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[2012] WASCA 12
Court of Appeal (WA)
2012-01-31
Newnes JA
Original judgment source is linked above.
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
CITATION : CRISTOVAO -v- JOHN HORTON & ASSOCIATES [2012] WASCA 12
JOHN HORTON & ASSOCIATES T/AS TAYLOR WOODGATE PTY LTD
Jurisdiction : DISTRICT COURT OF WESTERN AUSTRALIA
Practice and procedure - Claim for $2,700 by appellant in Magistrates Court - Appeal against interlocutory decision - Appeal dismissed by District Court - Whether costs of appeal to Court of Appeal disproportionate - Magistrates Court (Civil Proceedings) Act 2004 (WA) s 43(3) - 'Nature of case' includes particular issue on appeal - Costs disproportionate to nature of case and to amount of claim - No injustice from absence of appellant at hearing of appeal to District Court - Result no different if appellant had attended - No miscarriage of justice if appeal dismissed - Magistrates Court (Civil Proceedings) Act 2004 (WA) s 43(4)(c)
Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc [1981] HCA 39; (1981) 148 CLR 170
Allesch v Maunz [2000] HCA 40; (2000) 203 CLR 172
Defendi v Eden Hill Plasterers [2008] WASCA 269
Eastern Metropolitan Regional Council v Four Seasons Construction Pty Ltd [2000] WASC 178; (2000) 22 WAR 372
Stead v State Government Insurance Commission [1986] HCA 54; (1986) 161 CLR 141
1 JUDGMENT OF THE COURT: The respondent has applied for an order dismissing the appeal on the basis that none of the grounds of appeal has any reasonable prospect of succeeding and, alternatively, that the likely costs of the appeal would be disproportionate to the nature of the case. For the reasons which follow, we would dismiss the appeal.
2 The appeal has its origins in proceedings in the Magistrates Court. On 25 August 2010, the appellant commenced proceedings against the respondent in that court claiming the sum of $2,700. That was the amount which the appellant had paid to the respondent, a handwriting expert, to conduct an examination of a document to ascertain whether certain parts of it had been forged. The appellant alleged that the respondent had failed to carry out the examination in accordance with the appellant's instructions and the appellant sought to recover the amount he had paid for the examination. We should say that the respondent denied the claim and said that the work had been properly carried out.
3 In the course of the proceedings, the respondent was ordered to provide discovery of documents. It was subsequently ordered to provide further discovery and did so by an affidavit dated 8 December 2010. That list contained a DVD which the respondent said contained all of the documents in its possession which were relevant to the action.
4 On 5 January 2011, the appellant filed an application in the Magistrates Court seeking what he described as 'further and better particulars' of the respondent's list of documents. The appellant's complaint, in substance, was that the respondent had failed to itemise in its list of documents the individual documents contained on the DVD. An affidavit of the appellant, sworn on 4 January 2011, was filed in support of the application. In that affidavit, the appellant, relevantly, described the events leading up to the application and attached a letter, dated 14 December 2010, which he had written to the respondent asserting, among other things, that the respondent was required by the rules of court to list each document and image on the DVD by number, date and description. In his affidavit the appellant reiterated that it was the respondent's obligation to particularise each document in that way. The appellant did not, however, suggest that he would suffer prejudice in the absence of such a list.
5 The appellant's application came on for hearing in the Magistrates Court before Mr P Cockram SM on 28 January 2011. His Honour found that the provision of the DVD sufficiently complied with the order for discovery. He observed that on such an application the court had to bear in mind the principle of proportionality, noting that the claim was for the sum of $2,700. His Honour said he was not persuaded that it was necessary for the contents of the DVD to be further itemised in a separate list of documents and dismissed the application.
6 The appellant appealed to the District Court against that decision. The appellant's grounds of appeal were as follows:
7 The appellant filed an affidavit dated 7 February 2011 in support of the appeal. In that affidavit the appellant (relevantly) recited the events leading up to his application to the Magistrates Court. The appellant went on to assert that he would be 'disadvantaged and suffer inequality before the law by [the respondent's] omission to list properly his documents' and that he would be 'deprived, disadvantaged and destitute of his rights' in the matter if he was not provided with a properly prepared list of documents by the respondent.
8 The appeal came on for hearing on 19 August 2011 before the primary judge. The appellant did not appear. He had, however, the previous day sent a letter, dated 17 August 2011, to the District Court, in effect, requesting an adjournment of the hearing on the ground that he was 'under severe distress which causing me attacks of tiredness and interferes with my memory ability [sic]'. A medical certificate, dated the following day, 18 August 2011, was attached to the letter. It was a pro forma document signed by a general practitioner, Dr Lim, certifying that the appellant was 'unfit for work on account of personal illness from 15/8/11 to 23/8/11'. The primary judge treated the appellant's letter as an application for an adjournment. The respondent's counsel opposed an adjournment.
9 The primary judge noted that in his affidavit in support of the appeal the appellant gave his occupation as a butcher. His Honour observed that while it could be concluded from the medical certificate that the appellant was not fit to carry out that occupation, the certificate did not assist in determining whether he was fit to attend court for the purpose of the hearing. His Honour refused the adjournment.
10 The primary judge then turned to the merits of the appeal. He found that each of the documents on the DVD had its own number and could be identified by that number. His Honour considered that to require the respondent to list the documents individually would involve time and effort which was unnecessary and out of proportion to the amount in issue, and it would not assist in the resolution of the action. His Honour further considered that the additional information about the documents which the appellant had also sought in the application went beyond the requirements of discovery.
11 The primary judge went on to note that, on 5 July 2011, the appellant's action against the respondent had been dismissed by the Magistrates Court. His Honour ordered that the appellant pay the respondent's costs of the appeal on a party and party basis to 5 July 2011 and on an indemnity basis after that date.
12 On 5 September 2011, the appellant filed an appeal notice in this court.
13 The appellant's grounds of appeal are as follows:
14 The respondent has applied to have the appeal dismissed pursuant to s 43 of the Magistrates Court (Civil Proceedings) Act 2004 (WA) (the Act) on, in essence, two grounds. The first is that the appeal does not have a reasonable prospect of succeeding or that no miscarriage of justice would occur by striking it out: s 43(4). The second is that the likely costs of the appeal would be disproportionate to the amount of the claim, or the nature of the case, which is the subject-matter of the appeal: s 43(3).
15 It is convenient to turn first to the question of proportionality under the Act.
16 Section 40 of the Act provides:
A party to a case that is not a minor case may appeal to the District Court against -
(a) any order made by the Magistrates Court in the course of proceedings in the case; or
(b) the judgment of the Magistrates Court in the case.
17 We note in passing that a party does not require leave to appeal against an interlocutory order of the Magistrates Court. Such an appeal is of right. That is to be contrasted with an appeal against an interlocutory order in the general division of this court, which is only by leave: Supreme Court Act 1935 (WA), s 60(1)(f).
18 Section 42 of the Act provides that a party to an appeal to the District Court under s 40 may appeal to the Court of Appeal against the judgment of the District Court on the appeal.
19 Section 43 provides (relevantly) that on such an appeal:
(3) The appeal court may strike out the appeal if the likely costs of the appeal to the parties would be disproportionate to the amount of the claim in, or the nature of, the case which is the subject of the appeal.
(4) The appeal court may strike out any ground of appeal if -
(a) there is no reasonable basis for it;
(b) it does not have a reasonable prospect of succeeding;
(c) although it has a reasonable prospect of succeeding, no miscarriage of justice would occur by striking it out; or
(d) it is frivolous, vexatious, scandalous or improper.
20 There are therefore two limbs to s 43(3). In determining whether the likely costs of the appeal would be disproportionate, the first limb is concerned with the amount of the claim in the Magistrates Court, and the second limb is concerned with 'the nature of the case which is the subject of the appeal'. Section 43 is not concerned with the substantive merits of the appeal: Defendi v Eden Hill Plasterers [2008] WASCA 269 [16].
21 The 'nature of the case which is the subject of the appeal' in s 43(3) is not, in our view, confined to the nature of the substantive proceedings in the Magistrates Court. Where, as here, the appeal is against an interlocutory order, it includes the nature of the particular issue in those proceedings which is the subject of the appeal. If 'the nature of the case' was confined to the nature of the substantive proceedings in the Magistrates Court, it would mean that where an appeal was brought against an interlocutory order, the nature of the interlocutory order would be irrelevant on an application under s 43(3). The only question would be as to the amount of the claim or the nature of the substantive proceedings. So long as the costs of the appeal were not disproportionate to the amount of the claim or the nature of the substantive proceedings, it would be irrelevant that the appeal concerned a minor procedural issue in respect of which the costs of the appeal were entirely disproportionate. Such an appeal would not be susceptible to being struck out under s 43(3).
22 That, in our view, could never have been intended. Section 43(3) is concerned to prevent disproportionate costs being incurred by the parties on appeals from proceedings in the Magistrates Court. It is not concerned with proportionality in any other respect, such as the court resources required for the determination of the appeal. It is evident that the requirement of proportionality under s 43(3) is intended to enable a party to litigate a modest claim in the Magistrates Court without the risk that an opponent who (for whatever reason) is unconcerned with costs might pursue appeals of disproportionate and even crippling expense. That intention would be defeated if, so long as the costs of the appeal were not disproportionate to the nature or amount of the substantive proceedings, a party unconcerned with costs could pursue with impunity an appeal against any (or even, every) adverse interlocutory decision, even where the issue on the appeal was of a minor or trifling nature.
23 In this instance, the nature of the case which is the subject of the appeal is the decision of the Magistrates Court to dismiss the appellant's application for an order that the respondent file an itemised list of its discovered documents in a claim for $2,700. It is that which is to be measured against the likely costs of the appeal.
24 In an affidavit in support of the strike-out application, the respondent's solicitor, Mr Soactar, says that both his firm and counsel who has been briefed in the appeal have entered into costs agreements with the respondent. Mr Soactar has attached to his affidavit a draft bill of costs for taxation on a party and party basis but he expresses the opinion that the respondent's costs of the appeal will be greater than the amount of the costs in the draft bill. The total amount of the draft bill is $22,801, including disbursements of $2,341. We note in passing that as the respondent is a corporation, it is required to act by solicitors on the appeal: Eastern Metropolitan Regional Council v Four Seasons Construction Pty Ltd [2000] WASC 178; (2000) 22 WAR 372.
25 It is unnecessary to subject the respondent's draft bill of costs to any detailed scrutiny. On its face, it is not manifestly excessive. While, on taxation, it might well be reduced to some extent, equally the costs that the respondent would actually incur are likely to be greater than the amount allowed on taxation. It is reasonable to proceed on the basis that it is likely the respondent's actual costs would not fall far short of the amount in the draft bill.
26 The appellant is acting in person on the appeal, as he has in the proceedings below. He will not therefore incur any legal costs. As the appellant holds a pensioner concession card, he is also exempt from court filing fees.
27 This appeal, in our view, is precisely the sort of matter to which s 43(3) is directed. The claim in the Magistrates Court is a straightforward one for what nowadays, in the context of contested litigation, is a small amount of money. Indeed, it falls well within the minor cases jurisdiction of the Magistrates Court (which currently has a limit of $10,000), although the appellant has chosen not to bring the action under that procedure. The appeal itself concerns a relatively minor procedural point which involved an exercise of discretion by the magistrate. Costs in the order of $20,000 on an appeal in respect of a procedural issue of that nature, in a claim involving a total sum of $2,700, are so entirely disproportionate as to justify the appeal being struck out under the second limb of s 43(3). There is nothing in the appeal which could possibly warrant the involvement of this court.
28 In any event, we consider that the appeal would also fall within the first limb of s 43(3). The cost involved in an appeal to this court is entirely disproportionate to the claim of $2,700. It is liable to be struck out on that ground also.
29 In the light of our conclusion, it is unnecessary to consider the other grounds relied upon by the respondent. We would add, however, that we consider the appeal is liable to be struck out on grounds quite apart from the issue of proportionality.
30 The grounds of appeal assert, in essence, that the primary judge erred in refusing to grant an adjournment of the hearing on the basis of Dr Lim's medical certificate, and that in proceeding to hear and determine the appeal in the appellant's absence the primary judge denied the appellant natural justice in that he failed to give the appellant a reasonable opportunity to be heard. (In relation to ground 8 (the letter from the Civil Listings Officer), on the hearing before this court the appellant conceded that he was in fact aware the appeal was proceeding to a hearing on 19 August 2011 - as is evident from the terms of his letter to the court of 17 August 2011 requesting an adjournment.)
31 Even if (which we doubt) there is some arguable error in the judge's decision not to grant an adjournment, as the High Court pointed out in Stead v State Government Insurance Commission [1986] HCA 54; (1986) 161 CLR 141, not every departure from the rules of natural justice will entitle the aggrieved party to a fresh hearing. A fresh hearing will not be granted if an opportunity to be heard could have made no difference to the result. The court said:
By way of illustration, if all that happened at a trial was that a party was denied the opportunity of making submissions on a question of law, when, in the opinion of the appellate court, the question of law must clearly be answered unfavourably to the aggrieved party, it would be futile to order a new trial.
Where, however, the denial of natural justice affects the entitlement of a party to make submissions on an issue of fact, especially when the issue is whether the evidence of a particular witness should be accepted, it is more difficult for a court of appeal to conclude that compliance with the requirements of natural justice could have made no difference (145).
See also Allesch v Maunz [2000] HCA 40; (2000) 203 CLR 172 [28], [48] - [50].
32 In addition, under s 43(4)(c) of the Act an appeal court may strike out a ground of appeal although it has a reasonable prospect of succeeding if no miscarriage of justice would occur by striking it out. Section 43(6) provides that if all of the grounds of appeal are struck out the court may give judgment on the appeal accordingly.
33 In this case, any denial of natural justice could not have affected the outcome of the appellant's appeal to the District Court. Nor would striking out the appeal cause a miscarriage of justice. As we have said, the question of the adequacy of the respondent's list of documents involved a common-place issue of practice and procedure which was to be determined by the Magistrates Court in the exercise of its discretion. The manner in which that discretion is to be exercised is informed by the obligation of the Magistrates Court to ensure that cases are dealt with efficiently, economically and expeditiously: s 13(2)(a) of the Act. And the manner in which an appeal against the exercise of the discretion is to be determined is subject to the principle that a tight rein is to be kept on appeals against discretionary decisions involving matters of practice and procedure, so that not only must there be an error of principle but the decision appealed from must work a substantial injustice to one of the parties: Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc [1981] HCA 39; (1981) 148 CLR 170, 177.
34 On the appeal to the District Court, the primary judge considered afresh the material that was before the Magistrates Court on the appellant's application. His Honour concluded, in effect, (as had the magistrate) that the itemisation sought by the appellant was not necessary for the fair determination of the action and would involve unnecessary time and expense. There was nothing in the material before his Honour which was capable of leading to a contrary conclusion. Nor was there anything to suggest that any injustice would be caused if the appellant did not obtain the itemised list he sought. The bare assertion that he would be 'disadvantaged' is not of itself sufficient to demonstrate any injustice.
35 A rehearing of the appeal to the District Court could not lead to a different result. Indeed, none of the grounds of appeal challenge the substantive finding of the primary judge. In the course of the hearing of the appeal to this court, the appellant said, however, that he wanted to put to the District Court on the hearing of the appeal two points; that the respondent had omitted documents from its discovery, and that the appellant was entitled to an itemised list of the documents. There is no evidence as to the first and, moreover, it is not evident how a separate itemised list would assist in relation to that. The second involves a discretionary decision of the Magistrates Court with which an appellate court would not interfere in the absence of substantial injustice to the appellant. There is nothing upon which a finding of substantial injustice could be made.
36 In those circumstances, the grounds of appeal have no reasonable prospect of succeeding and no miscarriage of justice would occur if the appeal were dismissed.
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
CITATION : CRISTOVAO -v- JOHN HORTON & ASSOCIATES T/AS TAYLOR WOODGATE PTY LTD [2012] WASCA 12 (S)
JOHN HORTON & ASSOCIATES T/AS TAYLOR WOODGATE PTY LTD
Jurisdiction : DISTRICT COURT OF WESTERN AUSTRALIA
Practice and procedure - Costs - Indemnity costs - Appeal had no reasonable prospect of succeeding - Costs of appeal disproportionate to matter in issue - Conduct of appellant unreasonable
Appellant to pay respondent's costs on an indemnity basis
Colgate-Palmolive Co v Cussons Pty Ltd [1993] FCA 536; (1993) 46 FCR 225
Cristovao v John Horton & Associates [2012] WASCA 12
Flotilla Nominees Pty Ltd v Western Australian Land Authority [2003] WASC 122 (S); (2003) 28 WAR 95
1 JUDGMENT OF THE COURT: On 31 January 2012, we dismissed an appeal against a decision of Curthoys DCJ in the District Court: Cristovao v John Horton & Associates [2012] WASCA 12. The appeal arose out of proceedings the appellant had commenced in the Magistrates Court against the respondent claiming the sum of $2,700. In the course of those proceedings, the appellant applied for an order requiring the respondent to file a more detailed list of discoverable documents. That application was dismissed on the ground that the respondent's existing list of discoverable documents was adequate. The appellant appealed against that decision to the District Court. The primary judge dismissed the appeal.
2 We dismissed an appeal against the decision of the primary judge on the ground, first, that the likely costs to the parties of the appeal to this court would be disproportionate to the issue on the appeal: Magistrates Court (Civil Proceedings) Act 2004 (WA), s 43; and, secondly, that none of the grounds of appeal had any reasonable prospect of succeeding.
3 The respondent has applied for an order that the appellant pay the costs of the appeal on an indemnity basis. Alternatively, the respondent seeks an order that the appellant pay the respondent's costs on a party and party basis. The appellant resists an order in either form.
4 On 31 January 2012, it was ordered that each party file written submissions on costs and that the issue of costs be determined on the papers. The parties have since filed written submissions in support of their respective contentions.
5 In respect of the claim for indemnity costs, the respondent advances, in substance, three submissions. First, it is submitted that the appellant's substantive claim in the Magistrates Court had been dismissed before the appeal was instituted and the appellant should therefore have been aware that the appeal served no purpose. Secondly, an offer by the respondent to compromise the appeal was unreasonably rejected by the appellant. Thirdly, the appellant's conduct was unreasonable and, further, the appellant ought to have recognised that the appeal was without merit.
6 The written submissions of the appellant are, with respect, incomprehensible. So far as we are able to make anything of them, we understand the appellant's submission to be that as the amount of the claim falls within the minor cases jurisdiction of the Magistrates Court, the respondent is not entitled to its costs of the appeal. That, it is said, is because legal costs are not recoverable in the minor cases jurisdiction except in certain specific instances, none of which apply here.
7 If that is the appellant's contention, it is misconceived. The provisions of the Magistrates Court (Civil Proceedings) Act in relation to costs in the minor cases jurisdiction of that court are irrelevant to the costs of the appeal to this court. Moreover, the appellant's claim was not brought in the minor cases jurisdiction of the Magistrates Court. Had it been brought in that jurisdiction, no right of appeal to the District Court would have arisen: Magistrates Court (Civil Proceedings) Act, s 32.
8 The general rule in this court is that a successful party is entitled to an order for its costs: O 66 r 1, Rules of the Supreme Court 1971 (WA). In the present case, the respondent was successful and no reason has been shown which would disentitle the respondent to an order for costs. The only issue is whether the respondent is entitled to its costs on an indemnity basis.
9 The general rules as to indemnity costs can, for present purposes, be shortly stated. An order for indemnity costs is a departure from the ordinary principle that costs are awarded on a party and party basis. While an award of indemnity costs is a matter of discretion, there must be some special or unusual feature in the case to justify the court exercising its discretion in that way. Thus such an order may be appropriate in circumstances where there has been some element of improper, or at least unreasonable, conduct by a party or the party's legal advisers: see Colgate-Palmolive Co v Cussons Pty Ltd [1993] FCA 536; (1993) 46 FCR 225, 233 (Sheppard J); Flotilla Nominees Pty Ltd v Western Australian Land Authority [2003] WASC 122 (S); (2003) 28 WAR 95 [9].
10 In addition, ordinarily an indemnity costs order will only be available in circumstances where, in the absence of such an order, the successful party is unlikely to recover the full amount of their costs. In relation to that there is an affidavit of the respondent's solicitor sworn on 22 November 2011. In that affidavit, the solicitor says, in substance, that the respondent has entered into a costs agreement in respect of its costs of the appeal and that the costs payable by the respondent to its solicitors under that costs agreement would exceed the amount recoverable by the respondent by way of party and party costs.
11 In our opinion, the respondent is entitled to an order for indemnity costs. The appeal had no prospect of succeeding and, in addition, the conduct of the appellant in pursuing the appeal was, in the circumstances, unreasonable. As noted earlier, the appeal involved a minor procedural issue in a claim in the Magistrates Court for the sum of $2,700. Moreover, there was no evidence that the appellant would suffer any prejudice if the decision of the Magistrates Court was not reversed. It was obvious from the very outset that the costs involved in the appeal to this court would be entirely disproportionate to the amount in issue in the action, let alone the point in issue on the appeal.
12 That the costs would be disproportionate could hardly have escaped the appellant's attention, notwithstanding that as a self-represented litigant he would not incur any legal costs and that, as the holder of a Disability Support Pension Card, he was not liable to pay court filing fees. He knew that the respondent was represented (which, as a company, it was required to be) and that it would incur substantial legal costs. The appellant's approach appeared to be that he was, as he believed, entitled pursuant to the rules of court to a more detailed list of discoverable documents and he was determined to pursue that entitlement regardless of the time and cost involved.
13 Such an approach proceeds upon a serious misconception. The relentless pursuit of a procedural issue of little practical significance cannot be justified simply by resort to claims of entitlement. Nor can it be excused simply because the appellant is not legally qualified. The concept of proportionality to be found in s 43 of the Magistrates Court (Civil Proceedings) Act and O 1 r 4B of the Rules of the Supreme Court is but a reflection of the dictates of common-sense. Plainly, on any reasonable view the time and cost involved in an appeal to this court could not be justified by what was in issue on the appeal.
14 If, remarkably, that had not occurred to the appellant at the outset it would have been brought home by the letter from the respondent's solicitors of 10 November 2011, after the appellant's case was filed, in which express reference was made to the concept of proportionality in s 43(3) of the Magistrates Court (Civil Proceedings) Act. The respondent's solicitors also contended that the appeal was without merit. The appellant was invited to abandon the appeal on the basis that each party bear its own costs. That invitation was met with a firm rejection.
15 We are satisfied that the appellant's conduct in bringing and pursuing the appeal was unreasonable and that this is an appropriate case for an order for indemnity costs.
16 There will be an order that the appellant pay the respondent's costs of the application dated 22 November 2011 and of the appeal, including any reserved costs, to be taxed on an indemnity basis so that the respondent is fully indemnified for its costs except in so far as those costs are unreasonable in amount or were unreasonably incurred.
(1981) 148 CLR 170
(2000) 203 CLR 172
(1986) 161 CLR 141
(2000) 22 WAR 372
(1993) 46 FCR 225
(2003) 28 WAR 95