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[2012] WASCA 46
General information, not legal advice.
Court of Appeal (WA)
2012-03-01
Newnes JA
Original judgment source is linked above.
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
CITATION : CRAFT DECOR PTY LTD -v- OTERI [2012] WASCA 46
Jurisdiction : DISTRICT COURT OF WESTERN AUSTRALIA
Citation : OTERI -v- CRAFT DECOR PTY LTD [2010] WADC 187
Practice and procedure - Claim in Magistrates Court for $40,000 - Claim under general procedure of Magistrates Court - Judgment for $4,700 - Amount of judgment sum within minor claims jurisdiction of Magistrates Court - Whether costs of action limited to costs applicable to minor claim - Meaning of costs order made by Magistrates Court - Appeal against order for costs under general procedure
Acts Interpretation Act 1984 (WA)
Commissioner of Taxes (Vic) v Lennon [1921] HCA 44; (1921) 29 CLR 579
DJL v Central Authority [2000] HCA 17; (2000) 201 CLR 226
Hampton Transport Services Pty Ltd v FJ & AM Bell [2010] WADC 19
Oteri v Craft Décor Pty Ltd [2010] WADC 187
Pelechowski v Registrar, Court of Appeal (NSW) [1999] HCA 19; (1999) 198 CLR 435
Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355
The Commonwealth v Baume [1905] HCA 11; (1905) 2 CLR 405
1 NEWNES JA: I have had the benefit of reading in draft the reasons for the decision of Hall J. His Honour has set out the relevant background and the grounds of appeal, and it is unnecessary to repeat those except to the extent necessary to explain my reasons. I would dismiss the appeal for the following reasons.
2 Put broadly, the Magistrates Court (Civil Proceedings) Act 2004 (WA) (the Act) provides for two, alternative, procedures for claims in the Magistrates Court: a general procedure which is dealt with in pt 3 of the Act, and a minor cases procedure which is dealt with in pt 4 of the Act. The jurisdictional limit of the court for a general procedure claim was, at the time the claim was lodged, the sum of $50,000; it increased to $75,000 as at 1 January 2009: s 4. The minor cases jurisdictional limit was, at the time the claim was lodged, the sum of $7,500; it increased to $10,000 as at 1 January 2009: s 3. The minor case procedure was introduced by the Act, which came into force on 1 May 2005.
3 On 11 October 2005, the respondent filed a general procedure claim against the appellant in the Magistrates Court claiming damages in the sum of $40,216 for defective floor tiling. On 27 January 2009, after trial, Magistrate Michelides gave judgment for the respondent in the sum of $4,752. At the same time, his Honour made an order for costs as follows:
[The appellant] to pay [two-thirds] of [the respondent's] costs to be taxed on scale applicable to judgment sum of $4,752.
4 It appears that the order was made after the issue of costs had been argued before the magistrate.
5 Subsequently, the respondent lodged a bill of costs for taxation. In the course of the taxation, the registrar conducting the taxation consulted Magistrate Michelides to ascertain from him as to whether, by the order, he intended to allow costs under the general procedure of the court or only the 'allowable costs' applicable to a minor claim. Magistrate Michelides informed him that it was the former. The registrar then taxed the costs in the sum of $16,253.56.
6 The appellant appealed against the decision of the registrar to tax the costs under the general procedure of the court. The respondent, for her part, made an application that the costs order be amended by adding at the end the words 'but not limited to allowable costs under s 31 of [the Act] pursuant to s 16(2) of the [Act]'. Both the appeal and the application were heard by Magistrate Jones. His Honour held that as the judgment sum fell within the minor cases jurisdictional limit and the respondent had not elected to have the case heard as a minor case, under s 25(5) of the Act the respondent was entitled only to 'allowable costs', which he found amounted to the sum of $825.90. Magistrate Jones further held that the registrar was not entitled to enquire of Magistrate Michelides as to what Magistrate Michelides intended by the costs order. Magistrate Jones allowed the appeal and dismissed the respondent's application to amend the costs order.
7 The respondent appealed to the District Court. On the appeal against the decision of Magistrate Jones that the respondent was only entitled to allowable costs, the primary judge held that his Honour had erred. Her Honour held that s 25(5) did not apply and the costs were to be taxed on the basis of a general procedure claim. In respect of the application to amend the costs order, the primary judge held that Magistrate Jones had erred in finding that the registrar was not entitled to have regard to the explanation of Magistrate Michelides as to what he intended by the order. Her Honour found that after being told by Magistrate Michelides what he had intended by the costs order, the registrar had impliedly amended it to reflect the explanation, as he was entitled to do under s 23(3) of the Magistrates Court Act 2004 (WA).
8 The primary judge set aside the decisions of Magistrate Jones allowing the appeal against the registrar's decision and dismissing the application to amend the costs order. Her Honour ordered that the assessed costs allowed by the registrar be reinstated and that the costs order be amended in the terms sought by the respondent.
9 The appellant appeals to this court against the decision of the primary judge. In substance the appellant contends, first, that as the judgment was for an amount within the minor cases jurisdictional limit of the Magistrates Court, pursuant to the Act the respondent is entitled only to the 'allowable costs' applicable to a minor case. Secondly, the appellant says that, on its proper construction, the effect of the costs order was that the costs awarded to the respondent were the allowable costs applicable to a minor claim. Thirdly, the appellant says that the primary judge erred in finding that the registrar was entitled to consult Magistrate Michelides and to act on his explanation as to what he meant by the costs order.
Ground 1 - the proper construction of the Act
10 The first contention turns on whether, on the proper construction of the Act, a claimant who brings a general procedure claim in the Magistrates Court for an amount in excess of the minor cases jurisdictional limit, but who obtains judgment for an amount which is within that limit, is entitled to costs applicable to a general procedure claim or whether the costs are restricted to the 'allowable costs' applicable to a minor case.
11 Under pt 3 of the Act, the procedure to be followed in a case under the general procedure is that set out in the rules of court, unless a written law provides otherwise: s 14(1). Part 3 itself also contains a number of provisions dealing with various aspects of the general procedure. It is unnecessary to refer in any detail to the provisions of pt 3 or the rules. Suffice it to say, they set down what can be sufficiently described as a conventional regime for the conduct of litigation, including detailed provisions for case management of cases in the court.
12 Costs in cases under the general procedure are dealt with in s 25. Section 25 provides, relevantly, as follows:
(1) The Court may order a party to a case to pay the whole or a part of another party's costs in the case.
(2) A successful party is entitled to an order under subsection (1) that the whole of its costs in the case be paid by the unsuccessful party, unless the Court considers there is good reason not to make such an order or subsection (5) applies.
(a) the value of the claim, or of the relief claimed, by the claimant is not more than the minor cases jurisdictional limit; and
(b) the claimant did not elect to have the claim dealt with under the minor cases procedure or, under section 28(3), the court ordered that the case be dealt with under the general procedure,
the Court may only make an order under subsection (1) in favour of a successful party if the order would be permitted by section 31 were the case being dealt with under the minor cases procedure.
(7) The amount of any costs to be paid is to be determined by the Court unless the parties concerned agree on the amount.
(8) The amount of any costs to be paid in respect of work done by a legal practitioner in conducting any proceedings in the case is to be determined under the applicable costs determination.
13 It is significant that the limitation under s 25(5) on the court's power to make a costs order only arises, relevantly, if two criteria are satisfied. First, 'the value of the claim' is not more than the minor cases jurisdictional limit and, secondly, the claimant did not elect to have the claim dealt with under the minor cases procedure. It is evident that s 25(5) is intended to apply to a claim that a claimant could have brought as a minor case but elected not to do so.
(a) a claim within the jurisdiction of the Court where -
(i) the value of the claim or of the relief claimed is not more than the minor cases jurisdictional limit; and
(ii) the claimant has elected to have the claim dealt with under the minor cases procedure;
(b) a matter within the jurisdiction of the Court ... that is declared to be a minor case for the purposes of this Act by the written law that confers jurisdiction on the Court to deal with the matter; or
(c) any other claim within the jurisdiction of the Court ... that the parties agree is to be treated as a minor case.
15 In a minor case, the minor cases procedure set out in pt 4 must be followed, unless the court orders that case be dealt with under the general procedure: s 28. Part 4 prescribes a quite different, and much simpler, procedure than that which applies under the general procedure. It requires the court to deal with a minor case in private unless the court orders otherwise and the court must act with as little formality as is reasonable: s 29(1), (3). The court is not bound by the rules of evidence but may inform itself as it thinks fit: s 29(4). With certain limited exceptions, a party to a minor case is not entitled to legal representation: s 30.
16 The evident intention is that, given the relatively modest amount involved, a minor case should be dealt with simply, expeditiously and ordinarily at little cost to the parties. The latter is reflected in s 31 of the Act, which deals with costs in a minor case and, so far as relevant, is as follows:
(a) the court fees and service fees paid by a successful party; and
(b) the costs of enforcing a judgment.
(2) A successful party to a minor case is entitled to an order under section 25(1) in relation to the party's allowable costs but not in relation to the party's other costs in the case.
(3) Despite subsection (2), the Court may make an order under section 25(1) as to the payment of the party's other costs by another party if it is satisfied that -
(a) because of the existence of exceptional circumstances an injustice would be done to the successful party if that party's other costs were not ordered to be paid; or
(b) the unsuccessful party's claim or defence was wholly without merit.
17 The amount of the claim in this case, the sum of $40,216, clearly fell outside the minor case jurisdictional limit. As I have said, the case was brought and dealt with under the general procedure.
18 The appellant submitted, however, that in respect of costs the respondent was not entitled to costs under s 25(1) for a general procedure claim, but was confined to 'allowable costs' under s 31 for a minor claim. That, it was argued, was because s 25(5) applied to the claim. That is, the 'value of the claim' was not more than the minor cases jurisdictional limit and the claimant had not elected to have the claim dealt with as a minor claim. It was submitted that, by virtue of s 25(5), in such a case costs can only be ordered under s 25(1) if the court is satisfied that there were exceptional circumstances which would make it unjust not to do so or the appellant's defence was wholly without merit. The appellant says there was no finding in either respect by Magistrate Michelides and I do not understand that to be in dispute.
19 The appellant's argument depends upon the proposition that the 'value of the claim' in s 25(5) refers to the amount of the judgment obtained by the respondent, rather than the amount of the claim which the respondent made.
20 In support of its contention that s 25(5) was to be understood in that way, the appellant referred to the Magistrates Court (Civil Proceedings) Rules 2005 (WA) (the Rules), made under the Act, and, in particular, to r 87 and r 88. Those rules appear in pt 15 of the Rules, dealing with costs, under div 2 which is headed 'Determining value of claim'. They are as follows:
For the purposes of assessing a party's costs under the applicable costs determination, the value of a claim is the amount determined under this Division (the determined value).
(1) Except as provided in subrule (2), if an originating claim is successful and -
(a) there is no counterclaim; or
(b) if there is a counterclaim, each counterclaim is unsuccessful,
then the determined value of the originating claim is the amount of the judgment.
(2) If an unsuccessful counterclaim was for an amount greater than the judgment sum, then the determined value of the originating claim made is the amount of the greatest counterclaim.
21 Those provisions provide no assistance to the appellant. In the first place, they are expressly concerned with determining the value of the claim specifically for the purpose of assessing a party's costs under the relevant costs determination. They are not concerned with the antecedent question of whether, under the Act, the costs are to be assessed under a costs determination or whether they are limited to 'allowable costs'. (In fact, as the primary judge observed, the provisions appear to be an anachronism as, since the Rules came into force on 1 July 2005, the value of the claim is no longer relevant to the costs determination applicable to a general procedure claim.) Secondly, while it is the case that words used in subsidiary legislation have the same meaning as in the statute under which the subsidiary legislation is made (Acts Interpretation Act 1984 (WA) s 44), there is no principle that the converse applies. Thirdly, for reasons I will now turn to, the meaning in those rules, if sought to be applied to s 25(5), is inconsistent with the clear meaning that follows from the proper construction of the Act.
22 Under s 26(1)(a), a claim will constitute a 'minor case' where, first, 'the value of the claim' is not more than the minor case jurisdictional limit and, secondly, the claimant 'has elected to have the claim dealt with under the minor cases procedure'. It is clear that an election by a claimant as to whether a claim is to be dealt with under the minor cases procedure has to be made, if not at the commencement of the claim, at least before the claim has been determined by judgment. It cannot have been intended that the 'value of the claim', and therefore whether it is open to the claimant to elect to have the claim dealt with under the minor cases procedure, is to be determined retrospectively by the amount of the judgment ultimately obtained by the claimant. The 'value of the claim' in s 26(1)(a)(i) can only refer to the amount claimed. Therefore a claimant can only elect to have a case dealt with under the minor cases procedure if the amount claimed is not more than the minor case jurisdictional limit.
23 It follows that 'the value of the claim' in s 25(5) also refers to the amount claimed, rather than the amount of the judgment obtained by the claimant. There are at least two reasons for that. In the first place, it would make no sense to say, for the purposes of s 25(5)(b), that a claimant 'did not elect to have the claim dealt with under the minor cases procedure' if no such election was available because the amount claimed exceeded the minor cases jurisdictional limit. Secondly, it is a rule of statutory construction that when the same word or phrase appears in different parts of a statute it should be given the same meaning, unless there is good reason not to do so: see Pearce DC and Geddes RS, Statutory Interpretation in Australia (7th ed) [4.6]. In this case, there is no reason to give the words a different meaning.
24 The appellant's first contention must be rejected. The value of the respondent's claim exceeded the minor cases jurisdictional limit and it was not open to the respondent to elect to have the case dealt with under the minor cases procedure. It was not a claim to which s 25(5) applied.
25 In the course of argument, counsel for the appellant placed considerable reliance on the decision in Hampton Transport Services Pty Ltd v FJ & AM Bell [2010] WADC 19, where it was held that 'the value of the claim' in s 25(5) refers to the judgment sum. In my respectful opinion, that case was wrongly decided and it should not be followed.
26 I should say that the view of the Act I have reached does not mean that a claimant with a claim within the minor cases jurisdictional limit can effectively circumvent s 25(5) and recover costs on the basis of a general procedure claim simply by deliberately inflating the amount of the claim so as to put it beyond the minor cases jurisdictional limit. The court has a general discretion as to costs under s 25(1) and (2) which is sufficient to enable an appropriate cost order to be made in such circumstances.
27 In substance, the appellant contends that the primary judge erred in construing the costs order to mean that the costs were to be taxed (or, in the new terminology which came with the introduction of the Rules, 'assessed') under the general procedure of the court, and should have found that the order was only for 'allowable costs' under s 31. That contention must be rejected. The terms of the order are quite inconsistent with an intention that the respondent should be entitled only to allowable costs, which under s 31 are limited to disbursements by way of court and service fees, and the costs of enforcing the judgment.
28 It is the case that at the time the costs order was made the amount of the judgment in an action was no longer relevant in determining the scale on which the costs of the action would be assessed. But nor was it relevant to the assessment of 'allowable costs'. The reference in the costs order to the taxation of the costs on the scale applicable to the amount of the judgment is, with respect, only capable of being understood as a misapprehension by the magistrate that the regime in force until shortly after the Act and Rules came into effect, was still in force. Under the former regime, the scale on which the legal costs of the action would be taxed was determined by the amount of the judgment. It has, however, never been the case that 'allowable costs' are determined on a 'scale'. Moreover, given the nature of 'allowable costs' it is not apparent why, in this case, it would have been thought necessary that they should be 'taxed', a process ordinarily associated with legal costs and one for which, where a minor case is commenced under pt 4 of the Act, the Rules make no provision. Nor, given that 'allowable costs' are confined to filing and service fees and enforcement costs, is it apparent why it would have been thought appropriate that only two-thirds should be recoverable.
29 I consider it to be clear that the costs referred to in the costs order were the costs of a claim under the general procedure. The appellant's contention that the order is to be construed as referring to 'allowable costs' must be rejected.
30 In light of the conclusion I have reached, nothing turns on the remaining grounds of appeal, to which, I should observe, counsel gave relatively little attention on the hearing of the appeal. I would, however, say something about the decision of the primary judge to allow the appeal against the decision of Magistrate Jones to dismiss the respondent's application to amend the costs order.
31 The decision of Magistrate Jones turned on his finding that the registrar was not entitled to seek clarification from Magistrate Michelides as to what Magistrate Michelides intended by the order. The primary judge took a different view, concluding that such a course was open either under s 23 of the Act or by virtue of an implied or incidental power of the court (see Pelechowski v Registrar, Court of Appeal (NSW) [1999] HCA 19; (1999) 198 CLR 435 [50] - [51]; DJL v Central Authority [2000] HCA 17; (2000) 201 CLR 226 [25] - [26]). As I understand her Honour, she viewed the referral to Magistrate Michelides as an application of what she generally described as 'the slip rule' to amend the order to make clear the decision the magistrate had reached, the issue of costs having already been argued before him. As I understood her (brief) submissions, counsel for the appellant submitted, first, that it was not permissible to seek clarification from Magistrate Michelides as to what was intended by the order (whether that clarification was sought under s 23 of the Act or an implied power of the court) and, secondly, that if it was open to do so, that could only be done by a hearing before him, not by the registrar consulting him privately.
32 In relation to the first point, as the amendment to the order made by the primary judge does no more than state expressly what, in my opinion, the order otherwise means, no miscarriage of justice could occur by leaving the order in its amended form. But as to the second point, I accept that, if it had been open to go back to Magistrate Michelides on the basis that the terms of the order were ambiguous (and it is unnecessary to express a view as to whether it would have been open, as I have found that the terms were not ambiguous), that could only have been done by bringing the matter on before him. The course taken in this case of a discussion between the registrar and Magistrate Michelides was, with respect, not a permissible course.
34 MURPHY JA: I agree with the reasons of Hall J, subject to the following. First, the construction of s 25(5) of the Magistrates Court (Civil Proceedings) Act 2004 (WA) favoured by his Honour (and by Newnes JA) is reinforced when regard is had to the fact that a 'claim' merges in the judgment and there is no subsisting 'claim' having any 'value' following judgment. Secondly, in my view, it was wrong for the registrar to consult the magistrate about what the magistrate thought his order meant. The meaning of the order depended upon its proper
construction, objectively ascertained. There was no invocation of the slip rule at the time and, indeed, for the reasons given by Hall J, the slip rule had no potential application in this case. It was inappropriate for the registrar to go behind the order, to the subjective intention of its author, in order to discern the legal effect of the order.
35 As the appellant has failed on the principal issues of the proper construction of the statute and the proper construction of the costs order, the appeal must be dismissed.
36 This appeal relates to a costs order made in civil proceedings in the Magistrates Court on 27 January 2009. The meaning and effect of the order was contested by the parties. On the appellant's view, the order entitled the respondent to costs applicable to a minor case as defined in the Magistrates Court (Civil Proceedings) Act 2004 (WA) s 26(1). That is, the appellant says that the respondent is entitled only to court fees, service fees and costs related to the enforcement of the judgment. On the respondent's view however, the order entitled her to two-thirds of her actual costs taxed on the relevant scale.
37 The difference between the positions advocated by the appellant and the respondent was not without significance. On initial assessment by a registrar of the Magistrates Court, the respondent's position was accepted and costs were allowed in the sum of $16,253.56. That decision was appealed, and a magistrate allowed the appeal from the registrar's decision and, in accepting the appellant's submissions, allowed costs in the sum of $825.90. The respondent then appealed to the District Court; that appeal was allowed and the registrar's decision was reinstated. This is an appeal from the decision of the District Court judge.
38 The question before this court is whether a claimant who brings a general procedure claim in the Magistrates Court, but who obtains judgment for an amount which is within the minor cases jurisdiction limit, is only entitled to costs applicable to a minor case. Though there are a number of grounds of appeal, they all relate back to this central issue. The resolution of this issue depends upon the interpretation of s 25 and s 26 of the Magistrates Court (Civil Proceedings) Act 2004. In particular, the question is whether the phrase 'the value of the claim' refers to the amount of the claim as originally brought or the assessed value of the claim in the final judgment.
39 Section 3 of the Magistrates Court (Civil Proceedings) Act 2004 provides the following relevant definitions:
claim means a claim made to the Court by a party (whether a claimant, a defendant or another party);
minor case has the meaning given by section 26(1);
minor cases jurisdictional limit means $7,500 and, on and after 1 January 2009, means $10 000;
40 The Magistrates Court civil jurisdiction is set out in pt 2 of the Act. The jurisdictional limit of the court is $75,000 or, prior to 1 January 2009, $50,000. Proceedings for a claim within the Magistrates Court's jurisdiction may be commenced by lodging a general procedure claim: r 7 Magistrates Court (Civil Proceedings) Rules.
41 However, a cheaper and more simple procedure is provided for where the claim is for an amount which is not more than the minor cases jurisdictional limit. The objects of the minor cases procedure are set out in s 27 of the Magistrates Court (Civil Proceedings) Act 2004.
42 Section 25 provides for the making of costs orders on a general procedure claim. That section provides as follows:
(1) The Court may order a party to a case to pay the whole or a part of another party's costs in the case.
(2) A successful party is entitled to an order under subsection (1) that the whole of its costs in the case be paid by the unsuccessful party, unless the Court considers there is good reason not to make such an order or subsection (5) applies.
...
(5) In a case where -
(a) the value of the claim, or of the relief claimed, by the claimant is not more than the minor cases jurisdictional limit; and
(b) the claimant did not elect to have the claim dealt with under the minor cases procedure or, under section 28(3), the court ordered that the case be dealt with under the general procedure,
the Court may only make an order under subsection (1) in favour of a successful party if the order would be permitted by section 31 were the case being dealt with under the minor cases procedure.
(7) The amount of any costs to be paid is to be determined by the Court unless the parties concerned agree on the amount.
general procedure means the procedure prescribed by Part 3 and the rules of court other than rules of court made for the purposes of this Part;
(a) a claim within the jurisdiction of the Court where -
(i) the value of the claim or of the relief claimed is not more than the minor cases jurisdictional limit; and
(ii) the claimant has elected to have the claim dealt with under the minor cases procedure;
(b) a matter within the jurisdiction of the Court referred to in section 8 that is declared to be a minor case for the purposes of this Act by the written law that confers jurisdiction on the Court to deal with the matter; or
(c) any other claim within the jurisdiction of the Court (including a claim within the jurisdiction of the Court by virtue of a consent given under section 6(1)(f)) that the parties agree is to be treated as a minor case.
44 Hearings in minor cases are held in private and are to be conducted with as little formality as possible: s 29(1) and s 29(3). When dealing with a minor case the court is not bound by the rules of evidence and may inform itself on any matter in such manner as it thinks fit: s 29(4). Rights to representation on the hearing of a minor case are limited: s 30.
45 Section 31 makes special provision for costs in respect of minor cases. That section provides as follows:
(a) the court fees and service fees paid by a successful party; and
(b) the costs of enforcing a judgment.
(2) A successful party to a minor case is entitled to an order under section 25(1) in relation to the party's allowable costs but not in relation to the party's other costs in the case.
(3) Despite subsection (2), the Court may make an order under section 25(1) as to the payment of the party's other costs by another party if it is satisfied that -
(a) because of the existence of exceptional circumstances an injustice would be done to the successful party if that party's other costs were not ordered to be paid; or
(b) the unsuccessful party's claim or defence was wholly without merit; or
(c) the proceedings in the minor case -
(i) were commenced but not concluded in a Local Court before 1 May 2005; and
(ii) were, immediately before 1 May 2005, not proceedings that were being heard and determined under the Local Courts Act 1904 Part VIA.
46 The Magistrates Court (Civil Proceedings) Rules 2005 came into operation on the same day as the Act. Unless the Magistrates Court orders otherwise the Rules apply in every case except a minor case: r 5. Part 15 of the Rules deals with costs. Rule 81 provides that where a costs order is made the successful party may lodge a bill of those costs. If objection is made the matter is listed for assessment before a registrar: r 83.
For the purposes of assessing a party's costs under the applicable costs determination, the value of a claim is the amount determined under this Division (the determined value).
(1) Except as provided in subrule (2), if an originating claim is successful and -
(a) there is no counterclaim; or
(b) if there is a counterclaim, each counterclaim is unsuccessful,
then the determined value of the originating claim is the amount of the judgment.
(2) If an unsuccessful counterclaim was for an amount greater than the judgment sum, then the determined value of the originating claim made is the amount of the greatest counterclaim.
48 On 11 October 2005 the respondent filed a general procedure claim in the Magistrates Court against the appellant claiming damages of $40,216 for defective floor tiling. The matter proceeded to a hearing that was part heard on 5 and 6 December 2007 and completed on 13 and 14 November 2008.
49 On 27 January 2009 Magistrate Michelides gave judgment for the respondent in the sum of $4,752. His Honour also made an order as to costs in the following terms:
Defendant to pay two-thirds of plaintiff's costs to be taxed on scale applicable to judgment sum of $4,752.
50 On 1 February 2010 the respondent lodged a bill of costs which was taxed before a registrar of the Magistrates Court. The respondent submitted to the registrar that the costs should be taxed according to the costs determination which is applicable to the general procedure jurisdiction. The appellant submitted that because the costs order had specified costs on a scale applicable to the sum awarded at judgment, and that that sum fell within the minor cases jurisdictional limit, then only 'allowable costs' under the minor cases jurisdictional limit should be awarded.
51 The appellant filed a notice of objection and submitted that for the purposes of assessing the respondent's costs, 'the value of the claim' is equal to the amount of the judgment. This conclusion was said to flow from r 87 and r 88 of the Magistrates Court (Civil Proceedings) Rules 2005 (WA). It was said that the effect of s 31 of the Magistrates Court (Civil Proceedings) Act was to limit the respondent to two-thirds of the allowable costs, namely fees and service fees paid by the respondent.
52 The registrar reserved his decision and indicated that he intended to seek directions from Magistrate Michelides as to his intention in making the costs order. By letter dated 2 February 2010 the registrar wrote to the parties in the following terms:
Mr Michelides has directed that his intention was not to limit the costs to allowable costs under s 31. The claim was for an amount that fell within the general procedure jurisdiction of the court and could not have been brought in the minor case jurisdiction.
53 The matter was then relisted for taxation and on 30 March 2010 the registrar assessed and allowed costs for the respondent in the sum of $16,253.56. The taxation was performed according to the costs determination applicable to the general procedure jurisdiction.
54 On 19 April 2010 the appellant appealed against the registrar's decision pursuant to s 29(1) of the Magistrates Court Act 2004 (WA); the appeal was by way of a rehearing. The appeal was heard by Magistrate Jones on 2 June 2010, Magistrate Michelides having by that time retired. Magistrate Jones reserved his decision.
55 In the meantime, on 11 June 2010 the respondent made an application to amend the costs order made by Magistrate Michelides to add the following words: 'but not limited to allowable costs under s 31 of the Magistrates Court (Civil Proceedings) Act 2004'. The application to amend the order was said to be made pursuant to s 16(2) of the Magistrates Court (Civil Proceedings) Act. That application was also referred to Magistrate Jones for determination.
56 On 30 June 2010 Magistrate Jones allowed the appeal and dismissed the respondent's application to amend the costs order. As regards the appeal, his Honour set aside the registrar's assessment and in lieu thereof ordered that the respondent's costs be allowed in the sum of $825.90. This represented two-thirds of the allowable costs applicable to a minor case.
In my view the wording of [Magistrate Michelides'] judgment is in accordance with Rule 87 and 88 of the Magistrates Court (Civil Proceedings) Rules 2005, which I have mentioned above, that is, that the costs award relates to costs allowable on that judgment sum which falls under the minor cases jurisdiction therefore section 31 mentioned above applies. Section 31 prescribes that the allowable costs means court fees and service fees paid by a successful party and the costs of enforcing a judgment. Section 31 refers to section 25(1) which gives the power to grant costs to a successful party however, it also says it can only make an order to a successful party if it is permitted by section 31 which I have already referred to, however, subsection (3) of section 31 prescribes that further costs can be awarded if the court is satisfied that because of the existence of exceptional circumstances an injustice would be done to the successful party if that party's other costs were not ordered to be paid.
It was submitted to me and it doesn't appear to be in dispute that the learned Magistrate heard lengthy and extensive submissions in relation to the matter of costs and finally made the order as I've outlined above. Subsection (3) mentioned above may or may not have been raised during those submissions however I do not intend and indeed it would be inappropriate for me to go behind that order, nor would it be appropriate for me to have regard to the penultimate paragraph of the Registrar's letter to the parties dated the 2 February 2010 [to] which I've already referred.
In summary the legislation is quite clear that if the judgment sum falls within a particular category then a costs order can only be made applicable to that category. It is clear from the judgment mentioned above, the Magistrate ordered costs to be taxed on a scale applicable to the category of $4,752.00 which is under the minor case proceedings which falls under section 31 I mentioned above which only allows costs and allowable costs means the court fees and service fees, therefore in allowing all those costs referred to in the Bill of Cost which I referred to earlier and are forming part of this judgment, the Registrar erred in law.
58 As regards the respondent's application to amend the original costs order, Magistrate Jones concluded that the proposed amendment was not one that could be made under the slip rule. It appears to have been assumed that that was the nature of the application and his Honour held that the respondent should appeal the costs order rather than seeking to make an amendment of the type sought.
59 On 13 July 2010 the respondent lodged an appeal against Magistrate Jones' decision. That appeal was heard on 8 October 2010 by Schoombee DCJ and her Honour delivered her decision on 14 December 2010: Oteri v Craft Décor Pty Ltd [2010] WADC 187.
60 Schoombee DCJ concluded that Magistrate Jones was incorrect in coming to the conclusion that r 87 and r 88 provided a general definition of the phrase 'value of the claim'. In particular, her Honour did not consider that r 87 and r 88 assisted in determining the meaning of the phrase as used in s 25(5) of the Act. Her Honour referred to the history of the rules and said:
Rule 87 specifically provides that 'for the purposes of assessing a party's costs under the applicable costs determination' the value of a claim is the amount determined under that division (ie, the judgment sum). This definition of 'value of the claim' therefore only applies at the stage when a party's costs are assessed under the relevant costs determination.
The costs regime applicable to claims in the general procedure jurisdiction is set out in s 25 of the Act. Section 25(1) provides that a court may order a party to pay the whole or a part of another party's costs in the case. Section 25(2) states that a successful party is entitled to an order that the whole of its costs be paid by the unsuccessful party, unless the court considers that there is a good reason not to make such an order. According to s 25(7) the amount of any costs to be paid is determined by the court unless the parties agree on the amount. Section 25(8) provides that the amount of costs to be paid in respect of work done by a legal practitioner is to be determined under the applicable costs determination.
Where a party is successful in a general procedure claim, obtains a costs order and has its costs taxed under the applicable costs determination, r 87 provides that the judgment sum determines the relevant category or 'column' of the costs determination under which the party's costs will be taxed. The Local Court costs scales provided for many years for various 'divisions' or 'columns' within a costs scale depending on the amount of the judgment. Since 2005 that differentiation no longer applies in costs determinations applicable to the Magistrates Court.
Prior to the promulgation of the Rules (which came into effect on 1 May 2005), r 6 of the Local Court Rules 1961 provided that any costs to be taxed be taxed on the basis of the items set out in an appendix (the costs scales) 'in accordance with the column of that scale appropriate to the value of the sum recovered'. Rule 87 and r 88 appear to be a remnant or repetition of that rule, although curiously they only commenced on 1 May 2005, the same date on which the first costs determination under the Legal Practice Act 2003 came into operation which no longer drew a distinction between various categories based on the value of the sum recovered.
Accordingly, r 87 and r 88 no longer seem to have any role to play in costs determinations, but that does not mean that they should be interpreted to have a more general application where such an interpretation goes against the express wording of these rules. Rule 87 is expressly said to apply 'for the purpose of assessing a party's costs under the applicable costs determination' [37] - [41].
61 In rejecting the proposition that r 87 and r 88 could assist in determining the meaning of the phrase 'value of a claim' where it appears in s 25 of the Act, her Honour said:
The intention of s 25(5) is clearly that where the value of a claimant's claim or of the relief claimed at the outset is under the jurisdictional limit for minor cases, but the claimant does not elect to have the claim dealt with under the minor cases procedure, the claimant will be penalised by a costs order appropriate to minor cases. The phrase 'the value of the claim' has a different meaning in s 25(5) to that in r 87 and r 88. This is apparent from the fact that s 25(5) does not only refer to 'the value of the claim' but also to 'the value ... of the relief claimed'. It would not make sense to apply the meaning given to 'the value of the claim' in r 87 and r 88 (ie, the judgment sum) to the same phrase in s 25(5), but still have the reference to 'the value ... of the relief claimed' in the same section. This would lead to a contradictory result where the judgment sum was less than the amount of the relief claimed at the outset.
Section 26 and s 28 of the Act which determine what type of claim falls under the minor cases jurisdiction and how such a claim is dealt with also make it apparent that the phrase 'the value of the claim' where it appears in the Act is intended to mean 'the value of the claim at the time that it is filed' [44] - [45].
62 As regards the slip rule, her Honour noted that s 23 of the Magistrates Court Act (rather than s 16(2) of the Magistrates Court (Civil Proceedings) Act 2004) provides for what is often described as the slip rule. She referred to the rule as having been given a wide interpretation in other contexts to correct clerical mistakes or errors in judgments or orders arising from accidental slips or omissions. Her Honour was of the view that it was open to the registrar to amend the costs order to reflect the intentions of Magistrate Michelides. She was also of the view that Magistrate Jones was in error in not taking into account the explanation of Magistrate Michelides and the registrar's reliance upon it.
(a) it is not appropriate for the Court to go behind the wording of the Order.
(b) the Order was made by Magistrate Michelides having regard to extensive argument before the Magistrate on the issue of costs under the Magistrate Court (Civil Proceedings) Act 2004.
(c) the learned judge interpreted the words of the order out of context with the entire Order. The order was for 'The Defendant to pay 2/3 of the Plaintiff's costs to be taxed on scale applicable to judgment sum of $4,752.00'.
(d) the scale applicable to the judgment sum of $4,752.00 is the 'allowable costs'.
(e) the scale applicable to the judgment sum was not lifted by Magistrate Michelides.
(f) allowable costs permitted by sections 31(1) and 31(2) of the Magistrate Court (Civil Proceedings) Act 2004 are taxed by a Registrar to assess whether the allowable filing fees were in fact incurred.
(a) at the time the Registrar made the enquiry of Magistrate Michelides there was no application before the Registrar to amend the Order.
(b) there was no appeal of the Order.
(c) the judgment sum of $4,752.00 fell within the category of a minor case and as such Magistrate Michelides could not have made any costs orders greater than allowable costs unless there were exceptional circumstances, pursuant to section 31(3)(a) of the Magistrates Court (Civil Proceedings) Act 2004. Magistrate Michelides did not find or identify any exceptional circumstances which would allow him to make an order for costs greater than the costs allowed under the minor cases provisions.
(a) the Respondent filed an application dated 11 June 2010 in the Magistrates Court of Western Australia to amend the Order pursuant to section 16(2) of the Magistrates Court (Civil Proceedings) Act 2004 ('June Application').
(b) Magistrate Jones provided oral reasons in relation to the June Application.
The learned Judge should have found that there was no application before Magistrate Jones to amend the order under the slip rule and that any appeal was of an interlocutory nature.
Particulars
(a) the Order made by Magistrate Michelides included a cost order that 'the Defendant pay 2/3 of the Plaintiff's costs to
be taxed on scale applicable to judgment sum of $4,752.00'.
(b) the Respondent filed the June Application.
(c) any dismissal of an application to amend the order under the slip rule or the June Application would not result in the Respondent being deprived of her right to taxed costs. The taxed costs were the allowable costs under section 31(1) Magistrates Court (Civil Proceedings) Act 2004.
(d) leave to appeal against the Order under the slip rule was not sought by the Respondent.
(a) the Order was made by Magistrate Michelides having regard to extensive argument before the Magistrate on the issue of costs.
(b) The Respondent sought to add the words 'but not limited to allowable costs under s 31 of the Magistrates Court (Civil Proceedings) Act 2004' to the Order. The addition of the words is not a material mistake in relation to a person, thing or matter.
64 The appellant submits that the words 'the value of the claim' in s 25(5) refer to the value of the claim as ultimately awarded in the judgment. It says this is consistent with r 87 and r 88.
65 The appellant's submissions in this regard cannot be accepted for the following reasons.
66 Firstly, the limit on the available costs in respect of a minor case must be understood in the context of the Act as a whole. It is apparent that legal costs incurred in a minor cases are usually minimal, given the restrictions upon legal representation that apply to such cases. Whether there will be representation and the procedure which is followed in respect of a case is determined by the nature of the claim that is lodged. For example, on the amount of the claim lodged in this case it was never possible for it to proceed as a minor case (unless both parties agreed under s 26(1)(c)). It would be arbitrary if the entitlement to actual costs depended not on the way in which a case was conducted, but on the decision made at the end of it. Thus, it is more consistent that the phrase 'the value of a claim' (in s 25(5)) refers to the claim as lodged and not to the judgment.
67 Secondly, it is clear that the purpose of s 25(5) is to encourage claimants, whose claim as filed falls within the minor cases jurisdictional limit, to elect to have their matter dealt with under pt 4 of the Act. This encouragement is reinforced by the risk that if such an election is not made, and the claim proceeds as a general procedure claim, then the claimant will be limited to the costs that could be made under s 31. The fact that s 26(1)(a)(ii) provides for an election to be made presumes a decision made at the commencement of proceedings. If the value of the claim in s 25(5)(a) referred to the amount of the final judgment then there would be an inconsistency with s 25(5)(b) insofar as the latter sub-section requires that there was also a failure to make an election. Where a claim as originally filed was above the minor cases jurisdictional limit there would be no election to be made.
68 In other words, the suggested interpretation of the appellant would render s 25(5)(b) otiose. An interpretation should be favoured which gives all of the provisions of the Act some work to do: The Commonwealth v Baume [1905] HCA 11; (1905) 2 CLR 405, 414 (Griffiths CJ) and Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355, 382 (McHugh, Gummow, Kirby & Hayne JJ). It is clear that s 25(5) only applies where both the value of the claim is in the minor cases category and where the plaintiff does not elect to have it so dealt with. The requirement of a failure to elect puts it beyond doubt that this must be a pre-judgment decision. That requirement directs attention to the amount of the claim as filed, not the amount of the final judgment.
69 Thirdly, the determination of the amount to be awarded in a judgment usually depends upon findings of fact made following a hearing. It is often difficult to predict in advance of a trial how the witnesses will perform, what evidence will be admitted and what findings of fact the magistrate will make. It does not follow that because a judgment sum is within the minor cases jurisdiction that the original claim for a greater sum must have been without merit, or that the outcome was inherent and knowable by the claimant. In these circumstances, it is difficult to see why a case that commenced and proceeded as a general procedure claim, and in respect of which no election under s 26(1)(a) was possible, should be treated as a minor claim for the purposes of costs.
70 Fourthly, r 87 and r 88 do not, on their face, purport to dictate the nature of a costs order that can be made. Those rules expressly relate to the value of a claim 'for the purposes of assessing a party's costs' (emphasis added). The assessing of costs necessarily occurs after an order has been made. It is the work of a registrar under r 83. In the past there have been different costs determinations applicable in respect of different judgment sums. While that is no longer the case, it serves to indicate the limited purpose r 87 and r 88 might have been intended to have. When that is borne in mind, it is clear that there is no merit in using those rules to assist in interpreting the Act.
71 Fifthly, the general rule that an interpretation should be favoured which gives the same meaning to a word or phrase throughout a statute applies only within a single piece of legislation. See Pearce DC and Geddes RS, Statutory Interpretation in Australia (7th ed) [4.6]. There is no basis for a requirement that the meaning of a word or phrase in subordinate legislation must dictate how that word or phrase is interpreted in its parent Act (although the converse is true): Interpretation Act 1984 (WA), s 44. In any event, any presumption as to consistency must bow to the context in which the words or phrase appear. The presumption cannot prevail if the words themselves are sufficiently clear: Commissioner of Taxes (Vic) v Lennon [1921] HCA 44; (1921) 29 CLR 579, 590 (Higgins J). In my view, it is clear that the context and meaning are different in respect of s 25(5) and r 87.
72 Sixthly, the explanatory memorandum in relation to the Act states the following in relation to s 25(5):
Subclause (5) ensures that where a matter that is within the minor cases jurisdiction is commenced in the general jurisdiction the costs that can be awarded are the very limited costs that would be allowed had the action been commenced in the minor cases jurisdiction. The intention is to ensure that a defendant in a case that could have been commenced in the small cases jurisdiction is not thereby disadvantaged.
73 In my view this serves to reinforce the correctness of the interpretation contended for by the respondent. In referring to a matter being in the minor cases jurisdiction at the time of commencement the explanatory memorandum is clearly referring to claims which are for a value which would make an election under s 26(1)(a) possible. To the extent that a different conclusion was reached by Scott DCJ in Hampton Transport Services Pty Ltd v FJ & AM Bell [2010] WADC 19, then, with respect to his Honour in that case, his conclusion was wrong. Any suggestion that a party could avoid the consequences of s 25(5) by falsely inflating the amount of their claim fails to take into account the discretion in the making of costs orders that the Magistrates Court has under subsections 25(1) and 25(2).
74 In the present case, the claim lodged by the respondent was for a sum far in excess of the minor cases jurisdictional limit. Accordingly, it was never possible for the respondent to elect under s 26(1)(a) to have the claim dealt with under the minor cases procedure and the second requirement of s 25(5) could never have been met.
75 In any event, in my view, the proper interpretation of the phrase 'the value of the claim' in s 25(5)(a) is the amount of the claim as originally brought. This is the ordinary meaning of the phrase and there is nothing to justify a conclusion that the phrase was being used as a term of art or in some technical or special sense.
76 There was no error on the part of the District Court judge in regard to the interpretation of s 25(5) and, accordingly, ground 1 is without merit.
77 In the circumstances, the District Court judge being correct in regard to the proper interpretation of s 25, the only question remaining was the correct interpretation of the order made by Magistrate Michelides. In my view, that order was clear on its face. There are several aspects of it which are only consistent with an order made on a general procedure claim under s 25 rather than an order made under s 31. In particular, I note the following:
(1) the absence of any reference to the phrase 'allowable costs' as used in s 31. Rather the more general word 'costs' is used;
(2) the reference to the costs having to be taxed which is more consistent with an assessment of professional costs;
(3) the reference to the costs to be taxed on a 'scale' which is not consistent with an order under s 31 for allowable costs only. Rather, it is consistent with an assessment of actual costs on a general procedure claim;
(4) the reference to having to pay a proportion, namely two-thirds, of the plaintiff's costs which appears to be more readily referable to actual costs incurred. On its face this has the appearance of being an apportionment of costs to reflect the fact that the plaintiff had been only partly successful. The need for any such apportionment would less obviously arise if the costs were already limited by s 31.
78 The appellant places some reliance on the words 'applicable to the judgment sum of $4,752' as indicating that Magistrate Michelides intended that the costs order would be treated as a minor cases costs order under s 31. If that was so, it is likely that his Honour would have stated this intention in more direct terms. In fact there is another, obvious explanation for these words, which is that his Honour was assuming that different scales applied according to the amount of the judgment sum. In the absence of compelling evidence to the contrary, the plain meaning of his Honour's words must be accepted.
79 In my view, there was no necessity for the order to be corrected by reference to the slip rule. In any event, it does not appear to me that on a proper understanding of that rule, it could be applied to the circumstances of this case. Section 23 of the Magistrates Court Act 2004 is headed 'Correction of Accidental Errors' and provides:
(1) The Court may correct a judgment or order if it contains -
(a) an accidental slip or omission;
(b) a material arithmetic error; or
(c) a material mistake in the description of any person, thing or matter.
80 It could not be said that Magistrate Michelides made an accidental slip or omission, or made a material mistake in the description of any person, thing or matter. The omission of the words 'but not limited to allowable costs under s 31' cannot be described as a mistake of any description, let alone an accidental slip.
81 The purpose of the insertion of the words sought in the application to amend was not to correct a mistake but to put beyond doubt the meaning of the costs order. An amendment to the costs order was only sought as a response to the interpretation contended for by the appellant.
82 It is unnecessary to deal in greater detail with the slip rule or whether the registrar was in error in seeking guidance from Magistrate Michelides as to the meaning of the costs order. This is because those issues are immaterial in the face of the conclusions that the original order was clear on its face and that such an order was not contrary to s 25(5).
83 For these reasons, even if they had a prospect of succeeding, grounds 2 to 7 do not refer to material errors, and no miscarriage of justice could arise in respect of them.
(1921) 29 CLR 579
(2000) 201 CLR 226
(1999) 198 CLR 435
(1998) 194 CLR 355
(1905) 2 CLR 405