City of Stirling v Murphy
[2018] WADC 35
•8 MARCH 2018
CITY OF STIRLING -v- MURPHY [2018] WADC 35
| DISTRICT COURT OF WESTERN AUSTRALIA | Citation No: | [2018] WADC 35 | |
| Case No: | APP:72/2017 | 18 DECEMBER 2017 | |
| Coram: | WAGER DCJ | 8/03/18 | |
| PERTH | |||
| 12 | Judgment Part: | 1 of 1 | |
| Result: | Appeal struck out | ||
| PDF Version |
| Parties: | CITY OF STIRLING HEIDEMARIE MURPHY CHRISTOPHER JOHN MURPHY |
Catchwords: | Appeal Magistrates Court general procedure claims judgment The likely costs of the appeal would be disproportionate to the amount of the claim The likely costs of the appeal would be disproportionate to the nature of the claim Appeal struck out |
Legislation: | Magistrates Court (Civil Proceedings) Act 2004 (WA) s 25(1), s 31(2), s 43(3) Local Government Act 1995 (WA) s 6.62, s 6.56 |
Case References: | Kioa v West (1985) 159 CLR 550 Mowday v Shire of Merredin [2013] WASCA 182 Re Burton; ex parte Lowe [2003] WASCA 306 Re Michelides; ex parte Chin [2008] WASC 256 |
JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
- IN CIVIL
- Appellant
AND
HEIDEMARIE MURPHY
CHRISTOPHER JOHN MURPHY
Respondents
ON APPEAL FROM:
Jurisdiction : MAGISTRATES COURT OF WESTERN AUSTRALIA
Coram : MAGISTRATE WALTON
File No : GCLM 19239 of 2013
Catchwords:
Appeal - Magistrates Court general procedure claims judgment - The likely costs of the appeal would be disproportionate to the amount of the claim - The likely costs of the appeal would be disproportionate to the nature of the claim - Appeal struck out
Legislation:
Magistrates Court (Civil Proceedings) Act 2004 (WA) s 25(1), s 31(2), s 43(3)
Local Government Act 1995 (WA) s 6.62, s 6.56
Result:
Appeal struck out
Representation:
Counsel:
Appellant : Mr T W Kennedy
Respondents : In person
Solicitors:
Appellant : CS Legal
Respondents : Not applicable
Case(s) referred to in judgment(s):
Kioa v West (1985) 159 CLR 550
Mowday v Shire of Merredin [2013] WASCA 182
Re Burton; ex parte Lowe [2003] WASCA 306
Re Michelides; ex parte Chin [2008] WASC 256
1 WAGER DCJ: This is an appeal brought by the City of Stirling against the magistrate's decision to dismiss a general procedure claim judgment that was entered by the registrar against the respondents, Mr and Mrs Murphy.
2 Mr Murphy is a self-funded retiree and Mrs Murphy is a hospital clerk. They own their home in Woodlands in the City of Stirling. In 2013 the Murphys received their 2013/2014 rates and services notice from the City of Stirling for the sum of $1,773.50. They did not pay within the required period after which they received a final demand for payment dated 19 September 2013.
3 The Murphys paid $1,752.89 directly to the City of Stirling. This was received on 11 December 2013.
4 However, the City of Stirling had instructed solicitors to commence proceedings in the Magistrates Court at Perth on 21 November 2013 in order to recover the outstanding sum. Documents had been filed and service of the relevant documents had been unsuccessfully attempted on the Murphys on 8 December 2013. The Murphys ended up being served on 22 December 2013 which was 11 days after payment had been received by the City of Stirling.
5 Given that the outstanding rates and services had been paid by the time they received the summons, the Murphys completed the back of the summons admitting to the total amount of the debt. They stated that the account had been paid in full on 9 December 2013. This admission of debt was then filed in the Magistrates Court on 31 December 2013.
6 Consistent with the admission of debt the registrar gave judgment on 2 January 2014 in favour of the City of Stirling in the sum of $2,077.20. This sum was comprised of the 2013/2014 rates and the allowable costs for the proceedings. The City of Stirling was entitled to allowable costs because it was a successful party in a claim for less than $10,000: s 31(2), s 25(1) of the Magistrates Court (Civil Proceedings) Act 2004 (WA) (MCCPA).
7 Despite the allowable costs being properly ordered the Murphys complained that the City of Stirling had already been paid in full prior to them receiving any court documents and they refused to pay the City of Stirling the sum that represented the allowable costs.
8 In 2014 when the Murphys received their rates notice for the period 2014/2015 they were requested to pay $2,359.99. This sum was comprised of the outstanding rates and the outstanding allowable costs component of the judgment. The Murphys chose to pay only $1,872.74 towards the outstanding sum deducting the amount they understood represented the allowable court costs because they believed the amount they paid would cover the rates but leave the allowable court costs outstanding. In this way the allowable court costs component of the judgment sum that they had objected to paying would remain unpaid. However, the City of Stirling did not apply all of the sum paid to the Murphys 2014/2015 rates. It applied $303.70 to cover the outstanding allowable costs being entitled to do so pursuant to s 6.62 Local Government Act 1995 (WA). Section 6.62 states:
Where money is paid to a local government in respect of rates or service charges imposed on land, the local government is to apply the money for or towards —
…
(b) any outstanding costs of proceedings for the recovery of any such rates or charges.
9 The judgment was therefore paid in full on 15 October 2014. It appears the Murphys did not know that they had paid the judgment in full or they did not accept that this should have occurred because they continued to reduce the sum that they paid towards their rates each year by deducting a sum equivalent to the allowable court costs relevant to the judgment. The reductions they made to their rates and services payments were considered by the City of Stirling to be unpaid rates. Interest has therefore accrued on these outstanding sums.
10 In 2017 the Murphys applied to a bank for finance in order to purchase an investment property. The bank refused their loan application based wholly on the information contained in Mr Murphy's credit report. The credit report showed that a judgment in favour of the City of Stirling had been entered against the Murphys. This fact was sufficient to compromise Mr Murphy's credit rating leaving the Murphys unhappy with the credit report.
11 They commenced proceedings in the Magistrates Court seeking to have the claim dismissed on a without prejudice basis and the judgment made by the registrar of 2 January 2014 set aside.
12 On 21 July 2017 the matter came before Magistrate Walton for determination. His Honour proceeded to dismiss the original proceeding on a without prejudice basis and to set aside the judgment of the registrar dated 2 January 2014. His Honour also ordered that the Murphys pay the cost of the claim fixed in the sum of $150 to the City of Stirling.
13 The City of Stirling appeals the magistrate's decision on the following grounds:
1. The learned magistrate erred in exercising his discretion to set aside the judgment in that he:
(a) failed to take into account the lack of any defence;
(b) failed to take into account that the amount had been admitted and paid in full; and
(c) placed undue emphasis on s 13 and s 16 of the MCCPA when setting aside the judgment.
2. The learned magistrate erred in dismissing the claimant's claim in that he:
(a) failed to take into account that the claim had been paid in full;
(b) failed to take into account that the defendants had admitted the claim;
(c) summarily dismissed the claimant's claim in circumstances where he failed to consider the merits of the claim; and
(d) erroneously relied upon s 13 and s 16 of the MCCPA as the basis for dismissing the claim.
3. The learned magistrate failed to afford the claimant natural justice in that he failed to:
(a) give the claimant the opportunity to properly ventilate their argument in opposition to the application; and
(b) give the claimant the opportunity to prosecute its claim for costs.
4. The learned magistrate erred in not awarding the claimant allowable costs in that he:
(a) failed to take into account that at the date the claim was commenced the claimant's claim was outstanding;
(b) failed to take into account that judgment had been entered on account of the defendants' admission of claim; and
(c) placed undue emphasis on the claimant's lack of perceived action in enforcing the judgment.
The appeal court may strike out the appeal if the likely costs of the appeal to the parties would be disproportionate to the amount of the claim in, or the nature of, the case which is the subject of the appeal.
15 Section 43(3) was considered by the Court of Appeal WA in Mowday v Shire of Merredin [2013] WASCA 182 [19]. The court held:
Section s 43(3) of the Magistrates Court (Civil Proceedings) Act provides two separate and distinct bases upon which a court may strike out an appeal. It may do so because the costs of appeal are disproportionate to the amount of a claim, or it may do so because the costs of the appeal are disproportionate to the nature of the case. The discretion is enlivened once either limb is made out. It is an unfettered discretion to be exercised according to the justice of the case: see Tey v Optima Financial Group Pty Ltd [2010] WASCA 219 [26].
Are the costs of the appeal disproportionate to the amount of the claim?
16 The majority of the judgment was satisfied on 9 December 2013. Pursuant to s 6.62 of the Local Government Act the remaining portion was received on 15 October 2014. The judgment had been satisfied for nearly three years before the magistrate set it aside.
17 The City of Stirling sought $330 at the hearing being the original allowable costs that were paid on 15 October 2014. The magistrate awarded $150 of the costs sought only. However, the City of Stirling also acknowledged an overpayment of interest by the Murphys in the sum of $13.59. This means that when the judgment was set aside the City of Stirling was out of pocket by $136.41 and it had had the use of $150 for a period of nearly three years (being from 15 October 2014 to 21 July 2015).
18 In contrast the act of having the judgment set aside has, potentially, been a very costly exercise for Mr and Mrs Murphy. The City of Stirling has included a significant sum for the legal fee it has expended in its defence of the Magistrates Court proceedings on 21 July 2017 in the Murphys' rates notice for 2017/2018. The notice is for a total sum of $8,106.04. Although the rates notice has not been particularised, given the earlier rates and charges notices received by the Murphys I calculate the rates component would be no more than $3,000. The City of Stirling are therefore claiming approximately $5,000 in legal fees arising from the Magistrates Court hearing in 2017.
19 Counsel for the City of Stirling also submits that on top of these legal fees a further significant sum will be sought from the Murphys in relation to this appeal.
20 The costs of the appeal are disproportionate to the claim.
Are the costs of the appeal disproportionate to the nature of the case?
21 The City of Stirling has brought this appeal pre-empting that if it does not proceed the Murphys will not pay the outstanding allowable costs of $136.40, outstanding rates and legal fees incurred by the City of Stirling in 2017 and for this appeal. Counsel for the City of Stirling argues that this appeal should proceed as a test case because the City of Stirling puts through thousands of rates notices every year. If the rates and services charges are not paid on time and the City of Stirling commences proceedings then it should be able to have the allowable costs paid by the ratepayer. Further, the City of Stirling needs to know whether it is legally required to set aside a judgment and dismiss the matter once the judgment has been paid in full. Counsel argues that there is no legal requirement to do so, although it is acknowledged that the presence of a judgment against a ratepayer is likely to lead to the ratepayer having a poor credit rating.
22 Counsel raises concerns that some magistrates dismiss judgments for debts in situations that are very similar to the Murphys' position where others do not. The City of Stirling seeks clarity and considers it is reasonable to incur the costs of bringing the matter on appeal because of the need for clarity.
23 The City of Stirling is not a model litigant. It does not pretend to be one. The City of Stirling intends to claim costs for what it describes as a test case from the Murphys.
24 Counsel raises that s 6.56 of the Local Government Act applies in relation to the right to have costs paid. Whether s 6.56 applies or not, the costs presently sought and that will ultimately be sought by the City of Stirling are disproportionate to the nature of the case.
25 The discretion only needs to be enlivened under one limb of s 43(3) of the MCCPA, however I find that the appeal could be struck out on both bases.
26 I strike out the appeal.
27 I do however make the following observations.
28 Ground 3 of the appeal is:
The learned magistrate failed to afford the complainant natural justice in that he failed to:
(a) give the claimant the opportunity to properly ventilate their argument in opposition to the application; and
(b) give the complainant the opportunity to prosecute its claim for costs.
29 In Re Burton; ex parte Lowe [2003] WASCA 306 Barker J said at [63]:
63. The rules of natural justice have two substantive requirements: first, that a decision-maker give an opportunity to be heard to a person whose interests will be affected adversely by the decision; and, secondly, that the decision-maker be a person who is disinterested or unbiased in the matter to be decided. These two rules are called respectively the "hearing rule" and the "bias rule". It is sometimes suggested there is a third rule required by natural justice - the "no evidence" rule - which requires that the decision be based upon logically probative evidence. …
30 His Honour referred to Mason J in Kioa v West (1985) 159 CLR 550, at 584 – 585 at [64]:
64. …
"What is appropriate in terms of natural justice depends on the circumstances of the case and they will include, inter alia, the nature of the inquiry, the subject-matter, and the rules under which the decision-maker is acting."
65 The content of hearing rule was explained by the Full Court of the Federal Court of Australia in Commissioner for Australian Capital Territory Revenue v Alphaone Pty Ltd (1994) 49 FCR 576, at 591 - 592, in terms recently referred to with approval by Gleeson CJ, Gummow and Heydon JJ in a joint judgment in Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Palme (2003) 201 ALR 327; [2003] HCA 56, at [22]:
"Where the exercise of a statutory power attracts the requirement for procedural fairness, a person likely to be affected by the decision is entitled to put information and submissions to the decision-maker in support of an outcome that supports his or her interests. That entitlement extends to the right to rebut or qualify by further information, and comment by way of submission, upon adverse material from other sources which is put before the decision-maker. It also extends to require the decision-maker to identify to the person affected any issue critical to the decision which is not apparent from its nature or the terms of the statute under which it is made. The decision-maker is required to advise of any adverse conclusion which has been arrived at which would not obviously be open on the known material. Subject to these qualifications however, a decision-maker is not obliged to expose his or her mental processes or provisional views to comment before making the decision in question."
- See also the discussion of the general principles relating to the hearing rule in Hall v University of New South Wales [2003] NSWSC 669 per McClellan J at [66] - [76]; and Canellis v Slattery (1994) 33 NSWLR 104 per Kirby P at 119 - 120.
33 Counsel appearing for the City of Stirling at the hearing was asked why it had not sought to enforce the order that was made. His Honour asked counsel for a history of the proceedings both prior to and subsequent to the judgment. His Honour then said (ts 8):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
34 His Honour then proceeded to dismiss proceedings 19239 of 2013 and made no order as to costs, however his Honour then heard further from Mr O'Meara and ultimately ordered $150 being a fixed sum of costs. His Honour called on Mr O'Meara a number of times during the course of the hearing.
35 It is very unusual to have a ground of appeal in relation to counsel being denied natural justice against self-represented parties. Consistent with the transcript I conclude that the City of Stirling was afforded natural justice.
36 I also make the following observations in relation to grounds 1 and 2.
37 The Murphys admitted having paid the bulk of the claim. This is the reason why judgment was entered.
38 Having admitted the debt this is not a summary judgment nor a default judgment. In those cases the judgment could be set aside pursuant to s 17(3), s 18(6) and s 19(3) of the MCCPA.
39 In Re Michelides; ex parte Chin [2008] WASC 256 Hasluck J reviewed decisions made in relation to a consent judgment. His Honour said at [109]:
that in order to make out an arguable case that it would be 'just' to grant a review order the applicant must show that the judicial officer to whom the review order is directed has misconceived or exceeded his or her jurisdiction, or infringed the rules of natural justice or erred in law.
40 His Honour considered various observations made in SeamanCivil Procedure Western Australia at par 43.3 to par 43.16. His Honour said [120] – [122]:
120. The learned author notes that the purpose of the rule concerning consent orders is to save costs and court time by enabling parties to give rapid effect to agreements between them without the necessity of an attendance in court or in chambers. Registrars are empowered to settle, sign and seal orders, in order to give final effect to settlements. However, the making of orders by consent is a judicial act and even when all parties consent the court may decline to make them.
121. While encouraging parties to litigation to settle their differences, the court is jealous to protect its processes and will not exceed to an application for consent orders made in consequence of compromise arrived at by some parties to a proceeding where the effect of the orders will or may be stifle the hearing and determination of other aspects of the proceeding which involve one of the parties to the proposed consent orders.
122. The learned author observes that a court may set aside any other made by consent, and intended to carry out an agreement between the parties, upon any ground on which the agreement may be set aside raised in a separate proceeding instituted for that purpose. If judgment was obtained by fraud practised on the court there are three possible courses of action depending on circumstances; that is, an action may be brought to set aside the judgment; an action may be made in the original action; or an appeal may be taken. An appeal court may order a new trial where fraud in the conduct of the proceedings below is clearly evident. It is not necessary for the plaintiff in a new action to prove the fraud by fresh evidence which was not available to him or her and could not have been discovered with reasonable diligence before the judgment was delivered: McDonald v McDonald (1965) 113 CLR 529 at 532.
41 The judgment in the present case is not a consent judgment. There is no suggestion of fraud. The judgment is a perfected judgment.
42 There has been no reasons given as to why the judgment would be reviewed, varied or set aside because by paying the claim the Murphys have confirmed there was no defence and the claim was admitted. The magistrate referred to the City of Stirling doing nothing since obtaining judgment. Given that the City of Stirling had judgment and there was no need to enforce it, there does not appear to have been any reason why the City of Stirling would have taken any further action.
43 Finally, having a poor credit rating is not a reason why a judgment should not have been entered. It is a practical outcome of the judgment that impacts adversely on a party to the judgment but unlike fraud or duress it does not appear to be a factor that legally needs to be considered in determining whether to dismiss a perfected judgment.
0
11
2