is at Kurumba in the Gulf of Carpentaria. It does not and has not carried on business in the Southport Magistrates Court’s district. The work was performed solely on Mornington Island. Mr Mitchell maintained that the Southport Magistrates Court had jurisdiction to hear and determine the claim because the contract between the parties was concluded within that district. Carpentaria maintains that the contract for the electrical subcontract works was made on Mornington Island and any action in respect of it ought to have been brought in the Magistrates Court at Normanton.
The parties are in agreement that in or about July 1997 Mr Mitchell asked a subcontract carpenter, a Mr Jeff Wark, who lived in Kurumba if he knew of any tradesperson who might be interested in tendering for work on the hostel at Mornington Island. At Mr Mitchell’s request he approached Mr Peter Finn the principal of Carpentaria to quote on the electrical work. Mr Mitchell sent the plans and specifications for the project to Mr Wark who passed them on to Mr Finn.
On 26 July Mr Mitchell received a quotation by facsimile transmission from Mr Finn for Carpentaria to carry out the work for $101,629. The fax was sent to Mr Mitchell’s office within the Southport Magistrates Court district. The quote stated that it did not include a fire system or nurse call system or phones. Mr Finn wrote “proper quote will follow on Monday when we have office staff”.
On the following day Mr Mitchell received a further handwritten quotation from Mr Finn by facsimile transmission for $115,759 taking into account some missed items.
Mr Finn deposes that he sent by post a typed quotation bearing date 27 July 1997 to Mr Mitchell which had added to it “but not supplying fittings or terminating wiring ...”. Mr Mitchell deposed that Monday was not 27 July but 28 July and therefore would not have been typed by Carpentaria’s staff - and denies that he ever received the letter. On the evidence that would seem to be so because that variation is not included in the written contract and Mr Finn makes no reference as to how it came to be deleted. On 1 August 1997 Mr Mitchell telephoned Carpentaria’s office at Kurumba and asked that the quotation be reduced by 1 per cent since, it seems, that this was something which Mr Mitchell had agreed with the Council. That reduced amount of $114,259 was noted on the handwritten fax dated 27 July 1997 exhibited to both Mr Mitchell’s and Mr Finn’s affidavits.
Mr Mitchell deposed that he contacted Carpentaria after he had been advised that he was the successful tenderer for the project on about 6 August “to conclude [this must mean “confirm” since the price was agreed] the price and to set start dates. We had mutually agreed to $114,259.” Mr Mitchell faxed a confirmatory letter to Carpentaria:
“Just thought I should drop you a line to say we are about to start. I will send you a formal contract for the project - “Kuba Natha Aged Persons Hostel”. For the electrical work as per your Quote and the verbal acceptance $114,259 -
Our payment terms will be in line with our claim and payments from the Council should only take about 10-12 days from end of each month but I’ll talk to you about that when I arrive on Saturday 23 August 1997.
Peter our foundation Contractor and also plumber starts on site Monday 25/8/96 [sic] - I’ll need you to organise any conduits and submains to be placed starting on that day.”
Carpentaria started work on the subcontract prior to a formal contract being signed. Mr Mitchell signed the contract on 26 August at Mornington Island and Mr Finn for Carpentaria on 6 September. The contract is a Queensland Master Builders Association “Conditions of Building Sub-Contract”. It is a very short document and might be set out in full.
“Clause 1.       Brief Description of the Works to be carried out by the Subcontractor ... To carry out all electrical work included and covered in the plans and specification and also all installation of nurse call system, phone wires (units supplied by Callguard), supply and install generator, all light fittings and final completion.
Clause 1.Contract Sum ... One hundred and fourteen thousand, two hundred and ninety‑five dollars ($114,295.00).
Clause 2.Date for Commencement ... 1 September 1997
Date for Completion ... 15 December
Liquidated Damages ... After 15 January 1998 - $200 per week
Liquidated Damages for Head Contract ... $200 per week
Clause 3.Subcontractor’s Progress Claims to be submitted by ... 28th day of each month
Payment by Builder to be within ... 10 days
of end of month to which claim relates   )       Delete one
~~of receipt of the Subcontractor’s claims~~ )       alternative
Prescribed Payment System File No ... 92 298 732
Clause 6.Workers’ Compensation Insurance Policy Number
... PW967665205
Public Risk Insurance Company ... FAI
Public Risk Policy Number ... 2410846200
Limit of Cover ... $5 million
Expiry Date ... 1/7/98"
(Italics indicate the printed part of the document.)
The negotiations towards and the formation of the contract may be set out in simplified form. An offer to perform the work was made by Carpentaria on 27 July 1997 at a price of $115,759. That price was varied and the quotation of $114,295 was accepted by Mr Mitchell in his Southport office by telephone on 1 August. That was confirmed on 6 August. The work, its nature and detail was encompassed in the plans and specifications and the quotation of 27 July 1997.
Mr J Murphy for Carpentaria submits that there was no concluded agreement reached between the parties until the written contract was executed at Mornington Island because there were still important terms to be agreed which are to be found in the written subcontract. Those were ...
·the time for payment of claims;
·the quantum of liquidated damages; and
·the date after which liquidated damages were to apply.
Although Mr Finn deposes to many matters concerning the formation of the contract he makes no reference at all to these terms. There is no evidence as to whether such terms were important to the parties. Since there is no mention of them it is supposed they were not. They were mere matters of detail. No other terms submitted to be essential to the contract were said to be omitted. On their face in the context of this agreement they do not appear essential and Carpentaria commenced work on the subcontract prior to the execution of the written contract.

Mr Murphy submits that this is a case which falls within the third class described in Masters v Cameron (1954) 91 CLR 353 at 360, namely
“... the case may be one in which the intention of the parties is not to make a concluded bargain at all, unless and until they execute a formal contract.”
In my view the parties had reached agreement on the terms which they regarded as essential and sufficient to constitute a binding agreement when Mr Mitchell accepted through Mr Finn Carpentaria’s variation in the price for doing the work.
In that circumstance, Mr Murphy submits that that contract was superseded by the formal written subcontract. The approach which I prefer is to regard the written agreement as varying the terms of the original oral agreement to the extent only of including the additional non‑essential terms as to the time for making the progress payments, the amount of liquidated damages and the date after which liquidated damages were to apply. It is clear that both Carpentaria and Mr Mitchell regarded themselves as having entered into a binding agreement for Carpentaria to perform the subcontract and Mr Mitchell to pay the agreed price subject to the variations along the way to which such subcontracts are notoriously susceptible prior to executing the written contract.
The contract was therefore formed in the district of the Southport Magistrates Court.
Debt or liquidated demand in money
This was not a ground of objection taken in Carpentaria’s conditional entry of appearance and defence nor was it contained specifically in the original application for review. It is spelt out in the amended application filed on the hearing.
The intermediate balance of the claim after adjustments to the contract price for variations and other charges and payments is shown in the plaint as $1,413.60 in favour of Carpentaria. The amount of the claim of $562.40 was arrived at by the addition of legal costs of $1,500 and $476 interest. To that was added the filing and service fees giving an amount of $599.40 which is the amount of the judgment.
Mr Mitchell tendered on this hearing, without objection, a letter of demand sent to Carpentaria dated 10 July 1998 (ex 1) in which the contract and variations in payments are itemised. Included is the claim for legal costs and interest:
“Less legal costs to date (as previously advised) $1,500.00
And Add interest for monies held by ill-founded
subcontracts charge now null and void
Interest at per 12% per annum
Monies held $21,188.18 interest at 12%
Since 2/5/98 is $7.00 per day, 68 days to date is
calculated at 68 x $7.00 $476.00”
Mr Mitchell, again without objection, said from the Bar table that he had placed before the Magistrate his solicitor’s letter relating to those costs.
There is nothing in the subcontract which provides for legal costs and/or interest. The subject matter of the solicitor’s charges may relate to the subcontract or to the charge imposed pursuant to the Sub‑contractors Charges Act, but that is of no consequence to the outcome of this application.
Just what constitutes a debt or liquidated demand in money is notoriously difficult in some circumstances to ascertain. Knox CJ and Starke J approved the definition given by Odgers, Pleading and Practice, 5th ed, p 41 in Spain v Union Steamship Co of New Zealand Ltd (1923) 32 CLR 138 at 142:
“... whenever the amount to which the plaintiff is entitled ... can be ascertained by calculation or fixed by any scale of charges, or other positive data, it is ... liquidated.”
Sholl J in Alexander v Ajax Insurance Co Ltd [1956] VLR 437 reviewed the history of the expression and offered the following exposition at p 455. The expression
“... covered any claim:-
(a)for which the action of debt would lie;
(b)for which an indebitatus (or “common”) count would lie - including those cases formerly covered by the quantum meruit or quantum valebat counts, notwithstanding that the only agreement implied between the parties in such cases was for payment at a “reasonable” rate;
(c)for which covenant, or special assumpsit, would lie, provided that the claim was for a specific amount, not involving in the calculation thereof elements the selection whereof was dependent on the opinion of a jury.”
The claim for legal costs and interest on the money withheld from Mr Mitchell by virtue of the subcontractor’s charge is not a debt or liquidated demand in any of those senses. That claim is in the nature of damages either for breach of contract or relating to Carpentaria’s conduct in imposing the subcontractor’s charge. There is no agreement or statutory entitlement from which they spring. The Magistrate could not, therefore, as to subject matter hear and determine the claim as a small debt. Accordingly the Magistrate’s judgment in favour of Mr Mitchell on 14 September 1998 being beyond the jurisdiction of a small debts court should be set aside.
I will hear submissions as to costs.