Hellenic Club of Canberra Ltd v Omari [2004] ACTSC 67 (13 August 2004)

Last Updated: 17 September 2004

THE HELLENIC CLUB OF CANBERRA LIMITED v YOUSEFF OMARI

[2004] ACTSC 67 (13 August 2004)

SMALL CLAIMS COURT - appeal - application for leave to appeal - whether error of law

PROCEDURE - appeal from small claims court - leave to appeal - whether error of law

NEGLIGENCE - duty of care - pure economic loss - whether cause of action available

Magistrates Court (Civil Jurisdication) Act 1982, ss 387A, 394, 396, 401, 404, 431, 433, 434, 450

Cole v South Tweed Heads Rugby League Football Club Limited [2004] HCA 29, 15 June 2004

ACTEW Corporation Limited v Mihaljevic [2004] ACTSC 59, 2 July 2004

Bryan v Maloney [1995] HCA 17; (1995) 182 CLR 609

Hill v Van Erp [1997] HCA 9; (1997) 188 CLR 159

Perre v Apand Pty Limited [1999] HCA 36; (1999) 198 CLR 180

Woolcock Street Investments Pty Limited v CDG Pty Limited [2004] HCA 16; (2004) 78 ALJR 628

Azzopardi v Tasman UEB Industries Limited (1985) 4 NSWLR 139

No. SC 29 of 2004

Judge: Master Harper

Supreme Court of the ACT

Date: 13 August 2004

IN THE SUPREME COURT OF THE )

) No. SC 29 of 2004

AUSTRALIAN CAPITAL TERRITORY )

BETWEEN: THE HELLENIC CLUB OF CANBERRA LIMITED

Applicant

AND: YOUSEFF OMARI

Respondent

ORDER

Judge: Master Harper

Date: 13 August 2004

Place: Canberra

THE COURT ORDERS:

1. That the application for leave to appeal be refused.

1. This is an application for leave to appeal from a decision of the Small Claims Court, constituted by Special Magistrate Symons, given orally at the conclusion of a hearing on 27 May 2004. The respondent to the application, Mr Omari, commenced proceedings in the Small Claims Court by originating application on 5 December 2003, without legal representation. The procedures of the Court are designed to facilitate the bringing and determination of small claims (up to $10,000) without legal representation.

2. Small claims are dealt with in Part XXII of the Magistrates Court (Civil Jurisdication) Act 1982. Section 396 of the Act provides as follows:

396. Small Claims Court

(1) The Magistrates Court has jurisdiction to enquire into and determine applications for the purposes of this Part.

(2) The Magistrates Court shall be known as the Small Claims Court when exercising jurisdiction under this part.

3. The section which confers jurisdiction on the Small Claims Court is in the following terms:

401. Jurisdiction

(1) The Small Claims Court has jurisdiction to enquire into the following applications:

(a) debt applications;

(b) goods applications;

(c) damages applications;

(d) nuisance applications;

(e) trespass applications;

(f) applications for debt declarations;

(g) applications for common boundaries determinations.

4. The commencement of proceedings is governed by s 404, which is as follows:

404. Originating Applications

(1) Proceedings shall be instituted by filing an Originating Application (Form 1) together with the relevant attachments set out in form 1...

5. The forms are set out in schedule 2 to the Act, which also sets out attachments applicable to each of the categories of claim in section 401. The forms are available from the registry of the Court. In the present case, it appears that the applicant obtained a printed form which he completed in handwriting. He completed an attachment `B' which is intended for a goods application, defined in s 394 as an application in relation to the provision of goods or services, and including an application for damages for the detention of goods. Plainly this was the wrong attachment. A portion of the form provides for completion of the grounds of the application (`describe here the details of your application against the respondent and/or any damages sought'). The respondent wrote in `as per attached'. The attachment was handwritten on a plain sheet as follows:

January 2003

I was playing the poker machine at the Hellenic Club of Canberra, I had $2040 credit on my machine. I pressed the service button in order to get paid, suddenly an old person touched my machine and $2,000 were gone just when two staff members (Con and Manuel) arrived, they were shocked like myself by what he's done, but to everyone's disbelief, he touched the button of the machine where Con shouted "you've just done it again". I requested that I'm to be paid my money again but the two staff members suggested that I see the operations manager Mr Jim Webster who wasn't in the club at the time.

The next day I talked to Mr Webster who led me to believe that it all OK and I'll be paid my money back but he argued that he was very busy and he'll see me later on.

After few days, I went to his office, he apologised for not being able to help me but he's willing to take some responsibility by cancelling the membership of that person. After realising the futility of talking to Mr Webster about getting my money back which went back as a credit to the club I requested the videotape and that person's details, again, he promised but to no avail. After many attempts to try to talk to Mr Webster or to see him in person, I was told by the information desk staff always that he's no available, or busy.

The money owing to me by the Hellenic Club of Canberra is as follows: $2040 plus interest plus court cost.

6. A response was filed by the Club through its solicitors, on grounds expressed as follows:

The applicant attended the Hellenic Club and was playing the poker machines. The credit on his machine was lost due to an unsuccessful gamble. At no time did Mr Webster offer to pay any money to the applicant. The loss of the gamble is not a credit to the club as alleged by the applicant and there is no liability of the club to patrons who lose on the poker machines. The applicant's claim is denied in full.

7. Clearly the claim was not a goods application under s 401. It seems to me that it can only have been a debt application or a damages application. A debt application is defined in s 394 to mean an application for the recovery of a debt, and a damages application to mean an application for damages for negligence or for any other tort except nuisance or trespass.

8. The claim was listed for hearing on 27 May 2004 before Special Magistrate Symons. Mr Omari appeared in person and the club was represented by Ms Mylecharane, a solicitor employed by Vandenberg Reid. The hearing of a small claim is described in the Act as an inquiry. There is an entitlement to representation by any other person (s 434). The rules of evidence do not apply (s 431) and evidence is not to be given on oath or affirmation (s 433). An inquiry concludes in a judgment of the Court which is final and conclusive (s 450).

9. For the purposes of this application, I have had the benefit of a transcript of her Worship's findings and reasons, though not of the evidence. Evidence was given by Mr Omari and a Mr Nagi, the man who pressed the button on the machine. For the Club, evidence was given by Mr Webster. Her Worship noted that the evidence of Mr Omari and Mr Nagi was unchallenged. She accepted Mr Omari's evidence that he was playing a poker machine, and that a point was reached where he had a credit of $2,040 on the machine. He was aware that someone was watching him from behind. He called a staff member over. The person watching from behind accidentally pressed a button on the machine which caused the credit amount to disappear from the credit panel on the machine. I take it that the effect of pressing the button or buttons was the same as if the person playing the poker machine had elected to wager the entire credit amount on the next play, and that the wager was lost.

10. Her Worship accepted that Mr Omari took the matter up with a staff member, and was told that he would have to talk with Mr Webster, who was unvailable until the next day. She accepted that Mr Omari had a conversation the following day with Mr Webster from which Mr Omari understood that he would be paid once the person who had pressed the button was identified.

11. Her Worship also accepted evidence from Mr Nagi that he had been a frequent visitor to the Club and had spent a lot of time there, and that he accidentally pushed the button or buttons which had the effect of cancelling the winnings. He was very apologetic and called the supervisors to correct what he had done. Some time afterwards he received a letter from the Club suspending or cancelling his membership. Her Worship outlined evidence given by Mr Webster that such a letter could well have been sent to Mr Nagi, and that he had completed an incident report and checked videotapes from cameras in the club, but that the tapes did not show the machine in question at the crucial time.

12. Her Worship accepted that Mr Omari was a Club member, and found that he was entitled to expect that money he was spending in the Club was protected from being accessed by someone else. She was not satisfied that he had caused or contributed to the loss. She found that Mr Omari was entitled to recover the lost money pursuant to a duty of the club to members. The club was in breach of a duty of care to Mr Omari. Accordingly he was entitled to judgement for $2,040 plus interest and expenses.

13. There is no appeal from a decision of the Small Claims Court as of right. The applicable provision of the Act is:

387A. Appeals - Small Claims Court

(1) A party to proceedings in the Small Claims Court may, with the leave of the Supreme Court, appeal from a judgment of the Small Claims Court in those proceedings.

(2) The Supreme Court shall not grant leave under subsection (1) unless satisfied-

(a) that the decision of the Small Claims Court on a question of law was wrong; or

(b) that the conduct of the proceedings in the Small Claims Court was unfair to the applicant for leave to appeal.

14. An application for leave to appeal was filed on 16 June, relying upon both error of law and procedural unfairness, but the latter ground has not been pursued. The club's argument is that her Worship's judgment was tainted by error of law.

15. The procedure in the Small Claims Court is designed to be relatively informal, and has been established to provide a simple and inexpensive means of resolving disputes over modest amounts of money, that is amounts in relation to which legal costs would be disproportionate if the conventional procedures of the Magistrates Court were applicable. The Small Claims Court is a jurisdiction frequently availed of by unrepresented litigants. The Court does not impose on litigants the constraints related to the identification and pleading of causes of action which properly apply in other jurisdictions.

16. At the same time, it does not seem to me to have been the intention of the legislature to establish a regime where claims can be made and determined without reference to the law which applies in other courts. So much seems clear from the reference in the definition of `damages application' in s 394 to negligence, nuisance, trespass and other torts.

17. Thus it seems to me that whilst an unrepresented applicant in the Small Claims Court is not expected to identify the cause of action upon which the claim is based, other than by selecting the correct form of attachment to the originating application, it is necessary for the Magistrate or referee constituting the Court at an inquiry to identify the cause of action and ensure that it is one known to the law. Because the applicant chose the wrong form of attachment, it is a little unclear whether her Worship characterised the claim as a debt application or a damages application, but I take it from her reference to the Club's duty of care that she saw the application as one for damages for negligence, rather than an application for the recovery of a debt. The latter may have been arguable having regard to her Worship's finding that Mr Webster told the plaintiff that the Club would pay him the money in dispute.

18. Mr Tsirimokos, who appears for the club on the application for leave, submits that the facts found by her Worship do not as a matter of law give rise to a cause of action in negligence. This was not a point taken at first instance. He argues that Mr Nagi, who pushed the button or buttons on the poker machine, was at that time a member of the Club but not the Club's agent, and that he was solely responsible for the acts which led to the disappearance of the credit on the machine. He submits that on the evidence, there was nothing the Club could have done to prevent it.

19. Her Worship has not spelt out the precise nature and scope of the duty of care which she found was owed by the club to Mr Omari, or the precise nature of the breach. This would be unnecessary in the kind of factual context which commonly gives rise to actions in negligence, such as a motor vehicle collision, but it creates difficulties here, where there seems to be a jump from the factual findings to a conclusion that the conduct of the club amounted to a breach of duty of care.

20. The facts found by her Worship give rise to a consideration of an area of the law of negligence which may be said to be still in the course of development. The High Court recently decided a personal injury claim in a club's favour, in circumstances where the plaintiff had attended the club as a member's guest, had become very intoxicated, and had been struck by a motor vehicle after leaving the club: Cole v South Tweed Heads Rugby League Football Club Limited [2004] HCA 29, 15 June 2004. The majority was comprised of Gleeson CJ, Gummow, Hayne and Callinan JJ; McHugh and Kirby JJ dissented and would have found in favour of the plaintiff. That decision gave rise to some consideration and discussion of the nature and extent of the duty of care owed by a club to members and guests, but it is not directly in point, because it was a personal injury case.

21. The claim by Mr Omari in negligence was one for pure economic loss; that is, it was not a claim for personal injury or damage to property. I recently refused an application by a defendant to strike out a statement of claim in a pure economic loss negligence suit as disclosing no cause of action, holding that the claim was arguable and that the plaintiff should have the opportunity to have its claim determined; ACTEW Corporation Limited v Mihaljevic [2004] ACTSC 59, 2 July 2004. In my reasons for that decision I made reference to a line of High Court authority, in which some claims for pure economic loss had been upheld (for example Bryan v Maloney [1995] HCA 17; (1995) 182 CLR 609; Hill v Van Erp [1997] HCA 9; (1997) 188 CLR 159; and Perre v Apand Pty Limited [1999] HCA 36; (1999) 198 CLR 180). In the most recent such decision, recovery was not permitted: Woolcock Street Investments Pty Limited v CDG Pty Limited [2004] HCA 16; (2004) 78 ALJR 628.

22. Because the principles are still in the course of development, I cannot say that Mr Omari's case was not an arguable one and it follows that I cannot conclude that her Worship made an error of law in holding, by implication, that a good cause of action existed.

23. It is plain from s 387A that no appeal is available from a decision of the Small Claims Court on the facts, even if one could `say of a finding that it is perverse, that it is contrary to the overwhelming weight of the evidence, that it is against the evidence and the weight of the evidence, that it ignores the probative force of the evidence which is all one way or that no reasonable person could have made it': Azzopardi v Tasman UEB Industries Limited (1985) 4 NSWLR 139 per Glass JA at 155-156. The question is whether, accepting all of her Worship's findings of fact, one can nevertheless discern an error of law in arriving at the conclusion. A magistrate sitting in the Small Claims Court is not immune from the obligation cast upon all courts to set out her findings of fact and the applicable law, and to expose her reasoning process leading to the conclusion and orders. But the test as to whether that obligation has been satisfied will be considerably less stringent in an ex tempore judgment in the Small Claims Court than in a considered decision of a superior court.

24. This Court may not grant leave to appeal from a decision of the Small Claims Court unless satisfied that its decision on a question of law was wrong. Her Worship has made factual findings from which she has concluded that the club owed a duty of care to Mr Omari to protect him from the loss which he suffered. I can reasonably infer that her Worship saw that loss as the loss of the opportunity to convert the credit balance on the face of the poker machine to cash. Her Worship was satisfied that on the evidence, the Club had committed a breach of that duty. Although her Worship did not spell out precisely what acts or omissions on the part of the Club constituted the breach of duty, I remind myself that she was sitting in the Small Claims Court, a tribunal designed to minimise formality, time and expense, and that the decision was given orally and immediately following the conclusion of the hearing. In the circumstances I am not satisfied that her Worship's decision on any question of law was wrong.

25. Detailed argument and consideration as to whether recovery should be permitted as a matter of policy in circumstances similar to the facts of this case will need to await an appropriate vehicle. To the extent that I might have any discretion to grant the present application for leave to appeal, my inclination would be to exercise the discretion against granting leave because of the small amount at issue and the potential unfairness of committing an unrepresented small claimant to participating in litigation at the appellate level (and perhaps more than one level) on a complex question in a developing and not yet settled area of the law.

26. The application for leave will be refused.

I certify that the preceding twenty-six (26) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Master.

Associate:

Date: 13 August 2004

Counsel for the applicant: Mr A Tsirimokos

Solicitor for the applicant: Vandenberg Reid

Respondent: In person

Date of hearing: 6 August 2004

Date of judgment: 13 August 2004