Joseph Anthony Marks v National and General Insurance Company Limited [1993] ACTSC 84 (20 September 1993)

SUPREME COURT OF THE ACT

JOSEPH ANTHONY MARKS v. NATIONAL AND GENERAL INSURANCE COMPANY LIMITED
No. S.C.A. 185 of 1992
Number of pages - 7
Appeal - Estoppel

COURT

IN THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
Miles CJ

CATCHWORDS

Appeal - from decision of ACT Small Claims Court dismissing claim of the appellant against respondent.

Estoppel - res judicata - issue estoppel - whether previous proceedings in small claims court discontinued - whether claim in the Magistrates Court, Brisbane is the same cause of action as the present claim - Whether decision of court is the oral pronouncement or that which is on the record.

Estoppel - whether issue estoppel or res judicata applicable where judgment obtained by consent - difference between complaint withdrawn and complaint dismissed.

Small Claims Act 1974, sub-s.37(1)

Magistrates Courts Act 1921-1989 (Queensland), ss.4, 25 and sub-s.11(1)

Magistrates Courts Rules 1960, rr. 11, 229

Torrisi v. Oliver (1951) VLR 380 at 383

See v. Lee (1899) 15-16 WN (NSW) 240 at 241

Paroukes and Another v. Katsaris (1987) VR 39

Linprint Pty. Ltd. v. Hexham Textiles Pty. Ltd. (1991) 23 NSWLR 508

Chamberlain v. Deputy Commissioner of Taxation [1988] HCA 21; (1987-1988) 164 CLR 502

Isaacs v. Ocean Accident and Guarantee Corporation Ltd. (1958) SR (NSW) 69

Jackson v. Goldsmith [1950] HCA 22; (1950) 81 CLR 446

Effem Foods Pty. Limited v. Trawl Industries of Australia Pty. Limited and Ors. (unreported, Federal Court of Australia, Sydney, 23 July 1993)

Ord v. Ord (1923) 2 KB 432

Port of Melbourne Authority v. Anshun Proprietary Limited [1981] HCA 45; (1981) 147 CLR 589

Wells v. D'Amico (1961) VR 672 at 676

Wallace v. Lawson (1968) 88 WN (NSW) 505

HEARING

CANBERRA, 8 April 1993
20:9:1993

Appellant appeared in person

(Mr. J.S. Marks)

Counsel for the Respondent: Mr. R. Refshauge

Solicitors for the Respondent: Macphillamy Cummins and Gibson

ORDER

THE COURT ORDERS THAT:
The appeal be dismissed and the Special Magistrate's order dismissing the claim be confirmed.

DECISION

This is an appeal from the decision of the ACT Small Claims Court following the grant of leave to appeal. The appeal is against the decision of the Small Claims Court on 19 February 1993 dismissing the claim of the appellant against the respondent.

2. The present proceedings were commenced by a claim filed in the Small Claims Court on 27 July 1992. It was for money alleged to be due on an insurance policy No. HR 74530, issued in Canberra on 23 February 1984 by the respondent and indemnifying the appellant against loss caused by water damage to the appellant's premises at 118 Junction Road, Morningside, Queensland. The particulars of claim showed the quantum of loss at $6,425, but the claim itself was limited to $5,000, the monetary limit of the jurisdiction of the Small Claims Court. Notwithstanding that limit, an additional amount of $8,304.80 was claimed for interest. There is nothing in the claim or the particulars annexed to indicate when the damage is alleged to have occurred. Nothing in the nature of grounds of defence is before this Court.

3. According to the report of the Special Magistrate made under sub-s.37(1) of the Small Claims Act 1974, when the claim came on for hearing before the Small Claims Court on 5 February 1993, the only issue was whether or not the appellant was estopped from proceeding in the Small Claims Court by operation of the doctrine of res judicata or issue estoppel.

4. The Special Magistrate's report made reference to previous proceedings instituted by the appellant in the Small Claims Court in 1988. The Special Magistrate appears to have taken the view that they related to the same insurance policy and the same loss as that which is the subject of the present claim. On 6 October 1988 a Special Magistrate refused to permit the appellant to discontinue those previous proceedings and entered judgment for the respondent. However, on appeal to this Court, Kelly J on 28 April 1989, ordered that the judgment be set aside and leave be given to the appellant to discontinue the previous proceedings in the Small Claims Court. Whether or not the appellant took any formal step thereafter to file a notice of discontinuance in the previous proceedings is unclear. However, it may be assumed for the purposes of the appeal that the previous proceedings (the previous ACT proceedings) were effectively discontinued.

5. The documents before the Special Magistrate from the previous ACT proceedings included a notice of claim dated 6 June 1988. It claimed $1,545 for loss caused by water damage to the appellant's premises at 118 Junction Road, Morningside, Queensland in early 1985 and claimed a right to indemnity under policy No. HR 74530. An amended notice of defence dated 12 September 1988 denied the loss, denied the agreement, asserted a failure to give required notice as agreed and asserted that the sum claimed was excessive. There were also before the Special Magistrate on 19 February 1993 documents relating to proceedings in the Magistrates Court, Brisbane (the Queensland proceedings). The documents included a copy of a plaint issued or filed by the appellant in the Magistrates Court, Brisbane, claiming indemnity for loss caused by water damage to the same premises as previously mentioned under the same insurance policy No. HR 74530. The plaint as filed alleged that the damage occurred on or about April 1985, but the date was apparently struck out by amendment made on 29 May 1991. No date was substituted. The amount claimed on the plaint was $7,733. Amongst the defences raised in the notice of defence filed was the payment of $5,500 in respect of the damage the subject of the plaint. That payment was alleged to have been made by Suncorp Insurance and Finance in April 1988.

6. When the Queensland proceedings came on for hearing before the Magistrates Court, Brisbane on 4 June 1992, counsel appeared for each party and the formal order of the Magistrates Court, Brisbane was drawn up and sealed. Omitting formal parts, it was recorded as follows:

"IT IS THIS DAY ORDERED BY CONSENT that the plaintiff's action be

dismissed."

7. Clearly the Special Magistrate, whose decision is now under appeal to this Court, was of the view that the proceedings commenced by the plaint in the ACT Small Claims Court are an attempt to litigate the issues which were the subject of the action in the Magistrates Court, Brisbane and whilst the order of 4 June 1992 stands, it is not open to either party to relitigate the issue.

8. A threshold question is whether the Magistrates Court, Brisbane had jurisdiction to determine the action. It was held in the Victorian case of Torrisi v. Oliver (1951) VLR 380 at 383 that where it can be shown that an inferior court set up by statute had no jurisdiction to give a binding decision on the matter under consideration, a plea of res judicata will have no application. Such was the outcome in Bishop and Calcino Ltd. v. O'Brien (1920) QWN 10. However, the proceedings presently before the Court are not such a case. The Magistrates Court, Brisbane had jurisdiction over the subject matter of the claim under s.25 of the Magistrates Courts Act 1921-1989 (Queensland) and r.11 of the Magistrates Court Rules 1960. By virtue of s.4 of the Magistrates Court Act, the Court has power and authority to hear and determine in a summary way all actions over which it has jurisdiction. In any case, the appellant does not appear to dispute the power of the Brisbane Magistrates Court to dismiss the action commenced in that Court.

9. Another preliminary question to be determined is the effect upon the operation of the principle of res judicata of the fact that judgment had not been entered in Queensland, a point upon which the appellant relied in a lengthy affidavit filed in this Court setting out the circumstances which led him to decide to withdraw the complaint in the Magistrates Court, Brisbane. In the case of See v. Lee (1899) 15-16 WN (NSW) 240 at 241, O'Connor J expressed the view that "The judgment is the decision of the Judge delivered in open Court, not the record afterwards made by the Registrar". In Carroll v. Price (1960) VR 651, the Full Court of the Supreme Court of Victoria declined to approve the decision in See v. Lee. The Full Court focussed upon orders or decisions orally pronounced in open court and the power of a court of general sessions to set aside its own such order before any entry has been made in the records of the Court. Similarly, in Paroukas and Another v. Katsaris (1987) VR 39, the Full Court held that the order of a Magistrates Court may be altered or reversed by that Court until it has been entered into its records.

10. These decisions can, however, have little bearing on the present case, where the factual circumstances are not comparable. The facts in the present case are more like those upon which the Court's reasoning was based in Linprint Pty. Ltd. v. Hexham Textiles Pty. Ltd. (1991) 23 NSWLR 508, in which Kirby P said (at 521): "The entry of a judgment of the County Court of Victoria is the duty of the Registrar not of the judge: ..... The appropriate order was that which Murdoch CCJ made, viz, an order dismissing the counter-claim: ..... that order was 'final and conclusive between the parties'. It remains so to this day."

11. In the Magistrates Court, Brisbane it was likewise the duty of the Registrar to enter the judgment: r.299 Magistrates Court Rules, and it is otherwise provided by s.11(1) of the Magistrates Courts Act that all judgments and orders made by the Court shall be final and conclusive. Thus the fact that judgment has not been entered in the records of the Magistrates Court, Brisbane cannot be a bar to the operation of res judicata.

12. The appellant's affidavit of 23 December 1992 notes that "it was by my and the respondent's barristers agreed for me to withdraw my plaint and the magistrate noted that the plaint was dismissed by consent." The affidavit goes on to state that the appellant gave no undertaking in the Brisbane proceedings not to bring any further action or proceeding in respect of the claim and that although he "sought to have the consent order of 4 June 1992 set aside", he did not proceed with any application of that nature but brought further proceedings to recover his loss in the ACT Small Claims Court.

13. The matters raised by the appellant in his affidavit just referred to are of no avail in this Court. If the order of the Magistrates Court, Brisbane is to be set aside, it has to be set aside by that Court. The Magistrates Court, Brisbane was, on the face of it, a court of competent jurisdiction, the alleged damage the subject of the claim having occurred within the territorial limits of that jurisdiction.

14. Under s.118 of the Australian Constitution, full faith and credit shall be given, throughout the Commonwealth to the laws, the public Acts and records, and the judicial proceedings of every State. The constitutional requirement that there be full recognition of judicial proceedings throughout the Commonwealth means that a court in one State has no power to challenge a decree or order of a court in another State or Territory: Harris v. Harris (1947) VLR 44, In the Estate of Searle, Deceased (1963) 5 FLR 137. I assume that the Magistrates Court, Brisbane has the power to set aside a judgment of its own where the judgment is not entered after a hearing on the merits. However, whether or not the Magistrates Court, Brisbane has that power, it is certain that this Court has no power to set aside the judgment of that Court which is on its face final, and as Kirby P said in Linprint (at 518):

"The mere fact that a party has a privilege to apply to have that
judgment set aside cannot convert it to a contingent or
provisional judgment forever flawed and incapable of giving
rise to res judicata."

15. The appellant, who appears for himself, submits that there is no issue estoppel or res judicata when judgment is obtained by consent.

16. The fact that the order was a consent order does not deprive the order of finality under s.11(1) of the Magistrates Courts Act nor does it preclude the operation of res judicata, as was recognized by the High Court in Chamberlain v. Deputy Commissioner of Taxation [1988] HCA 21; (1987-1988) 164 CLR 502, where Deane, Toohey and Gaudron JJ held (at 508) that "the principle of res judicata holds good" in a case where judgment is entered by consent, citing Isaacs v. Ocean Accident and Guarantee Corporation Ltd. (1958) SR (NSW) 69 at 75, 79-80. In Isaacs, Owen J held (at 81) that "A judgment entered by consent .... is intended to end the litigation between the parties to it."

17. Before the principle of res judicata may be held to apply in such a case, however, it must be established that the cause of action relied upon by the appellant in the case under consideration is the one upon which he relied in the earlier proceedings. As Fullagar J expressed the rule in Jackson v. Goldsmith [1950] HCA 22; (1950) 81 CLR 446 at 466: ".....where an action has been brought and judgment has been entered in that action, no other proceedings can thereafter be maintained on the same cause of action."

18. In the recent Federal Court decision in Effem Foods Pty. Limited v. Trawl Industries of Australia Pty. Limited and Ors. (unreported, Northrop, Burchett and Lee JJ, Sydney, 23 July 1993), Burchett J noted that "essential to res judicata is the identity of what was formerly adjudged with what now falls for determination".

19. In referring to the "identity" of the causes of action, Burchett J is echoing the pronouncement of Williams J in Jackson v. Goldsmith (at 460) that a plea of res judicata "would only be good if the causes of action .... were precisely the same ....". Williams J cites Ord v. Ord (1923) 2 KB 432 as authority for this proposition. If reference is had to the judgment of Lush J in Ord v. Ord, it becomes evident that "identity" for the purposes of a plea of res judicata in effect means that the "same sort of evidence would prove the plaintiff's case in the two actions" (at 442; 443), or, to put it another way, the plea will be available where the subject matter of the litigation is the same: Starke J in Blair v. Curran [1939] HCA 23; (1939) 62 CLR 464 at 510.

20. In Port of Melbourne Authority v. Anshun Proprietary Limited [1981] HCA 45; (1981) 147 CLR 589, Brennan J (at 610) suggested a threefold definition of the expression "cause of action", which, in his opinion "is sometimes used to mean the facts which support a right to judgment ..... sometimes to mean a right which has been infringed ..... and sometimes to mean the substance of an action as distinct from its form".

21. With respect to the present proceedings, the cause of action arose in each case under the same insurance policy No. HR 74530 and was based upon water damage due to breakage of a water disconnector trap caused to a property situated at 118 Junction Road Morningside in Queensland. There is no essential disparity in relation to the time at which the loss is alleged to have occurred. The particulars of loss and damage suffered were essentially the same with the following exceptions - a claim for repairs for work done by J.S. Ford to the value of $142 was included in the ACT claim; the amount claimed for repairs by R and R Gastaldini was $1,000 less in the second claim, the architectural fees were $250 more in the second claim, and there was no claim for surveys in the second claim. In summary, these differences amounted to a total difference of $1,308 between the amounts sought in each claim, although the appellant was prepared to forego the residue over $5,000 in the Small Claims Court.

22. The variations in the particulars of loss and damage are relatively slight. They did not stand in the way of a determination by the Special Magistrate that the cause of action in the Queensland proceedings was the same as that in the present proceedings and that the principle of res judicata applied. The parties in each proceeding are the same and the cause of action relied upon in each proceeding "is in substance the same cause of action": Gavan Duffy J in Wells v. D'Amico (1961) VR 672 at 676. Alternatively, to employ the language of Brennan J in Port of Melbourne Authority v. Anshun (at 611), the second action is founded upon the same facts as the earlier action and the contractual right of the appellant has passed into judgment.

23. The applicable principle in this case is res judicata, rather than issue estoppel, insofar as "the very right or cause of action claimed or put in suit has in the former proceedings passed into judgment, so that it is merged and has no longer an independent existence....." per Dixon J in Blair v. Curran (at 532).

24. Once it has been established that res judicata applies, "effect must be given to it" even though "that effect may be to tape the mouth of truth", as recognized by Burchett J in Effem Foods v. Trawl Industries.

25. It was also submitted by the appellant that the order of the Magistrates Court, Brisbane should not be regarded as a final judgment because its true characteristic was in the nature of a withdrawal of proceedings and that there is a distinction between withdrawal or discontinuance of a claim (even though the papers be marked "withdrawn - dismissed") and a dismissal of a claim. However, the appellant is in no position to rely on that argument (assuming it to be valid). The record of the Magistrates Court, Brisbane, as drawn up, and sealed makes no reference at all to any withdrawal of proceedings. The appellant's affidavit makes no allegation that counsel for the appellant sought in the Magistrates Court, Brisbane to withdraw the claim or ask the Magistrate to mark the court file "withdrawn - dismissed". The record states simply that by consent the action is dismissed with costs. If the record of the Magistrates Court, Brisbane is incorrect, the claim for rectification must be made to that Court.

26. This is not a case which precludes the application of the principle of res judicata on the basis that the court papers were marked "Complaint withdrawn ..... Dismissed", as was the position in Wallace v. Lawson (1968) 88 WN (NSW) 505. In his judgment in that case, Asprey, JA noted that where the complaint itself is dismissed, as opposed to the complaint being withdrawn, "there has been an adjudication that the subject matter of the complaint has not been established" (at 510).

27. The appellant also placed reliance on a letter dated 7 December 1992 from the Registrar (Civil) of the Magistrates Court Office in Brisbane. The letter states that "on the 4th June, 1992, the Magistrate, at the request of both the Plaintiff's and Defendant's Counsel, ordered the action be dismissed" and that "there was no judgment given in this action either for the plaintiff or the defendant". The Registrar's letter cannot affect the true legal position. The order of 4 June 1992 was a final order having for present purposes the same effect as a final judgment. That it was not a judgment after a hearing on the merits (which is what the Registrar may have meant) is not to the point. Accordingly, while the order made by the Magistrates Court, Brisbane remains in force, it cannot be open to the appellant to found a like cause of action in this Territory.

28. For the foregoing reasons I am of the view that the Special Magistrate sitting in the Small Claims Court was correct in dismissing the appellant's claim on the basis of the application of the principle of res judicata. The appeal is dismissed and the Special Magistrate's order dismissing the claim is confirmed. Unless the parties wish to be heard, I propose to order that the appellant pay the respondent's costs of the appeal.