Petracca v Fitzgerald No. Scciv-02-131

PETRACCA v FITZGERALD
[2002] SASC 97
Magistrates Appeal

WICKS J
Preliminary
This is an application made by the appellant, Mr Petracca, in which he sought an order that Mr Kim Lawson of the State Government Insurance Commission be granted leave to appear on his behalf on the hearing of the appeal in this matter “pursuant to Galladin Pty Ltd v Aimnorth Pty Ltd & Others (1993) 60 SASR 145.” There is also an application by the respondent for the appointment of Mr Barry James Kerr for a similar purpose.
Claim and counterclaim
On 6 July 2001, the plaintiff commenced proceedings by way of a minor civil action in the Civil (Minor Claims) Division of the Magistrates Court in which he claimed $2,336.20 inclusive of filing fee and costs.
The defendant, Ms Fitzgerald, filed a defence and counterclaim in the matter on 27 July 2001. In her counterclaim, she claimed $7,762.08 damages together with interest and costs. Such claim exceeds the jurisdiction of the Civil (Minor Claims) Division and falls within the general jurisdiction of the Court.
Jurisdictional limits
A small claim is a monetary claim for $5,000 or less. The normal jurisdiction of the Magistrates Court in relation to civil matters in the case of motor vehicle accidents is limited to $60,000. These limits have been increased recently but the increases are only applicable to actions in the Magistrates Court which have been commenced after 3 February 2002.
Introduction of counterclaim within General Claim Division
Section 3(2) of the Magistrates Court Act 1991 (“the Act”) provides that a minor civil action is an action founded on a small claim. Section 3(3) provides that if a claim that is not within one of the classes referred to in s 3(2) is introduced into a minor civil action, the action ceases to be a minor civil action unless the court orders that the subsequent claim be tried separately. No order of that kind has been made in this case. The operation of s 3(2) and s 3(3) is automatic and does not require an order of the court.
The matter came to trial before a Magistrate in the Civil (General Claims) Division of the Court. The transcript of the proceedings refers to the action being:
"IN THE MAGISTRATES COURT
CIVIL (MINOR CLAIMS) JURISDICTION"
However, I believe this to be incorrect. As I have said above, the conversion of a claim from the Civil (Minor Claims) Division to the Civil (General Claims) Division is automatic.
Magistrates Court s 10AB
A recently enacted s 10AB of the Magistrates Court Act provides that if proceedings involving a monetary claim have been duly commenced in the Civil (General Claims) Division, the Court may if it thinks it appropriate to do so on application by or with the consent of the parties, hear and determine the proceedings as a minor civil action and the proceedings will, in that event, for the purpose of the Act be to be a minor civil action. In the present case there is no evidence of any application by or with the consent of the parties. There is an endorsement on the court file in the following terms:
"Registrar to list matter as Small Claim Hearing and to notify both parties."
In my view, this does not go far enough. There was no application by the parties; nor was there evidence of any consent. I consider that s 10AB of the Magistrates Court Act has no application to the present case. The proceedings were commenced in the Civil (Minor Claims) Division and not the Civil (General Claims) Division of the Court Section 10AB is only applicable to the latter.
Magistrate’s judgment
The learned Magistrate published reasons for his decision. Those reasons concluded with the following paragraph:
"I therefore determine this matter as follows. I find that the plaintiff was 60% liable for this accident. I find that the defendant was 40% liable. Applied to the agreed quanta, there will be a balance of judgment owing by one party to the other. Each party to bear their own costs."
I do not know what the agreed quanta are. There is nothing about them in the file. Possibly, they may be the amounts claimed in the claim and counterclaim. These amounts are incomplete in that they do not include all interest which should be recoverable. On the topic of interest, see s 34 of the Magistrates Court Act.
Appeal and jurisdiction to hear appeal
Once a matter falls within the jurisdiction of the Civil (General Claims) Division, a final judgment in that matter may be the subject of an appeal under s 40 of the Magistrates Court Act to a single Judge of this Court.
In the circumstances, I find that I have jurisdiction to hear this appeal. If judgment had been given in the Civil (Minor Claims) Division of the Magistrates Court I would not have had jurisdiction. The matter would have had to go the District Court for review under s 38 of the Magistrates Court Act.
Jurisdiction of a Court cannot be conferred by agreement. In Spanos v B & K Paton Pty Ltd (In Liquidation) Unreported SASC No S6879 delivered 2.10.98 Perry J said at p 9:
"It is, of course, axiomatic that the parties cannot, by consent, confer a jurisdiction on the court which it does not otherwise have."
A Notice of Appeal was filed and served on 2 January 2002.
Representation of parties by unqualified person appointed by insurance companies
The question which I have been asked to consider is whether to grant leave to employees or agents of two insurance companies to represent the company and the insured concerned on the hearing of a Magistrates Appeal to this Court.
In Galladin Pty Ltd v Aimnorth Pty Ltd (1992) 60 SASR 145, Perry J permitted one member of a family to represent other members concerned in litigation. In that case, reference was made to the decision of the Privy Council in O’Toole v Scott (1965) AC 939 where their Lordships held at p 958:
"(1)that the discretionary power [to permit lay representation in Court] must be exercised specially in a particular case and not by way of a general practice and
(2)that the discretionary power is properly exercisable only when its exercise is necessary for the administration of justice, and not when it is merely desirable for convenience and expedition and efficiency in the administration of justice.
… The discretion is an element or consequence of the inherent right of a judge or magistrate to regulate the proceedings in his court."
This issue, to my mind, raises fundamental questions. It is one thing to relax the practice of the Court somewhat to allow a person who genuinely cannot pay to have assistance to a lesser or greater degree in the presentation of his or her case, particularly where legal assistance is not available, but it is another matter to permit a corporation engaging in insurance to send along an employee or agent to conduct litigation on its behalf in the superior Courts even if the claims concerned, be they for debt or damages, are small.
Hitherto the practice has been for the business of the Court to be presented by qualified counsel who understand the numerous complexities of the English legal system which we have inherited in this country. To practise competently, counsel must have a proper understanding of the rules of evidence and procedure. Additionally, he or she will have to have some knowledge of the legal principles which are under consideration in the litigation concerned.
It is another matter for substantial corporate entities to arrange for insured persons to be represented in this way in exercise of the rights of subrogation. It is not in the interests of the insured, but rather in their own interest to recover some part of their losses in the event that recovery proceedings are got underway.
Application by lay persons to represent parties on appeal
Application has been made by the appellant in this matter that Mr Kim Lawson of SGIC be given leave to appear on the appeal in this matter. It would appear that Mr Lawson is an employee of that corporation. A further application was made by the respondent that Mr Barry James Kerr, a licensed enquiry agent of Barden & Associates, acting on instructions from CGU, be granted leave to appear on behalf of the respondent in the appeal.
As I have said, on the filing of the counterclaim which does not itself relate to a minor claim, the proceedings ceased to be a minor civil action, even though the Magistrate before whom the action was tried may have thought that he was acting in the Civil (Minor Claims) Division. That division has been established to deal with minor civil claims. It uses an inquisitorial system of inquiry rather than one of an adversarial kind.
Representation by a legal practitioner will only be permitted in the Civil (Minor Claims) Division where the other party is a legal practitioner, where all parties agree or where the Court is of opinion that the party would be unfairly disadvantaged if not represented by a legal practitioner. A company may be represented by an officer or employee. 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. The Court permits 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. As a general rule costs are not awarded in the Civil (Minor Claims) Division. As to acting without fee or reward, I wonder whether either Mr Lawson or Mr Kerr met this condition on the hearing before the Civil (Minor Claims) Division.
There are no rights of appeal but a decision on a small claim may be reviewed by a District Court Judge. The process of review would proceed adopting rules of evidence and procedure laid down in s 38 of the Magistrates Court Act and applied in the case of a hearing before a Magistrate at first instance.
Small claims procedure
Lawyers are to be kept out of the Civil (Minor Claims) Division. The procedure in that Division is well adapted to the resolution of disputes involving small claims. However representation before the Civil (General Claims) Division and before this Court on appeal from the Civil (General Claims) Division is another matter. Anything properly dealt with in that division or properly dealt with in this Court is not a small claim and must be dealt with utilising legal representation other than in exceptional circumstances. The formal rules of evidence are also applicable.
Conclusion
Accordingly, the applications of the appellant and the respondent respectively seeking leave for Mr Lawson and Mr Kerr to appear to represent the appellant and the respondent are dismissed.

[2002] SASC 97

19 March 2002