Chang v Chong - [2012] WADC 148

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CIVIL

LOCATION: PERTH

CITATION: CHANG -v- CHONG [2012] WADC 148

CORAM: SCHOOMBEE DCJ

HEARD: 22 AUGUST 2012

DELIVERED : 18 OCTOBER 2012

FILE NO/S: APP 36 of 2012

BETWEEN: IRENE AI CHEN CHANG
Appellant
AND
KELVYN KIT WING CHONG
Respondent

ON APPEAL FROM:
Jurisdiction              :  MAGISTRATES COURT OF WESTERN AUSTRALIA
Coram  :MAGISTRATE BAYLY
File No  :PE 585 of 2012

Catchwords:

Appeal from Magistrates Court - Misconduct restraining order - Appeal against costs order - Whether application was frivolous or vexatious - Whether error in principle by magistrate in exercising his discretion regarding costs

Legislation:

Restraining Orders Act 1997 (WA) s 69(2)

Result:

Appeal dismissed

Representation:

Counsel:

Appellant: Mr J Kitto
Respondent: In person

Solicitors:

Appellant: Kitto & Kitto
Respondent: Not applicable

Case(s) referred to in judgment(s):

Allesch v Maunz (2000) 203 CLR 172
Attorney General v Michael [2005] WASC 203
Attorney-General v Wentworth (1988) 14 NSWLR 481
Butler v Bennett [2007] WADC 107
Cummings v Lewis (1993) 41 FCR 559
House v The King (1936) 55 CLR 499
Mudie v Gainriver Pty Ltd (No 2) [2003] 2 Qd R 271
Oceanic Sun Line Special Shipping Company Inc v Fay (1988) 165 CLR 197
Soden (in his capacity as registrar of the Federal Court of Australia) v Kowalski [2011] FCA 318
Van der Feltz v Rispoli [2010] WADC 29

SCHOOMBEE DCJ: This matter concerns an appeal against a costs order made by the learned magistrate after he had refused to grant a misconduct restraining order against the appellant, Mrs Chang. The learned magistrate made no order as to costs in accordance with s 69(2) of the Restraining Orders Act 1997 (WA) pursuant to which a court is not to order an applicant for a restraining order to pay costs to the respondent unless it considers the application to have been frivolous or vexatious. The learned magistrate found that the application by Mr Chong was not frivolous or vexatious.

Background facts

Mr Chong applied for a misconduct restraining order against Mrs Chang on the basis that she had turned up at his business premises, had removed items of kitchenware that she alleged belonged to her and was waiting for a truck to pick up larger kitchen appliances belonging to her when Mr Chong arrived. Mr Chong alleged in his application for the misconduct restraining order that Mrs Chang had behaved in a manner that was intimidating or offensive to him, had damaged property owned by him and behaved in a manner that was, or was likely to, lead to a breach of the peace.
At the time of Mrs Chang's appearance at Mr Chong's premises the parties were involved in a commercial dispute. Mrs Chang had conducted a restaurant business on a trial basis at Mr Chong's pool and karaoke parlour pursuant to a memorandum of understanding entered into between the parties. At some stage in early February 2012 Mrs Chang no longer wished to proceed with conducting the restaurant business and informed Mr Chong by letter from her solicitors, dated 20 February 2012, that she would arrive at Mr Chong's business premises on 24 February 2012 at 10.00 am to collect specified items of kitchenware, furniture and appliances. The letter requested that Mr Chong allow Mrs Chang to remove these items from the premises leased by Mr Chong. Mr Chong did not reply to the letter and was not present at his business premises at 10.00 am on 24 February 2012.
At the hearing of the application for the misconduct restraining order Mr Chong gave evidence that when he arrived at the premises a bit later Mrs Chang had already removed the smaller items that she claimed belonged to her, had packed up the larger items and was waiting for a truck to pick them up. Mr Chong told the learned magistrate that he called the police, who arrived and prevented Mrs Chang from taking the larger items with her. Mr Chong said Mrs Chang had arrived with eight other people and they were waiting around the corner, having coffee and looking furious. He said he feared for his safety and did not want to leave his premises. He also complained that 'everything was in a mess' because Mrs Chang had packed up items and they were blocking the way inside his premises.
Mr Chong told the learned magistrate that the restaurant was not in operation at that time, but four of his employees were cleaning the kitchen when, according to what he was told, the nine people stormed in and demanded to take Mrs Chang's belongings. Mr Chong said he was concerned that Mrs Chang might return to claim the larger items that had been left behind and his employees were not willing to work at his premises because they felt insecure and unsafe.
Mr Chong agreed that he did not personally speak to Mrs Chang on that day and that she did not say anything offensive to him. He only overheard her mumble something about him being unfair when she was talking to the police. Mr Chong admitted that he had not seen Mrs Chang after 24 February and had not heard from her. However, he was aware that Mrs Chang had returned to his premises shortly after 24 February 2012 and had removed a sign with the name of her restaurant which had been affixed to the outside of Mr Chong's premises.
Mr Chong also gave evidence that prior to 24 February 2012 Mrs Chang had already removed some of her belongings from his premises. He was not present, but was told about this. When he arrived at the premises on that occasion he saw that the restaurant was in a mess and that the seats, chairs and tables were all in the wrong place.
In cross‑examination Mr Chong made it clear that he was not prepared to let Mrs Chang take any items belonging to her, unless she could produce proof of ownership. He said he did not work in the kitchen and did not know which items, including the appliances, belonged to him and which were hers. Mr Chong also told the learned magistrate that he was asking for a restraining order so that he could get to see Mrs Chang and organise a discussion to resolve the outstanding issues concerning the commercial dispute, such as Mrs Chang's usage of electricity, water and telephone.

The learned magistrate's decision

The learned magistrate came to the conclusion that Mr Chong had in effect brought a commercial dispute to the court and that he had not provided any evidence to show that Mrs Chang was likely to behave in a manner that could reasonably be expected to be intimidating or offensive to Mr Chong nor that she was likely to cause damage to his property or to behave in a manner that would lead to a breach of the peace. The learned magistrate found that there was no evidence that Mrs Chang had been intimidating or offensive when she came to collect her property or that she damaged any of Mr Chong's property. She had advised Mr Chong by letter from her solicitors that she would arrive at a particular day and time to pick up specified items. No objection was raised to this letter by Mr Chong.
Accordingly, the learned magistrate dismissed the application for a misconduct restraining order.
Counsel for Mrs Chang then asked for a costs order on the basis that the application by Mr Chong had been frivolous or vexatious. The learned magistrate rejected the submission that the application was vexatious or frivolous. He noted that Mrs Chang had after all gone to Mr Chong's premises, removed some items and packed up others with the intention of taking them. In the course of earlier discussions with counsel for Mrs Chang the learned magistrate had expressed doubt whether Mrs Chang had a legal right to enter Mr Chong's premises and remove her items at a time when the memorandum of understanding pursuant to which she was operating the restaurant business at his premises had been terminated by her.

Meaning of 'frivolous or vexatious'

I have on a previous occasion reviewed the law regarding the meaning of the words 'frivolous or vexatious' as they pertain to an application for costs under s 69(2) of the Restraining Orders Act 1997 (WA). My review of the law is set out in pars [36] – [44] in Van der Feltz v Rispoli [2010] WADC 29. In summary, an application can only be described as 'frivolous' if it has little or no weight or value, is not worthy of serious notice or lacks reasonable grounds or sense. The word 'vexatious' means causing or tending to cause vexation, annoyance, distress or trouble.
Counsel for Mrs Chang confined his submission to the argument that the application by Mr Chong had been vexatious. Counsel submitted that the term 'vexatious' did not require that Mr Chong had a subjective intention to cause vexation, annoyance, distress or trouble. The mere fact that the application had objectively produced this effect was enough to make it vexatious.
I accept that this is a correct interpretation of the word 'vexatious' as it appears in s 69(2) of the Restraining Orders Act 1997 (WA). In Oceanic Sun Line Special Shipping Company Inc v Fay (1988) 165 CLR 197, 242 Deane J came to the conclusion that the word 'vexatious' should be interpreted in an objective sense and meant 'productive of serious and unjustified trouble and harassment'. This interpretation given to the word 'vexatious' was with regard to an application to stay proceedings brought in an Australian court on the basis that the continuance of the action would work an injustice to the defendant or be 'oppressive or vexatious to him'. It was in this context, that Deane J found that the word 'vexatious' was describing the objective effect of a continuation of the proceedings in an Australian forum rather than as characterising the conduct of the plaintiff in persisting with that forum. Deane J noted that if the plaintiff was not acting bona fide or in pursuit of a legitimate advantage, that would make it much easier for a continuation of the proceedings to be characterised as 'vexatious or oppressive'.
In Mudie v Gainriver Pty Ltd (No 2) [2003] 2 Qd R 271 [31] McMurdo P and Atkinson J came to the conclusion that the interpretation given to the word 'vexatious' in Oceanic Sun Line was also apposite in respect of a provision in the Local Government (Planning and Environment) Act 1990 (Qld) which dealt with costs orders and was in similar terms to s 69(2) of the Restraining Orders Act.
Further guidance in relation to the interpretation of the word 'vexatious' may be obtained from the case law dealing with legislation which allows a court to declare a person a vexatious litigant. Section 3 of the Vexatious Proceedings Restriction Act 2002 (WA) defines vexatious proceedings to mean proceedings:
(a)which are an abuse of the process of a court or a tribunal;
(b)instituted to harass or annoy, to cause delay or detriment, or for any other wrongful purpose;
(c)instituted or pursued without reasonable ground; or
(d)conducted in a manner so as to harass or annoy, cause delay or detriment, or achieve any other wrongful purpose.
In Attorney General v Michael [2005] WASC 203 Le Miere J came to the conclusion that the definition of 'vexatious proceedings' in (a) and (c) contemplated that proceedings could also be vexatious if they were objectively an abuse of the process of a court or pursued without reasonable ground. The proceedings could therefore be vexatious regardless of the subjective intention or motive of the litigant.
In Attorney-General v Wentworth (1988) 14 NSWLR 481 Roden J gave detailed consideration to the legal principles and authorities relevant to a declaration that a person was a vexatious litigant. Roden J came to the conclusion that litigation could properly be regarded as vexatious on either objective or subjective grounds. His Honour held at 491 that the test for vexatious proceedings was best expressed in the following terms:
(1)Proceedings are vexatious if they are instituted with the intention of annoying or embarrassing the person against whom they are brought.
(2)They are vexatious if they are brought for collateral purposes, and not for the purpose of having the court adjudicate on the issues to which they give rise.
(3)They are also properly to be regarded as vexatious if, irrespective of the motive of the litigant, they are so obviously untenable or manifestly groundless as to be utterly hopeless.
(4)In order to fall within the terms of s 84:
(a)proceedings in categories 1 and 2 must also be instituted without reasonable ground (proceedings in category 3 necessarily satisfy that requirement);
(b)the proceeding must have been 'habitually and persistently' instituted by the litigant.
The last two requirements arose from the wording of s 84 of the Supreme Court Act 1970 (NSW) which provided essentially that a vexatious litigant was a person who habitually and persistently and without any reasonable ground instituted vexatious legal proceedings.
Justice Roden's interpretation of 'vexatious proceedings' in the context of declaring a person to be a vexatious litigant was adopted in Soden (in his capacity as registrar of the Federal Court of Australia) v Kowalski [2011] FCA 318, [46] – [49]. That case concerned the declaration of a person to be a vexatious litigant under O 21 r 1 of the Federal Court Rules. Stone J came to the conclusion that vexatiousness was a quality of the proceedings rather than of the party's intention. Stone J pointed out that a party might institute proceedings with the intention to harass, embarrass or annoy, but the proceedings might nevertheless involve a legitimate claim. An intention to harass, embarrass or annoy might be a powerful indicator that the proceedings were vexatious, but it could not be determinative. Stone J came to the conclusion that, for practical purposes, the test of whether a proceeding was vexatious was, in Roden J's words, whether it was 'so obviously untenable or manifestly groundless as to be utterly hopeless'.
The last three cases discussed all dealt with the meaning of 'vexatious proceedings' in the context of legislation allowing a court to declare a person a vexatious litigant. This is in a different context to deciding whether proceedings were vexatious for purposes of awarding costs. The Supreme Court Act 1970 (NSW) and the Federal Court Rules specifically require that the person to be declared a vexatious litigant has habitually, persistently and without reasonable grounds instituted other vexatious proceedings in a court in Australia. This clearly does not apply to the section dealing with costs orders in this case. Nevertheless, guidance may be obtained from the interpretation given to the concept of 'vexatious proceedings' in the cases dealing with vexatious litigants.
It seems to me that one may safely adopt the interpretation given by Roden J to the words 'vexatious proceedings' and also obtain some guidance from how these words have been defined in the Vexatious Proceedings Restriction Act 2002 (WA). It could therefore be said that an application for a restraining order is vexatious if it:
1.was instituted or conducted with the subjective intention of harassing, annoying or embarrassing the person against whom it was brought;
2.was instituted or conducted for a collateral purpose, such as to cause delay or detriment, and not for the purposes of having the court adjudicate on the issues to which the application gives rise;
3.is an abuse of the process of the court;
4.is, irrespective of the motive of the litigant, so obviously untenable or manifestly groundless as to be utterly hopeless.
I have described the fourth category in the manner that I have done rather than as proceedings brought 'without reasonable ground' (as referred to in s 3 of the Vexatious Proceedings Restriction Act 2002), because not every proceeding that turns out to have been misconceived and brought without reasonable ground is necessarily vexatious. This is clearly a matter of degree and the use of the words 'obviously untenable or manifestly groundless as to be utterly hopeless' give a better indication of what is required.
An objective interpretation of the word 'vexatious' in the context of costs orders makes sense as one can perceive a situation where it would be appropriate to label proceedings as 'vexatious' even though the plaintiff did not intend to cause serious and unjustified trouble and harassment. For example, proceedings which were misconceived, irrelevant, incomprehensible, repetitive, and based on a scattergun approach could have the effect of causing unjustified trouble and harassment without the applicant necessarily intending to do so.
The question whether the proceedings were objectively speaking vexatious will turn on the particular circumstances of the case and will include public policy considerations and the interests of justice: Mudie v Gainriver Pty Ltd [37].

Limits of appeal court's power on appeal

Pursuant to s 40(4) of the Magistrates Court (Civil Proceedings) Act 2004 an appeal from the Magistrates Court to the District Court must be decided on the material and evidence that was before the Magistrates Court. Rule 50(1) of the District Court Rules 2005 also provides that an appeal must be by way of reconsideration of the evidence that was before the primary court, unless the parties otherwise agree. The intention of the Magistrates Court (Civil Proceedings) Act 2004 when read with the District Court Rules indicates that an appeal to the District Court is by way of a rehearing: Butler v Bennett [2007] WADC 107 [10].
This means that the appellate court can only exercise its powers on appeal where the appellant can show that the magistrate made a legal, factual or discretionary error: Allesch v Maunz (2000) 203 CLR 172 [23]. The circumstances under which an appellate court may review a costs order, which is a discretionary order are even more limited. It is not sufficient that the appellate court would have imposed a different order if it had been in the position of the magistrate. There must have been some error made by the magistrate in exercising his discretion. Such an error may be constituted by the magistrate relying on extraneous or irrelevant matters, mistaking the facts or not taking into account some material consideration: House v The King (1936) 55 CLR 499 504 - 505 and Cummings v Lewis (1993) 41 FCR 559, 604. If such an error has been made the appellate court may exercise its own discretion in substitution for the magistrate's based on the material that was before the magistrate.

Review of learned magistrate's decision on costs

The decision by the learned magistrate that Mr Chong's application had not been frivolous or vexatious was entirely appropriate. There is no indication that the learned magistrate relied on extraneous or irrelevant matters, mistook the facts or failed to take into account some material consideration. The learned Magistrate may have been a bit brief in the way he expressed his reasons for the costs order, but if one has regard to all the matters raised at the hearing, it is apparent that he came to the conclusion that Mr Chong may have had a legitimate concern about Mrs Chang entering his leased premises and taking what she considered to be her property without some agreement having been reached as to her being entitled to do so and which items were hers. Mr Chong also gave evidence that he was concerned about her coming back and again trying to remove her belongings and said his employees were unwilling to work in the restaurant because they felt unsafe.
The learned magistrate came to the conclusion that Mrs Chang was neither rude, nor intimidating nor offensive to Mr Chong while at his premises and her conduct did not justify the making of a misconduct restraining order pursuant to the requirements of s 34 of the Restraining Orders Act 1997 (WA). However, Mr Chong is likely to have misunderstood what sort of evidence was required to justify a misconduct restraining order. He said the police had advised him to apply for a restraining order and at some stage during the proceedings Mr Chong asked the learned magistrate to explain to him what was required to prove his entitlement to a misconduct restraining order.

Counsel for Mrs Chang conceded on appeal that Mr Chong's application was not frivolous, even though it was misconceived. Counsel submitted that the application was nevertheless 'vexatious' in an objective sense because it unnecessarily took up the court's time and resources and caused serious and unjustified trouble and harassment for Mrs Chang. Counsel referred to matters such as Mr Chong applying for an adjournment because of the unavailability of one of his employees to give evidence, Mr Chong calling his partner, Ms Lau Chi You, as a witness without asking her any questions and Mr Chong requesting the magistrate to explain to him on what basis a misconduct restraining order could be obtained. Counsel for Mrs Chang also submitted that the learned magistrate had in effect invited him to make an application that there was no case to answer indicating how little value the learned Magistrate saw in Mr Chong's case.
It seems that counsel's argument was in essence that Mr Chong conducted the proceedings with so little knowledge of what was required to prove his case and so little regard to procedure, that the whole process was vexatious. However, in deciding whether proceedings are vexatious all the circumstances of the case will have to be taken into account as well as public policy consideration and the interests of justice.
Section 69(2) was clearly enacted to ensure that citizens who have a legitimate concern about future intimidating or offensive behaviour towards them or about somebody damaging their property or behaving in a manner causing a breach of the peace will not be discouraged from applying for a misconduct restraining order by reason of fear of the possible costs consequences. It is in the nature of an application for a misconduct restraining order that this will often be made by an unrepresented litigant. Whereas unrepresented litigants have some obligation to enquire about the law applicable to their application and the correct procedure to be employed in court, it is a matter of degree as to when proceedings based on misconceived notions of the law and incorrect procedure are so harassing and troublesome that they become vexatious.
In this case Mr Chong had misconceived the basis on which a misconduct restraining order could be obtained, but he did not cause any excessive trouble to Mrs Chang in the manner that he conducted the proceedings. He accepted the learned Magistrate's ruling that the case would not be adjourned seeing that Mr Chong had been advised of the date of the hearing approximately 2 months earlier, he accepted that he could not give evidence of matters that occurred in his absence and he probably did not understand that he was meant to ask his partner questions in order to elicit her evidence. Mr Chang's ignorance of the law and procedure may have hampered his own case, but it did not cause any undue delay in the proceedings; nor was Mr Chong's conduct marked by unruliness, harassment or spurious, repetitive or incomprehensible arguments.
There was also no indication that Mr Chong had brought the application in bad faith and only for the purpose of forcing Mrs Chang to the negotiation table. Counsel for Mrs Chang pointed out that Mr Chong did not want to agree to the learned Magistrate's suggestion of a mutual undertaking by the parties which would have involved Mr Chong handing over the items to which Mrs Chang claimed ownership, and Mr Chong admitted that he wanted a restraining order so that he could get to see Mrs Chang and organise a discussion. But it was apparent from the proceedings that Mr Chong also had a legitimate concern about Mrs Chang returning to his premises to remove her belongings and that this would upset his employees.
Taking everything that happened during the hearing into account, the learned magistrate did not err when he found that the application was not frivolous or vexatious. Accordingly, there are no grounds for me to interfere with the discretionary decision of the learned magistrate.
The appeal is dismissed.