Tey v Optima Financial Group Pty Ltd
[2010] WADC 98
•25 JUNE 2010
JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CIVIL
LOCATION: PERTH
CITATION: TEY -v- OPTIMA FINANCIAL GROUP PTY LTD [2010] WADC 98
CORAM: DAVIS DCJ
HEARD: 2 JUNE 2010
DELIVERED : 25 JUNE 2010
FILE NO/S: APP 44 of 2009
BETWEEN: KOK YONG TEY
Appellant (Defendant)
AND
OPTIMA FINANCIAL GROUP PTY LTD
Respondent (Plaintiff)
ON APPEAL FROM:
Jurisdiction : MAGISTRATES COURT OF WESTERN AUSTRALIA
Coram :MAGISTRATE COCKRAM
File No :CIV 8354 of 2008
Catchwords:
Appeal from Magistrates Court - Application to strike out appeal - Costs of appeal disproportionate to the amount of and nature of the claim - Appeal has no reasonable prospect of succeeding
Legislation:
Magistrates Court (Civil Proceedings) Act 2004 s 43(3), s 43(4)
Result:
Appeal dismissed
Representation:
Counsel:
Appellant (Defendant) : In person
Respondent (Plaintiff) : Mr B W Ashdown
Solicitors:
Appellant (Defendant) : Not applicable
Respondent (Plaintiff) : De Vita & Dixon Lawyers
Case(s) referred to in judgment(s):
Apex Holiday Centre (Inc) v Lynn [2004] WASCA 35
Avsar v Westland Healthcare Ltd [2008] WASCA 35
Defendi v Eden Hill Plasterers [2008] WASCA 269
Eastern Metropolitan Regional Council v Four Seasons Construction Pty Ltd (2000) 22 WAR 372
Foran v Wight (1989) 168 CLR 385
Panamena Europa Navigacion (Compania Limitada) v Frederick Leyland & Co Ltd (J Russell & Company) [1947] AC 428
Siu Yin Kwan v Eastern Insurance Co Ltd [1994] 2 AC 199
Tobin v Dodd & Ors [2004] WASCA 288
World Best Holdings Ltd v Sarker [2010] NSWCA 24
DAVIS DCJ: Mrs Tey was the defendant in an action brought against her by Optima Financial Group Pty Ltd for the sum of $550. Following a trial in the Magistrates Court on 18 June 2009, Optima obtained judgment against Mrs Tey on 2 July 2009. Judgment was for the sum of $550 together with interest at the rate of 6 per cent per annum and costs fixed in the sum of $368.05.
Mrs Tey has appealed from that judgment.
Optima has brought an application to strike out her appeal:
1.Pursuant to s 43(3) of the Magistrates Courts (Civil Proceedings) Act 2004. By that section, the appeal court may strike out an appeal if the likely costs of the appeal to the parties would be disproportionate to the amount of the claim in, or the nature of, the case which is the subject of the appeal.
2.Pursuant to s 43(4) of the Magistrates Court (Civil Proceedings) Act 2004. By that section the appeal court may strike out any ground of the appeal if there is no reasonable basis for it, it does not have a reasonable prospect of succeeding, no miscarriage of justice would occur by striking it out or if it is frivolous, vexatious or improper. Optima in this case has applied to strike out all of Mrs Tey's grounds of appeal.
Relevant to the second part of Optima's application pursuant to s 43(4) of the Magistrates Court (Civil Proceedings) Act, Mrs Tey had indicated, both before the bringing of the strike out application and at the hearing of the application, her intention to seek leave to amend the grounds of appeal. I directed that Mrs Tey file a minute of proposed amended grounds of appeal and I advised the parties I would consider those proposed amended grounds to see whether they might overcome this aspect of Optima's strike out application.
The background to this appeal and the nature of the case
As set out in the Magistrate's written reasons for decision, Optima conducts an accounting and advice business and Mr O'Brien is a director and shareholder of that business. In September 2006 Mr O'Brien met with Mrs Tey and it was agreed that for a fee of $550 inclusive of GST, the financial statements of Skyland Travel Service, a travel business carried on by Mrs Tey, would be audited for the financial year ending 30 June 2006. As a result, a number of documents would be prepared on Mrs Tey's behalf. The relevant documents were, it was agreed, to be lodged on Mrs Tey's behalf with the Travel Compensation Fund. That lodgement was to be done electronically. On 22 September 2006 Mrs Tey met with Mr O'Brien at Optima's office in Osborne Park and took delivery of the relevant documents. On 24 September, with the help of her son, she electronically lodged the documents with the Travel Compensation Fund.
Optima brought proceedings against Mrs Tey in the Magistrates Court to recover its fee of $550 for the agreed work. Mrs Tey raised a number of defences including that she had not contracted with Optima, but had contracted with Mr O'Brien, and that the fee was not owed because the work had not been completed.
In the Magistrate's written reasons for decision, he addressed each of the issues which had been raised in the defence and made the following findings:
1.Mrs Tey claimed her contract was with Mr O'Brien, that there was no mention of Optima and that she therefore did not contract with Optima. The Magistrate found on the evidence that Mr O'Brien was acting as an agent for Optima, although he did not tell Mrs Tey that he was a director of Optima. The Magistrate found that the fact that Mr O'Brien did not specifically identify Optima as the party contracting with Mrs Tey to undertake the agreed auditing work was not fatal to Optima's claim. Where an agent does not disclose that he is acting for a principal, the principal may later disclose the agent's authority and the principal can sue on any agreement entered into by the agent on the principal's behalf. Optima was entitled to sue for the recovery of the outstanding fee of $550.
2.Mrs Tey claimed the agreed work was not completed because of a failure by Optima to lodge the relevant documents with the Travel Compensation Fund. On the evidence the Magistrate found that Optima did not lodge the documents because Mrs Tey said she would do it. Optima was thereby relieved of any requirement to lodge the documents and Mrs Tey could not rely on this as a reason for not paying the $550.
3.Mrs Tey claimed that a Statement by Principal Accounting Officer should have been, but was not, prepared by Optima. The Magistrate accepted Mr O'Brien's evidence that such a Statement was not needed. He also found, in effect, that such a Statement was not required as part of the audit, supported by the fact that there was no evidence that the Travel Compensation Fund declined lodgement of the relevant documents because the Statement was not provided.
4.Another defence raised by Mrs Tey was that accounting and format policies of Skyland for the year ending 30 June 2006 were changed without her permission. The Magistrate accepted, on the evidence, that the work undertaken by Mr O'Brien was carried out in an appropriate manner, that Mrs Tey was provided with the relevant documents prepared by Mr O'Brien and that Mrs Tey had signed the Annual Financial Review. He found that Mrs Tey made no complaint about the quality or manner of the presentation of the documents provided to her. In fact, no complaint was made by her until the proceedings were commenced.
5.Mrs Tey claimed there was a failure to prepare an Audit Engagement Letter detailing the scope of the audit and requirements under the Institute of Chartered Accountant Auditing Standards. After considering those Standards the Magistrate found that they did not apply during the relevant year for which Mrs Tey's audit was carried out and there was no failure by Optima to comply with those Standards.
6.Mrs Tey claimed that Optima was named on the financial reports without permission. This related to Mrs Tey's defence that she contracted with Mr O'Brien and not Optima, which the Magistrate had already dealt with.
In his reasons for decision, the Magistrate made specific findings about the credibility of each of the witnesses Mr O'Brien, Mrs Tey and her son, Mr Tey. The Magistrate found Mr O'Brien and Mr Tey to be good witnesses and accepted their evidence. He made adverse findings about Mrs Tey's credibility, giving examples of inconsistencies in her evidence and where, as he put it, she gave evidence which she believed would best suit her purpose without regard to its truth.
As Mrs Tey confirmed during the hearing of this application and as also can be seen from the minute of proposed amended grounds of appeal which she has now filed, the principal issue raised in the defence of Optima's claim was that Mrs Tey's agreement was with Mr O'Brien. There was a secondary issue of whether the audit work which was agreed to be carried out was in fact completed. These are relatively simple issues.
Striking out of the appeal pursuant to s 43(3) of the Magistrates Court (Civil Proceedings) Act – proportionality
When looking at this aspect of the application to strike out Mrs Tey's appeal, I must consider whether the likely costs of the appeal would be disproportionate to one of two things:
1.the amount of the claim in the case; or
2.the nature of the case: see Defendi v Eden Hill Plasterers [2008] WASCA 269 per Martin CJ at [3] and McLure JA at [13].
The costs which I am to take into account are those payable in this appeal, and not the costs which may have been incurred at first instance. Ordinarily the costs of the appeal would be the legal costs payable to the parties' respective legal representatives. In this case Mrs Tey is self‑represented. Optima is, however, legally represented and it must be represented by a solicitor in this appeal, pursuant to the requirements of the Supreme Court Rules which are applicable in this jurisdiction: see Rules of the Supreme Court O 12 r 1(2) and Eastern Metropolitan Regional Council v Four Seasons Construction Pty Ltd (2000) 22 WAR 372.
When s 43(3) refers to costs being "disproportionate", it has been held that this means out of proportion, which is a question of degree: see Defendi v Eden Hill Plasterers (supra) per McLure JA at [15] and Miller JA at [48]. Disproportionate costs can be relative to the amount of the claim in issue, or relative to the "nature of the case".
The nature of the case does not require looking at the strength or merits of the appeal, but does require a comparison between the likely costs of the appeal and the maximum return or benefit from the litigation. In Defendi v Eden Hill Plasterers per Miller JA at [48], [52] and [53], with whom Martin CJ agreed at [1], stated that this requires looking to see whether the nature of the case is a simple dispute and if the likely costs of the appeal would be disproportionate to it, the Court should strike out the appeal.
Pursuant to the Legal Practitioners (District Court Appeals) (Contentious Business) Determination 2008 the scale items relevant to party/party costs of the appeal include amounts of up to a maximum of $3,190 for getting up the appeal and a maximum of $6,380 for counsel fee on hearing. As part of the getting up for the hearing, the judgment of the Magistrate will need to be considered and the transcript of the trial on 18 June 2009 which comprises 124 pages will have to be reviewed. There is also a scale item for proceedings in chambers allowable to a maximum of $3,190. In this case there have already been two hearings before a District Court Judge and other appearances before the Deputy Registrar, and there are likely to be more between now and the hearing of the appeal. The exact costs of this appeal are difficult to predict because much will depend on the number of hearings which need to take place between now and the appeal hearing itself, and the length of the hearing of the appeal. I am satisfied, however, that thousands of dollars will be incurred by Optima in payment of legal costs to its solicitors pursuant to the relevant scale.
I am satisfied that the likely costs of this appeal will be disproportionate to both the amount of the claim in this appeal and the nature of the case which is the subject of the appeal. The amount of the claim is $550. The nature of the case is a simple one. Neither the amount of the claim nor the nature of the case justify the costs of the appeal. The maximum return or benefit from the litigation, to either party, is minimal. This is an example of an appeal which, having regard to what was said by Martin CJ in Defendi v Eden Hill Plasterers at [6] and [7], would become a source of injustice if it was permitted to continue.
I am satisfied that Mrs Tey's appeal should be struck out on this ground of Optima's application.
Striking out of the appeal pursuant to s 43(4) of the Magistrates Court (Civil Proceedings) Act
Given my finding on that part of the application brought pursuant to s 43(3), it is not necessary for me to consider this second part of Optima's strike out application, however I do so since this was argued before me.
I consider that the original appeal grounds set out in the notice of appeal should be struck out. I have not set them out in full in these reasons, but they do not address the merits of the decision by the Magistrate, provide no detail at all as to how it is said that the Magistrate erred either in law or fact and are, in my view, misconceived and improper. The first ground of appeal refers to the fact that the Magistrate had not established "beyond reasonable doubt" that the claimant had a right of claim, which is not the civil standard. The second ground asserts that it "was arguable" that all the affidavits and all facts relevant to the claim "was insufficient to support the case in favour of the claimant". Both the first and second grounds refer to "all the materials in the court file" when the only relevant evidence is that produced at the trial on 18 June 2009. In a similar vein the third ground refers to the Magistrate controlling documents which were to be admitted by exhibits at the trial "when all documents lodged and filed to date … should all be included and considered as evidence". The final ground reserves the right to add to or amend the grounds of appeal. In my view, none of these grounds of appeal disclose any reasonable basis for appeal, nor have any reasonable prospect of succeeding. Accordingly all of the grounds should be struck out: Avsar v Westland Healthcare Ltd[2008] WASCA 35 at [26] and [27].
Mrs Tey filed a minute of proposed amended grounds as directed on 11 June 2010. Her proposed amended grounds for the appeal are that:
1.(Numbered 3 in the minute):
"The learned Magistrate erred in law in finding the claimant [Optima] was entitled to sue.
Particulars
(i)There was no evidence that the Defendant contracted with Optima Financial Group Pty Ltd.
(ii)No evidence was before the Court that Mr O'Brien was an agent for the claimant.
(iii)No evidence was before the Court that the claimant disclosed Mr O'Brien's authority to act as agent."
2.(Numbered 4 in the minute):
"The learned Magistrate erred in law in finding that the contract was completed.
Particulars
(i)An entire contract was made involving the lodgement of the report in compliance with Travel Compensation Fund Requirements and within time limits.
(ii)The claimant did not carry out the whole contract.
(iii)The learned magistrate acknowledges that those propositions are correct; reasons page 5."
3.(Numbered 5 in the minute):
"The learned Magistrate erred in law and in facts in that Mr O'Brien is a registered company auditor with ASIC (Australian Securities & Investments Commission).
Particulars
(i)The Magistrate did not acknowledge the fact that audited accounts can only be signed by a natural person, NOT a Limited Company nor a Proprietary Company
(ii)That Mr O'Brien has failed to follow the Accounting and Auditing Practicing Standards of his accountancy professional body CPA Australia; and failed to follow the Rules and Regulatory Guides of ASIC.
(iii)Almost the entire Court documents in this primary court file showed that Mr O'Brien advised the Perth Magistrate (sic) Court that his private home address … is to be used for service of Court documents. But the claimant's Registered Office's address is …" [and the addresses are set out].
4.(Numbered 6 in the minute):
"The appellant is a layman, and she reserves her right to add to or amend these grounds of appeal after consideration of the entire transcript of the evidence at trial in the primary court before the commencement of the appeal hearing. The appellant reserves her right to add to or amend her submissions before the commencement of the appeal hearing in the District Court of Western Australia."
I need to consider whether leave should be granted to Mrs Tey to amend in accordance with these proposed grounds.
The grant or refusal of leave to amend is a matter of discretion. The relevant principles governing an application for leave to amend appeal grounds are set out in Apex Holiday Centre (Inc) v Lynn [2004] WASCA 35. The merits of the proposed new grounds of appeal are a relevant consideration in determining whether or not leave to amend should be granted, however, given the materials before me are limited to the Magistrate's written reasons for decision, the merits can only be assessed in a "rough and ready way": Apex Holiday Centre (Inc) v Lynn (supra) at [28] and [29]. When considering the merits, I must take into account that Mrs Tey is a self‑represented litigant and that I need to determine whether, notwithstanding poorly expressed grounds, there is merit in any of her proposed amended grounds of appeal: Tobin v Dodd & Ors [2004] WASCA 288 at [13] ‑ [18].
I consider that the first proposed amended ground of the appeal is without merit and I would refuse leave to amend to include this as a ground of appeal. As a matter of law, the Magistrate was correct in his finding that Optima was entitled to sue. An undisclosed principal may sue or be sued on any contract made on his behalf by his agent acting within the scope of his actual authority. The agent does not have to disclose at any time that he is acting for the principal: Bowstead W, Reynolds F.M.B, Graziadei M, "Bowstead & Reynolds on Agency" 18th ed London, Sweet & Maxwell, 2006 at 8-070; Siu Yin Kwan v Eastern Insurance Co Ltd [1994] 2 AC 199 at 207. In limited situations, such as a contract for personal services, a contracting party's identity may be important so that this principle does not operate. The contract in this case was not a contract for personal services, but an ordinary commercial contract for the carrying out of a business audit. Optima was entitled to sue as undisclosed principal: Siu Yin Kwan v Eastern Insurance Company Ltd (supra) at 207 - 208.
As to the second proposed amended ground, although it is expressed to be an error of law, it also relates to a factual finding of the Magistrate. I understand it to relate to the fact that it was Mrs Tey who attended to the electronic lodgement of the relevant documents with the Travel Compensation Fund. On the evidence before him the Magistrate found that although when the contract was first made, Optima was expected to lodge the documents with the Fund, Mrs Tey advised that she would do that electronic lodgement. The Magistrate found that Optima was thereby relieved of any requirement to lodge the documents. For the following reasons, there is in my view no merit in this second proposed amended ground of appeal. I would not allow leave to amend the appeal to include this ground.
To succeed in an appeal on a factual finding it must be demonstrated that the Magistrate made a finding that was not reasonably open to him on the evidence. In his reasons for decision, the Magistrate expressly rejected Mrs Tey's explanation of why she electronically lodged the documents, which was that she discovered she had not been given all necessary documents. It is apparent from the Magistrate's reasons that there was other evidence to show that the audit agreed to be carried out, for which the fee of $550 was fixed, was in fact completed and the reason that Mrs Tey was able to electronically lodge the documents was because she had all the relevant documents. The factual finding that the Magistrate made, therefore, was reasonably open to him on the evidence.
I also consider that there was no error of law by the Magistrate on this issue. It is an established principle of contract law that Mrs Tey cannot take advantage of the non-fulfilment of a contractual term, the performance of which she has herself prevented. There is a related principle which “exonerates one of two contracting parties from the performance of the contract when the performance of it is prevented and rendered impossible by the wrongful act of the other contracting party": see Foran v Wight (1989) 168 CLR 385 at 418, 445 and 446; Panamena Europa Navigacion (Compania Limitada) v Frederick Leyland & Co Ltd (J Russell & Company) [1947] AC 428 at 436; World Best Holdings Ltd v Sarker [2010] NSWCA 24 at [59] to [62].
The third proposed amended ground of appeal, although not well expressed, appears to be directed again to the Magistrate's finding that Optima was entitled to sue. It appears that Mrs Tey's argument is that as audited accounts must be signed by a natural person, along with the other particulars set out relating to this ground, it could only be Mr O'Brien who was the contracting party. The fact that a registered auditor must personally sign the audit report does not mean that the accounting company of which that auditor is a director or employee, or the accounting firm of which that auditor is a partner or employee, has no capacity to contract to carry out or charge fees for that audit. I consider that there is no merit to this proposed amended ground of appeal and I would not allow leave to amend to include this ground.
The fourth proposed amended ground of appeal is a "catch all" ground that Mrs Tey "reserves her right to add to or amend these grounds of appeal after consideration of the entire transcript of evidence at trial in the primary court before the commencement of the appeal hearing." That is vague and embarrassing, it does not articulate any error or disclose any reasonable basis for appeal. I would not allow leave to amend to include a ground in these terms.
In my view, none of the grounds of appeal, either existing or proposed, has any reasonable basis for it or any reasonable prospect of succeeding. I am satisfied that all of Mrs Tey's appeal grounds ought to be struck out. I would refuse Mrs Tey leave to amend her grounds of appeal in terms of the minute of proposed amended grounds of appeal filed on 11 June 2010.
Conclusion and orders
In light of my findings that Mrs Tey's appeal should be struck out pursuant to s 43(3) of the Magistrates Court (Civil Proceedings) Act, that all of Mrs Tey's appeal grounds should be struck out pursuant to s 43(4) of the Act and she should not have leave to amend, it is appropriate that I give judgment accordingly, pursuant to s43(6), without a full hearing of the appeal. The orders I will make are that the appeal be dismissed, with the appellant, Mrs Tey, to pay the respondent's costs of the appeal, including any reserved costs, to be taxed.
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