Commissioner for Consumer Affairs v GYAM Pty Ltd No. Scgrg-00-976

COMMISSIONER FOR CONSUMER AFFAIRS v GYAM PTY LTD
[2000] SASC 409

Magistrates Appeal (Civil)

1................ OLSSON J....... This is an appeal against the decision of a stipendiary magistrate. It is limited to one aspect of authorisation by him, on an application pursuant to Schedule 3 of the Second-hand Vehicle Dealers Act 1995 (SA), of payment of compensation to GYAM Proprietary Ltd ("GYAM") from the Second-hand Vehicles Compensation Fund (the “Fund”).

In view of the restricted nature of the present appeal there is no need to traverse the relevant facts in great detail. These are set out in reasons for decision published by the learned magistrate, in which he recites the historical facts.
Suffice to say that GYAM, at the relevant time, carried on business as a crash repairer under the trade name "Plaza Crash Repairs". For the purposes of its business it maintained a series of vehicles which it made available to customers, as loan cars, whilst their primary vehicle was being repaired. It placed three such vehicles, which were due for disposal, with a second-hand car dealer known as JDK Auto Sales on consignment for sale.
It was never in dispute that JDK Auto Sales failed to account to GYAM for the proceeds of sale; and that GYAM had no reasonable prospect of recovering the amount in question, namely $13,350. An issue arose as between GYAM and the Commissioner of Consumer Affairs as to whether GYAM was, itself, a dealer in second-hand motor vehicles and thus excluded from the compensation provisions of Schedule 3. That issue was resolved in favour of GYAM and there is no appeal against the finding of the learned magistrate concerning it.
At the conclusion of his consideration of the matter the learned magistrate formally authorised payment of the sum of $13,350 to GYAM and also ordered payment out of the Fund of the legal costs of the application, together with a lump sum of $1000 in lieu of interest. The present appeal is confined to the question as to whether or not the learned magistrate had jurisdiction to award an amount by way of (or in lieu of) interest.
Paragraph 1 of Schedule 3 of the Second-hand Vehicle Dealers Act continues the existence of the Second-hand Vehicles Compensation Fund, which had been created by pre-existing legislation. Schedule 3 also sets out detailed provisions for its administration. It is necessary, for present purposes, to focus upon the provisions of paragraph 2(1) of Schedule 3. This reads as under:-
"Claim against Fund
2. (1) Subject to subclause (2), if the Magistrates Court, on the application of a person not being a dealer who has -
(a)     purchased a second-hand vehicle from a dealer; or
(b)     sold a second-hand vehicle to a dealer; or
(c)     left a second-hand vehicle in a dealer's possession to be offered for sale by the dealer on behalf of the person,
is satisfied that -
(d)     the person has a valid unsatisfied claim against the dealer arising out of or in connection with the transaction; and
(e)     the person has no reasonable prospect of recovering the amount of the claim (except under this schedule),
the Court may authorise payment of compensation to that person out of the Fund."
It is at once apparent that Schedule 3 makes no reference whatsoever to the allowance of any sum by way of interest. It merely uses the expression "compensation". As Dixon J. (as he then was) said in Nelungaloo Proprietary Limited v The Commonwealth & Ors (1947-48) 75 CLR 495 at 571:-
“Now, ‘compensation’ is a very well understood expression. It is true that its meaning has been developed in relation to the compulsory acquisition of land. But the purpose of compensation is the same, whether the property taken is real or personal. It is to place in the hands of the owner expropriated the full money equivalent of the thing of which he has been deprived.
Compensation prima facie means recompense for loss, and when an owner is to receive compensation for being deprived of real or personal property his pecuniary loss must be ascertained by determining the value to him of the property taken from him. As the object is to find the money equivalent for the loss or, in other words, the pecuniary value to the owner contained in the asset, it cannot be less than the money value into which he might have converted his property had the law not deprived him of it.”
It follows that the concept of compensation does not normally encompass some allowance for interest. By way of contrast, interest is a charge or allowance paid for the use or retention by one person of a sum of money belonging or owed to another. (See discussion in Consolidated Fertilizers Ltd v Deputy Commissioner of Taxation (1992) 107 ALR 456 at 461-462 and the authorities referred to in Duke Group Ltd (In Liq) v Pilmer & Ors (1998) 144 FLR 1 at 169.)
Mr Randle, of counsel for the respondent, argued that the word “compensation” employed in Schedule 3 should be given an expansive construction. It was, he said, wide enough to connote the concept that interest on moneys in default ought to be encompassed - because interest itself is, relevantly, a form of compensation for being kept out of money owed.
It seems to me that the short answer to such a suggestion is that there is nothing in the expression of Schedule 3 to warrant a conclusion that the expression “compensation” is employed otherwise than in accordance with its normal, primary connotation.
As Dixon J pointed out, the word compensation essentially focuses on the making good or replacement of an actual, crystallised loss - in a case such as this the quantum of moneys for which JDK Auto Sales was due to account to GYAM and did not.
There is simply no warrant for extending the normal conceptual base of the expression, particularly in the context of a statutory compensation fund such as that presently under consideration.
There are now a number of such schemes. Virtually all of them are pre-occupied with the making good of actual, direct loss by way of compensation, by way of contrast with constituting a fund for payment of damages. The present fund is plainly of that type, given, of course, that each situation has to be reviewed in light of the express words in the applicable statutory scheme.
If there is any power to award interest it must be found elsewhere than in Schedule 3.
It is true that s 34 and s 35 of the Magistrates Court Act 1991 (SA) (“Magistrates Court Act”) respectively empower the Magistrates Court to award both pre-judgment interest and interest on judgment debts. However, as Mr Hinton, of counsel for the Commissioner, points out, a very real question arises as to whether the sections in question are applicable to an application pursuant to Schedule 3.
When a magistrate is entertaining an application pursuant to that Schedule he or she is not exercising the general civil jurisdiction of the Court. Rather, the magistrate is performing a special statutory function, the ultimate result of which is not the making of any formal order. The outcome is either the grant or refusal of authorisation to the Commissioner to make a payment of compensation out of the statutory Fund.
The non criminal jurisdiction of the Magistrates Court is defined by s 8 and s 10 of the Magistrates Court Act, which are to be found in Division 3. Section 9 separately deals with the criminal jurisdiction of the Court. The three sections are expressed as under:-
“Civil jurisdiction
8. (1) The Court has jurisdiction -
(a).... to hear and determined an action (at law or in equity) for a sum of money where the amount claimed does not exceed -
(i)if the claim is for damages or compensation for injury, damage or loss caused by, or arising out of, the use of a motor vehicle - $60 000;
(ii)in any other case - $30 000;
(b).... to hear and determine an action (at law or in equity) to obtain or recover title to, or possession of, real or personal property where the value of the property does not exceed $60 000;
(c)to hear and determine an interpleader action where the value of the property to which the action relates does not exceed $60 000;
(d).... to grant any form of relief necessary to resolve a minor civil action.
(2) The parties to an action may waive any monetary limit on the civil jurisdiction of the Court, and, in that event, the Court will have jurisdiction to determine, the action without regard to that limitation.
Criminal jurisdiction
9. Subject to the Summary Procedure Act 1921 the Court has jurisdiction -
(a).... to conduct a preliminary examination of a charge of an indictable offence;
(b)to hear and determine a charge of a minor indictable offence;
(c).... to hear and determine a charge of a summary offence.
Statutory jurisdiction
10. (1) The Court has any jurisdiction conferred on it by statute.
(1a)The Court, in its Civil (Consumer and Business) Division, has -
(a).... jurisdiction to hear and determine an application under Part 4 or Schedule 3 of the Second-hand Vehicle Dealers Act 1995; and
(ab)jurisdiction to hear and determine an application under the Retail Shop Leases Act 1995; and
(b).... jurisdiction to hear and determine an application under Part 5 of the Building Work Contractors Act 1995; and
(c)any other jurisdiction conferred on that Division by statute.
(1b).. Nothing prevents the Court, in its Civil (Consumer and Business) Division (whether constituted of a judicial officer or officers or sitting with assessors), from exercising civil jurisdiction other than that referred to in subsection (1a) in order to promote the convenient disposal of proceedings by the hearing together of different causes of action or claims.
(2)The rules may assign a particular statutory jurisdiction (other than a statutory jurisdiction specifically assigned by or under another Act to a particular Division of the Court) either to the Civil (General Claims) Division, or to the Criminal Division, of the Court.”
It is immediately apparent that the legislature has gone to considerable lengths to establish and differentiate between three separate elements of jurisdiction to be exercised, namely the “Civil jurisdiction”, the “Criminal jurisdiction” and the “Statutory jurisdiction”. Each is a quite separate head of jurisdiction, distinct from the other.
The so-called “Statutory jurisdiction” is not a mere subset of the “Civil jurisdiction”. This is made abundantly plain by the references in s 10(1a) and s 10(1b) to matters arising in the “Statutory jurisdiction” being dealt with by the Court in its “Civil (Consumer and Business) Division” - which is a mere structural and administrative description of the organization and staffing of the Court provided for by s 7. It is also to be noted that s 3 contains a definition of “minor civil action”, which separately refers to a class of matters labelled as a “minor statutory proceeding”. This expression is, in turn, defined in a manner which conclusively relates to areas of jurisdiction which, plainly, all fall within the “Statutory jurisdiction” of the Court.
So it is that a judicial officer exercising the “Statutory jurisdiction” in the “Civil (Consumer and Business) Division” is expressly empowered, at the same time, to hear and determine a related “Civil jurisdiction” matter which would normally be tried in the “Civil (General Claims) Division”, where it is convenient and desirable to do so.
Part 5 of the statute contains a series of what are titled “Special Provisions as to Court’s Civil Jurisdiction”. These range over topics such as injunctive powers, restraining orders, mediation and conciliation, trial of issues by arbitrator, expert reports, alternative forms of relief, declaratory judgments, interim awards of damages, interest, payments to children and costs.
In my opinion, the expression “Civil Jurisdiction” used in the title to Part 5 is a generic expression intended merely to advert to the non criminal jurisdictions of the Court. I do not think that the phrase “Civil Jurisdiction” in the title is intended as a reference only to the jurisdiction created by s 8. So much is apparent from the reference in s 27(1) to the Court constituted of a Magistrate who may be sitting with assessors - a situation which only arises in the “Statutory jurisdiction” - and to varying forms of expression in other sections such as ‘action’ and ‘any civil proceedings’. Care must be exercised in reviewing the precise verbiage of each individual section, in order to divine the intended scope of its operation.
So it is that s 37 states that costs “in any civil proceedings” are to be in the discretion of the Court. The phrase “civil proceedings” is not separately defined, although “civil action” is defined to mean “an action or proceeding brought in a civil division of the Court”. (The emphasis has been added.) Here again there appears to be a deliberate distinction made between various types of non criminal jurisdiction, all of which are generically labelled “civil proceedings”. Thus, it may reasonably be contended that the section conferring power to award costs in speaking in a generic sense and extends to proceedings in both the “Civil jurisdiction” and the “Statutory jurisdiction”, because each involves matters in a civil division of the Court.
If there is power to award interest in a matter such as that now under consideration, it must be derived from s 34 of the Magistrates Court Act. The material portions of that section read as follows:-
“Pre-judgment interest
34. (1) Unless good reason is shown to the contrary, the Court will, on the application of a party in whose favour a monetary judgment has been, or is to be, given include in the judgment an award of interest in accordance with this section.
(2) The interest -
(a) will be calculated at a rate fixed by the Court; and
(b).... will be calculated in respect of a period fixed by the Court (which must, however, in the case of a judgment given on a liquidated claim, be the period running from when the liability to pay the amount of the claim fell due to the date of judgment unless the Court otherwise determines); and
(c)is, in accordance with the Court’s determination, payable in respect of the whole or part of the amount for which judgment is given.
(3).... The Court may, without proceeding to calculate interest under subsection (2), award a lump sum instead of interest.
(4)... ”
It is at once to be seen that it is a pre-requisite to the invoking of s 34 that there must have been a situation in which the applicant is a party “in whose favour a monetary judgment has been, or is to be, given ...”.
Even allowing for the fact that the statute defines the word “judgment” to “means a judgment, order or decision ...”, the language employed is not apt to encompass the present circumstances.
Section 34 clearly directs attention to true inter partes proceedings, usually (but perhaps not exclusively) in the “Civil jurisdiction”, in which there has been a formal adjudication of disputed right, resulting in the entry of a judgment or making of an order that one party pay a monetary sum to another.
There has been no such adjudication or entry of judgment in the instant case. Schedule 3 merely establishes a regime in which a claimant against the Fund has to vouch the propriety of the amount claimed and that it is within the aegis of the statutory scheme. No formal judgment is entered, nor is an order made. The Court, if satisfied that a claim properly falls within the ambit of the statutory compensation scheme, simply gives a certificate of authorisation to the Commissioner, which then permits him to disburse the amount certified.
In essence, this leads to the same end conclusion as that which found favour with the learned Judge in the case of Griggs v The Commissioner for Consumer & Business Affairs (1997) 194 LSJS 498 (“Griggs”), although he does not appear to have discussed any potential impact of s 34 of the Magistrates Court Act on the situation. Griggs was, of course, a decision binding on the learned magistrate. It is somewhat surprising that he did not apply it to the instant case.
I therefore allow the appeal for the purpose of setting aside so much of the authorisation of the learned magistrate as has allowed payment of a lump sum of $1000 in lieu of interest out of the Fund.

[2000] SASC 409

24 November 2000