Paul Francis Moore v Susan Elizabeth Moore
[2022] ACTMC 7
•1 April 2022
MAGISTRATES COURT OF THE AUSTRALIAN CAPITAL TERRITORY
Case Title: | Paul Francis Moore v Susan Elizabeth Moore |
Citation: | [2022] ACTMC 7 |
Hearing Date(s): | 9 March 2022 |
DecisionDate: | 1 April 2022 |
Before: | Magistrate Lawton |
Decision: | Leave is granted to the plaintiff to discontinue the proceedings under rule 1160(2). The plaintiff to pay the defendant’s costs up to 3 February 2022 on a party-party basis. The defendant to pay the plaintiffs costs from 4 February 2022 on a party-party basis. |
Catchwords: | PRACTICE AND PROCEDURE – COSTS – value of clock the subject of dispute was below the $25,000 jurisdictional threshold in s 266A of the Magistrates Court Act 1930 (ACT) – leave not required for the plaintiff to discontinue proceedings – leave granted to discontinue under r 1160(2) of the Court Procedures Rules 2006 (ACT) to allow the court to determine costs under r 1163(2) – no evidence plaintiff enquired as to the value of the clock prior to commencing proceedings – where plaintiff’s submissions extended the duration of proceedings – where defendant failed to disclose a valuation despite correspondence indicating the need for one – costs awarded to defendant up until the date of correspondence – costs awarded to plaintiff after the date of correspondence |
Legislation Cited: | ACT Civil and Administrative Tribunal Act 2008 (ACT), s 16 Court Procedure Rules 2006 (ACT), r 1721, r 1160, r 1163 Magistrates Court Act 1930 (ACT), s 266A(1)(b) |
Cases Cited: | Bunyon v Lewis (No.3) [2013] FamCA 888 Calderbank v Calderbank [1975] 3 WLR 586; 3 All ER 333 Foots v Southern Cross Mine Management Pty Ltd [2007] HCA 56; 234 CLR 52 Jornad Pty Ltd v Sapme Pty Ltd (No 3) [2020] ACTSC 355 Latoudis v Casey [1990] HCA 59; 170 CLR 534 Nelipa v Robertson [2009] ACTSC 16 Norbis v Norbis [1986] HCA 17; 161 CLR 513 Oshlack v Richmond River Council [1998] HCA 11; 193 CLR 72 Perisher Blue Pty Ltd v Chubb Fire Safety [2014] ACTCA 43 Re Minister for Immigration & Ethnic Affairs (Cth); Ex Parte Lai Qin [1997] HCA 6, 186 CLR 622 Rural & General Insurance Broking Pty Ltd v Australian Prudential Regulation Authority [2009] ACTSC 67, 231 FLR 199 Smith v Airservices Australia [2005] FCA 997, 146 FCR 37 The Citadel Group Ltd v Alexander [2017] ACTSC 308 |
Parties: | Paul Francis Moore (Plaintiff) Susan Elizabeth Moore (Defendant) |
Representation: | Counsel I Metz (Plaintiff) P Davey (Defendant) |
| Solicitors Farrer Gesini Dunn (Plaintiff) Dobinson Davey Clifford Simpson (Defendant) | |
File Number(s): | CS 205 of 2021 |
MAGISTRATE LAWTON:
Introduction
In this matter parties seek determination of issues relating to costs.
Counsel for the plaintiff submitted that the defendant should pay the plaintiff’s costs on a solicitor-client basis from 26 January 2022. Counsel for the defendant submitted that the plaintiff should pay the defendant’s costs on a party-party basis from the date these proceedings were commenced in the Magistrates Court, being 8 November 2021.
Chronology
This matter is a dispute between a brother (plaintiff) and sister (defendant) over the ownership of an antique clock (the antique clock).
On 8 November 2021, the plaintiff commenced proceedings by filing an originating claim and statement of claim at the ACT Magistrates Court Registry.
On 11 January 2022, the matter was before Acting Registrar Barry for a directions hearing. At this time, Acting Registrar Barry raised the value of the clock as an issue in respect to the jurisdiction of the Magistrates Court. On this occasion the defendant estimated the value of the clock to be $500. Acting Registrar Barry indicated to the parties that they would need to provide evidence of the value of the clock on the next occasion.
On 4 February 2022, the solicitor for the plaintiff sent a letter to the solicitor for the defendant requesting the defendant arrange a formal valuation of the clock, with the costs to be equally shared by the parties. The solicitor for the defendant did not provide a response to this letter.
On 15 February 2022, the defendant filed a defence and counter claim.
On 22 February 2022, the matter was before Registrar Banks where the issue of jurisdiction was again raised. The parties made brief submissions before Registrar Banks set the matter down for a hearing on this issue on 9 March 2022.
On 2 March 2022, the solicitor for the defendant filed an affidavit stating that he was informed by the defendant that the clock is an Ansonia clock and annexed screenshots of listings on the website ‘gumtree’ that appeared after searching ‘Ansonia clock’ in Australia.
On 7 March 2022 the defendant filed an affidavit stating that she had requested her friend make enquiries on her behalf to a clock maker on 26 January 2022. Annexed to the affidavit were the email exchanges and two photographs of the front of the clock and the metal plate attached to it. In this exchange the clock maker stated that the auction value of the clock would be between $200-500 and that the restored approximate insurance value is $1500-2000. Notably the reply from the clockmaker was sent just 12 minutes after the original enquiry email was sent on 26 January 2022.
On 8 March 2022 the plaintiff filed written submissions in respect to the costs issue and an affidavit under the hand of the plaintiff’s solicitor. The defendant also provided written submissions in respect to the costs issue, which were filed in Court.
On 9 March 2022, the matter was before myself, and parties informed the Court that the issue of jurisdiction had been resolved and the value of the clock was agreed to be between $200 and $500. The parties informed the Court that the only outstanding issue was in relation to the issue of costs.
Submissions and considerations in respect to Costs
General Principles
As raised by counsel for the plaintiff, in the recent decision of Jornad Pty Ltd v Sapme Pty Ltd (No 3) [2020] ACTSC 355, McWilliam AsJ outlined the following principles applicable to the costs jurisdiction under the Court Procedure Rules 2006 (ACT):
[10] Costs are in the discretion of the Court, pursuant to r 1721 of the Court Procedures Rules 2006 (ACT) (Rules); see also Oshlack v Richmond River Council [1998] HCA 11; 193 CLR 72 (Oshlack). The discretion has been described as absolute and unfettered or words to similar effect: Latoudis v Casey [1990] HCA 59; 170 CLR 534 at 557; Perisher Blue Pty Limited v Chubb Fire Safety Limited [2014] ACTCA 43 at [41]-[42]. Such discretion is guided by settled principle, but not controlled by it: Norbis v Norbis [1986] HCA 17; 161 CLR 513 at 537.
[11] Generally, the discretion is exercised in favour of the successful party: Foots v Southern Cross Mine Management Pty Ltd [2007] HCA 56; 234 CLR 52; Oshlack at [66]-[68].
[12] Circumstances that may warrant a different ordering being made include where an offer of compromise has been made that was more favourable to the recipient party than the ultimate outcome of the matter, either pursuant to the regime contained in Pt 2.10 of the Rules or otherwise in accordance with the principles articulated in Calderbank v Calderbank [1975] 3 WLR 586; 3 All ER 333.
In The Citadel Group Ltd v Alexander [2017] ACTSC 308 (Citadel Group), McWilliam AsJ cited McHugh J in Re Minister for Immigration & Ethnic Affairs (Cth); Ex Parte Lai Qin (1997) 186 CLR 622 (Lai Qin) at 624-625 (citations omitted, emphasis added):
“In most jurisdictions today, the power to order costs is a discretionary power. Ordinarily, the power is exercised after a hearing on the merits and as a general rule the successful party is entitled to his or her costs. Success in the action or on particular issues is the fact that usually controls the exercise of the discretion. A successful party is prima facie entitled to a costs order. When there has been no hearing on the merits, however, a court is necessarily deprived of the factor that usually determines whether or how it will make a costs order.
In an appropriate case, a court will make an order for costs even when there has been no hearing on the merits and the moving party no longer wishes to proceed with the action. The court cannot try a hypothetical action between the parties. To do so would burden the parties with the costs of a litigated action which by settlement or extra-curial action they had avoided. In some cases, however, the court may be able to conclude that one of the parties has acted so unreasonably that the other party should obtain the costs of the action.
Principle in the Legislation in respect to discontinuance by plaintiff
Both parties addressed the Court on the application of rule 1160 and rule 1163 of the Court Procedure Rules 2006 which state:
1160 Discontinuance or withdrawal by plaintiff
(1) A plaintiff may discontinue a proceeding, or withdraw a part of it, at any time before the court sets a hearing date for the proceeding.
(2) A plaintiff may discontinue a proceeding, or withdraw part of it, at any other time only with the court’s leave or the agreement of the other active parties.
…
1163 Costs of discontinuance or withdrawal
(1) A party who discontinues or withdraws is liable to pay—
(a) the costs of the party to whom the discontinuance or withdrawal relates up to when the notice of discontinuance or withdrawal is served on the party; and
…
(2) If a party discontinues or withdraws with the court’s leave, the court may make the order for costs it considers appropriate.
The defendant submitted that as the plaintiff had conceded the clock’s value was below $25,000 then the plaintiff must withdraw or discontinue the proceedings under rule 1160(1) rather than with the Court’s leave under rule 1160(2), as a hearing date had not yet been set.
Counsel for the plaintiff sought the Court’s leave to discontinue the proceedings on 9 March 2022 under rule 1160(2) and make whatever cost orders the Court considered appropriate. Counsel for the plaintiff submitted that if rule 1160(1) did apply (which the plaintiff did not concede that it did) it would not disentitle the Court from being capable of making a costs order it considered appropriate in cases that are discontinued prior to a hearing date being obtained.
This reading of rule 1160(1) differs from that of Refshauge J in Nelipa v Robertson [2009] ACTSC 16 at [4] where his Honour referred to the application of rule 1160 to the facts of that case as follows (emphasis added):
[4] Following discovery and provision of certain material, Mr Nelipa was advised that he no longer had reasonable prospects of success in the proceedings and he applied for leave to discontinue them. That leave was not necessary (r 1160(1) of the Court Procedures Rules 2006 (ACT)) but for the fact that Mr Nelipa did not want the inevitable consequence of a discontinuance without leave, which was that he would have to pay the defendants' costs (r 1163(1)). Under r 1163(2), however, the court is given power to make “the order for costs it considers appropriate” where the court gives leave to the party to discontinue.
Similarly, Refshauge, Penfold and Burns JJ in Perisher Blue Pty Ltd v Chubb Fire Safety [2014] ACTCA 43 at [42] (Perisher Blue) referred to the decision of Stone J in Smith v Airservices Australia (2005) 146 FCR 37 at [38]-[44] (Airservices Australia) where her Honour ‘noted that a party who discontinues or withdraws proceedings without leave (in this Territory under r 1163(1) of the Court Procedures Rules) is required to pay the costs of the other relevant party or parties, but that where a party discontinues or withdraws by leave (under r 1163(2)), the Court may make such order as it considers appropriate.’
I agree with the defendant’s submission that leave of the Court is not required for the plaintiff to discontinue the proceedings.
Counsel for the plaintiff sought the leave of the Court on 9 March 2022 to discontinue the proceedings despite not being required to. This was evidently for the purpose of asking the Court to make orders in respect to costs that it considers appropriate without being constrained by rule 1160(1).
Although I agree that leave is not required in this instance, I will grant leave for the plaintiff to discontinue the proceedings in order to properly exercise the Court’s discretion in respect to costs.
Considerations when exercising discretion in respect to costs
The ACT Court of Appeal in Perisher Blue at [43] further referred to Stone J in Airservices Australia:
[43] Her Honour noted that the power to award costs is a discretionary power unfettered other than to be exercised judicially, but accepted that, in the case of discontinuance (and presumably, withdrawal), there was an underlying policy that a party who discontinues proceedings is held liable for costs of the other parties but that this is not a “usual rule”. It is, however, a starting point for any consideration of the award of costs in the case of a discontinuance and, although the reasons for discontinuance may vary considerably, it is likely to be in the interests of justice that a party who discontinues proceedings should pay the costs of the other parties.
In this instance the starting point is that the plaintiff, as the party who is discontinuing the proceedings, should bear the costs of the defendant.
Penfold J in Rural & General Insurance Broking Pty Ltd v Australian Prudential Regulation Authority [2009] ACTSC 67 at [82] (Rural & General Insurance Broking) summarised the relevant legal principles in respect to the costs discretion within the ACT under rule 1163(2) as follows:
[82] The legal principles discussed above can be summarised for present purposes as follows:
(a) The costs discretion to be exercised under r 1163(2) where a party is given leave to discontinue is at large, but must be exercised judicially.
(b) There is no presumption that under r 1163(2) costs will be awarded to one or other party. There is no entitlement to costs against the discontinuing party arising simply because in some cases it may be preferable in the interests of finality to enter judgment against the party rather than giving leave to discontinue.
(c) In the exercise of the costs discretion, it is appropriate to have regard to:
(i) whether the behaviour of each party was reasonable until the point when discontinuance was sought; and
(ii) whether seeking to discontinue reflects a surrender by the discontinuing party in a hopeless case or a supervening event or other change in external circumstances that has rendered the action “futile” or pointless.
(d) In relation to the reasonableness of a party's behaviour, the matters that may be relevant include (but are not limited to), those set out in the following list (extracted from Oshlack (see [59] above) and Edwards Madigan (quoted at [61] above):
(i) whether a party has “by its lax conduct effectively invite[d] the litigation”;
(ii) whether either party has unnecessarily protracted the proceedings;
(iii) whether the successful party has succeeded on a point not argued before a lower court;
(iv) whether a party has prosecuted the matter solely to increase the costs recoverable;
(v) whether a party has obtained only the relief previously offered by another party in settlement offers;
(vi) whether a discontinuing plaintiff had “an arguable case” against the other party;
(vii) whether the “complexity, duration or expense of the litigation could have been reduced if either party had taken a different view of the case”.
(e) In relation to the reason for seeking to discontinue:
(i) a surrender will usually leave the surrendering party to pay the other party's costs; and
(ii) discontinuance for futility will sometimes mean that no costs order is made.
Counsel for the plaintiff submitted that the Court should order that the defendant pay the plaintiff’s costs on a solicitor-client basis from 26 January 2022.
This submission was based on, firstly, the defendant’s ‘failure to engage with the plaintiff’s legitimate concerns’ and secondly, the failure of the defendant to put the plaintiff on adequate notice that it would be making the jurisdiction argument and that a valuation of the clock had been obtained on 26 January 2022.
Counsel for the defendant submitted that the Court should order that the plaintiff pay the defendant’s costs on the ordinary basis from the date these proceedings were commenced, being 8 November 2021.
This submission was based on the fact that the plaintiff commenced proceedings in the Magistrates Court where the amount claimed was less than $25,000. Section 266A(1)(b) of the Magistrates Court Act 1930 states that ‘a proceeding may not be started in the Magistrates Court in relation to another civil dispute if an amount of not more than $25,000 is claimed, or sought to be declared as a debt, whether or not any other relief is also sought’
The submissions made by both parties essentially go to the issue of whether the behaviour of each party was reasonable until the point of discontinuance was sought. In considering the reasonableness of each party’s actions, I will do so with reference to the list of considerations summarised by Penfold J in Rural & General Insurance Broking [82] subparagraph (d).
Counsel for the plaintiff submitted that the reason the plaintiff commenced in the Magistrates Court was in circumstances where he had no way of ascertaining the value of clock and could not reasonably have been expected to abandon any right to relief over $25,000.
However, had the plaintiff taken the view that commencing in the ACT Civil and Administrative Tribunal (ACAT), rather than the Magistrates Court, would be the more appropriate course to take when the value of the clock was unknown, the expense and duration of these proceedings would not have been necessary.
Counsel for the defendant submitted that while the plaintiff did not have the clock in his possession at the time of commencing the proceedings, it had previously been in his possession for 8 years and in his family since 1910. Counsel for the defendant submitted that this would have given the plaintiff a level of familiarity to, at a minimum, make enquiries as to whether the clock was worth more or less than $25,000.
Counsel for the plaintiff addressed the Court on why this was not possible, which included the fact that the plaintiff had not had the clock in his possession for 20 years and only had one photograph of the clock (where the clock just happened to be in the background).
While this may well have been the case, the plaintiff provided no evidence of even basic enquiries being made in order to determine whether the value of the clock fell within the jurisdiction of the Magistrates Court prior to commencing proceedings.
As expressed by McWilliam AsJ in Citadel Group, citing McHugh J in Lai Qin at 624, ‘the Court cannot try a hypothetical action between the parties’ in assessing costs. However, it is clear that the plaintiff has discontinued the proceedings due to the fact that the plaintiff has no arguable case in this jurisdiction.
In addition to this, the duration of this matter, in part, can be contributed to counsel for the plaintiff making submissions on 22 February 2022 that this matter was outside of the jurisdiction of ACAT due to it not being a civil dispute as defined in section 16 of the ACT Civil and Administrative Tribunal Act 2008. The matter was adjourned to 9 March 2022 for the purposes of a hearing on this issue.
In oral submissions on 9 March 2022, counsel for the plaintiff essentially asked the Court to put little weight on the civil dispute argument as his instructing solicitor was put on the spot on the previous occasion. This, however, was not the case, as the transcripts show the issue of jurisdiction was first raised by Senior Deputy Registrar Barry on 11 January 2022 before the matter was adjourned for the purpose of the parties addressing the Court on this issue on 22 February 2022.
The next matter for consideration is the reasonableness of the defendant’s actions, as the failure to disclose the valuation obtained on 26 January 2022 also unnecessarily protracted the proceedings.
It was revealed during the proceedings on 9 March 2022 that the defendant had only disclosed the existence of the email exchange regarding the value of the clock to her solicitor two days prior, that is, 7 March 2022. The defendant’s affidavit sworn on 7 March 2022 annexes the correspondence between the defendant’s friend and the valuer, and the swift reply received. The affidavit offers no explanation as to why the valuation was not provided to the defendant’s solicitor prior to 7 March 2022.
It is troubling that no explanation is forthcoming, particularly when the issue of the value of the clock had been raised in directions on 11 January 2022 and raised again at the directions of 22 February 2022. Indeed, the correspondence from the plaintiff to the defendant of 4 February 2022 squarely raised the need for a valuation.
While the plaintiff up to this point was still also pursuing the civil dispute argument, as evidenced by the written submissions filed on 4 March 2022, the disclosure of this valuation at the time at which it was received, and certainly after 4 February 2022 when the issue was raised in the plaintiff’s letter to the defendant, would have likely avoided further delay in these proceedings.
It is likely the jurisdiction issue would have resolved at the directions hearing before the Registrar on 22 February 2022 had the valuation been disclosed in a timely manner.
Of all the defendant’s conduct raised by the plaintiff as having contributed to the duration of these proceedings, I find the failure to disclose the valuation is the only conduct of relevance.
The plaintiff asserted delinquency on the part of the defendant by declining to participate in mediation, failing to give adequate notice regarding the issue of jurisdiction and withholding the valuation. There was no obligation on the defendant to mediate in these proceedings and while this may have led to the plaintiff commencing proceedings, it did not lead to the plaintiff commencing proceedings in the Magistrates Court over ACAT.
As I have stated earlier, the transcript from the proceedings on 11 January 2022 makes it clear that the issue of jurisdiction was first raised by Senior Deputy Registrar Barry.
The plaintiff briefly made submissions in respect to the defendant filing a defence in these proceedings on 15 February 2022, and in doing so is said to have ‘impliedly accepted the jurisdiction of this Court’.
As expressed by Bennett J in Bunyon v Lewis (No.3) [2013] FamCA 888 at [148] in reference to the submission made by the applicant that jurisdiction is not an issue because the respondent consents to it: ‘This submission appears to be predicated on a misconception that jurisdiction can be conferred on the court by acquiescence or agreement of the parties. That is not the case. This Court either has jurisdiction or it does not have jurisdiction.’
I do not find any of the defendant’s actions as delinquent. However, the delay by the defendant in disclosing the valuation to either her solicitor or the plaintiff did unnecessarily protract the proceedings, and that will be reflected in the orders I make.
Orders
Leave is granted to the plaintiff to discontinue the proceedings under rule 1160(2).
The plaintiff to pay the defendant’s costs up to 3 February 2022 on a party-party basis.
The defendant to pay the plaintiffs costs from 4 February 2022 on a party-party basis.
| I certify that the preceding [52] numbered paragraphs are a true copy of the Reasons for Decision of his Honour Magistrate Lawton Associate: Emilia Currey Date: 1 April 2022 |
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