Marschke v Brace[2016] QMC 14

MAGISTRATES COURTS OF QUEENSLAND

1. [1]
   On 8 April 2016 I dismissed an originating application brought by the Applicant against the Respondent seeking the termination of the Respondent’s appointment as bailiff, and I dismissed an application brought in that originating application by the Respondent. Directions were made as to the filing and service of the submissions in relations to costs and the matter was relisted before me on the 17 June 2016 at which time the decision in relation to costs was reserved.

2. [2]
   At issue is whether a Magistrates Court that dismisses a proceeding as beyond jurisdiction, has jurisdiction to award costs in that proceeding.

3. [3]
   Both parties have provided written submissions. Neither party was able to identify any authority on point.

4. [4]
   It is not in dispute that the Magistrates Court is a creature of statute. Therefore any power to award costs must be statute based. The issue was considered by Judge McGill in Horne v Frank [2001] QDC 29. The court dismissed an appeal brought under section 222 of the Justices Act 1886 on the grounds that the appeal was incompetent and should be struck out. The court found that there was no valid appeal before the court.^[1] Judge McGill noted that the District Court, and the Magistrates Court, not being superior courts, only have such jurisdiction as is conferred on them, expressly or by implication, by statute. His Honour noted that prior to amendments made by the Civil Justice Reform Act 1998, section 12 of the Magistrates Court Act 1921 specifically empowered a Magistrates Court to award costs when a matter was brought before it beyond its jurisdiction. The explanatory memorandum to the Civil Justice Reform Act 1998 stated that section 12 was omitted to avoid any inconsistencies with Section 81 of the District Court Act. However, Judge McGill observed that there was no inconsistency given that section 81 of the District Court Act provides for removal of a matter to the District Court of a matter commenced in the Magistrates Court where the Magistrates Court was without a jurisdiction. His Honour did not consider that Rule 689 of the Uniform Civil Procedure Rules empowered the court to award costs where it had no jurisdiction to hear the substantive proceeding.  Rule 689 (1)  provided:

“Costs of a proceeding, including an application in a proceeding are in the discretion of the court but follow the event, unless the court considers another order is more appropriate.”

In this regard his Honour stated-

“the general power to award costs in R 689 does not expressly extend to costs in a matter where the jurisdiction of a court is not validly invoked; it speaks of ‘costs of a proceeding’’’.

“Costs of the proceeding” was defined in section 679 to mean “costs of all the issues in the proceeding and includes-

1. (a)
   costs ordered to be costs of the proceedings; and

1. (b)
   costs of complying with the necessary steps before starting the proceeding; and

1. (c)
   costs incurred before or after the start of the proceeding for successful or unsuccessful  negotiations for settlement of the dispute”.

5. [5]
   This definition remains unchanged although section 689 has been replaced by Rule 681 (1) which provides “costs of the proceeding, including an application in a proceeding are in the discretion of the court but follow the event unless the court orders otherwise ”.

6. [6]
   In his decision in Horne v Frank Judge McGill made no reference to Rule 679.

7. [7]
   Judge McGill found that in Queensland at the time of his decision there was no provision in either the District Court Act or the Uniform Civil Procedure Rules which conferred on the District Court a general power to award costs in matters where the court did not otherwise have jurisdiction. He accordingly found he had no jurisdiction to make a costs order in relation to the proceeding before him.

8. [8]
   Following that decision, the Magistrates Court Act 1921 was amended by the insertion of section 5A. That section specifically provided that if a Magistrates Court considered it did not have jurisdiction to hear and decide a proceeding started in the court the court may strike out the proceeding and order the party who started the proceeding to pay the costs of the other party to the proceeding. At the same time a similar provision, section 85(5 )was inserted into the District Court Act 1967.

9. [9]
   However both of those sections were repealed by the Civil Proceedings Act 2011. That Act applies to the Supreme, District and Magistrates Courts. Section 15 of that Act provides a court may award costs in all proceedings unless otherwise provided. Proceeding is defined in Schedule 1 to mean “a proceeding in a court (whether or not between parties, and includes-

1. (a)
   an incidental proceeding in the course of, or in connection with, a proceeding; and

1. (b)
   an appeal or stated case”

10. [10]
    The Explanatory notes for the Act state that section 15 confers a general power to award costs where no other power is provided. It is also stated to be based on section 221 of the Supreme Court Act 1995.

11. [11]
    However, section 221 of the Supreme Court Act 1995 which applied only to the Supreme Court was in much broader terms. It provided “the Supreme Court shall have power to award costs in all cases brought before it and not provided for otherwise than by this section”.

12. [12]
    In the explanatory memorandum to the Civil Proceedings Act 2011, in referencing the repeal of section 85(5) of the District Court Act 1967 and section 5A of the Magistrates Court Act 1921, states that the Act repeals the division dealing with removal of actions which has been superceded by Part 4 of the Bill. However Part 4 of the Bill deals only with transferring matters to another court if the transferring court is without jurisdiction. The provisions relating to the power to award costs where the matter is struck out with jurisdiction is not replaced or repeated. In light of the explanatory memorandum it would appear that the omission of the power of both the Magistrates Court and the District Court specifically to award costs in a proceeding struck out for want of jurisdiction has been either inadvertently omitted, or were considered unnecessary given the provisions of section 15 of the Civil Proceedings Act 2011.

13. [13]
    The issue then is whether section 15 of the Civil Proceedings Act 2011 in combination with Rules 679 and Rule 681 of the Uniform Civil Procedure Rules empower the court to award costs in respect of a matter struck out for want of a jurisdiction.

14. [14]
    The decision in Horne v Frank [2001] QDC 29 was considered with approval by the Supreme Court of New South Wales in Wolinski v Hia Insurance [2003] NSWSC 475. In that case the Supreme Court was considering the cost provisions of the Fair Trading Tribunal Act of New South Wales(FTTA). Section 48 of the Act made provision in relation to costs. Section 48(6) stated in this section, “costs”, includes;

1. (a)
   costs of or incidental to proceedings in the tribunal, and

2. (b)
   the costs of or incidental to the application.

15. [15]
    Master Harrison noted that there was no specific mention in the costs provisions of a power to award costs where the Tribunal lacked jurisdiction. He stated-

“However, pursuant to Section 48 (6) the Tribunal may award “costs of, or incidental to proceedings” or “costs of or incidental to the application”. This provision appears to be the basis of power for the award of costs by the Tribunal where it is without jurisdiction. As noted by McGill DCJ in Horne at Para 36, where a power to award costs is granted to a court by statute it must be conferred expressly. However, it can also be granted by necessary implication, although in this instance the existence of the power must clearly appear.”

16. [16]
    He then referred to the decisions in Re Crittenden;Ex Parte the Law Institute of Victoria [1958] VR 101 and Perkins v Count Court of Victoria and Ors [2000] 2 VR 246 . In Re Crittenden; Ex Parte the Law Institute of Victoria the Supreme Court of Victoria was concerned with its power to award costs in a matter where it was without jurisdiction .Section 32(1) of the Supreme Court Act 1928 relevantly provided “the costs of and incidental to all proceedings in the court … shall be in the discretion of the court or judge and the court or judge shall have full power to determine by whom and to what extent costs are to be paid.”

17. [17]
    Lowe J found the matter before him could be characterised as a “proceeding” and he therefore had power to award costs.

18. [18]
    In Perkins v Count Court of Victoria and Ors the costs enabling provision relied upon was in these terms:

“Unless otherwise provided by this or any other Act or by the Rules, the costs of and incidental to all matters in the court, including the administration of estates and trusts, is in the discretion of the court and the court has full power to determine by whom and to what extend the costs are to be paid.”

19. [19]
    Master Harrison stated “ the provisions dealt with in Re Crittendon and Perkins which refer to “costs of and incidental to” are similar to section 48(5) of the FTT which provided that the Tribunal may determine “by whom and to what extent costs are to be paid”. Section 48 (6) (a) and section 48 (6) (b) further defines costs as those “of or incidental to proceedings in the Tribunal”, and “the costs of or incidental to the application”. By analogy, Section 48(5) and Section 48(6)(a) and Section 48(6)(b) confer upon the Tribunal a general power to award costs where the Tribunal is without jurisdiction… the language of Section 48(5) and Section 48(6)(a) and Section 48 (6)(b) conveys a clear indication of an intention to confer a power to award costs and sets out a power to award costs incidental to an application to the Tribunal. By necessary implication the provision is broad enough to be a source of power for the award of costs where the Tribunal is without jurisdiction.”

20. [20]
    When one considers the combined effect of Section 15 of the Civil Proceedings Act (2001), and Rules 679 and 681 of the Uniform Civil Procedure Rules, the court has power to award costs in respect of all of the issues in the proceeding before it, including an incidental proceeding in the course of, or in connection with, a proceeding.

21. [21]
    One of the issues in the proceeding before me was whether the proceeding was properly constituted. I find that by virtue of section 15 of the Civil Proceedings Act (2001) and Rules 679 and 681 of the Uniform Civil Procedure Rules that the court has power to make an award of costs in circumstances where the court is without jurisdiction to hear the substantive proceeding.

22. [22]
    The Applicant contends that as I found the application to remove a bailiff was not a civil proceeding the Uniform Civil Procedure Rules do not apply.

23. [23]
    What I found was that the application was not properly constituted because the relief sought could not be the subject of a civil proceeding^[2] However one of the issues to be decided in the proceeding brought before me was the nature of the proceeding and the court’s jurisdiction to entertain it. In the circumstances I consider that to be an issue in connection with and incidental to the application.

24. [24]
    Accordingly, I find that I have power to award costs in respect of the application.

25. [25]
    The Respondent in its submissions seeks costs fixed in the sum of $4,500 or alternatively to be assessed on a standard basis. The Respondent was not able to advance any basis for the calculation of the costs claimed.

26. [26]
    The Applicant contended that notwithstanding that the Applicant chose an incorrect forum in which to seek relief, the Respondent would have been put to the same costs had the Applicant made an administrative application to the court for the Respondent’s removal. I am however concerned that in purporting to invoke the court’s jurisdiction the costs to which the Respondent has been put are significantly greater than would have been the case had the Applicant proceeded by way of administrative application.

27. [27]
    I note that the voluminous material has been filed on the part of the Applicant in support of the application

28. [28]
    Schedule 3 of the Uniform Civil Procedure Rules 1999 outlines costs payable in proceedings before the Magistrates Court.

29. [29]
    For proceedings involving claims between $20,000 and $50,000 the amount allowable for instructions to defend is $1,154.

30. [30]
    Taking into account the nature of the proceeding, and the material that was required to be considered by the Respondent in response to the application I consider an amount of $1,500 a reasonable amount for costs thrown away by reason of the application.

31. [31]
    In the circumstances I order the Applicant pay the Respondent’s costs of the application fixed in the sum of $1,500.