Red Group Holdings Pty Ltd v R C and M M Wright Transport Pty Ltd
[2013] TASSC 26
•3 June 2013
[2013] TASSC 26
COURT: SUPREME COURT OF TASMANIA
CITATION:Red Group Holdings Pty Ltd v R C & M M Wright Transport Pty Ltd [2013] TASSC 26
PARTIES: RED GROUP HOLDINGS PTY LTD
v
R C & M M WRIGHT TRANSPORT PTY LTD
FILE NO: 186/2013
DELIVERED ON: 3 June 2013
DELIVERED AT: Burnie
HEARING DATE: 3 June 2013
JUDGMENT OF: Estcourt J
CATCHWORDS:
Procedure – Inferior courts – Tasmania – Local courts – Practice – In general – Whether payment into court can be withdrawn or modified.
Magistrates Court (Civil Division) Rules 1998 (Tas), rr92, 94.
Aust Dig Procedure [418]
REPRESENTATION:
Counsel:
Appellant: S Shelley
Respondent: S G Wright
Solicitors:
Appellant: McLean McKenzie & Topfer
Respondent: Wright Gilmour
Judgment Number: [2013] TASSC 26
Number of paragraphs: 31
Serial No 26/2013
File No 186/2013
RED GROUP HOLDINGS PTY LTD v
R C & M M WRIGHT TRANSPORT PTY LTD
REASONS FOR JUDGMENT ESTCOURT J
(DELIVERED ORALLY) 3 June 2013
The appeal
This appeal primarily concerns the question of whether the Magistrates Court (Civil Division) Rules 1998 ("the Rules") permit a payment into court made pursuant to r92 of those Rules to be withdrawn or modified, and whether they subject such payment to an implied time for acceptance.
The learned magistrate, from whose decision the appeal is brought, held that the Rules did not so operate and that even if it were otherwise, the circumstances of the case were not such as to attract the exercise of any discretion he might thereby have to permit a withdrawal of the payment into court.
The notice of appeal by nine grounds, which need not be enumerated here, raises three questions. The first is whether the learned magistrate erred in his construction of Pt5 of the Rules either taken by itself or when read in conjunction with rr4 and 10. The second is whether the learned magistrate's decision should be set aside for a breach of the rules of procedural fairness. The third is whether the learned magistrate erred in the exercise of his discretion were he to have such a discretion.
The history of the proceedings
The following summary of the history of the proceedings as they were at the time of the learned magistrate's decision is taken directly from pars[1] and [2]:
"1 A brief summary of the history of this matter is as follows:
(a)On 18 July 2012 the claimant filed a claim against the defendant arising out of a sublease between them. The bases of the claim were as follows:
(i) A claim in the sum of $2461.36, for unpaid rent due at the date of termination of the sublease, which was alleged to be 21 May 2012.
(ii) A claim for damages arising from the need for the claimant to remove and store at its own expense, goods left on the premises by the defendant. The amount claimed in this regard was $2650 plus $50 per week for ongoing storage costs from 19 June 2012.
(b)On 10 August 2012, the defendant filed a defence in which it denied that the rent was outstanding and asserted that it had already paid the relevant sum to the claimant. The balance of the claim was not admitted. On the same day, the defendant paid into court the sum of $3150. The notice which accompanied the payment stated that the payment was in full and final settlement of the claimant's liability to the defendant, did not include an amount in respect of costs, and was made without admission of liability.
(c)On 21 September 2012, the claimant filed an amended claim. The amendment to the claim deleted the claim for unpaid rent. The balance of the claim was left intact. The total claim was recalculated at the sum of $4300 plus $100 per week from 20 September 2012. The order which granted leave for the filing of the amended claim noted an application by the defendant to withdraw the payment into court, and that that application was opposed. It is that application which is currently before me for determination.
(d)On the same day that leave was given for the amendment of the claim, leave was also given to the defendant to file an amended defence and counterclaim. That document was filed on 9 October 2012. The counterclaim alleged loss and damage arising from the wrongful detention by the claimant of various property including a baling machine. That loss was particularised after I heard that the current application [sic]. The amount claimed by the defendant in its counterclaim is $38,324.01 plus exemplary damages.
2 The defendant argues that it should be entitled to withdraw the notice of payment into court and have the money it has paid into court pursuant to the notice returned to it. Mr Shelley, counsel for the defendant, argued that this application should be allowed because:
(a)The claimant has not accepted the payment within a reasonable time or at all.
(b)There has been a material change in circumstances since the payment was made into court. In particular, the claimant has effectively withdrawn its allegation of unpaid rent. Further, there is now a counterclaim in place for a considerable sum."
The decision below
I here set out in full pars[3] - [11] of the learned magistrate's reasons for decision:
"The Court's Power to Permit the Withdrawal of the Payment into Court
3 The payment into court was made pursuant to Rule 92, Magistrates Court (Civil Division) Rules. That rule provides that a party may, with or without admission of liability, pay a sum into court which it considers sufficient to satisfy the claim against it. By Rule 94, the other party may accept the payment into court by filing and serving a notice to that effect. If it does so, then the notice of acceptance will operate as a full satisfaction of that party's claim.
4 The question of payment out of court is dealt with by Rule 95. That rule provides that if a payment into court is not accepted, the money paid into court is to be forwarded to the party entitled to it in accordance with the outcome of the action. If it is accepted, then the money is paid out in accordance with the terms of the notice of acceptance.
5 Part 5 of the Rules also provides for the filing and service of an offer of compromise. It is relevant to note that by Rule 90, the party making an offer of compromise may file and serve a notice of withdrawal or variation of that offer if it is not accepted. However, there is no similar provision authorising the variation or withdrawal of a payment into court once it has been made.
6 The Supreme Court Rules also make provision for payment into court. There are some significant differences between the Supreme Court Rules and the Magistrates Court Rules in respect of such payments. These differences include:
(a)A payment into court pursuant to the Supreme Court Rules must be accepted within 14 days of receipt of the notice of the payment. There is no such time limit provided in respect of the acceptance of the payment in the Magistrates Court Rules.
(b)Rule 268(4) (b), Supreme Court Rules provides that, with the leave of the court, a notice of payment into court may be modified or withdrawn or delivered in an amended form. As already noted, there is no similar provision in the Magistrates Court Rules.
7 I regard these differences as significant. The absence of a time limit in respect of acceptance, and the absence of provision for modification or withdrawal of a payment in the Magistrates Court suggest that the intention manifest in these rules is that a payment in, once made, may be accepted at any time up to judgment, and may not be withdrawn. That this is the intended operation of the rules in respect of payments into court is also supported by the fact that in respect of offers of compromise, the rules make specific provision for variation or withdrawal. Whilst at first blush, this may appear to be an unduly restrictive and potentially unfair outcome, it is also arguably consistent with the emphasis placed by the rules on the need to encourage each party to make an early and realistic assessment of its position in the litigation and, if possible, resolve same by agreement.
8 There is nothing particularly repugnant to principle in such an interpretation. The process of payment into court is a creature of statute, unknown to the common law (see Williams v Volta [1982] VR 739). Traditionally, the courts have regarded money paid into court pursuant to statute or Rules of Court as money which is to be held and made available to satisfy any judgment entered in the proceedings. Where the courts are authorised to give leave for a payment in to be withdrawn or modified, it is well established that such leave will only be given in certain circumstances, for example, where there has been a change in circumstances, or further evidence has been found after the payment into court.
9 Mr Shelley has argued that given that the Rules are silent as to the question of withdrawal of the payment into court, I should adopt the practice and procedure of the Supreme Court, having regard to the provisions of Rule 10 (b), Magistrates Court Rules. In particular, he argues that I can import into the Magistrates Court Rules dealing with this question, the provisions of Rule 268 (4) (b), Supreme Court Rules.
10 I disagree with this submission. Rule 10 is only applicable If the manner or form of … doing any other thing is not prescribed by these rules, or any Act. This does not seem to me to be the situation applicable in respect of payment into court under the Magistrates Court Rules. The manner and form of paying money into court, accepting a payment in and having money paid out of court is prescribed by the Magistrates Court Rules. Had it been intended that there be a time limit on acceptance of the payment in, or that the payment in be capable of being withdrawn or modified, it would have been a simple matter for the Rules to prescribe to that effect. I note provisions to that effect in the Supreme Court Rules dealing with payment into court, and the Magistrates Court Rules dealing with offers of compromise. I conclude that Rule 10 is not applicable to these provisions and, accordingly, there is no basis on which I can adopt the practice and procedure of the Supreme Court.
11 I determine, therefore, that once a payment into court has been made pursuant to the Magistrates Court Rules, it can be accepted at any time up to judgment in respect of the claim and cannot be withdrawn or modified. The money will only be paid out of court once a claim has been determined, in accordance with that determination, or pursuant to a notice of acceptance of the payment in."
Discussion of the appellant's arguments
On the first of the three questions raised on the appeal the appellant argues that the learned magistrate erred in holding that once a payment into court is made it may be accepted at any time up until judgment and cannot be withdrawn or modified, and contends that, having regard to r4 of the Rules, the learned magistrate erred in holding otherwise, and also erred in holding that r10 had no application. The appellant submits that the decision of the learned magistrate thereby defeated the public policy purpose of payments into court, their purpose for offerors, and the purpose of the rules themselves.
Rule 4 provides as follows:
"4 Conduct of Court proceedings
Proceedings in the Court are to be conducted –
(a) with the least possible delay; and
(b)in a manner that ensures, as far as is practicable, that the parties are on an equal footing; and
(c) in a manner that saves costs; and
(d) in a manner that is proportionate to –
(i) the amount of any claim; and
(ii) the importance or complexity of the action; and
(iii) the financial positions of the parties."
Rule 10 provides as follows:
"10 Directions as to practice and procedure
If the manner or form of commencing an action, taking a proceeding or doing any other thing is not prescribed by these rules or any Act, the Court –
(a)on the application of a party, may give directions as to the procedural steps to be taken; or
(b)with necessary modification, may adopt the practice and procedure of the Supreme Court."
Counsel for the appellant, Mr Shelley, submits that the learned magistrate's decision, if correct, would result in absurd consequences.
First, he argues that notices of payment into court would become extinct as a tactical tool in the Magistrates Court because offers of compromise under the Rules can be modified or withdrawn and can be subject to conditions, including as to time for acceptance, whereas a notice of payment into court cannot.
Second, counsel submits there would only be a very minor increased risk of costs to an offeree because the offeree could continue to investigate its case and could accept the offer after hearing all the evidence, or even after the conclusion of the trial and before any reserved judgment was delivered.
I see no absurdity in either of those results as the Rules provide a clear choice between a permanent and irrevocable offer in the nature of a payment into court and the more flexible alternative of an offer of compromise. It is true that a payment into court could be accepted at a very late stage, but it needs to be remembered that the effect of r93 of the Rules is that if the notice of payment into court does not specify the sum offered for costs, the party accepting the payment in is entitled to costs only up until the date of the payment in.
It is therefore correct that if a plaintiff, for example, decided not to accept a payment into court prior to hearing the defendant's evidence at trial, then the plaintiff would not be liable for the defendant's costs of preparation and attendance at trial if the plaintiff subsequently then accepted the payment in, but equally however, the plaintiff would have incurred its own costs of preparation for, and attendance at, the trial. Such a course would thus involve a forensic decision for the plaintiff to be made assessing the expense involved. Such a potentiality or fear of it could however be altogether avoided by the defendant electing not to make a payment into court but rather an offer of compromise containing appropriate limiting conditions.
That the circumstances in which a payment into court might be sensibly chosen over the more flexible offer of compromise may, as a result, be rare, does not justify this Court ignoring the tolerably plain words of the provisions of the sections comprising Pt5 of the Rules.
If Pt5 of the Rules was not intended to operate by way of a clear choice between significantly different alternatives, it would, as the learned magistrate said, have been a simple matter for the Rules to prescribe to that effect. I add, as was the case with their predecessors, by specifying a time for acceptance of the payment in by the offeree and by specifying a right in the offeror to withdraw or modify the amount paid in.
The clear language of r94, taken together with what, given such a brief series of provisions contained in Pt5, could scarcely be regarded as an accidental omission to specify a time for acceptance or a power of withdrawal or modification, suggests to me that Pt5 was intended to provide for payments into court that would operate otherwise than as had been the case in statutory provisions in the past or in other rules of other courts, either past or current at the time of the drafting of the Rules.
This includes most eloquently, of course, the provisions as to payment into court contained in the rules made under the Local Courts Act 1896 which were the immediate predecessors to the Rules. Rule 39 of the rules under the Local Courts Act originally required that a payment into court be accepted within such reasonable time before the return day of the summons as the time of the payment in permitted. Rule 39 remained that way for over 100 years until it was rescinded and replaced by an amendment to the provisions of SchV of the Local Courts Act, enacted by the Local Courts Amendment (No 2) Act 1987. The new r39 included, by subr(4), a right to withdraw or amend the payment into court with the leave of the court and it specified, by subr(6), the time for acceptance of the payment in as the earliest of 14 days from the date of the notice of payment in, or the commencement of the hearing of the action. Similar provisions were not carried into the Rules in 1998 which thereby marked a significant, and in my view deliberate, departure from the previous practice.
Rule 94 provides as follows:
"94 Notice of acceptance of payment into Court
(1) A party may file and serve a notice in writing accepting a payment into Court.
(2) A notice of acceptance operates as full satisfaction of a party's claim.
(3) Judgment in terms of the acceptance of a payment into Court is a final judgment."
Moreover, r95 contemplates that money paid into court will remain in court, if not accepted prior to a final outcome in the action, and conversely it does not contemplate earlier withdrawal of that money by the party paying in. Rule 95 provides:
"95 Payment out of Court
(1) If a payment into Court is not accepted, the money paid into Court is to be forwarded to the party entitled to it in accordance with the outcome of the action.
(2) On the filing of a notice of acceptance, a registrar is to forward the money paid into Court to the party entitled to it in accordance with the notice of acceptance."
For these reasons it is clear to my mind that this is not a case where it would be appropriate to imply into r94(1) a requirement that a notice of acceptance of a payment into court must be delivered within a reasonable time after service of the notice of payment in. The Rules are more than just silent on the question of the time in which the relevant act asserted to be required (ie, acceptance within a particular time prior to judgment) is required to be performed. On the contrary, r94(1) read in the context of Pt5 of the Rules in its entirety, must in my view be taken as providing that there is no requirement for the relevant act itself.
Put another way, Pt5 of the Rules contemplates that an offer of compromise may be withdrawn or varied if it is not accepted in accordance with its terms, but that a payment into court endures until immediately before the final outcome of the proceedings and is not required to be accepted at any earlier time.
Finally, on this first question of the construction of Pt5 of the Rules, the appellant argues that there is no provision for the "manner" of withdrawing or modifying a notice of payment into court or imposing a time limit on its acceptance, and accordingly r10 of the Rules should apply to govern the manner of that procedure by, in effect, importing the provisions of rr268(4)(b) and/or 269(1) of the Supreme Court Rules 2000.
Rule 268(4)(b) of the Supreme Court Rules provides as follows:
"268 Payment into Court by defendant
…
(4) A notice of the payment under subrule (2) –
(a) is to be in accordance with the prescribed form; and
(b)with the leave of the Court or a judge, may be modified or withdrawn or delivered in an amended form."
Rule 269(1) of the Supreme Court Rules provides as follows:
"269 Acceptance by plaintiff of money paid into Court
(1) Subject to rule 270, within 14 days after the receipt of a notice of money paid into Court or before the commencement of the trial, whichever is the earlier, a plaintiff may accept the whole or a part of the money specified in the notice in satisfaction of the claim or any cause of action to which the money relates."
I do not accept that submission. It may well be correct that there is no provision in Pt5 for the "manner" of withdrawing or modifying a notice of payment into court or imposing a time limit on its acceptance, but the anterior question is whether any provision of Pt5 even contemplates the existence of a right to withdraw or modify, or an obligation to accept a payment in prior to final judgment. In my view the answer to that anterior question is "no" and in fact the contrary is the case. The scheme of Pt5 is to provide for such rights and obligations in the case of an offer of compromise, but to provide quite differently in the case of a payment into court.
It follows, in my judgment that there is no room in Pt5 of the Rules for the application, via r10, of the provisions of rr268(4)(b) and/or 269(1) of the Supreme Court Rules.
As to the second question arising on the appeal, that is whether the decision of the learned magistrate should be set aside for a breach of the rules of procedural fairness, I am satisfied that if his Honour indeed did not sufficiently indicate to counsel for the appellant that he intended to determine the question of whether a payment into court could be accepted at any time prior to judgment, then that fact ought not to result in a new hearing being ordered by me.
In Stead v State Government Insurance Commission (1986) 161 CLR 141 the High Court in a joint judgment said at 145:
"The general principle applicable in the present circumstances was well expressed by the English Court of Appeal (Denning, Romer and Parker LJJ) in Jones v National Coal Board (1957) 2 QB 55, at p 67, in these terms:
'There is one thing to which everyone in this country is entitled, and that is a fair trial at which he can put his case properly before the judge. ... No cause is lost until the judge has found it so; and he cannot find it without a fair trial, nor can we affirm it.'
That general principle is, however, subject to an important qualification which Bollen J plainly had in mind in identifying the practical question as being: Would further information possibly have made any difference? That qualification is that an appellate court will not order a new trial if it would inevitably result in the making of the same order as that made by the primary judge at the first trial. An order for a new trial in such a case would be a futility.
For this reason not every departure from the rules of natural justice at a trial will entitle the aggrieved party to a new trial. By way of illustration, if all that happened at a trial was that a party was denied the opportunity of making submissions on a question of law, when, in the opinion of the appellate court, the question of law must clearly be answered unfavourably to the aggrieved party, it would be futile to order a new trial."
In my view, at its highest, all that could have happened in the event of a breach of the rules of procedural fairness by the learned magistrate is that the appellant would have been deprived of an opportunity to make submissions on a question of law which, in my opinion, must clearly be answered unfavourably to the appellant.
It is unnecessary for me to decide the third question arising on the appeal as I am persuaded that the learned magistrate had no discretion to permit the appellant to withdraw the payment into court and it is immaterial whether, if he did, he ought to have exercised that discretion in favour of the appellant.
Disposition
It follows that the appeal is dismissed.
0
1
0