Acorn Services Ltd v Dill

• Jurisdiction: Bermuda
• Judgment Date: 23 April 2013
• Docket Number: Appellate Jurisdiction 2013 No 3
• Date: 23 April 2013
• Court: Supreme Court (Bermuda)

2013 Bda LR 32

In The Supreme Court of Bermuda

Appellate Jurisdiction 2013 No 3

Between:

Acorn Services Ltd

Appellant

and

Kenneth F Dill

Respondent

Ms L Tannock for the Appellant

The Respondent in person

The following cases were referred to in the judgment:

Pitcher v Commissioner of CorrectionsBDLR [2011] Bda LR 68

Philips Hong Kong Ltd v Attorney General of Hong Kong [1993] UKPC 29

Dunlop Pneumatic Tyre Co Ltd v New Garage and Motor CoELR [1915] AC 79

Debt collection in Magistrates' Court — Reasons not given — Collection fee — Liquidated damages or penalty

JUDGMENT of Kawaley CJ

Introductory

1. By an Ordinary Summons issued in the Magistrates' Court on February 14, 2012, the Appellant claimed $5,886 consisting of $4,412 in rental arrears and $1,474 in respect of collection fees pursuant to clause 4(f) of the relevant Lease. In addition $125 was claimed in respect of legal costs and $50 in respect of the costs of service. At the trial on December 4, 2012, the Plaintiff increased its arrears of rent claim but the Magistrates' Court (Worshipful Arthur Hodgson (Acting)) only allowed $500 for ‘Legal and Charges’. Judgment was awarded in favour of the Plaintiff in the amount of $8,708.86.

2. The Appellant, while seeking this Court's affirmation of the Judgment of the Magistrates' Court in part, appeals in part on the following ground:

‘1. The Learned Magistrate erred in Law by not advising of his reasons for not granting the Plaintiff's collection costs, thereby denying the Plaintiff their right to due process.’

3. However, the central complaint was substantive as well as procedural. Namely, that (a) the Summons had claimed a collection fee of 33% based on common market practice in the debt collection world, and (b) that the Magistrates' Court ought to have awarded $2708.92 or 33% of the total amount of the arrears of rent found to be due. Ms Tannock conceded that the Lease did not specify on what basis the collection charges would be computed.

4. The Appellant's counsel submitted that this aspect of the Appellant's claim had not been challenged by the Respondent at trial. The Respondent contended with great conviction that the Appellant's counsel had conceded before the Learned Acting Magistrate that the collection costs should not be awarded. Because the Appeal Record and the Magistrate's notes were silent on this issue, I reserved judgment so that a transcript of the audio recording could be prepared. I also indicated, after hearing counsel, that if the appeal was successful I would summarily assess costs.

Findings: were sufficient reasons given for refusing the claim for a 33% collection fee?

5. According to an unofficial transcript of the hearing completed by the Court on or about April 15, 2013, the following discourse took place between the parties and the Learned Acting Magistrate in relation to the collection costs head of claim in the course of a two hour long hearing1:

‘…COURT: Anyway, what have you done with this bill?

MS TANNOCK: Your Worship I relieve the amended amount which has deducted the cost of the locks. Which includes rent, water and late fees up until June 2012 comes to $8,208.86. Our collection fee is which we claim we are entitled to claim under Section 4(f).

COURT: That collection fee, how do you determine that? When somebody signs an agreement that says you're entitled to recover expenses of collection, how do you determine what that is?

MS TANNOCK: You mean what the percentage is?

COURT: Yeah, how do you, you know…

MS TANNOCK: The percentage is determined by the collection agency, what it's based on the debt.

COURT: Suppose they want 100% can they take 100%?

MS TANNOCK: They can try but I don't know how much will fly in front of a Magistrate.

COURT: Right, so how does a Magistrate make a decision about what it should be?

MS TANNOCK: Your Worship the standard amongst debt collection agencies on this island is around 33% that is what we charge.

COURT: And I don't think they are usually able to collect that amount. If this were done on a, on a umm time spent basis, that had to be assessed by the Court what would it be? How much time have you put in this case?

MS TANNOCK: If you give me a moment to confirm how many times we've appeared in Court Your Worship. This matter was set for trial on the 8^th of June, so we appeared in Court once before and we've appeared today. Your Worship I'm prepared to say at least 500.

COURT: One of the disadvantages of being in business is that you never collect all that you would like to.

MS TANNOCK: I understand that Your Worship and I appreciate that but under the lease he's entitled, our clients are entitled to the cost of the their legal fees and collection fees.

COURT: Well it can't be both, legal and...