Carter v Makris - [2011] SASC 109

SUPREME COURT OF SOUTH AUSTRALIA
(Civil)
CARTER & ANOR v MAKRIS
[2011] SASC 109
Reasons of Judge Lunn a Master of the Supreme Court
12 July 2011
PROCEDURE
Remission of filing fee for issue of summons for possession under Part 17 of the Real Property Act 1886 - application by plaintiff for remission under s 130(2) of the Supreme Court Act 1935 based on poverty of defendant - defendant liable to reimburse filing fee to plaintiff under terms of mortgage - held defendant was a party by whom the filing fee was payable for purposes of s 130(2) and that she was in poverty - whole filing fee remitted.

CARTER & ANOR v MAKRIS
[2011] SASC 109
JUDGE LUNN:
Reasons on plaintiff’s application for remission of filing fee

The defendant is the registered proprietor of a house property at 7 Malin Street, Semaphore Park. It is her home. By a mortgage dated 1 April 2011 she mortgaged it to the plaintiffs to secure repayment of a loan of $137,000 which was repayable on 1 April 2012. Interest at 17.35% p.a. was payable on the 14^th day of each calendar month.
The defendant has defaulted in her interest payments. As at 18 May 2011 she was $3,961.58 in arrears. As at 4 July 2011 she was still in arrears. The plaintiffs have served the required default notices to enable them to enforce their rights under the mortgage to obtain possession of the property and to exercise their power of sale.
On 6 July 2011 the plaintiffs lodged for issuing by the Registrar a Summons under Part 17 of the Real Property Act 1886 against the defendant seeking an order for possession of the property. Under the Supreme Court Regulations 2005, as varied by the Supreme Court (Fees) Variation Regulations 2011,[1] the fee prescribed for the issue of the Summons is $2,126.[2]
[1] South Australian Government Gazette, 9 June 2011, pp 2391 et seq.
[2] The plaintiffs are not a prescribed corporation as defined in those regulations, but if they had been, the fee would have been $3,000.
At the time of lodging the Summons for issuing, the plaintiffs also lodged an Interlocutory Application seeking that the fee for issuing the Summons be remitted under s 130(2) of the Supreme Court Act 1935. Section 130 provides:
130—Court fees
(1) The Governor may, by regulation, prescribe and provide for the payment of fees in respect of proceedings in the court, or any step in such proceedings.
(2) The court may remit or reduce a fee on account of the poverty of the party by whom the fee is payable or for any other proper reason.
Clause 30 of the mortgage provides that the defendant shall pay to the plaintiffs on demand all expenses which may be paid or incurred by the plaintiffs in the exercise or enforcement of their powers, rights and remedies under the mortgage. It further provides that the payment of such expenses is to be a charge upon the land secured by the mortgage and recoverable in like manner as the principal sum and interest under the mortgage. As the mortgage is subject to the National Credit Code, those powers of the plaintiffs under the mortgage are limited by s 107 of that Code to expenses reasonably incurred by the plaintiffs in their enforcement of the mortgage. On the evidence contained in the affidavits filed by the plaintiffs, the incurring of a summons issuing fee is a reasonable expense.[3]
[3] It could be subsequently argued by the defendant that an issuing fee paid by the plaintiffs was not a reasonable expense incurred by them if they could, and should, have obtained a remission of that filing fee by an application under s 130(2).
Section 130(2) refers to “the party by whom the fee is payable”. It does not say payable to whom. Clearly it encompasses the liability of the plaintiffs to pay the fee to the Court, but it is also wide enough additionally to encompass the liability of the defendant to pay the fee to the plaintiffs. As far as I am aware, there is no authority on the point. The purpose of s 130(2) is to relieve persons who are in poverty from liability for court fees which, if payable by them, would impose undue hardship on them and would adversely affect them in comparison with persons who had the means to pay them. The section should be given a liberal and beneficial interpretation to achieve this object. Hence, I consider it is wide enough to be applied where the Court fee is payable immediately by the defendant to the plaintiffs upon the action being commenced.[4] The reality of the situation is that if the filing fee is not remitted before the Summons is issued, the burden of it will necessarily fall on the defendant.[5]
[4] By virtue of the provisions of the mortgage mentioned above, it is not a liability of the defendant which is contingent upon any subsequent order of the Court that the filing fee should be reimbursed by the defendant to the plaintiffs.
[5] Although it has never been the subject of any judicial decision, the practice of the Court has been not to apply s 130(2) retrospectively. So once a filing fee has been paid, it is not thereafter reimbursed if it is shown that it could have been remitted if an application had been made before it was paid.
Even on this interpretation of s 130(2), the fee can only be remitted if it is shown on the evidence before the Court that the defendant is in poverty. All the authorities which I have been able to find on the meaning of poverty have been decided in the context of “poverty” for the purpose of valid charitable trusts.
In R v Jonas[6] I said the following about the meaning of poverty in the context of the equivalent s 53(2) of the District Court Act 1991:
The term “poverty” does not have a precise definition. There has been considerable judicial exposition of its meaning in the law relating to charitable trusts, although in modern times in that context a fairly liberal and benevolent construction has generally been placed on it. As was said in Re Gillespie [1965] VR 402 at 406:
“Poverty is a relative term. In order to be a valid gift for the relief of poverty the law does not require that the persons to be benefited should be destitute or even on the border of destitution.”
The High Court has said:
“There are degrees of poverty less acute than abject poverty or destitution, but poverty nevertheless”: Lemm v FCT (1942) 66 CLR 299 at 410; Ballarat Trustees Executors and Agency C v FCT (1950) 80 CLR 350 at 355.
It’s meaning has been paraphrased in various cases as extending to persons who have small means and so who have to “go short”: Re Coulthurst’s Will Trust [1951] 1 All ER 774 at 776; Re Niyazi’s Will Trust [1978] 3 All ER 785 at 787. It has been held that persons are in poverty who require financial assistance to become self-supporting: Re Central Employment Bureau for Women [1942] 1 All ER 232 at 233. This suggests that persons who need Social Security payments to meet their basic living expenses are in poverty, although the mere fact that someone is in receipt of Social Security benefits does not automatically mean that they are in poverty.
[6] (1996) 185 LSJS 424.
In Alice Springs Town Council v Mpweteyerre Aboriginal Corporation & Ors[7] Mildren J said:
… the question is not whether there are people “living in poverty” or whether they are not “poor persons” because they do not value money or possessions in the same way as do other cultures. The word “poverty” is the condition of having little wealth or material possessions (Shorter Oxford English Dictionary), and is not used in any metaphorical sense. One object of the associations is to provide relief from that condition to people who are in need of it. “Poverty” in this sense, is of course, relative, but it is well-established that the law does not require that the persons to be benefited should be destitute or even on the border of destitution: Re Gillespie [1965] VR 402 at 406 per Little J.
[7] (1997) 139 FLR 236 at 252.
In an affidavit of an employee of the plaintiffs’ mortgage broker it was stated:
3.When the Defendant went into default I have spoken to her on a number of occasions. In those conversations the Defendant whom I verily believe has said the following to me:
3.1     The Defendant is now a pensioner and cannot afford to pay payments pursuant to the mortgage;
3.2     She has no savings;
3.3     Her brother who borrowed the money with her (although he did not receive the borrowed money) is now refusing to assist where he had previously stated he would be making payments;
3.4     That she is in dire financial circumstances.
On this evidence I am satisfied that the defendant is in poverty. Any loss of her home will be a major financial blow to her. Even if through the operation of the provisions of the National Credit Code or s 55A of the Law of Property Act 1936 an order is not made in this action evicting the defendant from her home, she would still be liable under the terms of the mortgage to pay the filing fee of $2,126 to the plaintiffs. That sum would represent many pension payments for her and would clearly be a severe hardship for her. Accordingly, I find in the circumstances of this matter s 130(2) can apply to remit the filing fee.
Ultimately, the Court needs to exercise a discretion about whether in all the circumstances it is proper to exercise that discretion under s 130(2). I bear in mind that if the defendant was to file a counterclaim in the action, that would also attract under the Fees Regulations a similar fee of $2,126. If she was to seek to file a counterclaim,[8] she would most likely be granted a remission of the whole of the fee payable for the filing of it on the grounds of her poverty. There is no difference in principle between that remission of a filing fee directly payable by her and one which is indirectly payable by her by virtue of the provisions of the mortgage. Accordingly, I have ordered that the whole of the filing fee for the Summons be remitted.
[8] Under 6R 204(6) the defendant could probably obtain any relief which she sought by filing an application which does not attract a filing fee. However, she is not prevented from proceeding by way of counterclaim if she was to elect to do so.