Casualife Furniture Pty Ltd v Knopp
[2000] VSC 150
•14 April 2000
| SUPREME COURT OF VICTORIA | Do not Send for Reporting |
| PRACTICE COURT | Not Restricted |
No.7930 of 1999
| CASUALIFE FURNITURE PTY LTD | Plaintiff |
| v | |
| PAMELA KNOPP | Defendant |
| (Trading as Knopps Removal and Storage) |
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JUDGE: | Gillard, J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 14 April 2000 | |
DATE OF JUDGMENT: | 14 April 2000 | |
CASE MAY BE CITED AS: | Casualife Furniture Pty Ltd v Knopp | |
MEDIUM NEUTRAL CITATION: | [2000] VSC 150 | |
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Appeal from Master - appeal from Magistrates' Court - grounds of appeal - must be questions of law - must establish prima facie error.
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APPEARANCES: | Counsel | Solicitors |
For the Plaintiff | Mr J. Guss | Joseph Guss |
| The Defendant was not represented by counsel |
HIS HONOUR:
This is an appeal from orders made by Master Wheeler on 27 March 2000 in an application pursuant to Rule 58.07 of the Rules of Court to appeal against orders made by the Magistrates' Court sitting at Dandenong on 15November 1999 constituted by Mr White M.
The appellant is a company, Casualife Furniture Pty Ltd carrying on business at the relevant time as the manufacturer and distributor of furniture. The respondent to the proposed appeal and the plaintiff down below is Pamela Knopp trading as Knopps Removals and Storage. This firm carried on business as a cartage contractor.
The respondent issued a complaint in the Magistrates' Court on 20 October 1997 against the appellant, seeking the sum of $10632.80 for cartage services provided to 30 June 1997. The appellant complained that some of the furniture was damaged and it cross-claimed in respect to this damage by setting up the alleged damage as a set-off in an amended defence.
The proceeding came on for hearing before Mr White M in November 1999 and was concluded on 15 November 1999. The Magistrate found for the respondent and ordered the appellant to pay the sum of $10,623.80 plus $2,734.43 damages in the nature of interest together with $5215.15 for costs. He purported to dismiss the counter claim but that was clearly an error because the cross-claim as I have called it, was raised by way of defence of set-off.
I should interpolate here that application was made by counsel appearing for the respondent below that the costs of the proceeding should be on a solicitor/client basis and the Magistrate so ordered..
The appellant filed its application seeking an order that it be permitted to appeal the Magistrates' Court orders. The application was heard ex-parte by Master Wheeler. Before Master Wheeler, some five or six grounds were sought to be raised, and in the end the appellant satisfied the Master there was a prima facie case for relief. He made orders pursuant to Rule 58.09(3) stating three grounds concerning the costs and damages in the nature of interest.
The Master refused to state any other grounds sought by the appellant. The appellant being aggrieved by the fact that the Master refused to state further grounds, in the words of Rule 77.05(1) is a "person affected .. by the order made" and appeals to a judge. The appeal is a re-hearing day novo and accordingly the court hears the ex-parte application afresh, unfettered by the Master's orders or his reasons.
This is an ex-parte application for an order to appeal and the appellant must establish - (i) that there is a prima facie case for relief; and (ii) that the Magistrate was wrong as a matter of law i.e. he made an error of law.
Having established these matters, the Master and now a judge must consider whether refusal of an order to appeal would impose an injustice in the circumstances. I refer to the Rule 58.09(3).
That sub-paragraph permits the court to refuse an application if satisfied that in the circumstances a refusal would impose no substantial injustice. This is a recent amendment to the rules and is obviously designed to exclude appeals on matters of little importance or alternatively not involving a large sum of money. I may say that is not an exhaustive list of the types of matters where a refusal would impose no substantial injustice.
The right to appeal is found in s.109 of the Magistrates' Court Act (1989). It confines an appeal to a question of law. A question of fact is not a question of law and where there is a finding of fact based upon the resolution of disputed evidence, the finding is not appealable. However, having said that, in rare cases a finding of fact could constitute an error of law where for example there was absolutely no evidence to support the finding so that the finding was perverse.
The grounds sought by the appellant are five in number and were set out in the draft order that was handed to the Master.
I first of all refer to ground one, which was in these terms: "Whether the learned Magistrate erred in finding that one Lee Knopp was not the contracting party with the appellant and the plaintiff was."
In discussion with Mr Guss who appears on behalf of the appellant, it was accepted that this was not a correct statement of the true ground.
After some discussion with Mr Guss he agreed that this ground should read "That the learned Magistrate erred in finding that the plaintiff was the contracting party."
One of the issues raised by the appellant as defendant below and which was strenuously argued was that its contract was not with Pamela Knopp but with Mr Lee Knopp and that accordingly Pamela Knopp had no right to bring the proceeding against Casualife Furniture for the services rendered. Who, in fact, is the contracting party, is a question of fact and this matter, as I say, was a very live issue down below. In the course of giving his reasons, the Magistrate had to consider the matter and he found that the true contracting party was in fact Pamela Knopp.
There was evidence that she was registered as such, but more importantly, Mr Knopp gave evidence to that effect and it is quite clear from the reasons for judgment given by the Magistrate, that he believed Mr Knopp. He said: "I must say that I was impressed by the witness called by the plaintiff, Mr Lee Knopp and in general terms I accept his evidence where it is in conflict with the evidence of other witnesses."
Later on he made a specific finding that at no time did Mr Knopp hold himself out as being the owner of the business. He found that he was the Manager of same and acted in that capacity at all relevant times. He specifically rejected evidence that was given that he stated he was the owner of any such business.
In my view the defence raised a question of fact and not a question of law. There was a dispute between the parties on the facts, evidence was called and in the end result, the Magistrate found that Mrs Knopp was the contracting party and hence the correct plaintiff. That was a matter for the Magistrate and he so found.
Mr Guss also pointed out that he raised the question of estoppel in regard to this, namely that Mr Knopp held himself out, however I have some difficulty in understanding the estoppel, but more importantly, any detriment that is alleged to have been suffered by Casualife Furniture as a result of the said estoppel. But in any event, the Magistrate made a specific finding that Mr Knopp did not hold himself out as the owner of the business. This, in my view, is purely a question of fact. There was evidence to support the finding and in my view there is no demonstration of error, let alone any error of law.
The second ground was expressed in the draft order in these terms: "Whether the learned Magistrate erred in finding that if the plaintiff was the contracting party, that the set-off claimed by the appellant in the amended defence dated 16 March 1999, does not extinguish or partly extinguish the respondent's claim."
I must say I do not understand this ground in the light of the circumstances and I did ask Mr Guss to explain what was his real point. I did suggest to him that perhaps what he was saying was that the learned Magistrate erred in finding that the appellant had not proven its entitlement to a set-off by way of cross-claim but Mr Guss did not embrace that as being the true ground. I must confess I have great difficulty understanding what he is saying. But what happened was that it was alleged by the defendant, Casualife in the proceeding below, that there was a proper cross-claim for damages. This was raised by way of the defence of set-off. It was said that the cartage business had damaged the furniture and that this had caused loss and damage to Casualife.
So that was a matter that was raised before the Magistrate. The burden of proof was on the appellant. It had to prove that the furniture was, in fact, damaged by the cartage business and secondly that that damage was caused in breach of contract or as a result of negligence and thirdly that this caused financial loss to the appellant which was quantified in some way.
The Magistrate clearly had all those matters in mind because he considered them and he made some very strong findings as to the substance of this claim. He made it quite clear that he accepted the evidence of Mr Knopp that in relation to 20 chaise lounges, there was no damage caused by the plaintiff in the course of the cartage.
Mr Guss pointed out that there was more furniture alleged to have been damaged other than the 20 chaise lounges, but as appears from p.192 of the transcript being part of the reasons for judgment by the Magistrate, he again accepted the evidence of Mr Knopp. Indeed he went on to say this - "The evidence pinning any such losses in any way contractually or otherwise to the plaintiff, save for the evidence relating to a table and a leg of a chair is at best, as I have said, unclear, it is unsatisfactory, it was based on supposition and is not in any way supported by any documentary or other evidence. Again I refer to the clear evidence of Mr Knopp that when he delivered the furniture, principally the chaise lounges, they were not damaged and further, and this was not doubted, that after his delivery of the same, there was a third party, or another act of transport that was required, that is to take the lounges to an island."
So the Magistrate found as a fact that there was no damage caused by the cartage business. But he went on to hold that he was satisfied that there was no evidence to support a quantification of the loss and he said this at p.192. "No evidence was presented in relation to the calculations made by Mr Guss to substantiate them. He simply stated he used the information he was given to make the calculations. No invoices, indents or any documentary evidence or any document used in the running of the business was presented to support his claim or how he arrived at those figures. The clear impression with which I was left is that the defendant's figures are contrived and are intended simply by way of defence in answer to this claim, a claim which in my view on the evidence presented to me, is entitled to succeed."
No doubt His Worship was referring to the plaintiff's claim in relation to the latter matter.
So again, as a question of fact, the Magistrate has found against Casualife and in my opinion, Mr Guss has not demonstrated any error of law. There is no prima facie case for relief in relation to this alleged error of law and in my view, the cross-claim was raised as a question of fact. The Magistrate found against the contentions put forward by the appellant. In my opinion there is no basis for any ground whatever it may mean, in relation to this question.
That brings me to the three grounds which the Master did in fact state as being prima facie errors of law and which he indicated would be the basis of the appeal.
As this is a re-hearing, nothing of what the Master has done binds me and Mr Guss on behalf of the appellant has to persuade me that there is a prima facie case for relief.
The first ground is expressed in this way: "Whether the Magistrate erred in exercising his discretion in ordering the appellant pay the cost of the hearings of this matter of 29 April and 26 August 1999."
The background to this situation is that it appears that a hearing was concluded on 29 April in the absence of the appellant. No orders were actually made that day. The appellant maintains it was never told about the hearing and sought later for the orders that were proposed to be made, be vacated. This application came on 26 August 1999.
After the Magistrate indicated that he would order costs on a solicitor/client basis, he invited Mr Guss appearing for the appellant and Mr Tweedie of counsel, appearing for the respondent, to go away and work out the costs. Mr Guss informs me that of the amount that was ordered which was some $5215.50 and agreed, some $1,223 was attributable to those two hearings.
Mr Guss submits that it was an error of law in that the Magistrate exercised his discretion to make the appellant pay those costs, when it was not its fault and the fault lay with the court.
In my view there is a prima facie case for relief in relation to the order for the costs made with respect to the hearing on 29 April and I would not in any way disagree with the Master that there is a possible error. However, so far as 26 August proceeding is concerned, which was a very short proceeding the costs of which were probably less than about $200, I do not agree that there has been any error of law in relation to the exercise of that discretion. It was necessary for Casualife to appear on that day to have the orders vacated, but the fact was that it took that step and then subsequently lost the case. So in my view, the order made that day was a proper exercise of discretion.
I should add here and now and this is trite law but the question of payment of costs was a matter in the discretion of the Magistrate. He has a very wide power to order costs and not only order costs on a party/party basis, but in suitable cases, on a solicitor/client basis.
That brings me to the next ground which the Master was prepared to order and that was in these terms: "Whether the Magistrate erred in exercising his discretion in ordering that the appellant pay the costs of the hearing in this matter after 26 August 1999 on a solicitor/client basis and not a party/party basis?"
As I have said, the Magistrate had a very wide power. He is entitled to order solicitor/client costs. This is apparent from the schedule of costs in the Rules and the issue really comes down to the question whether there was any basis for making such orders.
Mr Guss is quite correct that the normal rule is that costs are awarded on a party/party basis. However, in special cases, costs may be ordered against a party on a solicitor/client basis.
The general approach was stated by Nathan J in Bass Shire Council v King unreported 15 August 1994 when he said:
"Is undoubtedly a principle of law that costs of an event on a party/party basis, that the courts are free to depart from that principle if confronted with circumstances where the conduct of one or other of the parties .. would warrant the ordering of costs of an indemnity basis. There must be special circumstances which lifts the case out of the ordinary."
This statement of principle was quoted with approval by the Court of Appeal in Spencer v Dowling 1997 2 VR 127 at 147 and 163.
Over the past 20 years the courts in this country have become more prepared to make orders on a solicitor/client basis and it would appear that the general rule which emerges from the cases is that one of the parties whose behaved in an inappropriate manner and the circumstances demand that it should pay costs on a solicitor/client basis. In Colgate Palmolive v Cussons 46 FCR 225 Shepherd J, after considering the principles, observed that the categories in which the discretion to order solicitor/client costs may be exercised are not closed. He then conveniently set out in summary form some of the instances when solicitor/client costs have been paid and one of those that he referred to was: "The making of allegations which ought never to have been made or the undue prolongation of a case by groundless contentions" and referred to what Davies J said in a case of Ragata Developments in the Federal Court.
It is clear from the submissions made by Mr Tweedie on behalf of the plaintiff in the proceeding below that the grounds upon which solicitor/client costs were sought were twofold, namely that there were groundless matters raised by way of the cross claim in the defence and that there was an unnecessary prolongation of the proceeding.
The best person to make an assessment of the bases and decide whether or not the contentious were true was the Magistrate who heard the proceedings in April of 1999 and in August of 1999 and the ultimate hearing. He was in a very good position to consider whether or not the defendant appellant had behaved in a way which justified an order for solicitor/client costs against it. Mr Guss was unable to point to any demonstrable error of law in relation to the exercise of the discretion and in my view there was a basis for making an order on a solicitor/client basis. The Magistrate in his reasons, said this in relation to solicitor/client costs, at p.210:
"So far as the proceedings before me in this hearing, I tend to make an order in favour of the plaintiff and I see no reason why, given the whole circumstances of this matter, those costs should not be ascertained on a solicitor and client scale."
One has to consider those reasons in the light of the submissions put by Mr Tweedie of counsel and Mr Guss. Mr Guss correctly informed the Magistrate as to the correct principles to apply and I have no doubt that the Magistrate had in mind the proper principles. Mr Guss underlined the fact that the ordinary rule is that party/party costs be paid. Mr Tweedie, for his part, when he put his submissions, said that there were a number of reasons why costs should be on a solicitor/client basis. He referred to the strong comments made by the Magistrate in his reasons with respect to the cross claim and the prolongation of the proceeding.
I am satisfied that there is a discretion, that he was entitled to exercise the discretion and I am not persuaded in any way that there is any prima facie error of law made by the Magistrate in ordering the costs on a solicitor/client basis after 26 August 199.
That brings me to the last ground that the Master specified and it is expressed in this way:
"Whether the Magistrate erred in exercising his discretion in ordering that interest of $2,733.43 should be paid by the appellant to the respondent, ie for the whole of the period between the filing of the summons and the hearing."
There is no doubt that the Magistrates' Court can award damages in the nature of interest on a judgment but in so doing it is guided by the Supreme Court Act and the provisions relating to payment of interest. The Supreme Court Act clearly allows interest on a judgment in relation to debt or damages and the section goes on to provide that the interest is to run from the issue of a proceeding down to the judgment. In the end, it is a matter for the discretion of the Tribunal, in this case the Magistrate and he had to make up his mind whether it was appropriate.
Mr Guss put a submission to him that he should not order interest for the whole period, that is from the date of the issue of the summons in 1997 up to the date of the judgment. He said that only 50 percent should be allowed. The thrust of what he put to the Magistrate and what he put to me today was that the appellant should not be held liable for the delay in bringing the proceeding to the final hearing but Mr Guss frankly admitted today that he was not suggesting that the delay was caused by the plaintiff. So it was one of those situations where his main argument was, "Well, why should we have to pay for the whole period because it wasn't out fault?"
Now, as I said to Mr Guss in the course of submissions, the argument put has been advanced for at least the last 30 or 40 years. It was an argument that was put in the 60's where often in jury cases the unsuccessful defendant complained that the case took too long to come to court. The retort in all those cases was "that you should pay for the interest for the whole period because you have had the use of the money ever since". Now the fact that there is a penalty in the interest rate is there because it is to encourage defendants to pay sooner rather than later. In my view the Magistrate was confronted with rival submissions, he considered them and in my view he came to the correct decision. I am of the view that there is no basis at all for attacking the Magistrate's decision on interest.
In my view there is only one arguable point and it involves a very small sum of money, somewhere between $1,100 and $1,200 and I did raise with Mr Guss whether I should permit the appeal to go forward because of the small amount involved and the costs involved. When all said and done, it does not really raise an important point of principle. The amount is indeed very small.
Rule 58.09(3) provides:
"The Master may refuse the application if satisfied that in all the circumstances a refusal would impose no substantial injustice."
Of course, that applies to the court because I am now standing in the shoes of the Master because of the appeal so the interesting question is whether I should refuse this application on the ground that refusal would impose no substantial injustice. I must say that I am very tempted to refuse it because quite frankly the amount involved is very small but nevertheless I think that it would cause a substantial injustice to the appellant.
So I am prepared to allow one ground but I otherwise disallow the grounds that the Master allowed. It will be necessary to amend the orders made by him, especially in relation to the stay, so I will make the following orders:
1.That the appeal be allowed.
2.That the orders made by Master Wheeler on 27 March 2000 be set aside and in lieu thereof order as follows: Under "other matters" this matter coming on to be heard before the court on 16 and 24 February 2000 and the court having on 24 February 2000 directed that the matter should stand for judgment and the judgment being pronounced on 27 March 2000 and appealed and the appeal coming on for hearing that this matter stands for judgment this day accordingly.
(1)The final order of the Magistrates' Court of Victoria, which is the subject of this appeal, is the order made on 15 November 1999 by the Magistrates' Court at Dandenong constituted by Mr White, Magistrate, whereby the appellant was ordered to pay the respondent the sum of $10,623.80 and interest of $2,734.43 with costs of $5,215.50, with a stay of 30 days.
(2)The question of law shown by the appellant to be raised by this appeal is:
Whether the Magistrate erred in exercising his discretion in ordering the appellant to pay the costs of the hearing of the proceeding of 29 April 1999? (See pp.200-203 transcript - Exhibit "JG3").
The court orders that:
1(a)that the appellant have leave to file and serve an affidavit exhibiting copies of the internal documents who latently noticed to it of adjourned hearing dates (see 200 transcript) by 14 April 2000.
2. On or before 28 April 2000, the appellant:
(a)serve on the respondent;
(b)leave with the Registrar of the Magistrates' Court at Dandenong for the Magistrate a sealed copy of this order as authenticated.
3.Subject to further order, any answering affidavit on which the respondent is asked to rely to be filed and served on the appellant's solicitors by 12 May 2000 or the appeal is referred for hearing determination by a judge on the date after 1 June 2000.
(Discussion ensued.)
4.The appeal is referred for hearing determination by a judge on a date after 1 June 2000, to be appointed by the Listing Master either in consequence of her placing the appeal in appropriate list of proceedings or otherwise.
5.As soon as practicable after authentication of this order, the appellant Lee with the Associate Listing Master see or copy the orders out unless authenticated.
6.Subject to further order that the order referred to in paragraph 1 of "other matters" is stayed in so far as the order for costs is concerned to the extent of $1200 and no more.
7.The parties have liberty to apply.
8.The appellant's costs, the application of this order are reserved.
9.Service of copies of the exhibits under paragraph 2 is dispensed with. Respondent may inspect them at the office of the appellant's solicitor during ordinary business hours and by appointment; rule 29.09 four, five and six of the Supreme Court rules applies to such inspection.
10.This order to be authenticated forthwith.
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