Supreme Court New South Wales Medium Neutral Citation: Allied Express Transport Pty Limited v Fone Care Pty Ltd [2011] NSWSC 1543 Hearing dates: 7 December 2011 Decision date: 14 December 2011 Jurisdiction: Common Law Before: Harrison AsJ Decision: (1) Leave to appeal on the issue of costs is refused. (2) The orders made by his Honour Magistrate Curran dated 24 March 2011 are affirmed. (3) The amended summons filed 7 December 2011 is dismissed. (4) The plaintiffs are to pay the defendant's costs as agreed or assessed. Catchwords: PRACTICE AND PROCEDURE - application for leave to appeal from Local Court - order as to costs - leave refused Legislation Cited: Civil Procedure Act 2005 Local Court Act 2007 Trade Practices Act 1974 (Cth) Uniform Civil Procedure Rules 2005 Cases Cited: Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; (2009) 239 CLR 175 House v The King (1936) 55 CLR 499 State of Queensland v J L Holdings Pty Ltd (1997) 189 CLR 146 Texts Cited: Corbin on Contracts, vol 5 (1964) Australian Tax Office, Tax Ruling GSTR2001/4 (12 November 2008) Category: Procedural and other rulings Parties: Allied Express Transport Pty Limited (First Plaintiff) Allied Overnight Express Pty Limited (Second Plaintiff) Fone Care Pty Ltd (Defendant) Representation: J Hassett, solicitor (Plaintiffs) S T Chrysanthou (Defendant) Hassett Dixon Solicitors (Plaintiffs) Kalantizis Lawyers (Defendant) File Number(s): 2011/122455 Decision under appeal Date of Decision: 2011-03-24 00:00:00 Before: Curran LCM File Number(s): 2010/256071 Judgment 1HER HONOUR: By amended summons filed 7 December 2011, the plaintiffs seek firstly, an order allowing their appeal from the decision as to costs of his Honour Magistrate Curran made on 24 March 2011 in Local Court proceedings 2010/256071 ("the costs decision"), pursuant to s 39 of the Local Court Act 2007; secondly, an order that the whole of the costs decision be set aside; and thirdly, an order that the costs of Local Court proceedings 2010/256071 be costs in the cause of Local Court proceedings 2011/122131. The defendant did not oppose the filing of the amended summons but seeks its costs thrown away by the amendment. 2The first plaintiff is Allied Express Transport Pty Limited. The second plaintiff is Allied Overnight Express Pty Limited. They were the plaintiffs in the Local Court proceedings. The defendant is Fone Care Pty Ltd who was the defendant in the Local Court proceedings ("Fone Care"). The parties relied on an agreed tender bundle dated 1 December 2011. 3On 24 March 2011, the Magistrate dismissed the plaintiffs' proceedings and ordered that they pay the defendant's costs. The appeal 4Section 39 of the Local Court Act provides that a party who is dissatisfied with a judgment or order of the Local Court may appeal to the Supreme Court, but only on a question of law. The onus is on the plaintiff to demonstrate that there is an error on a question of law. 5Section 40(2) of the Local Court Act provides that a party to proceedings before the Local Court who is dissatisfied with an order as to costs may appeal to the Supreme Court, but only by leave of the Supreme Court. 6Section 41 of the Local Court Act provides that the Supreme Court may determine an appeal either (a) by varying the terms of the judgment or order, or (b) by setting aside the judgment or order, or (c) by setting aside the judgment or order and remitting the matter to the Local Court for determination in accordance with the Supreme Court's directions, or (d) by dismissing the appeal. Grounds of appeal 7The defendant asserts that the appeal, as framed in the amended summons, only raises an appeal as to costs. The plaintiffs' solicitor maintains that this is not merely an appeal in relation to costs, but relies on the following grounds, namely that his Honour Magistrate Curran erred in refusing an adjournment of the hearing on 24 March 2011 when both parties requested there be an adjournment; secondly, the Magistrate erred in refusing to allow the plaintiffs to tender any further evidence whatsoever on 24 March 2011 despite the fact that evidence sought to be tendered by the plaintiff was admissible and relevant to the issues between the parties; and thirdly, the Magistrate erred in applying s 56 of the Civil Procedure Act 2005 and reaching the conclusion that the section required the proceedings to be dismissed with costs against the plaintiff. 8On 13 April 2011, the plaintiffs commenced further Local Court proceedings against the defendant and additional parties seeking essentially the same relief. However, the only order the plaintiffs seek this Court to disturb is the costs order. 9It is my view that the plaintiffs are dissatisfied with, and appeal, an order as to costs and therefore leave to appeal is required pursuant to s 40(2)(c) of the Local Court Act . The Local Court proceedings 10On 2 August 2010, the plaintiffs filed a statement of claim in the Local Court. The plaintiffs are transport companies and they sued the defendant seeking moneys alleged to be owed for the sale of goods and services. 11On 11 June 2008, the parties agreed to an instalment payment plan whereby the defendant was to pay to the plaintiffs the sum of $83,386.60 for unpaid transport charges. The defendant paid $55,743.36 of this sum, leaving an amount of $27,643.24 owing. It is alleged that Fone Care breached the 11 June 2008 agreement in that it did not make the third instalment payment. 12By defence filed 9 September 2010, the defendant admitted that it failed to pay the third instalment. However, it alleged that the agreement was unjust, unconscionable and made in circumstances which breached s 51AC of the Trades Practices Act 1974 (Cth) (Defence [4]). The instalment agreement 13The relevant parts of the agreement are as follows. "Agreement to Pay by Instalments Outstanding debt to Allied Express Transport Pty Ltd And Allied Overnight Express Pty I, Con Zeritis of Nokia Care Pty Ltd, Fone Care Pty Ltd and Fone Biz Pty Ltd (the "Company") acknowledge and agree that: 1 I am authorised in writing to make this application on behalf of the Debtor company, my position with the company being that of Director and General Manager 2) The names and addresses of the company's directors are: Con Zeritis xxxxx 3) ...The company carries on business at the following addresses: xxxx 4) The Company and its directors acknowledge that the amount of $83,386.60 including GST is owed and remains outstanding for services performed by Allied Express Transport Pty Limited and Allied Overnight Express Pty Ltd or its related company as at June 11, 2008. This amount is provisional upon the following issues being resolved: a) Provision of "south run" in WA on the FONBIZ from January 18, 2008 [illegible] b) Reconciliation of $6,105.25 amount on the FONBIZ Eastern States account. c) Confirmation of payment on the following accounts a. FONASP (QLD) January and prior account of $169.49, b. FONCAR (VIC) January and prior account of $1964.81 c. NOKPAR (NSW) February account of $583.28 d. FONCARE (WA) January and prior account of $1460.42, February account of $2624.04, March account of $1865.59 and April account of $1583.78 ... 5) The Debtor Company applies to pay the unpaid amount of the debt by instalments via EFT: In the amount of: [detail of instalments set out] 6) The Company acknowledges that any default on the payments described above will result in Allied Express immediately issuing proceedings for the recovery of any outstanding amount and all associated costs of recovery and interest. This also includes recording the debt as defaulted with the relevant credit reference associations, and if appropriate issuing proceeding (sic) to wind up operations." 14On 11 and 14 February 2011, in the Local Court, the parties exchanged affidavit evidence. The plaintiffs served the affidavit of John Richardson sworn 7 February 2011. The affidavit exhibited the terms of carriage of goods, Clause 29 of the document stating that the plaintiffs were entitled to exercise a lien on goods where money was outstanding (page 29 of tender bundle ). It was this clause that the plaintiffs relied upon to counter the defendant's claim that it seized goods and refused to release them unless the defendant entered into the agreement. It also exhibited the plaintiffs' ledger and invoices showing the $83,386.60 and a copy of the instalment agreement ( reproduced above in part ). 15The defendants served the affidavit of Angela Mansfield dated 14 February 2011. Ms Mansfield is the Finance and Administration Support Officer for Fone Care. She referred to paragraph 4(a) of the instalment agreement. She deposed that she reconciled those accounts and formed the view that Fone Care was not liable for the payments claimed by the plaintiffs as those accounts, as reconciled, had been paid in full. 16Importantly, the next day on 15 February 2011, the parties attended a review hearing before the Magistrate. The plaintiffs' solicitor did not draw to the Magistrate's attention that their case may not be ready because the amount owing had now been put in issue. That meant that they would either need an adjournment to put on further evidence or alternatively some time to consider whether they needed to put on further evidence. Instead the hearing date was confirmed. At the hearing of this appeal, the plaintiffs' solicitor submitted that there was not enough time between service of the defendant's affidavit and the review hearing for him to have formed a view that he would need to sort through a large bundle of documents to locate documents and file further evidence. 17However, even when the solicitor did actually form the view that he would need to obtain further evidence he allowed about one month to elapse before he notified anyone. He did not advise the defendant's solicitor or the court about the proposed service of a further affidavit of John Richardson. 18On 17 March 2011 (one week before the hearing), the plaintiffs served on the defendant an incomplete affidavit, which attached some of the historical invoices and presented its calculations in answer to the defendant's calculations. 19On 21 March 2011, Mr Hassett, the plaintiffs' solicitor had a telephone call from a solicitor in the employ of the solicitors for the defendant, Victoria-Jane Otavski. Ms Otavski said that they needed more time to consider the affidavit of John Richardson that had just been served on them. She said that they would have to review all those invoices so they wanted to adjourn the hearing. Mr Hassett agreed because he appreciated that there was a fair bit of material. Mr Otavski asked if she could write to the court and say that by consent the parties had agreed to an adjournment. Mr Hassett replied, "Yes" ( page 4 of tender bundle). 20On 21 March 2011, the defendant's solicitor wrote to the court seeking a by consent adjournment, on the basis that the historical invoices were voluminous, and she needed time to review them. On 22 March 2011 the callover Registrar advised both parties that the request for an adjournment was refused. This should have alerted parties that the grant of adjournment was not an automatic right. 21On 24 March 2011, the Magistrate after hearing argument, refused the adjournment. The Magistrate's reasons on adjournment application 22The Magistrate, in his decision stated (T11-13, 24/3/2011): "This matter commenced by issue of a statement of claim which is dated 5 August last year. In fact, it is dated 2 August 2010. Defence was filed 6 September 2010. The matter was initially before the court on 10 November 2010 when a review date was appointed. That was 8 February 2011. On 8 February, I do not know exactly what happened but there was a direction on that particular occasion that would be adjourned until 15 February and that all evidence had to be served between the parties by 4pm on 14 February. Matter was before the court on 15 February and the hearing date was confirmed, the assumption obviously being that the direction of the court made on 18 February had been complied with, which is merely a follow up of the initial direction of the court that goes out in the document that I have referred to earlier. The defendant wrote to the court on 21 March 2011 indicating that on 17 March, that is Thursday of last week - the defendant served an incomplete affidavit upon the plaintiff. There were exhibits apparently that had to be delivered and at that stage because they had not been delivered and they had not been examined - apparently those exhibits were quite important because they marry up apparently invoices and payments and therefore there was some crucial significance to this case, this being a claim for $27,000, which in turn is based supposedly, as set out in the statement of claim on that agreement that was entered Into between the parties on 11 June 2008 in relation to some instalments associated, I assume, with an ongoing provision of courier services. Be that as it may, that material, it is apparent from the letter of 17 March, was not available, had not been closely examined, and the letter that was written to the court indicated that the parties had not had an opportunity to consider the further evidence that related to the 17 March document and that they proposed that by consent the hearing date be vacated, that is, today, There is no formal application before the court prior to today's date, such as, for instance, notice of motions supported by affidavit requesting vacation of the hearing date. The matter was merely related to the court via the letter that I have referred to. In other words, the informal notification of the court that the parties were not in a position to proceed. Mr Lee has turned up today, he represents the plaintiff, and Ms Otavski appears for the defendant. Both have informed the court that neither have any witnesses available today so that the matter at least can proceed partly before an application is made for the matter to be adjourned for further evidence. Whether, of course, such an application would be acceded to by the court is another question but be that as it may, both parties have been quite candid in coming to court today to indicate that no witnesses are available firstly. But secondly, they have also indicated that neither counsel who would have been briefed in the matter are available either because they have assumed that there will be an adjournment and they have obviously committed themselves to engage in other activities and they are not here today either. Therefore the matter is in a position where no evidence can be taken. The matter cannot be progressed at all today. It either goes to a hearing today or the court accedes to an adjournment application that is made jointly by the parties. I have got to have regard to a number of factors. As I indicated, I have got to have regard to the fact that the parties are given the standard directions very early in the piece in relation to the importance of serving their statements upon each other. As I have indicated, the purpose of that is obviously to inform the parties as to the nature of the case they have to meet. But more importantly, it allows parties to consider the strength or weaknesses of each other's case and hopefully be able to reach some sort of resolution by way of compromise. Alternatively, if it becomes apparent that the basis upon which the statement of claim was issued is mistaken, then the matter can be taken out of the list and disposed of. But when parties do not serve material, obviously material that is important which I am told this material is of vital importance, it means that parties do not have the opportunity to consider that matter. There is the question of resolving the matter by way of compromise between the parties until the matter comes on before the court. That is not helpful in terms of the transaction of court business, which in terms of efficiency depends upon parties being able to fully assess each other's case and hopefully reach some sort of compromise either on the day of hearing or prior to the matter getting to the hearing. The other matter, obviously, which is of concern is that today has been allocated for the hearing of this matter, which means in terms of the court lists other matters have had to be not allowed to have a hearing date that has been allocated and taken up with the prospective hearing of this particular matter. I have got to have regard to a number of factors in terms of the way in which I deal with this application in addition to the factors that I have already referred to. Section 56 of the Civil Procedure Act says that the overriding purpose of the Act is to facilitate the just, quick and cheap resolution of the real issues in the proceedings. Obviously also one of the subsidiary matters that the court has got to have attention to is the fact that there has got to be certain emphasis upon particularly the cheap and quick resolution of matters. I am always mindful of justice but particularly in matters which involve, as it does in this case, the sum of $27,000. It does not take very long to work in this jurisdiction, either as a practitioner or as a magistrate, to realise that the amount of money that is sometimes expended on these comparatively small matters where sums of just over $20,000 are in dispute. But it does not take very long for significant and in many cases disproportionate costs to be accrued in relation to the litigation of matters which usually does not help anyone in the long run. I have also got to have regard to the objects of case management, which are set out in s 57 of the Act which I will not recite but they deal largely with the timely disposal of matters and the efficient disposal of matters, which the matters that I have referred to earlier and particularly the court procedures in relation to the pre-trial reviews is aimed at and hopefully will assist in facilitating the objects of the Act that I have referred to earlier. As I indicated, the court in this particular case is not even in a position where perhaps some sort of progress can be advanced in the matter by, for instance, taking some evidence and then listening to a renewed application and perhaps then considering whether or not the matter should be adjourned. The court is presented basically with a fait accompli in that there has been an agreement between the parties which they thought the court would accede to and therefore counsel is not here nor are any witnesses available to at least start the case. As I have said, this is a matter which has been before the court for two reviews and the court was assured, particularly on the second occasion, that the matter was ready to proceed and that all the available evidence had been exchanged. That obviously is not the case. In the circumstances for the reasons that are apparent from all the matters that I have referred to, I decline to grant the adjournment." The law 23The decision to grant or refuse an adjournment is a discretionary one. The guiding principles in relation to an appeal against such an exercise of discretion are set out in House v The King (1936) 55 CLR 499 at 504-505 where the High Court said: "...The manner in which an appeal against an exercise of discretion should be determined is governed by established principles. It is not enough that the judges composing the appellate court consider that, if they had been in the position of the primary judge, they would have taken a different course. It must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so. It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance. In such a case, although the nature of the error may not be discoverable, the exercise of the discretion is reviewed on the ground that a substantial wrong has in fact occurred. ..." 24In Aon Risk Services Australia Ltd v Australian National University [ 2009] HCA 27; (2009) 239 CLR 175 French CJ made the following remarks in relation to the granting of an adjournment: "[5] In the proper exercise of the primary judge's discretion, the applications for adjo urnment and amendment were not to be considered solely by reference to whether any prejudice to Aon could be compensated by costs. Both the primary judge and the Court of Appeal should have taken into account that, whatever costs are ordered, there is an irreparable element of unfair prejudice in unnecessarily delaying proceedings. Moreover, the time of the court is a publicly funded resource. Inefficiencies in the use of that resource, arising from the vacation or adjournment of trials, are to be taken into account. So too is the need to maintain public confidence in the judicial system... ... [26] Sali v SPC Ltd was concerned with a refusal by the Full Court of the Supreme Court of Victoria to grant an application for an adjournment of an appeal. By majority, this court held that in the exercise of a discretion to refuse or grant an adjournment, the judge of a busy court was entitled to consider "the effect of an adjournment on court resources and the competing claims by litigants in other cases awaiting hearing in the court as well as the interests of the parties". Brennan, Deane and McHugh JJ went on to say: What might be perceived as an injustice to a party when considered only in the context of an action between parties may not be so when considered in a context which includes the claims of other litigants and the public interest in achieving the most efficient use of court resources. Toohey and Gaudron JJ dissented in the result but acknowledged by reference to GSA Industries , that: The contemporary approach to court administration has introduced another element into the equation or, more accurately, has put another consideration onto the scales. The view that the conduct of litigation is not merely a matter for the parties but is also one for the court and the need to avoid disruptions in the court's lists with consequent inconvenience to the court and prejudice to the interests of other litigants waiting to be heard are pressing concerns to which a court may have regard. (footnote omitted) [27] The observations made in the two joint judgments in Sali were linked to the particular knowledge that a judge or court, called upon to exercise a discretion to adjourn, would have of the state of that court's lists. However, the mischief engendered by unwarranted adjournments and consequent delays in the resolution of civil proceedings goes beyond their particular effects on the court in which those delays occur. In that connection, there have been a number of cases after Sali in which it has been accepted, in the context of Judicature Act Rules, that the public interest in the efficient use of court resources is a relevant consideration in the exercise of discretions to amend or adjourn. " 25The Chief Justice referred to State of Queensland v J L Holdings Pty Ltd (1997) 189 CLR 146 and said: "[29] In their joint judgment, Dawson, Gaudron and McHugh JJ reaffirmed the "principles established in Cropper v Smith and accepted in Clough and Rogers v Frog ... ". They held that nothing said in Sali suggested that proper principles of case management might be employed, except perhaps in extreme circumstances, to shut a party out from litigating a case which was fairly arguable. Their Honours said : Case management is not an end in itself. It is an important and useful aid for ensuring the prompt and efficient disposal of litigation. But it ought always to be borne in mind, even in changing times, that the ultimate aim of a court is the attainment of justice and no principle of case management can be allowed to supplant that aim. And further: Justice is the paramount consideration in determining an application such as the one in question. Save in so far as costs may be awarded against the party seeking the amendment, such an application is not the occasion for the punishment of a party for its mistake or for its delay in making the application. Case management, involving as it does the efficiency of the procedures of the court, was in this case a relevant consideration. But it should not have been allowed to prevail over the injustice of shutting the applicants out from raising an arguable defence, thus precluding the determination of an issue between the parties. Kirby J wrote a concurring judgment. [30] It might be thought a truism that "case management principles" should not supplant the objective of doing justice between the parties according to law. Accepting that proposition, J L Holdings cannot be taken as authority for the view that waste of public resources and undue delay, with the concomitant strain and uncertainty imposed on litigants, should not be taken into account in the exercise of interlocutory discretions of the kind conferred by r 502. Also to be considered is the potential for loss of public confidence in the legal system which arises where a court is seen to accede to applications made without adequate explanation or justification, whether they be for adjournment, for amendments giving rise to adjournment, or for vacation of fixed trial dates resulting in the resetting of interlocutory processes." 26In their joint judgment in Aon , Gummow, Hayne, Crennan, Kiefel and Bell JJ stated at [116] that "There may be some point of distinction in our views as to what J L Holdings holds" however their Honours made similar conclusions to that of French CJ. Their judgment also emphasises that a court, in granting applications which might cause undue delay, must consider case management and the role of the courts in serving the public: "[111] ...The fact of substantial delay and wasted costs, the concerns of case management, will assume importance on an application for leave to amend. Statements in J L Holdings which suggest only a limited application for case management do not rest upon a principle which has been carefully worked out in a significant succession of cases. On the contrary, the statements are not consonant with this court's earlier recognition of the effects of delay, not only upon the parties to the proceedings in question, but upon the court and other litigants. Such statements should not be applied in the future. [112] A party has the right to bring proceedings. Parties have choices as to what claims are to be made and how they are to be framed. But limits will be placed upon their ability to effect changes to their pleadings, particularly if litigation is advanced. That is why, in seeking the just resolution of the dispute, reference is made to parties having a sufficient opportunity to identify the issues they seek to agitate. [113] In the past it has been left largely to the parties to prepare for trial and to seek the court's assistance as required. Those times are long gone. The allocation of power, between litigants and the courts arises from tradition and from principle and policy. It is recognised by the courts that the resolution of disputes serves the public as a whole, not merely the parties to the proceedings." 27In his reasons for refusing to grant the adjournment, the Magistrate noted that the statement of claim was dated 2 August 2010; the matter had been ser down for 24 March 2011. The Magistrate considered the objects of case management and that other cases had not been able to use the date of 24 March 2011 as a hearing date because it had already been allocated to the parties. In the context of Aon , his Honour was entitled to take these considerations. 28The solicitor for the plaintiffs referred to paragraph 1 of the General Division Standard Directions (Ex A) which states: "1. Each party shall serve upon all parties copies of written statements or affidavits of the intended evidence of al witnesses, together with copies of any annexures, reports or other documentation (all which should be numbered) intended to be relied upon, on a day at least 14 days prior to the Review date of this matter (being a date at least 42 days prior to the day fixed for trial)." 29According to the plaintiffs' solicitor this direction does not mean that a party cannot serve any further evidence. I agree with that proposition. The plaintiffs' solicitor submitted on this appeal that the defendant's affidavit evidence of Ms Mansfield exhibited numerous invoices and ledgers and made allegations that the plaintiffs say could only be answered by the tender, by the plaintiffs, of the historical invoices. The dispute was largely mathematical, regarding how much money had been paid at certain times and resulting running totals. The solicitor for the plaintiffs submitted that the Magistrate should have granted an adjournment when it was jointly requested by the parties. That does not mean that there is an automatic right to an adjournment. It is always a matter for the court as to whether or not an adjournment should be granted. 30Where a solicitor for a party, such as the plaintiffs in this case, is aware that it may need to serve further evidence and the hearing date is imminent, it is appropriate that he advise the opposing party and the court that they intend to serve further evidence at the earliest possible time. Once the hearing date had been confirmed, the solicitor should not have allowed a month to elapse before serving the further affidavit on the opposing party without any prior notice. As this affidavit was served a few days prior to the hearing date, it necessitated the opposing party to seek an adjournment, if the late affidavit was to be relied upon at the hearing. In the circumstances, it is my view that the decision to refuse the adjournment application was one that was open to the Magistrate. There is no error in the exercise of the Magistrate's discretion. 31After the adjournment was refused, the Magistrate requested that the parties try to settle the matter. Failing settlement the matter was to be listed for hearing at 11.30 am that day (T15, 24/3/2011). When the matter came on for hearing, the Magistrate did not permit the plaintiff to rely on the latter affidavit of John Richardson. On appeal the plaintiffs' solicitor submitted that the Magistrate wrongly excluded relevant evidence, namely that affidavit. This is another discretionary decision. The reason that the Magistrate refused to allow the tender of further evidence was because it was not served in accordance with directions and more importantly the other side was not in a position to meet it. 32Finally, the plaintiffs' solicitor submitted that the Magistrate misapplied s 56 of the Civil Procedure Act . The plaintiffs' solicitor submitted that instead of "just quick and cheap resolution of matters" the Magistrate, by not granting the adjournment, incurred additional costs on the parties and now caused a whole new proceeding. The plaintiffs' solicitor further submitted that the Magistrate's decision achieved the precise opposite of the object of s 56 in that he caused a second legal proceeding when the first proceeding could have resolved the matter. According to the plaintiffs' solicitor it could not be said that the Magistrate's hearing of the matter was just and the plaintiffs were denied the opportunity to answer the defendant's case. This argument has some force but it was the plaintiffs who put themselves in the position of not allowing the matter to be ready for hearing. 33While the decision to proceed with the hearing made the disposal quick and cheap, the Magistrate, by allowing the plaintiff a second chance, meant that the overall result, may not be as just, quick and cheap as it could have been. Had the Magistrate not made the order under s 91(b) of the Civil Procedure Act it is likely that the plaintiffs' claim would have been dismissed on a trial basis because the correct defendants had not been sued ( T40 24/3/2011). In some ways the plaintiffs have gained an advantage by being given a second opportunity. In any event no remedy is sought other than to disturb the costs order. 34The plaintiffs' case failed because firstly, the Magistrate decided that they did not establish that they had joined the appropriate defendants to the proceedings; secondly, there was a conditional contract where clause 4 was a precondition and the plaintiffs did not discharge its onus in establishing that the precondition had been met. The proceedings were dismissed pursuant to s 91(b). 35Section 91(b) reads: "91 Effect of dismissal of proceedings (1) Dismissal of: ... (b) the whole or any part of a claim for relief in any proceedings, does not, subject to the terms on which any order for dismissal was made, prevent the plaintiff from bringing fresh proceedings or claiming the same relief in fresh proceedings." 36Hence, the plaintiff can and has brought fresh proceedings in the Local Court. The Magistrate's decision on costs 37Section 98 of the Civil Procedure Act relevantly provides that costs are in the discretion of the court. 38Rule 42.1 of the Uniform Civil Procedure Rules 2005 provides: "General rule that costs follow the event Subject to this Part, if the court makes any order as to costs, the courts is to order that the costs follow the event unless it appears to the court that some other order should be made as to the whole or any part of the costs." 39In relation to costs, the Magistrate said to Mr Lee, the solicitor who appeared for the plaintiffs (T41, 24/3/2011): "... It seems to me that unfortunately you're the one that is going to have to tell me what you want to say about costs. It seems to me that there is very little that can be said. Costs follow the successful litigant, the defendant. Unless there is some exceptional circumstance I just can't see why the defendant shouldn't be awarded costs. If you wish to have five or ten minutes to perhaps discuss the situation with someone as to what can be put I will give it to you. I am not adjourning the matter to another day." 40Mr Lee was afforded a short adjournment in order to get instructions. He returned and stated (T41): "... I was unable to contact any of my colleagues in relation to potential costs arguments but I've come to the conclusion that I acknowledge the difficulty in arguing costs and I advise the Court that if you award costs as agreed or assessed that would be suitable." 41The Magistrate decided: "...I think it is inevitable unless there is some exceptional reason and I do that in the context of accepting that I suspect that the defence has a few deficits but I think they were not as significant as the deficits in the statement of claim and the onus is upon the plaintiff to prove his case in the balance. ... IN THE CIRCUMSTANCES GIVEN I HAVE DISMISSED THESE PROCEEDING I INTEND MAKING AN ORDER FOR COSTS THAT THE DEFENDANT (SIC) PAY THE DEFENDANT'S COSTS AS AGREED OR ASSESSED." 42In awarding costs to the defendant, the plaintiffs submitted that the Magistrate allowed the costs of the preparation of the affidavits, which are now to be the subject of the current legal proceedings. The solicitor for the plaintiffs submitted that it is just and equitable that those costs be costs in the cause of the current Local Court proceedings, as the issues are, in effect, yet to be determined. If the defendant has recovered costs in these earlier proceedings for the preparation of affidavits, those costs cannot be recovered again. 43Counsel for the defendant submitted that having dismissed the plaintiffs' statement of claim, the Magistrate made the usual order that costs follow the event. The defendant says that the plaintiffs did not and still have not put forward any reason why that usual order should be departed from. In any event, the defendants submitted that this court does not have the power to make an order that the costs of Local Court proceedings 2010/256071 be costs in the cause of the Local Court proceedings 2011/122131 on the basis that Local Court proceedings 2011/122131 are not before this Court. They have yet to be determined in the Local Court. Neither party referred to any authority on this issue. 44As the plaintiffs' case was unsuccessful the Magistrate made an order that the unsuccessful party pay the successful party's costs. There is no error in the Magistrate's exercise of discretion in relation to costs. He applied the usual order, namely that costs follow the event. 45Leave to appeal the order as to costs is refused. The orders made by his Honour Magistrate Curran dated 24 March 2011 are affirmed. The amended summons filed 7 December 2011 is dismissed. 46Costs are discretionary. Costs usually follow the event. The plaintiffs are to pay the defendant's costs as agreed or assessed. The Court orders that: (1) Leave to appeal on the issue of costs is refused. (2) The orders made by his Honour Magistrate Curran dated 24 March 2011 are affirmed. (3) The amended summons filed 7 December 2011 is dismissed. (4) The plaintiffs are to pay the defendant's costs as agreed or assessed. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 15 December 2011