Jurisdiction : MAGISTRATES COURT OF WESTERN AUSTRALIA

Appeal - Application to strike out appeal - Whether costs were disproportionate - Turns on its own facts

Magistrates Court (Civil Proceedings) Act 2004 (WA)

Magistrates Court (Civil Proceedings) Rules 2005 (WA)

Davey v Fisher as Trustee for The Fisher Family Trust t/as Perth Diesel Performance [2024] WADC 100

DuluxGroup (Australia) Pty Ltd v Chapple [2023] WASCA 83

Kalaui Pty Ltd v Moove Holdings Pty Ltd [2025] WASCA 23

Miller v McKnight [2023] WASCA 182

1. The present matter to be determined by the court is an application by the respondent that the appeal be struck out pursuant to s 43(3) of the Magistrates Court (Civil Proceedings) Act 2004 (WA) (the Civil Proceedings Act) on the grounds that the likely costs of the appeal to the parties will be disproportionate to the amount of the claim in, and/or the nature of, the case which is the subject of this appeal.

1. The appeal was commenced by the filing of an appeal notice on 16 May 2024. The appeal was against a decision made by the Magistrates Court on 26 April 2024. The orders subject to appeal are:
   1. The Defendant's Form 23 - Application made pursuant to Rule 95F(3)(a) of the Magistrates Court (Civil Proceedings) Rules 2005 for an Order for costs pursuant to Rule 95F(3)(b) of the Magistrates Court (Civil Proceedings) Rules 2005, lodged on 1 March 2024, is dismissed.
   2. Pursuant to section 25(5) and 31(3) of the Magistrates Court (Civil Proceedings) Act 2004, the Defendant shall pay the Claimant's costs of and incidental to the Defendant's Form 23 - Application lodged 1 March 2024, fixed in the sum of $1,200.00.

1. The presently sought order was set out in the notice of respondent's intention filed on 23 July 2024.
2. There are three grounds of appeal contained in the appeal notice. It is unnecessary at this point to set out the grounds of appeal in full. However, the central proposition is that the magistrate erred in finding the power to award costs pursuant to r 95F(3)(b) of Magistrates Court (Civil Proceedings) Rules 2005 (WA) (the Civil Proceedings Rules) is subject to the restriction imposed by s 25(5) of the Civil Proceedings Act.
3. In oral submissions counsel for the appellant said:

The fundamental question to be resolved by the appeal is, when a case is taken to be dismissed under r 95F of the [Civil Proceedings Rules] after going inactive, whether, in such a case, the defendant is a successful party within the meaning of s 25 and s 31 of the [Civil Proceedings Act], and therefore, whether an award of costs is generally available if the claim is below the minor cases jurisdiction or the amount of $10,000.

1. It is agreed that there is no decision of this court or the Supreme Court binding the Magistrates Court on this issue.

1. To better understand the present application it is necessary to summarise the course of the proceedings in the Magistrates Court.
2. The proceedings emanated from a motor vehicle collision on 3 June 2018 on Agonis Street, Yakamia in Western Australia which involved the parties.
3. It is common ground between the parties that the dispute in the Magistrates Court was between, effectively, RAC Insurance Pty Ltd, for the appellant in these proceedings, and a credit hire company Right2Drive Pty Ltd, for the respondent. This remains so in the appeal.
4. On 28 August 2018 Right2Drive, the credit hire company from which the respondent obtained a motor vehicle to temporarily replace their damaged motor vehicle, sent a letter of demand to the appellant's insurer, RAC Insurance Pty Ltd (RAC) seeking payment in the sum of $1,037.69.
5. On 30 August 2018 RAC responded to Right2Drive's letter of demand and made a payment in the sum of $371.23. This was because this was the amount it considered was reasonable to pay under the relevant insurance coverage.
6. On 17 December 2020 the claimant issued a General Procedure Claim against the defendant for the balance of the amount sought, being $666.46.
7. The amount of the claim was in the minor cases jurisdiction for the purposes of costs under s 25 of the Civil Proceedings Act. The claim was not proceeded with and was placed on the inactive cases list on 18 March 2022, pursuant to r 95B of the Civil Proceedings Rules. By reason of the claim having then been inactive for a continuous period of six months, pursuant to r 95F of the Civil Proceedings Rules, it was taken to be dismissed on 18 September 2022.
8. The appellant then lodged an application on 1 March 2024 seeking an order for costs pursuant to r 95F(3) of the Civil Proceedings Rules. The application was dismissed. The reason for this was because the magistrate decided the right to recover costs could not be awarded as the appellant was a 'successful party' within the meaning of s 25(5) and s 31 of the Civil Proceedings Act. The magistrate then went on to award the costs of the failed application to the respondent.

1. Section 43(3) of the Civil Proceedings Act provides in substance that the court may strike out an appeal if the likely costs of the appeal to the parties would be disproportionate to the amount of the claim in, or the nature, of, the case which is the subject of the appeal.
2. Section 45(4) of the Civil Proceedings Act provides the court may make an order under s 45(3) of its own initiative.
3. Section 43(3) provides the court with power to exercise a discretion if one or both of two preconditions are satisfied. The preconditions are, firstly, that the likely costs of the appeal to the parties would be disproportionate to the amount of the claim which is the subject of the appeal; and, secondly, the nature of the case which is the subject of the appeal would be disproportionate to the amount of the claim which is subject to the appeal.
4. The discretionary power is that the court may strike out the appeal.
5. There is no dispute between the parties that one or both of the preconditions has been met.
6. As stated at the outset, the disagreement between the parties, and the issue to be determined, is whether it is appropriate to exercise the discretion contained in s 43(3) of the Civil Proceedings Act.

1. Miller v McKnight[1] was an application under s 43(3) to strike out an appeal from this court to the Court of Appeal. The court set out a number of principles. Insofar as relevant, they are:[2]
   1. Importantly an appeal court may make a strike-out order on its own initiative pursuant to s 43(5) of the Civil Proceedings Act.[3]
   2. The term 'disproportionate' means out of proportion. Whether the likely costs are disproportionate is an evaluative question of fact and degree. The only relevant costs are those of the parties to the appeal. The costs incurred in the Magistrates Court are irrelevant.[4]
   3. The issue of the resources of the court should not be taken into account in determining the issue of proportionality.[5]
   4. In deciding whether to strike out the appeal the court is not required to consider the merits of the decision appealed against.[6]
   5. Generally the discretion is an unfettered discretion to be exercised judicially according to the justice of the case.[7]
   6. A finding that the likely costs of the appeal will be disproportionate to the amount of the claim will ordinarily be a factor of considerable weight in the exercise of the discretion. Often it will be the determinative factor in the exercise of the discretion.[8]
   7. The requirement of proportionality is intended to enable a party to litigate a modest claim in the Magistrates Court without the risk of an opponent who is unconcerned with costs who might pursue appeals of disproportionate and even crippling expense.[9]
2. The Court of Appeal in Miller decided the first precondition to the exercise of the power was met; because the likely costs of the appeal to the parties would be disproportionate to the amount of the claim in the case which was the subject of the appeal. The court found the likely costs would be many multiples of the value of the claim in the Magistrates Court.[10] However the court decided it should not strike out the appeal. In making this decision the court referred to a number of 'countervailing factors'.[11] The court said it was not an 'ordinary case'; with the circumstances of the appeal being described as 'unusual'.[12] The court said there were wider benefits that may accrue to the benefit of the administration of justice in the court hearing and determining the appeal.[13] The court said this was 'the principles applying to the recovery of credit hire charges ought to be the subject of a considered decision by this court'.[14]
3. In summary the countervailing factors found by the court were:
   1. The practical reality was that the appellant and the respondent would not be meeting the costs of the appeal. They would be met by the insurer (RAC) and the credit hire provider (Compass Corp Pty Ltd).
   2. Following on from the first point, proceeding with the appeal would not prevent or hinder the fulfilment of the statutory purpose of s 43(3). That is, the risk of disproportionate and even crippling expenses of an appeal was not objectively likely to deter a person in the position of the respondent from litigating a modest claim of the same kind in the Magistrates Court.
   3. The appeal raised a question of legal principle of general application.
   4. Although the question of legal principle arose in the context of a modest claim, that was always likely to be the position in a case of the kind before the court. The evidence before the court established there are many claims between insurers and credit hire providers on an annual basis and that the aggregate value of the claims was sizable. A number of those claims result in proceedings in the Magistrates Court.[15]
   5. A decision of the Court of Appeal was likely to be of some value in resolving the disputes arising between insurers and credit hire providers and to have a greater bearing than simply resolving the dispute on appeal as between the appellant and the respondent.
4. It is apparent from the reasons of the Court of Appeal that it was the combination of these countervailing factors that was decisive.[16] It was not the position that one of them alone led to the decision not to strike out the appeal.
5. In deciding not to strike out the appeal the court noted however the following points and arguments:
   1. The appellant relied on two affidavits sworn by Mr Twomey, a manager employed by RAC. The court said there was force in the criticism that his evidence was pitched at a remarkably high level of generality. It sought to summarise generally the scope of litigious disputation between insurers and credit hire providers in Western Australia.[17]
   2. The evidence of Mr Twomey did not go as far as to assert that the determination of the appeal would resolve the issues commonly arising as between insurers and credit hire providers.[18]
   3. It may turn out that the appeal is not a suitable vehicle in which to fully ventilate and determine the issue raised by the appellant.[19]
   4. The extent to which the court's determination of the appeal would assist in resolving the various disputes arising between insurers and credit hire providers is uncertain.[20]
6. In Davey v Fisher as Trustee for The Fisher Family Trust t/as Perth Diesel Performance,[21] Egan DCJ decided to exercise the power under s 43(3) of the Civil Proceedings Act to strike out an appeal. Before reaching this conclusion his Honour considered a number of authorities on the nature and exercise of the discretion and distilled the following principles. At [44] - [45] his Honour said:
   1. A number of matters can perhaps be distilled from the above cases, namely:

(a) the discretion to strike out is not exercised in circumstances where there are countervailing factors which might weigh against the exercise of the discretion (and those countervailing factors are often referred to as 'discretionary reasons');

(b) the discretion is not exercised in 'ordinary' or 'common place' cases, or in relation to cases which are neither complex nor novel;

(c) the discretion is exercised in cases where the amount claimed falls within the limit of the minor claims threshold in the Magistrates Court - that threshold being $10,000; and

(d) the discretion is exercised in cases where the costs incurred or likely to be in incurred in the appeal are in an order of magnitude of at least three times the value of the claim.

1. The observations set out at [44(c)] and [44(d)] should not be understood as limiting the exercise of the discretion to cases where, respectively, the claim falls within the limit of the minor claims threshold and/or the costs of the appeal are in an order of magnitude of at least three times the value of the claim, as clearly every case needs to be assessed on its own facts pursuant to the justice of the case.
2. It is accepted by counsel that there is a typographical error in [44(b)] so that the word 'not' should be removed.
3. After the hearing counsel brought to my attention the recent decision of the Court of Appeal in Kalaui Pty Ltd v Moove Holdings Pty Ltd.[22] That case also dealt with the question of whether an appeal to the Court of Appeal should be struck out pursuant to s 43(3) of the Civil Proceedings Act.
4. In deciding the question the court did not deviate from the principles set out in Miller. Indeed the court quoted substantially from the reasons in Miller.[23]
5. In Kalaui, the court was satisfied the likely costs of the appeal to the parties would be disproportionate to the amount of the claim in the case which was the subject of the appeal. In exercising its discretion, the court decided that it was appropriate to strike out the appeal. The primary reason why the appeal was struck out was that the case concerned a small commercial leasing dispute.[24]
6. In Kalaui the court said:[25]

... It is not in the interests of justice to allow the perpetuation of litigation where its cost to the parties is disproportionate to the value of the dispute. Such a situation tends to bring the due administration of justice into disrepute, adversely affecting public confidence in the operation of the justice system.

1. The court contrasted the case before it to that in Miller. The court described Miller as being a situation where the dispute formed part of a larger dispute between the parties or commercial interests standing behind them.[26] The court in Kalaui was not satisfied the decision of the primary judge in the appeal to the District Court was likely to become an important precedent if it was not reviewed by the Court of Appeal.[27]

The evidence relevant to the application to strike out

1. The respondent's application is supported by an affidavit of Mr Blair Simpson affirmed on 26 November 2024.[28] Mr Simpson is a legal practitioner admitted in Western Australia. He is employed as the Principal Lawyer and Legal Practice Director of RTN Law, the solicitors for the respondent to the appeal. Attached to the affidavit and marked 'BS-1' is a copy of a letter that was sent on behalf of the respondent to the principal registrar of the court on or about 27 August 2024. The letter sets out the background, asserted value of the appeal and an assessment of the costs of the appeal.
2. At pars 10 - 13 of the letter, Mr Simpson set out what he believed to be the value of each of the costs orders that the appellant in the appeal seeks to overturn. They totalled a maximum value of $6,630. In par 14 of the letter, Mr Simpson estimated that the respondent's legal costs of the appeal were likely to be in the order of $7,000 - $11,500 plus GST. The letter said that Mr Simpson assumed the appellant's legal costs would be of a similar magnitude. Accordingly it was asserted by Mr Simpson that the parties likely costs of the appeal would be in the order of about $14,000 - $23,000.
3. It is appropriate to note here that the appellant did not dispute these estimates. Indeed the appellant accepted the appeal costs were likely to exceed $30,000.
4. On the estimate of Mr Simpson, the costs involved in the appeal are between 211% - 346% of the value of the appeal. Put another way, the amount of the value in issue in the appeal is 28% - 47% as against the costs of the parties in determining the appeal. Using the amount of $30,000 costs, these percentages are 452% and 22% respectively.
5. Also attached to the affidavit of Mr Simpson was an affidavit of Mr Henry Peyper of McCabes Legal who acted on behalf of the respondent in the Magistrates Court. The affidavit of Mr Peyper was sworn on 1 March 2024. It deposed to the background to the Magistrates Court decision under appeal, as recorded above. That affidavit was filed in support of the Form 23 Application filed by the defendant on 1 March 2024, in the Magistrates Court, referred to earlier.
6. The appellant's opposition to the application was supported by an affidavit of Ms Rebecca Brown sworn on 5 November 2024. Ms Brown is employed by RAC. She is a team leader within the motor claim management team and responsible for the day-to-day management of the team. The team processes, assesses and manages demands against people insured by RAC.
7. The purpose of the affidavit of Ms Brown was to place evidence before the court about other cases in the Magistrates Court which could be affected by a decision in the appeal. It was argued by the appellant that because of these facts it would not be appropriate to strike out the appeal. This is because the court's decision on the appeal could act as a precedent, relevant to the determination of numerous cases in the Magistrates Court. The affidavit asserted:
   1. RAC has approximately 600 active defended cases in the Magistrates Court.
   2. At least 550 of the defended cases involve a claim for the cost of hiring a vehicle from Right2Drive.
   3. For the financial year ending 30 June 2024 RAC received 864 demands from Right2Drive totalling approximately $5,831,047.

1. The arguments of the parties were succinctly stated in written outlines of submissions and amplified during the hearing.

1. The respondent referred to the maximum value of the appeal being $6,630. It was submitted it was a small sum of money compared to other matters dealt with by the court. It was submitted, having regard to the affidavit of Mr Simpson, the likely costs in the appeal were disproportionate to the sum of money at stake.
2. The respondent quoted from the reasons of the Court of Appeal in DuluxGroup (Australia) Pty Ltd v Chapple[29] that the appeal will '[consume] the scarce public resources of this court on what is, at bottom, a relatively small costs dispute'.[30]
3. The respondent referred to the appellant's acceptance that the discretion of the court was enlivened under s 43(3) of the Civil Proceedings Act.
4. The respondent referred to the appellant's contention that the volume of claims on foot between the RAC and Right2Drive is a countervailing factor which should lead the court to refrain from exercising its discretion. The respondent then referred to the appellant's reliance upon the decision of the Court of Appeal in Miller.
5. The respondent then submitted, however, that there are fundamental problems with the appellant's argument, being:
   1. The appeal in Miller involved the determination of a substantive question of legal principle. That was the extent to which credit hire charges attached to the hire of a vehicle and so were properly compensable as a loss.[31] The question in this appeal is a procedural question about costs.
   2. The court decided, at least as a matter of impression, that the determination of the appeal would be of value in determining a question germane to all or at least a significant proportion of the hundreds of 'credit hire' cases before the Magistrates Court. That led the Court of Appeal to observe that the case in Miller was not an ordinary case because 'there are wider benefits that may accrue to the benefit of the administration of justice in the court hearing and determining the appeal'.
   3. The respondent argued the same cannot be said here. It was argued the appeal concerns costs orders made in a singular proceeding in the Magistrates Court. This court's decision on the appeal may provide guidance in terms of how the Magistrates Court ought to exercise its discretion to award costs where a proceeding is dismissed due to inactivity under r 95F of the Magistrates Court (Civil Proceedings) Rules. But it has not been established to be a common issue in any sense among the various 'credit hire' cases between RAC and Right2Drive, identified in the affidavit of Ms Brown. It had not been demonstrated that there would be a significant number of cases between RAC and Right2Drive, which would be affected by a decision in the appeal, so as to make it inappropriate to strike out the appeal.
6. It was submitted that the highest the appellant's position rises is to say that the Magistrates Court deals with a large number of cases of a similar type to the present, and there is some prospect the appeal may be of precedent value to an unidentifiable number of those cases.
7. It was then submitted that if this were accepted it would be antithetical to the statutory purpose underpinning s 43(3) of the Civil Proceedings Act. It was submitted it would give 'licence to any party in a low value case to take up procedural points on appeal, no matter how obscure, if their resolution may result in binding precedent'. It was submitted that something more must be present. An example was given that the issue the subject of the appeal would have the potential to bear on many common cases. It was submitted it was this argument which found favour with the Court of Appeal in Miller.

1. The appellant emphasised there was a right to appeal. Leave from the court was not required. It was submitted, in effect, that the power to strike out was 'fairly draconian'. However the legislature was clearly aware of these things when giving the court the power to strike out under s 43(3) of the Civil Proceedings Act.
2. Also, during the hearing of the application counsel for the appellant accepted that 'in the absence of countervailing factors, the court might usually be expected to strike out an appeal worth around $6,500 where the parties are both represented ...'.
3. The appellant submitted their opposition to the application was supported by the affidavit of Ms Brown. It was submitted the present situation was like the situation before the Court of Appeal in Miller. That is there were countervailing factors which meant the discretion under s 43(3) should not be exercised in the circumstances of the appeal.[32]
4. Reference was made to the evidence from Ms Brown to the effect that RAC is currently defending approximately 600 claims in the Magistrates Court and approximately 550 of those claims were brought on behalf of Right2Drive. The appellant submitted that although individually the credit hire claims were, by and large, for relatively small amounts, the aggregate quantum was significant. Again, by reference to the affidavit of Ms Brown, it was reiterated that RAC received demands from Right2Drive totalling some $5,831,047. It was submitted that the court's determination of the appeal and the guidance on the proper interpretation of s 25 of the Civil Proceedings Act, and the rights of defendants to recover costs when claims under $10,000 were dismissed for being inactive, would have significant implications for the approach taken to costs recovery in a large number of claims received by RAC, and potentially other insurers in Western Australia.
5. However I interpolate that there was no quantification of these claims, numerically, as a percentage of the total amount of claims referred to, or by dollar figure.
6. The appellant also submitted that determination of the costs question could affect a decision on whether to commence a low value claim in the Magistrates Court. However in my view this submission is largely speculative as there was no evidence before the court that could lead to a conclusion on this point. The highest the point could be taken is that a decision on the appeal may have such an impact in some cases.
7. The appellant also submitted that the fact that the present appeal involves a procedural issue about costs rather than a substantive issue of law as in issue in Miller is a distinction without a difference. It was submitted that costs are often of the same if not more significance to the parties.
8. The appellant also submitted that it was accepted by the Court of Appeal in Miller, that there was a high level of generality of the number of cases said to be affected by a decision in that appeal. Nevertheless the appeal was not struck out.
9. The appellant also pointed to the fact that there was no evidence from the respondent to establish that only a small number of cases would be affected by a decision in the appeal.
10. The appellant concluded that having regard to the nature of the grounds of appeal and its broader implications to others apart from the parties to the appeal, the present appeal should not be struck out.

1. The respondent submitted that once a precondition for the exercise of the power in s 43(3) was met, the appellant had, in effect, an onus to satisfy the court that the appeal should not be struck out. The appellant submitted it was for the respondent to convince the court that it should strike out the appeal. In my opinion it is not of particular assistance to decide whether or not there is an onus, although I accept that the respondent, having brought the application, has an onus in that sense. But in my opinion the better question is whether the power ought to be exercised according to what is just in all of the circumstances of the case. This conclusion is reinforced by s 43 of the Civil Proceedings Act also providing a power for the court to act on its own initiative in invoking the power to strike out.
2. As I have said the likely costs of the appeal are significantly disproportionate to the amount of the claim which is to be the subject of the appeal. I have already set out the estimated percentages. That is at least a very weighty factor in exercising the discretion. In my opinion it is the decisive factor in this case. There are insufficient countervailing factors of sufficient weight to decide other than that the appeal should not proceed.
3. This is despite there being some factors which have some commonality with Miller. The named parties will not be in effect funding the appeal. The expenses of the appeal will be met by RAC and Right2Drive. The costs of the appeal will not be 'crippling' to either these entities or the named parties.
4. Also, I do not accept the respondent's submission that if the present appeal were to proceed it would give license to any party in a low value case to take up procedural points on appeal, no matter how obscure, if their resolution may result in binding precedent. I do not accept the point to be raised on the appeal could be properly described as obscure.
5. Nor do I think the fact that this is an appeal about costs is necessarily significant.
6. The decision as to whether to exercise the discretion in s 43(3) is fact specific. A respondent, even with significant resources, should not be required to defend an appeal where the costs in defending it are disproportionate to the amount of the claim which is the subject of the appeal, if the justice of the case necessitates the appeal be struck out. The most significant distinguishing factor in this case to Miller is that, as set out earlier, the Court of Appeal decided the determination of the appeal was desirable as there was a significant matter of legal principle in issue. The court considered this to be an important factor despite the degree of generality to which the potentially affected cases were expressed. There was nevertheless, the prospect that the decision could affect a large number of cases in the Magistrates Court. In the present appeal, as stated, the potential procedural precedent is restricted to cases for costs where a claim is dismissed for being inactive. There is no information before the court, in any sense, as to how many cases in the Magistrates Court would or could be affected by a decision on the appeal. More particularly there is no information before the court as to the extent to which this could arise in cases where RAC and Right2Drive or some other credit provider are involved. As stated, the evidence of Ms Brown does not descend to these details.
7. In all of these circumstances in my opinion it is therefore just to order that the appeal be struck out.
8. In my opinion this conclusion is not inconsistent with the decision in Miller, and in conformity with the principles set out in Davey. In particular, the amount at issue, the amount of the appeal costs in question as against the amount at issue and the lack of weighty countervailing factors.

1. The order of the court is that pursuant to s 43(3) of the Civil Proceedings Act, the appeal is struck out. I will hear from counsel as to costs.

I certify that the preceding paragraph(s) comprise the reasons for decision of the District Court of Western Australia.

[1] Miller v McKnight [2023] WASCA 182 (Miller).

[2] In setting out these principles the court quoted from and cited a number of earlier cases. It is not necessary for present purposes to specifically cite these authorities.

[12] Miller [3], [50], [52].

[21] Davey v Fisher as Trustee for The Fisher Family Trust t/as Perth Diesel Performance [2024] WADC 100 (Davey).

[22] Kalaui Pty Ltd v Moove Holdings Pty Ltd [2025] WASCA 23 (Kalaui).

[28] There was no objection to the respondent relying on the affidavit of Mr Simpson, or the appellant relying on the affidavit of Ms Brown, to be later referred to. They were received as Exhibits 1 and 2 respectively.

[29] DuluxGroup (Australia) Pty Ltd v Chapple [2023] WASCA 83 [1] - [2].

[30] Although the Court of Appeal referred to s 43(3) of the Civil Proceedings Act it was not a decision made about whether an appeal should be struck out under that subsection.

[31] Miller [16] - [17] and [46].

[32] Miller [42], [43], [45] - [48].