Hussain v Canberra Taxi Industry Association Ltd [2007] ACTSC 79 (14 September 2007)

Last Updated: 30 September 2008

MOHAMMAD MUNIR HUSSAIN v CANBERRA TAXI INDUSTRY ASSOCIATION LIMITED [2007] ACTSC 79 (14 September 2007)

EX TEMPORE JUDGMENT

No. SCA 62 of 2007

Judge: Crispin J
Supreme Court of the ACT
Date: 14 September 2007

IN THE SUPREME COURT OF THE )
) No. SCA 62 of 2007
AUSTRALIAN CAPITAL TERRITORY )

BETWEEN: MOHAMMAD MUNIR HUSSAIN

Appellant

AND: CANBERRA TAXI INDUSTRY ASSOCIATION LIMITED

Respondent

REASONS FOR JUDGMENT

Judge: Crispin J
Date: 14 September 2007
Place: Canberra

1. This is an application for leave to appeal against a decision of the Small Claims Court dismissing proceedings and making an order for what were described as “non-legal costs”. For the present purposes it is unnecessary to set out the nature and extent of the issues that had been intended to be raised by the applicant in the proceedings in the Small Claims Court because it is common ground that he commenced proceedings against the wrong party.
2. When this became clear there was a discussion between him and the solicitors for the respondent about the matter, and the respondent’s solicitors indicated that the respondent would consent to an amendment of the pleadings in order to substitute the correct defendant for the respondent provided the respondent’s non-legal costs were paid. That was not agreed and the matter was listed before the Magistrate to enable the applicant to pursue an application for leave to amend the pleadings. The learned Magistrate instead proceeded to dismiss the proceedings and ordered that the non-legal costs in the sum of $1,377.50 be paid by the applicant.
3. The applicant had argued, in essence, that he should not be obliged to pay costs, even non-legal costs, because his mistake in commencing proceedings against the wrong party had been entirely understandable, having regard to a confusion on a document which apparently contained the wrong Australian Company Number. Her Honour dismissed that contention, in my view rightly.
4. It seems to me that any party against whom proceedings are commenced, for reasons that are misconceived is prima facie entitled to an order for costs. There may be circumstances in which that would be inappropriate such as when the party seeking costs has effectively induced the commencement of the proceedings by misleading the plaintiff. In the present case the applicant’s arguments do not extend to such a contention. I can see no error in the approach that her Honour took making an order for costs.
5. It is however clear that the applicant wished to raise issues about the nature and extent of the expenses claimed, and as to the basis upon which they could be awarded.
6. The evidence reveals that what was claimed was essentially a series of amounts referable to rates of remuneration that were normally charged by the respondent to clients within the taxi industry. In other words, the respondent was essentially seeking to charge for its time.
7. I should observe that the scope for an appeal to this court from a decision of the Small Claims Court is extremely limited. Section 275 of the Magistrates Court Act 1930 is in the following terms:

(1) A party to a proceeding in the Small Claims Court may, with the Supreme Court’s leave, appeal from a judgment of the Small Claims Court in the proceeding.
(2) The Supreme Court may grant leave only if satisfied -
(a) that the decision of the Small Claims Court on a question of law was wrong; or
(b) that the conduct of the proceeding in the Small Claims Court was unfair to the applicant for leave to appeal.

8. In the present case the application is founded solely upon an allegation that there has been an error of law. It seems to me that the only arguable error of law relates to the issue as to whether or not the Rules of Court authorise the Magistrate to make an order for payment of non-legal costs of the kind that have been claimed.
9. In the proceedings before me the solicitor for the respondent relied upon rule 3781 of the Court Procedures Rules 2006. That provides, effectively, that the Small Claims Court may not make an order in relation to costs of proceedings except in accordance with that part of the Rules. Subrule (3) provides however that the Court:

. . . may make an order for costs (other than the costs of representation by a lawyer) in favour of a party to a proceeding (the first party) against another party to the proceeding (the second party) for expenses unnecessarily incurred by the first party because of any act or omission of the second party.

10. The decisive question is: what does this provision mean? Does it extend to authorising the Court to reimburse a litigant for time spent in opposing a proceeding taken against it? It seems to me that it must be considered in the context of the general rule that professional costs are not recoverable. Furthermore, even in a court in which full legal costs are otherwise recoverable, unrepresented litigants are not generally able to sustain claims for payment in respect of the time they have spent in conducting their cases. See, for example, Cachia v Hanes (1991) 23 NSWLR 304 and James Aris & Associates v Minister for Works (unreported) 29 April 1994 Full Court of the Supreme Court of Western Australia BC 9406787.
11. In the context of the general rule normally applicable in the Small Claims Court, it seems to me that Rule 3781(3) was intended to authorise a magistrate to make an order that would ensure that a party who had incurred expenses unnecessarily because of any act or omission of the other party would be duly reimbursed for those expenses. It does not seem to me that that rule was intended to enable the Small Claims Court to ensure that a respondent was paid for his, her or its time or for the time of its employees. That would have involved a quite radical departure from the position that pertains in all other courts and it seems to me to be most unlikely that the Rules Committee would have intended to make such a departure in the Small Claims Court where costs are otherwise irrecoverable.
12. This issue was not drawn to her Honour’s attention and it was entirely understandable that she proceeded in the manner that she did. However, now that the issue has been raised, I am obliged to rule that the law did not authorise the order in question. I therefore grant leave to appeal.
13. Gentlemen, the only matter before me is an application for leave to appeal, it’s not the appeal itself. Having found an error of law, should I proceed to uphold the appeal or should I simply stand the appeal over generally and order that the order be stayed?
MR CRABB: Well, the applicant’s view would be that we would seek to end the appeal process, so if your Honour is minded. Because all we ask is that we go back to where we were a few months ago.

HIS HONOUR: Mr Tallboys.

MR TALLBOYS: Your Honour, as I understand it, you are not upholding two of the three legs of the appeal, being the application to appeal the dismissal of the application in proceeding.

HIS HONOUR: That’s right.

MR TALLBOYS: Or to appeal the dismissal of the originating application. So if this is only the issue of the costs which has been successfully appealed.

HIS HONOUR: Only the costs.

MR TALLBOYS: Then there’s no need for it to be remitted to anywhere.
HIS HONOUR: All right. I can make an order now dealing with it?

MR TALLBOYS: We would seek, on the grounds that we have been put to the time and expense of having to deal with the other two legs of the appeal, that we would seek an order for costs.

HIS HONOUR: Mr Crabb?

MR CRABB: Well, your Honour, I would concede that of the three orders made by the Magistrate you’re really finding an error with the third, and so that would end the current Small Claims proceedings. In terms of the application by my friend I don’t know why he’s made that application. The application was for an error in law on the part of the Magistrate. That’s been found. Costs usually follow in such things. So I would request costs.

HIS HONOUR: All right. Then whilst the substantive appeal was not strictly before me there is, in the light of my finding, no objection to my making an order that the order for costs be set aside. I am then faced with competing costs applications. The respondent seeks costs on the basis that the appeal failed insofar as it extended to the issue of whether the proceedings should have been dismissed and in relation to whether an amendment should have been made. On the other hand, the applicant seeks costs on the basis that the application related primarily to the issue of costs and he has succeeded on that issue. It seems to me that the dominant issue was the question of costs, though the other matters were argued before the magistrate and were the subject of at least some argument before me. In all the circumstances, I think the appropriate order is that the respondent pay half of the applicant’s costs of the proceedings before me. I so order.

MR TALLBOYS: Your Honour, may I readdress on one issue? The respondent is clearly an innocent party who was the subject to not only a claim in the Small Claims Court but an appeal of that claim to the Supreme Court. Our client had no choice but to respond to this, lest the appeal be allowed and my client incur further costs.

HIS HONOUR: Mr Tallboys, I am sorry, but it’s too late, I have already made the order.

MR TALLBOYS: Yes, your Honour.

I certify that the preceding paragraphs are a true copy of the Reasons for Judgment herein of his Honour, Justice Crispin.

Associate:

Date: 26 September 2007

Counsel for the appellant: Mr P Crabb
Solicitor for the appellant: Capital Lawyers
Counsel for the respondent: Mr B Tallboys
Solicitor for the respondent: Chamberlains Law Firm Pty Limited
Date of hearing: 14 September 2007
Date of judgment: 14 September 2007