MAGISTRATES COURT (SMALL CLAIMS JURISDICTION) AMENDMENT BILL

Second Reading

Adjourned debate on second reading.

(Continued from 28 July 2011.)

Ms CHAPMAN (Bragg) (10:49): It is with pleasure that I stand to support the Magistrates Court (Small Claims Jurisdiction) Amendment Bill 2011 introduced by the member for Norwood, a hardworking member. He is always conscious of the importance of supporting those in small business and those individuals, not just in his own community but throughout South Australia, who need the support from time to time of our court system to ensure the protection of their person and property—and it is in relation to the latter particularly that I refer today.

This bill essentially is to introduce the limit of small claims that may be prosecuted in the Magistrates Court under our small claims jurisdiction from a financial cap currently at $6,000 up to $25,000. They proceed under our minor civil jurisdiction division of the Magistrates Court, and this has been an important aspect that is part of the whole machinery to protect our community.

Essentially in South Australia we have a three-tier system of courts. We have the Supreme Court, the District Court (introduced in the 1970s) and the Magistrates Court. The Magistrates Court has continued to absorb the lower end of criminal cases and a large portion of our civil jurisdiction. With the advent of the federal courts, it is fair to say that a number of the higher level cases in our civil jurisdictions are transferred for litigation and dispute resolution in the federal courts.

The Supreme Court still hears our most serious crimes, usually murder and treason. There are not too many treason cases these days, but I remind members—and I am sure the member for Croydon will be well aware—that an addendum to the Criminal Law Consolidation Act includes the treason acts of England—

The Hon. M.J. Atkinson: What about breaches of the Electoral Act—failure to disclose donations by the president of the party?

The SPEAKER: Order, the member for Croydon!

Ms CHAPMAN: —back from 1351 to The Treason Act of 1795 to The Treason Act of 1817. I think the member for Croydon is very interested in this. I will mention one aspect of that part of the 1795 act, which is still part of our jurisdiction here as an addendum to the Criminal Law Consolidation Act, which defines and assists us in dealing with the act of treason as follows:

Attempts of wicked and evil-disposed Persons to disturb the Tranquillity of this your Majesty's Kingdom, particularly by the Multitude of seditious Pamphlets and Speeches daily printed, published, and dispersed, with unremitted Industry, and with a transcendent boldness, in Contempt of your Majesty's Royal Person and Dignity, and tending to the Overthrow of the Laws, Government, and happy Constitution of these Realms, have judged that it is become necessary to provide a further Remedy against all such treasonable and seditious Practices and Attempts.

It goes on, but I will be sure to remind the Premier of that addendum to the Criminal Law Consolidation Act.

So, let me get back to the Magistrates Court, which is unquestionably one of the busiest courts in South Australia. It has over time absorbed greater and greater workloads to provide not only for the trials, hearings and prosecutions of criminal matters but also, of course, the civil litigation. In many cases, South Australians need to have their disputes about civil matters resolved promptly. They very often involve motor vehicle accidents. Not often are they less than $6,000 these days because I think just a little dent on your bumper bar means you are probably up into another jurisdiction. But there are a number of instances where we need to be able to quickly and as cheaply as possible give people a forum for respite and resolution of their dispute.

The Hon. M.J. Atkinson: 'Respite' actually. You got the pronunciation wrong.

Ms CHAPMAN: Be quiet. The provision in the Magistrates Court at present also provides for a number of other important aspects that go with the Magistrates Court's powers, not just to hear and try and deal with civil claims. This is why it is so important that we remember that there are a number of other powers of relief available to South Australians that would not be available if the government progressed with their small business claims commissioner idea—ridiculous as that is—by introducing some other quasi administrative person who is going to provide a call centre referral to other mediation services.

Already in the Magistrates Court Act we have powers for referral of matters to mediation and conciliation and for trials of the issues to be dealt with by an arbitrator, both of which are seen as alternative dispute resolution processes.

Sections 27 and 28 of the Magistrates Court Act cover that and also, very importantly, under sections 25 and 26, the court has power in its civil jurisdiction to provide interim injunctions and restraining orders. This is very important for litigants or potential litigants to be able to go to the court and apply for early and sometimes urgent relief to protect the asset on which they are about to take the proceedings, either for its remedy, repair, the recovery of funds, that piece of property, or the like. It is very important that we remember the significance of the small claims jurisdiction within the powers that magistrates have under the Magistrates Court Act.

One of the principal reasons the small claims jurisdiction is so successful is that it provides for a quick resolution. Some would argue that there is a bit of a crushing at least of the other entitlements and rules that have been built up over generations to protect litigants, like the rules of evidence, like the disclosure through written pleadings, and so on, but the minor civil jurisdiction in the Magistrates Court says, fundamentally, that the trial of civil matters must take the form of an inquiry by the court, so it avoids our usual adversarial system, it itself can illicit by inquiry from the parties and the witnesses the examination of evidentiary material, which means that the magistrate can take on a much more inquisitorial role.

For those of you who have been down there, you may have seen a magistrate sitting there with a red car and a blue car and asking the litigants who was moving in what direction at the time of the accident, etc. They are not bound by written pleadings or the rules of evidence. The court itself can call and examine its own witnesses, etc—a streamlined but important process when the value of the claim is a small amount.

The other aspect that is very important, and is part of the cost saving exercise, is to say that the parties have to appear for themselves, and that means that you can avoid the situation where one party in a power imbalance, by virtue of their financial position, is able to employ a QC or some great hot shot from the legal profession who will come in, and the other party is in a financial position, unable to access legal aid—it is not a category of entitlement for relief—and therefore of course have to appear for themselves. That power imbalance that is left in the representation of the hearing has some exceptions.

The only time I have ever appeared in the small claims jurisdiction was in fact to represent a member of parliament, and in that instance a party had applied, under the then threshold (which was $6,000), and the claimant against the member of parliament was someone who was seeking a piece of property to be returned that was less than the value of the cap under the act. In that instance the claimant had been a legal practitioner themselves, and I applied, on behalf of the member of parliament, to have the right to appear in a circumstance where the respondent in that instance, the member of parliament, would have been at a disadvantage because the applicant was in fact a legally qualified party.

The Hon. M.J. Atkinson: So who was that?

Ms CHAPMAN: Now, of course, the member for Croydon calls out, 'Who was that?' Of course I will not disclose the name of the party. I have represented over the years members of the Australian Labor Party, of the Liberal Party of Australia and of the Democrats party. I have not represented, from memory, someone who has disclosed the fact that they are a Green, but nevertheless those matters will remain here, up here in my head, member for Croydon, and they will die with me, you'll be pleased to know.

The important aspect is that there are situations where, in limited circumstances, someone can apply to be represented. This current position of the $6,000 cap is outdated. In what motor vehicle accident do you have damages of less than $6,000 these days? In a small claim for the recovery of a debt, a small amount in a business clearly can be well above this. For someone who has a $7,000, $8,000, $9,000, $10,000, $15,000 or $20,000 claim, they surely should, in this day and age, after 20 years, have the right to be able to apply for relief in this jurisdiction.

The Hon. R.B. SUCH (Fisher) (10:59): I support this measure: I think the monetary amount needs to be increased. I want to comment generally on the issue of what is normally referred to as bad debts. It is something that afflicts business, small business in particular, in often quite a devastating way. In my view, it is really a form of theft if you do not pay for something that you have received. To me, it is only one step away from actually stealing it.

If members talk to small and medium business, and I am sure they do, they will find that in many cases that business can be put in peril because people refuse to pay for services or goods that they have received. Whilst this is tackling the issue in one way, I do not believe the community, parliament, the government—and governments of any persuasion—have adequately created a framework to assist people, often small business, who do not have a large amount of resources to recover moneys owed to them. I think it is an issue.

This bill will not tackle it in its entirety, of course, but I would like to see some action from the government and by the parliament to address the issue of people who deliberately refuse to pay for services rendered, whether it be for a swimming pool, trade work done by plumbers, or whatever. We all know, talking to tradespeople and people in other forms of business, that there are certain people who do not pay up or drag out the payment for so long that it can actually put the small business at risk of collapsing. That should not be tolerated. It is unacceptable behaviour, and I do not think we currently deal with it in the most vigorous and comprehensive way that is really required.

I commend this bill. I think it is a step forward. I am mindful of the fact that we need to keep costs down for people who seek to recover moneys and property owed to them, but I think having a specialised area within the Magistrates Court system is a good option.

Mr GARDNER (Morialta) (11:02): I thank members for the opportunity to speak on the Magistrates Court (Small Claims Jurisdiction) Amendment Bill 2011. I commend the member for Norwood for introducing this important bill, and I can inform him that, having heard his speech and the speeches of the members for Bragg and Fisher, I have been convinced to vote for this bill.

It is an excellent piece of work. It is a very simple bill. The instructive clause deletes the definition of 'small claim' as $6,000 and substitutes $25,000. Of course, $6,000 was the threshold under which claims needed to be made in 1991. So, if something is now worth $6,001, a car accident or a small debt, and you want to pursue it, you need to go and get yourself a lawyer, and I think that is outrageous.

Yesterday we dealt with in this house the small business commissioner bill, and that was the government's response to the needs of small business to help them clear their issues and disputes. That would be an expensive measure, and I spoke at length about the vast number of things that the government should be doing instead of that if it was going to support small business, which is a great goal. This is one of them. This is something that would provide great assistance to small businesses, in particular, and individuals.

We are out of step with the rest of Australia on this matter. I note that Tasmania also has a limit of under $8,000 but that in New South Wales, Western Australia, the ACT and Northern Territory, a small claim is defined as a matter of under $10,000. In Queensland, the state that has most recently updated its legislation, the threshold is set at $25,000. South Australia would do very well to follow suit in this matter.

I note with concern the public comments of the Attorney-General saying that the government would be unlikely to support this measure but that the government might be prepared to look at another amount. Frankly, I think that is pretty wishy-washy. The member for Norwood has gone to the trouble of putting this bill together. He has made the case very succinctly. The public response has been excellent.

I noted on his Facebook page this morning that something like 50 people had 'liked' his comments, saying that this bill would be up for discussion—many of them small businesses and individuals who had had issues with debts that they had not been able to pursue because the cost of taking on legal representation and pursuing it through the courts would have been greater than the amount they could have recovered.

I commend the member for Norwood for bringing this to the parliament's attention. It deserves our attention and it deserves the support of the house. I think that, along with a great many things that the government should be doing for small business, this is pretty high on the list. With those words, I commend the bill to the house.

Mr GRIFFITHS (Goyder) (11:05): I also rise to support the member for Norwood and his private member's bill. He actually discussed this subject with me for the first time on the Thursday before Easter, which was a rather important day in Labor Party history as it turned out. A lot of events occurred on that Thursday before Easter. As I recollect, some press statements were made about things which I shall not reflect upon here.

I want to talk about the importance of this measure. I do respect enormously that the member for Norwood comes from a very strong family business background. He has dealt with business all his life. He makes this proposal on the basis that it provides a greater opportunity for small business to pursue concerns. We have spent the last two days in this place talking about small business. A variety of opinions have been expressed—no doubt about that—when it comes to the impact of the legislation, but there is unanimous support from across both sides about the fact that government policy needs to support small business.

We say that, in the main, it does not, but we do say that this bill from the member for Norwood does by increasing the threshold figure. To me it is an obvious situation. It provides a greater opportunity for small business to pursue concerns. It does not worry about the issue of going to the court and it provides a greater scope for lower levels of claims to be resolved, and that is what this place should be about by providing the forum.

In this case the member for Norwood has got it right. It is very disappointing to me that apparently the Attorney-General is not prepared to indicate his support for it and, indeed, the Labor Party will not vote for it, because this is a positive step forward that has the support of our side of the chamber that is connected to small business in every possible way; it speaks to small business continually and they are saying to us that they want this one to be supported. I urge members opposite to stand up and say, 'Yes, we want to vote on this, and yes we want to support it.'

Mr VAN HOLST PELLEKAAN (Stuart) (11:07): I will be quite brief on this. I rise to support the member for Norwood, the very hard-working and very capable member for Norwood. It is a tremendous initiative. Previous members have spoken extremely well about his proposal, so I will not go over all that. What I would like to do is to highlight how important this proposal would be for rural and regional people in South Australia who very often only have access to a magistrates court without travelling to Adelaide.

Unfortunately, not every area is covered by magistrates courts or permanent sitting magistrates. I understand that the member for Frome is actively trying to get a permanently sitting magistrate in Port Pirie, and I think that is tremendous. In Port Augusta we are fortunate to have two of them. However, raising this limit from $6,000 to $25,000 would give rural and regional—

The Hon. M.J. Atkinson interjecting:

Mr PENGILLY: Point of order, ma'am.

The SPEAKER: Order!

Mr PENGILLY: I have the member for Stuart sitting right behind me, and I cannot hear him for the inane rantings of the member for Croydon.

The SPEAKER: I uphold that point of order. Member for Croydon, you are warned.

Mr VAN HOLST PELLEKAAN: Thank you, Madam Speaker. Raising the threshold from $6,000 to $25,000 would then give far greater access to rural and regional people to the justice that we would all want them to have. I also would just like to support comments that have been made that, given the debate we have had over the last couple of days about a small business commissioner, this would be a very easy and very straightforward way of supporting small business, and we in the Liberal opposition always do everything we can to do that.

I would also like to highlight something that a few people may have missed in the member for Norwood's proposal, that is, that the $25,000 threshold he puts forward would be indexed with CPI, with inflation. I just say that, if the $6,000 threshold that was put in place 20 years ago had been indexed by just 2½ per cent, annual inflation would now be marginally under $10,000. The original $6,000 intention today would be nearly $10,000. So, if the government tries to water down the member for Norwood's proposal below the $25,000 suggestion, if it is not above $10,000 they have not achieved a thing. I commend this to the house.

Debate adjourned on motion of Mrs Geraghty.