R v Willee, Roger; Ex Parte Commonwealth of Australia
[1998] TASSC 153
•9 December 1998
153/1998
PARTIES: R
v
WILLEE, Roger
COMMONWEALTH OF AUSTRALIA, Ex parte
TITLE OF COURT: SUPREME COURT OF TASMANIA
JURISDICTION: ORIGINAL
FILE NO/S: M132/1998
DELIVERED: 9 December 1998
HEARING DATE/S: 18 November 1998
JUDGMENT OF: Cox CJ
CATCHWORDS:
Procedure - Inferior courts - Tasmania - Local courts - Jurisdiction - Whether the claim was one "arising out of a contract" - Magistrate's jurisdiction under Magistrates Court (Small Claims Division) Act 1989.
Magistrates Court (Small Claims Division) Act 1989 (Tas), s3(1).
R v Small Claims Tribunal and Homewood; Ex parte Cameron [1976] VR 427; Walsh v Palladium Car Park Pty Ltd [1975] VR 949; Fairey Australasia Pty Ltd v Joyce [1981] 2 NSWLR 314; APA Life Insurance Ltd v Charles [1981] 2 NSWR 352, referred to.
Aust Digest Procedure [417]
REPRESENTATION:
Counsel:
Prosecutor: A J Abbott
Respondent: A C R Spence
Solicitors:
Prosecutor: Australian Government Solicitor
Respondent: Page Seager
Judgment category classification:
Court Computer Code:
Judgment ID Number: 153/1998
Number of pages: 6
Serial No 153/1998
File No M132/1998
THE QUEEN v ROGER WILLEE;
Ex Parte THE COMMONWEALTH OF AUSTRALIA
REASONS FOR JUDGMENT COX CJ
9 December 1998
This is the return of an order nisi for certiorari to quash the decision of a magistrate sitting in the Small Claims Division in the Magistrates Court in Hobart on 10 June 1998 in Matter No 11156/98 whereby the learned magistrate ordered the prosecutor to pay to one Mark Thomas Ballard ("the claimant") the sum of $531.67 plus $27.50 filing fee within fourteen days.
The claimant commenced proceedings in the Small Claims Division over the non-payment to him of $556.67 which he claimed the prosecutor had offered to him by letter dated 22 December 1997 and which he had accepted. The claim arose in this way. The claimant was a Commonwealth public servant who accepted a voluntary retrenchment in 1996 and was paid a sum of approximately $70,000 in respect thereof. In late 1997, an officer of the Department of Finance and Administration, Mr Freeman, wrote to him advising that he was entitled to a further $436.67 net after tax of $120 as compensation for superannuation benefits that would have been payable to him had he worked through the unexpired period of notice of retirement. The claimant was invited to sign a claim form for this amount, which he did and which he returned to Mr Freeman. No payment was made, however, and on 6 March 1998, Mr Freeman wrote a further letter saying that the Department's legal advice had been altered as the result of recent decisions in the Industrial Relations Court and that its present advice was that the claimant was not entitled to the additional payment which would not now be made. After further correspondence, the claimant commenced proceedings in the Small Claims Division of the Magistrates Court. There are, of course, no pleadings in that Division and the particulars invited by the prescribed form for a claim are at best skeletal; but the claimant gave details (by ticking certain boxes) that his was a "general claim" in respect of a "contract not completed" and then he set out the following attachment:
"3 General Comment
· A letter of offer dated 6th December 1997 was received advising of further entitlements following my retrenchment.
· The attached form was completed 22 December and hand delivered the following day accepting the offer. A undertaking was given by Mr Freeman that the proceeds would be paid within 3 weeks. The original letter/form accepting the offer is held by Mr Freeman (copy attached).
· Commitments against the proceeds were made in the expectation of receipt of monies, being welcome at Christmas time.
· Payment was not made by the Commonwealth because the author of the letter left on annual leave for 3-4 weeks. Approximately 2,500 persons have been paid around Australia, however the Commonwealth has decided to regard that payment as 'ex-gratia'.
· Legal advice regarding the issue of entitlement was obtained after the decision had already been taken to make the offer, and a letter advising that payment would not be made was then issued some 9-10 weeks after the was made and accepted.
· I contend that a contract between myself and Mr Dale Freemen, as a delegate for the Commonwealth of Australia (Department of Finance and Administration), came into existence by virtue of their letter of offer dated 22nd December 1997 and my acceptance of that offer.
· A letter of demand was sent to the Secretary of the Department on 11th March 1998 advising that legal action would be instigated unless payment was made within 7 days. No response or courtesy call has been received from that letter."
The prosecutor, by letter before hearing and when the matter came on for hearing on 7 May 1998, sought to have it transferred to the Court of Requests, but the learned magistrate refused that request and embarked upon a hearing in the Small Claims Division. He reserved his decision and gave it on or about 11 July 1998. Relevantly it is as follows:
"In this case restricted to it facts I Make the following findings
1the amount claimed by the claimant arises out of a contract of employment but does not stand alone as a contract arising in terms of an offer and acceptance bound by the legal glue of consideration. In other words it was not part of the offer to accept a voluntary redundancy it was simply advice of what would be an additional entitlement to compensation.
2On the 10th Of December 1997 the Department of finances wrote to the Claimant attaching details of the additional entitlement in respect of the VD on 4th July 1996. The claimant returned the requisite form to adjust his final entitlement by $556.67 and seeking a payment by cheque. The final entitlement was not superannuation entitlement but compensation for the loss of such entitlement during the unexpired portion of the notice period.
3It is not in dispute that the Claimant was advised verbally by the Department's Client Services manager before payment was made to the effect that as it was Christmas he could spend up.
4The claimant acted accordingly and spent the money on Christmas presents well in excess of what he would normally do having refinanced himself into an overdraft situation since the redundancy. He therefore went further into debt and in my opinion suffered sufficient detriment in law to support a common law estoppel within all the requirements described by Jordon CJ in Franklin v Manufacturers Mutual Insurance Ltd (1935) SR(NSW)76 at 82. However common law estoppel does not enable the founding of a cause of action applicable in law only as a shield but not a sword. On the other hand equity recognizes other types of estoppel
5Subsequent to the above advice as to the entitlement many Former Commonwealth Public servants were paid the amounts calculated for them and the advice received is that the Commonwealth is still determining whether or not to seek to recover those amounts.
6There was a fiduciary relationship between the parties but there was no discernible negligent misstatement. What is clear is that since the respondent initially received legal advice and since it set out to implement it the respondent became aware of an Industrial Registrar's advice that conflicted and it adopted that position.
7What has happened here is that the Respondent clearly made a representation to the Claimant of entitlement. Its employee reinforced the assumption of entitlement induced by the Respondent. That I follow the position espoused in the joint judgement [sic] of Mason CJ and Wilson J in Waltons Stores (Interstate) LTD V Maher1988 62 ALJR p110 @ col 1 on page 117 where they say 'The forgoing review of the doctrine of promissory estoppel indicates the doctrine extends to the enforcement of voluntary promises on the footing that a departure from the basic assumptions underlying the transaction between the parties must e [sic] unconscionable.' I consider the element of unconscionability is to be found in the encouragement of the Claimant to spend on the assumption that he would be paid ie the promise would be performed and he could spend it in advance. The above case is authority for promissory estoppel being used to provide substantive rights to found a cause of action.
8I reject the last impediment to the Claimants [sic] recovery ie the submission that the Executive cant [sic] be Estopped by it representation. I distinguish Quins case on its facts but more particularly on the basis that to allow this claim does not hinder (significantly or otherwise) the public interest and such interest necessarily comprehends an element of justice to the individual see reason CJ as he then was in Quin's case 170 CLR@pl8 2nd para.
9The amount recoverable by the Claimant will be reduced by $25 the sum the Claimant would have spent on Xmas presents in any event."
Although the prosecutor complains that it was denied natural justice in that the learned magistrate determined the case on a basis, namely promissory estoppel, which had not allegedly been raised by the claimant or by the learned magistrate prior to or at the hearing of the matter, it is unnecessary to address that issue as I am satisfied that another ground of complaint, namely lack of jurisdiction, has been made out.
The jurisdiction of the Small Claims Division is given by the Magistrates Court (Small Claims Division) Act 1989 ("the Act"). Like many similar Acts throughout the country, it allows for the summary resolution of a number of claims where the amount at issue is modest and, save within very limited parameters, its decisions are not subject to review. In R v Small Claims Tribunal and Homewood; Ex parte Cameron [1976] VR 427 at 429, Anderson J said:
"Such a tribunal is an awe-inspiring entity: it acts in private, it organises its own procedures, it is not bound by rules of evidence, parties may appear only in person and may not be legally represented, and except when jurisdiction has been exceeded or there has been a denial of natural justice it is beyond the scrutiny of any court, even though it may in any order it makes be in obvious error (see R v Small Claims Tribunal and Syme; Ex parte Barwiner Nominees Pty Ltd, [1975] VR 831. Vested with such powers, authority and immunity the obligation of such a tribunal to be fair to all parties is of paramount concern."
The Act does not proscribe legal representation in all circumstances, but in most other respects has the same procedural characteristics as the Victorian Act as described above. In the circumstances of this case, while I agree with the importance ascribed by Anderson J to questions of natural justice, it is equally important that the court be vigilant in ensuring that the learned magistrate does not exceed his jurisdiction when presiding in the Small Claims Division. The Act is not designed to give jurisdiction in all disputes which may involve sums of money not in excess of that prescribed pursuant to the Act. Small claims amenable to the jurisdiction of the Small Claims Division are specifically defined.
By s3(1), it is provided:
"3 ¾ (1) In this Act, unless the contrary intention appears ¾
'small claim' means any of the following claims: ¾
(a)a claim arising out of a contract, including a claim arising out of a lease or tenancy agreement in respect of any premises leased or let to the lessee or tenant for residential purposes;
(b)a claim in respect of a quasi-contractual obligation;
(c)a claim for a declaration that a person is not liable to another person in respect of a claim or demand for the payment of an amount arising out of a contract or in respect of a quasi-contractual obligation;
(d)a claim in tort for damage to property;
(e)a claim in tort for damages in detinue or conversion,
where the total amount of the claim does not exceed the prescribed sum including, where a claim is made for an order to perform work to rectify a defect in goods or a deficiency in services, the value of the work sought to be performed, but does not include a claim for a debt or a liquidated demand where there is no dispute as to the liability for payment of the debt or demand, either in whole or in part;"
Counsel for the complainant concedes that his claim is not one in respect of a quasi-contractual obligation as envisaged in par(b) and it is clearly not one falling within pars(c), (d) or (e). The learned magistrate only had jurisdiction to hear and determine the matter if this could be said to be a "claim arising out of a contract".
The learned magistrate found a cause of action lying in promissory estoppel. Although the claimant, who is not a trained lawyer, sought to found it in contract on the basis that there had been an offer and acceptance, it clearly was not a contract supported by consideration, as the learned magistrate acknowledged. The claimant's counsel argued that nonetheless this claim arose out of the claimant's contract of employment.
A claim for damage to a vehicle bailed to the proprietors of a car park, notwithstanding that it gave rise to an action in tort, was held to be a claim arising out of a contract, provided (as was the case there) that the bailment itself was contractual in origin (Walsh v Palladium Car Park Pty Ltd [1975] VR 949). At 960, the Full Court said:
"This is demonstrated by the consideration that it is well established law that terms and conditions limiting a bailee's liability apply to a claim in tort. These limitations are imposed contractually. Hence the liability, even although in tort, must arise out of the contract."
In New South Wales, the Consumer Claims Tribunal has jurisdiction in respect of a "consumer claim", which is relevantly defined as:
"A claim by a person for (1) the payment of money … being … a claim … arising out of a contract for the supply of goods or the provision of services … between that person as a consumer and a person who, in relation to those goods or services … is engaged in a business activity as referred to in subsection 3(A)."
The latter subsection provided that such a person is engaged in a business activity if he carries on a business of supplying goods or providing services, or holds himself out as carrying on such a business. In Fairey Australasia Pty Ltd v Joyce [1981] 2 NSWLR 314, Yeldham J considered whether a consumer who bought an air conditioner from a trader could claim against the manufacturer of the goods in the Tribunal for defects in the goods supplied. At 320, he referred to the argument of counsel for the plaintiff in the proceedings before him, namely the manufacturer, who was a stranger to the contract, as relying:
"… in particular upon the fact that it was only a 'consumer claim' which might be referred to and determined by the tribunal (ss13, 17) and that a 'consumer claim' must arise out of a contract for the supply of goods or services between the consumer on the one hand and the person engaged in the business activity on the other."
He then went on to put the other contention, namely:
"… it was submitted that the words 'arising out of a contract' in the definition of 'consumer claim' were sufficiently wide to include a person who, although not a party to the relevant contract, nonetheless had a liability to the consumer 'arising out of' such a contract as defined. By way of example, to take the present case, it was submitted that the contract between the first defendant and Regulaire [the trader] was one which came within the definition of 'consumer claim' (as it obviously did) and that the plaintiff had or might well have a liability to the first defendant arising out of that contract under s64(5) of the Sale of Goods Act, 1923."
(That subsection allows a court in any proceedings arising out of a contract for a consumer sale to add the manufacturer of goods which appear to the court to not be of merchantable quality.)
At 321, Yeldham J said:
"In my opinion the Act should not be construed in the narrow fashion contended for on behalf of the plaintiff. Although it is concerned only with the rights of consumers of goods and services, no reason in principle exists for confining claims which may be determined by a tribunal to those which are made by one party to a contract against the other contracting party. The words 'arising out of a contract' are of considerable width. They have been considered on countless occasions in connection with other statutes, but it is not instructive to refer to any such authorities. Plainly, if the legislature had intended that the only claims in respect of which a tribunal might have jurisdiction were those where one contracting party sues another, it could, and no doubt would have said so in express words. It is, of course, plain that the person against whom an order is made must be one who has a legal liability to the consumer. The Act is not concerned with 'palm tree justice'. But provided the person who is not a party to the contract between the consumer and the person engaged in a business activity (which contract must exist in order to give the tribunal jurisdiction) but who is joined as a party to the claim might have a liability, whether under s 64(5) of the Sale of Goods Act or in tort, in my opinion a tribunal does have jurisdiction."
He then referred to Walsh v Palladium Car Park Pty Ltd (supra) and said at 322:
"That case, although different to the present one in that the two parties concerned were contracting parties, does support the view at which I have arrived that a claim may be one 'arising out of a contract for the supply of goods or the provision of services' if it has a reasonable relationship to and exists in consequence of a contract between the consumer and another person engaged in a business activity."
Yeldham J's decision has been followed by the Full Court of the Supreme Court of Queensland in R v The Registrar and Referees of Small Claims Tribunals; Ex parte Consolidated Rutile Ltd [1986] 2 Qd R 282.
In APA Life Insurance Ltd v Charles [1981] 2 NSWR 352, Hunt J, dealing with the same statutory provision, said at 361:
"I agree with Yeldham J, that the expression 'arising out of' must be construed as an expression of 'considerable width'. But it is not an expression of inexhaustible width. It cannot, for example, be construed as if it read as 'relating to' or, even more widely perhaps, as if it read as 'with respect to'. In the present case, the collateral contract precedes the policy of insurance. Thus the collateral contract itself cannot be said to arise out of the policy of insurance. The policy of insurance, because it did not provide the benefits promised by the alleged collateral contract, may perhaps have been the cause sine qua non to the claim now being considered, but that claim arises out of the collateral contract not out of the policy of insurance, and it cannot be said to be one 'arising out of' that policy: cf Monro v Bognor Urban District Council [1915] 3 KB 167, at p 171."
Although in some respects a contract of employment may be said, in the present case, to be the cause sine qua non of the claim, the latter does not arise out of it. It does not rely on its terms, nor does it have any direct connection with it, but arises solely, in my view, out of the alleged conduct of officers of the prosecutor's Department of Finance and Administration long after the contract of employment had come to an end. It is a far cry from the position in Fairey Australasia Pty Ltd v Joyce (supra) where the claim against the manufacturer arose out of the contract between consumer and supplier of goods which were alleged to have been defectively manufactured. The present claim has no reasonable relationship to the employment contract, nor does it exist by virtue of that contract, notwithstanding that the dispute would not have arisen had it not been for the previous relationship of employer - employee between the prosecutor and the claimant.
Irrespective of the merits of the learned magistrate's decision in this matter, he had no jurisdiction to entertain the claim and the order must be made absolute. This is not a case, in my opinion, where there is any justification for exercising a discretion not to grant the remedy sought.
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