Practice and procedure - Application for leave to appeal - Claim and counterclaim commenced in Magistrates Court - Both parties submitted Magistrates Court had jurisdiction - Appeal to District Court - Application to amend notice of appeal to District Court to challenge jurisdiction of Magistrates Court - Application dismissed - Whether substantial injustice would be done by leaving decision unreversed

Home Building Contracts Act 1991 (WA)

Magistrates Court (Civil Proceedings) Act 2004 (WA), s 6, s 10

Foster v Usherwood (1877) 47 LJ QB 30

Horsman v Commissioner of Main Roads [1999] FCA 1733

J & F Stone Lighting & Radio Ltd v Levitt [1947] AC 209

Scott v Bennett (1871) LR 5 HL 234

Waltons Stores (Interstate) Ltd v Maher [1988] HCA 7; (1988) 164 CLR 387

Welch v Nagy [1950] 1 KB 455

Wilson v Metaxas [1989] WAR 285

1 McLURE JA: The appellant applies for leave to appeal and to appeal from orders made by Groves DCJ on 6 February 2009 dismissing her application for leave to amend her notice of appeal to the District Court and her appeal.

2 The appeal to the District Court was from orders made by Magistrate Heaney in April 2008 dismissing the appellant's claim and entering judgment against her on the respondent's counterclaim. In her application to amend, the appellant sought leave to contend that the learned magistrate lacked jurisdiction to determine the claim and counterclaim. That contention is contrary to submissions put to the magistrate on her behalf.

3 In November 2006 the appellant commenced an action against the respondent in the Magistrates Court in Albany. The appellant's claim was for breach of a contract for the provision of landscaping services (the landscaping contract). The respondent counterclaimed for damages for the early termination of the landscaping contract.

4 The trial of the action took place in December 2007 and lasted three days. The magistrate reserved his decision.

5 By letter dated 31 December 2007 the magistrate advised the solicitors for each party that his 'initial conclusion' was that he did not have jurisdiction to determine the claim and counterclaim. The magistrate drew the parties' attention to s 6(5)(e) of the Magistrates Court (Civil Proceedings) Act 2004 (WA) (Magistrates Court Act) which relevantly provides:

[T]he Court does not have jurisdiction to deal with -

(e) a claim that the Building Disputes Tribunal ... has jurisdiction to deal with under ... the Home Building Contracts Act 1991.

6 The magistrate identified the reasoning leading to his initial conclusion that the Building Disputes Tribunal had jurisdiction to deal with the matters under the Home Building Contracts Act 1991 (WA) (Building Contracts Act). He called for submissions from the parties. The appellant and the respondent each provided written submissions on the proper construction of the Building Contracts Act and contended that the magistrate did have jurisdiction to determine all matters.

7 In his written reasons for decision delivered sometime in April 2008 the magistrate said:

Whilst I remain of the opinion that I have no jurisdiction to deal with this matter I have made my decision based on the evidence before me in anticipation of bringing this matter to a conclusion (2).

8 The magistrate in his reasons made orders that the appellant's claim be dismissed, the appellant pay the respondent's costs of the claim to be taxed, judgment be entered for the respondent in the amount of $2,000 and the appellant pay the respondent's costs of the counterclaim to be taxed. Formal orders were made and extracted on 22 April 2008.

9 On 23 April 2008 the appellant filed an appeal from the decision of the magistrate, the sole unparticularised ground being that the findings were against the weight of the evidence. The notice of appeal was not served on the respondent within the time required by the District Court Rules 1996 (WA) (District Court Rules).

10 By letter dated 15 September 2008 the appellant invited the magistrate to recall the orders made on 22 April 2008 on the ground that the magistrate had intended to dismiss the claim and the counterclaim for want of jurisdiction.

11 By letter dated 17 September 2008 the clerk of the court advised the appellant's solicitors as follows:

I am advised by Mr Heaney that the order as extracted by the Court is accurate and does reflect the Magistrate's decision. The Magistrate does not agree that his order can be rescinded and because it is a final order, if a party to the action were to disagree with that order the method to redress this would be to lodge an appeal against the decision.

12 In December 2008 the appellant filed an application to amend the notice of appeal to delete the original ground and insert three new grounds to the effect that the magistrate erred in law (1) in finding that he had jurisdiction; (2) in not giving reasons for his finding that he had jurisdiction; and (3) in not ensuring his orders accorded with his reasons.

13 The application to amend was heard and dismissed by Groves DCJ on 6 February 2009. He dismissed the application on the basis that the appellant had accepted and acquiesced in the position that the magistrate had jurisdiction and could not be permitted to depart from that position. Groves DCJ dismissed the application without considering the merits of the proposed grounds. He dismissed the appeal because the original ground failed to comply with the District Court Rules. There is no challenge to the dismissal of the appeal on that ground.

14 It was common cause that the appellant required leave to appeal from the decision of Groves DCJ under s 79(1)(b) of the District Court of Western Australia Act 1969 (WA).

15 Leave to appeal will ordinarily be granted where the decision below was wrong or attended with sufficient doubt to justify the granting of leave and substantial injustice would be done by leaving the decision unreversed: Wilson v Metaxas [1989] WAR 285. Whether substantial injustice will occur depends on all the circumstances of the case.

16 It is apparent from the magistrate's reasons and more particularly from the orders he made that, for the purpose of the proceedings before him, he accepted and acted on the submissions of both parties that he had jurisdiction notwithstanding he had a different opinion on the construction of the Building Contracts Act, details of which he had previously provided to the parties. Thus there is no merit in proposed grounds 2 and 3 of the appellant's application to amend.

17 The only arguable proposed ground of appeal is that the Magistrates Court did not have jurisdiction to deal with the claim and counterclaim because they were claims that the Building Disputes Tribunal had jurisdiction to deal with under the Building Contracts Act.

18 For the purpose of determining the application for leave to appeal to this court, I will assume the subject matter of the claim and counterclaim were matters within s 6(5)(e) of the Magistrates Court Act and thus beyond the statutory jurisdiction of the magistrate. However, that is not necessarily the end of the matter. The relevant legal principles are as follows.

19 In the absence of a statutory provision to the contrary, the jurisdiction of the Magistrates Court cannot be enlarged by the consent of the parties. Section 6(1)(f) of the Magistrates Court Act is an example of where its jurisdiction can be enlarged by consent. There is no equivalent provision applicable to the exclusion of jurisdiction in s 6(5)(e). Nor can the jurisdiction of the court be enlarged by the operation of the doctrines of waiver, acquiescence or election: Commonwealth v Verwayen (1990) 170 CLR 394, 404, 425, 492.

20 There are also authorities to the effect that if the jurisdiction of the court is limited by statute, it cannot be enlarged by estoppel: Welch v Nagy [1950] 1 KB 455; J & F Stone Lighting & Radio Ltd v Levitt [1947] AC 209. However, caution is required when considering statements in the authorities about estoppel. For example, in J & F Stone Lighting, which was relied on in Welch v Nagy, the court was referring to issue estoppel (and res judicata). The doctrines of res judicata and issue estoppel do not apply to a decision of an inferior court made without jurisdiction because, unless the statute conferring jurisdiction otherwise provides, the decision is a nullity: Bower GS, Turner AK and Handley KR, The Doctrine of Res Judicata (3rd ed, 1996) [110] - [115]. The same is not true of a decision of a superior court of general jurisdiction. As Martin B said in Scott v Bennett (1871) LR 5 HL 234 at 245:

The Court of Common Pleas is one of the superior Courts of Record. It may be that the Act of Parliament did not justify it, but nevertheless the judges had perfect jurisdiction to make it; and the [order] being made by them, it is binding and conclusive on all the world unless it can be altered by appeal or error.

21 However, a decision of the Magistrates Court made without jurisdiction is not a nullity because it has statutory jurisdiction to make a binding decision on jurisdiction. Section 10(1) of the Magistrates Court Act provides:

The Court has jurisdiction to decide whether a claim is or is not within the jurisdiction conferred on it by section 6 or the jurisdiction referred to in section 8.

22 Thus, the magistrate's orders are valid and binding unless and until they are set aside. It follows that the principles of res judicata and issue estoppel apply to the magistrate's decision. The application of those principles would prevent the appellant from re-litigating the issues in the Building Disputes Tribunal.

23 Moreover, there have been significant (relatively) modern developments in the law of estoppel in Australia, particularly equitable estoppel, as explained by the High Court in Waltons Stores (Interstate) Ltd v Maher [1988] HCA 7; (1988) 164 CLR 387. It remains to be determined whether estoppel can prevent a challenge to a valid order, albeit made without jurisdiction. Further, estoppel has been relied on to prevent an appellant from denying that a decision-maker without statutory jurisdiction had acted in the capacity as arbitrator so as to bind the parties: Horsman v Commissioner of Main Roads [1999] FCA 1733.

24 These matters go to the merits of the appeal to this court. However, I would decide the application for leave solely on the second limb of the test being whether substantial injustice would be done by leaving the decision unreversed.

25 In my assessment, substantial injustice would be done by reversing the decision of Groves DCJ. There is a very strong public interest in the finality of litigation. The appellant would seek to re-litigate the disputes in the Building Disputes Tribunal to try and secure a different result. There are other relevant considerations. First, it was the appellant who commenced and continued her claim in the Magistrates Court. Secondly, the appellant's considered and expressly stated position in the Magistrates Court was that the magistrate did have jurisdiction. Thirdly, both parties have outlaid significant legal costs in the Magistrates Court proceedings. The respondent was awarded and has been paid his taxed costs which are in the sum of $29,339.90. The total amount in issue at trial in the claim and counterclaim was approximately $32,000. Fourthly, it is possible that the respondent's claim against the appellant may be time barred under s 17(2) of the Building Contracts Act.

26 The observations of Bramwell LJ in Foster v Usherwood (1877) 47 LJ QB 30 continue to resonate. He said:

I may remark that it is a very strong thing for a person to say, 'I agreed that this cause should be tried as it has been; I consented to judgment being given; and now it is against me, I say that there is no jurisdiction'. In such a case the Court would struggle as far as possible to uphold the judgment (31).

27 I would refuse leave to appeal on public interest grounds and dismiss the appeal.