Rzadkowski v Donal Craig & Associates No. Scgrg-00-912

RZADKOWSKI V DONAL CRAIG & ASSOCIATES

[2000] SASC 396

Magistrates Appeal (Ex Tempore)

1................ LANDER J....... This is an appeal by a defendant from an order for costs made by a Magistrate in the civil jurisdiction of the Magistrates Court.

Section 40 of the Magistrates Court Act 1991 provides that a party to a civil action may, in accordance with the Supreme Court Rules, appeal against any judgment given in the action. Judgment is defined in s 3 of the Magistrates Court Act to mean “a judgment, order or decision and includes an interlocutory judgment or order.”
Section 40(2) provides that:
“If the rules of the Supreme Court provide that if an appeal from a judgment of a particular class can only be brought by leave of the Court, the right of appeal is limited accordingly, but in any other case an appeal lies at right.”
Rule 96B of the Supreme Court Rules provides that unless a Magistrate has otherwise certified in accordance with r 96B.02 any appeal against an interlocutory judgment under s 40 of the Magistrates Court Act is subject to leave being obtained from the Supreme Court.
I do not think an appeal against an order for costs of the action is an interlocutory judgment and, in my opinion, leave is not required.
The respondent’s claim against the appellant arose out of a solicitor and client relationship. The appellant had been involved in two motor vehicle accidents. Her claims for damages for personal injuries arising out of those accidents were settled. As a result of some confusion between the insurer and the respondent, the appellant was overpaid in relation to her settlement by $11,250.
Due to no fault of her own, she received that sum which was due to another of the respondent’s clients. The respondent reimbursed its other client the sum of $11,250 and took an assignment of its client’s cause of action against the appellant for recovery of the amount overpaid to her.
The respondent sought the repayment of the amount from the appellant on more than one occasion, but she declined to repay that amount. The respondent brought these proceedings against the appellant, claiming repayment of the sum $11,250. Very shortly after the proceedings were brought, $4,666 of the sum of $11,250 was repaid by a third party, but at the instigation of the appellant to the respondent. This left an amount outstanding of $6,584 out of the original overpayment of $11,250.
The appellant entered a defence to the respondent’s claim, and in that defence she pleaded that according to her calculations the amount of $1,334 was the amount of the overpayment. She, however, sought in the defence an order that the respondent’s claim against her be dismissed, and that the respondent pay her costs.
After the filing of the defence, a directions hearing was held before a Magistrate and during that hearing, I am told, the appellant was warned of the risk of further defending the proceedings. Shortly after that time, the appellant offered the respondent $3,000 in full and final settlement of the respondent’s claim. That offer was rejected.
On 9 August 2000, that is the day after the directions hearing, the respondent filed an offer to consent to judgment in its favour in the sum of $6,854 (sic), which represented the amount shown on the summons less the amount paid following the issue of the summons, plus the costs of action to be agreed or taxed. Clearly enough the author of the offer clearly transposed two of the figures. The respondent also wrote to the appellant on the same day. In that claim the respondent correctly identified the amount owing ($6,584), claimed costs of $710 and disbursements of $105 and offered to settle for $7,000 in full settlement provided the offer was accepted by 15 August 2000.
The appellant responded to that offer by offering to settle by payment of the sum of $6,854 (sic) at the rate of $80 per month, but made no offer for costs. In fact, in a letter to the respondent which was filed in the court, she said:
“Because the overpayment has been created by your fault I do not feel to be responsible for any costs of the court proceeding.”
The respondent wrote to the appellant on 21 August 2000 and enclosed the list of documents which the respondent had been ordered to file and, at the same stage, enclosed a notice of acceptance of the respondent’s offer for the appellant to sign. The respondent further advised the appellant in the following terms:
“We confirm that counsel has now been briefed on our behalf to appear at he (sic) trial and that preparations are now underway for same. We confirm that if you wish to settle this matter you are better off doing it sooner rather than later as our costs will be increasing at a faster rate the closer the matter comes to trial. Feel free to obtain independent advice to confirm this fact.”
The matter was listed for trial on 6 September 2000 and the respondent retained counsel to appear on the respondent’s behalf. Mr Craig, the principal of the respondent, made himself available to give evidence at the trial.
On 30 August 2000, the appellant issued an application returnable on 8 September 2000 in the Magistrates Court seeking the following orders:
“1..... That the defendant pay to the plaintiff an amount of $6,584 in monthly instalments of $80 per month.
2. That the trial scheduled on 6 September 2000 be canceled (sic).
3...... That the parties cover their costs.”
As can be seen, that application was returnable after the date of the trial.
Mr Craig has deposed in an affidavit filed on this appeal that the respondent was served with that application on 5 September 2000. The respondent was not advised by the court or the appellant that the matter listed for trial on 6 September 2000 was not to proceed and, accordingly, the respondent appeared on that occasion by counsel and Mr Craig attended as a witness. I am told they waited some two hours before they were advised that the trial would not proceed that day because there was an interlocutory application to be heard on 8 September 2000.
When the matter came on on 8 September 2000, the Magistrate was asked to rule as to whether or not the appellant should pay the respondent any costs. The Magistrate ruled that the respondent had no alternative but to bring these proceedings and that, as the appellant had denied her liability to repay the amount which was due, the appellant was liable to pay the costs occasioned by the respondent in recovering this sum.
The Magistrate, after concluding that the appellant had such a liability, then proceeded to tax costs, allowing the respondent a solicitor’s fee on issue of the proceedings, a fee for attendance on the directions hearing, a fee for preparation for trial, a fee for counsel on trial and a witness fee for Mr Craig on 6 September 2000 and a fee for the hearing of the application on 8 September 2000 and a fee for filing the offer and $100 by way of interest. He also allowed court fees. The costs, fees and interest totalled $2,610. The Magistrate entered judgment for the respondent in the sum of $6,584 plus the amount of $2,610. He stayed execution for 14 days.
The appellant has appealed against the order for costs made against her and further complains about the taxation by the Magistrate of the costs in the amount taxed at the time of the hearing. The appellant has included a large number of grounds in her notice of appeal, most of which are not relevant. I can treat her notice of appeal as being an appeal that the order for costs should not have been made.
The appellant appeared before me today and sought to have her husband address me in relation to the matters of which she complained. There was no objection by the respondent and I allowed her husband to appear as a McKenzie friend; McKenzie v McKenzie [1970] 3 All ER 1034. I have listened carefully to all that the appellant’s husband has said on behalf of the appellant and I have read all of the papers in the Magistrates Court and in this Court including an affidavit sworn by the appellant which was filed by the appellant today.
In my opinion, the appeal is untenable. The Magistrate, in my opinion, was clearly right to order the appellant to pay costs. The respondent had, as the Magistrate said, no alternative but to bring these proceedings when the appellant refused to repay or make appropriate arrangements to repay the amount by which she had been overpaid.
Whilst the appellant eventually recognised a liability to repay the amount of $6,584 she then refused to recognise that her previous denial had made her liable for costs.
Section 37 of the Magistrates Courts Act provides that subject to the Act itself and the Rules of Court, costs in any civil proceedings will be in the discretion of the Court. Rule 106(1) of the Magistrates Court (Civil) Rules provides:
“(1).. Subject to these rules or to an order of the Court, a successful party in an action, (other than a minor civil action) is entitled to costs against an unsuccessful party, or any other party that the Court may order, in accordance with the following principles:”
The principles are not important in a consideration of this appeal.
Costs are defined in r 2(1) to mean:
“party and party costs including disbursements, witness fees, experts’ charges and other expenses of and incidental to the conduct of an action:”
The court does, in fact, have a discretion if proper cause exists to require an unsuccessful party to pay costs on a solicitor and client basis; r 106(4).
In my opinion, the respondent was a successful party to the action and was thereby entitled to costs against the appellant. The respondent’s entitlement arose by reason of r 101(1). The proper exercise of the discretion on the part of the Magistrate must have inevitably led to an order for costs being made in favour of the respondent. In my opinion, the exercise of this Magistrate’s discretion in this regard cannot be faulted. This was a case where costs had to follow the event.
In my opinion, the learned Magistrate was also right to tax costs immediately. The costs, which had been taxed, appear to have been taxed in accordance with the appropriate scale under the Magistrates Court Rules. The appellant has complained about any amount being allowed by way of costs for preparation for trial and for counsel’s attendance when the trial did not come on on 6 September 2000. In my opinion, those criticisms cannot be maintained. It was appropriate, in the circumstances where the respondent had not been advised that the trial was to be adjourned, for the respondent to appear with counsel and be available as a witness for the purpose of presenting the respondent’s case. If the respondent had not appeared there would have been a risk that the respondent’s claim would have been struck out and the respondent then would have incurred a liability to the appellant for the appellant’s costs.
The appellant complained that it was no fault of hers that the respondent was not advised that the trial was to be adjourned. In a sense, that is so, but in another sense that is not correct. The application was made so late that the application was to be heard after the date set for the hearing of the trial.
In my opinion, the costs, as taxed by the learned Magistrate, were within the exercise of his discretion and so I also dismiss that ground of appeal.
In my opinion the appeal should be dismissed.
The respondent has made an application for the costs of this appeal. The respondent has claimed costs of the appeal at $200 which, in my opinion, is a very modest sum. Clearly enough, the appellant must pay the respondent’s costs; the appellant having been unsuccessful.
I order the appellant to pay the respondent’s costs of this appeal, which I fix at $200. I allow the appellant two months in which to pay that amount.
During the argument on the question of costs, the appellant, through her husband, asked me whether the costs payable in the Magistrates Court, of $2,610 were payable immediately. She was advised, through her intermediary, that the costs are payable immediately.
However the respondent has agreed that the costs in the Magistrates Court can be paid any time within the next two months. The court will, therefore, note that the respondent has agreed that the appellant is to have two months in which to pay the sum of $2,610 being the costs and interest awarded in the Magistrates Court.

[2000] SASC 396

16 November 2000