Kedem v Johnson Lawyers Legal Practice Pty Ltd - [2014] SASC 168

SUPREME COURT OF SOUTH AUSTRALIA
(Civil)
KEDEM v JOHNSON LAWYERS LEGAL PRACTICE PTY LTD
[2014] SASC 168
Judgment of The Honourable Chief Justice Kourakis
7 November 2014
APPEAL AND NEW TRIAL - APPEAL - GENERAL PRINCIPLES - INTERFERENCE WITH DISCRETION OF COURT BELOW - PARTICULAR CASES - OTHER MATTERS - COSTS
PROCEDURE - SUPREME COURT PROCEDURE - SOUTH AUSTRALIA - PROCEDURE UNDER RULES OF COURT - SUBMISSION TO JURISDICTION
APPEAL AND NEW TRIAL - APPEAL - PRACTICE AND PROCEDURE - SOUTH AUSTRALIA - EXTENSION OF TIME FOR APPEAL
PROCEDURE - COSTS - TAXATION
This matter originated in a claim for legal fees made by Johnson Lawyers Legal Practice Pty Ltd (Johnson Lawyers) against Mr Kedem in 2005. Mr Kedem filed an application seeking leave to file a notice of appeal against a decision made by a Master of this Court with respect to the taxation of those costs. Mr Kedem later instituted an appeal against the finding by a District Court Judge that he was liable to pay legal costs to Johnson Lawyers.
Held – application for permission to appeal against the decision of a District Court Judge, dismissed – application for permission to institute an appeal against the decision on a Master of the this Court refused.
Magistrates Court Act 1991 (SA) s 38; Legal Practitioners Act 1981 (SA) s 42; Supreme Court Civil Rules 2006 (SA) r 264; District Court Rules 2006 (SA) r 242, referred to.
King William Law Chambers v Mobitel (International) Pty Ltd (1981) 29 SASR 316; Von Doussas Legal Pty Ltd v Nasr [2008] SASC 206; Harradine v District Court of SA (2012) 280 LSJS 572; Attorney-General (NSW) v Quin (1990) 170 CLR 1, discussed.

KEDEM v JOHNSON LAWYERS LEGAL PRACTICE PTY LTD
[2014] SASC 168
Civil
KOURAKIS CJ:
Introduction

This matter has a long and complex history that originates in a claim for legal fees made by Johnson Lawyers Legal Practice Pty Ltd (Johnson Lawyers) against Mr Einav Kedem (Mr Kedem) in 2005. Johnson Lawyers is a firm of solicitors who acted for Mr Kedem in a previous action against him in this Court (the Pepper Finance matter).[1]
[1] Supreme Court of South Australia Action Number 1112 of 2004 Pepper Finance Corporation Limited v Einav Kedem.
In these proceedings Mr Kedem and Johnson Lawyers are, respectively, the appellant and respondent. Mr Kedem first filed an application seeking leave to file a notice of appeal against a decision made by a Master of this Court with respect to the taxation of those costs. Mr Kedem later also instituted an appeal relating to a decision made in the District Court on review of a minor civil action proceeding in the Magistrates Court that he is liable to pay legal costs to Johnson Lawyers. Mr Kedem’s complaint on the appeal relates to the finding of a District Court Judge on review that he was so liable.[2] Mr Kedem appeared before me, as he has done throughout the proceedings, legally unrepresented.
[2] That finding has been the subject of bankruptcy proceedings in the Federal Magistrates Court and the Federal Court of Australia; Kedem v Johnson Lawyers Legal Practice Pty Ltd [2012] FMCA 1118; Kedem v Johnson Lawyers Legal Practice Pty Ltd [2013] FCA 433; Kedem v Johnson Lawyers Legal Practice Pty Ltd (No 2) [2013] FCA 472; Kedem v Johnson Lawyers Legal Practice Pty Ltd (No 3) [2013] FCA 739.
I would dismiss Mr Kedem’s application for permission to appeal against a decision made by a Master of this Court with respect to the taxation of those costs. I dismiss Mr Kedem’s application to appeal against the decision of the District Court Judge. My reasons for so finding follow.
Background
Before I turn to consider the applications, it is necessary to detail the history of the matter.
Magistrates Court
On 14 September 2005, Johnson Lawyers issued proceedings in the Minor Civil Division of the Adelaide Magistrates Court for their legal fees in the sum of $4,235.21, comprising $3,912.44 for their fees and a collection fee of $322.77.[3] Johnson Lawyers had acted as Mr Kedem’s solicitors for a relatively short period mid-2005 in the Pepper Finance matter.
[3] AMCCI-05-8283.
On 10 October 2005, Mr Kedem filed a defence to that claim. At a directions hearing in the Magistrates Court on 26 October 2005 orders for discovery were made and the matter was adjourned to a trial date commencing on 4 January 2006. Johnson Lawyers were represented by the solicitor Mr Leventis and Mr Kedem appeared in person. At the time of the directions hearing in October 2005, Mr Kedem was living in his home at 5 Lorraine Avenue, Clarence Park (Clarence Park).
On 14 November 2005, Johnson Lawyers made an application in the Magistrates Court to have the trial date of 4 January 2006 adjourned. That application was heard on 23 November 2005 and according to the Magistrates Court electronic record it appears that neither Mr Kedem nor Johnson Lawyers were represented.
The trial date was adjourned to 23 February 2006 and an order was made that the Magistrates Court was to notify both parties. On 23 February 2006 there was no appearance for Mr Kedem at the trial. The Magistrate noted that there was no appearance by Mr Kedem and entered default judgment in favour of Johnson Lawyers.
On 4 June 2010, an application was made by Mr Kedem in the Magistrates Court to set aside the default judgment. Mr Kedem asserted that he had never been notified about the matter nor served with any documents because the documents were sent to the wrong address. In late 2005 and early 2006 possession of Mr Kedem’s home at Clarence Park was taken by the mortgagee and as a result he changed address.[4]
[4] By reference to the Supreme Court record, on 31 October 2005 Mr Kedem’s application for a stay of a warrant for possession was refused and his appeal dismissed.
Nevertheless, on 7 July 2010 a Magistrate heard and dismissed Mr Kedem’s application to set aside the default judgment. In dismissing the application the Magistrate made the following notation:
I note from the file that it is clear the original claim was sent on 14.9.05 to 5 Lorraine Avenue, Clarence Park, which was received by the defendant causing the defendant to file a defence.
He was aware of the directions hearing conducted on 26.10.05 because he attended same. That notice too was sent to the same address.
The defendant was then advised by the court of the eventual trial date of 23.2.06. The notification dated 23.12.05 was again sent to the same address.
The defendant indicates that he had changed address but he did not advise the court or the plaintiff and says he did not therefore, receive the notice of trial, whereupon a default judgment was entered on the day of trial.
The defendant failed to make any enquiry about the trial date, knowing that proceedings had been issued and knowing that he would not receive notification due to his change of address.
The defendant has failed to provide good reason why the judgment should be set aside. The application is struck out.
Costs of $80 in favour of the plaintiff for today’s attendance.
District Court & Supreme Court
On 8 July 2010, Mr Kedem instituted a Minor Civil Action Review in the District Court against the refusal of the Magistrate to set aside the default judgment.[5] On 24 August 2010 Judge Bampton, pursuant to s 38(7)(d)(iii)(A) of the Magistrates Court Act 1991 (SA) (the MCA), set aside the default judgment and indicated that she would proceed to deal with the claim for costs on its merits. In her reasons Judge Bampton stated:
In view of the fact Mr Kedem had been following the order for possession made by the Supreme Court, evicted from his premises and was living in his car, it is reasonable to assume that these proceedings were not foremost in his mind and, accordingly, the fact that he did not inquire or notify the Magistrates Court of his change of address is understandable.
Accordingly, in circumstances where he was not notified of the application for a new trial or the new trial date, or that default judgment had been entered, it is my view the court should exercise its discretion and set aside the default judgment allowing Mr Kedem an opportunity to argue his case, which is what I did last week.
[5] District Court of South Australia Action Number 1271 of 2010: DCCIV-10-1271.
In the hearing before Judge Bampton, Mr Kedem disputed that he was liable to pay legal fees to Johnson Lawyers. He agreed that a retainer agreement with Johnson Lawyers had been signed by him, but maintained that he paid some money in cash to the principal of Johnson Lawyers, some money by way of cheque and some directly to Mr Lazarevich. Mr Lazarevich is a barrister who had acted as counsel for Mr Kedem in the Pepper Finance matter.[6] Mr Kedem also argued that he made an agreement with Johnson Lawyers, through Mr Leventis, to reduce the legal fees. Johnson Lawyers provided, amongst other documents, a copy of the signed retainer letter between Johnson Lawyers and Mr Kedem dated 30 June 2005.
[6] Mr Lazarevich had also acted for Mr Kedem in another matter. I will refer to that matter as the Gretsas Chrzaszcz matter.
Judge Bampton found that “Mr Kedem was liable to pay Johnson Lawyers’ legal fees”. I will return in more detail to the findings of Judge Bampton when I consider the merits of Mr Kedem’s appeal below.
Having determined the issue of general liability, Judge Bampton then adjourned the proceedings to allow either Johnson Lawyers or Mr Kedem to apply to the Supreme Court for the taxation of costs pursuant to s 42(1) of the Legal Practitioners Act 1981 (SA) (the LPA).
Section 42 of the LPA then provided:
42—Costs
(1) On the application—
(a)     of a person claiming to be entitled to legal costs; or
(b)     of a person who is liable to pay, or who has paid, any legal costs,
the Supreme Court may tax and settle the bill for those costs.
(1a) The Supreme Court's power to tax and settle a bill of costs (but no other power of the Supreme Court under this section) may, subject to any rule, order or direction of the Court, be exercised by the Registrar of the Court.
(1b) Subject to the rules of the Supreme Court, an appeal lies to a judge against a decision of the Registrar pursuant to subsection (1a).
(2) Where an application has been made under subsection (1), the Supreme Court may—
(a)     restrain a person claiming to be entitled to the costs from commencing an action for recovery of the costs; or
(b)     stay any proceedings for recovery of the costs.
(3) The Court may, on taxation of a bill of costs under this section—
(a)     order the refund of any amount overpaid; or
(b)     where the proceedings have been instituted by the person seeking recovery of the costs—order payment of legal costs in accordance with the taxed bill.
(4) The Board may institute proceedings for the taxation of legal costs under this section on behalf of a person who is liable to pay, or has paid, the legal costs and must institute such proceedings if ordered to do so by the Tribunal.
(5) Any court in which proceedings for the recovery of legal costs have been instituted may order the plaintiff to apply to have the legal costs taxed in accordance with this section, and may adjourn the proceedings until the taxation has been completed.
(6) A legal practitioner may make an agreement in writing with a client for—
(a)     payment of a specified amount by way of legal costs (which may—but need not—consist of a daily, hourly or other time-related rate for professional work carried out by the legal practitioner on the client's behalf); or
(b)     payment of legal costs in accordance with a specified scale; or
(c)     subject to any limitations imposed by the Society's professional conduct rules or the regulations—payment of a contingency fee to be calculated on a basis set out in the agreement on fulfilment of a condition stated in the agreement.
(7) The Supreme Court may, in proceedings under this section, rescind or vary an agreement under subsection (6) if it considers that any term of the agreement is not fair and reasonable.
Returning to the history of this matter, on 8 December 2010, Johnson Lawyers initiated proceedings in the Supreme Court seeking a taxation of its costs of $3,912.44 which had been charged to Mr Kedem.[7] The matter came before Judge Lunn on 17 May 2011, following several hearings before another Supreme Court Master. Mr Kedem did not attend that hearing.[8]   In order to save the expense and delay of a formal taxation, Johnson Lawyers consented to Judge Lunn conducting a summary lump sum taxation of the costs under 6R 264(5)(c) of the Supreme Court Civil Rules 2006 (SA). Judge Lunn proceeded to tax the costs at $2,800.00, and ordered that Mr Kedem pay Johnson Lawyers the costs of the taxation in the sum of $1,000.00.
[7]    Supreme Court of South Australia Action Number 1704 of 2010: SCCIV-10-1704.
[8]    I note that Mr Kedem was late for this hearing and that he crossed paths with Mr James outside of the Court, whilst on his way to the already finished hearing. Mr James agreed that this was the case; that Mr Kedem was late for the hearing.
On 26 May 2011, Judge Bampton, acting on the taxation by Judge Lunn, entered judgment in the Magistrates Court action against Mr Kedem for the amounts of the taxation, interest and costs.[9] Mr Kedem was not present at that hearing in the District Court. I address the consequence of Mr Kedem’s non-attendance at [35] and [53] below.
[9] Taxation in sum of $2,800.00, plus interest calculated at a rate of 5% from 23 February 2006 in the sum of $735.29, plus costs of the review in the sum of $1,000.00.
On 10 June 2011, Mr Kedem issued an application in Supreme Court Action Number 1704 of 2010 to set aside the taxation of costs by Judge Lunn and for a rehearing.[10] Mr Kedem filed an affidavit in support of his application on 5 July 2011.[11]
[10] SCCIV-10-1704, FDN 6.
[11] SCCIV-10-1704, FDN 8.
That application came before Judge Lunn for hearing on 6 July 2011. Judge Lunn, in his published reasons delivered on 14 July 2011, correctly identified the division of responsibilities between the Supreme Court and lower Court as to quantum and liability respectively. His Honour noted that, subject to two possible exceptions, all of the grounds on which Mr Kedem contended that he was not liable to pay Johnson Lawyers’ charges for legal costs were issues of liability and not of quantification of costs. Accordingly they fell to be determined in the District Court under s 38(7)(d) of the MCA, and not by the Supreme Court under s 42 of the LPA.
In dismissing Mr Kedem’s application, and rejecting the two possible exemptions, Judge Lunn held that even if the lump sum taxation was set aside, there was no reasonable prospect that any taxation of the costs would result in a better outcome for Mr Kedem than the previous lump sum taxation made on 17 May 2011. In his reasons, Judge Lunn noted that it was for Mr Kedem to decide whether or not to apply to the District Court to set aside the judgment and agitate the liability issues he had raised.
Mr Kedem subsequently filed an application in the District Court to set aside the decision of Judge Bampton, made on 26 May 2011. The application came before Judge McIntyre for hearing on 23 August 2011 with Mr Kedem appearing in person. Mr James appeared for Johnson Lawyers. Following submissions from each party, Judge McIntyre dismissed Mr Kedem’s application, finding in favour of Johnson Lawyers and ordering costs in the sum of $250.
Judge McIntyre’s reasons on that issue cannot be located. Transcript from the hearing of 23 August 2011 before Judge McIntyre show nothing more than that judgment was delivered at 1.02pm and the proceedings continued at 1.05pm.
The Appeal
On 11 July 2013, Mr Kedem filed an application in the Supreme Court (Action Number 1704 of 2010) seeking leave to file and serve a notice of appeal against the decision of Judge Lunn delivered on 14 July 2011. That application first came before me for hearing on 26 July 2013 with, once more, Mr Kedem appearing in person and Mr James for Johnson Lawyers. The matter was adjourned to 14 August 2013 for further submissions where, at that hearing, it became apparent that the issue of write-offs and payments of amounts owed by Mr Kedem to Johnson Lawyers, as contended by Mr Kedem, may not have been considered, or at least sufficiently considered, by any judicial officer throughout the proceedings.
In brief, Mr Kedem contends that he paid money in cash and cheque to the principal of Johnson Lawyers, and some directly to Mr Lazarevich. Mr Kedem’s position is that the amount paid to Mr Lazarevich was in reduction of his fees and should, therefore, have been deducted from the costs claimed by Johnson Lawyers (the payment issue). Mr Kedem also argues that he obtained an agreement from Mr Leventis to write-off or waive some legal fees on condition that Mr Kedem engage Johnson Lawyers on the appeal in the Pepper Finance matter (the fee waiver issue).
In the course of the hearing of 14 August 2013, Mr James conceded that Judge Lunn had not considered the extent of any fee payment to Mr Lazarevich or the fee waiver issue. Mr James accepted that Judge Lunn had only considered whether the fees charged for the work done was reasonable.
With respect to Judge Bampton’s findings as to liability, Mr James submitted that the remarks of 24 August 2010 indicate that her Honour had considered the fee waiver and payment issues. In support of that contention Mr James directed the Court to the following passage of her Honour’s remarks:
It is to be noted Mr Kedem disputes he is liable to pay legal fees at all. Mr Kedem agrees he signed a retainer agreement with Johnson Lawyers. He maintains that he paid money in cash to Mr Johnson, some money by way of cheque and some directly to Mr Lazarevich. He also maintained that he obtained an agreement from one of the solicitors employed by Johnson Lawyers, namely Mr Leventis, to reduce legal fees. I adjourned the hearing last week in order that Johnson Lawyers could provide the court with copies of the relevant entries in the trust account and practice accounts together with retainer letters.
However, her Honour then adjourned the proceedings to allow an application to be made to the Supreme Court pursuant to s 42(1) of the LPA saying:
After hearing submissions from Mr Kedem and Mr James, for Johnson Lawyers, and considering documents handed to me during the course of the hearing, and having regard to the copy of the retainer agreement signed by Mr Kedem dated 30 June 2005, there is no doubt there is a liability to pay Johnson Lawyers’ legal fees.
Having determined that Mr Kedem is liable to pay the legal fees, the issue now is the quantum or how much of those legal fees he has to pay
…
Now that I have determined the issue of liability, the reasonableness of Johnson Lawyers’ bills has to referred to a taxing master in the Supreme Court. The procedure that takes place now is that I adjourn these proceedings allowing either Johnson Lawyers or Mr Kedem to apply to the Supreme Court for the taxation of costs…
On one reading of Judge Bampton’s remarks it appears that her Honour left open the fee waiver and payment issues to be determined after the taxing process. Alternatively, Judge Bampton may have thought that the questions of write-offs and payments would be considered on the taxation by the Supreme Court. When the matter came before Judge Bampton, on 26 May 2011, again Mr Kedem did not attend. I will turn to the consequence of Mr Kedem’s non-attendance shortly. Her Honour was advised by Mr James that the costs had been taxed. Her Honour proceeded to enter judgment without any further discussion save on the question of interest. It appears that judgment was entered by Judge Bampton for what Judge Lunn determined was the reasonable fee for all the work done, but without any deduction for the write-off at least, and perhaps for the money paid, as contended by Mr Kedem. In any case, Mr Kedem’s failure to attend the hearing meant that the payment and fee waiver issues were not expressly dealt with.

In the course of the hearing before me on 14 August 2013 on the application for permission to appeal against the taxation in this Court, Mr Kedem was informed that he could bring an appeal against Judge McIntyre’s decisions but that costs consequences could follow should he not succeed. The matter was then adjourned for a period to allow Mr Kedem to consider his position.
On 20 August 2013, Mr Kedem filed a notice of appeal against the decision of Judge McIntyre.[12] The judgment of Judge McIntyre which is appealed from was a decision on an application under 6DCR 242 to set aside or vary the judgment of Judge Bampton. Such applications are interlocutory in nature and therefore permission to appeal is required. Mr Kedem also seeks an order for an extension of time within which to bring that appeal.
[12] Supreme Court of South Australia Action Number 1119 of 2013: SCCIV-13-1119.
On 11 September 2013, the matter came before me for hearing of the appeal against the decision of Judge McIntyre, including the questions of permission and an extension of time, and determination of the application for permission to appeal against the decision of Judge Lunn.
The Taxation Appeal
In King William Law Chambers v Mobitel (International) Pty Ltd (KWLC),[13] this Court observed that the parties to a dispute over legal fees must have recourse to two courts in order to resolve the whole of the dispute between them. The role of the Supreme Court pursuant to s 42(1) of the LPA is confined to the proper quantification of the fees payable for legal work on the premise that the solicitor has been retained to perform the work. All other questions are to be determined by the Court in which the action has been brought. In this case it was for the District Court, under s 38(7)(d) of the MCA, to resolve the issues of liability.
[13] (1981) 29 SASR 316.
The division of the responsibilities between the Supreme Court and the court in which an action for legal fees is brought was laid down in the following passage from the judgment of White J in Von Doussas Legal Pty Ltd v Nasr:[14]
Counsel submitted that KWLC is authority for the proposition that all issues arising in an action to recover costs, when the costs do not relate to an action in the same court, are (apart from any issue as to the existence of a retainer) in the exclusive jurisdiction of the Supreme Court.
In my opinion, this submission should be rejected. It fails to give full effect to the reasons of King CJ and to s 42(1) of the LPA. The distinction drawn in KWLC was not between the existence of a retainer, on the one hand, and the reasonableness of the costs, on the other. It was instead the distinction between issues of liability and issues of quantification. King CJ referred to the English practice of a court, having determined the issue of liability , referring issues as to the reasonableness of the claimed bill to a taxing master. King CJ noted that there were difficulties applying that practice in South Australia bearing in mind the different jurisdictions of the Local Court and the Supreme Court. He suggested, however, that once the Local Court had determined that the defendant is “liable” under a contract of retainer it could adopt the procedure outlined earlier of offering the defendant an adjournment for a reasonable time to enable it to seek a taxation of costs. In the same vein, King CJ later referred to the determination by the Local Court “of the issue of liability”. As it happened in KWLC , the only issue raised as to liability was the issue of the existence of the retainer. That explains the focus in the reasons of King CJ on that issue. I do not see, however, any indication in those reasons that the issues of liability to which King CJ referred were confined to issues about the existence of a retainer.
Section 42(1)(b) of the LPA grants a power to this Court to tax and settle a bill of costs on the application of, amongst others, a person who is liable to pay legal costs. If such a person does not admit the liability to pay the costs, s 42(1) cannot be invoked. In that case, all issues arising in the dispute about liability will have to be determined by other means. Section 42(1)(a) does contemplate an application by a person claiming to be entitled to legal costs, and s 42(1)(b) permits an application by a person who has already paid legal costs. On application from those persons, this Court may have to determine issues of liability. The language of s 42(1) does not suggest however that the power to determine disputes in these circumstances is exclusive of the jurisdiction of other courts. Further, s 41(1) specifically contemplates that a practitioner may bring an independent action for the recovery of legal costs. It does not specify that such an independent action may be brought only in the Supreme Court. In my opinion, the terms of s 41(1) are inconsistent with this Court having an exclusive jurisdiction to determine disputes about the liability for costs.
(citations omitted)
[14] [2008] SASC 206, [17]-[19].
The ultimate order on a taxation pursuant to s 42 of the LPA may be an order for the payment of legal costs pursuant to s 42(3) LPA. Moreover, with the possible result that a refund of money paid might be ordered, s 42(3) of the LPA recognises that an order will take into account payments made.
The fee waiver and payment issues were not considered by Judge Lunn on the original taxation because Mr Kedem failed to appear. Mr Kedem cannot complain about a refusal for which he is responsible. In any event, Judge Lunn’s failure to consider the issue did not prevent Mr Kedem raising it before Judge Bampton. However, it was Mr Kedem’s failure to attend the hearing before Judge Bampton which again resulted in the failure to address the fee payment and waiver issues.
During the course of the hearing of the appeal, I was inclined to take the view that the hearing before Judge Lunn was limited to the question of the reasonableness of the fees charged on the premise that Mr Kedem had retained Johnson Lawyers, and that the fee waiver and payment issues had to be determined in the District Court. It remains my view that consistently with the decision in KWLC[15] the proceedings in the Supreme Court did not extend to the issue of liability. However, I have reached the view that the jurisdiction conferred by s 42 of the LPA does extend to disputes over payments made on an account of fees and fee waivers. Fee waivers are a particular species of agreements as to the basis on which fees will be charged. Agreements as to the charging of fees may specify an hourly rate, an event based charge and/or specify certain work for which there will be no charge. Such agreements may be retrospectively varied. Agreements of those kinds are the very subject matter of taxations. Payments on account of fees are inextricably connected to taxations.
[15] INSERT
Permission to appeal Judge Lunn’s orders should be refused.
The District Court Appeal
In this matter, Judge Bampton set aside the default judgment entered by the Magistrate pursuant to s 38(7)(d)(iii)(A) of the MCA, substituting the judgment that she considered appropriate. Judge McIntyre then dismissed Mr Kedem’s application to set aside that decision, made pursuant to 6DCR 242 of the District Court Rules 2006 (SA), which is an interlocutory decision. Importantly, s 38(8) of the MCA provides that a decision of the District Court on a review is final and not subject to appeal.[16]
[16] Harradine v District Court of SA (2012) 280 LSJS 572, [34] as per Blue J.
It is necessary first to consider the nature of a review pursuant to s 38 of the MCA. Section 38 of the MCA governs minor civil actions and, pursuant to subsection (6), creates the right to apply to the District Court for a review of a minor civil judgment entered in the Magistrates Court.
Section 38 of the MCA provides:
38—Minor civil actions
…
(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;
(b)     if a party to the action is a body corporate, the Court must, if the party seeks to be represented by an officer or employee who is not a legal practitioner, permit such representation;
(c)     if a person is subrogated to the rights of a party, the Court will permit that person to appear in the proceedings on behalf of that party and to be represented in the same way as if that person were a party;
(d)     the Court will permit a party, or a person subrogated to the rights of a party, to be assisted by a person who is not a legal practitioner but only if that person is not acting for fee or reward.
…
(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:
(a)     the right of a party to be represented by a legal practitioner at the review will be determined in accordance with subsection (4);
(b)     the Court may inform itself as it thinks fit and, in doing so, is not 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;
(e)     in hearing and determining the review, the Court must act according to equity, good conscience and the substantial merits of the case without regard to technicalities and legal forms.
(8)A decision of the District Court on a review is final and not subject to appeal.
(9)However, the District Court may reserve a question of law arising in a review for determination by the Full Court of the Supreme Court which may determine the question and make any consequential orders or directions appropriate to the circumstances of the case.
Therefore, the issue in this case is whether or not s 38(8) of the MCA includes a decision made on an application to set aside the decision made pursuant to s 38 of the MCA pursuant to 6DCR 42. As a result, the question that must be addressed is whether the application brought, heard and determined before Judge McIntyre was a proceeding encompassed within the s 38(6) MCA review.
As Justice Blue correctly determined in Harradine v District Court of SA,[17] there can be judicial review by the Supreme Court of the review by the District Court on the fairness of the procedure leading to a decision in a s 38(6) MCA review, but not on the substantive merits of the case.[18] I adopt and recite the history of the minor civil action jurisdiction, previously known as the small claims division, as summarised by Justice Blue in Harradine:[19]
[17] (2012) 280 LSJS 572.
[18] Harradine v District Court of SA (2012) 280 LSJS 572, [34]; Attorney-General (NSW) v Quin (1990) 170 CLR 1.
[19] (2012) 280 LSJS 572, [42] – [45].
The concept of a minor civil action (then known as a “small claim”) was introduced in 1974 by amendments to the Local and District Criminal Courts Act 1926 (SA). Specifically, section 152a(1) introduced into that Act provided:
A court, in hearing and determining a small claim, shall not be bound by the rules of evidence but may inform itself upon any matter relating to the claim in such manner as it thinks fit.
In 1991, the Magistrates Court Act was enacted to replace those provisions of the Local and District Criminal Courts Act which applied to local courts. Section 38(1) was enacted in its present terms. Section 38(1) is much more explicit and detailed than section 152a(1) of the old Act.
In 1974, when section 152a was proposed to be introduced into the old Act, the then Attorney‑General said in his second reading speech:
Our system of administration of justice is designed to sift carefully truth from falsehood, sound reasoning from fallacious reasoning, right from wrong. This is admirable and necessary. But it is too time consuming and therefore expensive to be a satisfactory way of dealing with small claims …
If, therefore, persons with small claims need to have the opportunity of bringing them to court, it is necessary to devise a nice simple system, admittedly second best and admittedly less thorough than is necessary for more important and complex matters, but for those very reasons less expensive. It is necessary to have procedures for small claims in which some of the rules and protections which one legal system provides are sacrificed to the necessity of relating the cost to the amount involved in the case.
In 1991, when the Magistrates Court Bill was introduced into Parliament, the then Attorney-General said in his second reading speech:
Clause 33 contains provisions relating to minor civil actions (small claims). The Court should attempt a negotiated settlement. If that is not successful, the Court is to conduct an inquiry on a more informal basis.
The policy in the creation of the minor civil jurisdiction was to hear matters informally, quickly and cheaply, and s 38(6)-(9) MCA give effect to a very limited right for review which is consistent with that policy.
Mr James submits that there is nothing in the wording of s 38 of the MCA which limits subsection (8) to judgments which are of a final character. Mr James argues that it would be counter-intuitive to hold that an order which finally disposes of the review is not subject to appeal but that interlocutory orders made with respect to that judgment are subject to appeal. I accept Mr James’ submission. The power conferred by 6DCR 242 allows the District Court to set aside judgments entered irregularly. It is a procedural power which is ancillary to, and in aid of, the jurisdiction, in the exercise of which the judgment was made. Section 38(8) of the MCA does not preclude applications pursuant to 6DCR 242. It prohibits only the bringing of an appeal against the decision of the District Court on review. It does not limit the processes of the District Court itself. If a judgment is set aside, and another entered in its place, the substituted judgment is made pursuant to the substantive jurisdiction conferred by s 38(6) MCA and not 6DCR 242. In an action brought pursuant to s 38(6) MCA the judgment so substituted would be subject to s 38(8) MCA. So too, the dismissal of an application brought pursuant to 6DCR 242 must be subject to the prohibition against an appeal enacted by s 38(8) of the MCA.
I refuse the application for permission to appeal against Judge McIntyre’s decision on the ground that it is precluded by s 38(8) of the MCA.
Extension of time
If Mr Kedem’s application was not barred by s 38(8) MCA, I would, in any event, have refused permission. There was a significant delay of nearly two years in bringing the appeal. In that time costs have been incurred. The events which found the original claim for costs and the dispute over costs were in 2005.
Moreover, Mr Kedem’s failure to appear before Judge Bampton has not been adequately explained and the public interest in the finality of litigation outweighed Mr Kedem’s interest in having the fee payment and waiver issues adjudicated. My reasons for so finding appear below.
As has been seen, Mr Kedem has failed to attend a number of hearings over the course of this matter. Significantly, with respect to this appeal, Mr Kedem failed to appear at the hearing of 26 May 2011 before Judge Bampton when judgment was entered against him.
On 11 September 2013, I informed Mr Kedem that unless a reason was provided as to why he did not attend before Judge Bampton on 26 May 2011 that, regardless of the merits, I would be inclined to dismiss his appeals. Mr Kedem was informed that if there was a good reason for not attending before Judge Bampton on the aforesaid date then he should provide supportive evidence. At that hearing, Mr Kedem referred to a medical appointment on 26 May 2011 at the same time as the hearing before Judge Bampton. Mr Kedem was granted leave to file and serve any affidavit material on the issue.
In accordance with those directions Mr Kedem provided an affidavit, dated 2 October 2013. Mr Kedem detailed his history of a stroke, which he suffered in 2004, and a motor vehicle accident, which occurred in 2011. He deposed to his treatment with the pain killing medication and physiotherapy. Mr Kedem was also on medication following shoulder surgery in 2012. Exhibited to Mr Kedem’s affidavit is a medical certificate from Dr Liang Zhong Chan that refers to a consultation with Dr Chen at 9.30am on 26 May 2011, being the same time and date as the hearing. Mr Kedem said that he did not attend the hearing before Judge Bampton on that date due to substantial and debilitating pain that he was suffering, and the urgent need to get medical treatment for pain relief. I accept that Mr Kedem had a medical appointment on 26 May 2011 but the evidence does not persuade me that he was unable to attend in the District Court on that day. In particular I observe that no medical report to that effect has been provided and Mr Kedem failed to inform the District Court of his claimed condition as soon as reasonably practicable.
An analysis of the documents provided in the course of the hearing make it clear that Mr Kedem paid an amount of money to Mr Lazarevich. However, in addition to Mr Lazarevich’s account with Johnson Lawyers for the Pepper Finance matter, Mr Lazarevich also had an account in relation to Mr Kedem’s Gretsas Chrzaszcz matter. Johnson Lawyers position is that the whole of the legal fees owed to them by Mr Kedem, being $3912.00, had not been paid and that everything that had been paid to Mr Lazarevich by Mr Kedem was not a payment that related to that amount. Mr Kedem’s position is that the amount paid to Mr Lazarevich was a reduction of accounts rendered to Johnson Lawyers for the Pepper Finance matter, and so therefore the amount should have been reduced from Mr Kedem’s respective legal fees. There is also the contention with respect to the write-off, an amount which Mr Kedem claims that Johnson Lawyers agreed to waiver provided that Mr Kedem retained Johnson Lawyers for the appeal proceedings in the Pepper Finance matter.
I turn first to the findings of Judge Bampton. Having considered the proceedings before Judge Bampton and heard submissions from both parties on the matter, I am not satisfied that her Honour had decided the payment question and the write-off question before the matter was referred to Judge Lunn for taxation. I am therefore not satisfied that Judge Bampton, at that point, resolved and addressed the two issues with respect to liability. Her Honour made some remarks during the course of argument that indicated a view that Mr Kedem would find it difficult to determine how the payment to Mr Lazarevich was used and appropriated, however her Honour never finally decided that question, or the question concerning the waiver of legal fees.
As I have outlined above, neither of those questions were determined by Judge Lunn when the matter was referred to the Supreme Court for taxation. When the matter returned to the District Court on 26 May 2011, following Judge Lunn’s taxation, the questions fell, again, to be determined by Judge Bampton. In the ordinary course that is what would have occurred, but Mr Kedem did not attend that hearing and therefore he was not there to take issue or make the point. In the normal course, Mr Kedem would be required to accept responsibility for his lack of attendance.

The payment of fees and waiver issue, although perhaps not very complex, are not simple. It is necessary to closely consider the accounts rendered by the Johnson Lawyers and Mr Lazarevich and to match payments made against those accounts.
The issue might have been cost effectively dealt with either before Judge Lunn or Judge Bampton at that time. The legal costs of re-opening that question now would be disproportionate to the amount in dispute.
Conclusion
I would make the following orders:
1.The application for permission to appeal against the decision of Judge McIntyre is dismissed.
2.The application for permission to appeal against the decision of Judge Lunn is refused.