Active State Pty Ltd v Jojoven Pty Ltd No. DCCIV-03-1634

ACTIVE STATE PTY LTD v JOJOVEN PTY LTD
[2004] SADC 21
Judge Lunn
Civil
MINOR CIVIL REVIEW

Active State Pty Ltd, which trades as “Visual Concepts Centre”, is a manufacturer and installer of commercial signs. Mr Knight is its director.
Jojoven Pty Ltd is the franchisee of a Pizza Haven shop at Golden Grove. Mr Haig is its director.
In 2001 the defendant requested the plaintiff to manufacture and install a number of signs on its Pizza Haven shop at Golden Grove. The plaintiff charged $18,166 for the work, but the defendant paid only $11,946 and disputed the balance. The plaintiff then brought a Minor Civil Action in the Magistrates Court for $6,000 against the defendant. (It waived the excess over $6,000 so that it could pursue its claim as a Minor Civil Action.) The defendant denied liability and filed a counterclaim for $500 for defective workmanship.
The action came on for trial before Mr Millard SM on 13 June 2003. Mr Knight and Mr Haig represented their respective companies. On that day evidence was given by Mr Knight and the plaintiff’s employee Mr Porter. The defendant then called Mr Diamanti, who was the property development agent for the franchisor, Pizza Haven, who also gave his evidence. Mr Haig then gave his evidence. At 5pm that day the trial was adjourned until 22 July 2003, inter alia, for the defendant to call Mrs Haig and Mr Colombo, another employee of Pizza Haven.
At the commencement of the adjourned trial on 22 July 2003 the Magistrate allowed Mr Knight to reopen the plaintiff’s case, to tender some further documents which he had obtained during the adjournment and to give some further evidence. Those further documents had not previously been seen by the defendant. Mr Colombo then gave evidence. The Magistrate reserved his decision.
On 26 September 2003 the Magistrate delivered substantial written reasons and entered judgment for the plaintiff for the $6,000 claimed and $500 interest plus costs. He gave judgment for the defendant on the counterclaim for $250. In his reasons he accepted the evidence and witnesses of the plaintiff in preference to those of the defendant. He was critical of the lack of documentation to support the contentions of the parties. As a result his findings turned largely on his assessment of the credibility of the witnesses. It was a complicated and messy dispute.
On 17 October 2003 the defendant instituted an application in his Court to review the Magistrate’s decision. The application, which was prepared by a lawyer, sought a review on the following grounds:

“A.    The learned Magistrate erred in that he:
(1)    Gave incorrect weight to Mr Tom Knight’s evidence as opposed to the evidence of Mr Steven Haig as to the oral agreements made regarding fixing the price.
(2)    Did not give adequate weight to the evidence given by Mr Colombo and Mr Diamanti as to how high the bulk head sign was originally positioned.
(3)    Did not have regard to all of the evidence or give proper weight to all of the evidence suggesting that plans and designs showing the correct position of the bulk head sign were provided to the Respondent.
(4)    Did not make adequate inquiry as to the quantum of the Respondent’s claim, in particular as to whether amounts actually charged for work by the agents/servants of the Respondent corresponds with amounts invoiced to the Applicant for the same work.
(5)    Did not give the Applicant an adequate opportunity to present his defence which would have included evidence that the Respondent had been incorrect about the amounts charged by his agents and or contractors to perform the work he was claiming for.
B.The Applicant has fresh evidence that suggests that Mr Knight’s evidence is not correct and therefore should not be relied upon.”

At the hearing of the review on 20 January 2004 I did not take any further evidence. The parties were again represented by their respective directors. Insofar as they spoke of the matters in issue it was not additional evidence but merely to enable me to better understand the evidence given before the Magistrate and his reasons.
The grounds A(1)-(4) can be disposed of quickly. The Magistrate had the benefit of seeing and hearing the witnesses. There is nothing before me to suggest that his conclusions on credibility were not permissible on the evidence given at the trial. There was nothing said in the submissions about A(4) or anything put before me to suggest that there was any substance in that ground.
The main thrust of the defendant’s submissions before me was that it had further evidence available which was not put before the Magistrate which allegedly contradicted his findings. In these reasons I have acted on the assertions of Mr Haig about the general outline of this further evidence, but I have not heard the evidence or assessed its cogency.
The defendant asserted that on the second day of trial the Magistrate had refused to allow it to recall Mr Diamanti to give evidence about the further documents which the plaintiff had produced at the beginning of that second day. In part I reserved my decision to read the 156 pages of transcript to see if it supported this contention. I could find nothing in the transcript to the effect that the defendant had sought to recall Mr Diamanti or that the Magistrate had refused to allow it to do so. If the defendant had wanted to recall Mr Diamanti, it should have sought an adjournment from the Magistrate for that purpose. It did not. Also nothing was put before me about what Mr Diamanti would have said if he had been recalled about those documents other than a general assertion that he could have spoken about them. No proper ground of review arises from this point.
The trial had been adjourned to 22 July partly so that Mr Haig’s wife could attend to give evidence for the defendant. On the last page of the transcript the Magistrate asked Mr Haig if he was calling his wife. The following is then recorded in the transcript on this topic:
“MR HAIG: Unfortunately I am unable to because of baby-sitting arrangements. … If it’s essential I could call her at a later time.
HIS HONOUR: It’s not essential.”
Part of the new evidence the defendant seeks to put forward is from Mrs Haig. If there was good reason for Mrs Haig not to be able to be present on 22 July the matter should have been raised with the Court well prior to 22 July or certainly at the commencement of the hearing on that day. “Baby-sitting arrangements” may or may not be a good reason for a witness not attending. It was not for the Magistrate to have to say whether it was essential for Mrs Haig to be called or not. It was for the defendant to have available the witnesses it wished to call. Whether it was desirable, as distinct from essential, for the defendant to call Mrs Haig was a decision to be made by the defendant. From other evidence it appears that Mrs Haig was present at, or in the vicinity of, some relevant conversations and presumably could have given some evidence about them. I was not told what she would say if she was to give evidence other than its effect would be to support the defendant’s case. Again this ground of review does not succeed.
On the topic of receiving fresh evidence on a review I repeat what I said in Lawrence v Sambevski (1996) 189 LSJS at 451-454:
“The precise nature and scope of a review of a judgment in a minor civil action under Section 38(6) of the Magistrates Court Act 1991 has never been authoritatively determined. There are a number of uncertainties about what precisely is involved in this review process. In considering these questions it must always be kept in the forefront of the mind that the underlying purpose of s38 is to set up a special, and somewhat unique, procedure whereby claims involving less than $5,000 are to be resolved by expeditious and cheap procedures which substantially truncate many of the procedures usually employed for determining ordinary civil actions. The procedures laid down for ordinary civil actions are those which Parliament and the Rules of Court have, with the benefit of long experience, accepted to be the best and most practicable means reasonably available to achieve justice to all parties through a judicial process. However, because much of what has otherwise been seen as desirable for achieving justice in more substantial cases has had the consequence of producing substantial costs and delays s38 has renounced some of these procedures in the interests of reducing costs and obtaining speedier results. A necessary consequence of this is that the Courts are deprived, at least in part, of some of the procedures which are desirable to ensure that justice is done as best as can be in every case. Hence the ability of both the Magistrates Court in dealing with minor civil actions, and the District Court in dealing with reviews, to produce the best possible determination in accordance with justice is substantially impaired. While there is often a strong temptation to think that if all of the time-honoured procedures of judicial proceedings had been employed in a minor civil action a result more consistent with justice may well have been produced, it is not for the Courts to resort to such procedures where it is contrary to the clear intention of Parliament in s38 that they are not to be used. As was stated about the predecessor to s38 in Csordas v Galvanising Industries (1990) 157 LSJS 350 at 353 what is needed for justice is to be balanced against the cost of it. Section 38 can only produce second best justice and the Courts and the parties have to live with that. While better justice could probably be achieved it would only be at a higher price, which Parliament has decreed is not to be paid.
…
(1)Section 38(6) does not create a review by way of a hearing de novo in which the District Court is obliged to hear all of the relevant evidence about all of the issues and make up its mind about them. Although there are references in s38(6) and (7) to “further hearing” and “re-hearing” they are confined to where the Court finds grounds of review made out and it is then necessary to take further evidence to determine what judgment should be given on the review.
(2)The scope of any fresh evidence to be taken on a review cannot exceed that which the Magistrate was required to take on the trial of a minor civil action. It would defeat the objects of expedition and minimisation of costs if on a review a party could adduce fresh evidence which could go into all sorts of relevant issues which were not opened up in the trial before the Magistrate. Almost every party who loses an action would like the opportunity to re-run the trial on expanded evidence and arguments, but this would mean that there could be reviews in almost every minor civil action and potentially increase the costs and delays enormously. The basic rule must be that parties are bound by the conduct of the trial before the Magistrate and that good reason is required for any additional evidence to be admitted. It was suggested that because s38(1)(a) and (b) requires the trial to be an inquiry by the Court there was an onus on the Magistrate to see that all relevant evidence was adduced at the trial. While there is such a duty on a Magistrate on crucial and essential issues (Park v Evans (1993) 173 LSJS 432), it is not for the Magistrate to conduct the cases for the parties or to give them advice on evidence: Csordas v Galvanising Industries (above) at 353. It would make minor civil actions far more complicated and expensive than Parliament intended them to be if a Magistrate was obliged to ensure that all possible evidence was adduced on any issue to which he might ultimately have regard in the determination of the action. Ultimately, the duty of the Magistrate is to decide the claim on the material which is properly before him at the conclusion of the trial. If in his reasons he goes outside of that evidence, that may well be a ground for a District Court on a review to interfere with his findings on the basis that they were not justified by the evidence, but it is not in itself, as was contended here, a justification for a party to lead fresh evidence on the review on any such topic.”
(The monetary limit for minor civil actions has since been increased to $6,000. Since that decision s30(6) and (7) of the Magistrates Court Act has been substantially changed, but not in any way which effects the applicability of what I said in that earlier case.)
If I were to allow the further evidence which the defendant wishes to adduce, it would lead to a retrial of the whole action. A significant part of it is intended to undermine the credibility findings of the Magistrate. It is not a case where the fresh evidence goes to a discrete point which in itself is capable of deciding the case. A fresh trial of the whole matter would be likely to be somewhat longer than the previous trial and would involve considerable expense. On what has been put before me by the defendant as to the proposed new evidence it may cause the issues, or some of them, to be decided in favour of the defendant, but there is no certainty, or even probability, that this would occur. The object of the minor civil claims jurisdiction is to dispose of actions expeditiously and economically and at a cost which is proportionate to the amount at stake. Here the considerable cost and delay involved in a further full trial of the action is not warranted as there is only $6,000 at stake. Regrettably, the complexities and difficulty of a piece of litigation are not necessarily proportionate to the amount at stake.
I find that the Magistrate acted properly and in accordance with requirements of s38 of the Magistrates Court Act 1991 in conducting the trial as he did and in making his findings. Nothing has been put forward by the defendant which constitutes a sufficient ground to overturn the decision of the Magistrate or to take any fresh evidence.
In these reasons I have assumed that this Court does have power to take fresh evidence which was not before the Magistrate. Nyland DCJ (as she then was) held on an earlier version of s38(7) in Park v Evans (1993) 173 LSJS 432 at 438 that it did have such power. However, I am not persuaded that is still necessarily correct. That decision was made in the context of a version of s38(6) and (7) which was repealed in 2000 and which had provided:
“(6) The District Court (constituted of a single Judge) may, on the application of a party dissatisfied with a judgment given in a minor civil action, review the proceedings and, if it appears just to do so, set aside the judgment and give any judgment that should, in the opinion of the District Court, have been given in the first instance.
(It is intended that the District Court should give a final judgment on the review and should not send the matter back to the Magistrates Court for further hearing or re-hearing.)
(7) On a review, the District Court-
(a)     may inform itself as it thinks fit on the subject-matter of the appeal and, in doing so, is not bound by the rules of evidence;
and
(b)     may, if it thinks fit, re-hear evidence taken before the Magistrates Court.”
A new s38(6) and (7) were introduced in 2000 which provide:
“(6) The District Court (constituted of a single Judge) may, on the application of a party dissatisfied with a judgment given in a minor civil action, review the matter.
(7) The following provisions apply to such a review by the District Court:
….
(b)     the Court may inform itself as it thinks fit and, in doing so, is bound by the rules of evidence;
(c)     the Court may, if it thinks fit, re-hear evidence taken before the Magistrates Court;
(d)     in determining the matter, the Court may-
(i)affirm the judgment; or
(ii)rescind the judgment and substitute a judgment that the Court considers appropriate; or
(iii)if the review arises from a default judgment or summary judgment, rescind the judgment and-
(A)substitute a judgment that the Court considers appropriate; or
(B)remit the matter to the Magistrates Court for hearing or further hearing; …”
The decision in Park v Evans turned in part on the District Court having to re-hear the whole matter where necessary and give a final judgment. Whether that is still the case will be dealt with in the next paragraph. If not, Park v Evans is distinguishable. Furthermore, s38(7)(c) is to be contrasted with s42(4) of the same Act which creates an appeal to the Supreme Court and which provides:
“(4) On an appeal, the appellate court may, if the interests of justice so require, re-hear any witnesses or receive fresh evidence.”
In that instance the receipt of fresh evidence is expressly added to the re-hearing of evidence. The implication from the power to receive fresh evidence being expressly included in s42(4), but not in s38(7)(c), may well be that it was not intended to confer that power under (7)(c).
I have not had to deal with the issue of whether, if an order for a re-trial was the appropriate judgment under s38(7)(d)(ii), I could have rescinded the present judgment and sent the action back to the Magistrates Court for a re-trial. The provision in the earlier version of s38(6), quoted above, “It is intended that the District Court should give a final judgment on the review and should not send the matter back to the Magistrates Court for further or re-hearing” is not repeated in the present s38. However, the present s38(7)(d)(iii)(B), as quoted above, gives an express power to remit to the Magistrates Court after a rescission of a default or summary judgment. It is not clear whether this impliedly excludes the power to send back any other action to the Magistrates Court for a re-trial.
For the reasons given the application for review is dismissed.

[2004] SADC 21

3 February 2004