Ayres v Maroubra Automotive Refinishers Pty Ltd [2014] NSWSC 1548
Wong v Maroubra Automotive Refinishers Pty Ltd
Source
Original judgment source is linked above.
Catchwords
COSTS - general rule that costs follow eventAyres v Maroubra Automotive Refinishers Pty Ltd [2014] NSWSC 1548
Wong v Maroubra Automotive Refinishers Pty Ltd
Judgment (2 paragraphs)
[1]
Judgment
HER HONOUR: In these proceedings, I determined two separate claims in detinue brought by separate owners of motor vehicles against the same repairer who, in each case, held their cars against his claim for payment of towage and storage fees. I determined the case in favour of the plaintiff in each case and rejected the defendant's cross claims: see Wong v Maroubra Automotive Refinishers Pty Ltd; Ayres v Maroubra Automotive Refinishers (No 2) [2015] NSWSC 222. I entered judgment in each case in an amount to be calculated in accordance with my reasons. The parties have this morning brought in short minutes of order calculating that judgment in the sum of $2,915.41 in the Wong proceedings and $2449.20 in the Ayres proceedings.
I have this morning heard submissions as to costs. The plaintiff in each case was the owner of the motor vehicle, that is, Ms Wong and Ms Ayres. In each case, the repairer brought a cross-claim against both the plaintiff and her insurer, IAL. The plaintiffs and the insurer were successful on all claims. It would ordinarily follow in this court that the defendant would be ordered to pay their costs in accordance with r 42.1 of the Uniform Civil Procedure Rules 2005 (NSW). Mr Svehla, who appears for the defendant, argued, however, that there should be no order as to costs. He relied on r 42.34 of the Uniform Civil Procedure Rules, which applies in proceedings (other than defamation proceedings) where a plaintiff has obtained a judgment in an amount less than $500,000 and would otherwise be entitled to an order for costs. Rule 42.34(2) provides that in that circumstance:
"An order for costs may be made, but will not ordinarily be made, unless the Supreme Court is satisfied the commencement and continuation of the proceedings in the Supreme Court, rather than the District Court, was warranted."
Two things may be noted about that rule. First, it does not follow that where the court is satisfied in the terms of the rule, the successful party must necessarily have his or her full costs. Secondly, as noted by Mr Habib on behalf of the plaintiff and IAL, since the rule adopts the word "ordinarily", a successful party who falls within the rule may nonetheless obtain an order for costs even if the Court is not satisfied in the terms stated.
The question of the appropriateness of the proceedings being in this Court arose in an earlier decision in the proceedings made by Davies J: Wong v Maroubra Automotive Refinishers Pty Ltd; Ayres v Maroubra Automotive Refinishers Pty Ltd [2014] NSWSC 1548. His Honour was considering an application relating to the admissibility of evidence that had been served late but, in the course of hearing that application, raised, of his own motion, the issue whether the proceedings should be transferred to the Local Court in light of the small amounts claimed. Mr Habib informed me this morning that at that hearing, although it is not recorded in the judgment, his Honour expressly did not decide the question of costs; that is, his Honour said that was not determining the appropriateness of the proceedings being continued in this Court for the purpose of r 42.34.
Davies J did conclude that the proceedings should not be transferred to the Local Court. His Honour said at [43]:
I am persuaded by Mr Habib's submissions in the circumstances of these cases that it would not be appropriate to transfer the proceedings to the Local Court. The issues raised include the matter of the industry code to which some insurers, including the second cross-Defendant and the vehicle repair industry are parties, and the application of that code. Under the Fair Trading Act 1987 (NSW) that code has now been made mandatory with the result that breaches of it amount to breaches under the Fair Trading Act.
Accordingly, having raised the issue, his Honour determined not to transfer the proceedings to the Local Court.
It follows from what Mr Habib very properly informed me as to what was said by his Honour at that time that that determination did not determine the question that now arises for my consideration under r 42.34.
Mr Habib submitted that the commencement of the proceedings in this Court was warranted owing to the question whether any other court would have had power to make the order made by consent at the outset of the proceedings for the release of the two cars (referred to at [35] of my principal judgment in the proceedings).
He further submitted that continuation of the proceedings in this Court was warranted for a number of reasons. First, the issues related to the proper construction of the industry code referred to at [43] of Davies J's decision. Separately, he noted that the issue that arose as between the plaintiffs and the repairer is an issue which also arose in respect of nine other vehicles. There is reference to the position of those other vehicles in correspondence tendered on the costs application in exhibit A.
The difficulty with that submission is that, although IAL was a cross-defendant to Maroubra's cross-claim in the proceedings, it was not the plaintiff in either proceeding. I accept, however, that IAL plainly had a broader interest in having a binding ruling as to the issue determined in my principal judgment. Mr Habib noted that, in accordance with s 39 of the Local Court Act 2007 (NSW), had the proceedings been commenced in the Small Claims Division of the Local Court, there would have been no right of appeal except on the ground of lack of jurisdiction or denial of procedural fairness. Accordingly, had the proceedings been commenced in the Small Claims Division, as the amount in dispute would have dictated, at the very least it would have been necessary for the plaintiffs to seek transfer of the proceedings to the General Division in order to have a right of appeal to this court under s 39(1) of the Local Court Act.
Again, however, I would note that neither of the plaintiffs was the insurer. The insurer became involved in the proceedings only as a defendant to Maroubra's cross-claim. The argument tended to assume - and it is probably the case - that IAL stands behind the plaintiffs but the fact is that, in terms of the issues raised between the parties to these proceedings in which I have to determine costs, the plaintiffs were the individual car owners.
Mr Habib also drew my attention to the fact that, as the correspondence tendered by him reveals, the insurer offered Maroubra an amount which fell short of the amount claimed by him for storage fees only by a very small quantity. So much may be accepted, but the critical question is whether the Court is satisfied that the commencement or continuation of the proceedings in the Supreme Court was warranted.
By way of footnote, I would interpolate that the rule refers to continuation of the proceedings in the Supreme Court "rather than the District Court". Most of the argument in the present case on the costs question addressed the comparison between commencement in this court and the Local Court. I do not think anything particularly turns on that aspect of the wording of the rule in the present case.
The short answer to the point taken by Mr Habib as to the insurer's desire to have a binding ruling as against the defendant in these proceedings is that there is not, before this Court, material on the strength of which I can form any judgment as to whether the ruling given by me would apply to the other nine disputes in respect of vehicles detained by Maroubra. Mr Habib relied on the fact that the declaratory relief sought by the plaintiffs that the defendant was not entitled to exercise a lien over either vehicle is relief that would be available only in the Supreme Court. He submitted that the question whether continuation or commencement of the proceedings was "warranted" falls to be determined according to the relief sought, not the relief granted, citing the decision in Redwood Anti-Aging Pty Limited v Knowles (No 2) [2013] NSWSC 742 at [20].
Mr Svehla responded, I think correctly, that the critical question is not whether the relief sought is relief that can only be granted by this court but whether the relief sought was necessary. He submitted that the declaratory aspect of the relief sought by the plaintiffs was not necessary having regard to the remedies available in a claim for detinue listed in s 93 of the Civil Procedure Act 2005 (NSW). It was common ground that the Local Court would have had power to make any of those orders.
It is clear enough that IAL had a broader interest than that raised in the litigation between the vehicle owners and Maroubra in the present proceedings in obtaining a judgment which would be binding in other contexts on claims in the Local Court. It may be accepted on that basis that it is unlikely that had the proceedings been commenced in the Small Claims Division they would have stayed there because it seems likely that IAL would have been successful in obtaining, at the very least, an order that the proceedings be transferred to the General Division with an eye to the appeal right under s 39 of the Local Court Act.
Having considered the matters raised in submissions this morning, however, I do not think it follows that Maroubra should wear the cost of these proceedings as if they were proceedings the commencement and continuation of which was warranted in this Court. I do, however, believe that it would be an unfair outcome if Maroubra, having lost the proceedings, was not visited with any costs of the action.
In all the circumstances, I consider the fair outcome to be to treat the matter as if the proceedings had been conducted in the General Division of the Local Court, where the parties informed me the likely principle governing costs would have been to order Maroubra to pay 25% of the amount of the judgment. So as to avoid any further dispute about the precise quantification, I think a rough approach can be taken to that calculation with the result that Maroubra should be ordered to pay $750 in the Wong proceedings and $600 in the Ayres proceedings.
The orders I make in the Wong proceedings are that judgment including interest be entered for the plaintiff in the sum of $2,915.41 and that the defendant pay the plaintiff's costs in the sum of $750. In the Ayres proceedings the orders are that judgment including interest be entered for the plaintiff in the sum of $2,449.20 and that the defendant pay the plaintiff's costs in the sum of $600.
[2]
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Decision last updated: 07 April 2015