Sutton v Tang[2015] QDC 191

DISTRICT COURT OF QUEENSLAND

Introduction

1. [1]
   In this matter the appellant seeks leave to appeal against the decision of the Magistrates Court made on 20 May 2015, by which it was ordered that:

1. the proceeding be transferred to Queensland Civil and Administrative Tribunal (QCAT);

2. both parties be legally represented before the tribunal; and

3. all parties are taken to have complied with the requirements of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (‘QCAT Act’).

2. [2]
   In the event that leave is given the applicant also seeks orders that the appeal be allowed and the decision of the Magistrates Court be set aside and in lieu thereof it be ordered that the proceeding remain in the Magistrates Court and be transferred to the Brisbane Registry of that court to be set down for a one day hearing forthwith.

3. [3]
   For reasons that I shall hereafter set out it is my view that this is an appropriate case for granting leave to appeal and for allowing the appeal and making the orders sought.

4. [4]
   I order:

1. Leave to appeal be granted;

2. The appeal be allowed; and

3. In relation to the decision of the Magistrates Court of Queensland dated 20 May 2015:

1. (a)
   the following orders are set aside:

1. (i)
   that the proceedings be transferred to QCAT;

2. (ii)
   that both parties be legally represented before the tribunal;

3. (iii)
   that all parties are taken to have complied with the requirements of the QCAT Act.

2. (b)
   and in lieu thereof it is ordered that:

1. (i)
   the proceedings remain in the Magistrates Court jurisdiction;

2. (ii)
   the proceedings be transferred to the Brisbane Registry of the Magistrates Court and be set down for a one day hearing forthwith.

The Proceedings

5. [5]
   On 25 November 2014 there was a minor motor vehicle accident involving the applicant’s vehicle and a vehicle owned by the second respondent and driven by the first respondent. Each of the parties was insured by different insurers. Each of the claim and the counterclaim, relating to the damage to the two vehicles, have been prosecuted by the insurers through their rights of subrogation.

6. [6]
   The Magistrates Court proceedings were commenced on 30 June 2014. On 8 August the defendant filed a defence and counterclaim. On 3 September 2014 the applicant filed a reply and answer. Subsequently, between then and 30 April 2015, the parties have taken all relevant steps in the Magistrates Court proceedings, including:

1. (a)
   disclosure;

2. (b)
   inspection of documents; and

3. (c)
   without prejudice negotiations.

7. [7]
   On 30 April 2015 the parties sent to the Magistrates Court a completed and signed request for a trial date, asking that the proceedings be set down for a one day hearing.

8. [8]
   On 7 May 2015 the Magistrates Court sent a notification to each of the parties seeking submissions as to why the proceedings should not be transferred to QCAT.

9. [9]
   The parties were in agreement that the proceeding should stay in the Magistrates Court and on 11 May 2015 the parties sent to the Magistrates Court joint submissions as to why the proceeding should remain in that court.

10. [10]
    Despite the joint submissions, the learned Magistrate who considered the matter on the papers on 20 May, made orders that:

1. the Magistrates Court proceeding be transferred to QCAT;

2. both parties be legally represented before QCAT;

3. the parties be taken to have complied with the requirements of the QCAT Act; and

4. the matter is ready to be set down for hearing.

Those orders are the subject of the appeal.

QCAT

11. [11]
    Before considering the issue of leave to appeal it is necessary to first set out some of the relevant provisions of the QCAT Act and rules.

12. [12]
    There is no doubt that these proceedings are proceedings that could have been commenced in QCAT. The jurisdiction of that tribunal includes jurisdiction to hear and decide a minor civil dispute (s 11 of QCAT Act). “Minor civil dispute” is defined in Schedule 3 to QCAT Act to mean inter alia a claim for an amount of not more than the prescribed amount for damage to property caused by, or arising out of the use of, a vehicle. The same Schedule defines “prescribed amount” to mean $25,000.

13. [13]
    In this case the damage to the vehicles was almost $2,400 to the applicant’s vehicle, and almost $2,200 to the second respondent’s vehicle.

14. [14]
    The jurisdiction of QCAT is not an exclusive one. The matter also comes within the jurisdiction of the Magistrates Court.

15. [15]
    Section 53 of the QCAT Act provides as follows:

(1)If a proceeding is started in a court and the subject matter of the proceeding could be heard by the tribunal under this Act, the court may, by order, transfer the proceeding to the tribunal.

(2)If a court transfers a proceeding to the tribunal under subsection (1) –

(a)the proceeding is taken to have been started before the tribunal when it was started in the court; and

(b)the court may make the orders and give the directions it considers appropriate to facilitate the transfer, including an order that a party is taken to have complied with the requirements under this Act, an enabling Act or the rules for starting a proceeding before the tribunal.

(3)An order under subsection (2)(b) has effect despite any provision of this Act, an enabling Act or the rules.

(4)A court may act under this section on the application of a party to the proceedings or on its own initiative.

16. [16]
    Clearly then the Court had power, on its own initiative, to make an order that the proceedings be transferred to the tribunal. Whether to in fact make such an order involved a discretion that was required to be exercised judicially having regard to the whole of the circumstances. I shall deal with the Magistrate’s decision justifying the order she made shortly, but it is relevant to first consider the issue of the power of the tribunal to order legal representation, and to make orders with respect to costs, since it seems to me those provisions were clearly relevant to the exercise of her Honour’s discretion.

17. [17]
    Section 43(1) of the QCAT Act provides that the main purpose of the section is to have parties represent themselves unless the interests of justice require otherwise.

18. [18]
    Subsection 3 of s 43 provides:

3. (3)
   In deciding whether to give a party leave to be represented in a proceeding, the tribunal may consider the following as circumstances supporting the giving of the leave –

1. …
2. the proceeding is likely to involve complex questions of fact or law;
3. another party to the proceeding is represented in the proceeding;
4. all of the parties have agreed to the party being represented in the proceeding.

19. [19]
    It is to be observed that although the agreement of both of the parties to being legally represented is a factor for the tribunal to consider in determining whether or not to give the parties leave to be so represented, the fact that they are in such agreement is not determinative of the issue. It remains within the discretion of the tribunal to decide whether or not parties are to be legally represented.

20. [20]
    In my view of more importance to this matter is the issue of costs in the tribunal. Pursuant to s 100 of QCAT Act, other than as provided under the Act or an enabling Act, each party to a proceeding must bear the party’s own costs for the proceeding. Section 102(1) of QCAT Act however provides that the tribunal may make an order requiring a party to a proceeding to pay all or a stated part of the costs of another party to the proceeding if the tribunal considers the interests of justice require it to make that order. Importantly, subsection 2 of s 102 provides as follows:

(2)However, the only costs the tribunal may award under subsection (1) against a party to a proceeding for a minor civil dispute are the costs stated in the rules as costs that may be awarded for minor civil disputes under this section.

21. [21]
    Subsection 3 of s 102 then sets out relevant factors that the tribunal may have regard to in determining whether to awards costs under subsections (1) or (2), but because of the provisions of the Queensland Civil and Administrative Tribunal Rules 2009 (Qld) (‘QCAT Rules’), it does not seem to me necessary to consider those factors. Rule 83 of QCAT Rules provides as follows:

For section 102 of the Act, the tribunal may award costs against a party to a proceeding for a minor civil dispute other than a minor debt claim –

1. (a)
   only if the party is a respondent against whom the tribunal has made a final decision; and
2. (b)
   only to order the party to pay to the applicant the amount of any prescribed fee paid by the applicant on filing the application for the proceedings.

22. [22]
    Thus the costs that the tribunal could order to be paid in this case would be limited to the amount of any prescribed fee paid by the applicant on filing the application for the proceeding. It seems to me that, at best, that would mean the filing fee paid by the parties on filing the claim and/or counterclaim in the initial proceedings. There is no power to award any other costs, no matter the extent to which they may have already been incurred prior to the transfer of these proceedings.

Magistrate’s Decision

23. [23]
    I turn then to the learned Magistrate’s decision. Her Honour first outlined the history of the matter. It is unnecessary to repeat that. Nothing she said there is inconsistent with the history that I have earlier outlined. She correctly identified that the claim and counterclaim fell within the definition of a “minor civil dispute” as defined in Schedule 3 of QCAT Act. She identified the provisions of s 53 of QCAT Act. She considered a number of cases that had been referred to her and, quite reasonably it seems to me, identified why they did not bind the discretion that she was required to exercise. Her Honour then dealt with submissions in respect of legal representation in the tribunal at paragraphs 17 to 22 of her judgment and submissions in respect of legal costs in the tribunal at paragraphs 23 to 27 of her judgment.

24. [24]
    In relation to the issue of legal representation the parties had jointly submitted before the learned Magistrate that as the respective insurers had taken over the proceedings pursuant to their right of subrogation, and both had legal representation, then the Magistrates Court was the appropriate forum in which the proceedings should be heard. Her Honour said:

“I do not accept this argument. Simply because a party has legal representation should not automatically entitle that party to have their minor civil dispute heard in a Magistrates Court. To follow such an argument has the potential to a two tier system of justice, one for those who can afford legal representation and one for those you (sic) cannot.”

I agree with her Honour’s observations in that regard.

25. [25]
    Her Honour correctly observed that whilst there was no prima facie right to legal representation in QCAT, leave can be given where it is in the interest of justice. I have referred already to the provisions of QCAT Act in respect of that matter. Her Honour outlined a number of matters the tribunal was entitled to take into account and then said:

“In this case, where both parties are legally represented and both agree to such representation and taking into account other relevant factors (such as the insurance companies taking over the proceeding) I consider that it is an appropriate matter where it would be in the interests of justice that the parties be given leave to be legally represented.”

26. [26]
    I do not disagree with her Honour’s observations. They are essentially in accord with the provisions of s 43(3) of QCAT Act to which I have already referred. If her Honour had left it at that, merely saying that she thought it was likely that the parties would be given leave to be legally represented before the tribunal, because of the provisions of s 43(3)(d) of QCAT Act, and that such a belief was relevant to the exercise of her discretion, in my view no criticism of her approach could be made.

27. [27]
    Her Honour, however, went further. The order she made was that both parties be legally represented before the tribunal. She purported to make that order pursuant to s 53 of QCAT Act.

28. [28]
    In my view, there was no power for her Honour to do so. The provisions of s 53(2)(b) of QCAT Act merely provides that the court may make the orders and give the directions “it considers appropriate to facilitate the transfer, including an order that a party is taken to have complied with the requirements under this Act, an enabling Act or the rules for starting a proceeding before the tribunal.” In my view, an order that the parties be legally represented before the tribunal, as the learned Magistrate ordered, is not an order “to facilitate the transfer.” Rather, it seeks to bind the discretion of the tribunal to make orders in respect of representation pursuant to s 43 of QCAT Act.  Her Honour’s order that the parties be legally represented before the tribunal was outside her power and was made in error.

29. [29]
    In circumstances where the appeal is against the exercise her Honour’s discretion that error, in my view, means that I should exercise that discretion afresh, although giving weight to her Honour’s decision.

30. [30]
    Her Honour, in respect of legal costs, considered the submission by both parties that each had already expended a significant amount on legal costs and that “the potential liability of legal costs is an important commercial factor which assists in ensuring that the parties make all reasonable efforts to resolve issues prior to taking the matter to trial”.

31. [31]
    Her Honour said that submission lost sight of the reason why QCAT legislation was enacted by parliament. Her Honour said that the issue of liability for costs and its relevance to parties’ commercial decisions is not a proper consideration for a court to have in deciding the appropriate forum for the matter to be heard and, ultimately, decided. Her Honour said if this were to be a consideration for a minor civil debt to remain in the Magistrates Court, then every proceeding involving an insurance company would have to be heard in the Magistrates Court. Her Honour said:

“Indeed any company or individual who has engaged legal representation (and for whom liability for costs is a commercial decision) would have grounds to undermine the intention of the QCAT legislation.”

32. [32]
    I do not accept those passages of her Honour’s judgment are correct. In my view it is incorrect to say cost issues are irrelevant to the exercise of the discretion whether or not to transfer matters under s 53 of QCAT Act. The legislation leaves to the discretion of individual magistrates or judges the decision whether to transfer a matter to QCAT. There is no reason to conclude that the incurring of legal costs by the parties may not be a relevant consideration. It is not, so far as I can see, the intention of the QCAT legislation to ensure that every action which could have been commenced in the tribunal but was instead commenced in the Magistrates Court ought to be transferred. The legislation provides that whether to do so is a matter for the discretion of the judicial officer in the court concerned, and does not seek to fetter that discretion in the way her Honour concluded. To have determined the parties legal costs are an irrelevant consideration, as her Honour appears to have done, seeks, in my mind, to unlawfully fetter that discretion. In my view the issue of costs is a factor to be taken into account in exercising that discretion and her Honour was in error in concluding that was not so.

33. [33]
    In the circumstances, I think that there is error in her Honour’s judgment, because of the matters I have identified about her power to make orders in respect of legal representations, and her holding that the limited power to make costs orders was irrelevant to the exercise of her discretion.

The Appeal

34. [34]
    Because of the amount involved in this case s 45 of the Magistrates Court Act 1921 (Qld) (‘Magistrates Court Act’) requires that leave to appeal first be given if there is to be an appeal. That provision applies in respect of all matters where the amount involved is less than $25,000. Section 45(1) of Magistrates Court Act dictates that leave should only be granted where a court “is satisfied that some important principle or law of justice is involved”.

35. [35]
    McGill SC DCJ considered this matter in Ramzy v Body Corporate for GC3 CTS38396 & Anor [2012] QDC 397. At paragraph [41] his Honour referred to the authority of Wanstall v Burke [1925] St R Qld 295, a decision of the Full Court. His Honour quoted a passage from Griffith CJ in that case where his Honour said:

“The practice we have already laid down …[is] of not granting special leave to appeal unless we are of opinion that the case is one of gravity, or involving some important question of law, or affecting property of considerable value; or unless it is a case which is otherwise of public importance, or is of a very substantial character.”

36. [36]
    In my view, two issues of public importance and of substantial character arise in this case so that it is appropriate to grant leave to appeal.

37. [37]
    The proper construction of s 53 of QCAT Act, and whether or not a transferring court has power to bind the discretion otherwise resident in the tribunal to make an order in respect of legal representation is a matter of significant public importance. I have already indicated my view that a court does not have that power.

38. [38]
    The second issue of importance concerns circumstances relevant to the exercise of the discretion to order transfer. The transfer in this case took place at a very late stage of the proceedings. Not only had proceedings been instituted but disclosure, inspection and without prejudice negotiations had been conducted. It was only when the parties had signed a request for a trial date and requested a one day hearing that the court, of its own motion, determined to transfer the matter to QCAT. At that stage the parties had no doubt incurred significant expense. Whilst there is no evidence of offers of settlement, given that there were without prejudice negotiations between insurers it is certainly possible that such offers might have been made pursuant to the rules which might significantly protect whichever party is ultimately successful in respect of costs that it has already incurred or will incur in the future. The transfer of the matter to the tribunal at that stage, having regard to the provisions of the QCAT Act with respect to costs for minor debt claims, would have obviated the rights that might otherwise be recumbent in a party as a result of such offers. In my view, that is an important consideration which militates against the making of the order that her Honour made. Her Honour’s determination that the issue of costs is not a proper consideration for a court in determining whether to transfer a proceeding is in my view wrong, and to correct such a view and the identified error in relation to the court’s power under s 53 of QCAT Act, is a matter of sufficient public importance to justify my giving leave to appeal.

39. [39]
    In the circumstances, it is my view that this is an appropriate matter for granting leave to appeal.

Appeal

40. [40]
    In my view the factors I have earlier identified in relation to costs of the parties and their inability to ever recover them in the tribunal because of the provision of r 83 of QCAT Rules, the very late stage of the proceedings when the order was made, and the wish of both parties to have the matter decided in the Magistrates Court, are all factors strongly favouring the determination of the matter in that court.

41. [41]
    I should indicate that my determination should not be seen as an indication that parties can, by agreement, effectively bind the discretion a court must exercise in determining whether to transfer proceedings to the tribunal. If this application had been made at an earlier time in the proceedings, it is likely that my view would have been different.

Orders

42. [42]
    I make the orders earlier set out.