Woolworths v Hidassy[2008] QDC 43

DISTRICT COURT OF QUEENSLAND

1. [1]
   This is an application for leave to appeal by Woolworths Limited against a costs order made against it on 23.1.2008 by his Honour Magistrate Killeen. The point raised on the appeal is a discrete one: does s. 56(2)(a) of the Personal Injuries Proceedings Act 2002 (“PIPA”) allow for any residual discretion to award costs when an amount of damages awarded is less than (the respondent plaintiff’s) mandatory final offer but more than that of (the defendant applicant).

Background Facts

2. [2]
   Mr. Hidassy was injured when he fell at the Woolworths supermarket at Kawana on 25.5.05. He delivered a Notice of Claim to Woolworths pursuant to the PIPA on 10.7.05.

3. [3]
   The compulsory conference required by s. 36 PIPA occurred on 24 October 2006. At the conference Woolworths admitted liability, and pursuant to s. 39 mandatory final offers were exchanged at the conference. The respondent’s offer was $12,000 and Woolworths offered $1.00. Mr. Hidassy then commenced proceedings in the Maroochydore Magistrates Court and a trial was held before Magistrate Killeen on 22 November 2007. On 23 January 2008, he gave judgment for Mr. Hidassy in the sum of $2,859.55 and invited submissions as to costs. At that time, Mr. Rafty who had acted for Mr. Hidassy throughout, handed up a written submission the details of which I will return to later. Woolworths were represented by a town agent who submitted that s. 56 of the PIPA did not give the Court power to award costs. He also applied for an adjournment to enable him to get further instructions from his principal who was not available. Magistrate Killeen adjourned to consider the submissions. When he resumed, he refused the adjournment application and ordered Woolworths to pay Mr. Hidassy’s costs.

THE ISSUES

1. (a)
   Leave to appeal

4. [4]
   s 45(1)(a), (2)(a) of the Magistrates Courts Act 1921 provides that leave is required “when…the amount (involved in the action) is not more than $5000” and this court shall not grant leave “unless…satisfied that some important principle of law or justice is involved”.

5. [5]
   Woolworths submission is that leave is not required as the amount involved in the action, as opposed to the amount awarded in the judgment, was more than $5000. This submission accords with the judgment of Hanger J (as his Honour then was) in Graham v Roberts (1956) St. R. Qd 459 followed by a number of judges of this court since, e.g. Shanahan DCJ in Thompson v Franko (2004) QDC 476 at [31]. This conventional approach accords with the natural and ordinary meaning of s. 45(1)(a) which draws a distinction between “the judgment or order of a Magistrates Court” and “an action in which the amount is more than $5000.”
6. [6]
   As can be seen from the judgment of Hanger J in Graham v Roberts, the relevant words of s 45(1) have not changed since that case was decided; indeed the words have not changed since the Magistrates Court Act was enacted in 1921 according to Wylie QC DCJ in North Mossman Motors v Petrus (1987) QDC 295. Hanger J’s construction therefore has stood the test of time and would, at the very least, be highly persuasive as far as I am concerned.

7. [7]
   Mr. Hackett informed me at the start of the hearing that he had discovered Court of Appeal authority which, he submitted, would cause me to re-consider the correctness of this venerable authority. He referred to Woodman v Maher [2001] 1 Qd R 106 and in particular p. 110-111 of Thomas JA’s judgment, and Aldrich v E.M. Investments (Qld) Pty Ltd [2000] 2 Qd R 346. It is immediately obvious that these cases were concerned with s. 118(2) of the District Court Act 1976 which relevantly provides:

8. [8]
   The words in s. 118(2) are materially different to the words in s. 45(1)(a) in that the latter section focuses on the “action” and the former “the judgment”. These decisions do not assist in the proper construction of s. 45(1)(a) and do not in any sense undermine the correctness of Graham v Roberts. In my opinion, leave is not necessary but if I am found to be wrong in that conclusion I would have held, for the reasons enunciated in paragraphs [19]-[24] of Mr. Whiteford’s outline, the issue here does involve an important principle of law or justice.

(b)  The merits of the appeal

9. [9]
   S.56(1) is in these terms:

“(1) This section applies if a court awards $50000 or less in damages in a proceeding based on a claim, but it does not apply to the costs of an appellate proceeding.”

10. [10]
    S.56(2)(a) is in these terms:

“(2) If the court awards $30000 or less in damages, the court must apply the following principles –

(a) if the amount awarded is less than the claimant’s mandatory final offer but more than the respondent’s … mandatory final offer, no costs are to be awarded; “.

11. [11]
    Woolworth’s argument (as submitted by its agent below) is that this provision is mandatory in its terms and does not provide a court any residual discretion to award costs in cases involving awards coming into this category. Clearly the award satisfies all three requirements of the section. Magistrate Killeen was obviously persuaded by Mr. Rafty’s argument that the decision in Amos v Brisbane City Council (2005) QCA 433 was authority for the proposition that there was a residual discretion to award costs in this case.

12. [12]
    In that case, the plaintiff applicant Mr. Amos had claimed damages against the Council as a result of tripping on a Brisbane footpath. The Magistrate dismissed the claim and awarded costs in favour of the Council. Mr. Amos argued unsuccessfully that s. 56(1) applied to his case. The Court of Appeal unanimously rejected that argument. Muir JA (with whom Jerrard and Keane JJA agreed) said (at 17):

“The words of s 56(1) are clear and unambiguous. “Award” is defined, relevantly, in the Shorter Oxford English Dictionary as “that which is awarded or assigned as payment, penalty, etc.” An award of damages in so far as courts are concerned, is an order of the court in favour of a successful plaintiff ordering the defendant to pay the sum determined by the court to be the damages for the wrong suffered by the plaintiff. The words of the subsection are quite incapable of accommodating an order dismissing a proceeding, with or without an assessment of damages to assist in the final disposition of the matter by an appellate court. In those circumstances, there are no damages and it follows that there can be no award of damages. Section 56, literally construed, is not inconsistent or in disharmony with any other provision of the Act.”

13. [13]
    Clearly this is not a case like Amos. Here there was an award which clearly fell within the parameters of s. 56(2)(a).

14. [14]
    In his argument, Mr. Hackett did not rely on the submissions below based on Amos, but instead argued that on a proper construction of a number of provisions of the PIPA, nevertheless the decision was correct, and there was, in the circumstances of this case, a residual discretion to award costs. To some extent this argument was advanced below by Mr. Rafty by reference to s. 20 of the PIPA. s. 20(1) is in these terms:

15. [15]
    Magistrate Killeen was persuaded that Woolworths had “failed to make a fair or reasonable offer to settle” the matter, and therefore “the Court does have the inherent jurisdiction to make an order for costs and that the Court has the ultimate discretion in that respect”. Clearly the offer of $1.00 made by Woolworths (which Magistrate Killeen clearly thought was contrary to the spirit of the Act) was made pursuant to s. 39 not s. 20.

16. [16]
    s. 20 falls within Part 1 Division1 and Chapter 2 of the Act to do with “Claims Procedures”. The only offer that Mr. Killeen was concerned with was the offer made at the compulsory conference pursuant to s. 39 which is in Division 4 which provides for the holding of a compulsory conference prior to “a proceeding in court based on the claim”. s 39(6) provides a definition of “mandatory final offer”, which is “A written final offer required under this section”. There can be no doubt that this was the $1.00 offer made by Woolworths at the compulsory conference.

17. [17]
    Mr. Hackett’s argument necessarily requires me to put a gloss on the express terms of s. 56(2)(a) which are clear and unambiguous. It is also clear to me that in cases to which s. 56(2) applies, Amos supports the submission made by Mr. Whiteford that s. 56 does provide a code to govern awards of costs in such cases. So much is clear from a number of passages in Muir JA’s judgment which finds support by analogy in the judgment of Philiippides J in Kenny & Anor v Eyears & Anor [2004] QSC 059 by reference to the words in s. 55F (2)(c) of the Motor Vehicle Insurance Act 1994 (“MAIA”). In Amos, at [19]-[20] Muir JA observed:

“[19] For better or worse, the legislative focus [in 56] was on the circumstance in which a plaintiff commences proceedings and succeeds, at least to the effect of obtaining some damages… . Presumably, the legislative intention was that costs in other cases could be left for determination in the normal way. Whilst there may be debate about whether it was desirable to confine the scope of section 56 in this way, the legislative scheme which emerges from a literal construction of the section cannot be said to be illogical, perverse or improbable.”

“[20] … The fact that Parliament has chosen to prescribe the way in which costs must be disposed of in proceedings in which there are awards of damages for $50,000 or less hardly gives rise to the implication that the courts’ long-standing statutorily conferred powers to award costs are otherwise removed.” (my emphasis)

18. [18]
    S 55F of MAIA is (relevantly) in these terms:

19. [19]
    In Kenny, Phillippides J said [at 11] by reference to s. 55F of the MAIA:

“Section 55F goes further and prescribes a comprehensive regime for awarding costs in awards of $50,000 or under.”

     The same observation applies to s. 56(1) of the PIPA.

20. [20]
    Mr. Hackett advanced a further argument (which was not made by Mr. Rafty) based on s. 48(2) of the PIPA.

21. [21]
    Although Magistrate Killeen was not referred to s. 48(2) and does not refer to it, Mr. Hackett argues that his finding that Woolworths had failed to make a fair and reasonable offer to settle was justified by reference to that section.

22. [22]
    In my view that argument has to be rejected in a case in which a court awards “$50000 or less in damages in a proceeding based on a claim”. The only evidence before Magistrate Killeen was of the mandatory final offers made pursuant to s. 39. s. 48 is obviously designed to leave open a discretion  to award costs against either a claimant or respondent in a proceeding before a court based on a claim for failure to comply Part 1 Division 1, but s. 56 clearly applies when an award of $50,000 or less is made. An application under s. 48 would necessarily require a Court to look at the whole history of costs offers and other relevant conduct by the parties. There was no such evidence here because s. 48 did not come into play, and could not because the award (as far as costs are concerned) came within s. 56(1) and (2)(a).

23. [23]
    s. 56(2)(a) focuses on the amount of the mandatory final offer and not its reasonableness or otherwise. Magistrate Killeen was therefore in error when he held that he had a residual discretion to award costs.

24. [24]
    The appeal is allowed. I will hear the parties on costs of the appeal which are excluded from the effect of s. 56(1).