Reported Decision : (2002) 55 NSWLR 212 New South Wales Supreme Court CITATION : Csalar v Circosta [2002] NSWSC 482 FILE NUMBER(S) : SC 11672/01 HEARING DATE(S) : 5/12/01 JUDGMENT DATE : 31 May 2002 PARTIES : Julius Csalar v George Circosta & Anor JUDGMENT OF : O'Keefe J at 1 LOWER COURT Local Court JURISDICTION : LOWER COURT 750/99 FILE NUMBER(S) : LOWER COURT Magistrate O'Shane JUDICIAL OFFICER : COUNSEL : Mr L Ma - Plaintiff Mr M Hadley - Defendant SOLICITORS : Brown & Associate, Lindfield - Plaintiff Consantine G Pavlis - Defendant CATCHWORDS : Appeal - Local Court - Small Claims Division - Arbitration - Re-hearing - Practice - Amendment to legislation - Increase in amount below which re-hearing prohibited - Date at which and event to which increased amount applies - Policy of Local Courts (Civil Claims) Act 1970 in relation to small claims - Policy of Arbitration (Civil Actions) Act 1983 in relation to small claims referred to arbitration. Local Courts (Civil Claims) Act 1970 ss 12(1), (2), (3), (4), (7); 21H LEGISLATION CITED : Courts Legislation Amendment Act 1999 Arbitration (Civil Actions) Act 1983 ss 10, 18, 18A(1), (2); Regulation 5 Workers Compensation Act 1926-1954 (NSW). Maxwell v Murphy (1957) 96 CLR 261 Republic of Costa Rica v Erlanger (1876) 3 ChD 62 Doro v Victorian Railways Commissioners (1960) VR 84 Fisher v Hebburn Ltd (1960) 105 CLR 188 CASES CITED : Moakes v Blackwell Colliery Co Ltd (1925) 2KB 64 Kraljevich v Lake View and Star Limited (1947) 75 CLR 169 Kojima v Australian Chinese Newspapers [2000] NSWSC 1153 Jakamarra v Krakouer (1998) 153 ALR 276 Pace v Read (2000) 179 ALR 437; [2000] NSWSC 823 Worrall v Commercial Banking Company of Sydney Limited (1917) 24 CLR 28. DECISION : 1. Summons (as amended) is dismissed; 2. The plaintiff is to pay the defendant's costs. - 12 - IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION O'Keefe J 31 May 2002 11672/01 – JULIUS CSALAR v GEORGE CIRCOSTA & ANOR JUDGMENT INTRODUCTION 1 This is an appeal from a decision given in the Local Court on 7 May 2001 in which the Magistrate decided that the Local Court did not have jurisdiction to re-hear a matter which had been referred to it for re-hearing following an award by an arbitrator. 2 The Summons (as amended) seeks relief as follows: 1. A declaratory order that the learned Magistrate had jurisdiction to adjudicate the matter number 750 of 1999 by way of re-hearing. 2. An order in the nature of mandamus that the learned Magistrate deal with the matter according to law. 3 The grounds relied on in the Amended Summons are : 1. The plaintiff has an accrued right of action prior to the amendment which is a substantive right rather than a procedural right. 2. The amending Act is not to be given retrospective interpretation and therefore the plaintiff's rights of re-hearing subsists (sic) or otherwise survive the amendment. 3. The learned Magistrate erred in declining jurisdiction by interpretation of a retrospective effect into the amending Act. BACKGROUND 4 The matter arises out of a claim made in the Local Court by Julius Csalar (the plaintiff) against George Circosta and Carmelita Circosta (the defendants). The Statement of Liquidated Claim was filed by the plaintiff in the Small Claims Division of the Local Court on 1 November 1999. It sought the recovery of $2,399.26 (sic) together with interest. In the Statement of Claim the plaintiff alleged that he had leased a restaurant from the defendants. Those premises required repairs because of the entry of water into them but, despite request being made for such repairs, they were not effected. As a consequence it was claimed that the roof leaked, the premises were flooded, the plaintiff lost business and was thus unable to pay the rent for a period of two weeks. Because of the non-payment of rent the defendants are alleged to have locked the plaintiff out of the premises and refused to allow him to remove perishable goods that were stored in the premises. The plaintiff also claimed in respect of the return of the rent bond of $1,500 which he had posted, but this was not released, as a result of which he lost the value of the bond together with interest on it amounting of $500. The claim included various other amounts which brought the total of the claim as particularised to $2,899.26. 5 At the time the Statement of Claim was filed the jurisdictional limit of the Small Claims Division of the Local Court for actions for the recovery of any debt demand or damage was $3,000 as provided in s.12(3) of the Local Courts (Civil Claims) Act 1970. An identical limitation applied in respect of actions to recover goods that are detained or to recover the assessed value of such goods (s.12(4)). However, on 25 September 2000 an amendment to s.12 by the Courts Legislation Amendment Act 1999 came into force so as to substitute an amount of $10,000 for the amount of $3,000 in both s 12(3) and s 12(4). 6 The defendants filed a defence on 10 February 2000 in which they admitted the lease but asserted that it was the plaintiff who had the obligation to carry out repairs and otherwise maintain the premises. In addition, the defence denied that the defendants had refused to allow the plaintiff to remove his goods from the premises or that they had declined to return the rent bond. A Notice of Cross-Claim was also filed by the defendants. In it they sought to recover various amounts for unpaid rent, for the cost of effecting repairs that were said to be the responsibility of the plaintiff and for unpaid council and water rates. In the cross claim credit was given for the rent bond of $1,500 held by the defendants and as a result the net amount of the cross claim was $4,218.78. 7 On or about 11 July 2000 the claim and cross-claim were referred pursuant to s 21H of the Local Courts (Civil Claims) Act 1970 for determination by an arbitrator on 9 November 2000. On that date the arbitrator found for the defendants on the plaintiff's claim and made an award in favour of the defendants for $4,004.11 on their cross-claim, together with costs assessed at $2,572. In the notification of the award, which was dated 13 November 2000, the parties were advised in a pro forma notification of their rights to lodge an application for re-hearing before the court subject to the following: "No application for a re-hearing may be made if the award is expressed to be made with the consent of all parties, or if the amount claimed in the action does not exceed $3000." 8 The unsuccessful plaintiff before the arbitrator, the plaintiff in the present action, applied on 4 December 2000 for a re-hearing in accordance with s.18 of the Arbitration (Civil Actions) Act 1983. On 21 December 2000 the Registrar made an order for a re-hearing of the action before the Court on 23 February 2001. The actual re-hearing came before the Local Court for hearing on 7 May 2001. Objection was then taken on behalf of the defendants that the Court had no jurisdiction to deal with the matter since the amount involved was less than the limitation of $10,000 imposed by s.18A(2) of the Arbitrations (Civil Actions) Act 1983 as it then stood. 9 The Magistrate upheld the objection stating that : "I have come to the view that (the defendants) application is the correct one and that this Court does not have jurisdiction to proceed to re-hearing of this matter." and: "I accept … that the relevant amount is in fact the amount of $10,000, which is the jurisdictional limit." and: "It seems to me that an application for a re-hearing is an entirely separate action, if you like than the application for or rather than the application hearing. The application was made in December 2000 … which means that the jurisdictional limit at that point was $10,000." 10 The matter for determination is whether in the circumstances of the present case the increase to $10,000 in the amount below which an order for re-hearing cannot be made applies or whether the amount below which an order for re-hearing cannot be made is $3,000 as was the situation when the Statement of Claim was filed on 1 November 1999. STATUTORY PROVISIONS AND ANALYSIS 11 The matter in issue between the parties is to be resolved by determining the intention of the Parliament when enacting the amendment to s 12 of the Local Courts (Civil Claims) Act 1970. 12 The approach of the courts to the construction of amending acts is clearly expressed in Maxwell v Murphy (1957) 96 CLR 261 in which Dixon CJ said: "The general rule of the common law is that a statute changing the law ought not, unless the intention appears with reasonable certainty, to be understood as applying to factual events that have already occurred in such a way as to confer or impose or otherwise affect rights or liabilities which the law had defined by reference to those past events. But, given rights and liabilities fixed by reference to past facts, matters or events, the law appointing or regulating the manner in which they are to be enforced or their enjoyment is to be secured by judicial remedy, is not within the application of such a presumption. Changes made in practice and procedure are applied to proceedings to enforce rights and liabilities, or for that matter to vindicate an immunity or privilege, notwithstanding that before the change in the law was made the accrual or establishment of the rights, liabilities, immunity or privilege was complete and rested on events or transactions that were otherwise passed and closed. The basis of the distinction was stated by Mellish LJ in Republic of Costa Rica v Erlanger (1876) 3 ChD 62. 'No suitor has any vested right in the course of procedure, nor any right to complain if during the litigation the procedure is changed, provided, of course, that no injustice is done (at 69)'. The distinction is clear enough in principle, and its foundation in justice is apparent. But difficulties have always attended its application. In some cases, they have been due to the discovery in the nature or context of the legislation, or in its subject matter of indications, whether faint and conjectural or strong and persuasive, of a desire to cover situations already existing." (at 267) 13 The determination of the intention of the Parliament is the goal. The approach referred to Maxwell v Murphy (supra) is an aid in reading that goal. If the language of the statute or its policy or its context, subject matter, nature or surroundings point to an intention that an amending provision should operate in respect of facts or events that have already occurred then the general rule referred to above will not apply. Although the court should not be too ready to depart from the general rule, the nature and degree of the injustice that would result from such a departure and the general policy of or underlying the act which has been amended are relevant considerations. Thus, in Doro v Victorian Railways Commissioners (1960) VR 84 it was held that where a long standing limitation on the amount that a claimant could recover under certain legislation was increased by amendment after an action had been commenced, but before its trial, the amended i.e. increased, amount should apply to all cases that were heard after the commencement of the amending act. 14 To a like effect is the decision of the Hight Court in Fisher v Hebburn Ltd (1960) 105 CLR 188. In that case the court considered an amendment to the then Workers Compensation Act which expanded the definition of and entitlements arising from certain incapacity suffered by a worker. Fullagar J said: "There can be no doubt that the general rule is that an amending enactment – or, for that matter, any enactment – is prima facie to be construed as having a prospective operation only. That is to say, it is prima facie to be construed as not attaching new legal consequences to facts or events which occurred before its commencement. The rule has been frequently applied to amending statutes relating to workers' compensation and it has often been held that such amendments apply only in respect of 'accidents' or 'injuries' occurring after their coming into force: the cases of Moakes v Blackwell Colliery Co Ltd (1925) 2KB 64 and Kraljevich v Lake View and Star Limited (1947) 75 CLR 169 are familiar examples. But there is no rule of law that such statutes should be so construed, and it would not be true to say that a retrospective effect can only be avoided by confining the operation of such a statute to subsequently occurring 'accidents' or 'injuries'. It may truly be said to operate prospectively only although its prospect begins, so to speak, with some event other than accident or injury." (supra at 194) 15 The Local Courts (Civil Claims) Act 1970 provides that the Local Court is divided into two divisions, namely the General Division and the Small Claims Division (s.6(1)). In the General Division the jurisdiction is to be exercised by a Magistrate sitting alone. However, in the Small Claims Division it may be exercised either by a Magistrate sitting alone or by an Assessor (s.6(3)). As at 1 November 1999 the Local Court sitting in its Small Claims Division had jurisdiction to hear and determine actions for the recovery of any debt, demand or damage in which the amount claimed was not more than $3,000 (or such greater amount as the rules may prescribe), whether on a balance of account or after an admitted set-off or otherwise (s.12(3)). The Court sitting in its General Division had jurisdiction to hear and determine actions for the recovery of any debt, demand or damage in which the amount claimed is not more than $40,000 (s.12(1)). The specific terms of these two sub-sections at the time of commencement of the action were as follows: "(1) Subject to this Part, a court sitting in its General Division has jurisdiction to hear and determine actions for the recovery of any debt, demand or damage (whether liquidated or unliquidated) in which the amount claimed is not more than $40,000, whether on a balance of account or after an admitted set-off or otherwise. … (3) Subject to this Part, a court sitting in its Small Claims Division has jurisdiction to hear and determine actions for the recovery of any debt, demand or damage (whether liquidated or unliquidated) in which the amount claimed is not more than $3,000 (or such greater amount as the rules may prescribe), whether on a balance of account or after an admitted set-off or otherwise." 16 The exercise by the Local Court of its power to refer matters to arbitration under the Arbitration (Civil Actions) Act 1983 is conditioned by s 21H of the Local Courts (Civil Claims) Act 1970. Section 21H(2) of that Act specifies the matters that the court shall have regard to before making an order. Those matters include the giving of directions for the conduct of the proceedings before the arbitrator "that appear best adapted for the just, quick and cheap disposal of the proceedings" (s 21H(2)(c)). Section 21H(3) prescribes the circumstances under which the court is prohibited from referring a matter to arbitration. They include considerations such as whether the action involves complex questions of law or fact (s 21H(3)(b)), whether the hearing of the action is expected to be lengthy (s 21H(3)(c)) and whether cause has been shown in a particular case why the action should not be so referred (s 21H(3)(e)). Thus the actions that are referred to arbitration are the more simple, short and straightforward matters. These are to be dealt with in a way that is best adapted for their just, quick and cheap disposal. 17 These provisions of the Local Courts (Civil Claims) Act 1970 find an echo in s 18A of Arbitration (Civil Actions) Act 1983, which limits rights of appeal in cases of small value (s 18A(2)) and in s10(2) which requires the arbitrator to act on the substantial merits of the case without regard for technicalities or legal forms. 18 An examination of the Local Court (Civil Claims) Act 1970, including but not limited to the statutory basis for the Small Claims Division, reveals a clear legislative policy in relation to claims for small amounts namely that there should be a quick, cheap and informal resolution of them. The legislation has been so framed as to ensure to the greatest extent possible that such small claims in the Local Court should begin and end in that court. The limitation on the right of appeal permitted by the statute betokens this. Taking up the time of superior courts with small cases is to be avoided. (Kojima v Australian Chinese Newspapers [2000] NSWSC 1153). Such an avoidance has the effect of helping to reduce delay in the courts. That this is in an important question of policy in the law is recognised by Gummow and Hayne JJ in Jakamarra v Krakouer (1998) 153 ALR 276, in which they said: "Delays in the courts are a major cause of disquiet, not only amongst those who resort to the courts, but also amongst judges and all others associated with the courts. Delay will almost always impede the proper disposition of any case that does not come on to trial promptly … delay … also adds to the overall burden on the judicial system … (and) keeps another case out of the lists …" (supra at 283). See also Pace v Read (2000) 179 ALR 437; [2000] NSWSC 823. 19 The Arbitration (Civil Actions) Act 1983 was enacted to provide for the determination by an arbitrator of certain civil actions in various courts, one of which is the Local Court. It gives jurisdiction to an arbitrator appointed pursuant to that Act in relation to a referred action and specifies that the jurisdiction conferred in respect of such an action "is part of the jurisdiction of the court by which the action was referred" (s 7(1)). An arbitrator exercising function in relation to a referred action has "all the powers and authorities of the court by which the action was referred". (s 7(1)) 20 The Arbitration (Civil Actions) Act 1983 makes provision for rehearings at the instance of a person aggrieved by an award of an arbitrator. (s 18). Where an application for rehearing of an action is made the court by which the action was referred to the arbitrator or the Registrar of such court "must order a rehearing of the action" provided the application for rehearing is made before the award becomes enforceable as a judgment or order of the court (s.18A(1)). However, the duty to order a rehearing is subject to a prohibition as follows: "18A … (2) An order for rehearing cannot be made if the amount claimed in the action, or the value of the property to which the action relates, does not exceed the amount prescribed by the regulations for the purposes of this section." 21 Regulation 5 of the Arbitration (Civil Actions) Act 1999 states: "For the purposes of section 18A of the Act, the prescribed amount is the amount equal to the jurisdictional limit of the Small Claims Division of the Local Court (that is, the amount for the time being specified or referred to under section 12(3) of the Local Courts (Civil Claims) Act 1970." 22 This regulation in my opinion requires the court to look at the jurisdictional limit provided for in s 18(2) at the time when the right conferred by s 18(1) is exercised and the duty imposed by s 18A(1) is fulfilled as a consequence. This, in my opinion, is the effect of the words "for the time being" in regulation 5. 23 A like policy to that referred to in paragraph 18 above underlies the Arbitration (Civil Actions) Act 1983. Such policy finds its expression in part in the restriction on the power of the court to make an order for rehearing (s18A(2)). Finality is the aspect of justice that the legislature puts to the forefront in both Acts, insofar as actions for small amounts are concerned. Since the amounts involved are small there is no real question of injustice involved for the parties. 24 It is against such a legislative framework and policy that the intent of the Parliament in relation to the amendment of the monetary limitation on the power of the court to make an order for rehearing of a matter that has been dealt with at arbitration should be understood. 25 As can be seen in paragraph 15 above, ss 12(1) and 12(3) are in almost identical form except for the jurisdictional limit prescribed for the different divisions of the court. Both sub-sections are different in form from the provisions of ss.12(2) and 12(4). Each of such last mentioned sub-sections deals with actions for the recovery of goods that are detained or for the recovery of the assessed value of such goods. Whilst the jurisdictional limits fixed by both those sub-sections are respectively the same as those fixed by s.12(1) and 12(3), the sub-sections dealing with the recovery of detained goods (or their value) include the words "commenced after the commencement of this section". Thus in the provisions of s.12 which deal with goods, as opposed to debt or damages, the legislature has made express provision that the jurisdictional limits fixed by the sub-sections do not apply to actions commenced prior to the coming into force of such sub-sections. The absence of a like provision in both s.12(1) and 12(3) is, in my opinion, significant in relation to the construction of such subsections. 26 Another provision to which regard should be had in determining the intention of Parliament in amending s 12(3) of the Local Courts (Civil Claims) Act 1970 is s 12(7), which provides that: "If: a) this section is amended, or a rule is made, to increase an amount specified in this section, and (b) an action in which an amount of money is claimed is pending in a court when the amendment or rule takes effect, the court may, on the application of a plaintiff, make an order altering the amount specified in the claim to an amount not exceeding the relevant amount as increased." 27 The effect of s 12(7) is to indicate that the Parliament intended that any increase in an amount, in this case the amount of $3,000, should be applicable to an action commenced before the amendment, much like what was said by Fullagar J in Fisher v Hebburn Ltd (supra). In my opinion this supports a conclusion that the time at which regard is to be had to the amount referred to in the statute is the time of hearing or of other act in the course of progress of the action, rather than the date of the institution of the action. 28 As indicated above the jurisdictional limits provided for in s 12(3) and (4) of the Local Courts (Civil Claims) Act 1970 were amended by the Courts Legislation Amendment Act 1999 which was proclaimed to commence on 25 September 2000. That amendment was in the following form: "3. Amendment of Acts The Acts specified in Schedules 1 – 8 are amended as set out in those schedules. … Schedule 6 [1] Section 12 Limits of jurisdiction Omit "$3,000 (or such greater amount as the rules may prescribe)" from section 12 (3) Insert instead "$10,000" [2] Section 12(4) Omit "$3,000". Insert instead "$10,000"." 29 Although the construction of the amending Act referred to in paragraph 27 above alters the ambit of the power of the court to order a rehearing and hence has an effect on a party's right of appeal, which is not a matter of procedure (Worrall v Commercial Banking Company of Sydney Limited (1917) 24 CLR 28), I am nonetheless of opinion that general rule in relation to construction, which is expressed in Maxwell v Murphy (supra), is rebutted by the language of the statutory provisions. Furthermore, in my opinion the policy referred to in paragraphs 18 and 23 above reinforces such a conclusion. 30 The increase in the amount specified in s 12(3) was effected by an act which appears to have been intended to bring the value of money as it was at the time of the enactment of s 12(3) into line with the value of money as at 1999 – a value which had been eroded over the intervening years by inflation. In these circumstances the concept of accrued rights which were averted to on behalf of the plaintiff is not, in my opinion, a consideration which would gainsay the conclusion to which I have come in relation to the time of application of the statutory limitation referred to in that section and in regulation 5. CONCLUSION 31 For the foregoing reasons, I am of opinion that the result reached by the Magistrate was correct and that at the time the Registrar of the Local Court purported to order a rehearing of the action in question he was debarred from so doing by s 18A(2) of the Arbitration (Civil Actions) Act 1983. As a consequence, in my opinion the relief claimed in the Amended Summons filed in this matter should be refused and such summons should be dismissed. ORDERS 1. Summons (as amended) dismissed. 2. The plaintiff is to pay the defendant's costs. ********** Last Modified: 06/05/2002 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.