John Lewis Food Service Pty Ltd v Mervyn Reynolds

[2014] VSCA 162

SUPREME COURT OF VICTORIA

COURT OF APPEAL

S APCI 2013 0173

JOHN LEWIS FOOD SERVICE PTY LTD	Applicant
v
MERVYN REYNOLDS	Respondent

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JUDGES:	ASHLEY and WHELAN JJA
WHERE HELD:	MELBOURNE
DATE OF HEARING:	15 July 2014
DATE OF JUDGMENT:	15 July 2014
MEDIUM NEUTRAL CITATION:	[2014] VSCA 162
JUDGMENT APPEALED FROM:	Reynolds v John Lewis Foods Services Pty Ltd [2013] VCC 681 (Judge Brookes)

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ACCIDENT COMPENSATION – Successful claim for weekly compensation – Costs – Whether proceeding heard and determined in the Country Court could have been heard and determined in Magistrates’ Court – Whether proceeding was ‘brought on a judgment of the … County Court’, thus excluding jurisdiction of Magistrates’ Court – Accident Compensation Act1985, ss 39, 43 and 50(3); Magistrates’ Court Act1989, s 100(2)(c).

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APPEARANCES:	Counsel	Solicitors
For the Applicant	Mr M F Fleming QC and Mr R Kumar	Wisewould Mahoney
For the Respondent	Mr J P Brett	Arnold Thomas & Becker

ASHLEY JA:

1. These are the reasons of the Court.

1. Counsel for Mervyn Reynolds, the respondent,[1] has conceded, responsibly, that no argument is available against the success of this appeal.  But, rather than simply make an order that the appeal be allowed, because the issue raised is of some general importance, and in deference to the judge below, we should briefly say why the concession has been correctly made.

   [1]Who was not counsel below.

1. The appeal, brought under s 52(1) of the Accident Compensation Act1985 (‘the Act’), challenges the costs order made by a County Court judge in a proceeding brought in that court. His Honour ordered that the appellant, John Lewis Food Service Pty Ltd, pay the respondent’s costs on the County Court scale. According to the argument for the appellant, his Honour was constrained by the operation of ss 39, 43 and 50(3) of the Act to award costs on the appropriate Magistrates’ Court scale. If the proceeding could have been brought in the Magistrates’ Court, that submission was correct.

1. The proceeding was one in which the respondent claimed an arrears and continuing weekly payments of compensation.  It was his case that the employer had wrongfully terminated payments.

1. The pertinent circumstances were as follows. Having sustained compensable injury, and being in receipt of weekly compensation, the respondent brought a common law proceeding referable to the compensable injury. A jury determined that he should be awarded an amount for pecuniary loss damages. It was less than the total amount of weekly compensation which he had by then received. In consequence of s 134AB(25) of the Act, judgment in respect of pecuniary loss damages was entered for a zero amount. Weekly payments were then terminated by the employer pursuant to s 114(1) of the Act in reliance upon s 134AB(36), which provides that –

(36)     If judgment is obtained, or a compromise or settlement made in respect of proceedings referred to in subsection (1) in respect of an injury, the Authority, the employer or self-insurer is not liable—

(a)where pecuniary loss damages are awarded, to pay weekly payments in respect of the injury;  or

(b)where pain and suffering damages are awarded, to make payments under section 98C or 98E in respect of the injury.

1. The substantial question which arose for determination was whether the employer was entitled to terminate weekly payments simply because the jury made an award of pecuniary loss damages, or whether the employer’s right to terminate depended upon judgment having been entered in favour of the respondent for an amount in excess of zero.

1. The judge decided the construction issue – which was of importance not only to the present litigants but also, prospectively, to workers and the WorkCover Authority in other cases — favourably to the respondent.  He ruled that s 134AB(36) directs itself to the judgment ultimately entered.  From that ruling,[2] which led in turn to an order that weekly payments be resumed, there has been no appeal.

   [2]The question was determined pursuant to r 47(04) of the County Court Civil Procedure Rules2008.

1. Without intending any disrespect to the Magistrates’ Court, which has a fund of expertise in the accident compensation jurisdiction, the substantive issue determined below was one well suited for determination by a very experienced judge in the County Court.[3]  The fact that there was no appeal from the judge’s ruling, which followed extensive submissions by both parties, is testament to the quality of his Honour’s reasons.

   [3]Although an appeal against the substantive ruling did not eventuate, the construction issue was one in which an appeal seeking the judgment of this Court was not improbable.  From judgment in the County Court there was the prospect of appeal directly to this Court.  Had the matter been determined in the Magistrates’ Court, any appeal would have been first to a judge in the Trial Division.  Elapse of time, and costs of litigation, would have been prospectively greater.

1. But that does not answer the question whether his Honour was constrained to award costs on the Magistrates’ Court scale.

1. The respondent relied below, and in this Court, upon s 50(3) of the Act, which provides as follows:

(3)Costs awarded to a worker or claimant by the County Court in proceedings brought by the worker or claimant in which the judgement or decision is a judgement or decision that could have been made by the Magistrates’ Court, had the proceedings been brought in the Magistrates’ Court, must be awarded as if the scale of costs applicable in the Magistrates’ Court applied.

1. Before the judge, it was contended by the respondent, however, that the jurisdiction of the Magistrates’ Court, conferred on the face of it by ss 39 and 43 of the Act, was denied by s 100(2)(c) of the Magistrates’ Court Act1989, which provides that –

(2)       The Court does not have jurisdiction in any cause of action—

…

(c)brought on a judgment of the Supreme Court or the County Court.

1. It was argued for the respondent that, because the present proceeding arose out of, or was intimately connected with, the judgment entered in the common law proceeding for a zero amount in respect of pecuniary loss damages, the present proceeding was ‘brought on’ that judgment.

1. Little by way of argument was advanced for the appellant below upon the question of costs. Neither the legislative history lying behind s 100(2)(c) nor pertinent authorities were mentioned.

1. When dealing with the question, it appears from notes taken by the appellant’s solicitor that the judge stated that he had a discretion as to costs; and that difficult matters had been involved, involving common law research and significant periods of preparation, which justified an order for costs on the County Court scale.

1. It does not appear that his Honour adverted to s 100(2)(c) of the Magistrates’ Court Act, although that provision had been the sole focus of the submissions for the respondent.

1. His Honour’s reliance upon the existence of a discretion with respect to costs was misplaced. The general discretion as to costs conferred by s 78(1) of the County Court Act1958 is overridden by s 50(3) of the Act. In Colac Otway Workforce Pty Ltd v Dwyer,[4] this Court agreed with the judge at first instance that it was plain that s 50(3) confines a plaintiff’s costs to the Magistrates’ Court scale where the outcome of the proceeding could have been achieved within the jurisdiction of the Magistrates’ Court.[5]

   [4][2005] VSCA 270 [5] (Nettle JA, with whom Eames and Ashley JJA agreed).

   [5]There was then a money limit to that court’s jurisdiction in an accident compensation matter.

1. Absent there being any discretion as to costs, the question to be answered was whether s 100(2)(c) of the Magistrates’ Court Act excluded the jurisdiction of that court in this proceeding.

1. There is an extensive legislative history of provisions similar to s 100(2)(c).[6]  The earliest was s XXVII of the County Courts Act Amendment Act 1856 (19 & 20 Victoriae, c 108).  Its present day successor is s 36 of the County Court Acts 1984 (1984, c 28).  In Victoria, the Imperial provision was in substance replicated by s 48 of the County Court Statute 1869.  A section in that form has been present in the County Court Act thereafter.[7] The only difference between the present s 37(2)(d) of the County Court Act 1958 and s 100(2)(c) of the Magistrates’ Court Act1989 is that the former understandably refers only to a cause of action brought on a judgments in the Supreme Court.

   [6]It was originally introduced into the Magistrates’ Court Act 1971 by s 28(5) of the Courts Amendment Act 1986.

   [7]County Court Act 1890, s 56;  County Court Act 1915, s 56;  County Court Act 1928, s 38;  County Court Act 1957, s 38;  County CourtAct 1958, s 37(2)(d).

1. At common law, the prima facie position is that an action lies on the judgment of every court of competent jurisdiction.  It matters not that the action is brought in a court superior or inferior in the hierarchy to the court in which judgment was entered.  The prima facie position may be displaced by statute.[8]

   [8]See Winsor v Dunford (1848) 13 QB 604. There it was held that the County Courts had jurisdiction to try an action in debt on a judgment recovered in Queens Bench. See also Berkeley v Elderkin (1853) 1 EL & BL 805, where the prima facie position was overridden by a clear legislative regime, and Austin v Mills (1853) 9 Ex 289, in which Berkeley was applied.  See further Savill v Dalton [1915] 3 KB 174, where a particular provision of the Bankruptcy Act 1883 produced a contrary outcome.  In Victoria, Falconer v Falconer (1910) VLR 489 was a case in which a statute displaced the common law position.

1. The purpose of provisions such as s 100(2)(c), as established by authorities, is to prevent an action being brought in an inferior court to enforce an unsatisfied judgment entered by judgment of a superior court. The matter was explained by Darley CJ in Duffy v De Rozzoli as follows:

The case of Winsor v Dunford[9] is a distinct authority that this action is maintainable.  Since that case the Act 19 and 20 Vic, c 108 (the English County Courts Act), was passed, in which it is expressly provided by sec 28, that ‘no action shall be brought in a County Court on the judgment of a superior Court.’  Perhaps it would be well if we had such a provision here;  I think it probable that the provision in the English County Courts Act was passed in consequence of the decision in Winsor v Dunford.[10]  But until we have some such Act that decision must govern our procedure.[11]

[9]12 QB 603; 18 LJQB 14.

[10]12 QB 603; 18 LJQB 14.

[11](1887) 8 LR (NSW) 153, 155-156. See also JG Eagleson and PA Jacobs, The Practice of the County Court (Charles F Maxwell G Partridge & Co, 1904), 105;  D Graham, Jacobs’ County Court Practice (Law Book Company, 5^th ed, 1972), 47;  and CWG Wheeler and T Topham, Bourke & Neesham County Court Practice Victoria Service (Butterworths, 1987), 358.

1. In the event, what is embraced by the concept of a cause of action ‘brought on a judgment of the … County Court’ is quite specific. It bears no resemblance to the use to which the respondent sought below to put s 100(2)(c) of the Magistrates’ Court Act.  That provision did not exclude the jurisdiction of that court in this matter.

1. It is regrettable that the judge was not appraised by either party of the relevant legislative history and pertinent authorities.  Even so, the error could not be permitted to stand.

1. We add, for sake of completeness, that we have not considered the significance or otherwise of s 43(1) of the Act. It confers the like jurisdiction of the County Court upon the Magistrates Court, ‘unless expressly excluded by this Act’. Obviously, s 100(2)(c) of the Magistrates’ Court Act does not meet that description. That potential problem for the respondent’s argument was not the subject of any submissions, either below or in this Court.

1. In the event, the appeal must be allowed and an order made, in substance, that the respondent have his costs on the appropriate Magistrates’ Court scale.

1. Today, counsel for the respondent resisted the making of an order that his client pay the appellant’s costs of the appeal. He submitted that this appeal had been brought because it was a matter of general importance to the appellant, and that the practical implication of success of the appeal — that is, in money terms — was likely to be small. He submitted that it would be appropriate in the circumstances that each party bear its own costs, and that his client should have an indemnity certificate under s 4 of the Appeal Costs Act1998.

1. For the appellant, senior counsel submitted that it was reasonable to bring this appeal. The effect of the judge’s reasons was to undermine s 50(3) of the Act, which is of general importance to his client. The judge had determined the matter, as it appears, not in reliance upon s 100(2)(c) of the Magistrates’ Court Act but rather upon an assumed discretion with respect to costs. He had done so notwithstanding s 50(3) of the Accident Compensation Act.  This appeal addressed the error implicit in the assumption that such a discretion existed.

1. In our view, the proper order to make is that each party bear its own costs of the appeal.  We are unimpressed by the paucity of submissions made below by both parties.  We think that the paucity of submissions very likely explains why the judge fell into error.  We also consider, as in substance appeared from the submissions for both parties today, that this appeal has been concerned not with the money consequences of the costs order made below but rather with the appellant seeking to secure its position generally.  We consider, in all the circumstances which we have described, that each party should bear his or its own costs of the appeal.

1. We order that –

1.        The appeal be allowed.

2.Paragraph 3 of the orders made in the County Court on 13 October 2013 be set aside.  In lieu thereof, it be ordered that the defendant pay the plaintiff’s costs on Magistrates’ Court scale F, such costs to include any reserved costs.  Costs to be assessed by the Costs Court in default of agreement.

3.        Each party bear his/its costs of the appeal.

1. Not as part of the order, we grant the respondent an indemnity certificate under s 4 of the Appeal Costs Act1998.

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