Surf Coast Smash Repairs Pty Ltd v Dandy Flooring Centre Pty Ltd
[2017] VSC 754
•20 December 2017
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
JUDICIAL REVIEW AND APPEALS LIST
S CI 2017 00709
| SURF COAST SMASH REPAIRS PTY LTD (ACN 161 159 208) | First Plaintiff |
| FAST CAR HIRE PTY LTD (ACN 153 627 582) | Second Plaintiff |
| - v - | |
| DANDY FLOORING CENTRE (VIC) PTY LTD (ACN 164 148 056) | Defendant |
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JUDGE: | Daly AsJ |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 16 October 2017 |
DATE OF JUDGMENT: | 20 December 2017 |
CASE MAY BE CITED AS: | Surf Coast Smash Repairs Pty Ltd & Anor v Dandy Flooring Centre Pty Ltd |
MEDIUM NEUTRAL CITATION: | [2017] VSC 754 |
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JUDICIAL REVIEW AND APPEALS – Appeal under s 109 of the Magistrates’ Court Act 1989 – Appeal against indemnity costs order in a fixed sum – House v R (1936) 35 CLR 499 referred to – Whether discretion improperly exercised – Colgate-Palmolive Co v Cussons Pty Ltd (1993) 118 ALR 248 considered – Whether excessive costs awarded – Whether learned Magistrate considered or was required to consider the scale of costs under Appendix A Magistrates’ Court General Civil Procedure Rules 2010 – Adequacy of reasons – Appeal dismissed.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiffs | Mr M A Black | EC Legal |
| For the Defendant | Mr J Searle | Barry Nilsson |
HER HONOUR:
This is an appeal against an order made by Deputy Chief Magistrate Holzer at the Magistrates’ Court at Melbourne awarding costs in the sum of $48,498.13 against the plaintiffs in this proceeding. The order was made in favour of a defendant in a proceeding arising out of damage to a motor vehicle where, on the day of the proceeding was listed for trial, an application by the plaintiffs for an adjournment was refused, and the proceeding was dismissed as the plaintiffs were not ready to proceed on that day. The plaintiffs in this proceeding seek to set aside the decision of the learned Magistrate and replace it with an order that the plaintiffs pay the defendant’s costs of the proceeding to be taxed on Scale F to Appendix A (‘Scale’) of the Magistrates’ Court General Civil Procedure Rules 2010 (‘Rules’).
Background
By way of background, this dispute arose after a Mr Visic reversed his car into a stationary Bentley on the premises of Surf Coast Smash Repairs Pty Ltd (‘Surf Coast’), apparently causing significant damage to the Bentley. Italia Motori Pty Ltd (‘Italia Motori’), as the putative owner of the Bentley, sued Mr Visic for damages in the Magistrates’ Court at Melbourne (‘first proceeding’). Default judgment was entered in favour of Italia Motori for $47,397.57 plus interest and costs. Mr Visic was declared bankrupt before the judgment could be satisfied.
Thereafter, Italia Motori (as owner of the Bentley) and Surf Coast (as bailee) commenced a further proceeding against Dandy Flooring Centre Pty Ltd (‘defendant’) in the Magistrates’ Court (‘second proceeding’) in respect of damage to the Bentley caused by Mr Visic, on the grounds that Mr Visic was acting as servant or agent of the defendant at the time of the accident (which the defendant denied). In a series of amendments to the original claim, Fast Car Hire Pty Ltd (‘Fast Car Hire’) was added as a plaintiff on the grounds that it was the owner of the Bentley. Italia Motori was then removed as a plaintiff in the second proceeding, leaving Surf Coast and Fast Car Hire as plaintiffs in the second proceeding.
When the second proceeding came on for trial on 30 January 2017, counsel for the plaintiffs applied for an adjournment on the grounds that the matter was not ready to proceed because their key witness, a vehicle assessor (‘assessor’), was not available to attend, owing to illness. No other witnesses or representatives for the plaintiffs were in attendance at court that day.
The learned Magistrate refused the plaintiffs’ application for an adjournment, dismissed the proceeding and, upon application by the defendant for an order for indemnity costs, ordered that costs of $48,498.13 be paid by the plaintiffs to the defendant. The defendant’s application for indemnity costs was made on the basis that the proceeding was, among other things, commenced where the plaintiffs should have known it had no prospects of success and for an ulterior motive. Counsel for the defendant submitted that the plaintiffs had ‘wilful disregard for the processes of the court and the prosecution of their own case’[1].
[1]Transcript of Proceeding, Surf Coast Smash Repairs & Anor v Dandy Flooring Centre F13782182 (Magistrates’ Court of Victoria, 30 January 2017, Magistrate Holzer), 69, 10–15.
No written reasons were provided by his Honour. However, the final orders made on that day included the following remarks:
No evidence was led in support of the claims, counsel withdrew, and opportunity to make submissions and lead any evidence was afforded to the legal representative, Mr Roger Misso of EC Legal Pty Ltd.
The hearing on 30 January 2017
The transcript of the hearing of the second proceeding is not complete, with many short inaudible sections omitted from the transcript. However, it is possible to glean from the transcript and the affidavits filed on behalf of the parties in this proceeding what occurred during the course of the hearing on 30 January 2017. It is necessary to provide a detailed account of what occurred at the hearing, given that the learned Magistrate did not provide written reasons for his decision, and given that the plaintiffs assert that the learned Magistrate took into account extraneous and/or irrelevant considerations, and failed to provide adequate reasons.
When the matter was called on for hearing not long before the luncheon break, Mr Benkel of counsel appeared for the plaintiffs. However, he was briefed only for the limited purpose of applying for an adjournment. At that time, the solicitor for the plaintiffs, Mr Roger Misso, was not in court, but attended after the lunch break at the request of the learned Magistrate. After Mr Misso gave evidence and submissions were made, the learned Magistrate refused the application for an adjournment. His oral ruling is reproduced below.
This is a proceeding commenced initially on 12 November 2015 by way of complaint brought by Italia Motori Pty Ltd and Others against Dandenong Flooring Centre Victoria Pty Ltd. The history of this proceeding in short compass is as follows. It has had a significant interlocutory history, there have been a number of continuations of pleadings leading to an amended statement of claim and a further amended statement of claim.
There is expert evidence before the court by way of a defendant’s Order 44 expert witness statement. That was prepared in May of 2016, and the events in question concern an alleged incident and vehicle property damage said to have occurred on 11 February 2015. We are now I note at 30 January 2017, the best part of two years later.
A hearing date for this proceeding was fixed in March of last year set for 15 June, then adjourned consensually to 10 October and then again adjourned to 30 January, today’s date. The time between the last date in court, 10 October, and today’s date should have been utilised fully and absolutely. Sadly it appears not to have been.
This litigation is subject to the Civil Procedure Act and in 2010 there was a paradigm and shift in the way in which courts including this court would deal with and consider contested litigation arising in the civil jurisdiction of the court. The overarching purpose of that Act is the facilitation of the just, efficient, timely and cost effective resolution of the real issues in dispute, and all of those elements are important, not just one or two.
There are at least five elements, the justness, the efficiency, the timeliness and the cost effectiveness and the real issues in dispute. inferring the overarching purpose courts must remain cognisant of the requirement fundamental to trials, that they be conducted fairly and in accordance with the principles of natural justice and procedural fairness.
The Supreme Court in Hodgson v Amcor made that plain. It is also relevant to reflect upon s 24 of the Charter of Human Rights and Responsibilities Act of 2006. There have been though a number of decisions which deal with the requirement to give proper effect to the overarching purpose and the facilitation of the overarching obligations.
Amongst those overarching obligations it he need to minimise delay and to act promptly. That is I think central to this particular proceeding before me. The complaint initially was for an amount of $47,000‑odd. It had a component of repairs of some forty three and a half thousand dollars and a hire car component of some three and a half thousand dollars totalling in round figures $47,000.
In the most recent incarnation of that claim the claim now is some sixty four and a bit thousand dollars, principally because of a hire car claim now said to relate to the ownership of this motor vehicle, being a Bentley Continental Coupe 2014 model, that was involved in the incident at the Laverton premises of the second name plaintiff, Surf Coast Smash Repairs, I will use that shorthand descriptor, in February of 2015, in circumstances where one Steven Visic, on the pleadings before me, is said to have been the driver.
Other issues arise about whether or not that person, if he was the driver, was acting within authority or outside authority, and it has been made known to me that a separate proceeding was issued prior to these ones by what was the first named plaintiff in this proceeding, Italia Motori Pty Ltd, a claim made directly against the driver, Mr Visic, and in respect to which a default order was made.
That is relevant in this case because that claim concerns the same car, the same date of the incident in February 2015, the same place of incident in the premises of the second named plaintiff and, significantly, the ownership of the vehicle was said to rest with Mr Visic. The costs of the hire car in that proceeding are identical to those which led to the first form of complaint in this proceeding, $3525.
The question of ownership of this car is material to this proceeding as it was through the earlier proceeding involving Italia Motori, who are no longer a party to this proceeding. It is said now in the fourth incarnation, and I will use Mr Searle of counsel’s description, the fourth inclination of the events in issue to be a vehicle owned by Ms Pitts as a director of Fast Car Hire Pty Ltd, the company said to own the car and are now said to have suffered loss.
One could surmise that the only reason this proceeding has now been brought in its current form is because of the impecuniosity of Mr Visic. That is the only logical conclusion that one can draw from that analysis. I mention that because it is relevant to the proceeding. the car, I said it was owned by Visic, I beg your pardon, I meant Najeeb Nahimi, in that earlier proceeding. So there has been a change of allegation as to who the owner of this Bentley indeed was.
MR SEARLE: Your Honour, I don’t really want to interrupt Your honour, but the pleading was that Italia Motori was the owner of the car.
HIS HONOUR: Thank you for correcting me, thank you. I’ve not seen the pleading but you’ve corrected me and I thank you for that.
MR SEARLE: I just make Your Honour aware of that. The pleading was that Italia Motori owned the car but the documentation to substantiate the damage to the car is the same documentation throughout the four incarnations. The assessor’s report says that Mr Najeeb Nahimi owns the car, it shows the owner of the car, but the pleadings [sic] that Italia Motori owns the car.
HIS HONOUR: Thank you. I’m grateful for that correction, and it highlights the concerns about the ownership of the vehicle and in turn whether this proceeding has any real prospects of success. This is not an application for summary dismissal or summary order and it is relevant to the assessment of the merits of this adjournment request. It’s relevant because I need to give effect to the overarching purpose.
It is plain when one looks at the cases on this issue that guidance of the overarching purpose was canvassed in the case of Northern Health v Kuipers [2015] VSCA, and Justices Kyrou and McLeish emphasised the mandatory nature of s.9, and they are the very things that link the overarching purpose with the overarching obligations in the proceeding.
The decision of Their Honours made it plain that the focus has to be by giving effect to the interests of justice, the fair and just determination of the real issues in dispute. The plaintiffs, the remaining plaintiffs now make the application to adjourn this proceeding on two bases, one of substance, one perhaps less so.
The first basis is Mr Benkel of counsel who appears for the remaining plaintiffs was briefed on a very limited basis and late, briefed on the basis late on Friday 27 January to negotiate and to seek an adjournment, not to run the case. It was never his instructions, as I understand the evidence from both Mr Benkel from the Bar table and also from his instructor, Mr Misso, who I have required to attend court today to fully explain the circumstances, to actually participate in the proceeding.
The reason for that is linked to other matters which lead into the second limb of the adjournment request, and that request is on the basis that it is said that the plaintiff’s assessor, Mr Varan, is unfit to attend. A medical certificate was obtained it seems by Mr Misso, Mr Benkel’s instructor, on about 24 January and received I think by him on Friday. The evidence is a little unclear but in that timeframe, just a matter of days ago.
That certificate is dated 24 January. It does not say that Mr Varan is unfit to attend court. Rather it says, through Dr Ravi Pachauri of the, I think it is Uni Hill Medical, Bundoora Medical Clinic, that he is suffering from a medical condition. The handwritten note is, “Due to that medical condition advised to have break from his work from 24 January to 31 January inclusive.” So it covers today and tomorrow, but does not say that he is unfit to attend court.
It is the evidence before me that Mr Misso, when he saw that situation arise on about the 24th, has taken steps to secure the attendance or more likely seek to secure the attendance of the assessor by the issue of a subpoena, that having occurred on Friday. Wholly unsatisfactory in the context of the case listed for hearing since October of last year.
It is plain that Mr Misso has been labouring perhaps not with one hand tied behind his back but perhaps with two because at no point in time has Mr Misso ever obtained instructions from a director of Surf Coast Smash Repairs, nor has he obtained instructions from a director of Fast Car Hire Pty Ltd, nor did his firm have instructions in respect of Italia Motori in respect of the earlier proceeding.
All instructions appear to have been through the auspices of a manager of Surf Coast Smash Repairs, a Mr David Deekie, and that raises a whole series of concerning points, concerning on the basis of what instructions E C Legal had and Mr Misso in respect to this proceeding. I asked Mr Misso whether or not there had been a certification signed in respect of the two remaining plaintiffs. That has not occurred.
There was, however, a certificate in respect of Italia Motori in this proceeding, they being initially a party to it. That raises some concerns about the way in which these cases which are said by Mr Misso to be consistent with a general approach, a general approach with this client, to be acceptable. I can assure the parties and Mr Misso that approach is not acceptable.
Fundamental to the obligations of any practitioner is the duty to ensure directors and authorised persons on behalf of companies are the sole repository of instructions, not to make assumptions, not to second guess what might be instructions and certainly to be more than a little alarmed about the fact that the directors of these two remaining companies have apparently no interest at all in being here.
When this case was listed for hearing they would have been required to give evidence. They are not here and they have had since October to be aware of and make arrangements. This adjournment comes not at the eleventh hour, it comes at the twelfth hour and makes it all the more difficult for Mr Benkel to maintain the argument that he does today.
The material in support of the adjournment request is inadequate manifestly for the reasons that I have already said but, in short compass, the lateness of [and] the limited nature of Mr Benkel’s brief is a concern. So too though and perhaps even more so the circumstances of Mr Varano’s non-appearance in the face of a plainly inadequate medical certificate, one that [does] not prevent, on the face of it, his attendance today and in the face of a subpoena that required him to be at court today, which he apparently has chosen with apparent impunity to ignore.
There is no evidence at all that supports an adjournment request, none. Further, the adjournment application in this case is not consistent with the overarching purpose of the Civil Procedure Act. Delay is the worst possible consideration affecting litigation in this court, and that delay acts of itself as a denial of justice and impacts upon the interests of justice that Mr Benkel asks me to keep in mind.
The interest[s] of justice need in that context to be informed by the proceeding, the history of this proceeding, the likelihood of a successful proceeding in all the circumstances. Even though I have not heard any evidence about this I had to make some assessment of the interests of justice in that context as well and in the context of disinterested parties, parties who have not had instructions taken from them, who are not here and, perhaps finally and perhaps most importantly, without explanation.
There is no explanation proper given to the court for the delay in instructions, nor the absence of parties to this proceeding before this court. The application for adjournment is refused.
In his affidavit sworn 7 March 2017, Mr Misso deposed that neither he nor counsel briefed by him had been prepared for the substantive matter to be heard that day, and as such their capacity to make submissions on the substantive claim was limited. Having heard from both parties, the learned Magistrate acceded to the submissions of counsel for defendant that the plaintiffs ought to have been ready to proceed on the spot, and dismissed the claim.
When, following the dismissal of the substantive claim, counsel for the defendant made submissions as to costs, Mr Misso deposed that while he made ‘some attempts’ as to submissions, he was not in a position to make any submissions on behalf of the appellants in respect of costs.’ Mr Misso deposed that he subsequently was excused and left the court before final orders were made, in order to attend an appointment.
Mr Misso also deposed as to the events leading up to the hearing on 30 January 2017, including the filing of the original complaint on 12 November 2015, the filing of an amended statement of claim on 22 July 2016, the filing of a further amended statement of claim on 1 September 2016, and the provision by the plaintiffs of further and better particulars of its statement of claim in December 2016.
Mr Misso deposed that on 24 January 2016 he caused the Court to issue a subpoena directed at the assessor, Mr Victor Varano, directing Mr Varano to attend court and give evidence on 30 January 2017 (being the following Monday). An affidavit of service showed that the subpoena was served upon Mr Varano on the evening of 24 January 2017. However, it is apparent from Mr Misso’s evidence at the hearing that on 24 January 2017 he emailed a copy of the subpoena to Mr Varano earlier that day, who emailed back to him a medical certificate dated 24 January 2017, which stated:
Mr Varano is in my opinion suffering from a medical condition
and
Due to his medical condition advised him to have a break from his work from 24th Jan to 31st Jan.
Mr Misso deposed as follows:
I remained at Court after Mr Benkel left although I was not in a position to properly represent my clients. Whilst I have practised as a solicitor for twenty-seven (27) years, I have never presented a case in Court, having always briefed out appearances to members of the Bar. I had not anticipated that I would need to be present at Court on the day of the hearing and was not in a position to conduct the case on behalf of the [plaintiffs]. The matter resumed at about 3.30pm and I indicated to the Magistrate that I could not properly represent the [plaintiffs] but that I would most likely be able to have the Directors of the [plaintiffs] attend at Court the following day to give evidence. The Magistrate ultimately acceded to a submission by Counsel for the [defendants] that the matter should have been ready to proceed on the spot and there was no evidence from the [plaintiffs] so the [plaintiffs’] claim was dismissed.
Counsel for the Respondent then made submissions in relation to costs and the Magistrate ultimately made orders that the [plaintiffs] pay the [defendant’s] costs on an indemnity basis in the sum of $48,498.13. I am not familiar with the legal authorities in relation to indemnity costs and was not in a position to make any submissions on behalf of the [plaintiffs] in respect of costs although I made some attempts. Ultimately I left the Court after 4.30pm and the matter continued in my absence. I was not present when the final orders were made.
The solicitor with care and conduct of the second proceeding on behalf of the defendant, Ms Sasha Jeffrey-Bailey, also affirmed an affidavit in this proceeding. She deposed, in summary, as follows:
(a) as to the procedural history of the second proceeding, including the various iterations of the complaint, and two previous adjournments of the trial;
(b) as to the first proceeding, and exhibited the claim documents annexed to Italia Motori’s complaint in the first proceeding, which were largely identical to the documents annexed to the complaint in the second proceeding;
(c) as to the current and former directors of the parties to the first proceeding and the second proceeding; and
(d) as to the documents which were handed up during the hearing.
Ms Jeffrey‑Bailey’s affidavit also went into some detail as to what occurred at the hearing before the learned magistrate on 30 January 2017. I have reviewed the following extract of the affidavit against the transcript of the hearing, and am satisfied that the following is a fair and accurate summary of what occurred at the hearing on 30 January 2017 (citations omitted):
At the commencement of the Hearing at approximately 12:55pm, Counsel for the [plaintiffs], Mr Benkel, sought an adjournment of the Hearing. The basis for the adjournment was that:
(a) Mr Benkel was briefed on the Friday before the Hearing;[2] and
[2]T2, L30-31.
(b)the [plaintiffs’] vehicle assessor had been ill with a stroke previously, and had been told by his doctor to reduce his work, and not to come;[3]
[3]T2, L24-27.
Mr Benkel was unable to provide any explanation as to why he received a brief so late in circumstances where the hearing had been listed since October 2016, and the same solicitors had been acting for the [plaintiffs] throughout.[4] Mr Benkel further advised the court that his brief was limited to attempt to settle the proceedings, and if this did not occur, to make an adjournment application;[5]
[4]T3, L18-24 and 30-31.
[5]T6, L13-17 and P22: L4-5.
In respect of the issue with the [plaintiffs’] vehicle assessor being unable to attend Court, Mr Benkel advised as follows:
(a)that the vehicle assessor had suffered a stroke, but Mr Benkel was unsure when the stroke had occurred;[6]
[6]T4, L9-12; P8: L1-2.
(b)that the vehicle assessor’s doctor had told him to reduce stress;[7] and
[7]T4, L18).
(c)the aforementioned was the only position Mr Benkel was able to advance as a result of only having been able to speak to his instructor on the day of the Hearing.[8]
[8]T4, L19, and 25-27.
Mr Benkel provided a medical certificate for the vehicle assessor, a copy of which is exhibited to RM’s Affidavit, marked with the letters ‘RM13’ (‘Medical Certificate’). Relevantly, the Medical Certificate:
(a) was dated 24 January 2017;
(b) advised the vehicle assessor had a ‘medical condition’; and
(c)advised that the vehicle assessor was to have ‘a break from his work’ from 24 January 2017 to 31 January 2017 inclusive; it did not say the vehicle assessor was medically unfit to attend Court to give evidence.
The above issues were identified by His Honour, Magistrate Holzer upon his perusal of the Medical Certificate.[9]
[9]T5, L23-27; T7, L24-28; T16, L14-18.
Mr Benkel was unable to provide any explanation as to why the [plaintiffs’] other essential witnesses, being the directors of the Plaintiffs, could not be called at the commencement of the hearing, with the evidence of the vehicle assessor to follow.[10]
[10]T5, L30-31; T6, L1-6 and 13-18; T8, L14-17.
His Honour, Magistrate Holzer stood the matter down until 2:00pm, and requested that Mr Benkel’s instructor, Mr Roger Misso of EC Legal, attend Court.[11]
[11]T9, L29-31.
The matter resumed at 2:08pm, and Mr Misso was sworn in to give evidence,[12] which included, inter alia, the following:
[12]T12, L1.
(a)that the brief to Mr Benkel was late due to difficulties Mr Misso had experienced in relation to obtaining instructions regarding further and better discovery, and the late instruction Mr Misso had received about the likely non‑attendance of the vehicle assessor at the Hearing;[13]
[13]T12, L31 and T13, L1-20.
(b)that Mr Misso had experienced difficulties obtaining instructions from the [plaintiffs] throughout the history of the Magistrates’ Court Proceeding;[14]
[14]T14, L21-31; T15, L1-3; T17, L7-15.
(c)that Mr Misso obtained his instructions in relation to the Magistrates’ Court Proceeding from the manager of [Surf Coast];[15]
[15]T15, L8-18.
(d)that EC Legal had previously received instructions from the manager of [Surf Coast] to issue the earlier Complaint in the name of Italia Motori against Visic for damages to the Bentley vehicle;[16]
[16]T19, L2-7.
(e)that he did not have instructions from anyone at Italia Motori;[17]
[17]T19, L10-11.
(f)that in the earlier Complaint, EC Legal had obtained a judgment in favour of Italia Motori against Visic that was based on Italia Motori being the owner of the Bentley vehicle. This judgment was mutually inconsistent with the Magistrates’ Court Proceeding, which alleged Fast Car Hire was the owner of the Bentley vehicle.[18] As at the date of the Hearing, the judgment against Visic had not been set aside;
[18]T19, L14-21.
(g)that Mr Misso had never received instructions directly from or spoken to the directors of [Surf Coast] and/or Fast Car Hire in relation to the Magistrates’ Court Proceeding, including in relation to issuing proceedings on their behalf;[19]
[19]T20, L1-13.
(h)that Mr Misso had never spoken to the directors of [Surf Coast] and Fast Car Hire;[20]
[20]T20, L20-22 and L25-28; T23, L17-25.
(i)that the directors of [Surf Coast] and Fast Car Hire would need to attend Court to give evidence in the Magistrates’ Court Proceeding;[21]
[21]T20, L18-19 and L23-24; T21, L4-5; 25, L24-26.
(j)that Mr Misso told the manager of [Surf Coast] that he and the directors of [Surf Coast] and Fast Car Hire needed to attend Court on 30 January 2017 for the Hearing;[22]
[22]T21, L8-12; T23, L14-16.
(k)that the manager of [Surf Coast] emailed Mr Misso advising he would not be attending Court on 30 January 2017;[23]
[23]T21, L11-12.
(l)that Mr Misso did not hear from the directors of [Surf Coast] and/or Fast Car Hire;[24]
[24]T21, L13-14.
(m)that Mr Misso was unable to advise why the directors of [Surf Coast] and Fast Car Hire did not attend Court to give evidence at the Hearing;[25]
[25]T25, L27-28; T26, L5-6 and 14-19.
(n)that Mr Misso was advised by the manager of [Surf Coast] that the directors of [Surf Coast] and Fast Car Hire were not coming to the Hearing and would be on standby for the Hearing;[26]
[26]T25, L28-29; T26, L7, and 12-13.
(o)that Mr Misso had not received a satisfactory explanation from the manager of [Surf Coast] as to why he and the directors of [Surf Coast] and Fast Car Hire could not attend Court on 30 January 2017;[27]
[27]T27, L9-12.
(p)that he had been advised that the directors of [Surf Coast] and Fast Car Hire were not to come in at the moment;[28]
[28]T26, L12-13.
(q)that Mr Misso had advised his clients that an adjournment may not be granted;[29]
[29]T26, L21-25.
(r)that Mr Misso had not been provided with any explanation as to why the directors of [Surf Coast] and Fast Car Hire were not coming to Court that satisfied him;[30] and
[30]T27, L9-12.
(s)that the Medical Certificate indicates that the vehicle assessor required a break from work until 31 January 2017, and that the vehicle assessor could attend Court on Wednesday, 1 February 2017 to give evidence.[31]
[31]T27, L15-18, and L22-24.
Following the conclusion of Mr Misso’s evidence:
(a)Mr Benkel made submissions in support of the adjournment application;[32] and
[32]T30-32.
(b)Counsel for [the defendant], Mr John Searle, made submissions in opposition to the adjournment application.[33]
[33]T32-42.
His Honour, Magistrate Holzer subsequently refused the adjournment application and provided reasons for doing so.[34]
[34]T43-50.
Mr Benkel subsequently withdrew his appearance for the [plaintiffs] at the Hearing, on the basis that his brief was limited to making the adjournment application, and in his place, Mr Misso appeared on behalf of the [plaintiffs].[35]
[35]T51-52.
Mr Misso was unable to lead any evidence in support of the [plaintiffs’] claim in the Magistrates’ Court Proceeding at the Hearing.[36]
[36]T56, L18-23; T57, L28-31.
[…]
As a result of Mr Misso not leading any evidence, His Honour, Magistrate Holzer ordered that the [plaintiffs’] claim in the Magistrates’ Court Proceeding be dismissed.[37]
[37]T58, L13-21.
On behalf of [the defendant], Mr Searle made submissions in support of an application for indemnity costs for the entire proceeding,[38] or alternatively, from 9 May 2016, being the date [the defendant] served an Offer of Compromise in the amount of $10,000 plus costs.[39]
[38]T58-70, L11-22.
[39]T71, L11-22.
His Honour, Magistrate Holzer then provided Mr Misso with an opportunity to make submissions on the issue of an award of indemnity costs. Relevantly:
(a) Mr Misso agreed that the Offer of Compromise had been served;[40]
[40]T72, L3-7.
(b)Mr Misso indicated that he was not in a position to address His Honour, Magistrate Holzer on indemnity costs;[41]
[41]T72, L12-13, and L23-25.
(c)His Honour, Magistrate Holzer then:
(1)summarised the legal principles applicable to an award of indemnity costs from the case of Colgate-Palmolive Company v Cussons Pty Limited (1993) 118 ALR 248 (‘Colgate-Palmolive’) for Mr Misso’s benefit; and
(2)advised Mr Misso he could look up the case of Colgate Palmolive on his computer if Mr Misso wanted him to;[42]
[42]T72, L26-29.
(d)following the above, again asked Mr Misso if he wanted to contradict Mr Searle in any way[43] following which Mr Misso made some comments, but then again indicated that he did not want to address the issue of an award of indemnity costs;[44]
[43]T73, L9-11; T75, L14-21.
[44]T72, L22.
(e)His Honour, Magistrate Holzer advised Mr Misso that he could have a short adjournment of 5 to 10 minutes to collect his thoughts so that he could address the issue of an award of indemnity costs;[45] and
[45]T75, L25-27, and L30.
(f)Mr Misso again elected not to make any submissions regarding the issue of an award of indemnity costs.[46]
[46]T76, L2-3.
His Honour, Magistrate Holzer then granted a short adjournment of the matter in order for details of the [defendant’s] costs incurred to date in relation to the Magistrates’ Court Proceeding to be obtained.[47]
[47]T78, L23-24; T79, L2.
His Honour, Magistrate Holzer also advised Mr Misso that the short adjournment would afford him a chance to reflect upon what occurred at the Hearing, and to say anything else he wished to say before the final orders were made.[48]
[48]T78, L24-27.
During the short adjournment, I placed a telephone call to my administration assistant, for confirmation as to the amounts billed to my client to date, and the amounts of any work in progress.
I am instructed and verily believe that during the short adjournment, Mr Searle placed a telephone call to his clerk for confirmation as to the amount of his fees incurred to date, including his fees in relation to appearing at the Hearing.
During the short adjournment, Mr Misso approached Mr Searle and me and advised that he had to leave Court as he had a prior commitment.
The matter was called before His Honour, Magistrate Holzer again, where Mr Misso advised the Court that he had a 5:00pm meeting, and requested that he be excused.[49] His Honour, Magistrate Holzer excused Mr Misso from appearing in Court after indicating to Mr Misso that the orders of the Court will be made.[50] Mr Misso left the Court room, and the matter proceeded in his absence.[51]
[49]T79, L4-17.
[50]T79, L15-16.
[51]T79, L23-25.
Mr Searle then made submissions regarding the quantum, reasonableness and necessity of the indemnity costs being claimed.[52]
[52]T80, L4; T81, L30.
In relation to costs, His Honour, Magistrate Holzer made enquiries regarding the following:
(a)the specific amounts attributable to professional costs ($21,960.51), and the specific amounts attributable to disbursements, including Counsel’s fees and an assessor’s fee ($26,537.62);[53]
(b)whether the tax invoice that had been issued as at the date of the Hearing had been paid;[54]
(c)whether there had been any discounts, allowances or adjustments to the tax invoices;[55]
(d)the way in which the numbers of the indemnity costs had been calculated;[56] and
(e)practitioner hourly charge-out rates.[57]
In response to these matters, copies of Barry Nilsson Lawyers’ tax invoices that had been issued as at the date of the Hearing were handed up to His Honour, Magistrate Holzer for his perusal.
[53]T80, L8-10.
[54]T81, L2-3.
[55]T81, L9-10.
[56]T18, L13-17.
[57]T81, L28-30.
Grounds of appeal
In their amended notice of appeal filed on 27 March 2017, the plaintiffs identified three main grounds of appeal. The amended notice of appeal identifies the following questions of law and grounds of appeal:
Did the learned Magistrate err in law in exercising his discretion in relation to costs by ordering the [plaintiff] to pay the [defendant]’s costs on an indemnity basis?
(a)The conduct of the [plaintiffs] did not fall within any of the principles upon which indemnity costs could properly be awarded.
(b)The [Magistrate’s] inferential finding that the Magistrates’ Court Proceeding had been commenced in wilful disregard of known facts was:
(i) not supported by any evidence;
(ii) alternatively, not a finding open to be made.
Did the learned Magistrate err in law by ordering the [plaintiffs] to pay an amount of costs which was excessive?
(a)The amount of costs ordered by the Magistrate exceeded the scale amount provided for by r 63.00.1 of the Magistrates’ Court General Civil Procedure Rules 2010.
(b)The Magistrate ordered payment of $48,498.13 in costs without making any, or any appropriate, enquiry as to whether the amounts making up the total were of an unreasonable amount or were unreasonably incurred.
Did the learned Magistrate err in law by failing to give any, or any adequate, reasons for ordering costs to be paid on an indemnity basis?
The Magistrate’s reasons for ordering that the [plaintiffs] pay the [defendant’s] costs on an indemnity basis fail to disclose a path of reasoning or the principles relied upon in reaching that decision.
Appeal ground (a)
Plaintiffs’ submissions
The plaintiffs contended that, whilst the award of costs in a proceeding involves an exercise of a discretion which is difficult to impugn, that discretion is not without limitation. The plaintiffs referred to the decision in House v R,[58] in which the Court held that a judge’s discretion is qualified in a number of circumstances, being:
If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so.[59]
[58](1936) 55 CLR 499 (House v R).
[59]Ibid, 505.
The plaintiffs acknowledged that due to the wide scope of discretionary power, a judge’s exercise of discretion is not overturned lightly by appellate courts. In Australian Coal and Shale Employees’ Federation v Commonwealth,[60] Kitto J found that to overcome the presumption that the exercise of discretion has been properly exercised:
…the appellant must show that the judge acted upon a wrong principle or gave weight to extraneous or irrelevant matters, or did not give sufficient weight to relevant considerations, or erred as to the facts.[61]
[60](1953) 94 CLR 621.
[61]Ibid, 62.
However, the plaintiffs submitted that the threshold identified above is met in this case. They submitted that the discretion to award costs on an indemnity basis has miscarried on the grounds identified in House v R, insofar as the learned Magistrate Holzer took into account extraneous and irrelevant considerations in making his decision. In particular, the plaintiffs submitted that the learned Magistrate improperly relied upon:
(a) issues concerning the ownership of the motor vehicle, which led him to form the view that the plaintiffs’ case could never succeed;
(b) the failure of the assessor to respond to a subpoena, the blame for which could not be sheeted home to the plaintiffs; and
(c) the non-attendance of any representative of the plaintiffs, other than legal representatives, at Court on the first day of hearing,
as grounds for awarding indemnity costs against the plaintiffs.
The plaintiffs contended that any doubts concerning the ownership of the Bentley was an irrelevant consideration. Given the default judgment in the first proceeding, and the lack of witnesses available at court on the first day of the second proceeding, the question of the ownership of the Bentley had never been ventilated in court, and it was therefore inappropriate for the learned Magistrate to reach any conclusions on the matter. The plaintiffs argued that the learned Magistrate drew improper inferences from the fact that the identity of the owner of the Bentley in the second proceeding was a different owner from the person identified as the owner in the first proceeding. In the absence of this discrepancy having been tested by the court, the plaintiffs contend that the learned Magistrate unreasonably made assumptions about the integrity of the plaintiffs, without considering the possibility that an innocent mistake had been made in relation to the identity of the owner of the Bentley in the first proceeding.
The plaintiffs contended that, in effect, the learned Magistrate considered that the second proceeding was commenced for an ulterior motive, a conclusion consistent with a finding of fraud, which was an unreasonable conclusion not open to the learned Magistrate to reach, and a matter that the plaintiffs ought to have had the opportunity to make submissions upon.
In addition, the plaintiffs submitted, the learned Magistrate unreasonably refused the plaintiffs’ request to stand the hearing of the proceeding over to the next day in order to provide further opportunity for the attendance of the directors of the plaintiffs in person, and instead relied upon the non-attendance of witnesses (on the first day of the three days allocated by the Court for the hearing) to justify making an indemnity costs order. Further, the learned Magistrate refused the adjournment despite the plaintiffs’ offer to pay the defendant’s costs of the time wasted by the non-appearance of witnesses.
In his oral submissions, counsel for the plaintiffs submitted that in the usual course of a hearing, the court would not have remained sitting as late in the day as it did, and therefore the usual course would be that the matter would have been stood over to the next day. The learned Magistrate’s decision to proceed after the conclusion of regular court hours to finalise the case on the first scheduled day of the hearing rather than adjourn to the next sitting day constituted an inappropriate denial of an opportunity for the plaintiffs to adduce any evidence at the trial, and ultimately led to the learned Magistrate’s decision to dismiss the matter, telling the plaintiffs that, ‘if you don’t call your first witness then I'm going to dismiss the proceeding on the basis that there is no evidence in support of the claim.’
Counsel submitted further, that no penalty should have been visited upon the plaintiffs for the assessor’s failure to attend court. Mr Misso had done everything he could to get him to attend, including issuing a subpoena. It was not the responsibility of the plaintiffs to provide the Court with a medical certificate, given the subpoena, but it did explain why the assessor did not attend.
Counsel for the plaintiffs submitted that while the issue before the learned Magistrate was the adjournment application and the defendant’s application that the proceeding be dismissed, the learned Magistrate treated the matter as a summary dismissal application, when the matters raised by counsel for the defendant had not been pleaded in the defence.
In summary, given the reliance of the learned Magistrate on findings of fact which were either extraneous or irrelevant to the consideration of the question of costs, his improperly held assumptions as to the credibility of the plaintiffs’ claims, together with the refusal of the learned Magistrate to allow the matter to adjourn to the next day in circumstances where there was no pressing urgency to deal with the matter, the plaintiffs submitted that there was no reason for his Honour to depart from the usual order as to costs on a standard basis, to be taxed according to the Scale.
Defendant’s submissions
The defendant’s submissions refer to a number of authorities concerning the principles which determine in what circumstances there should be interference with the exercise of a magistrate’s discretion,[62] which include:
[62]Harrison v Mansfield (1953) VLR 399; Australian Coal; Irving v Carbines (1982) VR 861; Costa v Parks (2008) VSC 47; Kymar Nominees Pty Ltd v Sinclair (2006) VSC 488 and Commissioner of State Revenue v Landrow Properties Pty Ltd [2010] VSCA 197.
(a) if the learned Magistrate acted upon a wrong principle;
(b) if the learned Magistrate allowed extraneous or irrelevant matters to guide or affect him;
(c) if the learned Magistrate mistakes the facts;
(d) if the learned Magistrate does not take into account a material consideration;
(e) if the learned Magistrate gives such inadequate weight to relevant considerations that his failure really amounts to a failure to exercise the discretion; and
(f) if, though it may not appear how the order was reached, the result is, upon the facts unreasonable or plainly unjust, so as to warrant the interference of an appellate court.
The defendant’s submissions noted that the Magistrates’ Court Act 1989 (Vic) (‘Act’), the Civil Procedure Act 2010 (Vic) (‘CPA’), and the Rules confer a wide discretion upon a magistrate with regard to the award of costs, and that there is a presumption in favour of the correctness of a discretionary decision, particularly in a decision in respect of costs. The defendant referred to the decision in Kymar Nominees Pty Ltd v Sinclair (‘Kymar’)[63] in which Cavanough J stated:
It is not for this Court to re-exercise a Magistrate’s discretion. Rather the question is whether it was open [emphasis added] to the Magistrate, on the material before him, to determine that the case fell within an exception to the general principle.[64]
[63](2006) VSC 488 [61].
[64]Kymar [37].
The defendant relied on the decisions in Colgate-Palmolive,[65] Connor v Weston[66] and Ugly Tribe Co Pty Ltd v Sikola[67] together with the transcript, in support of its assertions that while the usual principle is that costs follow the event, with costs to be paid on a standard basis, the following are circumstances where costs will be ordered to be paid on an indemnity basis, and are applicable here:
[65](1993) 118 ALR 248.
[66](unreported) 14 November 1996.
[67][2001] VSC 189.
(a) ‘as and when the justice of the case requires’; and
(b)‘some special or unusual feature in the case to justify the court in departing from the ordinary [principle],’ e.g:
(i)the fact that proceedings were commenced or continued for some ulterior motive or in wilful disregard of known facts;
(ii)the making of allegations that ought never have been made such as fraud allegations;
(iii)undue prolongation of a case by groundless contentions;
(iv)pursuit of a defence that was high handed or presumptuous;
(v)evidence of particular misconduct that causes loss of time to the court and to other parties;
(vi)commencement or pursuit of allegations which are without chance of success; and
(vii)failure to properly discover documents.
Counsel for the defendant noted that the authorities make it clear that the categories above are not closed.
The defendant submitted that the inconsistency between the plaintiffs’ claims in the second proceeding concerning the ownership of the Bentley with the judgment in the first proceeding, the non-attendance of witnesses or the directors of the plaintiffs themselves at court, and the delays in the proceeding as a whole, were factors open to the learned Magistrate to consider, and were relevant to the exercise of his discretion. Further, the learned Magistrate had an obligation to deal with the case expeditiously.
In his oral submissions, counsel for the defendant referred to extracts of the transcript to highlight the considerations which his Honour did turn his mind to in exercising his discretion. Counsel made the following observations regarding the conduct of the plaintiffs and its impact on the reasoning of the learned Magistrate:
…no evidence was led in support of the claims, counsel withdrew and opportunity to make submissions and lead any evidence was afforded to the,… I think went on to say the legal representatives of the plaintiffs but was refused. That’s the first very strong indication we get as to what was really going through the learned magistrate's mind that prompted him to make this order for indemnity costs.
The defendant also rejected the plaintiffs’ contention that the learned Magistrate was not entitled to rely on assertions as to the ownership of the Bentley which had not been tested in court. The learned Magistrate had access to all the relevant documents in relation to both proceedings, including information as to prior adjournments, and an affidavit sworn by a representative of Surf Coast earlier in the proceeding, deposing that Italia Motori owned the Bentley. His attention was drawn to the lack of any discovery of registration or ownership documents, and it was open to him to reach a view concerning the likely success of the second proceeding on the basis of this information, including documents in relation to the entry of the judgment in the first proceeding.
Counsel for the defendant rejected the plaintiffs’ contention that the plaintiffs’ prospects of success were an irrelevant consideration. He submitted that the plaintiffs’ claims could not have succeeded in circumstances where the plaintiffs were refusing to participate in the proceeding: they did not instruct their solicitors to brief counsel for the trial, they would not produce relevant documents, and they would not attend to give evidence. The position might have been different if Mr Misso had made a phone call and be in a position to tell the learned Magistrate that ‘they’ll be here at 10am tomorrow’, but he did not. No explanation was provided as to why the plaintiffs could not attend to give evidence. Surf Coast is a repair business which carried out the repairs on the Bentley. It was open to the learned Magistrate to form a view that there was, in the words of counsel for the defendant, ‘something very, very smelly going on’, and for that to be a relevant consideration in the exercise of his discretion with respect to costs.
The defendant noted that the current appeal concerns a question of costs, which by nature involves a particularly wide discretionary latitude, referring to the following statement in Kymar:
There is a strong presumption in favour of the correctness of a discretionary judgment of a Court, and all the more so in relation to the taxation of costs. Although, strictly speaking, the present question is not one of taxation of costs but of the extent of the parties’ respective liability, a reviewing Court will rarely interfere on such a question, especially in an appeal limited to questions of law.[68]
Accordingly, the defendant submitted, given this appeal concerns exercise of a discretion, and confined to the issue of costs, it is not sufficient for an appellate court to form a view that it would have come to a different decision. It must be the case that the learned Magistrate’s decision was clearly wrong.
[68]Ibid [61].
Appeal ground (b)
Plaintiffs’ submissions
In support of their second ground of appeal, the plaintiffs submitted that the authorities support the proposition that even when making an order for indemnity costs, those costs are to be fixed in accordance with the Rules.[69] In support of the plaintiffs’ contention that the learned Magistrate erred in law by ordering an excessive amount in costs, the plaintiffs submitted that:
[69]Magistrates’ Court General Civil Procedure Rules 2010 (‘Rules’).
(a) the amount of costs ordered by the Magistrate exceeded the scale amount provided for by r 63.00.1 of the Rules;
(b) the learned Magistrate ordered payment of $48,498.13 in costs without making any, or any appropriate, enquiry as to whether the amounts making up the total were of an unreasonable amount or were unreasonably incurred; and
(c) the learned Magistrate’s costs order amounted a full indemnity of the legal costs and disbursements incurred by the defendant. The plaintiffs contended that the learned Magistrate appeared to have erroneously formed the view that making an indemnity costs order was equivalent to providing a complete indemnity to the defendant. In their written submissions, the plaintiffs contended that the learned Magistrate’s decision to put the defendant ‘back in the position the defendant would have been had it not been for this ill-conceived and unmeritorious claim’[70] goes further than the Rules allow with respect to costs, which are required to be awarded in accordance with the Scale.[71]
[70]T 82, L 2-5.
[71]Magistrates Court (General Civil Procedure) Rules, 63.00.1, 63.28, 63.30.1, 63.31, 63.34.
The plaintiffs relied upon the decision of Wood AsJ in ACN 074 971 109 (as trustee for the Argot Unit Trust) and Pegela Pty Ltd v NationalMutual Life Association of Australasia Ltd(ACN 004 020 437),[72] in support of their contention that when making an order for indemnity costs, one still must have regard to the Scale, as follows [citations omitted]:
… The test to be applied for indemnity costs is outlined in Rule 63.30.1. The basis of calculation is contained in Rule 63.34(1) which deals with the basis of any entitlement to recover, namely on scale, absent any order of the Court to the contrary. Ironically, the same Judge who has referred this matter and made the indemnity costs order in this matter (Croft J) has also made an indemnity costs order in Sunland Waterfront (BVI) v Prudentia Investments Pty Ltd (No 3) . On that occasion he added the words “calculated by reference to the retainer between each of the defendants and their respective legal advisors” to the final cost order. The absence of these words in the current order makes it clear therefore that the intention, and the wording of the costs order provides for costs on scale. In Sunland the effect of the order was to make it clear that in that case the entitlement was not on scale but on the basis of existing cost agreements. This is entirely consistent with the rationale in Flotilla Nominees Pty Ltd v Western Australian Land Authority & Anor. The absence of these words in the present order means costs are to be taxed on scale consistent with the words in the order and the Judge’s intention.
[72][2013] VSC 137 [24] (‘ACN 074 971 109’).
As such, in awarding costs in excess of the Scale, the plaintiffs contend that the defendant should have been required at the very least to produce the costs agreement between the defendant and its solicitors to justify the amounts claimed.[73] Further, the plaintiffs submitted that his Honour apparently accepted the total amounts referred to in the invoices provided to the Court without enquiry as to the reasonableness of the amounts, as required by r 63.30.1 of the Rules.
[73]Paper Australia Pty Ltd v Victorian WorkCover Authority [2013] VSC 444, [19]- [20].
Further, in support of their contention that the existence of the Scale constrained the learned Magistrate in awarding costs, the plaintiffs referred to the following observations in Colgate-Palmolive,[74] which clarified that the Rules referred to:
…on their face arouse an expectation that all costs reasonably incurred will be allowed. But the authorities already referred to, and some others later to be mentioned, establish that this is not so, the reason being that the taxing officers are constrained by the scales of costs provided for in schedules to the relevant rules.
[74](1993) 118 ALR 248.
In summary, the plaintiffs submitted that there was no reason given for departure from the Scale, even if costs were to be ordered to be paid on an indemnity basis, and that the
…order of the Magistrates Court should therefore be varied to provide for costs on Scale F of the Rules, with an uplift of 25% from 11 May 2016 in accordance with r 26.08 to take into account the Offer of Compromise made by the Respondent.
Defendant’s submissions
In response to the plaintiffs’ submission that even when awarded on an indemnity basis, costs should still have been calculated by reference to the Scale, the defendant submitted that r 63.30.1 has no application here, as it applies only to taxation of costs, not the actual making of the order by which costs are awarded. Further, the defendant repeated its submissions that the Rules provided the learned Magistrate with a broad discretion with respect to costs, including the power to order costs other than according to Scale.
The defendant noted that a Magistrate derives his or her power with respect to the award of costs from the Act, which provides a ‘very wide’ discretion in relation to costs. The relevant section of the Act is as follows:
131. Costs to be in the discretion of the Court
1)The costs of, and incidental to, all proceedings in the Court are in the discretion of the Court and the Court has full power [emphasis added] to determine by whom, to whom and to what extent the costs are to be paid.
2)Subsection (1) applies unless it is otherwise expressly provided by this or any other Act or by the rules or regulations.
The defendant also referred to r 63.00 of the Rules which provides that:
1)Unless it is impractical to do so, the Court must fix the costs of any complaint or application on the day on which the complaint or application is heard and determined.
2)If costs are not fixed by the Court as provided for by paragraph (1), the costs must be taxed in accordance with this order.
The defendant also relied upon s 65C of the CPA, which reinforces the wide discretion afforded to courts with respect to the question of costs:
Other costs orders
1) In addition to any other power a court may have in relation to costs, a court may make an order as to costs it considers appropriate to further the overarching purpose.
2) Without limiting subsection (1), the order may –
a) Make different awards of costs in relation to different parts of a proceeding or up to and from a specified stage of the proceeding;
b) Order that the parties bear costs as specified proportions of costs;
c) Award a party costs in a specified sum or amount;
d) Fix or cap recoverable costs in advance.
The defendant submitted that the learned Magistrate’s assessment was sufficiently thorough, and that his decision was reached by ‘comprehensively reviewing the respondent’s solicitor’s invoices, satisfying himself as to charge out rates, the application on any discounts and the work done generally’. The plaintiffs were in no position to make assertions as to the degree of attention the learned Magistrate paid to the defendant’s invoices, their solicitor having left the court prior to the invoices being handed up to his Honour.
The defendant submitted that the learned Magistrate was not asked to assess costs according to any cost agreement and was not required to do so, or have reference to the Scale, because he made a deliberate and conscious order to ‘put back into the position the defendant would have been had it not been for this ill-conceived and unmeritorious claim.’[75] The defendant further submitted that:
It is clear that a Court, in the absence of a taxation of costs can order a fixed sum award calculated on an indemnity basis without applying the scales and without reference to any costs agreement.[76]
[75]T82, L1-5.
[76]See Owens v Oakley Thompson & Co [2014] VSC 198 [22], [26]; MIS Funding No 1 Pty Ltd v Buckley (No 2) [2013] VSC 702 [11]-15.
Appeal ground (c)
Plaintiffs’ submissions
In support of their final ground of review, the plaintiffs submitted that, in awarding a full reimbursement of the defendant’s costs, the learned Magistrate had exercised his discretion to depart from the usual position, and as such, his Honour was required to produce adequate reasons to explain his decision. The plaintiffs submitted that:
The Magistrate’s reasons for ordering that the Appellants pay the Respondent’s costs on an indemnity basis fail to disclose a path of reasoning or the principles relied upon in reaching that decision.
Counsel for the plaintiffs submitted that the learned Magistrate’s basis for awarding indemnity costs over and above the Scale was not justified, relying upon the decision in Brown v Tabro Meat Pty Ltd,[77] where Kaye J (as he then was) observed:
First, a failure by a judge or Magistrate to provide adequate reasons for decision can give rise to a legitimate sense of grievance on the part of the losing party, which is left in ignorance as to why the decision, adverse to its interest, has been made. That consideration is closely related to the public interest in maintaining the community’s acceptance of the judicial decisions and in maintaining the perception of the integrity of the judicial process. The second consideration is that, in cases in which an appeal lies, the provision of adequate reasons for judgment identifies to the appellate court the reasoning and basis upon which the decision, under appeal, is made. The provision of such reason is thus important in ensuring that the losing party maintain its rights of appeal.[78]
The authorities relied upon by the plaintiffs do not assist them upon this ground of appeal. In Hunter v Transport Accident Commission,[93] Nettle JA stated that:
[93][2005] 43 MVR 130 [31].
reasons should deal with the substantial points that have been raised; include findings on material questions of fact; refer to the evidence or other material upon which those findings are based …
and further
If a party has relied on evidence or material which the judge has rejected, the judge should refer to that evidence or material and, in giving reasons which deal with the substantial points that have been raised, explain why that evidence or material has been rejected.
In the current case, the plaintiffs advanced no submissions on the question of costs. There was nothing for his Honour to consider or reject apart from the submissions advanced by the defendant.
Accordingly, ground (c) fails. The appeal will be dismissed, and I will hear further from the parties on the question of costs.
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