National Exchange Pty Ltd v Brown
[2004] VSC 108
•5 April 2004
| IN THE SUPREME COURT OF VICTORIA | Not Restricted | |
AT MELBOURNE
COMMON LAW DIVISION
No. 7505 of 2003
IN THE MATTER of an appeal under s 109 of the Magistrates' Court Act 1989
| NATIONAL EXCHANGE PTY LTD | Appellant |
| V | |
| KELVIN LAURENCE BROWN | Respondent |
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JUDGE: | Williams J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 12 March 2004, 15 March 2004 | |
DATE OF JUDGMENT: | 5 April 2004 | |
CASE MAY BE CITED AS: | National Exchange Pty Ltd v Brown | |
MEDIUM NEUTRAL CITATION: | [2004] VSC 108 | |
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MAGISTRATES – Appeal – Order for stay of proceeding under s20 of the Service and Execution of Process Act 1992 (Cth) not a final order under s109 of the Magistrates’ Court Act 1989 – Appeal dismissed as incompetent.
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APPEARANCES: | Counsel | Solicitors |
| For the Appellant | Mr W. Stark | Griffin Law Firm |
| For the Respondent | Mr P. Over | Slater & Gordon |
HER HONOUR:
This is an appeal under s 109 of the Magistrates' Court Act 1989 from an order made on 7 August 2003 by Mr M L Smith M at the Magistrates' Court at Melbourne staying proceeding number R00605367 (“the proceeding”). The proceeding was between the appellant as plaintiff and the respondent as defendant and it was stayed on the respondent’s application under s 20 of the Service and Execution of Process Act 1992 (Cth) (“the Act”).
S 20 Service and Execution of Process Act 1992 (Cth)
Part 2 of the Act applied at all relevant times to civil proceeding in a court, including the Magistrates’ Court of Victoria. S 20(2) provided that a person served with initiating process might apply to the court for an order staying the process.
S 20(3) and (4) of the Act were in the following form:
“S20
(3) The court may order that the proceeding be stayed if it is satisfied that a court of another State that has jurisdiction to determine all the matters in issue between the parties is the appropriate court to determine those matters.
(4) The matters that the court is to take into account in determining whether that court of another State is the appropriate court for the proceeding include:
(a)the places of residence of the parties and of the witnesses likely to be called in the proceeding; and
(b)the place where the subject matter of the proceeding is situated; and
(c)the financial circumstances of the parties, so far as the court is aware of them; and
(d)any agreement between the parties about the court or place in which the proceeding should be instituted; and
(e)the law that would be most appropriate to apply in the proceeding; and
(f)whether a related or similar proceeding has been commenced against the person served or another person;
but do not include the fact that the proceeding was commenced in the place of issue.”
The application
By the complaint filed on 17 March 2003 the appellant plaintiff had claimed damages in the sum of $363.34 against the respondent defendant in relation to an alleged breach of a contract for the sale of a parcel of 359 AXA shares (“the shares”). The proceeding had been fixed for hearing at the Magistrates’ Court at Melbourne on 7 August 2003 as an arbitration under the Magistrates’ Court Rules.
The respondent was at all relevant times a resident of Brassall in Queensland. He made an application dated May 2003 seeking a stay of the proceeding in Victoria and its transfer to a Queensland court. The application did not specifically refer to the Act. However counsel appearing for the appellant on the application informed the Court that he took the application to have been made under the Act, although he submitted that the court had “an ordinary jurisdiction to stay and a specific statutory jurisdiction”.
The respondent did not appear at the hearing of the application. He spoke to the Magistrate by telephone from Queensland. S 20(7) of the Act provided that, for the purposes of determining the application, the court might hold a hearing by telephone.
The respondent relied upon an affidavit sworn by him on 8 May 2003 in support of the stay application. In his affidavit the respondent alleged that he had attempted to provide the appellant with his SRN number which was required to effect the transfer of the shares between him as vendor and the appellant as purchaser. He alleged that he had been served with the complaint seeking damages for breach of the contract of sale of the shares without notice that the appellant was about to commence proceedings against him. He alleged that the contract for the sale of the shares had been entered into in Queensland and disputed the jurisdiction of the Melbourne court. He asserted that he was a resident of Queensland and submitted that it would be “unduly onerous” to require his attendance in Melbourne and referred to his “limited means”. He urged the Court in all the circumstances to stay the proceeding in Victoria.
A transcript of the hearing of the application was marked “DM7” and exhibited to the affidavit sworn in support of the appeal on 25 September 2003 by Damian Paul Martin, counsel for the appellant at the Magistrates’ Court hearing. The transcript records[1] the Magistrate stating that he treated the application as one under the Act. His Worship referred to the limited information he had as to the financial means of each of the parties and, in particular, of the appellant. He said that it was “almost impossible to say where the subject matter of the action [was], because the subject matter in effect [was] shares in a company listed throughout Australia.”[2] He said that the only other relevant issue was the financial impact upon both parties of the place of hearing. He went on to conclude (addressing the respondent through the telephone) :
“In the circumstances, I accept that the impact upon you will be disproportionate to the impact upon the plaintiff company. Therefore, given that I find that the cause of action properly arose in Queensland and that you are disproportionately affected financially in terms of coming to Melbourne, as opposed to the plaintiff appearing in Queensland, I’m going to stay this proceeding under section 20 of [the Act]. That means that the proceeding will not continue in this court, but the plaintiff may …- if it wishes,… commence action against you in the local court, or whatever it’s called, in Queensland.”[3]
s 109 Magistrates' Court Act 1989
[1]T23 l27-24 l2
[2]T26ll14-16
[3]T26l24-27 l9
Section 109(1) of the Magistrates' Court Act 1989 relevantly provides:
"s 109(1) A party to a civil proceeding in the Court may appeal to the Supreme Court, on a question of law, from a final order of the Court in that proceeding.”
Under s 109 (3) the appeal is to be brought in accordance with the Supreme Court General Rules of Procedure (Civil Proceedings) 1996.
Order 58 of the Supreme Court Rules governs the procedure relating to appeals under s109. Order 58.09 provides for the Master of this Court to state the question of law the appellant shows to be raised by the appeal. The appellant made an application without notice to the Master under r 58.09, supported by the affidavit of Ruth Alice Elliot sworn on 5 September 2003. The appellant further relied upon Mr Martin’s 25 September 2003 affidavit.
On 25 September 2003 the Master ordered that the matter be referred to the Listing Master for fixing for trial and it came before this Court on 11 March 2004. When making his orders on 25 September 2003 the Master stated in “Other Matters” :
"(1) The final order of the Magistrates' Court of Victoria which is the subject of this appeal is the order made on 7 August 2003 by the Magistrates' Court at Melbourne constituted by Mr M L Smith, Magistrate, whereby the Court stayed the complaint of the appellant claiming damages for breach of contract for the sale of shares.
(2) The question of law shown by the appellant to be raised by the appeal is:
(a) did the learned Magistrate err in the exercise of his discretion to stay the complaint pursuant to s 20(4) of the Service and Execution of Process Act (Cth), particularly where there was no evidence or other information as to the financial circumstances of the plaintiff?"
Counsel appearing for the respondent told the Court that he was not instructed to make any submissions in opposition to the appeal. He said that he appeared only to seek to protect his client against an order for costs, although he subsequently did seek the respondent’s costs of the appeal.
Counsel for the appellant challenged the exercise of the Magistrate’s discretion in making the order. After initially making submissions based on the common law discretion to stay a proceeding, he agreed to confine his submissions to a challenge to the exercise of discretion under s20 of the Act.[4] He submitted that the Magistrate had erred in relying upon information which was not in the form of sworn evidence communicated to him by the respondent over the telephone during the hearing. He argued that the relevant rules in the Magistrates’ Court Civil Procedure Rules 1999 relating to the making of applications required that evidence in the application be sworn evidence. He went on to submit that the Magistrate had erred in finding that the cause of action arose in Queensland.
[4]T32 l15
The question of law as framed by the Master was premised upon the order being final in nature. The issue as to the characterisation of the order as final and the competence of the appeal had not been raised by the appellant but was raised by the Court and submissions were made in that regard by counsel for the appellant. Counsel for the respondent made no submissions, but did refer the Court to certain authorities including the decision of the Court of Appeal in Equus Financial Services Ltd v Francis Xavier Lah[5] and Rick Manietta Proprietary Limited & Ors v The National Mutual Life Association of Australasia Limited[6].
[5]Unreported, Brooking, Ormiston and Vincent JJ, 8 September 1994; BC 9405876
[6]Unreported, McDonald J, 8 September 1995
The competence of the appeal
Final order
There is no definition of "final order" in the Magistrates' Court Act 1989, but it has been held that, in a civil proceeding, the expression is used as an antonym of the expression "interlocutory order".[7]
[7]Kinex Exploration Proprietary Limited v Tasco Proprietary Limited & Anor [1995] 2 VR 318 at 320 per Batt J; Bullmore & Bullmore v Zurich Australian Life Insurance Limited (Unreported, Fullaghar J, 24 January 1991); Guss v Johnstone (Unreported, Beach J, 23 March 1994).
In Gilbert v Endean[8] Cotton LJ considered the nature of interlocutory applications in which evidence given on information and belief was permissible saying:
“ … those applications only are considered interlocutory which do not decide the rights of parties, but are made for the purpose of keeping things in status quo till the rights can be decided, or for the purpose of obtaining some direction of the court as to how the cause is to be conducted, as to what is to be done in the progress of the cause for the purpose of enabling the court ultimately to decide upon the rights of the parties.”[9]
[8](1878) 9 Ch D 259
[9] ibid at 268; for an extensive review of the authorities see: FAI Home Security Pty Ltd v Price [1999] VSC 274
Counsel for the appellant relied upon the decision of the Court of Appeal in Border Auto Wreckers (Wodonga) Pty Ltd v Strathdee[10] in support of his submission that, even if the stay order under s20 of the Act had been made on an interlocutory application, the Court should regard the order as final. He argued that it was final because of its effect upon the subject proceeding, despite the fact that the issues between the parties might be addressed in another forum if the requisite nexus was established.
[10] [1997] 2 VR 49
In Border Auto Wreckers it was held that s74(2D) of the amended County Court Act 1958 required leave to appeal from a judgment or order in an interlocutory application, if the order made in the application was interlocutory rather than final in nature.[11] It was held that an order extending time under s23A of the Limitation of Actions Act 1958 was interlocutory. Relevantly, Brooking JA gave guidance as to the approach to be adopted by the Court in distinguishing between interlocutory and final orders when he said:
“… the courts have rather painfully at last arrived at a position where what orders are interlocutory and what orders are final for the purposes of leave to appeal may be ascertained with tolerable certainty by reference to decided cases specifically in point or, in the absence of such a decision, to the rules which are now established by the decisions of the High Court.”[12]
[11]applied in Masters v McCubbery (CA (Vic), No 8551/1994, 30 August 1996, unreported, BC9603911)
[12]ibid
Counsel for the appellant also referred to the decision of the High Court in Hall v Nominal Defendant[13] in support of his argument that the s20 stay order was a final order. In that case Taylor and Owen JJ held that an order under s65A(3) of the Traffic Act 1925 (Tas.) refusing an application for an extension of time for the commencement of proceedings was not a final order. Taylor J said[14] that a broad and “unexceptionable” test for determining whether an order was interlocutory or final was encompassed by the words of Alverstone CJ in Bozson v Altrincham Urban District Council[15]:
“It seems to me that the real test for determining this question ought to be this: Does the judgment or order, as made, finally dispose of the rights of the parties? If it does, then I think it ought to be treated as a final order; but if it does not, it is then, in my opinion, an interlocutory order.”
[13](1966) 117 CLR 423
[14]ibid at 439-40
[15][1903] 1 KB 547 at 548-9
In Equus Financial Services Limited v Francis Xavier Lah[16] the appellant challenged an order of a County Court Judge made under s20 of the Act staying a County Court proceeding. After referring to the order, Brooking JA noted that s74 of the County Court Act 1958 “unfortunately allow[ed] appeals to be brought without leave from all manner of interlocutory orders”. His Honour, with whom Vincent J agreed, went on to say of the impugned order :
" … the decision below plainly concerned a matter of practice and procedure …”.[17]
[16]Unreported, Brooking, Ormiston and Vincent JJ, 8 September 1994; BC 9405876
[17]Ibid at 4
The distinction between a matter of practice and procedure and a final determination of the matters in issue between parties was considered in Adam P Brown Male Fashions Pty Ltd v Phillip Morris Inc[18]. Their Honours, Gibbs CJ, Aickin, Wilson and Brennan JJ, characterised a decision to release a party from an interlocutory order based on an undertaking as one concerned with a matter of practice and procedure. Their Honours said at 176:
“The essence of such a matter is described in terms which are sufficient for present purposes in Salmond on Jurisprudence 10th ed. (1947), p. 476:
‘Substantive law is concerned with the ends which the administration of justice seeks; procedural law deals with the means and instruments by which those ends are to be attained. The latter regulates the conduct and relations of courts and litigants in respect of the litigation itself; the former determines their conduct and relations in respect of the matters litigated’.”
[18](1981) 148 CLR 170
An order refusing a stay under s20 of the Act was characterised as interlocutory, as opposed to “final”, in Rick Manietta Proprietary Limited & Ors v The National Mutual Life Association of Australasia Limited[19]. In that case, McDonald J said:
"The refusal of the Master to stay the proceedings before the County Court in this case, in my view, is interlocutory in nature. It does not finally determine the rights of the parties, but only determines whether the litigation initiated in Victoria should not proceed in that State."
[19]Unreported, McDonald J, 8 September 1995.
Counsel for the appellant submitted that the decision in Rick Manietta was distinguishable because the proceeding had not been stayed in that case. He also argued that the Court should not follow the decision in Equus insofar as it had been held that the order staying the proceeding made under s 20 of the Act was not final.
Counsel for the appellant was unable to refer the Court to any authority directly supporting his submission that an order under s20 of the Act was final. Rather, he relied upon Border Auto Wreckers and referred generally to the authorities listed in paragraphs [I 64.01.445-450] of the commentary to the Supreme Court Rules in Williams, Civil Procedure.
He pointed to the reference in Williams to Port of Melbourne Authority v Anshun Proprietary Limited (No 1)[20] in which it was held that an order for the permanent stay of a proceeding as an abuse of process on the ground that the matters in question could and should have been litigated in an earlier proceeding constituted a final order. He submitted that the High Court in Anshun had held that the challenged order was final as it finally disposed of the rights of the parties. He submitted that, likewise, this Court should analyse the effect of the order staying the proceeding under s20 and hold it to be a final order. He noted that the High Court in Anshun had not considered itself bound by authorities, such as that of the Privy Council in Tampion v Anderson[21], characterising as interlocutory orders staying proceedings on the grounds that they were frivolous vexatious and an abuse of process. He said that, similarly, those authorities should not be followed by this Court when considering the application under s20 of the Act.
[20](1980) 147 CLR 35.
[21](1973) 3 ALR 414; 48 ALJR 11 (PC).
The Court of Appeal of the Supreme Court of Victoria recently considered the applicability of the decision in Anshun in Lucas v Transport Corporation Victoria[22]. There the appellant had challenged an order under r 23.01 of the County Court Rules 1989 permanently staying the proceeding on the ground that it was vexatious and an abuse of process on the basis that the appellant had released his relevant rights and his claim was bound to fail. The requisite leave to appeal from an interlocutory order had not been obtained. Chernov JA considered whether the order staying the proceeding was interlocutory or final. At 158, his Honour said:
"The test to be applied in determining whether an order is final or interlocutory is whether the judgment or order appealed from finally determines the rights of the parties having regard to the legal, rather than the practical, effect of the judgment or order: Licul v Corney (1976) 180 CLR 213 at 225 and Carr v Finance Corporation of Australia Limited (No 1) (1981) 147 CLR 246 at 248 per Gibbs CJ. As was observed by Brooking JA in Border Auto Wreckers (Wodonga) Proprietary Limited v Strathdee [1997] 2 VR 49 at 52, whether an order is final or interlocutory for the purpose of leave to appeal 'may be ascertained with tolerable certainty by reference to decided cases specifically in point or, in the absence of such a decision, to the rules which are now established by decisions of the High Court'. The authorities seem to make it clear that ordinarily an order staying an action on the ground that it is frivolous, vexatious and an abuse of process where the plaintiff's claim is hopeless, is interlocutory and not final: see Tampion v Anderson (1973) 3 ALR 414 at 415; 48 ALJR 11 at 12; Little v State of Victoria [1998] 4 VR 596 at 601; Wickstead v Browne (1992) 30 NSWLR 1 at 11; Olympic Airways SA v Nelson Wheeler Arnold [1998] VSCA 28 at 3 and 5."
[22](2000) 1 VR 156.
Chernov JA went on to distinguish the decision in Anshun on the basis that it dealt with an attempt to litigate an issue which was res judicata or the subject of the principle of issue estoppel.
Counsel for the appellant submitted that, in so far as the Court in Equus had held that the order under s20 of the Act was not final, it was “at odds with” the decision in Border Auto Wreckers and wrong, because the stay order under s20 of the Act did finally dispose of the plaintiff’s rights in the proceeding.
I am not persuaded by any of the appellant’s various submissions.
In my view the order under s20 of the Act does not finally determine the rights of the parties in the action, having regard to its legal, rather than practical effect. In accordance with the approach recommended by the authorities, I refer to the decision of the Court of Appeal in Equus as a case specifically in point and conclude that the order under s20 of the Act is one related to practice and procedure and interlocutory, as opposed to final, for the purposes of an appeal under s109 of the Magistrates Court Act 1989.
Accordingly, the appeal will be dismissed as incompetent. I will not go on to consider its merits.
Submissions as to Costs
The respondent has sought an order for costs in his favour, despite having initially stated through his counsel that he was represented on the appeal merely to protect himself from any order for costs sought by the appellant.
Counsel for the respondent restricted his application to one for costs relating to only two days of the hearing. He explained his limited application on the basis that he had initially indicated to the Court that costs would not be sought by his client. However, he went on to say, the estimated duration of the appeal hearing had been exceeded because of the manner in which the appellant had conducted it. He subsequently retracted his initial limited application and applied for the costs of the appeal.
The respondent’s application was resisted by the appellant. Counsel for the appellant submitted that the respondent should not be granted costs because:
(a) his counsel had earlier stated that he would not do so;
(b) he had filed no material and made no submissions in the appeal;
(c)his legal representatives had in effect had a “watching brief” in the matter; and
(d)had counsel for the appellant been aware that the respondent would seek costs, he would have “run the appeal differently”, so as to finish the hearing within a day.
Counsel for the appellant subsequently resiled from the submission that he would have acted so as to shorten the hearing of the appeal. Ultimately, he submitted that the Court should take the remaining matters referred to into account when exercising its discretion in relation to costs.
Conclusion
The circumstances of this case are unusual in that the appeal failed as incompetent because the Court found that the challenged order of the Magistrates’ Court was not a “final” order under s109 of the Magistrates’ Court Act. However the appellant had succeeded in its application before the Master for the formulation of a question of law premised upon the characterisation of that order as a final order. The issue of the competence of the appeal was not raised by either party.
Counsel for the respondent had told the Court that he appeared only to resist an application for costs and to seek a certificate if the appeal succeeded and that he would make no submissions. He made none, but, on the basis that he felt duty bound to do so, he did provide the Court with copies of three authorities relating to the operation of s20 of the Act. Two of those authorities were relied upon by the Court in arriving at the conclusion that the appeal was incompetent. At the end of the day, however, the respondent sought an order for costs.
In all the circumstances, in my view, each party should bear its own costs of the appeal and in the exercise of my discretion I should decline to make any order as to costs.
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