Magistrates Court (Monetary Limits) Amendment Bill

Second Reading

The Hon. P. MALINAUSKAS (Minister for Police, Minister for Correctional Services, Minister for Emergency Services, Minister for Road Safety) (17:49): I move:

That this bill be now read a second time.

I seek leave to have the second reading explanation inserted in Hansard without my reading it.

Leave granted.

The Magistrates Court (Monetary Limits) Amendment Bill 2016 (the 'Bill') reduces the upper monetary limit for minor civil matters in the Magistrates Court from $25,000 to $12,000.

The intention of this legislation is to reduce court delays and the complexity of small claims in the Magistrates Court.

The catalyst for this Bill was a report entitled, Statutes Amendment (Courts Efficiency Reforms) Act 2012: Review of the operation and impact of the increased monetary limit for Minor Civil Matters (the Report) produced by the Office of Crime Statistics and Research (OCSAR).

In 2012 the government introduced the Statues Amendment (Courts Efficiency Reforms) Bill 2012 (the 'Courts Efficiency Bill') into Parliament amending the Magistrates Courts Act 1991 (the 'Magistrates Court Act') to increase the monetary limit of Minor Civil proceedings from $6,000 to $12,000. The Courts Efficiency Bill, however, was amended in the Legislative Council. Once passed, section 23 of the Statues Amendment (Courts Efficiency Reforms) Act 2012 (the 'Courts Efficiency Act') amended section 3(1) and section 3(4)(a) and (b) of the Magistrates Court Act and increased the monetary limit from $6,000 to $25,000. These amendments commenced on 1 July 2013.

Section 28(1) of the Courts Efficiency Act requires that the Attorney-General, conduct a review of the operation and impact of the amendments made to the Magistrates Court Act, as soon as practicable after the first anniversary of the commencement of section 23. OCSAR conducted this review, the results of which are contained in the Report.

The purpose of the increase was to keep in line with interstate jurisdictions and improve access to justice, by expanding the range of claims that could be made without incurring substantial legal costs that would otherwise outweigh the value of the claim. It was acknowledged that the enlarged Minor Civil jurisdiction may impact upon the ability of the parties to represent themselves, but it was felt that the increased access to justice and reduced cost of litigation outweighed this potential negative consequence.

Under section 3(2) of the Magistrates Court Act a Minor Civil action includes small claims, neighbourhood disputes and minor statutory proceedings. A neighbourhood dispute is defined as a dispute between neighbours, or the occupiers of properties in close proximity, based on allegations of trespass or nuisance.

When the Courts Efficiency Bill was originally introduced into Parliament on 1 March 2012 it was proposed that the monetary limit for Minor Civil claims would only be increased from $6,000 to $12,000. This increase was proposed in consultation with the Chief Magistrate in order to keep South Australia in line with other jurisdictions and to improve access to justice.

The Bill was amended in the Legislative Council. This included an amendment moved by the Opposition to increase the monetary limit for Minor Civil claims from $12,000 to $25,000.

We opposed these amendments at the time and voiced concern in the Legislative Council that the small claims jurisdiction shouldn't be overloaded with long and complicated matters that may lead to further delays. We advised the House that parties in a small claim hearing are usually not entitled to legal representation and this could often add an additional burden, which would only be exacerbated by dealing with more complex trials in a more informal setting if the limit was increased.

We also informed the Legislative Council that the Courts Administration Authority had advised that an increase to $25,000 would also impact on the workload of court registrars dealing with minor civil claim directions hearings, as there would be an increase in the number of matters being listed. It was also put on record by our spokesperson in the Legislative Council that in most other states the small claims jurisdiction is limited to claims of $10,000, and Queensland is the only jurisdiction with a small claim jurisdiction of up to $25,000.

The committee was divided on the proposed amendments, but in the end the amendments were carried.

Between July 2014 and February 2015 OCSAR conducted a review of the operation and impact of the amendments made to the Magistrates Court Act by section 23 of the Courts Efficiency Act. The review was conducted using both quantitative and qualitative forms of data collection and analysis. The qualitative assessment was based on the collation and analysis of feedback from persons directly involved in the implementation and operation of the legislative changes. This included the judiciary, legal practitioners and representatives from the Courts Administration Authority. An online survey was also conducted for legal practitioners and a submission was received from the Joint Rules Advisory Committee (JRAC), which comprises members of the judiciary, Registrars, and representatives from the Law Society and the Bar Association. The quantitative analysis involved the statistical analysis of a range of administrative data collected by the CAA, including trends in the number of Minor Civil lodgements and time to finalise matters, between 2010/11 and 2013/14.

Following the commencement of section 23 of the Courts Efficiency Act, as set out in the Report, the review found:

an increase in the number and complexity of small claim lodgements in 2013/14 (up 7.9% to 21,547 in 2013/14);

some indication of an increase in accessibility to the civil justice system (with an increase in the actual number of small claims between $6,000 and $25,000 of in the order of 6.8% compared with claims for this amount range in the General Civil jurisdiction in previous years;

a possible reduction in the median number of days to finalise a defended claim between $6,000 and $25,000 although it is recommended a further 12 months of data be considered before drawing such a conclusion; and

an increase in the number of days from lodgement to finalisation for small claims since commencement of the Courts Efficiency Act (132 days in 2013/14, compared with between 109 and 118 in the three previous years).

A number of the respondents who provided feedback to OCSAR acknowledged that the monetary increase had broadened access to the civil justice system, but felt that the number of complex claims where the parties were unrepresented had also increased which was requiring additional time for the Registrar or Magistrate to determine the relevant issues. Respondents generally felt that the new limit of $25,000 for Minor Civil actions was too high and that changes, such as reducing the limit, excluding specific types of claims, or providing more access to simple legal advice were necessary to ensure a balance between accessibility and efficiency.

The majority of respondents felt that an increase in the monetary limit for small claims from $6,000 was warranted, but most had concerns about the $25,000 limit. The most common concern was the increased complexity of matters that were now defined as Minor Civil.

It was anticipated at the time of the previous amendment that the lack of legal representation would be overcome by the Magistrate taking on an 'inquisitorial role', however respondents to the review advised that there is insufficient time when conducting matters to fill the gap in the vetting process left by solicitors. These views are consistent with the data analysis, which indicates that in 2013/14 there were 3,256 minor civil lodgements with claim amounts of more than $6,000, which would have previously been dealt with in the General civil jurisdiction with legal representation.

As spelt out in the Report, JRAC supports my proposal to reduce the upper limit in the definition of a small claim to $12,000. Based on the 2013/14 figures, a $12,000 upper limit for Minor Civil would reduce the total number of lodgements by approximately 6%. While this reduction may appear small, it is noted that claims over $12,000 are generally more complex and require more time to finalise. The impact upon the operation of the Magistrates Court (Civil) is therefore likely to be higher than the percentage reduction suggests.

I note that New South Wales, Victoria, Western Australia and the Australian Capital Territory all currently have an upper monetary limit for small claims of $10,000. Tasmania has an upper limit of $5,000, whilst Queensland and the Northern Territory remain outliers with an upper limit of $25,000. Thus reducing the upper monetary limit from $25,000 to $12,000 will bring South Australian back in line with other Australian jurisdictions.

The aim of this amendment is to reduce court delays by decreasing the number and complexity of small claim lodgements in the Magistrates Court.

I commend the Bill to Members.

Explanation of Clauses

Part 1—Preliminary

1—Short title

2—Commencement

3—Amendment provisions

These clauses are formal.

Part 2—Amendment of Magistrates Court Act 1991

4—Amendment of section 3—Interpretation

This clause amends section 3 to reduce, from $25,000 to $12,000, certain monetary thresholds in the Magistrates Court relating to applications under the Retail and Commercial Leases Act 1995, small claims, neighbourhood disputes and minor statutory proceedings.

Schedule 1—Transitional provision

1—Transitional provision

The transitional provision makes it clear that the monetary threshold changes will only apply to proceedings commenced on or after the commencement of the measure.

Debate adjourned on motion of Hon. T.J. Stephens.