Goldsmith v Macquarie Leasing Pty Ltd (No. 2)

[2013] VSC 387

IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

JUDICIAL REVIEW AND APPEALS LIST

SCI 2012  04338

SASHA OLIVER GOLDSMITH & ORS	Appellants
v
MACQUARIE LEASING PTY LTD & ANOR	Respondents

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JUDGE:	DIXON J
WHERE HELD:	MELBOURNE
DATE OF HEARING:	29 JULY 2013
DATE OF JUDGMENT:	29 JULY 2013
CASE MAY BE CITED AS:	GOLDSMITH & ORS V MACQUARIE LEASING PTY LTD & ANOR (No. 2)
MEDIUM NEUTRAL CITATION:	[2013] VSC 387

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JUDICIAL REVIEW – Successful appeal from magistrate – orders for costs and interest – Whether jurisdiction of magistrates court exceeded.

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APPEARANCES:	Counsel	Solicitors
For the Appellants	Mr AW Sandbach	Goldsmiths Lawyers
For the Respondents	Ms E Glover	Douros Jackson Lawyers

HIS HONOUR:

1. I have an application by the successful respondent to this appeal for interest and costs.  That application is opposed. The unsuccessful appellants submit that the appeal must be dismissed with costs but that there be no further or other order. 

1. The orders I will pronounce are these:

(1)       The appeal is allowed and the judgment below is set aside.

(2)In lieu thereof, there be judgment for Macquarie Leasing Pty Ltd in the sum of $79,225.24 plus interest in the sum of $27,713.61,[1] and costs to be taxed in accordance with Order 63 of the Magistrates' Courts General Civil Procedure Rules 2010 in default of agreement.

(3)       The appellants pay the first respondent's costs of and incidental to the appeal.

I do for the following reasons.

[1]Calculated from the date of issue of the proceeding to the date of this judgment at the rate applying under the Penalty Interest Rates Act, 1986.

1. My reasons for judgment allowing the appeal[2] (the principal reasons) explain the issues before the magistrate and on appeal and can be referred to and read with these reasons. A central issue raised and determined was whether Macquarie Leasing was a disclosed principal of Corporate and entitled to enforce the guarantee. For the reasons I have given on that issue, the principal, Macquarie Leasing, was entitled to a judgment and it then followed that the agent, Corporate was not. Corporate had the benefit of a joint judgment from the magistrate and although and its position as a party to the proceeding at trial was appropriate, the joint judgment could not stand. 

   [2][2013] VSC 332.

1. In my view, Macquarie is entitled, on the resolution of that issue and the grounds of appeal that give rise to it, to a judgment in its own right, not a joint judgment with its agent.  A complication is said to arise because Corporate is in liquidation and the appellants have not sought leave to proceed under 471B of the Corporations Law against Corporate.

1. On the hearing of the appeal, I was informed that there had been some communication between the solicitors for the appellants and the liquidator, and the liquidator had stated that he would consent to the appellants having leave to proceed against the company in liquidation and would file a submitting appearance.  However, no application was made and the appellants chose not to pursue ground 12 of the grounds of appeal which they contended was directed against Corporate Finance.

1. The appellants now contend that, as ground 12 was not argued for want of leave to proceed, there is no ground or error of law that was upheld, which permits the appeal against the judgment in favour of Corporate to be allowed.  Thus, making the order that I propose, will deprive Corporate of a judgment that it obtained at trial without error being established and without the opportunity for it to be heard.

1. I reject this submission for three reasons.

1. The first reason is that the appellants have no relevant interest in Corporate's position.  They have not sought leave to proceed against it, and appear to be contending on procedural fairness grounds, as judgment debtors, that a judgment against them which is bad in law, should stand, because the judgment creditor has not been heard.

1. The second reason is that there is no live issue of procedural fairness for Corporate.  At all times both Corporate and Macquarie have been represented by the same solicitors and counsel, and there was, and is, no evidence before the court that that circumstance has changed.  Rather, upon this application being stood down, the respondent’s counsel obtained instructions from the liquidator that the liquidator does not wish to be heard in relation to the orders that I propose to make to dispose of this appeal, in the knowledge that those orders are intending to deprive it of any entitlement in the joint judgment that was entered by the magistrate.

1. The third reason for rejecting the submission arises when the true nature of the appeal from a magistrate is understood. The appeal is brought under s 109 of the Magistrates’ Court Act 1989 which provides that a party to a civil proceeding may appeal to this court on a question of law from the final order of a Magistrates’ Court.  It is well established that an appeal is an appeal strictly so called and not a rehearing.[3]

   [3]Carter v Reid (1992) 1 VR 351, 363. See also Builders Licensing Board v Sperway Constructions (Syd) Pty Ltd (1976) 135 CLR 616.

1. The essential distinction between an appeal strictly so-called, and an appeal in the nature of a rehearing, turns upon the material which the Appeal Court may take into account in determining the appeal, and the time at which that material and the relevant law must be considered.  The essential distinction was described by Jessel MR in Quilter v Mapleson[4] in these terms:

On an appeal strictly so called, such a judgment can only be given as ought to have been given at the original hearing; but on a rehearing such a judgment may be given as ought to be given if the case came at that time before the Court of first instance.

[4](1882) 9 QBD 672, 676.

1. In Builders Licensing Board v Sperway Constructions (Syd) Pty Ltd,[5] Mason J stated:

Upon an appeal stricto sensu the question considered is whether the judgment complained of was right when given (Ponnamma v. Arumogam (1905) AC 383, at p 388), that is whether the order appealed from was right on the material which the lower court had before it.

[5](1976) 135 CLR 616, at 619.

1. As I stated in the principal reasons, the order that ought to have been made at the original hearing was an order in favour of Macquarie, not a joint order in favour of both principal and agent. That conclusion turned on the material that was before the magistrate at the time the magistrate determined the matter.  It is not necessary in my view, that ground 12 of the Notice of Appeal be specifically and directly argued in order to make it appropriate that the correct order should now be made.  It necessarily arises from the consideration of the issue whether Macquarie Leasing was a disclosed principal of Corporate and entitled to enforce the guarantee, that Macquarie is entitled to a judgment in its own name, as opposed to a judgment jointly with its agent.

1. The next issue arising is that the appellants contend that the claim for the liquidated sum of $79,225.24 plus interest and costs is in effect a claim for an amount that exceeds the jurisdiction of the Magistrates’ Court and that it was not open for the magistrate at the original hearing to give a judgment in that form.

1. The Magistrates’ Court has jurisdiction to hear and determine any cause of action for damages or a debt or a liquidated demand if the amount claimed is within the jurisdictional limit.  This question turns on precisely what was claimed.  The appellants contended that under the facility agreement, Macquarie was entitled to interest and to costs and expenses.  As its claim to interest, at a contractual rate, and costs, a contractual indemnity for expenses, was based upon the terms of the facility agreement, those claimed amounts constitute damages. When added to the liquidated sum sought as a debt, the jurisdictional limit was exceeded. On the other hand, if the claim properly understood is for a liquidated sum within the jurisdictional limit and for interest and costs pursuant to the Supreme Court Act 1986 (Vic), the amount claimed does not in fact exceed the jurisdiction of the primary court.

1. This issue was the subject of a ruling before the magistrate that is not directly challenged in this appeal, however, the consequence of allowing the appeal on the primary issue is to re-open the costs discretion for reconsideration and to extend the period for which interest is sought.

1. I do not consider that any claim for indemnity costs, a contractual indemnity for expenses, is made by the appellants' statement of claim. Although a claim for indemnity costs clearly appears, in paragraph D of its prayer for relief, there is no substantive pleading of the term of the agreement that would enliven a contractual claim to indemnity costs. I do not accept that the claim being advanced for costs in the proceeding is other than a successful party's claim for costs pursuant to s 24 of the Supreme Court Act. Such a claim is not a claim for damages that, when aggregated with the debt claim, exceeds the jurisdictional limit.[6]

   [6]See generally Oshlack v Richmond River Council (1998) 193 CLR 72, at 95 [63]-[70].

1. The amount of the liquidated debt, $79,225.24, includes interest that is calculated pursuant to the terms of the agreement.  The particulars to paragraph 7 of the statement of claim make that clear.  Those particulars also make clear that the plaintiff/respondent sought interest pursuant to the Penalty Interest Rates Act, 1983 (Vic) from the date of commencement of the proceeding until the date of judgment. I reject, as a matter of fact, the contention that the interest claim is made pursuant to the terms of the facility agreement and takes the damages claimed in the proceeding above the jurisdictional limit of the primary court. I would add that there was a ground of appeal concerning the calculation of the liquidated amount although it primarily turned on a different question, the proper calculation of the termination amount.

1. I am satisfied that Macquarie’s claim was within the jurisdiction of the court, and that the order which I now propose to make is the order that could, and ought to, have been given at the original hearing. 

1. The final matter raised on behalf of the appellants was that the consequence of the orders that I propose to make is that the appellants have been wholly successful against Corporate, and in those circumstances costs should follow the event.  I do not accept this submission. 

1. The submission was based on a contention that the change of the beneficiary of the judgment against the appellants - from Macquarie and Corporate jointly, to Macquarie on its own - effected a material change in the relevant circumstances affecting the appellants. The appellants would have successfully so contended had they leave to proceed against Corporate. Nonetheless, Corporate has failed to maintain its judgment.

1. True it is that there is a change in those circumstances but none of that is material to the exercise of the costs discretion by reference to the basic rule that costs follow the event.

1. The event for the appellant, that motivated it to appeal was not to change the judgment from a joint judgment to a judgment solely for the benefit of Macquarie.  Had it intended to achieve that event, it was plainly open to it to have obtained leave to proceed which, as I have stated, would not have been opposed. It is clear that the event, properly understood in terms of the broader commercial objective of the appellants in this litigation, was to avoid liability to pay anything under the agreement and the guarantee.  In that event it has been unsuccessful.

1. Macquarie now makes no application in relation to the costs of Corporate.  The order that it seeks and which I will make in relation to the costs before the magistrate is limited to the costs of Macquarie Leasing. The order that I will make in relation to the appeal is likewise only in respect of Macquarie Leasing’s costs.

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