Mabelle Nominees Pty Ltd t/as Automatic Solutions v Roberts - [2011] WADC 50

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CHAMBERS

LOCATION: PERTH

CITATION: MABELLE NOMINEES PTY LTD t/as AUTOMATIC SOLUTIONS -v- ROBERTS [2011] WADC 50

CORAM: EATON DCJ

HEARD: 25 MARCH 2011

DELIVERED : 1 APRIL 2011

FILE NO/S: APP 13 of 2010

BETWEEN: MABELLE NOMINEES PTY LTD t/as AUTOMATIC SOLUTIONS
Appellant
AND
STEPHEN JAMES ROBERTS
Respondent

Catchwords:

Appeal from Magistrates Court - Costs - Jurisdictional error - Natural justice

Legislation:

Magistrates Court (Civil Proceedings) Act 2004, s 3, s 25, s 25(1), s 25(5), s 31
Magistrates Court (Civil Proceedings) Rules 2005

Result:

Appeal allowed
Matter of costs remitted to the magistrate for determination according to law

Representation:

Counsel:

Appellant: Mr S J Steenhof
Respondent: Mr F Sammut

Solicitors:

Appellant: Cornerstone Legal
Respondent: F Sammut & Co

Case(s) referred to in judgment(s):

Craig v The State of South Australia (1995) 184 CLR 163

EATON DCJ: On 1 July 2009 the respondent, Stephen James Roberts, filed a general procedure claim with the Magistrates Court of Western Australia at Rockingham. The respondent claimed from the appellant $8,373.20 plus costs and interest by reason of the appellant's alleged breach of contract. The total amount of the claim, with filing fees, was $8,513.45.
On 7 July 2009 the appellant gave notice of intention to defend.
On 26 August 2009 the parties attended a pre‑trial conference. The respondent did so with a legal representative. The appellant did not. The matter was unresolved and, in consequence, certain general orders were made for the filing of statements of claim and defence and an exchange of documents. The matter was adjourned to a listing conference on 12 October 2009.
In due course the respondent's claim was heard by his Honour Magistrate Temby in the Magistrates Court of Western Australia at Rockingham on 18 January 2010. The respondent appeared with counsel. The appellant was not legally represented but appeared in the person of Paul Raymond Bindon, a director of the appellant. At the conclusion of the trial the magistrate reserved his decision. Prior to doing so he invited the parties to estimate their costs at that point. Counsel for the respondent, Mr Sammut, then, in an ad hoc way, estimated his client's costs and disbursements. Mr Bindon was asked for 'a ball park figure'. The magistrate suggested 12 hours and Mr Bindon suggested that the rate would be $95 per hour.
On 28 January 2010 Magistrate Temby gave oral reasons, concluding that there should be judgment for the claimant in the sum of $8,373.20. Having announced that he would enter judgment in favour of the respondent, he informed both counsel for the respondent and Mr Bindon: 'So unless either of you gentlemen have anything to say in regard to any matters associated with costs, I propose now to tell you the outcome. Mr Sammut, anything further?' Both counsel for the respondent and Mr Bindon for the appellant responded in the negative. The magistrate then gave judgment for the claimant in the sum of $8,373.20, as mentioned, but together with costs fixed in the sum of $8,554. He then ordered that the appellant pay to the respondent the sum of $16,927.20, inclusive of costs. That order brought the proceedings to an end.
On 8 February 2010 the appellant filed a notice of appeal in this court seeking to set aside the order made by his Honour Magistrate Temby in the Magistrates Court at Rockingham on 28 January 2010. The grounds of the appeal are that his Honour erred in law by:
(a)incorrectly including within the judgment sum of $16,927.20 an amount of $8,413.75 with respect to legal costs;
(b)failing to consider and/or apply s 31 of the Magistrates Court (Civil Proceedings) Act 2004 when making a decision in relation to costs;
(c)failing to determine the existence of exceptional circumstances and/or whether the defence of the appellant (defendant) was wholly without merit when determining whether, and to what extent, the respondent's (claimant's) costs ought to be payable. Had he done so, he would not have found the existence of exceptional circumstances, and would not have considered the appellant's (defendant's) case to be wholly without merit;
(d)fail to allow the appellant the opportunity to be heard and/or provide submissions in relation to costs; and
(e)failing to give adequate reasons for his decision in relation to costs.
On 25 February 2010 the respondent, through his solicitors, entered an appearance.
The case in the Rockingham Magistrates Court was not a minor case. In the Magistrates Court (Civil Proceedings) Act 2004 a minor case means a claim within the jurisdiction of the 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. The minor cases jurisdictional limit, as defined by s 3 of that Act, meant originally $7,500 and on and after 1 January 2009, $10,000. The respondent's claim, having been lodged on 1 July 2009, came, therefore, within the minor cases jurisdictional limit being a claim below $10,000. It was not, however, a minor claim because the respondent did not elect to have his claim dealt with under the minor cases procedure.
Section 25 of the Act deals generally with the question of costs providing, firstly, that the court may order a party to a case to pay the whole or a part of another party's costs in the case and, secondly, that a successful party is entitled to an order that the whole of its costs in the case be paid by the unsuccessful party unless the court considers there is good reason not to make such an order or subsection (5) of that section applies. The section establishes the proposition that a successful party is entitled to the whole of its costs unless there is good reason not to make such an order or the value of the claim 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. If the latter circumstance exists the court may only make an order in favour of a successful party if the order would be permitted by s 31 were the case being dealt with under the minor cases procedure.
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 a party's allowable costs but not in relation to the party's other costs in the case unless the court is satisfied that, because of the existence of exceptional circumstances, an injustice would be done to the successful party if that party's other costs were not ordered to be paid or the unsuccessful party's claim or defence was wholly without merit.
The respondent's claim was below the minor cases jurisdictional limit. The amount recovered in respect of the claim, exclusive of costs, was within that limit. In such circumstances the respondent was not entitled to costs, other than allowable costs as defined by s 31 of the Act, unless the magistrate was satisfied that, because of the existence of exceptional circumstances, an injustice would be done to the successful party if that party's other costs were not ordered to be paid or the unsuccessful party's claim or defence was wholly without merit. Under s 31 'allowable costs' means only the court fees and service fees paid by a successful party and the costs of enforcing the judgment obtained by it.
Having determined the substantive issue between the parties, the magistrate indicated that he would dispose of matters associated with costs unless there was any submission from those at the bar table in that regard, without telling them what it was that he proposed to do. To have a particular intention in mind by way of determining an issue and to announce an intention to do so, inviting submissions, without informing the parties as to the precise terms of his proposal as to costs, was to afford the parties, in truth, no opportunity to be heard in that regard. Somewhat surprisingly, neither of those at the bar table enquired of the magistrate as to what it was that he proposed to do in that regard. Counsel for the respondent said nothing, perhaps confident that the matter of costs might be disposed of in his client's favour, he having succeeded in recovering the amount claimed. On the other hand, however, the appellant was not represented by counsel and Mr Bindon could not have been assumed to have had a working knowledge of the law relating to costs. It was, in those circumstances, incumbent upon the magistrate, in my view, to explain to the parties before him what it was that he proposed by way of a costs order and to invite submissions before announcing his order in that regard. He should have been aware, having regard to the amount of the claim and the amount recovered, that the matter of costs was not at large and that it was not open to him, in the circumstances, to make an order under s 25(1) of the Act by reason of the respondent having been successful in its action. He was obliged, in those circumstances, to turn his mind to s 25(5) of the Act and did not do so.
The respondent submits that the claim was not a minor claim as the respondent had not elected to have the claim dealt with under the minor cases procedure. That is accepted. Section 25(5) of the Act is, however, quite clear in that it refers to a circumstance where the 'value of the claim' is not more than the minor cases jurisdictional limit. It is the case that the respondent's claim was not dealt with under the minor cases procedure but there can be no doubt that the value of the claim fell within the minor cases jurisdictional limit. The respondent, it seems, concedes that point, arguing in his written submissions that the appellant's defence was wholly without merit and that he was wholly successful, the appellant being unsuccessful in every element of its defence.
The respondent submits that the findings of the court as set out in the magistrate's reasons for decision on 28 January 2010 make it clear that he took the view that the appellant's defence was wholly without merit.
The appellant pleaded in a defence to the claim that the respondent had removed and rejected all attempts to provide suitable protection of the steel fence and automatic gate, the subject of the contract, and had rejected all offers and suggestions of a maintenance contract. The appellant pleaded that it had complied with all aspects of the contract made with the respondent and had completed the contract in accordance with its obligations. There was no set‑off or counterclaim raised.
It is the case that the respondent carried the onus of proving his claim on the balance of probabilities and did so. It does not follow, in my view, that by reason of having done so the appellant's defence was wholly without merit. Certainly, the magistrate did not find that to be the case. In fact, the magistrate, having heard the evidence, was obliged to make findings of fact as to what was said by the parties at material times and apply the law to those findings. He was obliged also to consider and decide objections based on the rule in Brown v Dunn.
When turning to the question of costs he did not turn his mind to the provisions of s 31(3) of the Act. In failing to do so and, it seems, making an order in favour of the respondent under s 25(1) the magistrate made a jurisdictional error in that he disregarded an essential condition to the exercise of jurisdiction in that he was obliged to consider whether there existed exceptional circumstances which would lead to an injustice in the event that an order was not made under s 25(1) or whether the appellant's defence was wholly without merit (see Craig v The State of South Australia (1995) 184 CLR 163 [11]).
A further error made by the magistrate, with respect to him, was in denying the appellant the opportunity to be heard in that regard. In my view there was a denial of natural justice in respect to the question of costs. It is not simply the case that costs follow the event having regard to the provisions of the Act. There was clearly more to it than that. It was incumbent upon the learned magistrate to bring those matters to the attention of the appellant and to invite submissions in that regard. The costs awarded against the appellant were in excess of the judgment sum. It had an interest in being heard in that regard, particularly having regard to the provisions of s 25(5) of the Act. Under reg 88 of the Magistrates Court (Civil Proceedings) Rules 2005 the determined value of a claim for the purpose of assessing a party's costs is the amount of the judgment. The magistrate purported to give judgment for the respondent 'together with costs fixed'. The judgment sum was, however, the amount claimed and awarded, the sum of $8,373.20.
In addition, the magistrate gave no reasons for his order as to costs. In the circumstances, given the need for consideration of the relevant provisions of the Act, he was obliged to do so.
In my view, the appeal must succeed. I formally allow the appeal and remit the matter to Magistrate Temby for determination according to law. I will hear the parties as to costs.