Muldowney v Flinders University No. Scciv-02-267

MULDOWNEY v FLINDERS UNIVERSITY
[2002] SASC 313
Magistrates Appeal: Civil

MULLIGHAN J These appeals are brought by the appellant against decisions made by learned Magistrates on 3^rd July 2001 and 29^th January 2002 upon an application by the appellant to remit the amount due by him to the respondent by reason of orders for costs made against him in favour of the respondent.
The appellant was formerly a mature age student at the Flinders University of South Australia which I have concluded is the respondent on this appeal for reasons which I mention shortly. He had enrolled and undertaken study for the Degree of Bachelor of Commerce but has not completed that study. He has only progressed a little way and has not attended at the Flinders University since 1995. On 15^th December 1995 the Deputy Director of Administration and Registrar of the respondent made a complaint against the appellant seeking a restraining order in which it was alleged that the appellant, unless restrained, would behave in an intimidating or offensive manner towards a number of named individuals, including students at the Flinders University and employees of the respondent and the proprietor of a cleaning business engaged by the respondent to undertake cleaning services at the respondent. Earlier in that year proceedings were taken against the appellant by the Police alleging assault and later seeking a restraining order but they were withdrawn.
The appellant contested the complaint laid on behalf of the respondent which came to trial in the Magistrates Court at Adelaide. Judgment was delivered on 12^th June 1996 and the Magistrate ordered that the appellant be restrained from behaving in an intimidating or offensive manner to various persons at the premises of the respondent, from assaulting, approaching, threatening or otherwise interfering with those persons, from entering upon or remaining in the vicinity of or upon the campus of Flinders University at Bedford Park (“the Flinders University”), excluding the Flinders Medical Centre, and from damaging or threatening to cause damage to the real or personal property of the respondent. The Magistrate ordered the appellant to pay the respondent’s costs fixed at $19,470.50. The restraining order was subsequently varied in a way which is not relevant for present purposes.
The appellant applied for an extension of time within which to appeal against the restraining order and the order for costs. That application was refused on 19^th April 1999. Martin J, who heard the application, made the following observation which is relevant for present purposes:
“The evidence points to a rather unpleasant and disturbing picture of ongoing and widespread offensive and intimidatory behaviour over a period of time. It is not unfair to describe the evidence as demonstrating that the applicant was aggressive and obnoxious in the extreme. His conduct gave rise, understandably, to a reasonable apprehension of violence and of a continuation of that pattern of behaviour.”
Enforcement of the orders for costs was undertaken pursuant to Division 3 of Part 9 of the Criminal Law (Sentencing) Act 1988 (“the Sentencing Act”). Over a period of six years the appellant paid about $650 and further amounts have been deducted due to the periods the appellant was in custody upon the execution of warrants prior to 6^th March 2000 when enforcement in that manner could be undertaken. Division 3 was amended by s 25 of the Statutes Amendment (Fine Enforcement) Act 1998. It is unnecessary for present purposes to mention the new provisions in detail. The effect of them is that any pecuniary sum due has to be paid within 28 days of the order being made: s 61 of the Sentencing Act. Pursuant to s 3(1) of that Act a “pecuniary sum” means a fine, compensation, costs and other types of financial liability which are not relevant for present purposes. When imposing a fine or ordering a person to pay some other pecuniary sum, the court is not empowered to make any order relating to the time or manner in which the sum is to be paid: s 14A(1) of that Act. A pecuniary sum is paid to the Manager or any agent appointed by the Manager: s 62(1). The Manager is the Manager, Penalty Management, who is a member of the Administration of the Magistrates Court of South Australia: s 12(1)(ab) of the Magistrates Court Act 1991. That Manager disburses pecuniary sums collected by him in accordance with s 62(2) of the Sentencing Act which includes payment of costs to the party entitled to them.
Section 64 of that Act provides that a person owing a pecuniary sum (“the debtor”: see s 60) may enter into an arrangement for payment including by instalments. An authorised officer may investigate the debtor’s means of satisfying a pecuniary sum: s 66. An “authorised officer” is the Sheriff, the Manager, Penalty Management, a Registrar of the Magistrates Court, the Registrar of the Youth Court or a person appointed by the State Courts Administrator. The authorised officer may make penalty enforcement orders in relation to a debtor as appear likely to result in full or substantial satisfaction of the due amount: s 69(1). Priority should be given to suspension of a licence to drive a motor vehicle: s 69(2). Other options are the sale of property, a garnishee order and an order for community service.
On 17^th January 2000 a Magistrate heard an application, presumably by the authorised officer or the appellant, pursuant to the former s 68 of the Sentencing Act for an order remitting the outstanding amount of the pecuniary sum due by the appellant. The Magistrate refused the application but ordered that the amount due be paid by instalments of $50 per month.
The Registrar carried out an investigation into the financial means of the appellant after the amendments to Division 3 of the Sentencing Act came into operation on 6^th March 2000. He was satisfied that the appellant did not have, and was not likely within a reasonable time to have, the means to satisfy the pecuniary sum due by him without the appellant or his or her dependants suffering hardship. Consequently he referred the matter to the Magistrates Court for reconsideration pursuant to s 70I of the Sentencing Act which provides:
“70I(1) If the Registrar is satisfied, after an investigation of a debtor’s financial means has been carried out under this Division or on such other evidence as the Registrar thinks sufficient, that the debtor does not have, and is not likely within a reasonable time to have, the means to satisfy the pecuniary sum without the debtor or his or her dependants suffering hardship, the Registrar may remit the matter to the Court for reconsideration under this section.
(2)If the Court before which a debtor is appearing in any proceedings under this Part is satisfied that the debtor does not have, and is not likely within a reasonable time to have, the means to satisfy the pecuniary sum without the debtor or his or her dependants suffering hardship, the Court may, of its own motion, proceed to reconsider the matter under this section.
(3)On reconsidering a matter under this section, the Court may, by order -
(a)remit or reduce the pecuniary sum; or
(b)revoke the order (or orders) imposing the pecuniary sum and -
(i)make an order for community service; or
(ii)disqualify the debtor from holding or obtaining a driver’s licence for a period not exceeding 6 months; or
(iii)cancel the debtor’s driver’s licence and disqualify the debtor from obtaining such a licence for a period not exceeding 6 months; or
(c)confirm the order imposing the pecuniary sum,
and the Court may make such ancillary orders as the Court thinks appropriate.
(4)    An order under subsection (3)(b) does not affect the original recording (or not) of a conviction against the debtor or the imposition of any other penalty for the offence, or offences, to which the pecuniary sum related.
(5)    In making an order for community service, the Court must take into account the amount (if any) by which the original pecuniary sum has been reduced by the debtor.
(6)    If the Court remits a pecuniary sum, the order, or orders, by which the sum was imposed will be taken to be fully satisfied.”
Section 60(1) provides that a “debtor” means the person by whom the pecuniary sum is payable.
At the hearing on 17^th January 2000, the learned Magistrate heard evidence from the appellant as to his financial position. He accepted that the appellant and his partner have a combined income of $588 each fortnight which is from social security and liabilities of $553 each fortnight, leaving a disposable income of about $30 per fortnight. The evidence discloses that these liabilities were for rent, running an old motor car, food, gas, electricity and telephone. He had no assets apart from the motor vehicle valued at $400 and furniture and personal effects. There is no suggestion that the financial position of the appellant had significantly altered before the investigation by the Registrar.
The matter came on for hearing before the same Magistrate on 3^rd July 2001. At the hearing he allowed the respondent to appear, cross-examine the appellant and make submissions as he took the view that the respondent had an interest in the outcome of the application. The Magistrate declined to remit the amount owing to the respondent and also ordered that the amount due be paid. I was informed that these orders have been confirmed by another Magistrate subsequently.
It was accepted at the hearing of the appeal that the respondent has a rule that a person is not permitted to attend the Flinders University if he or she owes money to the respondent and that this rule has been applied to the appellant.
The appellant sought to cover the ground of the various legal proceedings taken against and by him relevant to his dispute with the respondent. These matters are not relevant on this appeal which is confined to the refusal of Magistrates to remit the amount of costs owing by him to the respondent and the current order that he pay that amount by instalments of $50 per month. The appellant said that he had twice made unsuccessful applications to set aside the restraining orders. Those applications are not before me on this appeal. If the appellant wants to return to the Flinders University for a proper purpose, he may bring a similar application again.
The grounds of this appeal are that the learned Magistrate made an error on the face of the record, he lapsed into jurisdictional error, he erred in his findings of fact and he erred in exercising a discretion which cannot exist in the circumstances. The appellant was unrepresented and those complaints are inappropriate. However, I could discern from his argument what are the true grounds of complaint, namely that the Magistrates on both occasions erred in declining to remit the amount of the costs due and in ordering that the appellant pay that amount by instalments.
The learned Magistrate who heard the matter on 3^rd July 2001 gave reasons for his decision. As to his approach, he said:
“It is my view that an order for costs in favour of a complainant that is against a defendant, as is the case here, would be rendered nugatory once the court applied any of the alternative penalties by way of reconsideration set out in s.70I. In consequence of an application under s.70I(6) where such a sum is remitted the debt is to be treated as satisfied and there is no basis for any further action on the part of the beneficiary of that debt to recover those costs. Thus s.189 of the Summary Procedures Act gives the court the power to make such an order so s.70I takes the order away. This result is consistent with the over all policy of the Sentencing Act which as underlined by those amendments of March 2000 is to prevent the imprisonment of defendants and also avoid the dependants of debtors suffering undue hardship by the payment of unreasonably large pecuniary sums.”
The learned Magistrate concluded that the appellant had no intention of obeying any order for substituted penalty and in particular community service. He declined to fix an alternative penalty. He said:
“If I were to disqualify him for 6 months he may perhaps obey that order because to disobey it would be to face the real prospect of a term of immediate imprisonment if he was found to be and proved to be disobeying the order of disqualifying him from holding or obtaining a driver’s licence by driving a car during the currency of that order. It is my view that notwithstanding the understandable desire of the Registry to be rid of this matter and notwithstanding the prospects of payment and recovery are not good that it would be an unjustified infringement of the rights and beneficiaries of the order to apply an alternative penalty at this stage. It may be that the university would want to take some further advice and pursue the recovery of the debt in a civil court although the track record might suggest that would probably be sending good money after bad.
I decline to make an order for alternative penalty.”
The matter was again referred to a Magistrate pursuant to s 70I which he heard on 29^th January 2002. He concluded that there had not been a change in circumstances since 3^rd July 2001. He agreed with the conclusions of the other Magistrate and said that there was no reason to make any other order. He confirmed the order made on 3^rd July 2001.
This appeal is against the decisions and orders made on 3^rd July 2001 and 29^th January 2002.
The first submission of the appellant is that the Fines Management Unit, a section of the administration of the Courts, had no jurisdiction in the matter because the orders for costs were not a pecuniary penalty as the appellant had not been found guilty of an offence against the law. Consequently the matter should not have been referred to the Magistrates Court and the power to order an alternative penalty did not apply. The amount due for costs should be regarded as a civil debt and the learned Magistrate should not have made any orders for payment of instalments.
Before considering that submission, I mention the reason for deciding that the respondent was the responding party to this appeal. S 13A of the Magistrates Courts Act provides for the functions of the Manager, Penalty Management, which include that he is responsible to the Principal Registrar of the Magistrates Court for the administration of the laws relating to the enforcement of expiation fees, of fines and other pecuniary sums imposed by courts exercising a criminal jurisdiction. The section of the Magistrates Court undertaking this task is popularly known as the Fines Payment Unit.
The Fines Management Unit have managed the debt owed by the appellant. As has been mentioned, an investigation of the financial affairs of the appellant was undertaken. Initially the Fines Payment Unit was named as the respondent to these appeals. The Court may not be a party to these appeals. The Fines Management Unit is part of the administration of the Court and cannot be a party at this appeal. Also it is not a separate legal entity. The respondent should be a party to the appeal. It was, in effect, the complainant in the initial proceedings. The orders for costs were made in its favour. It has a direct interest in the outcome of this appeal. For those reasons the appellant may amend the notice of appeal to substitute the respondent for the Fines Payment Unit as the responding party to the appeal. At the hearing of the appeals, Mr Kourakis QC, who appeared for the respondent, did not oppose that course and did not require an adjournment.
I return to the grounds of appeal. I do not think there can be any doubt that s 70I applies to orders for costs made by a Magistrate. S 189(1) of the Summary Procedure Act 1921 provides that, subject to that section, the Court may award such costs for or against a party to proceedings as it thinks fit. The restrictions in s 189 do not apply in the present circumstances. It may be seen that Parliament did not intend to exclude proceedings for a restraining order as s 189(2a) provides:
“(2a)Costs will not be awarded against a complainant in proceedings for a restraining order unless the Court is satisfied that the complainant has acted in bad faith or unreasonably in bringing the proceedings.”
There is no reason to suppose that the orders for costs made against the respondent were not made validly and in the appropriate exercise of discretion. The first submission is rejected.
I am not certain as to what the appellant was seeking to achieve by his further submissions. However, I think his main point which is arguable is that the learned Magistrates erred in not remitting the total balance of the costs due under the various orders and did not have power to substitute another penalty pursuant to s 70I(3).
After paying the outgoings earlier mentioned, and the instalments of $50 per month, the appellant and his partner will only have $50 per month, or about $11.50 per week to meet other expenses for themselves and the children. It was clearly established that the appellant could not pay the amount due within a reasonable time. He could not do so even if his dependant or dependants suffered considerable hardship.
It follows that the exercise of the discretion set out in s 70I(3) had to be considered. I refer to the reasons of the first Magistrate as they were adopted by the second Magistrate. The learned Magistrate erred in the exercise of that discretion by declining to remit or reduce the debt and also by ordering that it be paid over a period in excess of 32 years. Also, I think it is doubtful that there is power under s 70I to order payment by instalments. Pursuant to s 64 of the Act, a debtor may enter into an arrangement for, inter alia, payment by instalments. It may be seen that such a power is not to be found in s 70I(3) and if that option was open to the Magistrate upon exercising the discretion under that section, it is to be expected that Parliament would have said so. It is clear on the evidence before the learned Magistrate that the appellant had no prospect of paying the costs in his working lifetime.
Mr Kourakis submitted that the learned Magistrate was obliged to have regard to the interests of the interested third party such as the respondent when exercising the discretion under s 70I. A third party who is desirous of receiving its costs may not find any satisfaction in an order for community service or disqualification of the debtor from holding or obtaining a licence to drive a motor vehicle. All relevant matters relating to such a third party must be considered when exercising the discretion.
He drew attention to the concluding words of s 70I(3) which provide that the Court may make such ancillary orders as the Court thinks appropriate. He did not submit that this power enabled the making of the order for payment by instalments. As I have said, I doubt that there is any such power and that such an order is an ancillary order. S 70I provides for a substituted penalty if a pecuniary sum cannot be paid in a reasonable time. In the present case I do not regard 32 years as a reasonable time. However, I have not found it necessary to consider that matter.
In my view, the learned Magistrate erred in the exercise of his discretion by not remitting the amount of costs due by the appellant. It is simply an amount which he cannot pay. Even if the amount was substantially reduced the appellant does not have the means to pay. It was clearly established that the appellant could not pay any significant amount within a reasonable time without hardship. That situation is not likely to change. In my view, this is a clear case to remit the amount due. It is now an old debt and the scheme of the legislation is that a person should not be saddled with a debt which he or she simply cannot pay and has no prospects of paying in a reasonable time.

It was submitted on behalf of the respondent that its interests must be considered when exercising the discretion. If the amount is remitted, the respondent will lose a significant asset. That matter must be considered but it cannot overshadow the scheme of the legislation which is that no person must bear a financial liability which cannot be paid in a reasonable time without hardship. Parliament has decided to treat orders for costs in the same way as fines and compensation and the interests of the respondent cannot predominate.
Also, the discretion cannot be exercised to give effect to a collateral purpose of the respondent. A debt may not be maintained merely to prevent the appellant from attending Flinders University because of the rule of the respondent which has been mentioned.
It follows that the decision of the second Magistrate must also be set aside as he merely adopted the decision and reasons of the first Magistrate.
As the discretion under s 70I(3) is being exercised afresh, it is necessary to consider whether the orders for costs should be revoked and a substitute penalty should be imposed. The appellant is now aged 46 years. He has responsibility for two children aged three years and one year. He has limited resources. Disqualification or cancellation of his driver’s licence would have harsh consequences for him and his family. Community service is not appropriate as it would also impose expense and hardship upon the appellant as he would incur expense in attending the work and his availability to care for his children would be reduced. He has already undergone some deprivations. There are no assets which should be sold. I do not think any substitute penalty should be imposed.
In my view, the pecuniary sum should be remitted in its entirety.
I allow the appeal and set aside the orders made by the Magistrates for payment of the amount due by instalments. Pursuant to s 70I, I remit that amount entirely.

[2002] SASC 313

17 September 2002