Dokhe v Mills - [2019] WADC 74

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CIVIL

LOCATION:   PERTH
CITATION:   DOKHE -v- MILLS [2019] WADC 74
CORAM:   QUAIL DCJ
HEARD:   20 MAY 2019
DELIVERED          :   7 JUNE 2019
FILE NO/S:   APP 107 of 2018
BETWEEN:   BANANI AND NILESH DOKHE
Appellants
AND
CLARE MILLS
Respondent

ON APPEAL FROM:
Jurisdiction              :   MAGISTRATES COURT OF WESTERN AUSTRALIA
Coram:   MAGISTRATE WALTON
File Number             :   PER/GCLM/2895/2017

Catchwords:

Practice and procedure - Appeal against order for costs under general procedure of Magistrates Court - Claim within the minor claims jurisdiction of Magistrates Court - Meaning of costs order made by Magistrates Court - Delegation of costs order to registrar - Whether rejection of a Calderbank offer amounts to an exceptional circumstance

Legislation:

District Court Rules 2005 (WA)
Magistrates Court (Civil Proceedings) Act 2004 (WA), s 25, s 31
Magistrates Court (Civil Proceedings) Rules 2005 (WA)
Magistrates Court (Minor Cases Procedure) Rules 2005 (WA)
Magistrates Court Act 2004 (WA)
Magistrates Court Regulations 2005 (WA)

Result:

Appeal allowed

Representation:

Counsel:

Appellants	:	Mr G J Pynt
Respondent	:	No appearance

Solicitors:

Appellants	:	Hall & Wilcox (Perth)
Respondent	:	Not applicable

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

Allesch v Maunz [2000] HCA 40; (2000) 203 CLR 172
Brocklehurst v Wolinski [2015] WADC 36
Butler v Bennett [2007] WADC 107
Craft Decor Pty Ltd v Oteri [2012] WASCA 46
Cristovao v Forensic Documents Examiners Pty Ltd [2015] WASCA 85
Jones v Darkan Hotel [2014] WASCA 133
McKay v Commissioner of Roads (No 7) [2011] WASC 223
McKeon v Knapton [2009] WADC 170
Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72
Shilkin v Taylor [2011] WASCA 255

QUAIL DCJ:

Introduction

On 1 December 2016 a Honda Civic motor vehicle owned and driven by Ms Clare Mills was damaged in a collision with a Toyota Camry driven by Ms Banani Dokhe and owned by Mr Nilesh Dokhe.
By general procedure claim filed on 17 February 2017 in the Magistrates Court, Ms Mills claimed from Ms Dokhe the cost of vehicle repairs and hire car charges totalling $3,862.59. Ms Dokhe filed a general procedure statement of defence and counterclaim and Mr Dokhe ultimately joined in the action. The claim and counterclaim were both within the jurisdiction of the minor case procedure but Ms Mills and Mr Dokhe were insured and their insurers exercised rights of subrogation. All parties to the litigation were legally represented, including by counsel.
The case went to trial on 25 September 2018 before Magistrate Walton. On 5 October 2018 his Honour gave judgment for Ms Mills in the sum of $3,862.54 plus interest of $427.95. The counterclaim was dismissed.
The magistrate reserved his decisions on costs and subsequently the court issued three versions of general order formalising the judgment. In relation to costs the final version ordered that Ms and Mr Dokhe pay Ms Mills costs to be taxed if not agreed. The court further ordered that 'the "Calderbank offer" and any accompanying orders related to the application of s 25 Magistrates Court (Civil Proceedings) Act 2004 (WA) to be determined at any taxation'.
On 25 October 2018 Ms and Mr Dokhe filed an appeal in relation to the court's costs orders to this court.[1] Ms Mills filed a notice intending to respond to the appeal but was given leave to withdraw that notice with no order as to costs on 2 May 2019.
[1] Amended appeal notice filed 12 February 2019.
For the reasons which follow, the appeal must be allowed.

The proceedings in the Magistrates Court relating to the costs orders

The transcript of the hearing before the magistrate on 25 September 2018 and of the magistrate's decision on 5 October 2018 is in the materials provided by the Magistrates Court to this court. His Honour gave oral reasons for his decision and after dealing with the judgment sum and interest, heard from both parties' counsel on costs. Ms and Mr Dokhe submitted that as the amount of the judgment was under the minor cases threshold the court was precluded from ordering costs unless one of the criteria in s 31(3) of the Magistrates Court (Civil Proceedings) Act 2004 (WA) (MCCPA) was met.[2] Ms Mills submitted that there was an exceptional circumstance and it would be an injustice for her not to recover costs. Counsel submitted that 'the exceptional circumstances, your Honour, are the rejection of an offer made by the claimant for the compromise of the claim'.[3] She then went on to say that a Calderbank offer had been made on 26 July 2017 for 70% of the claim plus costs.[4] Counsel for Ms and Mr Dokhe then said that he was not aware of the offer but accepted it may well exist. The magistrate then said:
There's nothing exceptional about it because it's a MVA, a standard MVA that operate every day in this court. So the exceptional circumstances - the strength in (counsel for Ms Mills') submission lies in, let's just call it, the Calderbank. [5]
[2] Magistrates Court ts 5.10.18, page 15.
[3] Magistrates Court ts 5.10.18, page 16.
[4] Magistrates Court ts 5.10.18, page 16.
[5] Magistrates Court ts 5.10.18, pages 16 - 17.
Counsel for Ms Mills then said that she did not have the Calderbank offer with her but that it could be emailed through to the court if that would be of assistance. The magistrate then adjourned his decision on costs and it is important, I think, to quote the full paragraph from the transcript, describing the time pressure he was facing:
Okay. What I might do is the balance of the judgment remains. As is always the case in this jurisdiction, I have day 5 of a trial starting in 6 minutes and another matter to deal with. So what I'm going to do is I will come - pursuant to section 15 and 16, and where necessary section 14 of the Act, of the Magistrates Court (Civil Proceedings) Act - I will contact the parties with a decision on the costs aspect either today or Monday. Are the parties content for that?[6]
[6] Magistrates Court ts 5.10.18, page 17.
Subsequently three distinct versions of general order formalising the judgment were extracted, signed and sealed, possibly over the following months. Each order is dated 5 October 2018, although as will become apparent, at least the second and third versions could not have been made on that day. Each of the three versions is signed by a different person whose identity is not clear on the face of the order. So that there can be no confusion I have decided to receive each as an exhibit in the appeal.
There is no evidence in the materials provided to this court that the Calderbank offer referred to by Ms Mills' counsel was ever brought to the attention of the magistrate.[7]
[7] Counsel for the appellant advised the court on the hearing of the appeal that a search of the Magistrates court file had not located any offer; Appeal transcript ts 22, 27 ‑ 29. After hearing the appeal my associate attended and inspected the file and no offer could be located.
It is necessary to set out each of the versions of the general order made by the court and as much of the circumstances surrounding them as are apparent from the appeal materials before this court. The first version orders:
1.Judgment is entered in favour of the claimant as against the defendant in the sum of $3,862.54 plus interest of 6% from the 1 December 2016 to 5 October 2018 plus costs fixed at $427.95 to be taxed if not agreed.[8]
[8] Exhibit 1 in the appeal.
After receiving the sealed copy of the first version of the general order the solicitors for Ms Mills wrote to the court on 18 October 2018 and applied pursuant to r 133B of the Magistrates Court (Civil Proceedings) Rules 2005 (WA) (the MCCPR) to amend the orders to correct the error confusing the interest calculation and costs.[9] The rule allows a registrar on application by a party to order the correction of a 'typographical error or other defect'.
[9] Letter from Mr Boudib of CCSG Legal Pty Ltd dated 18 October 2018.
On 19 October 2018 the solicitors for Ms and Mr Dokhe received a sealed copy of the first version of the general order and on 25 October 2018 they wrote to the court requesting the judgment be clarified as to costs and utilising the powers in s 23 of the Magistrates Court Act 2004 (WA) (the MCA).[10] Section 23 allows a court, not necessarily constituted by the same magistrate as originally dealt with the matter, to correct accidental slips, omissions, arithmetic errors or descriptive mistakes in judgments or orders.
[10] Letter from Hall & Wilcox dated 25 October 2018.
It is not clear from the appeal materials on what basis the court then acted but a second version of the general order was signed and sealed. It orders:
1.Judgment is entered in favour of the claimant as against the defendant in the sum of $3,865.54 plus interest of 6% from the 1 December 2016 to 5 October 2018 plus costs fixed at $427.95 to be taxed if not agreed.
2.The counterclaim is dismissed.
3.'Calderbank offer' and any accompanying orders to the application of s 25 Magistrates Court (Civil Proceedings) Act to be determined at taxation. [11]
[11] Exhibit 2 in the appeal.
Subsequently, and without any explanation in the appeal materials, a third version of the general order was signed and sealed. It orders:
1.Nilesh Dokhe is added as a second defendant in the general procedure claim and as the second claimant in the counterclaim.
2.Judgment is entered in favour of the claimant as against the defendants in the sum of $3,865.54 plus interest at 6% from the 1 December 2016 to 5 October 2018 at $427.95, plus costs to be taxed if not agreed.
3.The counterclaim is dismissed.
4.The 'Calderbank offer' and any accompanying orders related to the application of s 25 Magistrates Court (Civil Proceedings) Act 2004 to be determined at any taxation.[12]
[12] Exhibit 3 in the appeal.
It is only possible to deduce that the third version is the final version of the court's orders because the error confusing interest and costs is finally corrected in order 2.
As unsatisfactory as the process of extraction, signing and sealing of the general orders in this matter was, I am prepared to determine the appeal on the basis that the third version is the final general order giving effect to the judgment of the court. As Ms Mills did not appear in the appeal and I have not received any contrary submissions concerning the scope and application of the slip rule, I will proceed on the basis that there was power in the court to correct the first and second versions of the general order. Other than as to costs, the third version reflects the oral reasons for judgment given by the magistrate.
As to costs, when he adjourned consideration of costs at the conclusion of the hearing on 5 October the magistrate expressly exercised his powers under s 15 and s 16 and where necessary s 14 of the MCCPA.[13] Relevantly, s 15 allowed the court to make a costs order on its own initiative. That was an appropriate exercise of the power in the circumstances of this relatively minor matter and where the parties had made costs submissions and all that appeared to be outstanding was provision of the Calderbank offer to the magistrate and his decision on its consequences.[14] In my opinion it would be entirely reasonable for a busy magistrate who deferred such a costs decision to publish it by way of a final general order. Accordingly I will proceed on the basis that the final version of the general order also publishes the magistrate's reserved judgment on costs.
[13] Magistrates Court ts 5.10.18, page 17.
[14] Magistrates Court ts 5.10.18, pages 16 ‑17.

The appeal from the Magistrates Court to the District Court

A party to a case that is not minor may appeal to the District Court against the judgment of the Magistrates Court in the case.[15] The appeal was filed within the 21 day time limit.[16] On 12 February 2019 the appellant filed an amended appeal notice. There are four amended grounds of appeal:
[15] MCCPA s 40.
[16] MCCPA s 40(3).
Ground 1 – Inconsistent final orders
1.On 5 October 2018, the Learned Magistrate entered final judgment in favour of the Respondent in the form of a General Order after reserving his decision following a one day trial in which all parties gave evidence about the circumstances of a motor vehicle accident.
2.General Order 2 that the Appellants pay the Respondent's 'costs to be taxed if not agreed' is inconsistent with General Order 4 that the "'Calderbank Offer' and any accompanying orders related to the application of Section 25 Magistrates Court (Civil Proceedings) Act 2004 to be determined at any taxation".
3.The Learned Magistrate erred in law in making inconsistent orders for costs in General Order 2 and General Order 4.
4.The matter should be remitted to the Learned Magistrate to make consistent costs orders according to law.
Ground 2 – Registrar has no power to enter a final judgment
5.In the alternative to Ground 1, the Learned Magistrate erred in law in making General Order 4, by which His Honour purported to delegate to a Registrar at taxation a power a Registrar does not have, in particular, a power 'to enter a final judgment on a case after trial': Magistrates Court Act 2004 (WA), s 28(1)(b).
6.The Learned Magistrate should have decided for himself what final order for costs should have been entered in relation to costs following a trial of the proceedings.
Ground 3 – No 'exceptional circumstances'
7.In the alternative to Grounds 1 and 2, the Learned Magistrate erred in law by making the costs order in General Order 2.
8.The Learned Magistrate could only have made the costs order in General Order 2 if His Honour had concluded that there were 'exceptional circumstances' for the purposes of the Magistrates Court (Civil Proceedings) Act 2004 (WA), ss 25(5) and 31(3) either because of the Appellants':
a)rejection of the Respondent's Calderbank offer; or
b)conduct of the litigation.
9.The Learned Magistrate could not have been satisfied there were 'exceptional circumstances' by reference to the Appellants' rejection of the Respondent's Calderbank offer because:
a)when His Honour made the costs order in General Order 2, His Honour:
(i)had not seen the Respondent's Calderbank offer;
(ii)did not know the terms of the Respondent's Calderbank offer; and
(iii)did not know anything about the circumstances in which the Respondent's Calderbank offer was made or rejected;
b)even if His Honour had seen the Respondent's Calderbank offer, a Calderbank offer can never amount to 'exceptional circumstances' for the purposes of ss 25(5) and 31(3).
10.The Learned Magistrate could also not have been satisfied there were 'exceptional circumstances' by reference to the Appellants' conduct of the litigation, apart from their rejection of the Respondent's Calderbank offer, because the litigation was a 'run of the mill' dispute involving property damage claims arising out of a motor vehicle accident where the Magistrate gave judgement after trial based on His Honour preferring one party's version of events to the other party's version of events.
11.The only costs order the Learned Magistrate should have made was an order that the Appellants pay the Respondent's 'allowable costs' as defined by the Magistrates Court (Civil Proceedings) Act 2004 (WA), ss 31(1).
Ground 4 – No written or oral reasons for 'exceptional' costs orders
12.In the alternative to Grounds 1, 2 and 3, the Learned Magistrate erred in law by making the costs order in General Order 2 and General Order 4 without giving any written or oral reasons for so doing when:
a)the costs order in General Order 2 required the Learned Magistrate to be satisfied that there were 'exceptional circumstances'; and
b)General Order 4 involved the Learned Magistrate purporting to delegate to a Registrar at taxation final orders for costs following the outcome of a trial.
13.The Learned Magistrate should have given reasons for making the costs order in General Order 2 and the General Order 4.

The District Court's appeal jurisdiction

The District Court's appeal jurisdiction is found in the MCCPA pt 7. The District Court must decide the appeal on the material and evidence that were before the Magistrates Court.[17] No party sought leave to admit other evidence.[18] The appeal is by way of a 'reconsideration of the evidence' that was before the Magistrates Court.[19] This is to be undertaken by way of a rehearing.[20] As a rehearing, the appellate powers of the District Court will only be exercised if the appellant demonstrates that the decision made by the magistrate the subject of the appeal was the result of some legal, factual or discretionary error.[21] The onus is on the appellant to demonstrate this error.[22]
[17] MCCPA s 40(4)(a).
[18] MCCPA s 40(4)(b), s 40(5).
[19] District Court Rules 2005 (WA) r 50(1).
[20] Butler v Bennett [2007] WADC 107; Brocklehurst v Wolinski [2015] WADC 36 [14].
[21] Allesch v Maunz [2000] HCA 40; (2000) 203 CLR 172 [23].
[22] Jones v Darkan Hotel [2014] WASCA 133 [31].
The amended grounds of appeal properly identify the issues and for the reasons that follow it is necessary to determine the first three.

Inconsistency in the final general order and delegation of costs orders to a registrar

Appeal grounds 1 and 2 are pleaded in the alternative and can be dealt with together. They allege inconsistency between the final version of general orders 2 and 4 and that the magistrate purported to delegate his own function to an assessment registrar who had no power to exercise it.
Order 2 requires costs to be taxed if not agreed. The power to order costs is in s 25 of the MCCPA which provides:
25. Costs
(1)The Court may order a party to a case to pay the whole or a part of another party's costs in the case.
(2)A successful party is entitled to an order under subsection (1) that the whole of its costs in the case be paid by the unsuccessful party, unless the Court considers there is good reason not to make such an order or subsection (5) applies.
(3)An order may be made under subsection (1) in a case even if the case is outside the Court's jurisdiction.
(4)An order may be made under subsection (1) at any stage of the proceedings in a case.
(5)In a case where -
(a)the value of the claim, or of the relief claimed, by the claimant is not more than the minor cases jurisdictional limit; and
(b)the claimant did not elect to have the claim dealt with under the minor cases procedure or, under section 28(3), the court ordered that the case be dealt with under the general procedure,
the Court may only make an order under subsection (1) in favour of a successful party if the order would be permitted by section 31 were the case being dealt with under the minor cases procedure.
(6)If in a case referred to in subsection (5) judgment is given under section 18 as a result of an application by the successful party, any order made under this section in favour of the party may, in addition to relating to any allowable costs referred to in section 31, include the party's costs of the application under section 18.
(7)The amount of any costs to be paid is to be determined by the Court unless the parties concerned agree on the amount.
(8)The amount of any costs to be paid in respect of work done by a legal practitioner in conducting any proceedings in the case is to be determined under the applicable costs determination.
(9)If the Court orders the costs of a self‑represented party to be paid by another party, the Court may order that the whole or a part of the expenses or losses incurred by the self‑represented party in or in connection with conducting the case be included in the costs.
(10)If the Court is satisfied that due to the acts or omissions of a legal practitioner, whether personally or through an employee or agent -
(a)costs have been incurred improperly or without reasonable cause; or
(b)costs have been wasted by undue delay or by any misconduct or default,
the Court may order all or any of the following -
(c)the legal practitioner to be wholly or partially disentitled to costs from the legal practitioner's client;
(d)the legal practitioner to repay to the legal practitioner's client the whole or a part of any costs that the legal practitioner has been paid by the client for items other than disbursements;
(e)the legal practitioner to pay to the legal practitioner's client the whole or a part of any costs that the client is ordered to pay to another party;
(f)the legal practitioner personally to indemnify any party other than the legal practitioner's client against the whole or a part of the costs payable by the indemnified party.
(11)The Court must not make an order under subsection (10) unless it has informed the legal practitioner of the proposed order and allowed the legal practitioner to call evidence and make submissions in relation to the proposed order.
(12)If an order is made under subsection (10)(c), the legal practitioner must not charge and cannot recover the costs concerned.

A successful party is entitled to the whole of its costs 'unless the Court considers there is good reason not to make such an order or subsection (5) applies'.[23] The operation of s 25(5) is considered below in relation to ground 3 but the effect of the words 'unless the Court considers' are that no order for costs can be made by a court without having first determined whether s 25(5) applies and whether there is good reason not to make the order. Thus in making order 2 the magistrate must have decided those issues and concluded that it was appropriate for Ms and Mr Dokhe to pay the whole of Ms Mills' costs, determined by reference to the applicable costs determination.[24] Once order 2 was made there was no scope to make any further costs orders under s 25.
[23] MCCPA s 25(2).
[24] MCCPA s 25(2), s 25(7), s 25(8).
Although the meaning of general order 4 is not completely clear, in my view it expressly delegates two functions to the assessment registrar, firstly consideration of the Calderbank offer and secondly, the application of s 25 of the MCCPA in light of the offer.
Both of those functions are integral to the decision to make general order 2 which could not have been made unless the magistrate had already exercised those functions himself. It follows that general order 4 is inconsistent with order 2 and suggests the magistrate had not decided all of the matters he was required to before making order 2. Ground 1 of the appeal is made out.
Although pleaded in the alternative, I will deal with ground 2 as it is relevant in considering what orders should be made on the appeal.
Neither of the two functions identified in general order 4 are within the power of a registrar to perform. Section 28(1)(b) of the MCA relevantly provides that the Rules of Court may delegate to a registrar any or all of the court's civil jurisdiction and powers other than the power 'to enter a final judgment on a case after trial'.[25]
[25] A registrar also has no power to find a person guilty of contempt of the court: MCCPA s 28(1)(c).
Costs orders finally determine the parties' rights and obligations after trial and are part of the final judgment, even where they are reserved to another day or where a party is given liberty to apply. The power to award costs is an exercise of judicial discretion within the statutory framework.[26] Under the MCCPA only 'the Court may order' a party to pay another party's costs.[27] The court is the Magistrates Court.[28] For trials in its civil jurisdiction the court is constituted by a magistrate.[29] It follows that while a presiding magistrate can exercise the statutory discretion to order a party to pay another party's costs as part of the final judgment on a civil trial, a registrar cannot.
[26] Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72 [63] – [66]; MCCPA s 25(1), s 25(2).
[27] MCCPA s 25(1).
[28] MCCPA s 3(1).
[29] MCA s 7(1). The Magistrates Court Regulations 2005 (WA) do not authorise justices of the peace to hear and determine civil trials.
The registrar's role in relation to costs is that of assessment.[30] Post‑offer costs in a general procedure claim are dealt with in r 65 of the MCCPR which contemplates that where the court makes an order that a claimant is entitled to post-offer costs under s 25(1) of the MCCPA, the registrar will assess those costs.[31]
[30] MCCPR r 86.
[31] MCCPR r 65(2)(d). See also r 5(1) which provides that the rules apply in every case except a minor case.
In this matter, only the magistrate could make an order for costs under s 25 and only he could consider whether rejection of a Calderbank offer was an exceptional circumstance for the purposes of s 31 of the MCCPA. The attempt to delegate those functions to the registrar was beyond the power of the magistrate to order and the registrar to comply. Ground 2 is made out.

Could rejection of a Calderbank offer constitute exceptional circumstances for the purposes of s 31 of the MCCPA?

As discussed above, the magistrate could only have made general order 2 if he had decided all of those matters he was required to under s 25. Ground 3 raises firstly, whether he in fact determined that 'exceptional circumstances' for the purposes of s 25(5) and s 31(3) of the MCCPA existed and secondly, whether rejection of a Calderbank offer could amount to an exceptional circumstance. Although pleaded in the alternative to grounds 1 and 2, again it is necessary to determine this ground in order to decide what orders to make on the appeal. To do so requires closer consideration of the costs provisions of the MCCPA.
The MCCPA provides alternative procedures for general procedure and minor cases procedure claims in the Magistrates Court. General procedure claims are dealt with in pt 3 and minor cases in pt 4. The minor cases procedure is simpler and less formal than the general procedure. With only a few exceptions, parties under the minor cases procedure cannot be legally represented.[32]
[32] MCCPA s 30.
Section 27(1) of the MCCPA provides that the 'primary object of the court when dealing with a minor case is to attempt to bring the parties to a settlement acceptable to all the parties.' In Craft Decor Pty Ltd v Oteri Newnes JA said about the minor cases procedure the 'evident intention is that given the relatively modest amount involved, a minor case should be dealt with simply, expeditiously and ordinarily at little cost to the parties'.[33]
[33] Craft Decor Pty Ltd v Oteri [2012] WASCA 46 [16].
That intention is reflected in s 31 of the MCCPA dealing with costs in a minor case. Section 31 is in the following terms:
31. Costs
(1)In this section -
allowable costs means -
(a)the court fees and service fees paid by a successful party; and
(b)the costs of enforcing a judgment.
(2)A successful party to a minor case is entitled to an order under section 25(1) in relation to the party's allowable costs but not in relation to the party's other costs in the case.
(3)Despite subsection (2), the Court may make an order under section 25(1) as to the payment of the party's other costs by another party if it is satisfied that -
(a)because of the existence of exceptional circumstances an injustice would be done to the successful party if that party's other costs were not ordered to be paid; or
(b)the unsuccessful party's claim or defence was wholly without merit; or
(c)the proceedings in the minor case -
(i)were commenced but not concluded in a Local Court before 1 May 2005; and
(ii)were, immediately before 1 May 2005, not proceedings that were being heard and determined under the Local Courts Act 1904 Part VIA³.
Section 31 works together with s 25. Section 25(5) is intended to apply to a claim that a claimant could have brought as a minor case but decided not to do so. If the criteria in the subsection are satisfied then the court may order a party to such a case to pay the whole or part of another party's costs in the case.
In this case the value of the claim and the counterclaim were both within the minor cases jurisdictional limit. Ms Mills did not elect to have her claim dealt with under the minor cases procedure and nor did Ms and Mr Dokhe elect to have their counterclaim dealt with that way. The court also made no order that the case be dealt with under the general procedure.
Thus the court could only make an order for costs under s 25(1) of the MCCPA in favour of a successful party (here being Ms Mills) 'if the order would be permitted by s 31 were the case being dealt with under the minor cases procedure'.
The effect of s 31 is that a successful party in a minor case is only entitled to 'allowable costs' being the court fees, service fees and costs of enforcing judgment.[34] Two exceptions to that general rule still exist, providing that the unsuccessful party (here Ms and Mr Dokhe) can be ordered to pay more than 'allowable' costs if firstly, there are exceptional circumstances and an injustice would be done to the successful party (Ms Mills) if that party's other costs were not ordered to be paid or secondly, the unsuccessful party's claim or defence was wholly without merit.[35]
[34] MCCPA s 31(1) and s 31(2).
[35] The above analysis is consistent with the approach taken by Newnes JA in Cristovao v Forensic Documents Examiners Pty Ltd [2015] WASCA 85 [72].
There was no evidence and no claim before the magistrate that the defence was wholly without merit. Rather, the claim for costs was predicated solely on the rejection of the Calderbank offer made by Ms Mills, as being exceptional circumstances giving rise to injustice to her if costs were not ordered to be paid.[36]
[36] Magistrates Court ts 5.10.18, pages 15 ‑ 16.
Exceptional circumstances are not defined for the purposes of s 31 of the MCCPA. In relation to the use of that phrase in s 42 of the MCCPA, concerning the admission of additional evidence on appeal to this court, the Court of Appeal has said:
It is not helpful to attempt to describe what would constitute exceptional circumstances for the purpose of s 42(3)(c). The variety of circumstances that might arise is inexhaustible and restating the statutory test in different words would serve no useful purpose.[37]
[37] Shilkin v Taylor [2011] WASCA 255 [68].
In my opinion that statement applies equally to s 31. I also agree with the approach taken to s 31 in this court by Sweeney DCJ who has said:
The appellant's submission is that, in restricting the circumstances in which a successful party can be granted costs, parliament clearly intended that it would not be sufficient merely that a party's position be vindicated by success at trial. I accept that submission. The appellant submits that awarding costs is therefore reserved for cases where it would be just to punish the unsuccessful party with a costs order.
It would be futile to attempt now to lay down some exhaustive principle governing such costs orders in the Magistrate's Court. In the end, each case will involve a consideration of its particular facts, bearing in mind the purpose behind the discretion. But I am not satisfied that the proper use of the discretion is limited to such cases involving dereliction of duty or lack of good faith, though certainly I would consider such cases to be appropriate vehicles for a costs order. Nor do I accept that a costs order should be reserved for cases where the unsuccessful party should be punished for some conduct. The exceptional circumstances might pertain exclusively to the personal circumstances of the successful party. The purpose of a costs order is to reimburse the successful party for costs it incurred.[38]
[38] McKeon v Knapton [2009] WADC 170 [166] – [169].
And further:
The mere failure of a party to prove his case is not of itself exceptional and nor, generally, is a finding in favour of the successful party on credibility issues.[39]
[39] McKeon v Knapton [204].
There was nothing exceptional about this case in its subject, conduct or length. It was not factually or legally complex. It is apparent that the magistrate decided the case on credibility issues.[40] He also described it as a 'standard MVA'. I agree with the magistrate's assessment. But for the decision of the parties to litigate the matter as a general procedure claim and not elect to have it dealt with as a minor case[41], the case was one which could have been litigated as a minor case, albeit that may have been impractical given the exercise by the insurers of subrogation rights.
[40] Magistrates Court ts 5.10.18, pages 6 and 12 ‑ 13.
[41] MCCPA s 26.
As there were no other exceptional circumstances, the issue then is, as the magistrate identified, whether only the rejection of a Calderbank offer amounted to exceptional circumstances for the purposes of s 31(3). For the following four reasons it could not have been.
Firstly, r 65 of the MCCPR deals with Calderbank offers made in general procedure claims. Under r 65(2) a claimant who makes an offer of settlement which is not accepted can apply for post‑offer costs pursuant to s 25(1) of the MCCPA if the judgment is not less than the offer. Where the court makes such an order, the post‑offer costs will be assessed on a party/party basis.
Regulation 65 does not apply to minor case procedure claims and there is no equivalent to it in the Magistrates Court (Minor Cases Procedure) Rules 2005 (WA) (the MCMCPR). That is perhaps unsurprising given the presumption in s 30(2) of the MCCPA that a party in a minor case is not entitled to be represented and consequently, where the presumption applies, there could be no claim for party/party legal costs. Where the presumption is displaced though, because for example the court is satisfied it is in the interests of justice for a party to be legally represented[42] or because all of the parties agree[43], the MCMCPR does not contemplate and makes no provision for recovery of post-offer costs. Thus there are no express rules for assessment of costs that might be ordered in minor procedure cases where a Calderbank offer is rejected.
[42] MCCPA s 30(4)(c).
[43] MCCPA s 30(4)(b).
Secondly, in general procedure claims the making of Calderbank offers is a routine aspect of civil litigation which is catered for in the MCCPR and encouraged by the court so that parties arrive at reasonable and efficient settlement of claims which do not then proceed to trial.
The principles governing awards of post‑offer costs where Calderbank offers are rejected are well established. In Mckay v Commissioner of Main Roads (No 7) the court explained:
The breadth of the courts discretion ensures that the court retains the maximum flexibility to meet the justice of the case. The character of what animates the exercise of the exceptional power toward indemnity costs explains why the courts require a finding of unreasonable rejection before indemnity costs are available based on a Calderbank offer. Those considerations do not apply to using a Calderbank offer to order party/party costs. I do not think the breadth of the cost discretion should be or is constrained by a requirement of finding unreasonable rejection as a prerequisite to a party/party costs order based on a Calderbank offer.[44]
[44] McKay v Commissioner of Roads (No 7) [2011] WASC 223 [127].
Rejection of a Calderbank offer in a general procedure claim is a common occurrence. Where the claim is not caught by s 25(5) and s 31 and, subject to the discretion of the presiding magistrate, the offer will usually be given effect and party/party costs ordered under r 65. There is no requirement to establish exceptional circumstances or that the rejection was unreasonable.
It seems to me that there is no material difference in the nature and operation of a Calderbank offer that is caught by s 25(5) and s 31 and one that is not. I do not think the fact of rejection alone can be characterised as exceptional circumstances where a routine general procedure offer rejection would not be.
Thirdly, in the minor case procedure the 'primary object of the court' is settlement of the dispute.[45] Settlement necessarily requires a party to make an offer. Rejection of an offer might be reasonable or unreasonable but it cannot subsequently amount to exceptional circumstances for the purposes of s 31 by reason only of its rejection.
[45] MCCPA s 27(1).
Fourthly, under s 31(2) of the MCCPA only a successful party to a minor case is entitled to costs. The Act does not contemplate an unsuccessful party being awarded costs at all. Calderbank offers are available to both parties in litigation. It would be an unusual and unfair result, and contrary to the primary object of settlement of minor cases, if a successful party could be awarded costs on the basis of rejection of a Calderbank offer when an unsuccessful party who made a Calderbank offer that was rejected, and should not have been, could not.
Accordingly, in my opinion, rejection of a Calderbank offer cannot, without more, amount to 'exceptional circumstances' for the purposes of s 31(3) of the MCCPA.
Exceptional circumstances will usually be found in the conduct of the parties or nature of the case warranting legal representation.[46] For example, the court may have decided that it is in the interests of justice for the parties to be represented under s 30(4) of the MCCPA. Those circumstances alone might be exceptional in a particular matter or they might only become so when coupled with rejection of a Calderbank offer. No doubt there could be many other examples and it would be futile to attempt to list more now. Each case needs to be assessed on its individual merits.
[46] That is, conduct separate to the question of the claim or defence having no merit which is dealt with by MCCPA s 31(1)(b).
Exercise of a right of subrogation, as occurred in this case, is not, in my opinion, of itself an exceptional circumstance for the purposes of s 31 of the MCCPA. It is a routine aspect of insurance litigation. Where insurers avail themselves of legal representation to litigate as a general procedure claim one which is capable of resolution under the minor cases procedure, they should do so knowing that they will usually only recover allowable costs, even if a Calderbank offer is made and rejected by a successful party.
Because the only basis for the claim of exceptional circumstances in this case was the rejection of the Calderbank offer, it follows that Ms Mills was not entitled to a costs order under s 25(1) of the MCCPA. As there were no exceptional circumstances she is only entitled to an order for allowable costs. Ground 3 of the appeal must be allowed.
Having come to this conclusion it is not necessary for me to remit the matter to the magistrate to receive evidence of the precise circumstances of the making and rejection of the Calderbank offer and determine the costs consequences of it.
I would also add that if rejection of a Calderbank offer alone were capable of being 'exceptional circumstances' for the purposes of s 31 of the MCCPA, it is difficult to see how in a subrogated minor matter it would be possible to satisfy the second limb of s 31, that an injustice would be done to the successful party if costs were not ordered. There was no evidence of this aspect of the claim before the magistrate but as it was not argued on appeal it is not appropriate or necessary to consider it further now.

The adequacy of the magistrate's reasons relating to costs

Ground 4 deals with the adequacy of the magistrate's reasons for decision. In light of my conclusions relating to grounds 1 ‑ 3 it is not necessary to deal with ground 4.

Orders on the appeal

In light of the confusion caused by the three versions of general order, each will be set aside and in their place will be the following orders:
1.Nilesh Dokhe is added as a second defendant in the general procedure claim and as the second claimant in the counterclaim.
2.Judgment is entered in favour of the claimant as against the defendants in the sum of $3,862.54 plus interest at 6% from 1 December 2016 to 5 October 2018 in the sum of $427.95.
3.The counterclaim is dismissed.
4.The defendants pay the claimant's allowable costs pursuant to s 31 of the Magistrates Court (Civil Proceedings) Act 2004 (WA), to be assessed if not agreed.
So there is no uncertainty, order 1 to 3 above are the judgment of the magistrate and the judgment date is 5 October 2018.
I will hear counsel on any other orders that are required.

I certify that the preceding paragraph(s) comprise the reasons for decision of the District Court of Western Australia.
AW
Associate to Judge Quail
6 JUNE 2019