Moulas & Co P/L v Capelj - [2007] SADC 87

DISTRICT COURT OF SOUTH AUSTRALIA
(Civil: Minor Civil Review)
MOULAS & CO P/L v CAPELJ
[2007] SADC 87
Reasons for Decision of His Honour Judge David Smith
24 August 2007
LIMITATION OF ACTIONS
Limitation of Actions - action on simple contract - acknowledgment - sufficiency - implication of promise to pay.
Limitation of Actions Act 1936 (SA) s35(a), s42(1); Magistrates Court Act 1991 s38(7)(b); Lord Tenterden’s Act (9 Geo. 4, c.14), referred to.
Sykes v Midland Bank [1971] 1 QB 113; Hall v Foong (1995) 65 SASR 281; In re River Steamer Company Mitchell’s Claim (1871) LR 6 Ch App 822; Spencer v Hemmerde [1922] 2 AC 507; Bucknell v The Commercial Banking Company of Sydney Ltd (1937) 58 CLR 155; Hepburn v McDonnell (1918) 25 CLR 199; Hipworth v Mahar (1952) 87 CLR 335; Motor Terms Co Pty Ltd v Liberty Insurance Ltd (1966) 116 CLR 177; The Stage Club Ltd v Millers Hotels Pty Ltd (1981) 56 ALJR 113, considered.

MOULAS & CO P/L v CAPELJ
[2007] SADC 87

This is an application to review a minor civil decision made by Mr Newman SM on the 31^st May 2007, whereby the Special Magistrate found that the applicant’s claim against the respondent for the balance of moneys allegedly owing for the supply of building materials, was statute barred.
On the day of the hearing of this application, namely the 14^th August 2007, after taking evidence and hearing argument from the parties, I took the view that the respondent had acknowledged the debt within the meaning of s42(1) of the Limitation of Actions Act 1936 (SA) and that acknowledgment “took the case out of the operation of” the said Limitation of Actions Act 1936. Therefore, I rescinded the order of dismissal of the magistrate and substituted judgment for the applicant company for $1,500 and costs of $179. I reserved the right to publish reasons. I do so now.
The applicant company, which carried on business in Coober Pedy, claimed that, between October 1999 and April 2000, it supplied building materials to the respondent and that, despite demands, the respondent refused to pay the balance owing, namely $1,500.00. Accordingly, the applicant company instituted proceedings to recover that sum on the 14^th February 2007.
The Special Magistrate concluded as follows:
This claim arises from the supply of goods, the last of which was supplied before April 2000. The six years provided in the statute of Limitations Act has expired. There are no good grounds which have been shown to me as to why there should be any extension granted of that time. The plaintiff believed some three or four years go that money was owed to him by the defendant. He has taken no action to institute proceedings until February of this year. The claim will be dismissed as it is out of time.
On the face of it, the action, being one founded upon a simple contract, had…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2007] SADC 87
Decision Date: 24 August 2007

CaseChat Overview and Summary

In this matter, the applicant company Moulas & Co P/L, which operates in Coober Pedy, brought an action against the respondent, Mr Mladen Capelj, to recover a balance of $1,500 for building materials supplied between October 1999 and April 2000. The Special Magistrate dismissed the claim as being statute-barred under the Limitation of Actions Act 1936 (SA). The applicant sought review of that decision. The central legal issue was whether the respondent had acknowledged the debt within the meaning of s42(1) of the said Act, such that the time limitation had no application. The Court found that the respondent had acknowledged the debt when he signed the invoice on 31st May 2001 and orally promised to pay at a later date. This acknowledgment and promise took the case out of the operation of the Limitation of Actions Act, and so the action was not statute-barred. The Court rescinded the order of dismissal and substituted a judgment for the applicant in the sum of $1,500 plus costs of $179.

The Court examined the relevant statutory provisions and authorities to determine whether the respondent had acknowledged the debt in a manner that would take the case out of the statute. Under s42(1) of the Limitation of Actions Act 1936 (SA), an acknowledgment or promise to pay a debt prevents the debtor from relying on the statute of limitations. The acknowledgment must be clear and imply a promise to pay. The Court found that the respondent's signature on the invoice and oral promise to pay the balance later constituted such an acknowledgment and promise. This acknowledgment took the case out of the operation of the Limitation of Actions Act and precluded the respondent from invoking the limitation period.

Orders