Petrasek v Koman
[2022] VSC 529
•9 September 2022
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
JUDICIAL REVIEW AND APPEALS LIST
S CI 2021 03252
| DANIEL PETRASEK | Appellant |
| v | |
| TOMASZ KOMAN | Respondent |
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JUDGE: | Moore J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 1 September 2022 |
DATE OF JUDGMENT: | 9 September 2022 |
CASE MAY BE CITED AS: | Petrasek v Koman |
MEDIUM NEUTRAL CITATION: | [2022] VSC 529 |
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APPEALS – Appeal from Magistrates’ Court – Where notice of appeal filed after statutory deadline – Leave to appeal granted due to exceptional circumstances – Appeal confined to Magistrate’s assessment of damages and costs orders – No error of law established – Appeal dismissed – Magistrates Court Act 1989, s 109 – Supreme Court (General Civil Procedure) Rules 2015, r 3.01(5) – Robinson v Harman (1848) 1 Ex Rep 850; Wong v Carter [2000] VSCA 53; Ericsson Australia Pty Ltd v Popovski [2001] VR 260; Mako’ochieng v Kirk [2017] VSC 459; Northern Territory v Sangare (2019) 265 CLR 164; Lu v Ballantyne [2022] VSC 454.
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APPEARANCES: | Counsel | Solicitors |
| For the Appellant | Appeared in person | |
| For the Respondent | Mr J McCoy | Altona Legal |
HIS HONOUR:
At the hearing of this appeal I granted leave to Daniel Petrasek under s 109(5) of the Magistrates Court Act 1989 (the Act) to proceed with his appeal against orders made by the Magistrates’ Court of Victoria on 9 July 2021 and 23 July 2021. Having granted leave, I dismissed the appeal. These are my reasons for judgment.
Background
Mr Petrasek is an intrepid and experienced open water sailor, having sailed extensively around the globe, including to remote locations such as the Galapagos and Falkland Islands. On 26 May 2010, Mr Petrasek arrived at Portland aboard his vessel, the Waterbird, an 11 metre sailing yacht. While in Portland, repairs were undertaken to the Waterbird, including fixing a new mast to the vessel. After the repairs were completed, Mr Petrasek sailed it to New Zealand and returned to Portland in about early 2012.
Upon his return to Portland, Mr Petrasek came to the view that he did not want to continue ocean sailing. He decided that he wanted to give the Waterbird to someone who would use it for ocean sailing. As he later expressed it, ‘my mission is to help dreamers who want to sail, not dreamers who do not’.
Mr Petrasek placed advertisements in newspapers and on boating websites seeking expressions of interest from people who might want the Waterbird. By this time, he had removed it from its mooring at Portland and transported it to a farm where he was residing.
In early October 2014, the respondent, Tomasz Koman, became aware of the Waterbird through the advertisements posted by Mr Petrasek. He expressed to Mr Petrasek his ‘intense interest’ in the craft. After the men exchanged a number of emails, on 30 October 2014, Mr Petrasek emailed Mr Koman stating that he was happy to give the Waterbird to Mr Koman on three conditions which he expressed as follows (the conditions):
(a)‘The hull will be fixed and off the current property by the end of February 2015’.
(b)‘You will look after the boat and keep it with the sailing equipment together (an upgrade is possible) in your hands (as the only owner), free of any bond for at least 3 years, starting tomorrow’.
(c)‘If you (on board) do not make an overseas (non-Australian port) till [sic] the end of October 2017, you return the boat to me (Portland area unless arranged otherwise) without delays’ (the third condition).
Mr Koman emailed Mr Petrasek the following day confirming his acceptance of the donation of the Waterbird on all of the conditions identified by Mr Petrasek.
On 3 December 2014, Mr Petrasek and Mr Koman signed a document which purported to confirm that Mr Petrasek had ‘donated’ the Waterbird to Mr Koman on 1 November 2014, and confirmed Mr Koman’s acceptance of the donation on the above conditions.
It would appear that Mr Koman commenced working on the Waterbird from about December 2014 while it remained on the farm where Mr Petrasek was residing. Mr Koman removed it from the farm in February or March 2015 and sailed it to Williamstown. He has not since sailed it anywhere else; the Waterbird has remained in Williamstown where Mr Koman has undertaken various repairs and maintenance on it. It was therefore uncontroversial at first instance that, contrary to the third condition stipulated by Mr Petrasek, Mr Koman did not travel overseas on the Waterbird by the end of October 2017; nor did he then return the vessel Mr Petrasek.
Proceedings in the Magistrates’ Court
Mr Petrasek issued a complaint in the Magistrates’ Court on 14 March 2018. He sought an order returning the Waterbird to him, as well as compensation for damages. By an amended statement of claim dated 21 October 2019, Mr Petrasek advanced a claim for breach of contract. He alleged that, by an agreement made on about 3 December 2014, he agreed to gift Mr Koman the Waterbird subject to the conditions and that, in breach of that agreement, Mr Koman did not sail the yacht to an overseas port by 31 October 2017 and failed to return the boat to him. The principal relief he sought was an order that the Waterbird be returned to him at Mr Koman’s cost; he claimed damages in the alternative.
As is presently relevant, in his amended defence dated 3 March 2020, Mr Koman admitted Mr Petrasek’s gift of the Waterbird, but denied that there were any conditions which attached to the gift or, alternatively, that any purported conditions were unenforceable. Mr Koman also advanced a counterclaim in which he sought a declaration that he was the owner of the Waterbird under s 4(2)(i) of the Admiralty Act 1988 (Cth).
The claim and counterclaim were heard before Magistrate Stratmann on 4 March 2021 at Warrnambool. The Magistrate delivered his oral reasons for judgment on 9 July 2021 (the Reasons). He upheld Mr Petrasek’s alternative claim for damages as well as Mr Koman’s counterclaim.
In relation to Mr Petrasek’s claim, the Magistrate ordered Mr Koman to pay damages to Mr Petrasek in the amount of $10,000 plus interest. In relation to Mr Koman’s counterclaim, the Magistrate made an order under s 4(2)(ii) and s 9 of the Admiralty Act 1988 (Cth) declaring that, as from 9 July 2021, Mr Koman was the owner of the Waterbird.
At the conclusion of the Reasons, which are summarised below, the Magistrate expressed the view that Mr Koman should pay Mr Petrasek’s costs in relation to Mr Petrasek’s claim, and that no order should be made as to costs in relation to the counterclaim. However, the Magistrate then received submissions in relation to various offers of settlement that had been made and then adjourned the proceedings, indicating that he would make orders in relation to costs after considering the correspondence provided by the parties.
On 23 July 2021, the Magistrate ordered that there be no orders as to costs on Mr Koman’s counterclaim and, in relation to Mr Petrasek’s complaint, ordered that Mr Koman pay Mr Petrasek’s costs from 27 February 2020 up to and including 26 June 2020 and that Mr Petrasek pay Mr Koman’s from that date until the hearing on 4 March 2021.
The Reasons
After summarising the parties’ claims, the Magistrate outlined some of the evidence dealing with the matters to which I have referred in [2]-[7] above. The Magistrate also referred to unchallenged evidence given by Mr Richard Oakley, a shipbroker and marine valuer, that, on about 26 March 2013, he valued the Waterbird at $10,000 (excluding mast and fittings) (the 2013 valuation). Mr Oakley valued the vessel in its berth condition at Portland, before Mr Koman commenced work on it.
The Magistrate then recorded his finding that the agreement between the parties was contained in their exchange of emails on 30 and 31 October 2014 and that the key question was what they intended. He found that Mr Petrasek intended to pass the property in the Waterbird, which he had enjoyed over a period of time in ‘serious adventures’, ‘to a person who shared a similar plan’. He found that Mr Koman understood that this was what Mr Petrasek intended and that they understood that property in the Waterbird would not pass until the third condition had been complied with.
The Magistrate also recorded his finding that the agreement between Mr Petrasek and Mr Koman was supported by consideration in the form of: (a) Mr Petrasek receiving the satisfaction of knowing that ‘the vessel he invested a large portion of his life in was going to continue on a path of adventure’; and (b) Mr Petrasek being relieved of the financial burden of maintaining and repairing the Waterbird.
The Magistrate found the conditions to be enforceable, but expressed ‘reservations’ in relation to the first two conditions which he found had ‘a certain ambiguous character due to the generality of the obligations’. However, no such ambiguity was evident in the third condition which the Magistrate found to be sufficiently clear in its meaning. His Honour recorded that it was clear that, contrary to the third condition, the Waterbird did not travel to an overseas port by the end of October 2017 and Mr Koman did not return the yacht to Mr Petrasek as required by the condition. On that basis, by his failure to comply with the third condition, the Magistrate found that Mr Koman had breached the agreement he made with Mr Petrasek on 31 October 2014 and that there was no basis for an estoppel as against Mr Petrasek.
In a part of the Reasons that are central to this appeal, the Magistrate then continued as follows:
What this Court must do is affect a just outcome as between the parties. In my view the breach of the agreement can be remedied by an award of damages. To order the return of the vessel would not affect a just outcome in this case given the length of time that Mr Koman has had the yacht in his possession, and the large number of works and costs paid in respect of it. The damages should reflect the value of the yacht at the time of Mr Koman removing the yacht from the plaintiff’s property. Interest on that sum, less any costs of ongoing storage of the yacht.
These last costs cannot in my view be reasonably quantified, and given that the yacht was located on land, they would have, in my view, been minimal. On 26 March 2013 the value of the yacht was assessed in the amount of $10,000. As I previously indicated, I note that this valuation has not been challenged during the course of the proceeding. As such, as to the plaintiff’s claim the Court awards damages in the amount of $10,000 and interest on that sum from the date of the breach, being 31 October 2017.
On the counterclaim I make further a declaration in accordance with s 4(3) of the Admiralty Act 1988 (Cth), as from today any interest the plaintiff holds in respect to the yacht known as Waterbird is transferred to Mr Koman, I direct the plaintiff to complete all necessary documentation, if any, to ensure the transfer of his interest in the property to the defendant within 30 days. I have not been made aware of any third party interest in the yacht in this proceeding.
His Honour then turned to the issue of costs to which I have referred in [12] above.
Notice of appeal
As reflected in the terms of s 109(1) of the Act, an appeal from an order of the Magistrates’ Court may only be brought on a question of law. As stated by Tadgell JA in Wong v Carter, the ‘existence of a question of law is not only a precondition to the right of appeal but also the subject of the appeal itself’.[1]
[1][2000] VSCA 53, [43].
The purported questions of law identified by Mr Petrasek in his notice of appeal were confined to the Magistrate’s assessment of damages and his orders in respect of costs.
(a)Mr Petrasek identified the following three questions under the heading ‘Question of law 1: Assessing damages’:
1(a): Were the damages caused by the breach of contract correctly assessed?
1(b):Did his Honour correctly interpret the figures, circumstances and subject of the 2013 yacht value estimate?
1(c):Isn’t it the case that significant considerations of the yacht’s value have been overlooked?
(b)Mr Petrasek identified the following question under the heading ‘Question of law 2: ordering costs’:
2:Were the legal principles associated with the offer applied correctly when the subsequent costs were ordered?
Leave to appeal
An appeal under s 109(1) of the Act must be instituted not later than 30 days after the day on which the order complained of was made.[2] As Mr Petrasek’s appeal in part concerns the orders made by the Magistrate on 9 July 2021, it was uncontroversial that he was required to file his notice of appeal by no later than 9 August 2021.[3] Mr Petrasek’s notice of appeal was filed three days late on 12 September 2021.
[2]Section 109(2)(a) of the Act.
[3]Although the period of 30 days expired on 8 August 2021, because that day was a Sunday, the 30 day period expired the following day: r 3.01(5) of the Supreme Court (General Civil Procedure) Rules 2015.
An appeal instituted after the 30 day period is deemed to be an application for leave to appeal under s 109(1).[4] Section 109(5) of the Act provides that the Court may grant leave and the appellant may proceed with the appeal if the Court:
(a)is of the opinion that the failure to institute the appeal within the period referred to in subsection (2)(a) was due to exceptional circumstances; and
(b)is satisfied that the case of any other party to the appeal would not be materially prejudiced because of the delay.
[4]Section 109(4) of the Act.
Mr Koman did not assert that he would suffer any prejudice because of Mr Petrasek’s delay in filing his notice of appeal. Accordingly, whether leave to appeal should be granted is dependent upon whether Mr Petrasek’s failure to institute the appeal within the prescribed period was due to exceptional circumstances.
The principles governing the exceptional circumstances threshold under s 109(5) of the Act are well-established and were helpfully set out by McDonald J in Mako’ochieng v Kirk as follows:[5]
[5][2017] VSC 459, [9] (omitting citations).
(a)The granting of an extension of time is not automatic. Upon the expiry of the time for the lodgement of the appeal, a respondent has a vested right to retain the judgment unless the application is granted;
(b)The onus lies on the applicant to satisfy the test of exceptional circumstances;
(c)Although ‘exceptional’ is defined as meaning ‘unusual, special, out of the ordinary course’ in the Oxford English Dictionary, in the context of the Act, the circumstances must be such that they can be said to ‘rarely occur’ and ‘perhaps be outside reasonable anticipation or expectation’;
(d)The inquiry is confined to the circumstances relevant to the applicant’s failure to appeal within time (i.e. 30 days) and whether they may be characterised as exceptional;
(e)As part of that inquiry, a court will examine the conduct of the applicant (and his or her agents) in the prosecution of the appeal and the explanation for failing to lodge the notice within time;
(f)The inquiry in determining whether exceptional circumstances exist as required by s 109(5) is not a consideration of all matters germane to the appeal;
(g)That which must be established is that the failure to institute the appeal within the statutory period was due to exceptional circumstances;
(h)The exceptional circumstances must relate solely to the explanation for the delay;
(i)By use of the expression ‘exceptional circumstances’, the legislature intended to place a considerable bar in the way of an applicant before leave will be granted. The bar is a ‘significant hurdle’, which requires a ‘persuasive explanation’, to be demonstrated by ‘clear and cogent proofs’.
At the hearing of the appeal, I gave leave to Mr Petrasek to give oral evidence on the issue of whether his failure to institute the appeal within the period of 30 days was due to exceptional circumstances. Having regard to that evidence and the parties’ submissions on that issue, I was of the opinion that Mr Petrasek’s failure to comply with the time requirement was due to exceptional circumstances as understood in accordance with the above principles. The exceptional circumstances of which I was satisfied were the combined effect of the following matters:
(a)It is apparent from the contents of the notice of appeal prepared by Mr Petrasek (who was not legally represented), as well as his evidence to the Court, which I accept, that he took active steps to lodge his notice of appeal within 30 days. The notice of appeal is dated 6 August 2021 and includes a notation by Mr Petrasek that it was ‘filed’ on that date. It also contains a further ‘filing note’ that ‘this notice has been firstly filed by an email on 6.8.2021. The online maintenance made it impossible to use RedCrest at that time’.
(b)Mr Petrasek’s inability to file his notice of appeal on 6 August 2021 because of the unavailability of the RedCrest system due to ‘online maintenance’ was confirmed by the fact that a planned outage of the RedCrest system was scheduled by the Court’s information technology and digital support group between 7.00pm on Friday 6 August and 8.00am on Monday 9 August 2021. The notice given of the planned outage indicated that RedCrest would be unavailable in that period.
(c)In the circumstances, having regard to the above matters, I accept Mr Petrasek’s evidence that, for reasons outside of his control, he was unable to access the RedCrest system when he attempted to file the notice of appeal on Friday 6 August, being the last weekday before the period of 30 days expired.
(d)Mr Petrasek’s efforts to comply with the 30 day requirement were also hampered by a number of other circumstances. As I have noted, unlike at the first instance, in the preparation of his notice of appeal, Mr Petrasek was not legally represented. Further, in attempting to file his notice of appeal he faced what he described, with apparent understatement, as ‘connectivity issues’. As he stated in his evidence to the Court, at that time he was living ‘in a small cabin in a remote area without electricity and with a very limited mobile signal and the only device [he] had that [he] could use was [his] small tablet’. I accept Mr Petrasek’s evidence that these features interfered with his capacity to lodge the notice of appeal through RedCrest in a timely way before 6 August 2021. As a result, the attempted filing was left until 6 August 2022 but, as I have explained, this could not be effected because of the planned outage of RedCrest.
(e)The circumstances referred to in the preceding subparagraph are also directly relevant in explaining Mr Petrasek’s delay in filing the notice of appeal between 9 August and 12 August 2021. In this period he was in contact with Court staff involved in managing the RedCrest system. As a self-represented litigant, he was principally endeavouring to address issues about the proper form and format of his notice of appeal; in preparing his notice of appeal, he had used a template from the Magistrates’ Court which was incompatible with RedCrest.
Although the above matters may not individually constitute exceptional circumstances, their concurrence and collective effect is well outside the bounds of what might reasonably be anticipated or expected. I am satisfied that together they amount to exceptional circumstances.
Question of law 1 – Assessment of damages
Question 1(a)
The question posed by Mr Petrasek in question 1(a) of his notice of appeal is whether ‘the damages caused by the breach of contract [were] correctly assessed’ by the Magistrate.
The general rule for the assessment of damages for breach of contract is that damages are awarded to a plaintiff for the loss of their ‘expectation interest’ in the contract. As originally expressed by Parke B in Robinson v Harman, ‘Where a party sustains a loss by reason of a breach of contract, he is, so far as money can do it, to be placed in the same situation, with respect to damages, as if the contract had been performed’.[6]
[6]Robinson v Harman (1848) 1 Ex Rep 850, 855.
It is apparent that the Magistrate did not adopt this approach to the assessment of damages. The Magistrate’s decision not to do so is unsurprising because an assessment of damages by reference to Mr Petrasek’s expectation interest is inapposite to the nature of his contractual relationship with Mr Koman. Their agreement was not commercial, nor was it familial. It is difficult to characterise it as other than being ‘personal’ in nature. Mr Petrasek’s ‘expectation interest’ in the agreement – the benefit of knowing that the Waterbird would continue on a ‘path of adventure’ – is not readily amenable to being converted into a monetary amount. If the contract had been fully performed and the conditions met, Mr Petrasek would not have obtained any commercial advantage or benefit.
The Magistrate recorded that, in determining a remedy, he sought to ‘affect a just outcome as between the parties’. He concluded that ‘the damages should reflect the value of the yacht at the time of [Mr Koman] removing the yacht from [Mr Petrasek’s] property’. In proceeding in this way, the Magistrate in substance assessed damages by putting Mr Petrasek in a position as if the agreement had never existed, rather than as if it had been performed. The Magistrate adopted an assessment of damages based on restoring Mr Petrasek the value he had lost by reason of Mr Koman’s failure to fulfil his side of the bargain.
The assessment of loss by reference to a plaintiff’s expectation interest is not invariably the manner in which damages are to be assessed; other bases for assessment may be considered. Ultimately, the choice of the basis for assessment is a matter for the Court.[7] In assessing damages in the above way, the Magistrate approached the assessment of damages in a manner akin to the assessment of restitution damages. Writing extra-judicially, the Honourable Justice Edelman has observed that the common law recognises the interest of the victim of a breach of contract in restitution, ‘which looks to the removal and reversal of benefits acquired under the contract by the contract breaker’.[8]
[7]JW Carter, LexisNexis, Carter on Contract (online at 6 September 2022) , [41-100].
[8]James Edelman, McGregor on Damages (Sweet & Maxwell 21st ed, 2021) [4-036].
For the above reasons, in the unusual circumstances of this case, it was open to the Magistrate to assess damages in the manner in which he did; no error is disclosed by his approach to the assessment of damages.
Question 1(b) & 1(c)
It is convenient to consider together questions 1(b) and 1(c) posited by Mr Petrasek in his notice of appeal:
1(b):Did his Honour correctly interpret the figures, circumstances and subject of the 2013 yacht value estimate?
1(c):Isn’t it the case that significant considerations of the yacht’s value have been overlooked?
On their face, neither of these questions advance an error of law. This conclusion is confirmed as a matter of substance by Mr Petrasek’s submissions[9] which make plain that, in posing these questions, he sought to reopen the Magistrate’s findings of fact, including by revisiting the evidence at trial and by seeking to adduce new evidence.
[9]In this Court, Mr Petrasek filed affidavits dated 10 September 2021, 15 September 2021, 16 November 2021, 25 November 2021, 21 December 2021 and 27 December 2021. Given that the nature of an appeal under s 109 of the Act is an appeal strictly so called, rather than an appeal by way of rehearing, the appeal is to be determined on the basis of the law at the time of the making of the order the subject of the appeal and on the basis of the materials before the Magistrate: Carter v Ried (1992) 1 VR 351, 363. Accordingly, the Court does not receive fresh evidence in the hearing of the appeal. However, given Mr Petrasek was not legally represented, I received the above-mentioned affidavits as submissions. Mr Petrasek also relied upon submissions dated 9 June 2022.
In seeking to show error of law, it is not enough to persuade a Judge on appeal that the Magistrate went wrong on a question of fact.[10] A decision on a question of fact cannot of itself justify the bringing of an appeal under s 109.[11] The only potential basis upon which Mr Petrasek might challenge the Magistrate’s assessment of damages at the level of fact would be to establish that the Magistrate’s assessment of damages was one which was not open. The relevant principles were recently restated by Beach JA in Lu v Ballantyne as follows:[12]
[10]Ericsson (Australia) Pty Ltd v Popovski (2001) 1 VR 260, 265 [14].
[11]Wong v Carter [2000] VSCA 53, [43].
[12][2022] VSC 454, [40]-[41] (emphasis added by Beach JA).
In S v Crimes Compensation Tribunal,[13] Phillips JA said that ordinarily a determination of fact will not give rise to an error of law ‘unless it is shown that the fact-finding tribunal arrived at a finding that was simply not open to it’.[14] As Cavanough J noted in State of Victoria v Subramanian,[15] Phillips JA extended this language to cover not only a finding of fact derived from the acceptance of direct evidence to that effect, but also ‘an inference of fact drawn by the Tribunal from other facts found by it’. Phillips JA went on to say:
In what I have said I have spoken of whether a particular finding (including an inference) was open to the fact-finding tribunal. Sometimes the question is posed as whether there was any evidence to support the finding which is under challenge, but that expression is perhaps ambiguous when it comes to inferences. It may question whether there were the primary facts from which the inference might be drawn or, there being no doubt about the primary facts, it may question whether the inference could be drawn from those facts. In this area the relevant question in relation to a fact is always whether the finding (including an inference) was open and so I think that that is the better formulation.[16]
A little later in S v Crimes Compensation Tribunal, when considering the appropriateness of the use of the expression ‘reasonably open’, Phillips JA said:
The word ‘reasonably’ is used in this context, I suggest, just to emphasise that, when judging what was open and what was not open below, we are speaking of rational tribunals acting according to law, not irrational ones acting arbitrarily. The danger of using the word ‘reasonably’ lies in its being taken to suggest that a finding of fact may be overturned on an appeal which is limited to a question of law, simply because that finding is regarded as ‘unreasonable’. That is not the law as I understand it, at least in Australia. A finding of fact will be overturned on an appeal on a question of law only if that finding was not open.[17]
[13][1998] 1 VR 83.
[14]Ibid 90.
[15](2008) 19 VR 335, 347–8 [32] (‘Subramanian’).
[16]S v Crimes Compensation Tribunal [1998] 1 VR 83, 90 (emphasis added).
[17]Ibid 91 (emphasis added). See also Karakatsanis v Racing Victoria Ltd (2013) 42 VR 176, 189 [40].
Applying these principles in the context of the approach adopted by the Magistrate to the assessment of damages, it was plainly open to the Magistrate to fix damages in the amount of $10,000. The Magistrate reasoned that damages should reflect the value of the Waterbird at the time Mr Koman removed it from Mr Petrasek’s property. The evidence before the Magistrate was that the Waterbird was removed from Mr Petrasek’s property in February or March 2015. The only evidence relevant to the valuation of the Waterbird was the 2013 valuation by Mr Oakley. In valuing the yacht at $10,000, Mr Oakley described it as being in a ‘sad and sorry condition/state’, noting that it had been sailed around much of the globe and in Antarctic waters. It needed ‘considerable maintenance and a full independent condition survey before it should again be taken to sea’. Before the Magistrate, Mr Petrasek did not challenge the 2013 valuation.
Although the contents of the 2013 valuation suggests that it was intended to identify the value of the Waterbird as at 26 May 2010 when it arrived in Australia,[18] because it was the only (and unchallenged) evidence about the yacht’s value, it was open to the Magistrate to rely on this valuation in fixing the value of the Waterbird at the time it was removed from Mr Petrasek’s property in about February or March 2015. That the Magistrate proceeded in this way was unsurprising as there was other evidence from which it could be readily inferred that the Waterbird’s value would not have increased since the 2013 valuation.[19] There was also evidence before the Magistrate upon which it was open for him to attribute no value to the mast which was excluded from the 2013 valuation.[20]
[18]Being a valuation for the assessment of customs duty.
[19]Mr Petrasek’s evidence was that he moved the Waterbird from its mooring (where it had been located at the time of the 2013 valuation) to the farm where he resided about a year after he returned to Portland. Mr Koman’s uncontested evidence was that when he first saw the Waterbird at Mr Petrasek’s property ‘the hull was overgrown with marine growth, there was a lot of grass … the mast was on top of the boat and the interior of the boat was in poor condition. There was … evidence of … animals, mice, grubs. There was old food stored on the boat’.
[20]The 2013 valuation noted that the Waterbird’s value excluded the value of the mast, boom and rigging which had been fitted after its arrival at Portland in the latter half of 2010. Mr Petrasek’s evidence was that he paid $1 for the mast which was not brand new. There was evidence before the Magistrate that the mast was purchased from a farmer who had had an ‘old steel boat that rusted away, and … the only thing he kept off the boat in his hay shed was the mast’.
On the basis of the approach adopted by the Magistrate in assessing Mr Petrasek’s damages by reference to the value of the Waterbird when it was removed from Mr Petrasek’s property in early 2015, it was therefore well open to the Magistrate to assess Mr Petrasek’s damages in the amount of $10,000.
Question 2 - Costs
By this ground of appeal, Mr Petrasek posits the following question: ‘Were the legal principles associated with the offer applied correctly when the subsequent costs were ordered’?
The background to the Magistrate’s orders in respect of costs and the orders made by him are set out in [12]-[13] above. It is apparent from those matters and the parties’ submissions on costs that his Honour exercised his discretion on costs by requiring Mr Koman to pay Mr Petrasek’s costs prior to 26 June 2020 and requiring Mr Petrasek to pay Mr Koman’s thereafter on the basis that, although Mr Petrasek succeeded in his claim, he rejected an offer of settlement dated 19 June 2020. On that date, Mr Koman made an offer to settle Mr Petrasek’s claim which was very similar to the outcome at trial.
It is clear that the Magistrate exercised his discretion by in part giving effect to the usual order as to costs in light of Mr Petrasek’s success, but then departing from the ordinary rule as to costs on the basis that Mr Petrasek’s refusal of the offer was unreasonable. This determination involved the exercise of a broad discretion which must be exercised judicially and in accordance with recognised principles.[21] In order to impeach the Magistrate’s decision on costs, Mr Petrasek must demonstrate an error of the kind described in House v The King.[22] No such error has been demonstrated or is otherwise apparent.
[21]Northern Territory v Sangare (2019) 265 CLR 164, 172-3 [24].
[22](1936) 55 CLR 499, 555.
It is for the above reasons that leave was granted for Mr Petrasek to proceed with his appeal and the appeal was dismissed.
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