Greene v Harte No. Scgrg-00-564

GREENE v HARTE
[2000] SASC 306

Magistrate’s Appeal

1................ MARTIN J......... This is an appeal against a decision of a Magistrate made on 9 June 2000 refusing an application to strike out a statement of claim filed by the respondent. The appellant has also filed an application for leave to appeal against an earlier decision in the same proceedings by a different Magistrate, in which leave was given to the respondent to amend her statement of claim.

The appellant and the respondent lived in a de facto relationship for approximately two years and four months. They separated on 24 January 1999. There are two children of the relationship, who now reside with the respondent. On 21 July 1999 the respondent commenced civil proceedings in the Magistrates Court claiming $4431.84 being amounts paid by her following the separation in order to settle joint debts. On 11 August 1999 the appellant filed a defence and counterclaim. The counterclaim alleged that following the separation the respondent wrongfully took away and converted to her own use joint property of the relationship and property belonging to the appellant which was not part of the property of the relationship. In respect of the property of the relationship, the appellant sought to recover $7215 being half the value of that property. When other items were added, the total of the counterclaim was $16215.
In December 1999 the parties failed to attend at a directions or conciliation hearing. The claim and counterclaim were struck out. According to an affidavit filed by the appellant, on 23 August 1999 the parties reached agreement before Father John Fleming that “no further litigation would take place.” An affidavit of 24 July 2000 from Father Fleming was annexed to the appellant’s affidavit. Father Fleming said that at a meeting of 23 August 1999, the parties apologised to each other and resolved to try and start again. He said the parties agreed to “put a stop to all current litigation.” According to the affidavit of the appellant, it was pursuant to the agreement that the respondent deliberately and voluntarily abandoned her claim in December 1999.
The respondent filed an affidavit in this Court in which she denied that she and the appellant had reached agreement not to pursue further litigation. She said she was not aware that the action would be struck out if the parties did not attend. On 29 March 2000 she filed an application to have the matter, “reinstated”. The respondent said in her affidavit that by March 2000 it was evident to her that a reconciliation was not possible. In support of her application to have the action reinstated, the respondent swore an affidavit dated 29 March 2000 in which she stated that the attempt of the parties to resolve the dispute between themselves had been unsuccessful.
The application was heard on 5 April 2000. Counsel for the appellant has indicated that while the appellant did not consent to the application, he did not oppose it. A Magistrate ordered that the claim and counterclaim be ‘reinstated’. Orders for discovery were also made and the appellant was given leave to amend his counterclaim within 14 days. A trial date was fixed for 5 June 2000.
Both parties had been unrepresented. In the respondent’s affidavit filed in connection with this appeal, she said that the appellant announced at the Magistrates Court that he wanted leave to amend his counterclaim to seek a greater sum. Subsequently, he advised her that the counterclaim would be in excess of $24000. She then took legal advice. In his affidavit of 30 August 2000 the appellant denied that he suggested an intention to claim $24000 by way of counterclaim.
On 8 May 2000, through her solicitors, the respondent filed an application seeking leave to amend her statement of claim. In support of that application the respondent filed an affidavit dated 8 May 2000 in which she stated that in view of the issues raised in the counterclaim arising out of the de facto relationship, she proposed to amend her statement of claim to bring into account the provisions of the De Facto Relationships Act 1996, (“the Act”) and to apply to the Court for a division of all matrimonial property pursuant to the Act. On 17 May 2000 a Magistrate granted the application and allowed the respondent 14 days to file an amended statement of claim. It is in respect of that decision that the appellant now seeks an order extending the time within which to seek leave to appeal from that decision and leave to appeal against it.
I note that if the application to amend had not been granted, the respondent would have sought an order that the defence be struck out and that the trial date of 5 June 2000 be abandoned. At that time the appellant had not filed an amended counterclaim and, according to the respondent, he had indicated that he had 14 days from 3 May 2000 in which to do so. In addition, the respondent asserted that the documents discovered were insufficient to enable her to prepare her defence within the time allowed. In particular, no valuation of the assets had been discovered and the appellant had not discovered details of his bank accounts.
Section 9(3) of the Act provides that an application for division of property must be made within one year after the end of the relationship unless the Court, after considering the interests of both partners, “is satisfied that extension of this period of limitation is necessary to avoid serious injustice to the applicant.” As mentioned, the relationship ended on 24 January 1999. The respondent applied to amend her statement of claim in order to seek a division of property pursuant to the Act approximately three and a half months after the expiration of the one year period of limitation. However, in the course of the application before the Magistrate, no mention was made of the limitation period. Not surprisingly, the Magistrate did not advert to the question as to whether an extension of the period of limitation should be granted in accordance with s 9(3).
On 1 June 2000 the appellant applied to have the amended statement of claim struck out because it was out of time. On 9 June 2000 a different Magistrate refused the application. Leave having been granted on 30 June 2000, the appellant appeals against that decision.
Prior to the hearing of the appeal, I raised with counsel the issue as to whether the appeal had been instituted against the correct decision. At that time, the appellant had not filed an application for leave to appeal against the decision of the first Magistrate permitting the amendment to the statement of claim. An application for leave to extend time and for leave to appeal against the decision of the first Magistrate was filed on 31 August 2000.
Counsel for the appellant submitted that the second Magistrate had jurisdiction to strike out the statement of claim because the pleading in reliance on the Act was filed outside the limitation period of one year and was filed without an order from the Court extending the period of limitation. I doubt that the second Magistrate had jurisdiction to strike out the statement of claim for the reasons advanced in support of that application. In effect, the appellant was asking the second Magistrate to act as a court of appeal by striking out an amendment that had been permitted by the first Magistrate. However, this issue was not argued in full because the parties agreed it was unnecessary for me to decide it. The parties agreed that I should determine the questions as to whether an extension of the period of limitation was necessary and, if so, whether that extension should be granted. Similarly, although an interesting question arises in respect of the first decision to permit the amendment of the statement of claim because no point was taken concerning the limitation period, on the assumption that a material error occurred in respect of the order of the first Magistrate because his Honour did not advert to the issue of an extension, it was agreed that I should determine the issue of extension and not remit the matter to the Magistrate.
Counsel for the respondent submitted that an extension of the period of limitation was not necessary. He pointed out that the introduction of the Act changed the law and enabled the parties to seek an equitable division of relationship property. He argued that, although the respondent’s original claim did not refer to the Act or an equitable division of property, in substance the claim sought the relief available by virtue of the Act.
The original claim by the respondent did not relate to assets brought to the relationship by the parties or accumulated during the course of the relationship. It concerned debts of the relationship accumulated in the joint names of the parties or in the name of the respondent. In essence, the respondent having paid those debts after the separation, she sought recovery of the amount paid on the basis that the appellant had taken all of the parties savings and joint furniture, the value of which exceeded the debts.
The appellant submitted that, in substance, the respondent pleaded that she was entitled to be indemnified by the appellant for the particular debts. In my opinion, however, the substance of the plea was centred upon the contention that the appellant had taken joint savings and furniture of a value that exceeded the debts. The essence of the plea raised, therefore, an issue of division of property. Section 10 of the Act provides that upon an application for the division of property, the Court may make orders it considers necessary to divide between the partners in a way that is just and equitable the property of either or both of the de facto partners. Sub-section (2) of s 10 provides examples of the orders that the Court may make, including an order for the payment by one partner of a lump sum to the other. By her original claim the respondent was seeking the payment of a lump sum by the appellant.
Parliament has deliberately conferred a special jurisdiction upon the Magistrates Court in order to provide for just and equitable resolutions of property disputes between persons who have lived in a de facto relationship. At the time the respondent filed her original statement of claim she was unrepresented. In essence, she asserted that as the appellant had taken certain property of the relationship she was entitled to recover from him a lump sum to recompense her for meeting relationship debts. In a practical sense, the respondent was justifying her claim on the basis of balancing the assets and liabilities of the relationship.
The pleading must also be assessed in the context of the Magistrates Court (Civil) Rules 1992 which govern the form of the pleadings. Rule 24(1)(a) provides that, subject to any order of the Court, a short form of pleading disclosing the cause of action upon which the action is based is sufficient. In accordance with rule 26 the action was commenced on a prescribed form which was a pre-prepared form appropriate to a minor civil claim in the Civil Division of the Magistrates Court. The form contained a line for completion by the respondent headed “Type of Claim”. In that line, the respondent had inserted the words ‘De Facto relationship’.
In my opinion, the respondent identified that the claim arose out of a de facto relationship and the substance of the claim as pleaded necessarily invoked the jurisdiction of the Court under the Act. In essence, the respondent sought a limited division of property. The claim was filed well within the limitation period. In those circumstances, the respondent did not require an extension of time at the time that she applied to amend her statement of claim. There was no error by the Magistrate.
The appellant was also unrepresented at the time that he filed his defence and counterclaim in August 1999. As mentioned, he claimed loss and damage comprising half the value of the de facto relationship property that he asserted had been wrongfully converted by the respondent. In a practical sense the respondent also sought to invoke the jurisdiction conferred by the Act.
In my opinion, therefore, both parties had invoked the jurisdiction of the Act. No extension of time was required for an amendment to the statement of claim. However, as full argument was addressed to the question as to whether, should an extension be required, the respondent had made out a case for the extension, I will indicate my views on that issue.
Counsel for the appellant observed that the limitation period itself necessarily creates an injustice. He submitted that no serious injustice would be caused by refusing the extension of time and thereby preventing the respondent from pursuing a division of property. He said the respondent had agreed to discontinue the proceedings and had abandoned her claim in December 1999. He suggested that if the Court permitted an extension of time it would, in effect, be assisting the respondent in breaking her agreement. No prejudice would follow because once the statement of claim was dismissed, the appellant was bound by a previous undertaking that he would abandon his counterclaim.
Various factual disputes between the parties are evident in the affidavits. Some of the material in the affidavits is irrelevant. I indicated to the parties that this appeal was not an occasion for the calling of evidence in an endeavour to resolve the disputes. In particular, I was not prepared to embark upon an attempt to resolve the dispute as to whether an agreement had been reached that the proceedings would be discontinued. Even if that agreement existed, it was reached in the context of a breakdown of a relationship which from time to time has given rise to tension and to bitterness. Disputed Family Court proceedings have occurred. It is not appropriate for this Court to embark upon an investigation as to whether the agreement existed and, if so, whether it was subject to conditions or why the respondent decided to reinstate the proceedings. I am prepared to proceed on the assumption that the respondent agreed to discontinue the proceedings, but for an unknown reason arising out of all the circumstances surrounding the relationship and the disputes between the parties, she decided that she wished to continue with the proceedings.
On the assumption that the original statement of claim did not seek a division of property and an extension was needed before the amendment was permitted, it is pertinent that the respondent was unrepresented at the time she initially took proceedings. When she sought legal advice she made an application to amend the claim to seek a division of property. That application was only approximately three and a half months outside the one year period of limitation. The parties lived together for over two years and there are two children of the marriage. The statement of claim identifies a number of assets which could be divided if a court, in the exercise of its equitable jurisdiction pursuant to the Act, thought a division was appropriate in order to do justice between the parties. There is a dispute as to whether the assets identified in the statement of claim would result in any significant order in favour of the respondent should she be successful. The appellant claims that the parties would be fighting over “straws”. The respondent disagrees. It is inappropriate for me to attempt to resolve that dispute. The pleadings and other material before me establish that a real issue remains to be determined.
Counsel for the appellant suggested that if the claim was struck out and the counterclaim withdrawn in accordance with the appellant’s undertaking, no injustice would be caused to the respondent. She would still be at liberty to pursue her original claim. In my opinion, however, that submission overlooks the entitlement of the respondent to seek a division of the property. In addition it overlooks the practical consequence that, should the respondent pursue her original claim based on some form of indemnity, the appellant could respond with a large counterclaim based upon wrongful conversion of property. In addition, if the claim was dismissed and the counterclaim withdrawn, there remains the possibility that the appellant could institute a claim for the recovery of the property he purchased during the course of the relationship that the respondent took with her. Such a claim would seek a remedy independent of any remedy available under the Act. If that occurred a real issue would exist as to whether the new proceedings were an abuse of process.
On the assumption that an extension is necessary, and bearing in mind the interests of the parties, in all the circumstances I am satisfied that an extension of the period of limitation is necessary to avoid serious injustice to the respondent.
Counsel for the appellant put forward a further submission upon which I should comment. On the assumption that the original statement of claim invoked the jurisdiction of the Act, counsel contended that the Court did not have jurisdiction to reinstate the claim. Similarly, if the counterclaim invoked the jurisdiction of the Act, there was no jurisdiction to reinstate the counterclaim. The parties separated on 24 January 1999 and the reinstatement occurred over 12 months later on 5 April 2000.
It is probably unnecessary for me to determine this issue. If the submission is correct, the error could be rectified by the Court granting an extension of the period of limitation for the purposes of “reinstating” the claim and counterclaim. However, an examination of the relevant rules demonstrates that, properly viewed, the action was not “reinstated”.
Following the filing of the counterclaim, a notice was sent to the parties requiring their attendance at a directions hearing on 31 August 1999. Notes on the Court file indicate that on 31 August 1999 the directions hearing was adjourned to 6 October 1999 for a conciliation conference before a Magistrate. On 6 October 1999, the hearing or conference was adjourned to 7 December 1999. In the absence of the parties on 7 December 1999 both the claim and counterclaim were dismissed. The note of dismissal does not identify the source of the power to dismiss the action. Either of rules 28 or 101 could have been applied. Rule 28 provides that if it appears that an action is not being conducted with due expedition, the Court may on its own initiative dismiss the action for want of prosecution. Rule 28(3)(c) provides that where an action is dismissed, the dismissal has the effect of a judgment but not as a final judgment. Pursuant to rule 87 a Magistrate has the power to set aside a judgment that is not a final judgment. If the Magistrate who dismissed the claim acted pursuant to rule 28, therefore, the claim was not later “reinstated”. The judgment was set aside.
The occasion on which the parties failed to attend in December 1999 appears to have been either a directions hearing or a conciliation conference. Rule 101 was applicable to both. Rule 101 provides that if a party fails to attend within 15 minutes of the time fixed for a conciliation conference or directions hearing, the Court may give judgment or make an order against that party. It is likely that the Magistrate acted pursuant to this rule. In those circumstances, however, in my opinion the dismissal of the claim and counterclaim did not operate as a “final judgment” as that term is defined in rule 2(1). It would amount to a judgment that could be set aside pursuant to the power given in rule 87.
In my opinion, therefore, notwithstanding the use of the word “reinstated” by the Magistrate on 5 April 2000, the action was not reinstated. The judgment of 7 December 1999 was set aside. The claim and counterclaim remained alive. It is not appropriate to regard what occurred on 5 April 2000 as the making of an application for the division of property for the purposes of s9(3) of the Act. In my opinion there is no substance in this complaint by the appellant.

For the reasons I have given, if it was necessary for the period of limitation to be extended, I would extend that period in order to enable the respondent to amend her statement of claim and to plead a division of property in the terms of the amended statement of claim filed in the Magistrates Court on 30 May 2000. However, as I have indicated, in my opinion an extension is not necessary. In those circumstances I make the following orders:
1...... The appeal against the decision of the Magistrate made on 9 June 2000 in which his Honour refused an application to strike out the amended statement of claim is dismissed.
2. The application to extend the time within which to seek leave to appeal from the order of the Magistrate made on 17 May 2000 granting leave to amend the statement of claim is granted and the time is extended to 1 September 2000.
3...... The application for leave to appeal against the order of the Magistrate made on 17 May 2000 is refused.
In connection with the third order I indicate that if I had been disposed to grant leave I would have dismissed the appeal. I have determined that leave should be refused bearing in mind the strictures imposed in respect of applications for leave to appeal against orders of Magistrates made in the circumstances under consideration. I have also borne in mind that, although the appellant was unrepresented at the relevant time, no point was taken that an extension of the period of time was needed. In all the circumstances, I consider leave should be refused. As I have indicated, if I had been disposed to grant leave I would have dismissed the appeal against the order of 17 May 2000.
I order that the appellant pay the respondent’s costs of the appeal in all respects.

[2000] SASC 306

6 September 2000