Magistrates Court (Monetary Limits) Amendment Bill

Second Reading

Adjourned debate on second reading.

(Continued from 24 May 2016.)

The Hon. A.L. McLACHLAN (15:59): I rise to speak to the Magistrates Court (Monetary Limits) Amendment Bill 2016. This bill seeks to amend the Magistrates Court Act to reduce the upper monetary limit for minor statutory proceedings, small claims in the Magistrates Court from $25,000 to $12,000. With the successful passage of this bill, in smaller minor claims under $12,000, the parties will have the matter dealt with by a magistrate without having to be represented by a lawyer and incurring legal costs, which can, in certain circumstances, be a considerable expense. In effect, it reduces the class of matters that can be dealt with in this manner.

The government asserts that the rationale for introducing this bill is to reduce court delays and the complexity of small claims in the Magistrates Court. It follows from the government's previous Statutes Amendment (Courts Efficiency Reforms) Bill which was passed in 2012. The 2012 bill sought to increase the threshold for small claims proceedings from $6,000 to $12,000. The stated purpose at that time was to keep South Australia in line with interstate jurisdictions and to improve access to justice by expanding the range of claims that could be made without incurring substantial legal costs.

The amendments to the Magistrates Court small claims and minor statutory threshold commenced on 1 July 2013. Section 28(1) of the courts efficiency act of 2012 required the Attorney-General to conduct a review of the operation and impact of these amendments as soon as practical after the first anniversary of the commencement. Pursuant to this requirement, the Office of Crime Statistics and Research, better known as OSCAR, conducted a review between July 2014 and February 2015.

The results and recommendations of this review were published in a report tabled in the parliament by the Attorney. The genesis of this bill follows from these recommendations. The report states that the review used both quantitative and qualitative forms of data collection and analysis. The qualitative aspect involved the collation and analysis of feedback from parties directly involved in the implementation and operation of the newly implemented changes, such as the judiciary, legal practitioners and representatives from the Courts Administration Authority.

The quantitative aspect involved the analysis of administrative data collected by the Courts Administrative Authority. The report found an increase in the number and complexity of small claim lodgements in 2013-14 is up 7.9 per cent, some indication of an increase in accessibility to the civil justice system, and an increase in the number of days from lodgement to finalisation for small claims since the commencement of the act.

There were also indications that the number of complex claims where parties were unrepresented had increased, requiring the registrar or magistrate to determine relevant issues. Legal practitioners who responded to an online survey considered that the new limit was too high and that changes, such as reducing the limit, excluding specified types of claims and providing more access to simple legal advice, were necessary to ensure a balance between accessibility and efficiency.

The Joint Rules Advisory Committee (JRAC) made a submission. The JRAC was established by the Chief Justice of the Supreme Court and the Chief Judge of the District Court. Its membership consists of nominated judges and masters, representatives of the legal profession, two members of the academic community and a magistrate. The JRAC monitors, reviews and recommends improvements and changes to courts' procedural rules governing proceedings in those courts.

In its submission to the OSCAR review, it recommended that consideration be given to reducing the upper limits in the definition of a small claim to $12,000. In recommending this course, the JRAC stated that small claims in which the amount in dispute exceeds $12,000 frequently raise factual and legal issues of a complexity equal to the claims in the ordinary jurisdiction of the Magistrates Court involving claims of more than $25,000. The time devoted by magistrates to hearing small claims involving more than $12,000 is greatly increased by the fact that the parties do not have legal representation.

I note that the JRAC recommended in the alternative that consideration be given to magistrates having a general unfettered discretion to direct that a monetary claim for more than $12,000 but less than $25,000 not be treated as a minor civil action, in which event party/party costs could be awarded in accordance with the existing scale of costs for non-minor civil actions.

The Law Society undertook consultation with its committees and also its membership. The comments it received overwhelmingly were in support of the proposed reduction in the limit for minor civil matters. The feedback it received indicated that there were very few claimants who would consider $25,000 to be a minor amount of money and that disputes involving sums of this kind were often complex. The Australian Lawyers Alliance also supported the bill.

The opposition did receive submissions from the Motor Trade Association which opposed the lowering of the monetary limit for minor civil disputes on the basis that it would cause a denial of justice particularly for small businesses. In light of the recommendations contained in the OSCAR review, coupled with wide-ranging support for lowering the threshold that has been expressed by the JRAC, the Law Society and the legal profession, the opposition will support the second reading of this bill.

The Hon. T.T. NGO (16:06): I rise to speak about the Magistrates Court (Monetary Limits) Amendment Bill. While I support the bill's primary objective of reducing the complexity of minor claims and alleviating delays in the Magistrates Court, I would like to raise some concerns about its impact on the community. My understanding is that the bill proposes a reduction in the upper monetary limit of small claims in the minor civil division of the Magistrates Court from $25,000 to $12,000. For a civil justice system to operate effectively, the courts' caseload needs to be managed as efficiently as possible.

I support the principle of this bill; that is, to relieve the Magistrates Court of the strain caused by complex actions currently heard as minor civil claims. I understand that judicial officers, registrars and legal practitioners have voiced support for a reduction in the $25,000 upper monetary limit.

I have concerns about whether the proposed amendments would have the undue effect of restricting litigants' access to the court. I feel strongly about access to justice for our community. Growing up in the western suburbs, I have witnessed firsthand the difficulties many people encounter with the justice system. Many self-represented litigants struggle to understand the process and to be active participants. There are inherent benefits in the way minor civil proceedings are dealt with. There is less formality and the general rule is that parties are not entitled to legal representation except in special circumstances. This goes towards creating a more level playing field, which is especially important where there is a power imbalance between the parties.

I am mindful that the majority of litigants would not consider sums of up to $25,000 to be a minor amount of money. These sums represent financial security for many people; nevertheless, not all such matters would be categorised as complex. My concern is when the proposed reduction comes into effect people with any claim of greater than $12,000 will be forced to commence general civil proceedings in the Magistrates Court. These proceedings may be handled with more formality and require parties to have legal representation.

I acknowledge there are advantages in bringing legal practitioners into civil litigation where more than $12,000 is being claimed. The involvement of experienced practitioners can fast-track particularly complex matters by helping parties to crystallise the issues and expedite the settlement process before the matter reaches trial. With no guarantee of success in litigation and more at stake in general civil claims, fear of legal costs may prevent disadvantaged people, including vulnerable, elderly or working class members of our community, from putting forward a genuine civil claim.

Community support structures such as the Legal Services Commission assist people who otherwise would not have any access to legal support. The commission provides free legal advice with minor civil matters through the telephone helpline and in person appointments. Even so, the commission does not have unlimited resources. The unfortunate reality is that grants of legal aid for representation are generally not available in civil matters.

I am told when a claim is likely to exceed the small claims jurisdiction, advisers will usually recommend that advice is sought from a private legal practitioner. However, we should recognise that many people simply cannot afford the services of a private lawyer. I am told solicitors can charge hourly rates that are greater than a client's daily wage. You can see why cost is a key consideration in general civil matters.

An entrenched principle in our justice system is that all people, regardless of their status, are equal before the law. Access to justice is, therefore, an essential element of this principle. A person's ability to participate in the civil justice system should not depend on their ability to afford legal representation. Justice Steven Rares once said:

If the common law right of access to justice is to have meaning, it cannot be turned into a privilege, based on financial or other selective criteria.

We do not want to create a situation where disadvantaged people surrender their legal rights for fear that they cannot meet the costs of bringing their claim to court. I hope my concerns will be taken into consideration. In saying this, I commend the bill to the council.

The Hon. K.L. VINCENT (16:13): I will speak briefly.

The Hon. S.G. Wade interjecting:

The Hon. K.L. VINCENT: Much to the Hon. Mr Wade's disappointment, I will be brief on this occasion. I know he likes to listen very intently, but to keep them keen you have to treat them mean and you have to keep it a rarity to keep the entertainment factor there, so I will only speak briefly today to the second reading of the Magistrates Court (Monetary Limits) Amendment Bill to indicate that Dignity for Disability supports the second reading.

We appreciate the briefing that the Attorney-General's staff provided to my staff. We also certainly agree, for reasons that have been outlined by a previous speaker, that the claims limit is currently too high at $25,000 and could result in claims which are deemed too complex being left without adequate legal representation and advice. We believe that everyone should have the right to adequate legal representation, so we strongly support the small claims limit being brought back down to $12,000 as proposed under the bill. For that reason, we support the second reading of the bill.

The ACTING CHAIR (Hon. J.S.L. Dawkins): The Hon. Ms Vincent has concluded her presentation, I gather. It is a bit difficult for me to know, because there is a conversation right behind you.

The Hon. K.L. VINCENT: I promised brevity and I have delivered.

The Hon. P. MALINAUSKAS (Minister for Police, Minister for Correctional Services, Minister for Emergency Services, Minister for Road Safety) (16:15): I thank all honourable members for their contribution during the second reading stage and look forward to the bill progressing.

Bill read a second time.

Committee Stage

In committee.

Clause 1.

The Hon. A.L. McLACHLAN: The opposition indicates that it will not be seeking any amendments to this bill.

The Hon. R.I. LUCAS: Can the minister indicate what, if any, opposition to the bill has been expressed to the government by any industry group or association.

The Hon. P. MALINAUSKAS: I have been advised that the Small Business Commissioner indicated they do not support the bill.

The Hon. R.I. Lucas: Did not?

The Hon. P. MALINAUSKAS: That is correct, as I understand it. I also understand that the Law Society did indicate support for the bill but did propose an amendment. I have just recently been advised that the Motor Trade Association expressed reservations with the bill and do not support it.

The Hon. R.I. LUCAS: I am aware of the relatively recent concerns that the Motor Trade Association has expressed about the bill. Can the minister indicate on what date did the government receive advice from the Motor Trade Association that it had concerns about the bill, and what action, if any, did the government take in relation to allaying any of the concerns of the Motor Trade Association about aspects of the legislation?

The Hon. P. MALINAUSKAS: I am advised that, on 24 May of this year, the Hon. Martin Hamilton-Smith was written to—this is from the Motor Trade Association—and that correspondence was then forwarded to the Attorney-General's Department, presumably. I understand there have not been any meetings that have taken place between the MTA and the government since that date.

The Hon. R.I. LUCAS: As I understand it, minister Hamilton-Smith did not take up the issue with the Motor Trade Association, other than receiving the correspondence and forwarding it, and that subsequent to that Attorney-General Rau did not have any discussion with the Motor Trade Association either about their concerns with the legislation. Is that what the minister has just indicated?

The Hon. P. MALINAUSKAS: Yes.

The Hon. R.I. LUCAS: My question to the minister then is: does the minister think that is a reasonable response from the government to a not inconsiderable inconsequential industry organisation that has raised concerns about a piece of government legislation, writes to minister Hamilton-Smith, he rightly or wrongly forwards that to the minister in charge of the bill, Attorney-General Rau, and then that there is not even a token response by way of discussion with the Motor Trade Association about their concerns with the legislation?

The Hon. P. MALINAUSKAS: I am advised that, upon receipt of the correspondence from the Motor Trade Association that was sent to the Hon. Mr Hamilton-Smith and its being reviewed by the relevant people within the Attorney-General's office, the correspondence did not accurately reflect the issue that is being looked at in the bill and, as a result, a determination was made that no further action was necessary.

The Hon. R.I. LUCAS: I understand the minister in charge of the bill in this chamber is not one of the two ministers involved, but I have to say that, upon the passage of the bill, I would ask him to have a look at the letter because that is patently not correct, in my view. Having seen a letter, which I assume is the same as the letter that went to minister Hamilton-Smith, it certainly directly relates to the legislation. They give specific examples of their concerns about access to, in essence, the courts and the cost of resolving legal disputes, in particular for small businesses, and they gave an example of the type of equipment that some of their dealers would have to deal with in terms of legal issues.

They were quite specific, so I am not being directly critical of the minister because he is not one of the two ministers, but his advice, in my view, is inaccurate, the complaints or concerns did relate to the bill. It may well be that the government might say, 'Well, too bad, we don't agree with them,' which is entirely the government's prerogative, but I think that to portray the concerns of the Motor Trade Association as, in essence, not relating to the bill is an unfair and inaccurate portrayal of their competence.

Having met with their officers, on a range of other issues I might say, who did raise this issue with me and indicated their concerns about this legislation, they certainly understand the legislation. They are competent officers and they are a competent organisation. They are not some cowboy outfit that does not understand what the government is doing. In the end, the government might just disagree with them and, as I said, that is entirely the government's prerogative, but I think for the government's advisers to say that the Motor Trade's letter did not really relate to the essential nature of the legislation, or whatever words the minister was advised to use, is, as I said, an unfair and inaccurate portrayal, in my view, of the Motor Trade's position.

Can the minister indicate what the nature of the opposition from the Small Business Commissioner was to the legislation and when the government was advised that the Small Business Commissioner—I assume on behalf of small businesses in South Australia—said that he did not believe this was good legislation and was opposing the government's proposal?

The Hon. P. MALINAUSKAS: I am advised that the Attorney-General has met with the Small Business Commissioner recently where the concerns of the Small Business Commissioner were discussed. I understand that the Small Business Commissioner understands the government's intent behind the bill and the fact that the propositions in the bill arise out of the Office of Crime Statistics and Research report.

In regard to the remarks from the Hon. Mr Lucas regarding the government's response to the MTA, I just want to state for the record that this government holds the MTA in high regard and in no way, shape or form should the MTA or anybody else who decides to read Hansard in due course think for a second that the government does not wholeheartedly respect the role the MTA plays in advocating for the interests of their members. There certainly has not been any suggestion by anyone, apart from the Hon. Mr Lucas, that someone is questioning the competence of that organisation. It is important to be clear for the record that the government enjoys a good working relationship with the MTA and hopes that continues going forward.

The Hon. R.I. LUCAS: With the greatest respect, the minister was the minister who stood in this house and actually said that the letter from the Motor Trade Association did not address the issues that related to the bill, or words to that effect. The Hansard record shows that so I do not think his most recent statement can absolve him of the commentary that he made earlier. He may well want to argue privately to the Motor Trade Association that that was based on advice he was given, but he and no-one else is on the record in relation to the Motor Trade's letter. As I said, if it is similar to the letter that I received a copy of it certainly does relate to the principal issues of this legislation, they do understand the legislation and they disagreed with it, which is entirely their right.

Coming back to the Small Business Commissioner, is the minister indicating that now that the Attorney-General has met with the Small Business Commissioner that the Small Business Commissioner is supporting the legislation?

The Hon. P. MALINAUSKAS: No, I am not indicating that.

The Hon. R.I. LUCAS: If the nature of the discussion with the Attorney is that the Small Business Commissioner understands the government's position but still does not support it, can the minister indicate what the continuing concerns of the Small Business Commissioner are with the government's legislation?

The Hon. P. MALINAUSKAS: I can indicate that the meeting between the Attorney-General and the Small Business Commissioner was cordial. Of course, the Small Business Commissioner and the Attorney may well have a difference of opinion regarding the bill. I understand that despite what was a good meeting between the Attorney-General and the Small Business Commissioner, the Small Business Commissioner was inclined to keep the same view that he did previously, which would be consistent with the correspondence that was sent from the Small Business Commissioner to the Attorney-General, signed 4 May. I am happy to share that with the Hon. Mr Lucas. Just as a little personal birthday gift, I will read this out for him:

Dear Minister

…I write to you in my capacity as the South Australian Small Business Commissioner and to signal to you my concern at the proposed changes to the existing $25,000.00 threshold for (unrepresented) access to the Adelaide Magistrate's Court as a 'Minor Civil Claim'.

As its name implies, this arm of the Court deals with minor civil claims, including the recovery of debts of up to $25,000 and for minor civil proceedings such as neighbourhood disputes, trespass, nuisance, etc. and applications under the Fences Act 1975.

Importantly for small businesses, those matters are dealt with in the Court with a minimum of formality, and whilst most parties are not entitled to legal representation, there are special circumstances in which representation will be allowed. Of key importance to small business in South Australia, this Court process is simple and quite informal and has been designed for anyone to utilise without requiring legal help.

My officers advise me (anecdotally) that there are a significant number of enquiries that they receive where the sum being disputed falls between the current $25,000.00 and proposed $12,000.00 thresholds. In my view, the current threshold operates well regarding small business disputes.

I note that the Court can give permission for a lawyer to appear for parties in certain circumstances—for example, if the other party is a lawyer, if both of the parties wish to have a lawyer, or if one party believes they would be unfairly disadvantaged by not having a lawyer. This is a discretion that is, in my view, properly left to the Court (upon application).

Whilst 'party-party' costs are not generally recoverable, the Minor Civil process does provide that it is where a claim is not successful, that Party might have to pay the other party what it cost them to defend the claim, including their costs to file documents, a fee for their attendance at court and fees for any witnesses they bring to court.

I am seeking a meeting with you at an agreeable time to discuss these concerns further. I can be contacted on—

his mobile number or his landline—

or John.Chapman@sa.gov.au. I look forward to discussing this important issue with you in due course.

Yours sincerely,

John Chapman

COMMISSIONER

4 May 2016

The Hon. S.G. WADE: I was wondering if the minister explained why the government chose to get a review of this proposal by the Office of Crime Statistics and Research considering this is a bill related to civil matters?

The Hon. P. MALINAUSKAS: I am advised that it is a branch within the Attorney-General's Department that does have the capacity to be able to access core information, and that puts it well placed to be able to conduct such a report or review.

The Hon. S.G. WADE: I would have thought the Attorney-General could get access to court information and perhaps make it available to a relevant adviser, such as the Small Business Commissioner.

The Hon. P. MALINAUSKAS: Is that a question?

The Hon. S.G. WADE: Access to information is hardly an excuse. The government can arrange for information to be provided to anybody. The Office of Crime Statistics and Research is a body dedicated to the provision of crime stats-related advice. What expertise they would have to do anything other than access information is what I am asking the minister to explain to the house.

The Hon. P. MALINAUSKAS: I have been advised—and I think it is well known—that the Attorney has an outstanding working relationship with the courts and regularly seeks advice, but I understand that the Office of Crime Statistics and Research is an organisation that has the capacity and the functionality to be able to do a report of this nature, to be able to do the statistical analysis that is required to be able to produce the information that is contained within this report.

The Hon. S.G. WADE: I will not pursue this any further, but just put on the record that to me that is not convincing. This is meant to be a review, it is meant to be a policy legislative review. The mere capacity to manipulate statistics in a criminal statistics context I do not believe makes them particularly well suited to this role. But, I will not pursue it: it reflects on the, shall we say, commitment to a full review that the Small Business Commissioner apparently was not even engaged and an apparently irrelevant body was.

The Hon. P. MALINAUSKAS: I will just respond to that by saying that I am not too sure what is the Hon. Mr Wade's beef or problem with the Office of Crime Statistics and Research. There is no suggestion whatsoever being made, apart from the Hon. Mr Wade, about the manipulation of statistics. It is a credible organisation within government that has the functionality and the analytical skills to be able to do the report, and on all accounts has done a good job.

The Hon. R.I. LUCAS: Does the minister agree or not agree with the impassioned views the Hon. Tung Ngo put on the public record on behalf of those South Australians who struggle to pay for legal costs in terms of access to the law? Did the minister agree with the statements and the concerns the Hon. Tung Ngo put on the public record?

The Hon. P. MALINAUSKAS: I thank the Hon. Mr Lucas for his birthday question, and I thank the Hon. Tung Ngo for the contribution he made earlier. The Hon. Tung Ngo is a passionate South Australian who has a genuine interest in his constituents and he advocates his case accordingly, but the government very much looks forward to enjoying the support of the Hon. Tung Ngo as this bill passes through parliament.

Clause passed.

Remaining clauses (2 to 4), schedule and title passed.

Bill reported without amendment.

Third Reading

The Hon. P. MALINAUSKAS (Minister for Police, Minister for Correctional Services, Minister for Emergency Services, Minister for Road Safety) (16:40): I move:

That this bill be now read a third time.

Bill read a third time and passed.