Garber t/as the Nerd Shop v Abbott
[2017] WADC 38
•22 MARCH 2017
GARBER t/as THE NERD SHOP -v- ABBOTT [2017] WADC 38
| DISTRICT COURT OF WESTERN AUSTRALIA | Citation No: | [2017] WADC 38 | |
| Case No: | APP:87/2016 | 20 FEBRUARY 2017 | |
| Coram: | EATON DCJ | 22/03/17 | |
| PERTH | |||
| 12 | Judgment Part: | 1 of 1 | |
| Result: | Appeal allowed | ||
| PDF Version |
| Parties: | JACK GARBER t/as THE NERD SHOP DAVID ABBOTT |
Catchwords: | Practice and procedure Appeal from the Magistrates Court against an order for costs Awarding of costs where the claim falls within the minor cases jurisdictional limit |
Legislation: | Magistrates Court (Civil Proceedings) Act 2004 |
Case References: | Gallo v Dawson [1990] HCA 30; (1990) 93 ALR 479 |
JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
- IN CIVIL
- Appellant
AND
DAVID ABBOTT
Respondent
ON APPEAL FROM:
Jurisdiction : MAGISTRATES COURT OF WESTERN AUSTRALIA
Coram : MAGISTRATE HALL
File No : JOO\GLCM 3145 of 2015
Catchwords:
Practice and procedure - Appeal from the Magistrates Court against an order for costs - Awarding of costs where the claim falls within the minor cases jurisdictional limit
Legislation:
Magistrates Court (Civil Proceedings) Act 2004
Result:
Appeal allowed
Representation:
Counsel:
Appellant : Mr C P Stokes
Respondent : Mr J Cianfrini
Solicitors:
Appellant : Chris Stokes & Associates
Respondent : JNC Legal
Case(s) referred to in judgment(s):
Gallo v Dawson [1990] HCA 30; (1990) 93 ALR 479
1 EATON DCJ: By a notice of appeal filed in this court on 8 November 2016 Jack Garber (the appellant) challenged an order made in the Magistrates Court on 21 July 2016. It was a costs order made against him following his failure to appear at a pre-trial conference and the entry of summary judgment against him. By notice dated 12 January 2017 David Abbott (the respondent) indicated an intention to take part in the appeal and argue that the costs order should stand.
The history of the litigation
2 The respondent filed a general procedure claim in the Magistrates Court at Joondalup on 4 December 2015 seeking $1,173 plus various fees. He described his claim as being 'a new claim' for breach of contract arising from the appellant's alleged breach of an agreement between the parties whereby the appellant would repair the respondent's computer for $199.
3 Alternatively, he claimed in conversion by reason of the appellant's refusal to return the computer to him. He alleged that on 6 October 2014 he had collected the computer from the appellant's premises and paid the agreed amount of $199. He found, he alleged, that the computer was still not functioning properly, appearing to have the same 'issues' giving rise to the need for repair. He returned the computer to the appellant, complaining that the repairs paid for had not been effected or effectively effected.
4 The appellant contacted the respondent to advise that further repairs had been carried out at a cost $149. The respondent objected on the basis that the original repair had not been effective and that he had never been told that there might be extra charges. The appellant refused to return the computer to the respondent until his further account was paid.
5 In his general procedure claim the respondent sought the following orders:
(a) that the appellant return the computer to him;
(b) that the appellant refund $199 being the original amount paid by the respondent; and
(c) that the appellant pay him damages of $938 (being the cost of a new computer).
6 In response the appellant gave notice of his intention to defend the general procedure claim and applied for a change of venue from Joondalup to Perth.
7 On about 17 March 2016 the respondent made a formal request for a pre-trial conference and objected to the application for change of venue.
8 On 24 March 2016 the application for change of venue was dismissed.
9 On 30 March 2016 the parties were given notice of a pre-trial conference to be held at Registrar's Chambers at 21 Reid Promenade, Joondalup on 3 May 2016 at 11.30 am. The notice directed both parties that they were 'required to attend'. In the body of the notice is the following:
Unless a registrar of the court orders otherwise a party must attend a pre-trial conference. If you are not ready, or if you are unable to attend the pre-trial conference, you should make a prior application to the court for an adjournment with the written consent of the other party. If you are unable to obtain the other party's consent you may apply to the court by lodging a Form 23 application. Do not leave it until the day of the conference as the registrar may give default judgment against a party who fails to attend a pre-trial conference.
10 On 3 May 2016 the respondent attended with counsel, Mr Cianfrini. The appellant did not attend and was not represented in his absence.
11 The court record of the conference notes that the appellant was called in the court waiting area. In his absence judgment was awarded against him in the sum of $1,368.30. The appellant was ordered to return the respondent's computer to him. There was no order as to costs.
12 On about 3 June 2016 the appellant made application to set aside the default judgment entered on 3 May 2016 and for other orders. On 21 July 2016 the application came before his Honour Magistrate Hall. The appellant appeared in person. The respondent appeared, again with counsel. The magistrate made the following orders:
1. The application to set aside default judgment is granted.
2. The costs of the pre-trial conference appearance on 31 May 2016 and costs of today awarded to the claimant, to be taxed if not agreed.
3. Adjourned to a pre-trial conference on 16 August 2016 at 11.30 am.
13 On 11 October 2016, the respondent, having filed a bill of costs for taxation pursuant to the costs order made on 21 July 2016, had his costs assessed and allowed at $1,160.65.
14 The appeal to this court challenges the costs order relating to the respondent's costs of 31 May 2016 and 21 July 2016 thrown away by reason of the appellant's failure to attend the pre-trial conference.
15 The matter proceeded to a pre-trial conference on 16 August 2016. On that occasion the respondent appeared, again with counsel, Mr Cianfrini. The appellant appeared unrepresented. The handwritten notes of the registrar who conducted the conference indicate that the matter of costs was raised with reference to s 25 of the Magistrates Court (Civil Proceedings) Act 2004 (the Act). The issue, having been raised was not, it seems, resolved.
16 The respondent was ordered to lodge a statement of general procedure claim within 14 days. The appellant was required to lodge a statement of defence within a further 14 days. The parties were ordered to exchange lists of documents on oath. Finally, there was a direction for the filing of a listing conference memorandum prior to a listing conference at a time and date to be appointed by the court.
17 Eventually, following the filing of further documents, the matter came before a magistrate who, on 6 October 2016, struck out the respondent's claim and made a costs order in the sum of $98.50.
The statutory basis for the appeal
18 Section 40 of the Act provides that a party to a case that is not a minor case may appeal to this court against any order made by the Magistrates Court in the course of proceedings in a case or against the judgment of the Magistrates Court in the case. An appeal cannot be commenced more than 21 days after the date of judgment unless this court gives leave to do so. Such an appeal is to be conducted in accordance with the rules of this court.
19 I am obliged to decide the appeal on the material and evidence that was before the Magistrates Court and any other evidence that I give leave to admit but leave may only be given in exceptional circumstances.
An application for leave to appeal out of time
20 As mentioned, a notice of appeal must be filed within 21 days of the judgment or order complained of. The appellant's notice of appeal filed on 7 November 2016 was clearly out of time. It noted that the last date for filing within time would have been 11 August 2016. The appellant seeks an extension of time.
21 In Gallo v Dawson [1990] HCA 30; (1990) 93 ALR 479 McHugh J considered whether an application for an extension of time in which to file a notice of appeal ought to be granted (480). The applicant relied upon a rule (O 60 r 6) in the High Court Rules 1952 (Rules of the High Court) which provided that the court may enlarge the time appointed by the rules for doing an act upon such terms, if any, as the justice of the case may require. He said that the object of the rule was to ensure that rules which fixed times for doing acts did not become instruments of injustice. He added that the discretion to extend time is given for the sole purpose of enabling the court to do justice between the parties.
22 With reference to the specific rule relied upon, McHugh J said that the discretion to extend time can only be exercised in favour of an applicant upon proof that strict compliance with the time limit will work an injustice upon the applicant having regard to:
(a) the history of the proceedings;
(b) the conduct of the parties;
(c) the nature of the litigation;
(d) the consequences for the parties of grant or refusal of the application for an extension of time;
(e) the prospects of the appellant succeeding; and
(f) the fact that upon the expiry of the time for appealing, the respondent had a vested right to retain the judgment.
23 In the matter before me there is a respondent with a vested right to recover costs pursuant to the costs order of 21 July 2016.
24 The nature of the litigation is clear.
25 The delay is 88 days.
26 I am in receipt of the following as to the appellant's application for an extension of time within which to appeal:
1. an affidavit of the appellant filed on 2 February 2017 in support of the application to extend time; and
2. an affidavit of the respondent filed on 8 February 2017 in opposition to it.
27 Both were filed pursuant to orders by a deputy registrar of this court made on 17 January 2017. In both affidavits the deponents depose to matters relevant to the issue of leave and to the substance of the appeal. Neither party, at the hearing of the appeal raised objection to the content of their opponent's affidavit. There is no transcript of the hearing of 21 July 2016. The magistrate's notes of that hearing are confined to the orders that he ultimately made. There is, in the papers received from the court below, very little in the way of materials or evidence. In those exceptional circumstances I propose to admit into evidence, on the hearing of the appeal, the entirety of both affidavits mentioned above.
28 In his affidavit the appellant said that he was confused when and after the costs order of 21 July 2016 was made because he was not expecting it. He added that he thought that the costs order was an interim order and was only appealable upon 'completion of the entire case'.
29 It is clear that, following the expiry of the 21 days the respondent's solicitors did point out in correspondence to the appellant that he was out of time to appeal. There was, as between the parties, a degree of negotiation which failed to resolve their differences. On balance I am satisfied that there is a satisfactory explanation for the delay.
30 On the issue of prejudice to the respondent, the respondent refers to pars 10 - 17 of his affidavit sworn 8 February 2017. His bill of costs has been taxed in the sum of $1,160.65. In par 17 of his affidavit the respondent deposes to the fact that, had the appeal been commenced within time or had the appellant provided his solicitors with a satisfactory explanation for the delay he may not have taken the steps that he did take in instructing his solicitors to prepare and tax the bill of costs and write correspondence. He says that the cost of doing so now exceeds the amount of the taxed costs.
31 The problem with this litigation from the outset is that the cost of it was always going to be disproportionate to the amount of the original dispute between the parties. Along the way, decisions were made, including the original decision to pursue the matter as a general procedure claim. Such decisions have consequences for the parties both in material and non-material terms. From an outsider's perspective there have been many missed opportunities to bring the litigation to an end. In my view the respondent's claim of being prejudiced if the appellant is granted an extension of time within which to commence his appeal is not particularly compelling.
32 Having considered all of the pertinent factors, including, in particular, the explanation for the delay provided by the appellant, the length of the delay, the claimed prejudice to the respondent and the consequences for both parties of a refusal of the application, I am of the view that I should grant an extension of time. I extend the time for the filing of a Notice of Appeal in this matter by three months.
The Substance of the Appeal
33 It is true that the action in the court below was commenced as a general procedure claim rather than as a minor case claim. The latter is defined by s 26 of the Act which provides that 'minor case' means a claim within the jurisdiction of the Magistrates Court where the value of the claim or of the relief claimed is not more than the minor cases jurisdictional limit and the claimant has elected to have the claim dealt with under the minor cases procedure.
34 The Magistrates Court did not make an order under s 28(3) of the Act that the case be dealt with under the general procedure.
35 The minor cases jurisdictional limit is presently (and was at the time of the filing of the claim in the Magistrates Court) $10,000. The respondent's claim was not more than the minor cases jurisdictional limit. He did not make election to have his claim dealt with under the minor claims procedure.
36 The respondent, in filing a general procedure claim, in my view, invoked the operation of s 25(5) of the Act. It provides that in a case where the value of the claim or of the relief claimed by the claimant is not more than the minor cases jurisdictional limit; and the claimant did not elect to have the claim dealt with under the minor cases procedure the court may only make an order under s 25(1) of the Act in favour of a successful party if the order would be permitted by s 31 of the Act were the case being dealt with under minor cases procedure.
37 The value of the respondent's claim, as mentioned, was not more than the minor cases jurisdictional limit. He did not elect to have the claim dealt with under the minor cases procedure. No order was made under s 28(3) of the Act.
38 Section 31 of the Act provides that a successful party to a minor case is entitled to an order under s 25(1) in relation to the party's allowable costs but not in relation to the party's other costs in the case. 'Allowable costs' means court fees and service fees and the costs of enforcing a judgment. Other costs may only be awarded where exceptional circumstances would give rise to an injustice to the successful party if that party's other costs were not paid or if the other party's claim or defence was wholly without merit. In the matter before me the appellant's defence was not wholly without merit. The respondent's claim was ultimately struck out.
39 On 21 July 2016, after hearing from both parties, the magistrate made an order setting aside default judgment against the appellant but ordered that he pay the respondent's costs thrown away to be taxed. In his affidavit sworn 2 February 2017 the appellant said that he was 'caught totally off-guard' by the costs order. He said that, at the time, he was aware that costs could not be awarded in minor case matters in the Magistrate Court. He said that he had 'not researched the issue when the matter was a general procedure claim'.
40 On 1 August 2016 the respondent's solicitors wrote to the appellant offering to agree the quantum of costs in the sum of $803. Failure to agree by 9 August 2016 would lead to the filing of a bill of costs for taxation.
41 On 16 August 2016, at an adjourned pre-trial conference the appellant first raised objection to the costs order. He said that his understanding was that the costs order was interim and only amenable to appeal once the substantive claim was disposed of.
42 On 16 August 2016 the appellant made application for dismissal of the respondent's general procedure claim on the ground of res judicata.
43 By email of 18 August 2016 the appellant advised the respondent that, in his view, the costs order of 21 July 2016 had been made in error. He pointed out that there had been no finding of exceptional circumstances, 'as required in a matter under $10,000'. He asked that the bill of costs be withdrawn and warned that, if it were not, he would appeal and, if successful, seek the costs of the appeal.
44 On 5 September 2016 the appellant's application to dismiss the claim was heard by a magistrate. Again the appellant raised his objection to the costs order of 21 July 2016. The magistrate reserved his decision. On 6 October 2016 he upheld the appellant's application and dismissed the claim. On that day the appellant once again objected to the costs order of 21 July 2016. The magistrate told him that he did not have the power to correct 'the error'.
45 It is true that the respondent's solicitors did write to the appellant on 30 August 2016 pointing out that any appeal from the costs order should have been filed on or before 11 August 2016 and that there would need to be an application for an extension of time in which to appeal.
46 The respondent proceeded to tax the costs of 21 July 2016 which were allowed in the sum $1,160.65. He then, through his solicitors, demanded payment.
47 On 26 October 2016 by email to the respondent's solicitors, the appellant suggested that the parties sign a minute of consent order setting aside the costs order of 21 July 2016. The appellant indicated that, failing agreement, he would appeal. The offer was rejected and the respondent repeated his demand for payment of the costs.
48 At this point the parties were in dispute as to whether the contentious costs order was regularly or irregularly made. The respondent contended that the order was regularly made but knew, firstly, that the appellant was out of time to appeal and that, secondly, he would need the court's leave to bring the appeal.
49 Counsel for the respondent submitted that there was no dispute that the respondent's claim was a general procedure claim within the minor case jurisdictional limit and that he did not elect to have the claim dealt with under the minor case procedure. Counsel contended that the magistrate still made no error as the costs were awarded in the context of setting aside a default judgment. That being so, he contended that s 19(3) of the Act had application. It provides that if a party fails to comply with an order or direction made by the court, the court may order the party to pay the costs occasioned by the non-compliance irrespective of whether the party ultimately succeeds in the case or give judgment against the party without a trial.
50 Mr Cianfrini, counsel for the respondent, submitted that the appellant's failure to attend the pre-trial conference was a failure to comply with an order or direction made by the court. He further submitted that s 25(5) of the Act states that it only applies to orders made by a magistrate under s 25(1) of that Act. He said that in the case of the orders made on 21 July 2016 the magistrate was exercising power under s 19(3) of that Act by setting aside the default judgment and then awarding costs pursuant to that section, not under s 25(1) of the Act.
51 Under the Magistrates Court (Civil Proceedings) Rules 2005 a claimant may request a registrar to list a pre-trial conference and, upon receipt, the registrar must list the conference and notify the parties in writing of the listing. It follows that the listing of a pre-trial conference is initiated by a party.
52 In this matter the respondent, who was the claimant, requested that the registrar list a pre-trial conference. The registrar did so and gave notice to the parties. The failure of the appellant to attend the pre-trial conference was not a failure to comply with an order or direction made by the court. In my view s 19 of the Act has no application in this matter. The magistrate, on 21 July 2016, was dealing with the appellant's application to set aside default judgment. He allowed that application and made the contentious costs order in consequence of allowing the application. It would appear that he did not turn his mind to s 25(5) of the Act. It may be that it was not brought to his attention.
53 In the alternative, counsel for the respondent submits that even if the magistrate was exercising power under s 25(1), there would still be no error as the hearing on 21 July 2016 was of the appellant's application to set aside default judgment. Default judgment was set aside making, he submitted, the successful party the appellant and the unsuccessful party, the respondent.
54 Counsel for the respondent submitted that s 25(5) of the Act only applies to an order under s 25(1) in favour of a successful party and does not mention any restriction of an award of costs in favour of the unsuccessful party.
55 Section 25 of the Act gives power to the court to order that a party pay the whole or part of another party's costs in the case. It makes no mention of successful or unsuccessful parties. The matter before me is governed by that part of the Act which deals with costs in the minor cases procedure because it falls within the minor cases jurisdictional limit. Section 31 of the Act deals with 'allowable costs'. The costs dealt with on 21 July 2016 do not fall within the definition of allowable costs. The power to award costs is founded on s 25 of the Act. Costs which are not allowable costs can only be awarded in the circumstances mentioned in s 31(3) of the Act. It would appear, firstly, that no such circumstances existed and, secondly, that that no such circumstances were raised before the magistrate.
56 It must follow that the making of the costs order on 21 July 2016 was an error of law. I allow the appeal. I will hear the parties as to costs.
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