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Van der Merwe v Flynn Street Qld Pty Ltd[2024] QMC 15

Van der Merwe v Flynn Street Qld Pty Ltd[2024] QMC 15

MAGISTRATES COURTS OF QUEENSLAND

CITATION:

Van der Merwe v Flynn Street Qld Pty Ltd [2024] QMC 15

PARTIES:

NICOLE VAN DER MERWE

v

FLYNN STREET QLD PTY LTD

FILE NO/S:

M2730/23

DIVISION:

Civil

PROCEEDING

Application for summary judgment filed 13 March 2024

Amended application filed 11 June 2024

ORIGINATING COURT:

Brisbane Magistrates Court

DELIVERED ON:

9 August 2024

DELIVERED AT:

Brisbane

HEARING DATE:

14 June 2024

MAGISTRATE:

A/Magistrate Janelle (Payne) Boegheim

ORDER:

  1. 1.The defendant does not have leave to use the Affidavit of Mr R B WAGNER sworn 19 June 2024 or the Affidavit of S V DAVEY sworn 18 June 2024 (“the Post-Hearing Affidavits”).
  2. 2.No order as to costs:
  1. (a)
    of and incidental to the plaintiff’s Application filed 13 March 2024, amended on 11 June 2024 and further amended on 14 June 2024;
  2. (b)
    thrown away as a result of the plaintiff’s filing of the Amended Statement of Claim or the defendant’s filing of the Amended Defence;
  3. (c)
    of and incidental to the Post-Hearing Affidavits and the parties’ correspondence to the registry in relation to the Post-Hearing Affidavits.
  1. 3.Unless the whole of proceedings are resolved by prior, the parties are directed to attend a settlement conference before a registrar of the Magistrates Court under Chapter 13, Part 9, Division 3 of the Uniform Civil Procedure Rules 1999 (Qld), on the first available date suitable to the registrar and the parties, and prior to any trial date being set.
  2. 4.If the matter does not resolve at or after the settlement conference:
  1. (a)
    prior to signing any Request for Trial Date, legal representatives for the parties are  directed to seek to confer in relation to proposed directions for an orderly trial;
  2. (b)
    if parties agree on directions in writing, they may file such consent and a draft order in the registry; and the Registrar may refer such consent to any magistrate, for consideration on the papers.

CATCHWORDS:

PROCEDURE – CIVIL PROCEEDINGS – filing of material post-hearing without leave, whether leave should be granted.

PROCEDURE – CIVIL PROCEEDINGS IN MAGISTRATES COURTS – COSTS – GENERAL RULE: COSTS FOLLOW EVENT – GENERAL PRINCIPLES AND EXERCISE OF DISCRETION – costs where defence amended after application for summary judgment and strike out filed – costs where application amended and then further relief withdrawn – Costs where no determination on merits – Costs where ultimate successor in litigation not known – where the plaintiff applies for its costs on either the indemnity or standard basis – where the defendant applies for costs – whether costs should follow the event

PRACTICE AND PROCEDURE – amendment of interlocutory application or application in a proceeding that is not an interlocutory process.

Uniform Civil Procedure Rules 1999 (Qld), rr 307, 375, 378, 386, 681.

Carr v Finance Corporation of Australia Limited (No 1) (1981) 147 CLR 246; [1981] HCA 20

Cape York Airlines Pty Ltd v QBE Insurance (Australia) Ltd [2008] QSC 302

Grace v Peter [2024] QSC 69

Green v Pearson [2014] QCA 110

Mbuzi v Hall & Ors [2010] QCA 356 at [16]

National Australia Bank Limited v Bluanya Pty Ltd & Anor (No 2) [2018] QSC 93

Queensland Rail v Amaca (No 2) [2011] QSC 317.

Stubberfield v Lippiatt & Co [2003] QDC 034

COUNSEL

L Brabazzon of Counsel for the defendant

SOLICITORS

Lovel, JA (sol), Lovels for the plaintiff

Leora Rose Law for the defendant

Issue

  1. [1]
    Both parties are unable to resolve costs of the plaintiff’s Application, filed 13 March 2024, initially for summary judgment and to strike-out the Defence, as then filed (“the Initial Application”), but amended on 11 June 2024 to instead seek a determination under s 42C Magistrates Court Act as to whether the matter was an employment claim (“the Amended Application”).  I am asked to decide costs in circumstances where the defendant substantially amended its Defence after the filing of the summary judgment application, the plaintiff subsequently amended its application to abandon this relief, the plaintiff then sought additional relief, which it abandoned on the morning of the hearing, and there has been no determination on the merits.
  2. [2]
    Both sides say I should order costs against the other; the plaintiff seeks costs on either the indemnity or standard basis; the defendant on the standard basis.[1]

Parties’ material

  1. [3]
    Both the plaintiff’s solicitor and the defendant’s counsel furnished the court with written submissions; and oral submissions were heard on 14 June 2024.
  2. [4]
    In its Outline of Argument filed and exchanged prior to the hearing, the plaintiff sought costs of the relief sought in Initial Application, on the indemnity basis:
  1. (a)
    contending that the defendant has acted unreasonably by filing a defence containing bare denials – and then amending that defence purporting to withdraw admissions and deemed admissions without seeking leave of the Court;
  2. (b)
    contending that the defendant has failed to engage in communication to define the issues generally in dispute;
  3. (c)
    contending that the defendant is inappropriately seeking its costs thrown away when the cause of the costs thrown away is the defendant’s own conduct;
  4. (d)
    contending that the defendant ought to have accepted an offer to settle the application on the basis that the defendant pay costs on the standard basis or fixed at $1,000.
  1. [5]
    The plaintiff furnished the court with oral submissions in relation to costs of the Amended Application.
  2. [6]
    The written submissions for the defendant did not specifically address costs in relation to either application but rather the substance of the Amended Application. I heard orally from the defendant’s Counsel in relation to costs of both applications.
  3. [7]
    Because of the busy civil applications list on 14 June 2024, I reserved my decision in relation to costs. It was not submitted that the defendant would put on any further material.
  4. [8]
    After I heard submissions in relation to costs and reserved my decision on 14 June 2024, the defendant’s solicitor appears to have filed two affidavits both sworn days after the hearing; one of the principal of the defendant, Ms Davey, on 18 June 2024 and one of the defendant’s solicitor sworn,19 June 2024 (both filed at the counter on 19 June 2024) (the Post-Hearing Affidavits).
  5. [9]
    I had not granted leave to file the Post Hearing Affidavits nor did the defendant’s Counsel request such leave at the hearing.
  6. [10]
    The filing of the material without an application for, and grant of leave, was highly irregular. It would be open to me to simply disregard it but out of fairness to the defendant, I wished to ensure that the defendant did not misapprehend that leave at been granted. I asked the registry to clarify with the defendant the basis upon which the Post-Hearing Affidavits had been filed.
  7. [11]
    In response, the defendant’s Counsel wrote to the registry ‘to explain the filing of the affidavits’ but did not expressly seek leave to use the material. There seemed to be a fundamental misconception by the defendant that it had an automatic right to put on responsive evidence after the hearing had closed.
  8. [12]
    As the High Court and intermediate appellate courts have made abundantly clear, the hearing is the time and place to present evidence and argument. After the conclusion of oral argument, a parry may not file supplementary written material without leave having been given beforehand and leave is not readily given.[2] This is so, even if the parties consent.[3]
  9. [13]
    Despite the lack of formal application or request for leave, and before considering prejudice to the plaintiff, I have considered whether the threshold for granting leave has otherwise been met, that is:
  • there is an exceptional circumstance warranting leave not having been dealt with in the course of the hearing;
  • the material would assist in resolving the real issues in dispute.[4]
  1. [14]
    The defendant’s Counsel submitted that the defendant did not appreciate at the hearing that the plaintiff was seeking costs in relation to the application for summary judgment as that relief was not being pressed.
  2. [15]
    I disagree with that casting of what occurred at the hearing. The whole of the plaintiff’s written submission went to costs of summary judgment/strike-out relief; the plaintiff’s oral submissions went to costs all forms of relief. Further, I had the following exchange with the defendant’s Counsel who made oral application for costs of both aspects of the application:

HER HONOUR: And, Mr Brabazon, you’re pressing for costs?

MS BRABAZON: Thank you, your Honour. Yes. We are. We are pressing for costs, and that’s not in my written submissions.

HER HONOUR: Okay.

MS BRABAZON: They were purely directed at the employment claim issue.

HER HONOUR: So you’re resisting their application for costs and pressing that they pay your costs.

MS BRABAZON: Yes. Indeed. And we are pressing that they pay our costs on a fixed basis – – –

HER HONOUR: And on what – – –

MS BRABAZON: – – – in the sum – – –

HER HONOUR: – – – basis are you seeking costs?

MS BRABAZON: On the basis that the plaintiff has withdrawn the summary judgment strike-out application. The defendant, obviously, spent costs preparing for that, and that was – that was adjourned already because the plaintiff did not file its evidence in time in contravention of rule 296. So we had already had an adjournment.

We then – the defendant, then, put on evidence in support of its case in the summary judgment and strike-out application. We, then, received only on Tuesday this amended application, which your Honour has before you, which has, now, also been withdrawn, and the defendant has spent costs in preparing for that application that was – that 1(a) was withdrawn.

  1. [16]
    At the outset of the hearing, I granted the plaintiff leave to read and file an Affidavit in relation to costs. That Affidavit went to the issue of costs of both aspects of the application. Defendant’s Counsel neither objected to the Affidavit nor mentioned the need to put in any material in response. I also proposed standing the matter down to later in the afternoon to read the material and submissions but both parties were content for me to reserve my decision and make it on the material before me. In the following exchange with the Defendant’s counsel, the only issue raised with that course, was the need for trial directions to progress the matter:

HER HONOUR: Mr Brabazon, how do you say best to deal with it?

MS BRABAZON: I’m in your Honour’s hands. Whatever is most suitable. There is one point, which is the defendant would like to seek some orders as to the forward continuance of the matter today, if possible.

HER HONOUR: Yes. I would like to work out a way forward after this. It is also Friday, and if I try and bring it back this afternoon, we’re going to run out of time, given the – but if I reserve the decision in relation to costs, and then when that decision is delivered, then can be further directions made to – – –

MR LOVEL: Yes, your Honour.

HER HONOUR: – – – by myself or another magistrate for getting the matter – – –

MR LOVEL: Possibly – – –

HER HONOUR: – – – moving.”

  1. [17]
    From looking at the Post-Hearing Affidavits, I cannot identify anything that would assist me in resolving the costs issue before me. I am also not satisfied there are exceptional circumstances. Allowing the material at this late stage, would require me give the plaintiff the opportunity to put on any further material and to relist the application for further hearing, further taking up the court’s time and resources in relation to a costs argument concerning a $5,000 claim.
  2. [18]
    The Affidavit of the plaintiff’s solicitor attached relevant correspondence in relation to costs. It is usual for affidavits in relation to costs to be exchanged at the hearing. Even then none of the correspondence, none of it greatly affects the outcome, which primarily falls on the pleadings and applications as filed.
  3. [19]
    The defendant does not have leave read the Affidavit of the Ryley Brockett Wagner sworn 19 June 2024, in relation to costs.
  4. [20]
    I also do not grant leave for the defendant to rely on the Affidavit of Ms S L Davey as it goes to the merits of the summary judgment application. It would be inappropriate and contrary Ex parte Lai Qin (1997) 186 CLR 622 for me to embark upon a determination of what would have been the outcome had the matter proceeded to a hearing. I disregard this Affidavit as it is irrelevant.

Background

  1. [21]
    The plaintiff is a real estate sales associate who, by a Claim filed and served on 22 December 2023, claims she is owed $5,025, being a share of commissions her principal, Mr Darren Davey, allegedly received with respect to two units at Labrador, that settled on 24 July 2023. The plaintiff contends she introduced the vendor and is entitled to 25% share of the commission.
  2. [22]
    On 11 January 2024, the defendant’s solicitor wrote to the plaintiff’s solicitor under r 444 Chapter 11, Part 8, Rule 444 of the Uniform Civil Procedure Rules 1999 (UCPR) requesting the plaintiff discontinue the Claim, alleging it did not show that the Magistrates Court had jurisdiction under Rule 22(c) UCPR; and did not comply with the Dispute Resolution provisions in the Employment Agreement.

Defence filed 31 January 2024

  1. [23]
    On 31 January 2024, the defendant filed a notice of intention to defend and defence.
  2. [24]
    In response to the Statement of Claim, the Defence:
  1. (a)
    admits the allegations in paragraphs 1, 2, 3 and 4 of the Defence;
  2. (b)
    pleads non-admissions in relation to paragraph 6, 8(b), 10-14 of the Statement of Claim, with reasons given as to why the allegations were not within the Defendant’s present means of knowledge;
  3. (c)
    in response to paragraph 9 of the Statement of Claim, denies that a demand was made for payment or the defendant was indebted to the plaintiff but provides no reason for the denial.
  1. [25]
    In Paragraph 5 of the Statement of Claim, it was pleaded:
  1. “5.On 2 May 2023, the Plaintiff and the Defendant agreed that the Defendant would the Plaintiff a share of the Defendant’s commissions on completed property sales at a rate corresponding wit the following circumstances:
  1. (a)
    where a property was listed for sale and sold by Mr Davey: 15% of the Defendant’s commission for the sale of that property; and
  2. (b)
    where the Plaintiff introduced a property listed for sale by Mr Davey, and that property was sold by Mr Davey: 25% of the Defendant’s commission for the sale of that property.”
  1. [26]
    In response to paragraph 5 of the Statement of Claim, paragraph 5 of the Defence pleads:
  1. “5.As to paragraph 5 of the statement of claim, the Defendant:
  1. (a)
    Admits that the Plaintiff and the Defendant had an agreement where the Defendant would pay the Plaintiff a share of commissions received for the settlement of the property whilst employed by the Defendant;
  2. (b)
    Denies that the commissions were payable for the sale of a property, however, states that such commission was only payable upon settlement of property whilst employed;
  3. (c)
    Denies that 15% commission was payable to the Plaintiff for properties listed for sale and sold by Mr Davey;
  4. (d)
    Denies that 25% commission was payable to the Defendanbt for properties introduced to Mr Davey by the Plaintiff and sold by Mr Davey

Particulars

On 3 May 2023, the Defendant agreed in writing that commission would be paid on settled propertied (sic) listed and sold by Mr Davey from 2 May 2023.”

  1. [27]
    On 23 February 2024, the defendant’s solicitor requested further and better particulars. Whilst the plaintiff cavilled with the necessity of the request, it provided Further and Better Particulars on 22 April 2024.
  2. [28]
    Meanwhile, on 13 March 2024, the plaintiff cast a die and filed the Initial Application for summary judgment, alternatively to strike out the defence, contending that no reasonable defence was disclosed.
  3. [29]
    On 29 April 2024, the plaintiff’s solicitor wrote to the Defendant’s solicitor alleging deemed admissions and asking the defendant to consent to judgment.
  4. [30]
    On 3 May 2024, the plaintiff filed a further Affidavit in relation to the Initial Application. On 7 May 2024, the plaintiff’s solicitor proposed an adjournment of the Initial Application if the defendant required additional time to consider and respond to the Affidavit, which was agreed.
  5. [31]
    In response, the defendant asked the plaintiff to withdraw the Initial Application, alleging contested factual issues being whether Unit 1 and 2 were settled when the plaintiff ceased her employment. However, by the pleadings – and as pointed out by the defendant’s solicitor in a letter of 7 May 2024, it was common ground between the parties that Unit 1 and Unit 2 settled on 24 July 2023 (paragraph 5(a) of the Defence); the only contest was construction of the terms of the commission agreement; and whether the plaintiff was entitled to commission.
  6. [32]
    The plaintiff did not agree to withdraw the Initial Application.
  7. [33]
    On 10 May 2024, the defendant filed evidence in reply to the Application for summary judgment.
  8. [34]
    By consent (and order of the registrar), the hearing listed for 10 May 2024 was adjourned to 14 June 2024. The terms of the consent are silent as to costs.
  9. [35]
    On 29 May 2024, the plaintiff filed an Amended Statement of Claim, with very minor amendments.
  10. [36]
    On 7 June 2024, the defendant filed an Amended Defence with substantial amendments, including new paragraphs 4(a) to (k), amended paragraphs 5 and 9 to remedy the previously bare denials; pleas instead of non-admissions in paragraphs 6 and 8, additional pleadings in paragraphs and 10 and fulsome denials instead of non-admissions in relation to paragraphs 10 to 14 of the Statement of Claim.
  11. [37]
    I do not accept the defendant’s contention that the comprehensive amendments to the Amended Defence were necessitated by the Amended Statement of Claim.
  12. [38]
    On 10 June 2024, the defendant provided an unsealed copy of its Amended Defence.
  13. [39]
    On 11 June 2024 at 9.18am, the Plaintiff’s solicitor wrote:

“My client no longer presses for summary judgment or strike out of the defence.

That being said, my client will not require an adjournment and will proceed with the hearing.

I will serve you with an amended application later today.”

  1. [40]
    The same day, 11 June 2024, at 1.22pm, the defendant replied that it would agree to the application for summary judgment being dismissed by consent, only if the plaintiff pay the defendant’s costs thrown away.
  2. [41]
    On 12 June 2024 at 9.08pm, the plaintiff asked for its costs of the summary judgment application up to 10 June 2024, fixed in the sum of $1,000.
  3. [42]
    In an email dated 12 June 2024, the defendant replied:

“We reserve our submissions to the application served yesterday to Friday’s hearing. There are evidential matters that your client is to prove as part of the application, which we are yet to be informed.

In the circumstances that your client is withdrawing its summary judgment application, the Defendant is entitled for its costs wasted in preparing for that application. The Defendant filed its defence after the Plaintiff’s amended claim.”

The Amended Application

  1. [43]
    On 11 June 2024, the plaintiff filed a document headed Amended Application. The relief sought in the Initial Application, except in relation to costs, was struck through. Instead, by way of paragraph 1A of the Amended Application, the plaintiff instead asked the Court to decide, under s 42C Magistrates Court Act, whether the claim made in the proceeding is or is not an employment claim.  Curiously, the plaintiff did not express a particular view.
  2. [44]
    The plaintiff contended that it was entitled to amend the interlocutory application as of right under rule 378.
  3. [45]
    In Stubberfield v Lippiatt & Co [2003] QDC 034 at [19]-[24], Samios J took a restrictive view and was satisfied that r 378 did not apply to permit amendment of an application in a proceeding. His Honour noted:

“Rule 378 provides that the amendments to be made are amendments for which leave of the court is not required under the rules. There is no rule that permits amendments to be made to an application without leave of the court. Rule 375(1) provides that the court may allow or direct a party to amend an application. In my opinion r. 378 did not permit [the applicant] to file the amended application. However, that does not mean he could not apply to the court for leave to amend the application, or, for that matter, file another application… It seems to me the debate about the amended application has arisen because it has been described as an amended application and contains an endorsement that it was filed pursuant to r. 378.”

  1. [46]
    However, the subsequent decision of the Court of Appeal in Mbuzi v Hall & Ors [2010] QCA 356 at [16][5] indicates the plaintiff’s amendment was properly made.
  2. [47]
    In any case, the defendant did not apply to disallow the amendment under r 379 or ask me to declare it ineffectual under r 371 UCPR
  3. [48]
    However, the approach taken by the plaintiff, in amending its initial Application under r 378, rather than seeking leave under r 375 (when I could make an order I considered appropriate) potentially means:
  1. (a)
    there was no application for summary judgment still before me, on which I could consider awarding the plaintiff costs.[6]
  2. (b)
    the effect of  r 386 UCPR is to potentially render the plaintiff liable to pay costs thrown away as a result of the amendment, including the defendant’s costs of preparing for the summary judgment application.
  1. [49]
    At the hearing, I then allowed the defendant to discontinue the relief in paragraph 1A of the Amended Application, under r 375(1) UCPR and the general right to withdraw or discontinue relief. The order also noted that the Plaintiff had earlier withdrawn the relief in paragraph 1 (but, for clarity, should have also referred to paragraph 3) and reserved the question of costs in relation to all relief.

The alleged deemed admissions

  1. [50]
    The plaintiff effectively contends that there were deemed admissions in the pleading, which were so egregious that, up to the filing of the Amended Defence at least, there was no need for a trial of the claim and judgment would have likely followed under Rule 292 UCPR.
  2. [51]
    Notably, the plaintiff did not apply for judgment based on admissions under Rule 190 UCPR.[7]
  3. [52]
    Pleadings are a tenet of the UCPR; their purpose is to inform the parties of the case they have to meet; and the Court as to the factual and legal issues it is asked to decide.
  4. [53]
    Rule 166 UCPR relevantly provides:
  1. (4)
    A party’s denial or non-admission of an allegation of fact must be accompanied by a direct explanation for the party’s belief that the allegation is untrue or can not be admitted.
  2. (5)
    If a party’s denial or non-admission of an allegation does not comply with subrule (4), the party is taken to have admitted the allegation.

…

  1. (7)
    A denial contained in the same paragraph as other denials is sufficient if it is a specific denial of the allegation in response to which it is pleaded.
  1. [54]
    It is only the denials in the initial Defence that are relevant here; in relation to the non-admissions, reasons are given.
  2. [55]
    Provisions which deal with non- admissions and denials in r 166 were the subject of "convincing analysis" by Daubney J in Cape York Airlines Pty Ltd v QBE Insurance (Australia) Ltd,  with his Honour holding as follows (paraphrasing):
  1. (a)
    the scheme of pleading provided for under the Rules meant that a party might only plead a denial of an allegation of fact made by its opponent if the party believed that allegation to be untrue, and a non-admission could only be pleaded when a party was uncertain as to the truth or falsity of the allegation of fact being responded to. [21]-[22];
  2. (b)
    Rule 166(4) was to be read disjunctively so as to require a party's denial of an allegation of fact to be accompanied by a direct explanation for the party's belief that the allegation was untrue, and a party's non-admission of an allegation of fact to be accompanied by a direct explanation for the party's belief that the allegation could not be admitted. [22];
  3. (c)
    That the reference in r 166(4) to a "direct explanation" was to be read literally so as to require an exposition of the party's rationale for its belief. [27];
  4. (d)
    That such an explanation was not a statement of a material fact for the purposes of r 149 of the Rules. However, the nature of the explanation might compel the party to plead, in compliance with r 149, the material facts on which it would rely to controvert the allegation, or other matters to prevent the opponent being taken by surprise. [29].
  1. [56]
    Sometimes, it may be assumed that 28 days or thereabouts is not enough time to find out whether many of the allegations contained in the statement of claim against the respondent were true or untrue. For example in Green v Pearson [2014] QCA 110, the proceedings were brought long after the relevant events and the defendant was a former employee without access to books and records.  Here, however, the defendant is the real estate agency that, it alleges, caused the settlement of the contracts, so was in a position to make inquiries.
  2. [57]
    Without deciding the question, I am not sure that the denial in paragraph 2(d) of defence was not accompanied by a direct explanation in breach of rule 166(4) and therefore were deemed admissions.[8] It may have been better expressed but in paragraph 2(b) of the Defence, if the word ‘however’, was read as ‘instead’, it was clear that the defendant denies the allegations because (it alleged commission) was only payable upon settlement of the sale of the property if the defendant was still employed at the time.  The particulars given identified a letter of 3 May 2023.
  3. [58]
    That of course does not mean that parts of the Defence were liable to be struck out for other reasons, including because of failing to plead in accordance with Rule 149 of the Rules but an application due to failure to comply with the Rules would usually require a letter under r 444 UCPR. Those deficiencies may (and I do not decide the question) have been remedied by the Amended Defence.
  4. [59]
    The question of deemed admissions is not one I am asked to decide; it will now only arise if the plaintiff contends that, notwithstanding the Amended Defence, the defendant is restricted in asking for disclosure or calling evidence in relation to the issue at trial.

Section 42C(1) Magistrates Court Act 1921 (Qld)

  1. [60]
    In written submissions filed in response, Counsel for the Defendant opposed the relief sought in the Amended Application on the basis that the plaintiff did not start a proceeding under 5A Magistrates Court Act 1921, which would require filing of a Form 2A – Employment Claim (relying on rule 522C of the Uniform Civil Procedure Rules 1999 (Qld) and give the parties the benefit of a conciliation process (42F to 42H of the Magistrates Court Act 1921).  – For completeness, I note that such any conciliation would be suspended pending determination of the s 42C application.[9]
  2. [61]
    The Amended Application was also not pressed at the hearing on 14 June 2024, it being conceded by the parties, at least for now, that the claim was not brought as an employment claim.
  3. [62]
    Whether the matter could have, or should have, been brought as an employment claim under s 42C(1) Magistrates Court Act 1921 (Qld) is an interesting question but one that I am not asked to decide at this point of the proceeding.
  4. [63]
    An employment claim is defined in s 42B Magistrates Courts Act 1921 (Qld) as one commenced under Part 5A of the Magistrates Courts Act.[10] Section 42B provides:

This part applies to a claim (an "employment claim")—

  1. (a)
    made in a proceeding started under this part by a person—
  1. (i)
    who is or was an employee of an employer; and
  2. (ii)
    whose annual wages at the time the breach of contract mentioned in paragraph (b) happened are less than the amount of the high income threshold under the Fair Work Act 2009 (Cwlth) , section 333;[11] and
  1. (b)
    arising out of a breach of a contract of employment between the employee and employer.
  1. (2)
    However, a claim is not an employment claim if the cause of action to which the claim relates is within the jurisdiction of the industrial relations commission.
  2. (3)
    A claim under the Fair Work Act 2009 (Cwlth) , section 539 is not an employment claim.
  1. [64]
    An employment claim does not include a claim under s 539 Fair Work Act 2009 (Cwlth)[12], for example one by a prior sector employee alleging contravention of the national employment standards. Whilst the plaintiff is an employee, she is claiming commission not wages.
  2. [65]
    The object of Part 5A is to reduce the cost of proceedings brought in a Magistrates Court by low income employees against employers for breaches of contracts of employment. As set out in section 42A, the object is achieved by—
  1. (a)
    prescribing, under section 54 , lower court fees for the proceedings; and
  2. (b)
    providing for awards of costs in limited circumstances; and
  3. (c)
    allowing parties to be represented, without leave, by relevant organisations [in addition to the rights of appearance by a lawyer or a party under s 18 Magistrates Court Act 1921); and
  4. (d)
    providing for compulsory conciliation before the hearing of the proceedings.
  1. [66]
    To bring an employment claim, the plaintiff must file and serve an employment claim in the approved form (Form 2A);[13] and the same requirements for a Claim (set out in Chapter 2, Part 3) apply.[14] A defendant to an employment claim would use Form 6A but otherwise the forms used are the UCPR forms.
  2. [67]
    If the claim is an employment claim, parties are referred to conciliation. By Rule 552N, the following rules are excluded:
  1. (a)
    chapter 6 (pleadings);
  2. (b)
    chapter 7, part 2, division 2 (disclosure by parties);
  3. (c)
    chapter 9, parts 2 (summary judgment and 4 (alternative dispute resolution);
  4. (d)
    chapter 13, parts 2 to 6 (trial procedure).
  1. [68]
    I recite the above not to decide whether the Claim is or is an employment claim but is relevant to note that if the matter were an employment claim, the provisions upon the plaintiff relies in relation to summary judgment and deemed admissions would not apply.
  2. [69]
    The defendant strongly submits the matter is not an employment claim, vis a vis, it has been commenced in the proper forum under the general civil jurisdiction of the Magistrates Courts.[15]  If the plaintiff’s claim pertains to a breach of contract of employment, it might be one that can be prosecuted in various jurisdictions or means. There might be various reasons why a particular forum is more appropriate or preferred (e.g. high income threshold, issues of representation, costs or another relevant factor).
  3. [70]
    For example, in the ordinary civil jurisdiction of the Magistrates Court, even if the claim is for less than $25,000, the simplified procedures under 514 UCPR might not apply if the claim is a minor civil dispute that could have been commenced in QCAT).[16]
  4. [71]
    There is currently no application before me under s 42C Magistrates Court Act nor is any party seeking an order that the proceeding continue as if started as employment claim.
  5. [72]
    Had the matter been brought as an employment claim under s 42ZC of the Magistrates Court Act 1921, as a Fair Work Claim in the Industrial Magistrates Court jurisdiction or as a minor debt claim in the Queensland Civil Administrative Tribunal, there would generally be no award as to costs. That may be a relevant consideration in relation to costs even in this jurisdiction,[17] at least at this early stage.

Principles in relation to costs

  1. [73]
    The general rule is to be found in Rule 681 UCPR, which provides that the costs of a proceeding, including an application in the proceeding, are in the discretion of the court but follow the event unless the court orders otherwise.
  2. [74]
    Rule 368 also provides:

“The costs thrown away as a result of an amendment made under rule 378 are to be paid by the party making the amendment unless the court orders otherwise”.

  1. [75]
    Rule 368 relates to both the costs thrown away by the filing of the Amended Defence and to the costs of amending the Application on 11 June 2024 (as the plaintiff submits it had an unqualified right to amend the application under that provision).
  2. [76]
    A party who has brought any proceeding has the right to withdraw it, subject to any limitation of that right imposed by statute, such as a requirement for leave.[18]  However, the effect may be that the application was no longer before the court, and there is no power to award costs.[19] I do not think the fact that the plaintiff has amended its application or was granted leave to withdraw certain relief avoids this fate; it just falls to me to decide what costs order is appropriate under rules 375 or 378 respectively.
  3. [77]
    Relevantly, Chapter 9, Part 3, of the UCPR, including rule 307 UCPR, applies to discontinuance or withdrawal of all or part of a proceeding but not relief sought in an application in a proceeding. If r 307 UCPR had applied, I would still have given leave and it would still expressly fall to me to make the costs order I consider appropriate (rule 307(2) UCPR).
  4. [78]
    Since the applications did not proceed to a determination on the merits, the proper exercise of the cost discretion will usually mean that the court will make no order as to the cost of the proceedings, if it appears that both parties have acted reasonably in commencing and defending the proceedings and the conduct of the parties continued to be reasonable until the litigation was settled or its further prosecution became futile: Re Minister for Immigration & Ethnic Affairs; ex parte Lai Qin (1997) 186 CLR 622 at 624–5).[20] (Lai Qin). As stated by McHugh JA:

“The court cannot try a hypothetical action between the parties. To do so would burden the parties with the costs of a litigated action which by settlement or extra-curial action they had avoided”

  1. [79]
    As was noted by Boddice J in Queensland Rail v Amaca (No 2) [2011] QSC 317 (‘Amaca”) at [6]:

“The awarding of costs is discretionary. There are many circumstances to be weighed in the exercise of that discretion. In Oshlack v Richmond River Council,[21], McHugh J, in the context of a discussion about the basis on which costs are awarded and the statutory power to award costs said -

"Although the discretion is broadly stated, it is not unqualified. It clearly cannot be exercised capriciously. Importantly, the discretion must be exercised judicially in accordance with established principle and factors directly connected with the litigation… By far the most important factor which courts have viewed as guiding the exercise of the costs discretion is the result of the litigation. The successful litigant is generally entitled to an award of costs."

  1. [80]
    In relation to summary judgment application before his Honour, Justice Boddice relied on the reasoning of Justice Muir in State of Queensland v Nixon [2002] QSC 296, in which Justice Muir had said:
  1. [6]
    The position in relation to summary judgment applications though, as r 299(1) recognises, is somewhat different. Such an application may fail even though that applicant may have good prospects of ultimately succeeding in the action. The party seeking to resist the application may rely on evidence which may not be accepted on the final hearing and the applicant may be obliged to proceed on the basis that the respondent’s version of the facts be accepted for the purposes of the application.
  2. [7]
    Because of considerations such as these, costs of summary judgment applications are something reserved or made the parties’ costs in the cause. It is otherwise where it appears, for example, that the applicant for summary judgment ought reasonably to have appreciated that the application would fail or is applying primarily with a view to securing a forensic advantage.”
  1. [81]
    As set out in Oshlack, the most important factor is the result of the litigation.  As in Amaca (where the costs of the summary judgment application were reserved to the trial judge), the issues the subject of the applications are not finally determined.
  2. [82]
    In Amaca, the defendants were successful in their defence of the strike out application as well as their application for leave to amend. Even though there was an argument that the costs of the application were discrete, Justice Boddice still reserved costs to the trial judge because the plaintiff’s contentions, the subject of the application, were not finally determined.
  3. [83]
    In Heritage Properties Pty Ltd & Anor v. Bettson Properties Pty Ltd & Ors [2007] QSC 222, the respondent’s contention was that its cross application for dismissal of the proceeding was defeated only by the last minute amendments, and that the application would otherwise have succeeded. After confirming it would be inappropriate to embark upon the merits, Chesterman J reserved costs to the trial judge.
  4. [84]
    In Green & Ors v Pearson [2014] QCA 110, the respondent defendant had made a number of tactical admissions and then applied for summary judgment based on limitation defences. The application was unsuccessful with the result that directions were made for the respondent to provide a draft amended defence to the appellant plaintiffs for them to indicated whether they required the respondent to apply to withdraw any deemed admissions. On 16 October 2013, the respondent defendant was granted leave to withdraw the deemed admissions was heard and resulted in the order presently under appeal. Costs were made costs in the cause.[22]
  5. [85]
    In National Australia Bank Limited v Bluanya Pty Ltd & Anor (No 2) [2018] QSC 93, the Court had refused an application for summary judgment finding that even though the plaintiff had met its threshold for summary judgment and was prima facie entitled to summary judgment, the Court was ultimately not satisfied that the case was one where it was appropriate to grant summary judgment. Relying on Amaca, Justice Brown found that the costs of the plaintiff’s application for summary judgment await determination of the final proceedings. (The defence and counterclaim was also struck out, with leave to replead; and the plaintiff awarded its costs of that application on the standard basis).[23]
  6. [86]
    As in Amaca, the issues the subject of the applications are not finally determined.
  7. [87]
    Here the parties have resolved their differences, except as to the costs already incurred in litigation; there is no ‘event’ and they should usually expect that the court will not award costs.[24]
  8. [88]
    In Best Price Real Estate Pty Ltd v Equity 2 Pty Ltd [2021] QCA 205, McMurdo JA (with whom Sofronoff P and Henry J agreed) stated:
  1. “[3]
    The circumstances here are relatively unusual. This Court agreed with the primary judge that the appellant’s Amended Defence should be struck out pursuant to r 171 of the Uniform Civil Procedure Rules 1999 (Qld). But it set aside the order that summary judgment given in the respondent’s favour, partly because the respondent had not sought summary judgment on all of its case. On the part of the case for which it had sought summary judgment, we held that there were some factual questions which warranted a trial. Those questions, however, had not been pleaded and one of them had not been raised in the appellant’s submissions in this Court.
  2. [4]
    The primary judge ordered the appellant to pay the respondent’s costs of the proceeding. That order has been set aside. The first question now is what order should be made for the costs of the respondent’s application in the District Court, which sought orders for the striking out of the defence and “further, or in the alternative”, for summary judgment. The strike out application was rightly made, and had that been the only application, the respondent would be entitled to its costs of it. Summary judgment ought not to have been granted. However, given the state of the Amended Defence, it was reasonable for the respondent to seek summary judgment (as it confined its application in the hearing before the primary judge). Justice would be served by ordering the appellant to pay one half of the costs of the application filed in the District Court on 12 June 2020.
  3. [5]
    The appellant submits that it should have the costs of the appeal, given the outcome. The respondent submits that in the unusual circumstances of this case, the costs should be reserved…
  4. [6]
    In my view, there is no reason to reserve the costs. The appellant should have some order in its favour, given the substantial success which it has enjoyed here. On the other hand, it persisted in its argument in support of its pleading, and it succeeded on some points which were not pleaded. … However the summary judgment given on the relevant claims succeeded on the basis of the factual issues to be tried. … I would order that the respondent pay one half of the appellant’s costs of the appeal.

Findings in relation to costs

  1. [89]
    I find that there were no costs thrown away as a result of the plaintiff’s Amended Statement of Claim as the amendments were so minor.
  2. [90]
    I find that because of the defendant’s filing of the Amended Defence, which contained substantial amendments, and for the first time, properly articulated Defence, the plaintiff’s costs of and incidental to Initial Application until that point, were ‘thrown away’ and would ordinarily need to be paid by the defendant under r 378, unless the court ordered otherwise.
  3. [91]
    It was appropriate, and facilitated the just and expeditious resolution of the real issues, for the plaintiff to not press the Initial Application once an Amended Defence had been filed, and in such circumstances, it would not be appropriate under Rule 378 for the plaintiff to pay the defendant’s costs thrown away as a result of the filing of the Amended Application.
  4. [92]
    Further, I find there were no costs thrown away by the defendant by the filing of the Amended Application because, in response to the Initial Application, the defendant bolstered its defence and the costs were not wasted.
  5. [93]
    The plaintiff did not seem to care whether or not the claim was an employment claim but it was the plaintiff that chose to make application under s 42C Magistrates Court Act. I find the plaintiff brought the application too hastily, without properly enquiring of the defendant its position.  Equally, however, the defendant’s response to the application was not to clarify that it did not consider the matter to be an employment claim but to ‘to reserve our submissions to the application served yesterday to Friday’s hearing’ and file and serve detailed submissions from Counsel strongly responding to that application.
  6. [94]
    This being a minor debt claim, the wealth of correspondence and material filed in this proceeding is already grossly disproportionate to the amount in dispute. The substantive issues in dispute are no closer to being determined.
  7. [95]
    In relation to the conduct of the parties:
  1. (a)
    a plank of the Defence, namely that, commission was only payable if the plaintiff remained employed with the defendant at the time of settlement can be gleaned from the Defence but was not squarely pleaded;
  2. (b)
    while the plaintiff did not press the Initial Application, there is no doubt that its application focused the second defendant’s attention on the need to amend the defence so that the true issues could be clearly identified.  Given the state of the defence, it was not unreasonable for the plaintiff to apply for summary judgment(though I make no finding as to the likely outcome).
  3. (c)
    it was unreasonable for the plaintiff to request the defendant consent to judgment;
  4. (d)
    the position both parties took in relation to costs of Initial Application was unnecessarily hostile, but the defendant’s position in seeking costs of the Initial Application application was the most unreasonable given that it was the state of its Defence that gave rise to the issues;
  5. (e)
    at no point did either party make an offer to the other that costs be simply costs in the cause, reserved or there be no order as to costs; the plaintiff sought the sum of $1,000.
  1. [96]
    It can be seen that costs should fall at the feet of both the plaintiff and the defendant for varying reasons at varying times. It is not helpful to the parties to make a number of different costs orders.[25]
  2. [97]
    There is nothing in the party’s conduct warranting indemnity costs.
  3. [98]
    Even if the plaintiff had pressed but failed in its summary judgment application, costs would usually be something reserved or made the parties’ costs in the cause, as the issues for trial were ventilated. Likewise, the Amended Application may have articulated the issues, for the parties at least.
  4. [99]
    Given the small quantum in dispute and the busy jurisdiction of the Magistrates Courts, I do not consider it a proper exercise of discretion, in this case, to reserve costs to the trial and require another Magistrate to determine the question of costs before me.
  5. [100]
    Overall, I can find no reason not to follow the approach usually taken that where there has been no determination on the merits, that there should be no order as to costs.
  6. [101]
    I do not propose to make a costs order in relation to the Post-Hearing Affidavits as -no application or responsive material was filed and the way in which the Initial Application was amended by the plaintiff caused unnecessary confusion.

Settlement conference

  1. [102]
    There is one further direction I consider appropriate.
  2. [103]
    This a claim for only $5,025, the wealth of correspondence and material filed in this proceeding is already grossly disproportionate to the amount in dispute. The substantive issues in dispute are no closer to being determined.
  3. [104]
    Regardless of whether the proceeding could have been brought as an employment claim, it is one that would benefit from a conciliation or settlement process.
  4. [105]
    The orders I have made largely ‘reset’ the issue of costs.
  5. [106]
    I consider it appropriate to direct that the parties attend a settlement conference, ideally before further costs are incurred.[26]
  6. [107]
    Accordingly, I make the orders as appear on pages 1 and 2 (paragraphs 1 to 4).

Footnotes

[1] Transcript, 14 June 2024, T1-9, ll 29-30.

[2] Carr v Finance Corporation of Australia Ltd (No 1) [1981] HCA 20; 147 CLR 246 at 258, Eastman v Director of Public Prosecutions of the Australian Capital Territory (2003) 214 CLR 318 at [27] to [31]; In the matter of an application by the Chief Commissioner of Police (Vic) [2005] HCA 18; 79 ALJR 881 at 884–885 [19]–[23] and 890 [53]–[54]; Dwyer v Commonwealth of Australia (1995) 31 ATR 48;

[3] Notaras v Waverley Council (2007) 161 LGERA 230 at 267[147].

[4] Above, footnote 1 and 2.

[5] Fraser JA, with whom Muir JA and Holmes JA agreed, referring to an earlier decision of Margaret Wilson J.

[6] Boal Quay v Kings Lynn Conservancy Board [1971] 1 WLR 1558; [1971] 3 All ER 597 1569; 604, 605 Schipp v Herfords Pty Ltd [1975] 1 NSWLR 41. cited in KAV v Magistrate Bentley [2016] QSC 46; Grace v Peter [2024] QSC 69 at [26].

[7] Application filed 13 March 2024.

[8] Green & Others v Pearson [2014] QCA 110 [23]

[9] UCPR r 522D.

[10] UCPR, r 522(C)(2).

[11] Currently $175,000.

[12] A fair work claim is a claim made in relation to the contravention of a civil remedy provision as set out under section 539 of the Fair Work Act 2009 (Cth) (which predominately applies to private sector employees). Fair work claims are generally claims about work-related entitlements relating to private sector employees in the national industrial relations system, including unpaid wages, breaches of enterprise agreements or breaches of national employment standards.           

[13] UCPR, r 522C.

[14] In contrast, the relevant forms for wage recovery claims are:

• For fair work claims

  1. –In the Industrial Magistrates Court - QIRC Form 90 – Fair Work Claim (no filing fee payable)
  2. –In the Magistrates Court - UCPR Form 2 - Claim (filing fee payable)

• For unpaid amount claims

  1. –In the Industrial Magistrates Court - QIRC Form 68 – Claim before an Industrial Magistrate (no filing  fee payable).

[15] i.e section 4 of the Magistrates Court Act 1924 (Qld).

[16] UCPR, Schedule 3, definition of minor claim.

[17] Rand v Simpson [2015] QDC 244.

[18] Grace v Peter [2024] QSC 69 at [57].

[19] Grace v Peter [2024] QSC 69 at [26].

[20] The relevant principles governing an application for costs in a case which has been resolved without a hearing on the merits were summarised by McHugh J in Re Minister for Immigration and Ethnic Affairs of the Commonwealth of Australia; Ex parte Lai Qin (1997) 186 CLR 622 at 624–625; [1997] HCA 6.

[21] Oshlack v Richmond River Council (1998) 193 CLR 72 at 97.

[22] Green (above) at [57] to [59] and footnote 12.

[23] National Australia Bank Ltd v Bluanya Pty Ltd & Anor [2018] QSC 49 at [50].

[24] Nichols v NFS Agribusiness Pty Ltd (2018) 97 NSWLR 681; [2018] NSWCA 84 at [2], [25]–[30]).

[25] Reliance Financial Services Pty Ltd v Criniti [2018] NSWSC 543 at [44].

[26] Regardless of whether the proceeding ought to have begun as an employment claim, Chapter 13, Part 9, is not one excluded by r 522N.

Close

Editorial Notes

  • Published Case Name:

    Van der Merwe v Flynn Street Qld Pty Ltd

  • Shortened Case Name:

    Van der Merwe v Flynn Street Qld Pty Ltd

  • MNC:

    [2024] QMC 15

  • Court:

    QMC

  • Judge(s):

    A/Magistrate Janelle (Payne) Boegheim

  • Date:

    09 Aug 2024

Appeal Status

Please note, appeal data is presently unavailable for this judgment. This judgment may have been the subject of an appeal.

Cases Cited

Case NameFull CitationFrequency
Best Price Real Estate Pty Ltd v Equity 2 Pty Ltd [2021] QCA 205
1 citation
Jump To
Cite 1 - [2021] QCA 205
Boal Quay v Kings Lynn Conservancy Board [1971] 1 WLR 1558
1 citation
Jump To
Cite 1 - [1971] 1 WLR 1558
Boal Quay v Kings Lynn Conservancy Board [1971] 3 All ER 597
1 citation
Jump To
Cite 1 - [1971] 3 All ER 597
Cape York Airlines Pty Ltd v QBE Insurance (Australia) Ltd[2009] 1 Qd R 116; [2008] QSC 302
1 citation
Jump To
Cite 1 - [2008] QSC 302
Carr v Finance Corporation of Australia Limited (No 1) (1981) 147 CLR 246
1 citation
Jump To
Cite 1 - (1981) 147 CLR 246
Carr v Finance Corporation of Australia Ltd [No 1] [1981] HCA 20
2 citations
Jump To
Cite 1 - [1981] HCA 20
Cite 2 - [1981] HCA 20
Dwyer v Commonwealth of Australia (1995) 31 ATR 48
1 citation
Jump To
Cite 1 - (1995) 31 ATR 48
Eastman v DPP (ACT) (2003) 214 CLR 318
1 citation
Jump To
Cite 1 - (2003) 214 CLR 318
Grace v Peter [2024] QSC 69
4 citations
Jump To
Cite 1 - [2024] QSC 69
Cite 2 - [2024] QSC 69
Cite 3 - [2024] QSC 69
Cite 4 - [2024] QSC 69
Green v Pearson [2014] QCA 110
4 citations
Jump To
Cite 1 - [2014] QCA 110
Cite 2 - [2014] QCA 110
Cite 3 - [2014] QCA 110
Cite 4 - [2014] QCA 110
Heritage Properties Pty Ltd v Bettson Properties Pty Ltd [2007] QSC 222
1 citation
Jump To
Cite 1 - [2007] QSC 222
In the matter of an application by the Chief Commissioner of Police (Vic) [2005] HCA 18
1 citation
Jump To
Cite 1 - [2005] HCA 18
KAV v Magistrate Bentley [2016] QSC 46
1 citation
Jump To
Cite 1 - [2016] QSC 46
Mbuzi v Hall [2010] QCA 356
1 citation
Jump To
Cite 1 - [2010] QCA 356
Minister for Immigration and Ethnic Affairs (Cth) Ex parte v Lai Qin [1997] HCA 6
1 citation
Jump To
Cite 1 - [1997] HCA 6
National Australia Bank Ltd v Bluanya Pty Ltd [2018] QSC 49
1 citation
Jump To
Cite 1 - [2018] QSC 49
National Australia Bank Ltd v Bluanya Pty Ltd (No 2) [2018] QSC 93
2 citations
Jump To
Cite 1 - [2018] QSC 93
Cite 2 - [2018] QSC 93
Nichols v NFS Agribusiness Pty Ltd [2018] NSWCA 84
1 citation
Jump To
Cite 1 - [2018] NSWCA 84
Notaras v Waverley Council (2007) 161 LGERA 230
1 citation
Jump To
Cite 1 - (2007) 161 LGERA 230
Oshlack v Richmond River Council (1998) 193 CLR 72
1 citation
Jump To
Cite 1 - (1998) 193 CLR 72
Queensland Rail v Amaca Pty Ltd (No 2) [2011] QSC 317
2 citations
Jump To
Cite 1 - [2011] QSC 317
Cite 2 - [2011] QSC 317
Rand v Simpson [2015] QDC 244
1 citation
Jump To
Cite 1 - [2015] QDC 244
Re Minister for Immigration and Ethnic Affairs of the Commonwealth of Australia; Ex parte Lai Qin (1997) 186 CLR 622
3 citations
Jump To
Cite 1 - (1997) 186 CLR 622
Cite 2 - (1997) 186 CLR 622
Cite 3 - (1997) 186 CLR 622
Reliance Financial Services Pty Ltd v Criniti [2018] NSWSC 543
1 citation
Jump To
Cite 1 - [2018] NSWSC 543
State of Queensland v Nixon [2002] QSC 296
1 citation
Jump To
Cite 1 - [2002] QSC 296
Stubberfield v Lippiatt & Co [2003] QDC 34
2 citations
Jump To
Cite 1 - [2003] QDC 34
Cite 2 - [2003] QDC 34

Cases Citing

No judgments on Queensland Judgments cite this judgment.

1

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