PEOPLE'S Choice Credit Union v Robey - [2013] SADC 34

DISTRICT COURT OF SOUTH AUSTRALIA
(Civil: Minor Civil Review)
PEOPLE'S CHOICE CREDIT UNION v ROBEY
[2013] SADC 34
Decision of His Honour Judge Barrett
15 March 2013
MAGISTRATES - APPEAL AND REVIEW - SOUTH AUSTRALIA - JUDICIAL REVIEW
The review relates to a Magistrate's interlocutory ruling that, (1) the action was a Minor Civl Action notwtihstanding that, before it was amended, it sought, in the alternative, an unliquidated sum as damages and it also sought an extension of time, (2) the extension of time application should be heard as part of the substantive claim, (3) the applicant Credit Union would not be unfairly disadvantaged if not granted legal representation at the hearing, and (4) the respondent pay $220 in costs on the interlocutory.
Held: The Learned Special Magistrate made no error. The Application for Review of the rulings is dismissed.
Magistrates Court Act 1991 s 3, s10AB, s 10B, s38; Limitation of Action Act 1936 s 48; Supreme Court Rules r 30; Magistrates Court (Civil) Rules r 13, referred to.
Hollow v Maragozidis (2001) 216 LSJS 291; Finemores (No 3) Pty Ltd v Evans (1998) 199 LSJS 34; Fennel v Wright [2006] SADC 88, considered.

PEOPLE'S CHOICE CREDIT UNION v ROBEY
[2013] SADC 34

This is an application to review interlocutory orders made by Mr Morris SM on 3 May 2012.
The substantive action before the Learned Special Magistrate was originally filed on 17 February 2012. It was a minor civil action claim for $3,266 or alternatively damages arising from fees the appellant had charged the respondent when the respondent failed to have sufficient monies in his account. The fees were charged from March 2003 to July 2008.
The appellant seeks a review of four of the seven interlocutory orders made by the Learned Special Magistrate on 3 May 2012.
Is the action a minor civil action?
The first ground of the review relates to the refusal by the Learned Special Magistrate to transfer the action to the General Claims division of the Magistrates Court. His Honour refused that transfer because he found that the action was a Minor Civil Action as defined in s 3(1) and (2) of the Magistrates Court Act 1991. The appellant contends that that finding is wrong on two bases:
(a) that while the liquidated claim was for less than the Minor Civil Action limit of $6,000, there was also an originally an unliquidated claim for damages. On 3 May the respondent was given leave to amend his claim to excise the damages component. In that way the claim remained one for a liquidated sum of under $6,000. The claim may be described as having been converted into a Minor Civil Action; and
(b) the claim included an application for an extension of time within which to make a claim. Some $626 of the liquidated claim relates to fees charged more than 6 years before the proceedings were commenced, thus necessitating an application for extension of time pursuant to s 48 of the Limitation of Action Act 1936.
The appellant’s two-fold submission is that the claim was not a minor civil claim because, at least when it was commenced, the quantum sought to be recovered had the potential to exceed $6,000 by reason of the unliquidated damages claim, and the claim included an application to extend time.
The Minor Civil Action jurisdiction of the Magistrates Court is established by s 10A of the Act with supplementary provisions in s 10AB and 10B. The manner in which the minor civil actions are to be heard is governed by s 38. “Minor Civil Action” is defined in s 3(1) and (2) of the Act. Sub-section 2 provides relevantly that a Minor Civil Action “is an action founded on ... a small claim”. “Small claim” is defined as “a monetary claim for $6,000 or less”.
The appellant contends that the respondent’s amendment of his claim, reducing it to a liquidated claim for less than $6,000, does not bring the action within the definition of a Minor Civil Action. An action takes its classification from the claim made at the commencement of the action. The appellant points to s 10B which, in a different context, speaks of actions being “commenced” in the wrong jurisdiction. The appellant refers to the words “founded” in the definition of small claims. The appellant points out that there is no specific provision in the act or rules providing for the conversion of an action into a Minor Civil Action.
There is however Supreme Court authority for what the appellant describes as the conversion of an action into a Minor Civil Action by way of amendment of pleadings.
In Hollow v Maragozidis (2001) 216 LSJS 291 at [22] Besanko J said:
In my opinion, whether a claim is a small claim and therefore a minor civil action is to be determined by reference to the pleadings (authorities excluded). That is not to say that a claim may not start as a general civil action and yet later become a minor civil action. The defendant may admit sufficient of the claim to bring it below the monetary limit and pay the admitted amount to the plaintiff. The plaintiff may then amend his or her claim to an amount below the relevant limit. Equally, a plaintiff may abandon part of his or her claim and amend the claim accordingly. What happened here though did not have that result ...
While these remarks are obiter, they are nevertheless persuasive. I respectfully agree.
The second basis for asserting the action was not a minor civil action is that it necessarily involved an application of an extension of time. In support of that contention the appellant referred to the definition of “claim” in r 30 sub-s 2 of the Supreme Court Rules. “Claim” is there defined to be “an assertion that grounds exist on which the court should or may in its discretion determine a judiciable issue, or exercise any other power, in the plaintiff’s favour (and includes a cross-claim and a third party claim)”.
In my view reliance on that definition is misplaced.
An application for an extension of time is ancillary to a substantive claim. It has been held that such an application is an interlocutory process. In Finemores (No 3) Pty Ltd v Evans (1998) 199 LSJS 34 at 37 Lander J (with whom the other members of the court agreed) described an interlocutory process as “a procedural step in the proceedings.
In my view the extension of time application in this case did not remove the action from the definition of a Minor Civil Action. There was an interlocutory or procedural step within the claim.
I find that the Learned Special Magistrate was correct in ruling that the action was a Minor Civil Action and accordingly he was not in error in refusing to transfer the action to the General Claims division of the court.
Should the extension of time application be heard as a separate issue before the matter was listed for trial?
The second ground of review is that the Learned Special Magistrate erred in ordering that the extension of time application be dealt with at the trial of the action rather than as a separate issue before the matter is listed for trial.
It is both common and convenient that an interlocutory application such as one to extend time will be heard at the same time as the substantive claim. That is particularly appropriate in this case. A discrete number of easily identifiable fees were charged against the respondent in the period extending beyond 6 years before the action was commenced. Inevitably evidence will be led at trial of events at the beginning of the period when the respondent’s account was being operated. It is entirely appropriate that the extension of time question be dealt with at the same time as the substantive claim.
Legal representation at the hearing
The third ground for review is that the Learned Special Magistrate erred in refusing to order that the applicant be represented by a legal practitioner at trial pursuant to s 38(4)(a)(iii) of the Magistrates Court Act. The applicant submits that because of the complexity of the matter and related matters the Learned Special Magistrate should have permitted the applicant to be represented.
The question of legal representation at Minor Civil Actions is governed by s 38(4) of the Magistrates Court Act. The only criterion relevant to this case is sub‑s 4(a)(iii). Legal representation will not be permitted unless:
The court is of the opinion that the party would be unfairly disadvantaged if not represented by legal practitioner.
In this case the party seeking representation is the applicant, the Credit Union, not the respondent.
In support of its submission the applicant refers to r 13(4) of the Magistrates Court (Civil) Rules. That sub-rule provides some guidance in assessing whether a party might be unfairly disadvantaged if not represented by a legal practitioner. Relevantly the applicant points to sub-r 4(d), namely whether “any proper cause exists” for representation being ordered.
The applicant submits three considerations which, together, amount to proper cause.
The first is the complexity of some of the legal issued raised by the claim. Those issues include questions of unconscionable conduct at common law and under the ASIC Act, misleading and deceptive conduct and the characterisation of fees as penalties.
The second is the alleged likelihood that the applicant will have to present substantial evidence relating to matters such as operating costs and how those costs are reflective in the Credit Union’s fees. The applicant refers to a decision in Fennel v Wright [2006] SADC 88 which is a case where representation was ordered with those considerations in mind.
Third, the expectation that the outcome of this case may affect many other litigants’ decisions in similar cases.
I take this last submission first. It may well be that other litigants would be encouraged or discouraged by the outcome of this matter. However the outcome of this matter will not be a binding decision. Other cases will not necessarily be decided in the same way. The purpose of the legislation in restricting the right to legal representation is to enable people involved in litigation involving small amounts of money to conduct their litigation without incurring relatively high fees for legal representation. It may be that binding decisions will have to be made if cases involving larger sums where legal representation is a right.
Turning to the first two considerations, I acknowledge the complexity of the legal questions involved in this matter. There is no doubt that the magistrate hearing the matter would be much assisted by legal representation on both sides. However the criterion for ordering legal representation is that the applicant would be unfairly disadvantaged. It will be a matter for the applicant as a corporate entity to determine which of its employees it employs to represent it at the hearing, but it is not apparent why the applicant would be in any worse position than the respondent, or indeed why the applicant would be unfairly disadvantaged.
The same really applies to the question of the possible need for the applicant to call evidence about complicated factual matters. I would think that the presentation of its case would be much assisted by a legal practitioner but it cannot really be suggested that there is no employee within the credit union who could not marshal such evidence. At all events the test is whether the applicant would be unfairly disadvantaged. These considerations are relevant to deciding whether any proper course exists to order representation.. Standing alone these matters might amount to a proper cause, but the ultimate question is one of unfair disadvantage.
In my view, it cannot be said that the applicant will be unfairly disadvantaged if it does not have legal representation on the hearing. In my view, the Learned Special Magistrate was not in error in declining to order that the applicant be represented by a legal practitioner.
The costs order
The fourth ground of review is that the Learned Special Magistrate erred in awarding the respondent costs of $220 in respect of the interlocutory application in which orders were made adverse to the applicant. In my view it was open to the Learned Special Magistrate to order such costs. The parties were represented by legal practitioners at the interlocutory stages as they were entitled to be. In that way the respondent might be expected to have incurred legal costs in what was a successful outcome for him. The discretion to award costs is wide. In my view, the Learned Special Magistrate made no error in making the modest order for costs that he made.
Conclusion
I dismiss the application for review.