| JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA LOCATION : PERTH CITATION : MASON -v- AYERS [2013] WADC 140 CORAM : SCOTT DCJ HEARD : ON THE PAPERS DELIVERED : 30 AUGUST 2013 FILE NO/S : APP 12 of 2013 BETWEEN : KAREN MASON Appellant
AND
KAZ JOHN AYERS
Respondent
ON APPEAL FROM:
Jurisdiction : MAGISTRATES COURT OF WESTERN AUSTRALIA Coram : MAGISTRATE FLYNN File No : AR 10086 of 2012, AR 10101 of 2012 Catchwords: Appeal struck out - Application for indemnity costs - Calderbank offer - Appellant in person
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Legislation: Magistrates Court (Civil Proceedings) Act 2004
Residential Tenancies Act 1987 Result: Costs to be taxed on a party/party basis
Representation: Counsel:
Appellant : In Person
Respondent : Ms D R de Blank
Solicitors:
Appellant : Not applicable
Respondent : MDS Legal
Case(s) referred to in judgment(s):
Deng v Managh [2013] WADC 58
Flotilla Nominees Pty Ltd v Western Australian Land Authority (2003) 28 WAR 95
Ford Motor Co of Australia Ltd v Lo Presti [2009] WASCA 115
Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Ltd (1988) 81 ALR 397
J-Corp Pty Ltd v Australian Builder's Labourer's Federation Union of Workers (WA Branch) (No 2) (1993) 46 IR 31
McCarthy v Hill (Ray White Rockingham) [2013] WADC 78
Quancorp Pty Ltd v MacDonald [1990] WASCA 101
Swansdale Pty Ltd v Whitcrest Pty Ltd [2010] WASCA 129 (S)
Tey v Optima Financial Group Pty Ltd [2012] WASCA 192
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1 SCOTT DCJ: On 6 February 2013 the Magistrates Court, pursuant to s 71 of the Residential Tenancies Act 1987 (RTA) made orders that the residential tenancy agreement between the appellant as tenant and the respondent as owner be terminated and that the appellant deliver up vacant possession of the tenanted property to the respondent by 15 February 2013.
2 The appellant appealed against that order by notice of appeal dated 15 February 2013. 3 On 13 June 2013 the deputy registrar listed the issue of the competency of the appeal before a judge on 5 August 2013. 4 On that day the appellant advised the court that she had only received the respondent's outline that morning and had not had an opportunity to obtain any legal advice with respect to those submissions. She was awaiting a copy of the disc of the transcript of the hearing in the Magistrates Court on 6 February 2013 because there were particular comments made by the magistrate that were omitted. 5 I informed the appellant that the matter had been set down for the hearing of the issue as to whether the appeal was competent, that is, whether an appeal lay to this court - not the merits of the appeal. 6 During discussion the appellant said that when she consulted with the Armadale (Magistrates) Court and enquired in which court she should lodge her appeal the person to whom she spoke was not sure and advised her that it would be the Supreme Court or the District Court. 7 She said that she approached the Supreme Court and spoke to four people there and said that she was told by the supervisor that the appeal was not to be submitted to the Supreme Court which would not accept it and that it had to be lodged in the District Court. 8 I explained to the appellant the nature of the issue raised by the respondent. That being pursuant to s 26 of the RTA the respondent contended that no appeal lay to this court and that her rights were restricted to a review which, pursuant to that section, was to be undertaken in the Supreme Court. 9 In response the appellant said that she was under the impression that the provisions of s 32(3)(b) of the Magistrates Court (Civil Proceedings) Act 2004 applied such that she could raise, pursuant to that section, an allegation that she was denied natural justice. (Page 4)
10 I adjourned the matter to 19 August 2013 for hearing and suggested to the appellant that if she made a decision not to proceed with the appeal the sensible thing to do would be to alert the solicitors for the respondent as soon as possible otherwise they would inevitably make further preparations with respect to the disposition of the issue on the appeal and she would risk costs for which she may be liable. 11 I made programming orders which required the appellant to file and serve written submissions by 15 August 2013 and if she continued to act in person those submissions could be informal provided they alerted the respondent and the court about what she proposed to argue. 12 On 19 August 2013 the matter was called on for hearing and there was no appearance by the appellant as a consequence of which the appeal was struck out. 13 Counsel for the respondent then said that the respondent wished to make an application for indemnity costs in respect to which further material was required to be collated. 14 I made orders that the respondent file and serve any submissions regarding costs within two days and the appellant would have until 4.00 pm on 26 August 2013 to respond in writing by filing and serving submissions as to costs and thereafter I would make a determination on the papers. 15 The respondent has filed and served submissions. No submissions have been filed by the appellant. 16 In the respondent's submissions reference is made to correspondence from the respondent's solicitors to the appellant on 7 March 2013, 27 March 2013 and 16 May 2013 copies of which are on the court file. 17 In each of those items of correspondence the solicitors for the respondent informed the appellant that in their view her appeal to the District Court was misconceived because an appeal under the RTA could not be made to the District Court but to the Supreme Court in limited circumstances. 18 Under cover of the correspondence of 16 May 2013 the solicitors for the respondent attached a copy of the decision of Deng v Managh [2013] WADC 58 and in a letter to the deputy registrar dated 30 May 2013, with a copy to the appellant, the solicitors for the respondent (Page 5)
referred to the decision of McCarthy v Hill (Ray White Rockingham) [2013] WADC 78. 19 The respondent submits that an order for indemnity costs ought to be made in this case because: (a) the appeal had no prospect of success given the provisions of s 26 of the RTA; (b) A Calderbank offer was made under cover of the letter of 16 May 2013 in which the solicitors for the respondent put an offer which remained open until 5.00 pm on 21 May 2013 that the appeal be dismissed and the appellant pay the respondent's costs of the appeal including any reserved costs to be taxed if not agreed. They informed the appellant that in the event that the offer was not accepted the respondent reserved the right to refer to the letter as to the issue of costs and specifically any application for an order that the appellant pay the respondent's costs of the appeal on an indemnity, rather than on a taxed costs basis; (c) the appellant could be presumed to have commenced the appeal to delay or avoid the enforcement of the Magistrates Court order requiring her to vacate the premises and that her motive in continuing the appeal following the vacation by her of the premises may well have been for the purpose of delaying an inevitable liability to make payment to the respondent of a costs order.
Calderbank offer 20 The critical question in deciding whether to award indemnity costs against the party who has rejected a Calderbank offer is whether the rejection was unreasonable in the circumstances: Ford Motor Co of Australia Ltd v Lo Presti [2009] WASCA 115 [23]. 21 In considering whether the rejection of a Calderbank offer was unreasonable regard should ordinarily be had to, at least, the following: (a) the stage of the proceeding at which the offer was received; (b) the time allowed to the offeree to consider the offer; (c) the extent of the compromise offered; (d) the offeree's prospects of success assessed at the date of the offer; (Page 6)
22 The principles relating to indemnity cost orders were conveniently summarised in Swansdale Pty Ltd v Whitcrest Pty Ltd [2010] WASCA 129 (S) [10] where the court said: (Page 7)
5. An indemnity costs order may be appropriate in situations which are shown to involve some element of improper, or at least unreasonable, conduct by a party or party's advisers. 6. A properly crafted special costs order may obviate the need for an indemnity costs order where components of cost scale items are allowed above the applicable scale ceiling. 7. An indemnity costs order may not be appropriate if the claimed costs would be likely to be recovered under the standard order for party/party costs, or under a special order raising or removing a scale ceiling allowance citing Flotilla Nominees Pty Ltd v Western Australian Land Authority (2003) 28 WAR 95 [11]. 8. An indemnity costs order will constitute an appropriate sanction marking the disapproval of improper or unreasonable conduct. 23 Where it is alleged that a person's conduct was improper or unreasonable so as to justify an order for indemnity costs, the fact that the person was without legal representation will ordinarily be a relevant factor in determining whether such an order is justified. What might be considered conduct warranting an indemnity costs order where a party is legally represented may not appear in the same light when account is taken of the lack of legal expertise of a litigant in person. That will necessarily be dependent upon the particular circumstances of the case. But where, after taking into account the lack of legal representation, the conduct of an unrepresented party be such as to warrant an indemnity costs order the court should not be reluctant to make such an order (Tey v Optima Financial Group Pty Ltd [2012] WASCA 192 [16]). 24 In support of the application the solicitors for the respondent attached a draft bill of costs for taxation in which the estimated taxed costs on a party/party basis were compared with the indemnity costs. The taxed costs on a party/party basis were estimated at $7,202.13 and on an indemnity basis at $9,372.75. 25 In this case the appellant was unrepresented. I am not prepared to find that she commenced and continued this appeal for an ulterior motive. There is no inference I could reasonably draw which would support such a finding. 26 I take into account her submission on 5 August 2013 that when she filed the appeal she had previously sought some guidance from the (Page 8)
Armadale Magistrates Court and the Supreme Court staff. I have no reason for not accepting her submission that that is what she did. 27 Before the Calderbank offer was made the solicitors for the respondent had informed her that in their view this court had no jurisdiction to entertain her appeal and any appeal would need to be instituted in the Supreme Court. 28 Then on 16 May 2013 a Calderbank offer was made in which, for the first time, the solicitors for the respondent made known the prospect of a claim for costs being made on an indemnity basis rather than a party/party basis in the event that the appellant did not accede to the offer then made. 29 That offer remained open until 21 May 2013. Whilst I accept that it remained open for that limited timeframe because of the directions hearing on 23 May 2013 I was informed by counsel for the respondent on 19 August 2013 that from previous experience with the appellant she only checked her mail once a week and that with respect to previous submissions that had been served it was more than a week after the solicitors had sent them that the appellant had received them. 30 I note from the respondent's submissions and the draft bill of costs that there may be an issue for the taxing officer as to whether items 4 - 6, 9 - 11, 15, 16, 24, 26, 28, 29, 32 - 35, 39 and 40 will fall within items 2 or 3 in the District Court Appeals Scale of Costs 2012 and whether items 51, 52, 54 and 55 will fall within items 3 or 4 of that scale. 31 It would seem to me, at least arguable, that work undertaken by the respondent's solicitors in preparation for argument as to the competency of the appeal may fall within item 4 of the scale for which the scale fee is a maximum of $10,890. 32 In this case a special costs order by which any scale item was lifted, would not be appropriate. Before a discretion can be exercised to make a special costs order the court must be of the opinion: 33 The matters which fall for determination here could not be so categorised. (Page 9)
34 In this case I do not consider a proper exercise of discretion results in an order for indemnity costs being made for the following reasons: 1. Standing alone, the failure on the part of the appellant to accept the Calderbank offer could not justify an order for indemnity costs. In the circumstances to which I have referred the timeframe for acceptance was too short. The correspondence can however be taken into account in considering the overall conduct of the appellant. 2. The appellant was unrepresented throughout the course of these proceedings. She had, as I accept, sought and received some advice from staff at the Armadale Magistrates Court and the Supreme Court with respect to the institution of her appeal. It is true that after her appeal was instituted the solicitors for the respondent as a matter of fairness acquainted her with their view as to the competency of her appeal and made available to her copies of two relevant authorities in this court in support of their contention and the futility of the appellant's appeal. 3. The appellant had given consideration to s 32(3)(b) of the Magistrates Court (Civil Proceedings) Act which does provide for a limited right of appeal (inter alia) on the grounds of a denial of natural justice. In addition in one of the authorities forwarded to her by the solicitors for the respondent namely McCarthy v Hill the judge in that case, in dealing with a similar appeal did turn his mind to the question as to whether, pursuant to s 36(7) of the Magistrates Court Act 2004 the appeal could be remitted to the Supreme Court. While his Honour refused to remit the appeal he did not take the view that because the appeal was incompetent under s 26 of the RTA that there was no power to remit. 4. The preliminary issue to be dealt with in this appeal involved a matter of construction of the RTA and also the provisions of s 36(7) of the Magistrates Court Act. Notwithstanding that in striking out the appellant's appeal I found that the appeal was incompetent by reason of the provisions of s 26(1) of the RTA and there was therefore no appeal to remit to the Supreme Court I am not of the view that in all of the circumstances the conduct on the part of the appellant, unrepresented as she was, to continue with the appeal was so unreasonable as to warrant an indemnity costs order. (Page 10)
35 In addition I am not satisfied that the respondent's costs will not tax out at a sum which might be commensurate with costs on a solicitor/client basis having regard, particularly, to the maximum scale item in item 4. 36 The order for costs will be in terms that the appellant pay the respondent's costs of and incidental to the appeal including any reserved costs but not including the costs of and incidental to the preparation by the respondent of written submissions in support of this application for indemnity costs. The costs are to be taxed on a party/party basis.
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