Atkins v O'BRIEN
[2018] SADC 93
•30 August 2018
DISTRICT COURT OF SOUTH AUSTRALIA
(Civil: Minor Civil Review)
ATKINS v O'BRIEN
[2018] SADC 93
Judgment of His Honour Judge Tilmouth
30 August 2018
ADMINISTRATIVE LAW - JUDICIAL REVIEW - REVIEWABLE DECISIONS AND CONDUCT - REVIEW OF PARTICULAR DECISIONS
The order of a Magistrate refusing to set aside an irregular dismissal of the Applicant's minor civil claim, rescinded on the basis that the Magistrate failed to consider, or duly exercise the power to set aside an irregular judgment conferred by MCCR 104(1)(b)(iv). In its place an order is made reinstating the action and remitting the action for trial on the merits.
Magistrates Court Act 1991 (SA) s 38(4), s 38(4)(a)(iii), s 38(4)(ab), s 38(6), s 38(7)(a), s 38(7)(d); Magistrates Court (Civil) Rules 2013 (SA) r 8, r 60(1), r 62(1), r 73(1), r 87(1), r 87(2), r 103(1), r 104, r 111(2); District Court (Civil) Rules 2006 (SA) r 279A, r 281, r 295(1)(a); Sale of Goods Act 1895 (SA) s 8(2), s 14(a); Ceneavenue Pty Ltd v Martin (2008) 106 SASR 1; Hall v Busst (1960) 104 CLR 206; Reg Glass Pty Ltd v Rivers Locking Systems Pty Ltd (1968) 120 CLR 516; Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221; Helicopter Sales (Aust) Pty Ltd v Rotor-Work Pty Ltd (1974) 132 CLR 1; Giannini Bros Pty Ltd v Lucas Transport Equipment Pty Ltd and Marin Transport Pty Ltd (1974) 8 SASR 525; Carlson v King (1947) 65 WN NSW 65; Public Service Board of NSW v Osmond (1986) 159 CLR 656; Goodrich Aerospace Pty Ltd v Arsic (2006) 66 NSWLR 186; RESI Corporation v Munzer [2016] SASCFC 15; Computer Edge Pty Limited v Apple Computer Inc (1984) 54 ALR 767; Licul v Corney (1976) 180 CLR 213, referred to.
Ulowski v Miller [1968] SASR 277, applied.
Shell Company of Australia Limited v Lymberopolous (1983) 105 LSJS 320, discussed.
ATKINS v O'BRIEN
[2018] SADC 93Review of a minor civil action
Mr Atkins brings an application for the review of a decision of a Magistrate exercising minor civil jurisdiction, refusing to set aside a judgment obtained against him.
Section 38(6) of the Magistrates Court Act 1991 (SA) confers the right to review such decisions ‘on the application of a party dissatisfied with a judgment given in minor civil actions’. These reasons explain why the application for review must be allowed, the action reinstated and remitted for trial.
The cause of action
The underlying cause of action initiated by Mr Atkins was based in contract. In an oral understanding reached in December 2015 with Mr Anton O’Brien’s firm trading as O’Brien’s Plumbing and Building Supplies, a verbal agreement was reached to undertake plumbing work on Mr Atkins’ home in Port Broughton. This essentially involved the connection of downpipes from the house to divert water into water tanks in the backyard. It is common ground that no quotation was given for this work, that no set price was agreed upon, and that Mr Atkins’ instructions were ‘to do what [Mr O’Brien] considered necessary for the water to run from the house to the tanks’.
The work was completed for which a tax invoice was rendered on 19 December 2015 in the total sum of $5,730. Mr Atkins was quite specific in identifying those areas of concern to him. In court documents filed with the court and a series of letters written to Mr O’Brien, Mr Atkins questions why certain work was undertaken, why certain ‘unnecessary’ materials were supplied or used, the breakdown of labour costs and he points out there were problems on the East side of the house. Mr O’Brien maintains that what was done was ‘appropriate, cost effective and to an appropriate standard’. The claim is for $2,190, represented by the difference between what Mr Atkins had already paid and $3,540, being a quotation he obtained on 2 December 2016 for undertaking the same work.
It is clear therefore that there was an unresolved dispute as to the quality and cost of the plumbing work undertaken.
Initial stages of the proceedings
The originating proceeding was instituted on 26 October 2017. On 21 November 2017 a note was sent under the hand of a Magistrate of the Court convening a directions hearing before a Registrar of the Court, pursuant to s 73(1) of the Magistrates Court (Civil) Rules 2013 (SA) (MCCR). This rule provides that once a defence is filed in a minor civil action, the file must be referred to a Magistrate to give directions as to the listing of the matter before a Registrar or Magistrate, amongst other powers.
Such a conference was convened on 30 January 2018 when Mr Atkins appeared for himself and the solicitor Mr McAuliffe appeared for the defendants (now respondents). The court record of the proceeding reads as follows:
Claim lodged on the grounds that the Plaintiff believes the defendant overcharged the Plaintiff.
Directions Hearing commenced.
Claim discussed. Verbal contract between both parties entered into, under the instruction of the Plaintiff, telling the Defendant “You do what you have to do, I will leave it up to you”. No formal quote was requested before or during the work proceedings.
I note, that this a verbal contract, with no formal contract entered into.
Defendant carried out the work in accordance with the instructions given by the Plaintiff.
Plaintiff acknowledged both verbally and in writing, that he instructed the defendant “You do what you have to do, I will leave it up to you”.
On these grounds, claim dismissed.
The power to direct a settlement conference contained in MCCR s 73(1) furnishes no power of final adjudication. No such power is to be found elsewhere in the MCCR. The powers that may be exercised thereunder are essentially procedural in nature. They relate to case management and pre-trial settlement procedures and the like. Even if there was such a power, the Registrar erred in dismissing the claim, as on the face of the materials available at that time, Mr Atkins had a reasonable basis for bringing his action: Ceneavenue Pty Ltd v Martin.[1] It is only when the court is constituted by a Magistrate that the power to give summary judgment disposing of the whole of the action under MCCR 8 can be exercised.
[1] (2008) 106 SASR 1, [81].
More than that, accepting ‘no formal contract’ was entered into, the general law implies terms into such oral arrangements, to charge reasonable prices as well as reasonable quality of performance: Hall v Busst,[2] Reg Glass Pty Ltd v Rivers Locking Systems Pty Ltd,[3] Pavey & Matthews Pty Ltd v Paul,[4] Helicopter Sales (Aust) Pty Ltd v Rotor-Work Pty Ltd,[5] Giannini Bros Pty Ltd v Lucas Transport Equipment Pty Ltd and Marin Transport Pty Ltd.[6] The same result is brought about by s 8(2) of the Sale of Goods Act 1895 (SA) in respect of price and partly by s 14(a) thereof, so far as the supply of goods is concerned.
[2] (1960) 104 CLR 206, 241-242.
[3] (1968) 120 CLR 516, 523.
[4] (1987) 162 CLR 221.
[5] (1974) 132 CLR 1, 8, 19.
[6] (1974) 8 SASR 525, 530.
The undeniable fact of the matter is then that the Registrar had no power to dismiss the claim prior to trial. The only power invested in the Registrar related to the capacity to sign judgment in default of an appearance or defence for liquidated amounts, or to sign judgment and fix a date and time of place for hearing in the case of an assessment of unliquidated damages pursuant to MCCR 60(1) and MCCR 62(1). The circumstances here fell within neither of these rules.
Proceedings before the Magistrate
Mr Atkins promptly brought an interlocutory application on 13 February 2018 to have his claim ‘reinstated’. This was heard by a Magistrate on 9 March 2018, who dismissed it. There is regrettably no transcript of that hearing. Mr Atkins appeared on his own behalf and the defendants were represented by the same solicitor. The court file was simply endorsed ‘application to reinstate the claim is refused’. No reasons were furnished.
Whilst MCCR 103(1) provides that the court ‘must give reasons for final judgment after the conclusion of a contested hearing’, it is desirable in any event when making interlocutory orders having the effect of finalising or disposing of an action, that Magistrates give reasons, even if brief. This is necessary to allow the review court to adequately perform the task of appellate review: Carlson v King,[7] Public Service Board of NSW v Osmond.[8] This failure may well have of itself, constituted reviewable error of law: Goodrich Aerospace Pty Ltd v Arsic,[9] RESI Corporation v Munzer.[10]
[7] (1947) 64 WN NSW 65, 66.
[8] (1986) 159 CLR 656.
[9] (2006) 66 NSWLR 186.
[10] [2016] SASCFC 15, [69], [91].
The power to set aside judgment is vested in two ways under the MCCR. For these purposes a summary judgment amounts to a ‘final judgment’: MCCR 2. First MCCR 87(1) & (2) permits a party seeking to set aside judgment, to persuade the court there is ‘an arguable case on the merits’ and in addition ‘has a reasonable excuse for not having complied with these Rules’. This power hardly applies here since there was no basis upon which Mr Atkins failed to comply with any rules of court, which is a precondition to the exercise of this power: MCCR 87(2)(b). This rule is ordinarily used for setting aside judgments obtained in default of an appearance or a defence.
Secondly MCCR 104 allows for judgments to be set aside on more fundamental grounds of ‘fraud’ (MCCR 104(b)(i)), and ‘upon any irregularity’ (MCCR 104(b)(iv)), amongst others. It is quite apparent for the above reasons that the dismissal of the action by the Registrar was irregular and therefore engaged the power to set aside contained in MCCR 104(1)(b)(iv). It is authoritatively established that a judgment obtained irregularly ‘will normally be set aside ex debito justitiae’ as of right: Watson v Anderson,[11] Gemini Property Investments Pty Ltd v Woodwards Investments Pty Ltd.[12]
[11] (1976) 13 SASR 329, 333.
[12] [2000] SASC 210, [15].
According to Mr McAuliffe the Magistrate indicated that he had no power to set aside the order of the Registrar. If that was the case his Honour was plainly wrong. He erred in any event by failing to exercise the jurisdiction conferred and engaged by the circumstances under MCCR 104 to set aside judgment and in failing to exercise the power favourably to Mr Atkins on the overwhelming merits of the case.
Extension of time
Before turning to the question of disposition, there is one preliminary matter. The MCCR 111(2) provides that review proceedings in the District Court must be instituted under r 279A of the District Court (Civil) Rules 2006 (SA) (DCCR). DCCR 281 therein provides that appeals must be commenced within 21 calendar days of the date of judgment or of decision subject to appeal.
The Magistrate’s refusal to reinstate was made on 9 March 2018. Mr Atkins’ appeal was not instituted until 14 June 2018, that is some three months later. He explained in an affidavit accompanying the application and repeated in open court, that it was not until 11 April 2018 that he was informed by the solicitor Mr Boylan of Port Pirie, no transcript or reasons for decision were available. Thereafter he had difficulties in coming to Adelaide to lodge the review.
DCCR 295(1)(a) affords the discretionary power to extend time for commencing the review process. Being an unrepresented person and given the egregious nature of the errors in dismissing his claim, it is appropriate in the interests of justice to grant him an extension of time. There would be hardship to Mr Atkins were he not permitted to pursue the claim, whereas there is little potential for prejudice to the defendants: Ulowski v Miller.[13]
[13] [1968] SASR 277, 280.
Disposition
For the above stated reasons the application for review must succeed and the order dismissing the application to reinstate the claim rescinded, pursuant to s 38(7)(d)(ii) of the Magistrates Court Act.
Power to remit
The powers of disposition on review are those contained in s 38(7)(d) of the Magistrates Court Act, which provides as follows:
38(7) The following provisions apply to such a review by the District 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;
It can be seen that the issue arises as to the existence of the power to remit in that s 38(7)(d)(iii) of the Magistrates Court Act only provides for remission in cases of minor civil actions when the ‘review arises from a default judgment or summary judgment’. What took place certainly was not a default judgment because there was no relevant default, so the question becomes whether the order dismissing the claim amounts to a ‘summary judgment’.
That question is to be determined in a legal sense rather than by at the practical effect of the judgment: Computer Edge Pty Limited v Apple Computer Inc.[14] Clearly the purported order of the Registrar put an end to the action between the parties finally disposing of their rights thereunder: Licul v Corney.[15]
[14] (1984) 54 ALR 767.
[15] (1976) 180 CLR 213, 219.
The power to make an order for the summary disposal of proceedings resides in MCCR 8 in the following terms:
8. (1) Where a party wishes to obtain –
(a)summary judgment in, or the disposal of the whole or part of, an action; or
(b) immediate relief,
he or she may do so on interlocutory application accompanied by an affidavit specifying –
(c) that there is no reasonable basis for the action or defence.
(2) The Court may –
(a) enter judgment accordingly;
(b)grant the whole or part of the relief sought, and order that the action continue in relation to the part not disposed of;
(c) make an order for an early trial; or
(d) make any other order.
…
This power contemplates summary judgment in favour of a defendant when there is no reasonable basis for the action and immediate relief in favour of a plaintiff, or when there is no reasonable basis of defence. The powers contained in MCCR 8 are composite powers to enter judgment finally disposing of the action.
Legal representation
There is one further aspect of this review that warrants mention. As seen, the O’Briens were legally represented both before the Registrar and the Magistrate. Section 38(4) of the Magistrates Court Act provides that legal representation is not permitted unless:
38(4) The following provisions govern representation in minor civil actions:
(a) representation of a party by a legal practitioner will not be permitted unless—
(i) another party to the action is a legal practitioner; or
(ii) all parties to the action agree; or
(iii)the Court is of the opinion that the party would be unfairly disadvantaged if not represented by a legal practitioner;
(ab) however, the Court may, in its discretion, permit representation of a party by a legal practitioner at the hearing of an interlocutory application;
It appears neither the Registrar nor the Magistrate adverted to the question of representation, as they should have. It was in fact held in Shell Company of Australia Limited v Lymberopolous,[16] with respect to similar provisions permitting legal representation previously contained in the repealed s 152b of the Local and District Criminal Courts Act 1926-1972 (SA), that as one party was represented when such representation was prohibited, rendered the proceedings ‘irregular and the orders made … rendered voidable’. The judge set aside the judgment made in the small claims jurisdiction on that account. It is unnecessary to finally determine this question in light of the earlier conclusion that the judgment under review should be set aside anyway.
[16] (1983) 105 LSJS 320, 235; Brebner DCJ.
These observations are made so as to alert Magistrates exercising the small claims jurisdiction to the fact that they are required to consider the question of legal representation when it arises. If it is to be permitted, orders must be made under s 38(4)(a)(iii) of the Magistrates Court Act only once the opinion is formed that a party would be ‘unfavourably disadvantaged’ if not represented, or under s 38(4)(ab) as a matter of discretion at interlocutory stages.
When considering the question of ‘unfair disadvantage’ Magistrates must likewise take into account the additional considerations set out in MCCR 13(4), which are:
13(4)In deciding whether a party would be unfairly disadvantaged in a minor civil action, if not represented by a legal practitioner, the Court must have regard to whether –
(a) the party has a judgment in his/her favour in the action,
(b) the party will suffer undue expense or inconvenience in attending,
(c) the party is unable to attend due to ill health,
(d) any other proper cause exists.
These combined provisions equally apply to the review process in the District Court by virtue of s 38(7)(a) of the Magistrates Court Act: Macerlean v Notfair Pty ltd (No 3).[17]It is therefore opportune to note that Mr McAuliffe appeared for the O’Briens on the second hearing of the review, during which he formally conceded the Registrar had no power to make the order he did. An order was made permitting him to represent them pursuant to s 38(4)(a)(iii) because that concession gave ‘proper cause to permit representation’, and because it could be expected they were otherwise ‘unfairly disadvantaged’, inasmuch as they could not be expected to understand and deal with the legal complexities involved.
[17] [2013] SADC 113.
Orders
It was for the above reasons that an order was made in court on 28 August 2018 granting the application for review by rescinding the judgment of the Magistrate entered on 9 March 2018, and substituting therefore an order reinstating the action and remitting the action for further hearing on the merits. Remission was warranted and appropriate since it appears that if the action proceeds to trial, a Magistrate would benefit from taking a view of the subject property. The parties are encouraged to attempt resolution of the dispute in the meantime.
Mr Atkins is entitled to orders for the cost of instigating the application for review of $160.00, and to the cost of travelling to and from Port Broughton on 23 August 2018 when the matter was set for hearing, and when the defendants failed to appear due to a misunderstanding with Mr McAuliffe, by way of the nominal lump-sum of $70.00.
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