APPEALED FROM: Anthony v Maxam Australia Pty Ltd

R v Registrar of the Magistrates Court of Tasmania at Burnie [2012] TASSC 42

Procedure - Costs - Jurisdiction - General - Power to make an order on the rate or scale of costs payable following a notice of discontinuance.

Magistrates Court (Civil Division) Act 1992 (Tas), s33.

Magistrates Court (Civil Division) Rules 1998 (Tas), rr32, 138, 139.

Procedure - Inferior courts - Tasmania - Local courts - Orders in nature of certiorari - Exercise of discretion where clear that the impugned order was beyond power but other remedies not exhausted.

R v Ross-Jones; Ex parte Green [1984] HCA 82; (1984) 156 CLR 185; Solution 6 Holdings Ltd v Industrial Relations Commission of New South Wales [2004] NSWCA 200; (2004) 60 NSWLR 558, applied.

Rodger v De Gelder [2011] NSWCA 97, distinguished.

Judgment Number: [2012] TASFC 5

2 The parties to be heard on orders to effect the decision.

1 The issue raised by ground (a) of the amended grounds of appeal was whether, following the filing and service of a written notice to discontinue an action pursuant to the Magistrates Court (Civil Division) Rules 1998, r32, the Magistrates Court ("the Court") had jurisdiction to make an order as to the basis or scale on which the costs payable by the party who filed the notice were to be assessed.

2 Rule 32 provides:

(1) A party may discontinue an action commenced by that party at any stage of the proceedings by notice in writing filed and served on any other party.

(2) Unless the parties agree otherwise, costs of the action are to be paid by the party discontinuing the action."

3 In Anthony v Maxam Australia Pty Ltd and R v Registrar of the Magistrates Court of Tasmania at Burnie [2012] TASSC 42, Wood J found that following the filing of a notice of discontinuance the Court had jurisdiction to make an order that the costs payable in consequence of the discontinuance were to be paid on a solicitor and client basis. The appellant by his amended grounds of appeal challenged that finding.

4 In the proceedings that are the subject of this appeal, the parties did not "agree otherwise" for the purposes of r32(2). Accordingly, upon the discontinuance of the action, the "costs of the action" were payable by the discontinuing party.

5 In essence the appellant's challenge to her Honour's finding involved contentions that:

• the filing of a notice of discontinuance ended a proceeding;
• as to a proceeding that has ended the Court has no jurisdiction to make an order as to the basis or scale on which costs are to be assessed; and
• the "costs of the action" that are payable pursuant to r32(2) can be determined without a Court order specifying how they are to be assessed.

6 There are numerous authorities to the effect that the filing of a notice of discontinuance brings a proceeding to an end. The authorities include: Conybeare v Lewis (1879 - 1880) 13 Ch D 469; The Salybia [1910] P 25 at 26; ROFA Sport Management AG v DHL International (UK) Ltd [1989] 2 All ER 743 at 749; Fowler v Renmark and Paringa District Hospital Inc (1988) 51 SASR 506 at 507; Gupta v ACT [2011] ACTSC 154 at [4] - [5]; Re Criminal Property Confiscation Act 2000; Ex parte DPP (WA) [2002] WASC 117; (2002) 130 A Crim R 581 at [24] and Logan and Anor v Camm & Whitson [2008] QSC 255 at [27]. However, recognition that a notice of discontinuance brings a proceeding to an end does not mean that a court is thereby deprived of its jurisdiction as to costs. The effect of a notice of discontinuance on a court's power with regard to costs will depend upon the terms of the applicable statutory provisions.

7 The Magistrates Court is a court of record throughout the State, the Magistrates Court Act 1987, s3A(2). The court for the purposes of the Magistrates Court (Civil Division) Act 1992 is the Magistrates Court exercising its civil jurisdiction in the civil division, that Act, s3. It being an inferior court of record created by statute, it can have no powers, jurisdictions or authorities other than those authorised by statute, KBRV Resort Operations Pty Ltd v Chilcott [2001] NSWCA 116; (2001) 51 NSWLR 516 par[22].

8 As observed by Professor G E Dal Pont, Law of Costs, 2nd ed, LexisNexis Butterworths, Australia, 2009, par6.4, the historical legacy with regard to the jurisdiction of a court to award costs dictates a starting point that, statute apart, a court lacks power to order costs, so that authority to do so must always be traced to a statutory provision. In this case, the Court's jurisdiction with regard to costs is to be found in the Magistrates Court (Civil Division) Act, s33(1), which provides:

"(1) The costs of and incidental to all proceedings are in the discretion of the Court and the Court may determine by whom and to what extent the costs are to be paid."

9 As can be seen, s33(1) places no temporal limit on the Court's jurisdiction with regard to costs in relation to a proceeding. It is notorious that the most common situation in which a costs order is made is after the outcome of a proceeding when it is possible to determine the extent to which the parties have succeeded or failed. Accordingly, in the absence of some clear basis for concluding otherwise, there is no justification for implying into s33(1) a limitation to the effect that an order for costs cannot be made after a proceeding has come to an end, whether by reason of an adjudication or a discontinuance.

10 More significantly, it is simply not possible to construe r32 as providing that the effect of a notice of discontinuance is to deprive the court of its jurisdiction to make an order as to the scale or basis upon which costs are to be assessed. In fact, the contrary is the case. That this is so becomes apparent when rr138 and 139, together with Sch1 are read in conjunction with the phrase "costs of the action" used in r32. Rules 138 and 139 are as follows:

(1) Unless the Court orders otherwise, a successful party in an action is entitled on judgment to costs against an unsuccessful party in accordance with this rule and rule 139.

(2) If judgment is in respect of an action for a sum of money -

(a) a successful claimant is entitled to costs on the relevant scale specified in Schedule 1 applicable to the sum actually recovered; and

(b) a successful defendant is entitled to costs on the relevant scale specified in Schedule 1 applicable to the sum claimed.

(3) If judgment is in respect of an action other than for a sum of money, a successful party is entitled to costs on the applicable scale in Schedule 1 as determined by the Court.

(4) Each item in Schedule 1 is inclusive of costs for all incidental and necessary activity and advice.

(5) Costs are not allowed for any item not listed in Schedule 1.

(6) An assessment officer may determine that a lesser amount than that specified for any item listed in Parts 1 and 2 of Schedule 1 is allowed.

(7) If a scale of costs in respect of a particular action is not specified in Schedule 1, the Court, on the application of a successful party or at the request of a registrar, may fix an appropriate scale of costs.

(8) If the Court considers proper cause exists, the Court may order that a successful party is entitled to costs on a solicitor and client basis.

(1) The Court, on the application of a party, may order that an action is a complex action.

(2) If the Court makes an order under subrule (1), a successful party is entitled to costs on the scale specified in Part 2 of Schedule 1."

11 We will not set out Sch1 - Costs and Expenses - in its entirety. Suffice it to say that Sch1 Pt1 relates to "routine actions" and details items of work for which costs are recoverable at a rate which depends upon whether the amount involved did not exceed $10,000, exceeded $10,000 but did not exceed $20,000, or exceeded $20,000. Part 2 relates to "complex actions" and is similar to Pt 1 save that the rate recoverable for some items of work is higher.

12 As is made plain by r138(1), the rules do not purport to circumscribe the Court's power with regard to costs. That power includes the power to fix or control the quantum of an order for costs. Nonetheless, insofar as rr138 and 139 envisage the following range of potential orders for costs, they are informative.

13 A successful claimant's costs of an action for a sum of money may be:

• in a routine action, costs on the relevant scale specified in Sch1, Pt1, applicable to the amount actually recovered; r138(2)(a); or
• in a complex action, costs on the relevant scale specified in Sch1, Pt2, applicable to the amount actually recovered, r138(2)(a), and r139; or
• costs on a solicitor and client basis, r138(8).

14 A successful defendant's costs of an action for a sum of money may be:

• in a routine action, costs on the relevant scale specified in Sch1, Pt1, applicable to the sum claimed in the action, r138(2)(b); or
• in a complex action, costs on the relevant scale specified in Sch1, Pt2, applicable to the sum claimed in the action, r138(2)(b), and r139, or
• costs on a solicitor and client basis, r138(8).

15 On an action other than for a sum of money, the successful party may be entitled to costs on the applicable scale in Sch1 as determined by the Court, r138(3). On an action in respect of which no scale of costs is specified in Sch1, on the application of a successful party or at the request of a registrar the Court may fix an appropriate scale of costs, r138(7). Consistent with these provisions and r138(8) a wide range of orders could be made on an action of the nature referred to.

16 The above shows that following the filing of a notice of discontinuance, in many instances, before the costs can be assessed it will be necessary for the Court to make an order specifying the basis for their assessment. This will be so in relation to every action that comes within r138(3) or (7). From this it can be seen that the phrase "costs of the action" in r32(2) recognises that an order with regard to the basis on which costs are to be assessed may need to be made subsequent to the filing of a notice of discontinuance. That said, it would be contrary to that which is made manifest by r32(2) to hold that subsequent to a notice of discontinuance the Court has no jurisdiction to make such an order.

17 When the gist of the above was explained to counsel for the appellant in the course of the hearing of this appeal he acknowledged that it was correct and conceded that the first ground of appeal could not be sustained. We dismiss that ground.

18 All the remaining amended grounds of appeal relate to the District Registrar's erroneous entry of an order for costs. Before her Honour the appellant sought relief in the nature of certiorari with regard to this order, that is, that it be quashed. Her Honour refused to grant that relief. The appellant contends that this refusal was an error.

19 With regard to the events that cumulated in the District Registrar making the erroneous order, her Honour said the following in pars[3] - [9] of her decision:

"3 In October 2009 the claimant commenced proceedings in the Magistrates Court Civil Division with a claim in the sum of $18,909.31 said to arise from a breach of an employment agreement with the defendant company, Maxam Australia Pty Ltd. It was asserted that the claimant was employed by the defendant company at its mining operations in Kazakhstan. In November 2009, the defendant's solicitors wrote to the claimant's solicitors informing them that they were pursuing the incorrect defendant, that Maxam Australia Pty Ltd had not employed the claimant at any stage, and that their investigations indicated that the plaintiff was engaged by a distinct corporate entity in Kazakhstan, Maxam Kazakhstan LLP. An application for costs was foreshadowed. Then, on 5 March 2010, the defendant's solicitors filed an application seeking various orders, including summary judgment for the defendant, and costs on a "full indemnity basis". This application was listed before Magistrate Jones on 16 July 2010.

4 On 30 March 2010, the claimant filed a notice of discontinuance (referred to as 'the notice') pursuant to the Magistrates Court (Civil Division) Rules 1998 (the 'MCCD Rules'), r32. Under the Rules, for the notice to be effective it had to be served (r32). The notice had been sent by ordinary mail to the defendant company's solicitors in Queensland rather than its solicitors in Burnie, Tasmania.

5 The District Registrar of the Burnie Magistrates Court issued a "notice of costs application" to the parties listing the application for 19 July 2010. On that date the application for summary judgment and costs, listed for 16 July, was also heard.

6 At the hearing before Magistrate Jones on 19 July, one of the key issues considered was whether there had been effective service of the notice of discontinuance on the defendant. It may be noted that the point had implications for the quantum of costs that the defendant would be able to pursue. If the notice had not been served as required by r32, the proceedings were still on foot, and the defendant could seek costs for the period beyond the filing of the notice while the proceedings were ongoing. Counsel for the claimant indicated that he would again serve the notice of discontinuance on the defendant's solicitors. The magistrate gave the parties seven days in which to file any additional submissions as to the validity of service of the notice of discontinuance.

7 Consideration was also given to the basis upon which costs were to be paid, the defendant having made an oral application for costs to be paid on an indemnity basis. Counsel for both parties consented to a determination being made on that issue before resolution of the issue of service. After hearing submissions, the magistrate ruled in favour of the defendant that the "costs should be ordered on the basis of solicitor/client costs", finding "special circumstances" warranted the order.

8 A formal order of the court, in terms of Form 9 (ref MCCD Rules, r77), relating to the proceedings for 19 July 2010 was prepared, signed by the District Registrar, and sent to the solicitors. The terms of the formal order are as follows:

'Parties to provide written submissions as to the validity of service of Notice of Discontinuance within 7 days.

Order that the respondent pay the claimants costs on a Solicitor/Client basis'.

9 This document, and the conduct of the District Registrar in signing it, falls for scrutiny in these proceedings by virtue of the general order. The first part of the record is an accurate note of the direction that was made regarding the filing of written submissions. The second part inaccurately records the proceedings. The magistrate did not make such an order. First, his ruling did not relate to the claimant's costs, but rather the defendant's costs. Second, he did not make a costs "order". He ruled that costs to be paid by the claimant should be on a solicitor and client basis. The prerequisite for the order was validity of service which was undetermined. Indeed, the fact that this determination was outstanding is evident from the record of proceedings."

20 That the entry of the order by the District Registrar was erroneous was conceded by Maxam Australia Pty Ltd on the hearing before her Honour. The key issue pursued before her Honour with regard to the order was whether or not her Honour should grant the relief sought by the appellant and quash the order.

21 Although it has been said that where the applicant for the remedy is the person directly aggrieved, prohibition and certiorari will lie as of right, ex debito justitiae, there is no question that the court always has a discretion to grant or refuse these remedies, R v The Justices of Surrey [1870] LR 5 QB 466 at 472, The Waterside Workers' Federation of Australia v Gilchrist Watt & Sanderson Ltd [1924] HCA 61; (1924) 34 CLR 482 at 517 and Solution 6 Holdings Ltd v Industrial Relations Commission of New South Wales [2004] NSWCA 200; (2004) 60 NSWLR 558 at par[133].

22 The authorities to which reference will be made almost invariably refer to the remedy of prohibition not certiorari. This is of no consequence as there is no difference in principle between the remedies except that prohibition may be invoked at an earlier stage than certiorari, R v Electricity Commissioners Ex parte London Electricity Joint Committee Company (1920), Limited [1924] 1 KB 171, Atkin LJ at 206. For relevant purposes it can be said that prohibition is appropriate to prohibit a decision-maker from proceeding towards, taking or implementing a decision beyond power. Certiorari on the other hand becomes appropriate once the determination that is beyond power has been made, and it lies to quash the determination.

23 In the course of this appeal to the Full Court the appellant and the respondent agreed to apply to the Magistrates Court for orders that will set aside the impugned order and did so by means of a joint consent memorandum to that Court. There being no question that the entry of the order was erroneous, the consent orders sought should and will be made. That being so the appellant no longer needs relief of the nature of certiorari to quash the order. Nonetheless, before us, the appellant has pursued the issue of whether her Honour erred in refusing to grant that relief on the hearing before her, as the outcome on this issue bears on the appropriateness of the order for costs that was made by her Honour and the order for costs to be made on this appeal.

24 In refusing to grant the relief sought her Honour said the following in pars[48] - [51] of her reasons for decision:

"48 It has been identified that the Deputy Registrar made an error in the formal order. This error has had consequences leading to a premature assessment of costs and the issuing of a warrant which has significant consequences for the claimant. I have had the benefit of submissions on the point of whether the error amounts to error on the face of the record for the purposes of certiorari, and whether it is permissible to have regard to the transcript of proceedings before the learned magistrate. Without reference to the transcript of those proceedings the error is not revealed. The submissions referred to Craig v South Australia [1995] HCA 58; (1995) 184 CLR 163. For reasons that follow it is unnecessary to decide this point, or indeed, the more general question of whether a mistake made by the Deputy Registrar in the formal order is amenable to this form of relief in the nature of certiorari.

49 If relief in the nature of certiorari is available in this situation, a relevant consideration in determining whether the discretion should be refused is whether an applicant has come to this Court having first exhausted other remedies: Rodger v De Gelder [2011] NSWCA 97 at par[92]. There are good reasons why this should be a usual requirement. It is sensible that the court at first instance, having specialist knowledge about its processes, should be scrutinising those processes and should be afforded the opportunity to remedy any problem relating to them (refer Aronson, M, Judicial Review of Administrative Action, 4th ed (supra), at 12.50 and 12.155). If there is then an appeal, this Court would have the benefit of the lower court's consideration of the matter.

50 The MCCD Rules provide an available remedy to address the error that has been identified. Rule 152 [...]

51 Rule 152 has application to acts of a District Registrar; the term "registrar" is defined in the MCCD Act, s3 as including a "district registrar". There is no time limit with respect to this kind of application for review. Rule 152 provides an obvious pathway still open to the applicant. In these circumstances discretionary relief should be refused."

25 With reference to that which her Honour said in par[48] of her reasons, we are satisfied that the conduct of the District Registrar that is under review was amenable to the relief sought. Although the District Registrar is not a component part of the Court, he or she constitutes the Court in the exercise of the powers conferred on that position, see The Commonwealth of Australia v The Hospital Contribution Fund of Australia [1982] HCA 13; (1982) 150 CLR 49 at 59, 64, 66 and 71 - 72, and Letts v Commonwealth of Australia (1985) 62 ALR 517 at 519. The material before her Honour clearly established that the entry of the order in contention was beyond the power of the District Registrar. As to such conduct being amenable to the remedy of certiorari, see Craig v South Australia [1995] HCA 58; (1995) 184 CLR 163 at 175 - 177.

26 Her Honour's reasons for refusing to grant the relief sought are encapsulated in par[49] of her reasons. Her Honour there correctly identified that a relevant consideration in determining whether the discretion should be exercised is whether the applicant has come to the court of review after exhausting other remedies. Her Honour went on to say that there are good reasons why the exhaustion of other remedies should be a usual requirement, and explained that it is sensible that the lower court should be afforded the opportunity to remedy the problem as if there is an appeal, the court of review will then have the benefit of the lower court's consideration of the matter.

27 With regard to the above her Honour cited Rodger v De Gelder [2011] NSWCA 97. In that case, Beazley JA (McColl and Macfarlan JJA agreeing) said at pars[84] - [85]:

"... I first wish to deal with the discretionary restraint on a court exercising supervisory jurisdiction where there are unexhausted appeal rights or review procedures: see Solution 6 Holdings at 591.

85 The reason for this restraint has been expressed in various ways. However, the common thread underlying the case law is that the court exercising supervisory jurisdiction is entitled to the benefit of the findings of the court or tribunal which is subject of the application for review. There is a dual utility in this exercise of restraint. First, it allows the court exercising supervisory jurisdiction to do so after disputed questions of fact have been determined. Secondly, it allows for the appellate or review procedures to correct the decision sought to be impugned, thus potentially rendering judicial review unnecessary: see Solution 6 Holdings at 593-595 and cases cited therein. It is an aspect of this second consideration that the court exercising supervisory jurisdiction is able to approach the matter with the benefit of the reconsideration by the court or tribunal which has the responsibility in law of being the primary forum of appellate review: see R v Ross-Jones; Ex parte Beaumont [1979] HCA 5; 141 CLR 504 at 194-195; Maltais v Industrial Commission (NSW) (1986) 14 IR 367 at 368."

The above is the backdrop against which Beazley JA went on to say at par[92]:

"As I have indicated, when a party who has a right of appeal in the court or tribunal whose orders are subject to judicial review, that party is not confronted with mutually exclusive choices. Rather, a superior court with supervisory jurisdiction usually requires a party to first exhaust those other remedies."

28 Whilst we share these views, they do not apply in the circumstances under consideration. In this case there is no question that the conduct of the District Registrar was beyond power. There were no disputed questions of fact that needed to be dealt with in the Magistrates Court, and there was no light which that Court could shed on the matter. The simple reality was that the impugned order needed to be quashed and the availability of an alternative means of achieving that end provided no good reason for refusing to quash it.

29 Moreover, there is ample authority that where an absence or excess of power is patently obvious, a court with a supervisory jurisdiction should exercise its discretion in favour of intervening.

30 In R v Ross-Jones; Ex parte Green [1984] HCA 82; (1984) 156 CLR 185, Gibbs CJ said, at 194, with regard to the refusal of the remedy of prohibition:

"If, therefore, a clear case of want or excess of jurisdiction has been made out, and the prosecutor is a party aggrieved, the writ will issue almost as of right, although the court retains its discretion to refuse relief if in all the circumstances that seems the proper course."

31 In Re Refugee Review Tribunal; Ex parte Aala [2000] HCA 57; (2000) 75 ALJR 52, at par[52], Gaudron and Gummow JJ (Gleeson CJ, Kirby and Hayne JJ agreeing) said of the above paragraph that it should be accepted as the correct approach.

32 In Boral Gas (NSW) Pty Ltd v Magill (1993) 32 NSWLR 501, at 509 Kirby P said:

"... where there is clear judicial error, prohibition will issue to an inferior court despite the existence of an internal appeal: see Burder v Veley [1840] EngR 36; (1840) 12 Ad & E 233 at 263; [1840] EngR 36; 113 ER 801 at 812; see also Hill v King (1993) 31 NSWLR 654."

33 In State Bank of South Australia v Nicholls [1993] VicRp 18; [1993] 1 VR 259, Ormiston J said at 280:

"Essentially each of those cases proceeds upon the assumption that often it is preferable to allow the tribunal to continue to hear a case and not to make orders which have the effect of stopping those proceedings. Sometimes the facts are sufficiently uncertain and sometimes it is said that the particular inferior court or tribunal has an expertise which ought to be brought to bear upon the particular decision before consideration in a higher court. However, without the necessity of examining each of those cases in detail, it is essentially a question of the exercise of the court's jurisdiction and, if the case is clear, then the court ought not to hesitate to exercise its jurisdiction. As was said in the Australian Stevedoring Industry Board Case by Dixon CJ and Williams, Webb and Fullagar JJ, at 118: 'If on the facts no basis could exist for exercising the power it would be a proper exercise of this Court's jurisdiction to award a writ of prohibition prohibiting unconditionally or peremptorily the cancellation or suspension threatened.'

In practical terms the same principle applies where the relief sought is to restrain the applicant from taking steps in a proceeding before an inferior court or tribunal. The court will naturally be cautious in exercising its jurisdiction but if the answer to the case is clear then it would be foolish to allow the matter to proceed elsewhere and to require a further application to be brought thereafter merely to give effect to the court's opinion at that later time."

34 In Solution 6 Holdings Ltd v Industrial Relations Commission of New South Wales (supra) at pars[154] - [158], Spigelman CJ, (Mason P, and Handley JA agreeing) said:

"154 Furthermore, it has always been accepted that where the absence or excess of jurisdiction is quite clear, a court with a supervisory jurisdiction will not exercise its discretion by refusing to intervene. The test has been expressed in varied, but equivalent, terminology: 'patent', per Brennan J in R v Ross-Jones (at 218); 'plainly', per Mason J in Pilkington ACI (at 127); 'clear', per Mahoney JA in Boral Gas (at 519) and per Murphy J in R v Federal Court of Australia; Ex parte WA National Football League (at 238).

156 The facts necessary to determine jurisdiction may be 'agreed' or 'indisputable'. (See Ex parte WA National Football League (at 206-207), per Barwick CJ.) The case may be one where 'the jurisdictional acts are not in dispute'. (Ballam (at 133), per McHugh JA.) That is the case here.

158 ... in my opinion, the defect in the jurisdiction of the Commission is patent, plain or clear in the sense referred to in the above authorities. It appears on the face of the amended summons and evidence cannot cure it, to apply the formulation in R v Gray; Ex parte Marsh . The claimants are persons aggrieved and orders should be made 'almost as of right' to use the formulation of Gibbs CJ in R v Ross-Jones approved, as I have noted above, in Re Refugee Tribunal; Ex parte Aala. An order to the effect of prohibition should issue."

35 In the case under consideration the appellant was the aggrieved party. It was beyond question that the entry of the impugned order was beyond power and there was no light that the Magistrates Court could shed on the matter if the appellant was sent back to that Court for relief instead of being granted the necessary relief by her Honour. In these circumstances we conclude that her Honour erred in failing to grant the appellant that relief.

36 In result, the appellant has lost on one of the two substantive issues he pursued before this court, but won on the other. The appellant failed on both of these issues before her Honour as well as failing on a contention to the effect that an order for solicitor and client costs could not be made in the Magistrates Court, as it was at odds with the scheme of the rules of that Court which provide for an event-based scale of costs. That contention was quite rightly rejected by her Honour and that rejection was not challenged before this Court.

37 However, as already mentioned, the appellant no longer needs relief of the nature of certiorari to quash the entry of the impugned order and it seems that the only orders we need to make to give effect to our decision relate to the order for costs that was made by her Honour and the order for costs to be made on this appeal. We will hear the parties before making orders in this regard.