Folan v Phobos Nominees Pty Ltd
[2024] WADC 22
•19 APRIL 2024
JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CIVIL
LOCATION: PERTH
CITATION: FOLAN -v- PHOBOS NOMINEES PTY LTD [2024] WADC 22
CORAM: CURWOOD DCJ
HEARD: 26 MARCH 2024
DELIVERED : 19 APRIL 2024
FILE NO/S: APP 41 of 2023
BETWEEN: BRIAN MARTIN FOLAN
Appellant
AND
PHOBOS NOMINEES PTY LTD
Respondent
ON APPEAL FROM:
Jurisdiction : MAGISTRATES COURT OF WESTERN AUSTRALIA
Coram: MAGISTRATE M CRAWFORD
File Number : PER/CIV/MINOR/2449/2023
Catchwords:
Appeal - Magistrates Court - Minor case procedure - Judgment entered by consent - Appeal against consent judgment - Whether appellant was denied natural justice - Turns on own facts
Legislation:
Magistrates Court (Civil Proceedings) Act 2004 (WA)
Result:
Appeal dismissed
Representation:
Counsel:
| Appellant | : | In person |
| Respondent | : | Mr L J Bone |
Solicitors:
| Appellant | : | Not applicable |
| Respondent | : | HWL Ebsworth Lawyers (Perth) |
Case(s) referred to in decision(s):
Chamberlain v Deputy Commissioner of Taxation (1988) 164 CLR 502
Duluxgroup (Australia) Pty Ltd v Chapple [2023] WASCA 83
Harvey v Phillips (1956) 95 CLR 235
Hollis v Pitt [2022] WADC 38
Jones v Darkan Hotel [2014] WASCA 133
Newcrest Mining Ltd v Thornton (2012) 248 CLR 555
Rankilor v Circuit Travel Pty Ltd [2013] WASCA 148
Rowe v Stoltze [2013] WASCA 92; (2013) 45 WAR 116
Siebe Gorman & Co Ltd v Pneupac Ltd [1982] 1 WLR 185
Spencer v Nominal Defendant [2007] QCA 254; [2008] 2 Qd R 64
Steicke v Pederick [2019] SASCFC 148; (2019) 134 SASR 114
Tallerman & Co Pty Ltd v Nathan's Merchandise (Victoria) Pty Ltd (1957) 98 CLR 93
CURWOOD DCJ:
This is an appeal against a consent judgment for $8,000 which was entered on 11 August 2023 in favour of the appellant, Mr Folan, against the respondent, Phobos Nominees Pty trading as Westside Autos (Westside) in a minor case claim in the Magistrates Court at Perth.
The magistrate facilitated settlement discussions which subsequently led to the magistrate making and extracting a consent judgment. Those settlement discussions took place before the commencement of the trial of Mr Folan's claim against Westside. Mr Folan's underlying dispute centred on whether Westside had breached warranty obligations with respect to a second-hand BMW vehicle which he had purchased from Westside.
Mr Folan's sole ground of appeal is that during the hearing in which the consent order was negotiated and entered he was denied natural justice or procedural fairness by the magistrate.
In order to deal with the appeal, I have had access to a copy of the Magistrates Court file which was provided to this court by the Magistrates Court pursuant to r 52(3) of the District Court Rules 2005 (WA) (DCR) (Matter Book). The Matter Book contains copies of all court documents relating to Mr Folan's claim and transcripts of the hearing on 11 August 2023 and earlier directions hearings in the case. Prior to the hearing of the appeal each of the parties were provided with a copy of the Matter Book.
The issues which arise on the hearing of the appeal may be summarised as follows:
1.Was Mr Folan afforded natural justice and procedural fairness by the magistrate during the hearing on 11 August 2023?
2.Given the settlement discussions which resulted in the purported agreement between the parties were without prejudice, can the court consider the without prejudice discussions, or are those discussions privileged?
3.Closely aligned to issue 1 is whether Mr Folan voluntarily entered into an agreement with Westside to settle his claim against them for the sum of $8,000?
For the reasons that follow, Mr Folan's appeal should be dismissed. In summary, the magistrate acted entirely appropriately in conducting the hearing on 11 August 2023. The primary object of the Magistrates Court when dealing with a minor case is to attempt to bring the parties to a settlement acceptable to all the parties. A fair reading of the transcript of the hearing on 11 August 2023 does not permit any inference to be drawn that there was any pressure or influence exerted on Mr Folan by the magistrate (or any other person) which caused Mr Folan to enter into the agreement with Westside to settle the proceedings on the terms that he did. Mr Folan acted on his own accord. The hearing was entirely fair to both parties. Further, an exception to the without prejudice privilege exists where a court is required to determine whether a binding agreement was formed, hence, there is no difficulty in considering the discussions between the parties during the hearing on 11 August 2023 to determine that a binding agreement was made.
During the course of the appeal in this court, Mr Folan objected to Westside's participation in the appeal because it filed a Form 8, notice of respondent's intention, significantly out of the time prescribed by the DCR. I briefly touch upon these issues in the final part of my reasons.
Background facts
In summary, the documents filed in the Magistrates Court proceedings disclose that:
1.In May 2022 Mr Folan purchased a 2006 model BMW 320 from Westside.[1]
2.Mr Folan contended that Westside breached warranty obligations under the contract of purchase.
3.Westside arranged for repairs to the vehicle. The repairs were not carried out to the satisfaction of Mr Folan.[2]
4.On 26 February 2023, Mr Folan commenced proceedings in the Perth registry of the Magistrates Court by lodging a Form 4 'Minor Case Claim'.[3]
5.The amount claimed by Mr Folan was $9,900 plus court filing fees, service and travelling fees. A total of $10,189.50 was claimed.[4]
6.On 28 February 2023, Mr Folan served the claim on Westside.[5]
7.On 20 March 2023, Westside filed a response to claim. Accompanying that document was 'notice of intention to defend minor case'.[6]
8.On 24 April 2023 the magistrate made programming orders.[7] Those orders required the parties to file and serve a statement of intended evidence from any proposed witness. The orders also granted the parties leave to adduce expert evidence at the trial.[8]
[1] Matter Book, page 298.
[2] Matter Book, page 580.
[3] Matter Book, pages 576 - 585.
[4] Matter Book, page 578.
[5] Matter Book, page 575.
[6] Matter Book, pages 570 - 572.
[7] Matter Book, pages 564 - 565. Based upon the Matter Book Magistrate Crawford had the carriage of the case and conducted all hearings in the matter.
[8] Although not typical in minor case claims, the magistrate had power to make orders with respect to expert evidence by virtue of r 6A of the Magistrates Court (Minor Cases Procedure) Rules 2005 (WA) (which enables a magistrate to exercise the court's powers in pt 3 of the Magistrates Court (Civil Proceedings) Act 2004 (WA) (Act)).
Subsequently, Mr Folan filed a statement of intended evidence for himself and for Mr Leif Coplin, a mechanic who Mr Folan proposed to call as an expert witness at the trial of his claim.[9]
[9] Matter Book, pages 461 - 462.
Westside failed to file statements of the intended evidence of its witnesses by the date set out in the order of 24 April 2023.
On 24 April 2023 the magistrate discussed a settlement of the claim with the parties, specifically:[10]
HIS HONOUR: Let's try and see if we can settle, then. What would you be prepared to take to settle this matter, Mr Folan?
FOLAN, MR: The thing about is I've already left this way short by settling it at 10,000. The - I - you know, I - I could add to this big time.
HIS HONOUR: Sure.
…
HIS HONOUR: What I'm going to do, gents, is I'm going to leave the room for a second. I'm going to give you five, 10 minutes to have a chat and settle this matter, and then I'm going to come back into the room in five, 10 minutes, and if you haven't settled it, I will decide what orders I'm going to make. He has asked for some more time.
[10] Matter Book, page 599.
At a hearing on 10 July 2023 the magistrate granted an extension of time until 17 July 2023 for Westside to file and serve statements of the intended evidence of its witnesses. The magistrate also fixed a trial date for the case on 11 August 2023.
At the hearing on 10 July 2023 the magistrate, again, further canvassed the prospect of settlement, albeit there was no interest from the representative of Westside in making an offer, specifically:[11]
HIS HONOUR: Is there any offer you want, Mr - before you sit down, Mr Keswick, which you've done, you've heard what he says. You've got an opportunity to finish this saga off today. It doesn't mean you have to pay him anything or what he's claiming or anything like that, but if you can make an offer on a without prejudice basis - in other words, on a without admission, even though we dispute liability, will offer X dollars to just sort this thing out, in which case this can all come to an end by the sound of things. Do you want to make an offer today to resolve everything or not?
KESWICK, MR: I'm sorry, your Honour. We're not prepared to make an offer.
[11] Matter Book, page 619.
On 17 July 2023 Westside filed a statement of intended evidence of its proposed witness, Hazel Commerell.[12]
[12] Matter Book, page 28.
Based upon the documents that the parties had filed prior to the hearing on 11 August 2023, the issues to be determined at trial appeared to be:
1.whether Westside had performed repairs to Mr Folan's BMW vehicle to a standard whereby the vehicle was fit for purpose and free from defects;
2.to the extent that the vehicle was not fit for purpose and free from defects, what the cost of reasonable repairs would be so the vehicle could be made fit for purpose and free from defects; and
3.whether Westside was obliged to pay any consequential loss to Mr Folan for any breach of the agreement for the sale and purchase of the BMW, including for Mr Folan's missing property which was allegedly taken from a hire car he was using while his BMW was being repaired.
The trial hearing on 11 August 2023
On 11 August 2023 the case was listed for hearing before the magistrate. Mr Folan represented himself and Mr Keswick, an officer of Westside, represented that company. After taking appearances, the following exchange occurred:[13]
HIS HONOUR: … Just because I'm a sucker for punishment, I'm going to try one last time to bring you folks to a settlement before we start the trial. If we do start the trial it will take a while, and I'm going to have to run you through the procedure, and best - I will try and make it as easy as possible for you folks, but it won't be a fun experience, I expect.
You can both remain seated at this point in time, because anything you choose to offer by way of a settlement will be treated as without prejudice - in other words, confidential and not to be used in evidence against you. But once we start the trial, you will have to stand when you're talking to me.
[13] Matter Book, page 630.
His Honour then asked Mr Folan:[14]
[14] Matter Book, pages 630 - 633.
HIS HONOUR: … Is there any settlement you would be interested in, bearing in mind you might lose the trial, because you bear the burden of proof. … maybe you will win, maybe you won't. I appreciate there's an element of principle in your claim. What sort of settlement would you be prepared to take to avoid having the trial and the risks that go with that?
FOLAN, MR: I can't afford to take anything less than full, your Honour, and it is not just on principle, it will be on proof.[15] I'm not concerned about the outcome, as in I can't see how it could be reversed on me. I have an abundance of evidence and proof. Everything I have, I need - everything I need, I have.
[15] It was made for $9,900.
HIS HONOUR: All right. So you are super confident, as many people are - maybe rightly or wrongly, we will find out at the end of the trial. So if you win, your best case scenario will be that you get the amount of the claim, 9900, plus your filing fees. Is that what you're going to be asking for if you win?
FOLAN, MR: It is, your Honour, and if I don't, I will be appealing, if possible, or taking it to another case - legal.
HIS HONOUR: All right. Well, understand this. You don't get to take another case, generally.
FOLAN, MR: Okay.
HIS HONOUR: You've got this case. You don't get to have two bites of the cherry, as it were. It would be an abuse of process if you brought the same claim or a similar claim again that should have been dealt with in this matter. Secondly, in relation to an appeal, you're welcome to appeal if you're unhappy with my decision, whatever that decision may be, but know that the ability to appeal for a minor case matter is very limited. That is because the court's interest is in bringing these matters to a resolution.
… they are small matters which need to be dealt with efficiently, economically and expeditiously, pursuant to section 30 in the Magistrates Court (Civil Proceedings) Act, and the legislature has designed it in such a way that, largely, the decision is final, with very narrow grounds of appeal or review. Mr Keswick, you've heard Mr Folan. What he says to me doesn't come as any surprise. Maybe it's for good reason, maybe it's not. We will find out at the end of the trial. You, I think, weren't prepared to offer anything. Do you want to make an offer to resolve this matter today on a without prejudice basis, … or not?
KESWICK, MR: Your Honour, I can. If Mr Folan is requesting nine thousand nine hundred and something, I'm willing to … [settle] this and walk away now at half, 50 per cent.
…
HIS HONOUR: 9900 divided by two, yes?
KESWICK, MR: Yes.
HIS HONOUR: So 4950. Would you round it up to five?
KESWICK, MR: Yes, your Honour.
HIS HONOUR: Right. Now, Mr Folan, yesterday, I had a trial. I won't give you the names of the parties or tell you what it was about. We had negotiations. And there was an offer made by one party to accept $3000. The other party was offering less than that. Ultimately, the result was a little bit more than $3000. So they got a better result. But they spent a lot of time at the trial. I've had other matters where people make offers. And they get nothing. You will have established your principle if you accept this. And I will make an order for payment. So there will be a judgment. And that will be the end of it. Have a think. That's the proposal.
FOLAN, MR: Your Honour, I appreciate everything you're saying. But I have a year's worth of me trying to avoid coming to this situation, as in, the - wasting the court's time like this is everything I have tried to avoid. And I have proof of that, as in, everything I have done has been (indistinct) tried to litigate, discuss, … and I have been completely ignored …
HIS HONOUR: What money have you actually spent? Because I've seen estimates on the file - I've seen estimates from German MotorWerks - - -
…
HIS HONOUR: - - - one for 7860, one for 3829. The only things that I think you've actually spent - well, as I have any evidence of is 452.43 for the service and diagnostic scan and 198 for the [labour]. What money have you actually paid out to fix this vehicle?
FOLAN, MR: … I have paid out money for, like, minimal - but can't afford to pay - - -
HIS HONOUR: No, no. Just stop for a second.
…
HIS HONOUR: So the answer to my question is - how much have you actually spent?
FOLAN, MR: Probably about a thousand dollars, the reason being, the parts - - -
HIS HONOUR: Well, that's about right. It's less.
FOLAN, MR: Yes.
…
FOLAN, MR: Yes.
HIS HONOUR: Why, then, should you get all those other amounts if you haven't even incurred them yet?
FOLAN, MR: Because I will have to incur them, your Honour …
…
HIS HONOUR: And the only reason you haven't done those things yet is because you don't have the money to do it?
FOLAN, MR: Yes.
After further discussions between the magistrate and Mr Folan, the magistrate continued:[16]
HIS HONOUR: … at the end of a trial, you will not have a choice. It will be my choice. You might like my choice. You might applaud me. You might be happy. You might hate me. … But it won't be your choice at the end of the trial. It is your choice right now. And if you want to get something out of this, it might be worth considering the offer. Can I just check with the orderly - the person who has come to the back order the court - is that a witness …?
…
ORDERLY:No, sir. That is Mr Folan's wife. She is not … a witness.
[16] Matter Book, page 634.
His Honour after clarifying that Mr Folan's wife would not give evidence, the hearing continued:[17]
[17] Matter Book, pages 634 - 636.
HIS HONOUR: Would you like her to assist you in making a decision on the offer that has been presented or not?
FOLAN, MR: No. She fully backs me, your Honour.
HIS HONOUR: I don't doubt that she fully backs you. And I applaud her for doing that. But just so that she knows, there is an offer on the table to pay $5000. If that's agreed, there will be an order right now. And there won't be a trial. If that offer is rejected and you lose the trial, you will get nothing. You do have a choice. Would you be prepared to take $7000, if he were to increase the offer to $7000, Mr Folan?
FOLAN, MR: Your Honour, if I may, it appears to me that I am being pushed towards taking a decision or taking an option that is against everything that I have substantiated in - - -
HIS HONOUR: All right. If you don't want to take it, that's fine. I'm not going to convince you otherwise. I am just saying, don't have the buyer's remorse at the end of the trial if you lose. If you don't want to take the offer, that's completely - - -
FOLAN, MR: No.
HIS HONOUR: - - - fine. It's my job to try and bring you to a resolution. So I make no apologies for being blunt about this.
…
HIS HONOUR: You might get a better result, you might get a worse result, you might get the same result. We will find out. You're not interested in the proposal and you don't even want to make a counter‑proposal, please tell me.
FOLAN, MR: I would say $9000. That's it, sir.
HIS HONOUR: All right. Mr Keswick, you've heard what he has said. What do you want to do?
…
KESWICK, MR: Your Honour, I'm prepared to go as far as 7131.35.
HIS HONOUR: How do [you] come to that figure?
KESWICK, MR: Because I worked out the difference between what … we spent and what the quotes come in for the repairs … The remaining amount is $7131.35, is what I see as being the difference between the payout and the quote. …
The magistrate then asked Mr Folan what he wanted to do with respect to that position. He said:[18]
FOLAN, MR: Your Honour, I would suggest that we bring in the expert witness, let him make his testimony and then have Mr Keswick reassess his. Because I have evidence that it is - honestly, it will make you look like - the whole thing from a different angle, basically. Because this should not even have arrived at this situation today. They have broken laws. They have broken regulations.
They cannot be … allowed to do that and get away with it. …
[18] Matter Book, page 636.
The magistrate then responded:[19]
[19] Matter Book, pages 636 - 638.
HIS HONOUR: - - - if we end the negotiations you will be allowed to put forward your case.
FOLAN, MR: Well - - -
HIS HONOUR: But you might not win. And like I said, I'm not trying to force you to take a settlement. You can do absolutely whatever you like. If you … were a fly on the wall in any of my matters, you would find that these are the conversations I almost always have in minor case matters with people.
FOLAN, MR: Understood.
HIS HONOUR: And you said you didn't want to waste the court's time, yet we have spent a huge amount of time on this matter and we will spend a huge amount more. We've got an orderly, a judicial support officer and a magistrate all at your beck and call for the princely sum of the filing fee of $166.50. You're welcome to use our time to run this case and you might win. And if you win, I congratulate you; well done. If you lose, well, you might look back at this and go, 'Oh drat. I should have taken a deal'. Would you go to some other figure? Would you go to eight as a final last-ditch position, Mr Folan, or not?
FOLAN, MR: Your Honour, eight and a half and that is absolutely - they're getting - - -
HIS HONOUR: All right.
FOLAN, MR: - - - away with murder; murder.
HIS HONOUR: Well, I don't think they are at eight and a half, but sure, that's your perspective. If you want to say that. $8500. Mr Keswick, I'm not going to take it any further. If you say no to that it sounds like we're going to have a trial and I will get straight into it.
KESWICK, MR: Your Honour, I'm prepared to round it up to seven five, 7500.
HIS HONOUR: 7500.
KESWICK, MR: That's it.
HIS HONOUR: Mr Folan?
FOLAN, MR: No, your Honour.
HIS HONOUR: Would you split the different at eight, or not?
FOLAN, MR: Yes, your Honour.
HIS HONOUR: Thank you. Mr Keswick, will you split the difference at eight?
KESWICK, MR: Yes, your Honour.
HIS HONOUR: Well done. Just bear with me. I'm going to record the outcome as case settled. The first order will be - well, the heading will be By Consent. The next order will be judgment is entered in favour of the plaintiff, Mr Folan, against the defendant in the sum of $8000. What that means, folks, is you are required - your company, Mr Keswick, is required to pay this amount.
KESWICK, MR: Yes, your Honour.
HIS HONOUR: If Mr Folan does not - yes. If you don't pay that amount, Mr Folan, you have a right to engage the bailiff to pay Mr Keswick's business a visit and collect this money from him - or, from his business, I should say. And if he doesn't or if the company doesn't pay you, the bailiff has the power to seize assets. Mr Folan, may I enter that judgment now?
FOLAN, MR: Yes, your Honour. Yes, your Honour.
HIS HONOUR: Thank you. Mr Keswick, may I enter this judgment now?
KESWICK, MR: Yes, your Honour.
HIS HONOUR: All right. Thank you. You're free to go. What I'm going to ask you to do is follow the directions of the orderly. I don't want either of you exchanging choice words in the corridor. …
It is self-evident that the judgment entered after the discussions on 11 August 2023 was by consent of the parties. It was not a judgment entered by the court after a determination of Mr Folan's claim or the hearing of any evidence. The judgment reflected what can only be described as a contractual arrangement between Mr Folan and Westside.
As I refer in further detail below, the directions of the magistrate, in all the circumstances, were clear that he was not commencing the trial and that nothing that was being said by Mr Folan or Mr Keswick would be treated as evidence in the trial if a settlement was not reached.
Mr Folan's appeal to the District Court
On 1 September 2023, Mr Folan filed an appeal notice. The appeal notice, as filed, contained 14 grounds of appeal.
On 21 November 2023 a registrar of this court made an order that the appeal proceed to hearing before a judge solely on appeal ground 1. That ground was framed by Mr Folan as:
… DENIAL OF NATURAL JUSTICE - PROCEDURAL FAIRNESS I FEEL WAS NOT APPLIED EITHER (ALRC REPORT 1290)
The statutory framework
Mr Folan elected to have his claim against Westside heard as a minor claim in the Magistrates Court. This election had various implications including for the magistrate's duty to attempt to bring the parties to a settlement.
A minor case is a claim within the Magistrates Court's jurisdiction where the value of the claim is not more than $10,000 and the claimant has elected to have the claim dealt with under the Magistrates Court (Minor Cases Procedure) Rules 2005 (WA).[20]
[20] The Act s 26 .
The Magistrates Court must deal with a minor case in accordance with the minor cases procedure unless an order is made to the contrary under s 28 of the Act.[21]
[21] See generally Duluxgroup (Australia) Pty Ltd v Chapple [2023] WASCA 83 [23] - [24] (judgment of the court).
Section 27 of the Act provides:
27.Object of minor cases procedure
(1)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.
(2)The Court may, at any stage of the proceedings, do all things and take all such steps as it considers to be appropriate to achieve that primary object.
(3)Anything said or done by a party for the purpose of attempting to settle a minor case is to be taken to be said or done without prejudice to any evidence or submission that the party -
(a)has adduced or made; or
(b)may subsequently adduce or make,
in or in respect of the proceedings, and the saying or doing of that thing does not disqualify the person or persons constituting the Court from sitting or continuing to deal with the case.
(4)If the Court is unable to bring the parties to a settlement acceptable to all the parties, the Court must deal with the minor case.
Section 32 of the Act regulates appeals against a judgment in a minor case. The section relevantly provides:
(3)Despite Part 7 an appeal against a judgment in a minor case may only be made on the grounds -
(a)that the minor case -
(i)was not within the jurisdiction of the Court; or
(ii)was not a minor case;
or
(b)that in dealing with the minor case there was a denial of natural justice; or
(c)that the judgment was beyond the Court's jurisdiction.
There is no suggestion that Mr Folan's claim against Westside was not a minor case, not within the jurisdiction of the Magistrates Court or that the judgment was beyond the court's jurisdiction.
Principles of natural justice and procedural fairness in the context of minor case claims in the Magistrates Court
In Hollis v Pitt,[22] Lonsdale DCJ discussed the principles of natural justice and procedural fairness in the context of minor cases in the Magistrates Court which I respectfully adopt. In summary: [23]
[22] Hollis v Pitt [2022] WADC 38.
[23] See Hollis v Pitt [61] - [64] and the discussion of Rankilor v Circuit Travel Pty Ltd [2013] WASCA 148 [54] - [55], [57] - [59] Rowe v Stoltze [2013] WASCA 92; (2013) 45 WAR 116 [51]; Jones v Darkan Hotel [2014] WASCA 133 [31].
1.The onus is on an appellant to establish he or she was denied natural justice.
2.The principles of natural justice as they apply to minor cases in the Magistrates Court are informed by the fact that the procedure is:
(i)intended to provide a speedy, informal and inexpensive process for the resolution of claims not exceeding $10,000 in which the primary object of the court is to attempt to bring the parties to a settlement acceptable to all the parties;
(ii)that the court is to act with as little formality as it thinks reasonable and is not bound by the rules of evidence but may inform itself as it thinks fit;
(iii)that proceedings are to be held in private and the parties are not entitled to legal representation; and
(iv)that an unsuccessful party has no right of appeal on the merits.
3.The rules of procedural fairness are not fixed or immutable. Procedural fairness is directed to avoid practical injustice and what is necessary to avoid practical injustice will depend upon the particular circumstances.
4.In a curial setting there is no absolute right to have an action heard and determined on its merits. What the rules of procedural fairness require is that each party be provided with a reasonable opportunity to be heard. The question of what is a reasonable opportunity is to be judged, not solely by reference to the interests of the parties, but also having regard to the wider interest of other litigants waiting to have cases heard and the public interest in the proper and efficient use of the scarce public resources of the court.
5.A decision‑maker must be a person who is disinterested and unbiased.
Without prejudice privilege
The settlement discussions at the hearing on 11 August 2023 were clearly discussions subject to without prejudice privilege, by virtue of the terms of s 27 of the Act. However, those communications became capable of being relied upon by either party, and reviewable by the court, after an apparent concluded agreement. Specifically, an exception to the without prejudice privilege arises where without prejudice communications, to which the without prejudice privilege would otherwise apply, result in a concluded agreement between the negotiating parties to settle their dispute.[24]
[24] See for example Tallerman & Co Pty Ltd v Nathan's Merchandise (Victoria) Pty Ltd (1957) 98 CLR 93, 110 (Dixon CJ & Fullagar J).
Nature of a consent judgment
A consent order or consent judgment has the same status as an order made on the merits.[25]
[25] See, for example, Chamberlain v Deputy Commissioner of Taxation (1988) 164 CLR 502; Newcrest Mining Ltd v Thornton (2012) 248 CLR 555 [48] (French CJ).
A distinction has been drawn in case law between a consent order that is founded on a contract between the parties and a consent order based on the parties' willingness to submit to a court order.
In circumstances where a consent order evidences an underlying contract between the parties, the order may only be set aside (or altered or varied) by the court in the same circumstances as the court would interfere with any other contract.[26] Such a step depends on 'the existence of a ground which would suffice to render a simple contract void or voidable or to entitle the party to equitable relief against it'.[27]
[26] See for example Spencer v Nominal Defendant [2007] QCA 254; [2008] 2 Qd R 64 [13] (Keane JA with whom de Jersey CJ & Mullins J agreed); see also the discussion of consent orders expressed to be made by consent and those which evidence a real contract in Siebe Gorman & Co Ltd v Pneupac Ltd [1982] 1 WLR 185 [189] (Lord Denning MR) (Siebe).
[27] Harvey v Phillips (1956) 95 CLR 235, 243 - 244.
By contrast, where an order has been made in circumstances where the parties have not objected to the order, the court may alter or vary the order, in the same circumstances as any other order that is made by the court without the consent of the parties.[28]
[28] Siebe [189].
In Steicke v Pederick[29] the Full Court of the Supreme Court of South Australia held that consent orders received from the parties were the product of an underlying agreement between them. Consequently, for a party seeking an extension of time beyond the time period stipulated in the consent orders, that party had to 'identify a ground to set aside the contract'.[30] In dismissing an application for an extension of time the court held that:[31]
… none of the usual grounds for setting aside a simple contract were available and that the applicant had not put forward any additional matters where the interest of justice would require the setting aside of a consent order of a contractual type.
[29] Steicke v Pederick [2019] SASCFC 148; (2019) 134 SASR 114 (Steicke).
[30] Steicke [47] (Kelly J with Nicholson & Lovell JJ agreeing).
[31] Steicke [56].
The consent order in this case was the product of an underlying agreement between Mr Folan and Westside. Mr Folan bears the onus of establishing a denial of natural justice or procedural fairness which caused him to enter into the agreement. Arguably, if he is able to establish a denial of natural justice, that may form the basis of a ground upon which to set aside the consent order, notwithstanding that the order, at face value, appears to be the product of a contract between Mr Folan and Westside. For the reasons that follow, there was no denial of natural justice or procedural fairness to Mr Folan.
Procedural history of this appeal
Mr Folan at the hearing of the appeal in this court did not seek to adduce any evidence of influence or duress being exerted upon him. The only basis to determine his ground of appeal was upon a consideration of the transcript of the proceedings on 11 August 2023 and the Magistrates Court record of documents filed.
When the appeal was first listed for hearing on 23 January 2024 Mr Folan made the following comments:[32]
It felt very much like I was steered by the judge.
…
I, with due respect, your Honour, I was … bullied into a decision.
The judge even weighed on my wife sitting at the back of the court, putting emotional pressure on me to take a $5,000 agreement which was strange.
…
Yeah, my whole motivation, shall we say, is that I was not allowed to speak essentially. I was not allowed to present my case.
[32] ts 5 - ts 12.
At the hearing on 23 January 2024 I made orders that by 29 February 2024 Mr Folan could file any application to rely on any evidence in the appeal that was not before the Magistrates Court.
On 20 February 2024 Mr Folan filed an affidavit. The affidavit stated, in the section of the document entitled 'purpose of the affidavit':
How I intend to show I was not afforded natural justice … I be using the information PROCEDURAL FAIRNESS IN TRIBUNALS AND COMMISSION OF INQUIRY to points to show the legitimacy of my rights not being afforded to me on the day of the trial or in the process of my case as a whole. The transcript of the trial will be used to show the nature of the case with the magistrate having a pre ordained idea of what he wanted to happen that day. My belief as outlined from the very first document to bring the case right through to the trial date was that my case in quantity and quality exceeded the $10,000 limit and so was not willing to accept anything less. Unless of course the defendant was somehow able to discredit my case with evidence of their own.
The balance of probabilities being the legal standard of proof that courts use in determining the liability of a defendant within civil trials though again cemented my case as far as superior and almost incomparable to that of the defendant. But yet it was me and my case - who was put under relentless scrutiny and pressure by the magistrate on the day. The defendant whose barren case was not once even asked a question. Nor was I allowed to put any to him. The lies were left out of sight and the truth was attempted to be dismantled or devalued in so many different ways.
I will include a more detailed assessment of how the presiding magistrate appears to manipulate his authority and position to overwhelm me away from having evidence presented for trial and into a settlement agreement I clearly had no wish to accept or even to be involved.
It appeared from this document that Mr Folan only intended to rely upon the transcript of the hearing and general submissions at the appeal hearing.
The appeal hearing on 26 March 2024 - Mr Folan's submissions
Mr Folan, at the hearing of the appeal, made clear that he was only relying upon the documentary record before the Magistrates Court including the transcript of proceedings on 11 August 2023.[33] His submissions at the appeal were, in effect:
1.After the entry into the contract to purchase the BMW vehicle, but before the commencement of the proceedings, Westside engaged in conduct which Mr Folan regarded as unlawful.[34]
2.The arrangement/agreement to settle his claim for $8,000 was caused by the magistrate using his influence over Mr Folan.[35]
[33] ts 60.
[34] ts 33.
[35] See ts 46, ts 49, ts 58 - ts 59; Matter Book, pages 637 - 638.
To understand Mr Folan's submissions about influence, I went through with Mr Folan at the appeal hearing an exchange between the magistrate, Mr Keswick and Mr Folan reflected in the transcript of the hearing on 11 August 2023 at pages 10 ‑ 11[36] whereby:
1.Mr Folan had said he would accept $8,500;
2.Mr Keswick said he was 'prepared to round it up to 7,500';
3.the magistrate asked Mr Folan whether he would 'split the difference at eight or not'; and
4.to which statement Mr Folan said 'Yes, your Honour'.
[36] Matter Book, pages 637 - 638.
I asked Mr Folan whether a fair reading of those pages of the transcript reflected a negotiation between the parties as to how the sum of $8,000 had been arrived at and that judgment was then entered for the sum of $8,000.[37] In response, Mr Folan's position was that it was not a negotiation and that the magistrate was using influence over him and Mr Folan had declared repeatedly throughout and before the trial (which I interpreted to be on the occasions before 11 August 2023) that he 'had no interest in making a settlement'.[38]
[37] ts 44 - ts 45.
[38] ts 45 - ts 46, ts 49 - ts 50, ts 58.
Mr Folan said further that he 'was not allowed to speak that day [11 August 2023] openly'.[39]
[39] ts 63.
Counsel for Westside made brief submissions at the hearing of the appeal to the effect that:
1.Westside rejected any suggestion of any impropriety or illegal activity.
2.The magistrate acted appropriately at the hearing on 11 August and a commercial settlement was reached.
Issue 1: Was Mr Folan afforded natural justice and procedural fairness at the hearing on 11 August 2023?
In my opinion, a fair reading of the transcript leads to an irresistible conclusion that at the hearing on 11 August 2023, the magistrate acted properly and, in fact, as the Act required him to conduct the proceedings. The magistrate sought to have the parties address their minds to a settlement of the dispute between them.
The approach of the magistrate was appropriate notwithstanding that a trial was listed to commence. The primary object of the Magistrates Court, when dealing with a minor case, is to attempt to bring the parties to a settlement acceptable to all of them. Further, the Act provides that at any stage the court may take all such steps as it considers to be appropriate to achieve that primary object and it is only when the court is unable to bring the parties to a settlement acceptable to all of them, the court must deal with the minor case by commencing the trial.
Having read the transcript of the hearing in the Magistrates Court on 11 August 2023, (and of the earlier hearings), the magistrate acted entirely appropriately and within the purpose and objects of the legislation under which the hearing was being conducted.
On the face of the transcript, the magistrate made clear to the parties that it was open to both of them for the magistrate to proceed to the hearing of the case but that settlement should be explored.
The directions of the magistrate, in all the circumstances, were clear that he was not commencing the trial and that nothing that was being said by Mr Folan or Mr Keswick would be treated as evidence in the trial if a settlement was not reached.
Further, when Mr Folan said that he wished to call his expert witness the magistrate expressly told him that if the negotiations ended, he would be allowed to put forward his case.[40] In my opinion, the objective words of the magistrate were clear that the course being followed was a negotiation rather than a hearing to reach any determination on the merits of Mr Folan's claim.
[40] Matter Book, pages 636 - 637.
The notion that Mr Folan was denied natural justice or procedural fairness is, in my opinion, not made out from any objective reading of the transcript. Specifically, Mr Folan was aware that:
(a)the discussions about settlement did not involve an adjudication of his case but were an attempt to facilitate a settlement without the need to resort to trial;
(b)if a settlement which was acceptable to him (and Westside), was not reached, he had a right to proceed to trial and to call evidence;
(c)he may be better or worse off if a trial was heard or determined or he may be in the same position as accepting a settlement offer; and
(d)his negotiations with Westside which ultimately led to a resolution of his claim of an entry of a consent judgment of $8,000 was in the finalisation of his claim against Westside in the proceedings.
Section 27(3) of the Act expressly provides that anything said or done by a party for the purpose of attempting to settle a minor case is to be taken as without prejudice to any evidence or submissions that the party has adduced or made or may subsequently adduce or make in respect to the proceedings. Further, the person constituting the court during any attempt to settle the case is not disqualified from sitting or continuing to deal with the case. With that backdrop in mind, it was appropriate for the magistrate to enquire about settlement prior to commencing the trial and he did so. It was also appropriate for the magistrate to confirm with both parties their consent to the settlement amount before entering the judgment.
Mr Folan's ground of appeal, did not on its face, disclose how he was been denied natural justice. Mr Folan's ground of appeal misapprehends the role that the magistrate was obliged to play under the terms of the Act. Mr Folan was given the option of terminating settlement discussions and proceeding with the trial of his claim. He elected to continue settlement discussions. As I explain below, he voluntarily entered into a settlement with Westside to compromise his claim.
Issue 2: Are there any implications to consider in an assessment of without prejudice discussions?
Notwithstanding the 'without prejudice' privilege attached to the discussions on 11 August 2023, those discussions may be considered for the purposes of determining Mr Folan's appeal (see [33] above).
Taking all matters into account, there is no reason why the without prejudice discussions before the magistrate cannot be taken into account for the purposes of the determination of the appeal. Indeed, to adjudicate the appeal those discussions must be considered. I now turn to a consideration of whether a valid contract to settle the proceedings was made between Mr Folan and Westside.
Issue 3: Did Mr Folan voluntarily enter into an agreement with Westside to settle his claim?
On the face of it, the parties made a binding agreement during the hearing on 11 August 2023. The magistrate has formalised that agreement by the making of the consent order.
The magistrate was, in my view, at pains to obtain the consent of each party prior to making the consent order.[41]
[41] Matter Book, page 638.
There is nothing apparent on the face of the court record or the transcript of the proceedings which could form any basis for setting aside the contract made between Mr Folan and Westside on 11 August 2023 during the Magistrates Court proceedings. Issues such as fraud, mistake or misrepresentation which may be grounds to set aside an agreement do not arise in this case.
Mr Folan raised various allegations concerning the conduct of representatives of Westside in the course of the appeal hearing which were set out in the documents he filed in the Magistrates Court proceedings. Specifically:
(a)a hire car provided to him by Westside, whilst his BMW was being repaired, was unlawfully taken from him by representatives of Westside;
(b)representatives of Westside took his house key;
(c)Westside acted in an improper or even unlawful manner; and
(d)the BMW he purchased had defects, the repairs undertaken were inadequate and the vehicle required further repairs.
These allegations were all known to Mr Folan at the date of the hearing on 11 August 2023. A lack of knowledge of these matters could not have influenced or contributed to his decision to settle his claim on 11 August 2023.
With respect to the alleged repossession of a hire car and allegations about his property being taken, Mr Folan stated that these events occurred in late 2022.[42] As an aside, I am not making any suggestion that Westside engaged in any improper or unlawful conduct. The point of highlighting these matters is that there does not appear to be any conventional basis upon which grounds could be formulated to set aside the agreement reached, such as there having been any misrepresentation made to Mr Folan, or any mistake by Mr Folan in entering into the agreement. All of the matters concerning the conduct of Westside and the state of the BMW vehicle that Mr Folan submitted in the course of the hearing of the appeal were all matters known to him as at 11 August 2023.
[42] ts 34.
In all of the circumstances, I conclude that the agreement reached by Mr Folan and Westside on 11 August 2023 was a compromise which was acceptable, in all of the circumstances that existed on 11 August 2023, to both Mr Folan and Westside. Westside agreed to pay Mr Folan and have judgment entered for a sum of $8,000 representing an amount of approximately 80% of the total value of his claim.
On a fair reading of the transcript, Mr Folan gave consideration to the offers made by Mr Keswick on behalf of Westside and ultimately the arrangement that was made could not be said to be anything other than consensual.
For all of these reasons, my opinion is that Mr Folan's appeal must be dismissed.
Westside's delay in filing a Form 8 notice of respondent's intention in this appeal
Finally, I will deal with the issue of Westside's delay in filing a Form 8 notice of respondent's intention in this appeal. I am dealing with this matter in my reasons because it occupied a significant amount of time at the hearing of the appeal.
On 23 January 2024, which was the initial hearing date listed for this appeal, Westside sought leave to appear and participate in the appeal by seeking an order that it could file its notice of intention out of time. In support of its application, it relied upon an affidavit of its solicitor which sought to explain the delay in filing a Form 8 notice. I granted that leave to Westside on 23 January 2024 and made the following orders:
1.The hearing be listed for a directions hearing on 7 March 2024 at 11.00 am.
2.Leave be granted to allow the respondent to file a notice of intention dated 29 December 2023.
3.By 29 February 2024, any application to rely on any evidence in the appeal that was not before his Honour Magistrate Crawford be filed and served.
4.No order as to costs.
I granted Westside leave to file its notice of intention to be heard out of time because, amongst other matters, I understood Mr Folan's position on 23 January 2024 to be that he wished to put on affidavit evidence as to the conduct of the hearing on 11 August 2023 by the magistrate to support his contentions that:
(a)he felt like 'he was steered by' [the magistrate];
(b)'[he] was … bullied into a decision …'; and
(c)[the magistrate] 'weighed on [his] wife sitting at the back of the court, putting emotional pressure on [him]'.
Westside is a company and must be represented by a solicitor in any proceedings in this court. I considered that I should exercise my discretion to enable Westside to participate in the appeal, notwithstanding that it had failed to file a notice of intention to be heard in the appeal within the time limit prescribed in the DCR. I reached this view because it was not clear if Mr Folan would file an affidavit of the conduct of the hearing on 11 August 2023. Further, if Mr Folan filed affidavit evidence, Westside should be given an opportunity to be heard with respect to any evidence Mr Folan sought to adduce.
On 7 February 2024 Mr Folan emailed the associate to the principal registrar of the court. In substance, Mr Folan requested an explanation for the acceptance of Westside's notice of respondent's intention. Mr Folan questioned an alleged non‑compliance with laws and sought a clarification of matters 'within his rights'.
On 27 February 2024 Mr Folan emailed the court attaching a Form 9 application in appeal. Mr Folan requested that the directions hearing listed for 7 March 2024 be adjourned. Mr Folan stated in the Form 9:
The applicant applies for - the March 7th date of next hearing be postponed until I have received explanations From the courts on several matters I have raised on Numerous occasions and been promised written correspondence that I have yet to receive. My ability to present my case properly and make appropriate decisions have been seriously impacted by the courts unexplained decisions.
On 1 March 2024 the court notified Mr Folan that the directions hearing on 7 March 2024 would proceed.
On 6 March 2024 at 4.38 pm, Mr Folan emailed the court registry to advise the court that he would not attend the hearing listed for 7 March 2024. Mr Folan did subsequently appear at the directions hearing on 7 March 2024 and his appeal was listed on 26 March 2024 for a final hearing.
I ordered on 7 March 2024 that the final hearing on 26 March 2024 take place without the need for either of the parties to file any further written material including submissions in an attempt to minimise or confine costs. I also arranged on 7 March 2024 for both parties to be provided with a copy of the Matter Book.
In the course of this appeal, Westside have not filed any written submissions or affidavit material and made only brief oral submissions at the final hearing of the matter which I have summarised at [49] above.
Given the uncertainty at the hearing on 24 January 2024 as to what Mr Folan meant by the various statements he made about being bullied or steered in a certain direction by the magistrate, I found it appropriate that Westside should be given leave to participate in the appeal. As I have noted, Westside's participation within the appeal has been limited to making brief oral submissions at the hearing of the appeal.
Conclusion
The appeal is dismissed. I confirm the consent judgment entered in the Magistrates Court on 11 August 2023 in PER/CIV/MIN 2449/2023 in the sum of $8,000. I will hear from the parties as to the costs of the appeal.
I certify that the preceding paragraph(s) comprise the reasons for decision of the District Court of Western Australia.
LM
Associate to Judge Curwood
19 APRIL 2024
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