Carta v Tilley [2019] QDC 186

DISTRICT COURT OF QUEENSLAND CITATION: Carta v Tilley [2019] QDC 186 PARTIES: PAUL CARTA (appellant) v CHRISTOPER TILLEY (first respondent) and CLAIRE LEONIE TILLEY (second respondent) FILE NOS: MAG55820/2017; Appeal 1876/2019 DIVISION: PROCEEDING: Civil Appeal ORIGINATING COURT: Magistrates Court at Brisbane DELIVERED ON: 26 September 2019 DELIVERED AT: Brisbane HEARING DATE: 19 September 2019 JUDGE: McGill SC, DCJ ORDER: Leave to appeal; Appeal allowed; Order of the Magistrates Court of 1 May 2019 set aside; Order under the Civil Proceedings Act 2011 s 26 that the proceeding pending in the Magistrates Court at Brisbane between the parties be transferred to the District Court. Order that the respondents pay the appellant’s costs of the appeal; Grant the respondents an indemnity certificate under the Appeal Costs Fund Act 1973 s 15(2). CATCHWORDS: INFERIOR COURTS – Magistrates Court – Jurisdiction – transfer of proceeding to QCAT – whether errors in discretion to transfer – whether transfer reasonable – whether consequential order valid – order for transfer set aside. Queensland Civil and Administrative Tribunal Act 2009 s 53. Cypressvale Pty Ltd v Retail Shop Lease Tribunal [1996] 2 Qd R 462 – cited. Drew v Makita (Australia) Pty Ltd [2009] 2 Qd R 219 – cited. King v ASIC [2018] QCA 352 – cited. March v Metrotek Constructions Pty Ltd [2011] QDC 376 – considered. -- 1 of 7 -- 2 Ralacom Pty Ltd v Body Corporate for Paradise Island Apartments (No 2) [2010] QCAT 412 – cited. Ramzy v Body Corporate for GC3 CTS 38396 [2012] QDC 397 – followed. Rozenblit v Vainer (2018) 262 CLR 478 – cited. Sutton v Tang [2015] QDC 191 – followed. Wyatt v Albert Shire Council [1987] 1 Qd R 486 – cited. COUNSEL: S K Long for the appellant T Mwilambwe (solicitor) for the respondents SOLICITORS: Celtic Legal for the appellant. GTC Lawyers for the respondents. [1] On 1 May 2019 this matter which was then pending in the Magistrates Court at Brisbane was ordered to be transferred to the Queensland Civil and Administrative Tribunal pursuant to the Queensland Civil and Administrative Tribunal Act 2009 (“the Act”) s 53. The only other order made was that costs be reserved. The appellant, who was the plaintiff below, seeks leave to appeal against that order pursuant to the Magistrates Court Act 1921 s 45(2). At the hearing the respondents did not oppose either the grant of leave or that the appeal be allowed, pointing out that the order had not been sought by them and had been made by the acting magistrate on his own initiative. In my opinion it was quite wrong for the acting magistrates to have so ordered, and it is appropriate to grant leave to appeal, allow the appeal, and set aside that order. The reasons for this are as follows. Background [2] By a claim filed on 6 December 2017 the plaintiff claimed $7,300 as money payable by the defendants under an agreement, or in the alternative damages in that sum for breach of the agreement. The claim is essentially a landlord’s claim for unpaid rent. The defendants, in what appears to be the current pleading filed in the Magistrates Court, denied that there had been any unpaid rent, alleged that there had been payments of rent made which the plaintiff had not given credit for, and also alleged that there had been substantial overpayment of rent over the whole period during which the defendants were in occupation, and sought to set off overpaid rent against any rent unpaid as claimed. They also counterclaimed for the amount of the overpaid rent, a sum alleged to be in excess of $80,000, and for the return of a rental bond of $1,400. In answer the plaintiff claimed the premises were actually damaged, thus consuming the rental bond, and that there has been no overpayment of rent. [3] A request for trial date was filed on 14 February 2019, indicating that both parties were represented by solicitors. There was a settlement conference held on 11 April 2019 before a registrar, which did not resolve the matter. It appears from the copy of the file provided by the Magistrates Court registry that there were three other occasions when the matter came before a magistrate without transfer being raised. The matter was listed for a trial on 1 May 2019. On that occasion the parties arrived ready to conduct a trial. Each side was legally represented, indeed in each case by counsel. The parties were present, and a proposed witness was also available to be called by the defendants. Neither party applied for a transfer of the matter to QCAT. -- 2 of 7 -- 3 The hearing [4] In the course of a preliminary argument it appears that the acting magistrate discovered that the matter was a claim for unpaid residential tenancy rent, and responded by saying he had power just to send the claim to the tribunal, and “it shouldn’t be here”: p 4. He said that there should be no costs in something like this, and asked why the matter was in this jurisdiction. He was told that that issue had never been raised before and both parties had proceeded in the court. Counsel for the plaintiff pointed out that the costs had been incurred, and that they were there ready to run the trial which could be heard that day: p 5. She submitted that the Magistrates Court had jurisdiction to hear the matter, and the acting magistrate conceded that he had jurisdiction, but expressed the view that it was “just a cost running-up exercise”: p 5. The matter went on for some time, but the acting magistrate kept coming back to the same point, that the matter should have been brought in QCAT because there should not be any costs in a matter of this nature. Costs at QCAT [5] It is correct that there is a different regime in relation to costs in QCAT from that in the Magistrates Court; prima facie in QCAT the parties bear their own costs,1 though there is a discretion to award costs in a case where the tribunal considers that it is in the interest of justice to do so.2 Because the amount claimed by the plaintiff was under the minor civil dispute limit, it was a minor civil dispute, and the costs which could be awarded were severely limited, to the amount of the filing fees, if awarded to the plaintiff.3 That may be a reason why a defendant would want to have a proceeding brought in the Magistrates Court transferred to QCAT, to avoid the ordinary consequence that costs follow the event in the Magistrates Court: UCPR r 681. But in this case the defendants had not made an application to transfer the matter to QCAT, and had incurred legal costs themselves. [6] Insofar as the parties had themselves incurred legal costs, those costs had been incurred, and nobody was going to save any money by not having a trial that day. Indeed not having a trial that day was necessarily going to cost the parties a deal of extra money, in having to pay the costs of a trial another day, and any additional pre- trial steps in QCAT. The pre-trial steps in the Magistrates Court would be essentially wasted, because I understand the procedure in QCAT leading up to a trial is different from the procedure in the Magistrates Court leading up to a trial. Under the Act s 53 it was open to the acting magistrate, when transferring a matter to QCAT, to order that a party be taken to have complied with the requirements under the Act, an enabling Act or the rules for starting a proceeding before the tribunal, which no doubt would have facilitated the transfer, and simplified the task of the plaintiff when the matter arrived at QCAT, but no such order was made. [7] The proposition that this was a matter that ought to be before QCAT receives no support from the legislation; the effect of the legislation is that this was a matter which could be brought either in the Magistrates Court or in QCAT, and in those 1 The Act s 100. See Ralacom Pty Ltd v Body Corporate for Paradise Island Apartments (No 2) [2010] QCAT 412 at [24]. 2 The Act s 102. 3 The Act s 102(2); QCAT Rules r 83, r 84. If it was a minor debt claim, a little more could be awarded, but only to a successful plaintiff. I have not looked into whether the counterclaim, which was apparently for an amount above the minor civil dispute limit, had any effect on this. -- 3 of 7 -- 4 circumstances the legislature has conferred a choice on a plaintiff as to where to commence a proceeding. One reason why a plaintiff might want to proceed in the Magistrates Court is to obtain the benefit of the costs regime in that court, particularly if the plaintiff intends to obtain legal assistance in the pursuit of the claim. Another reason is that there is a right to legal representation in the Magistrates Court,4 whereas leave is required in QCAT to have legal representation.5 [8] The acting magistrate’s attention was not drawn specifically to the counterclaim before making his order, and it appears that he was unaware of it.6 Perhaps he had failed to take the ordinary precaution of reading the pleadings before going into court. At one point it was submitted that it would be months before the trial was set down in QCAT if the matter were transferred, to which the acting magistrate reacted by expressing doubt, but there was no evidence before him as to just how long it would take, particularly if the pre-trial procedures in QCAT had to be undertaken first.7 It would necessarily involve more delay than just proceeding with the trial that day. [9] The acting magistrate said he was satisfied that the subject matter of the proceeding could be heard by the tribunal, and “I therefore order that the proceeding be transferred to the tribunal” pursuant to the Act, s 53. He added that he would reserve costs. It is not by any means clear what he thought could be achieved by reserving costs. There is nothing in s 53 of the Act which deals expressly with the costs of a matter prior to the transfer, nor have I found anything in the Act which permits the tribunal to deal with the costs incurred in the court.8 Costs are a creature of statute, and a court or a tribunal does not have power to deal with costs except to the extent that that power is conferred upon it by the applicable legislation.9 It seems to me that the practical effect of the order is that no costs will be awarded in respect of the costs incurred while the matter was in the Magistrates Court.10 Consideration [10] As a matter of general principle, in my view if an order is to be made transferring a matter from a court to QCAT pursuant to s 53 the application for that, or the order if it is to be done on the court’s own initiative, should occur soon after the proceeding is commenced. In view in particular of the different consequences in terms of costs between the court and QCAT, and in view of the different pre-trial procedures of the court and of QCAT, it will inevitably be wasteful and inefficient if an order is left to a late stage in the matter, even if it is made before the matter actually comes on for trial in the court. In circumstances where the parties have already incurred significant costs within a regime where costs ordinarily follow the event, one of them at least will be prejudiced as a result of the transfer. 4 Magistrates Courts Act 1921 s 18(1)(b). 5 The Act s 43. 6 He was then told there was a counterclaim for the return of the bond: decision p 2. 7 I have been informed, after preparing these reasons, by the Deputy President of QCAT that the likely delay between the transfer of the claim (ready for hearing) to QCAT and a hearing in QCAT is between 12 and 26 weeks, and most likely towards the middle of that range. 8 Contrast a transfer under the Civil Proceedings Act 2011, Pt 5, where s 33 expressly permits the court to which a proceeding is transferred to deal with costs before the transfer, to the extent that they are not dealt with by an order made before the transfer. 9 Wyatt v Albert Shire Council [1987] 1 Qd R 486 sat 488. 10 That would necessarily follow in the case of a minor civil dispute. -- 4 of 7 -- 5 [11] In March v Metrotek Constructions Pty Ltd [2011] QDC 376 I refused to transfer under s 53 a proceeding in the District Court which could have been brought in QCAT, where the amount claimed was over $400,000 but the matter involved a domestic building contract dispute, and the tribunal had jurisdiction: [3]. In that matter the defendant had applied for a transfer and had applied promptly, indeed before filing a defence, a matter which caused me some concern because it made it impossible to determine strictly the nature of the dispute, a matter which might be of some relevance. I found that the matter was a conventional building dispute. [12] I concluded in that matter that the proceeding should not be transferred to QCAT, on the basis that the plaintiffs had a choice and they had exercised that choice in favour of the court for a legitimate reason, namely the desire to ensure that they could obtain legal representation in the proceeding. I also expressed the view that the costs regime in the District Court was superior to that in QCAT. I did not regard as persuasive the matters put forward by the defendant as to why QCAT was superior, and considered that in the circumstances the balance lay against a transfer. [13] A case which was closer to the present was the decision of Reid DCJ in Sutton v Tang [2015] QDC 191. In that matter as in this an order had been made in the Magistrates Court that a proceeding pending in that court be transferred to QCAT pursuant to s 53. There were also orders permitting both parties to be legally represented before the tribunal, and the parties to be taken to have complied with the requirements of the Act. Nevertheless his Honour gave leave to appeal and set aside the decision, ordering that the matter remain in the Magistrates Court, that it be transferred to the Brisbane registry and that it be set down for a one day hearing forthwith. [14] That case involved a claim and counterclaim for property damage arising out of a motor vehicle accident.11 In that matter the parties had reached the stage of signing and filing a request for trial date, which prompted a query as to why the proceeding should not be transferred to QCAT. Both parties submitted that it should remain in the court, but nevertheless the order was made. Unlike in the present case, the magistrate gave lengthy reasons for making the order. His Honour agreed with some, but considered that the magistrate erred in making the order that both parties be legally represented before the tribunal, on the ground that s 53 did not permit such an order to be made. It followed that that order did not have the effect of ensuring that both parties were legally represented in the tribunal, and so it was appropriate to exercise the discretion afresh. His Honour held that the magistrate was also in error in treating the existence of only a limited power in the tribunal to make costs orders as irrelevant to the exercise of the discretion: [32]. His Honour concluded that, because of the inability to recover costs in the tribunal, the late stage of the proceeding when the order was made, and the wish of both parties to have the matter decided in the court, the balance strongly favouring the matter remaining in the Magistrates Court: [40]. Accordingly the appeal was allowed. [15] In the present case the position is a little different, in that the defendants had not agreed to the matter remaining in the Magistrates Court, though at the hearing they did not oppose its remaining there, nor did they oppose its remaining there when the matter was before me. The other consideration is that in this matter the issue arose at 11 When I was starting at the bar many years ago these were very common in the Magistrates Court, but I understand that this sort of litigation is now much less frequent. -- 5 of 7 -- 6 an even later stage of the proceeding, on the actual day of trial. In other respects however the matters referred to by his Honour apply in the same way here. [16] There is also the consideration that no reasons were given by the acting magistrate for making the order. He simply jumped from finding that a transfer could be ordered, to ordering one. In circumstances where the order was contentious, reasons should have been given.12 I should not be left having to pick through the transcript of the hearing to try to work out what the reasons for the order were. I am however reduced to doing that for want of any express reasons given when the order was made. [17] It appears that the magistrate was motivated by a concern that the defendants should not be exposed to the burden of having to pay the legal costs of the plaintiff as well as the claim if the plaintiff were successful. Apart from implying a somewhat pessimistic view of the merits of the defence and counterclaim, this overlooked the fact that the defendants, who had the benefit of legal advice, had chosen not to apply promptly, or indeed at all, for a transfer to QCAT. Perhaps they had more confidence in the justice of their position than the magistrate did, and wanted to secure in addition the benefit of a costs order in their favour, something which would not be available to them in QCAT. [18] Apart from that, the position adopted by the acting magistrate was not fair to the plaintiff. If the plaintiff has been put to legal expense to pursue a just claim, it is hardly justice if he recovers only the amount of his claim, an amount which may be less than he has spent in order to obtain judgment. One can understand why the legislature put in place what is essentially a no costs jurisdiction, in circumstances where the matters before the tribunal are expected to be ordinarily the sort of simple dispute which people can litigate in person, but if that is the approach to be adopted, it is important that both parties know as early as possible in the litigation that that is the position they are in. It is in my view fundamentally unjust for that position to be thrust upon a plaintiff who has commenced a proceeding in a court after the legal costs of the proceeding have already been incurred. [19] There was certainly no explanation or justification given by the acting magistrate for taking a contrary position. Indeed, his approach strikes me as so superficial that it is difficult to believe that there was not some other, unexpressed reason for the order. I hope this did not reflect some broader campaign by magistrates to move minor civil disputes to QCAT. No doubt the Magistrates Court is busy, but so in QCAT. To make an order like this on the day of trial risks giving the appearance that it was motivated by a desire simply to avoid the work involved in trying the case. So long as the legislature permits such proceedings to be brought either in a court or in QCAT, plaintiffs are entitled to a choice, and in the absence of any legislated preference for QCAT, the discretionary power in s 53 is to be exercised to overturn that choice only for good reason; that is to say, only when there is a balance of circumstances favouring a transfer. That was certainly not the case here. 12 Drew v Makita (Australia) Pty Ltd [2009] 2 Qd R 219 at [57] – [65]. For a more recent summary of the obligation, see King v ASIC [2018] QCA 352 at [39] – [44]. The content of the obligation depends on the nature of the matter and the issues in dispute, but unexplained conclusions are not sufficient: Cypressvale Pty Ltd v Retail Shop Lease Tribunal [1996] 2 Qd R 462 at 477 per Fitzgerald P. -- 6 of 7 -- 7 Leave to appeal [20] Because of the amount involved, an appeal lies only by leave. I need not repeat my discussion of the approach to leave in Ramzy v Body Corporate for GC3 CTS 38396 [2012] QDC 397. In my opinion there is an important question of law arising, which is the correct approach to the exercise of the discretion under s 53 of the Act. That such an order was made in this case demonstrates that the existing authorities on that section have not produced a proper approach to it, and further appellate oversight is needed. It is in my view appropriate to give leave to appeal in the present case. [21] This is an appeal in respect of the exercise of a discretion, so the principles in House v R (1936) 55 CLR 499 at 504-5 apply. In addition, it is an appeal in respect of a matter of procedure in the Magistrates Court, although perhaps not in the usual sense. Ordinarily such appeals are treated cautiously, and an appeal court interferes with reluctance. But even in such matters, an appeal court will interfere if necessary to avoid injustice,13 and that I consider is the situation here. Conclusion [22] For the reasons I have given it was quite inappropriate for the acting magistrate to have made the order he did. The appeal should be allowed and the order of the acting magistrate of 1 May 2019 set aside. In those circumstances, the matter remains pending as a proceeding ready for trial in the Magistrates Court. [23] I am however concerned that the matter has been so long delayed, and if no further order is made it will have to wait again some time before a trial can occur in the Magistrates Court. The parties have had far too much unfortunate delay in bringing this matter on for trial, and at the hearing I therefore suggested that I could offer the parties a quick trial in the District Court, and to that end transfer the proceeding to this court under the Civil Proceedings Act 2011, s 26(1). That course was not opposed. This court of course also has jurisdiction to deal with the proceeding, though ordinarily it would not do so because of the amounts claimed. I am able to offer the parties a trial in the week commencing 4 November, and when these reasons are published a trial date will be fixed. Costs [24] With regard to the costs of the appeal, this is a matter which was entirely at the initiative of the acting magistrate, and in those circumstances it would be appropriate for the costs to be paid out of public funds. That can be achieved it seems to me only by making an order that the respondents pay the appellant’s costs of the appeal, and then giving the respondents an indemnity certificate under the Appeal Costs Fund Act 1973 s 15(2). That should cover both the costs they pay to the appellant, and their own costs of the appeal, which they have taken some trouble to minimise. The provisions of s 17 of that Act, which would enable an indemnity certificate to be issued to the appellant, are not available because the requirements of that section have not been satisfied. 13 Rozenblit v Vainer (2018) 262 CLR 478. -- 7 of 7 --