| JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA LOCATION : PERTH CITATION : HAMPTON TRANSPORT SERVICES PTY LTD -v- FJ & AM BELL [2010] WADC 19 CORAM : SCOTT DCJ HEARD : 29 JANUARY 2010 DELIVERED : 18 FEBRUARY 2010 FILE NO/S : APP 20 of 2009 BETWEEN : HAMPTON TRANSPORT SERVICES PTY LTD Appellant
AND
FJ & AM BELL
Respondent
ON APPEAL FROM:
Jurisdiction : MAGISTRATES COURT OF WESTERN AUSTRALIA File No : MID/GCLM 2625 of 2006 Catchwords: Costs order in Magistrates Court - Judgment within minor cases jurisdiction - Action in general procedure
(Page 2)
Legislation: Interpretation Act 1984
Magistrates Court (Civil Proceedings) Act 2004 Result: Appeal allowed Representation: Counsel:
Appellant : Mr S V Forbes
Respondent : Ms E Williams
Solicitors:
Appellant : Paiker & Overmeire
Respondent : DTS Legal
Case(s) referred to in judgment(s):
Michael Kellaway International Pty Ltd v Shark Bay Airport Pty Ltd unreported; SCt of WA; Library No 980302; 25 March 1998
Vella v Ivanovski [1984] WAR 8
(Page 3)
1 SCOTT DCJ: This is an appeal from the order for costs made on 16 March 2009 in action MID/GCLM/2625/2006 (Magistrates Court action) in which the learned Magistrate ordered that the appellant pay the respondents costs of the action to be taxed.
2 This appeal is brought pursuant to s 40 of the Magistrates Court (Civil Proceedings) Act 2004 (Civil Proceedings Act) by which the appeal is required to be conducted in accordance with the Rules of Court made by this Court. By r 50 of the District Court Rules the appeal is by way of re-hearing. 3 In the Magistrates Court action, the respondent by summons claimed $16,104 for damages arising from a breach of a contract for the hire of a water tanker. That summons was filed in the general procedure of the Magistrates Court. The claim by the respondent was amended and at trial the claim was for liquidated damages in the sum of $20,031.06 plus costs. 4 The respondent claimed: (a) hire fees in the sum of $16,140; (b) cost of repairs in the sum of $3,087.06; and (c) loss of hire fees while the water tanker was being repaired in the sum of $840. 5 The learned Magistrate found that the appellant had breached the terms of the contract and awarded damages in the sum of $6,270 plus interest thereby totalling $7,230.46. 6 As to costs, although there were by no means comprehensive submissions made, the learned Magistrate was alerted to the fact that the minor cases jurisdictional limit was $7,500 and it was put to him by counsel for the appellant that because the judgment was for less than that sum, there ought to be no order as to costs. 7 The Magistrate concluded that the "normal law" was that costs followed the event and that the only order he could make was that the appellant pay the respondent's costs to be taxed. 8 The issue which falls for determination in this appeal is whether the Magistrate erred in making that order having regard to the provisions of s 25(5) and s 31 of the Civil Proceedings Act. The relevant provisions of the Civil Proceedings Act are as follows. (Page 4)
9 Part 4 of the Civil Proceedings Act deals with the minor cases procedure in which the primary objective of the court when dealing with a minor case is to attempt to bring the parties to a settlement acceptable to all the parties (s 27(1)). 10 Section 26(1) provides: 11 Section 25 provides: (Page 5)
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." 12 Section 31 provides: 13 Part 15 Div 2 of the Magistrates Court (Civil Proceedings) Rules 2005 (Civil Proceedings Rules) deals with determining the value of a claim for the purpose of assessing a party's costs. Division 2 does not regulate the manner in which a Magistrate may make an order as to costs but only regulates the manner in which the costs ordered are assessed. 14 Rule 87 provides: "For the purposes of assessing a party's costs under the applicable costs determination, the value of a claim is the amount determined under this Division (the determined value)." (Page 6)
15 Rule 88 provides: "(1) Except as provided in subrule (2), if an originating claim is successful and - 16 There then follows a number of other rules referrable to the determined value having regard to different circumstances which may prevail consequent upon a judgment. 17 The appellant submits that s 25(5), as properly construed, means that in the event that the sum awarded to a claimant (in this case the respondent) is not more than the minor cases jurisdictional limit and (relevantly) the claimant did not elect to have the claim dealt with under the minor cases procedure then unless a costs order is permitted by s 31, the claimant would only be entitled to allowable costs. 18 The appellant says that had the learned Magistrate given consideration to the provisions of s 31 of the Civil Proceedings Act no order for costs would have been made in the respondent's favour other than for allowable costs because the Magistrate could not have been satisfied as to the existence of circumstances to which s 31(3)(a) and s 31(3)(b) refer. 19 The respondent says that the term "claim" is defined in s 3 of the Civil Proceedings Act as a "claim made to the Court by a party" and that the term "value" which is not defined in the Civil Proceedings Act is to be understood by its ordinary meaning namely the monetary worth of the claim made to the court. 20 The respondent submits that the "value of the claim" being the term used in both s 25(5) and in the definition of minor case in s 26(1) has the same meaning in both provisions. 21 The respondent submits that the term "value of the claim" as it appears in s 25(5) does not mean, properly construed, the amount for which judgment was entered but means the monetary worth of the claim (Page 7)
as it appears in the summons filed by the claimant when the proceedings were instituted. 22 The respondent says that a determination as to whether a case may be dealt with as a minor case is made upon the claim (in the summons) being filed ie., based upon the sum claimed. 23 The respondent contends that by reason of the provisions of s 6 of the Interpretation Act 1984 (Interpretation Act) if the legislature had intended that where the amount of the judgment or judgment sum did not exceed the minor cases jurisdictional limit and the claim was not commenced as a minor case, the successful claimant would be entitled to an order for no more of its costs than could be awarded pursuant to s 31 of the Civil Proceedings Act, the term "judgment sum" would have to appear in place of the phrase "value of the claim" as it appears in s 25(5)(a) of the Civil Proceedings Act. 24 The respondent refers to the cases of Vella v Ivanovski [1984] WAR 8 and Michael Kellaway International Pty Ltd v Shark Bay Airport Pty Ltd unreported; SCt of WA; Library No 980302; 25 March 1998 as supporting its submission. 25 Whilst recognising that those cases deal with the specific provisions of the District Court of Western Australia Act 1969 (District Court Act) (s 74) it is contended that those authorities indicate when the usual costs order is to be departed from. 26 To that end, it is submitted that in the circumstances of this case it was reasonable when the claim was filed seeking damages of $16,104 for the respondent to expect to recover damages exceeding $7,500 and as a consequence the principles in these cases have some application. I do not agree. 27 I do not consider that either of these cases provides support for the respondent's contentions. 28 When those cases were decided s 74 of the District Court Act relevantly provided: (Page 8)
(a) the defendant may, at any time, apply to the Court … for an order remitting the action to the appropriate Local Court … (2) … when an action is brought in the Court that might have been brought in a Local Court without the consent of the defendant, the plaintiff is not entitled to recover a greater sum by way of costs than he could have recovered had the action been brought in a Local Court, unless the District Court Judge hearing the action certifies – (a) in the case of an action founded in tort, that in his opinion it was proper to bring the action in the Court instead of the Local Court; and (b) in any other case, that by reason of some important principle of law being involved, or of the complexity of the issues, or of the facts, the action was, in his opinion, properly brought in the Court." 29 The claim in Vella (supra) was a personal injuries claim (ie., founded in tort) and the claim in Kellaway (supra) was a mixture of a tortious claim and a contractual claim. Each of these cases were determined having regard to the provisos in s 74(2)(a) and s 74(2)(b). There are no equivalent provisions in the Civil Proceedings Act. 30 Indeed save for the provisos in s 74(2)(a) or s 74(2)(b) the plaintiff in each of Vella and Kellaway would not have been entitled to recover a greater sum by way of costs than they could have recovered had the relevant action been brought in a Local Court. 31 The legislative intent of Pt 4 of the Civil Proceedings Act is to provide a speedy and economical means of disposing of cases which are defined as minor cases ie., relevantly, if the monetary value of the claim is no more than $7,500. 32 The value of a claim (its monetary worth) is not determined by the sum which a claimant may claim. That monetary worth does not change from the date of the institution of proceedings to judgment – but by judgment that monetary worth is then determined. It is the case if a claimant files a summons in which the claim exceeds $7,500 that, absent the consent of the parties, the claim will not be dealt with under the minor cases procedure. (Page 9)
33 Whilst the sum stated by a claimant in the summons may procedurally determine whether the matter is then dealt with as a minor case that does not affect the proper construction of the term "value of the claim" as it appears in s 26 or in s 25(5). 34 The legislative intent evident from the provisions of s 25(5) of the Civil Proceedings Act is in my view that where the monetary worth of a claim following judgment is within the minor cases jurisdiction then unless the provisions of s 31(3) apply a claimant is entitled to recover no more than allowable costs. That is the proper construction of s 25(5). That monetary worth is the sum for which there is judgment on the claim. 35 The construction of s 25(5) to which I refer gains support from the second reading of the Magistrates Court (Civil Proceedings) Bill 2003 and the explanatory memorandum. 36 In the second reading the Honourable Minister said: "Under the Bill, claimants with a claim of less than $7,500 who elect the general procedure would have to pay their solicitors costs, even if they are successful". 37 In the explanatory memorandum relating to s 25, the following appears: "Subclause (5) ensures that where a matter that is within the minor cases jurisdiction is commenced in the general jurisdiction the costs that can be awarded are the very limited costs that would be allowed had the action been commenced in the minor cases jurisdiction. The intention is to ensure that a defendant in the case that could have been commenced in the small cases jurisdiction is not thereby disadvantaged". 38 To construe s 25(5) of the Civil Proceedings Act otherwise would enable a claimant to circumvent the minor cases procedure (and the cost consequences) by issuing proceedings in the general procedure for a sum greater than $7,500 in circumstances where (for example) he may not expect to be awarded a sum in excess of the minor cases jurisdictional limit. In my view, that cannot have been the legislative intention. 39 The Magistrate ought to have construed s 25(5) as I have found. I do not consider that had he done so, it was open to him to be satisfied, pursuant to s 31(3)(a) or s 31(3)(b) of the matters contained therein. The respondent in its submissions does not contend otherwise. (Page 10)
40 In the circumstances the Magistrate erred in awarding costs to the respondent pursuant to s 25(1) and s 25(2) of the Civil Proceedings Act. 41 The Magistrate's order will be set aside and in lieu thereof it be ordered that the appellant pay the respondent's costs restricted to allowable costs pursuant to s 31(1) of the Civil Proceedings Act.
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