The Proposed Uniform Civil Rules

A draft of the proposed Uniform Civil Rules 2020 has been published on the CAA website at: http://www.courts.sa.gov.au/ForLawyers/Pages/Draft-Rules.aspx. The draft does not yet include the all important forms but incorporates many more proposed changes. No longer plaintiffs and defendants, everyone will be applicants and respondents. Importantly, the Magistrates Cost scale survives. The following summary is of some of the proposals which will be in the next update of Magistrates Court Practice SA. At present, the stated intention is for the uniform rules to be adopted by 18 May 2020 but as these are linked with the implementation of the new computer system, it might be sensible to anticipate some delays to that schedule.

This note is not intended to be an exhaustive discussion of the proposed rules. It focusses on topics of primary interest to Magistrate Court users. For clarity, reference should be had to the Uniform Civil Rules (UCR).

The UCR will repeal all the existing Supreme, District and Magistrates Court rules which are described as the Previous Rules (UCR 2.1). The UCR will apply to all new proceedings. The Previous Rules will apply to steps taken in existing proceedings up to the date of commencement of the UCR, which will then apply to all future steps in the existing proceedings. (UCR 1.4). The application of different rules to existing proceedings will give potential for future arguments, especially in relation to costs. The UCR include a special Ch 24 which governs minor civil actions but that then incorporates several of the other UCR so that minor civil applicants will have to cross reference to those relevant rules. Chapter 24 will be discussed momentarily. The UCR do not apply to Intervention Orders or criminal proceedings but, by excluding those in the definition of “excluded proceedings” (UCR 2.1), it apparently applies the UCR to everything else. A note to UCR 14.3 implies that reviews of decisions of the Chief Recovery Officer under the Fines Enforcement and Debt Recovery Act 2017 will be governed by the UCR.

In future, plaintiffs will be applicants and defendants will be respondents and other parties third, fourth et al or interested parties.

UCR 3.1 sets out “overarching obligations” to be honest, co-operative, timely, cost efficient and many similar good things and failure can be met with orders to remedy the problem and pay costs for the failure.

Judicial Registrars in the Magistrates Court will have the same powers as a Magistrate except to hear a contempt charge or where a statute provides otherwise (UCR 11.3). One might wonder if in the future this might make magistrates unnecessary in the civil jurisdictions of the Magistrates Court. This possibility highlights the risk in giving quasi-judicial officers on a seven year term appointment a full judicial role in light of the principles made clear in Kable v Director of Public Prosecutions (NSW) (1996) 189 CLR 51; 70 ALJR 814; [1996] HCA 24. One day, a disgruntled litigant might test this. A Registrar, as well as a Judicial Registrar, can tax costs in classes of actions directed by the Chief Magistrate (UCR 11.3(a)). Registrars will continue to exercise the enforcement processes under the Enforcement of Judgements Act 1991 without the rider (so far as the author could see) in MCCR 125(8) that a registrar should refer a debtor to a magistrate, if one is available, before making an order for imprisonment.

The MCCR 12 “do anything” rule, giving a wide discretion to depart from the rules, will be adopted at much greater length in UCR 12.

UCR 13 provides for the new electronic filing system. Users must be registered and where there is an electronic copy of a document, the electronic copy will be the official record of the court (UCR 13.8). This will be profound change from the present where the paper file remains the record of the court with an electronic copy of much of it.

Pre-action notices

Personal injury lawyers will be interested to see the obligation to give written notice of an injury to the potential defendant/respondent with six months of the incident that caused the injury (UCR 61.6) as well as the later pre-action notice requirements. Perhaps because the legal basis for such a requirement is moot, there does not seem to be any consequence for failure to comply as the cost consequences in UCR 61.16 do not apply to Division 2 where this requirement is found. All claimants will notice that the rules provide for an extensive pre-action protocol which includes a notice of claim in some detail with an offer to settle. The proposed defendant/respondent must counter with details of defences and any proposed counter claim (to be called a cross claim) and then the plaintiff/respondent must in effect plead to the counterclaim. And third parties can be joined. Then the parties must meet (UCR 61.12). If the parties do not comply with this regime, which seems to have the effect of an informal court process before the real court process, they suffer cost and other consequences (UCR 61.13–UCR 61.16). There are exemptions from the process (UCR 61.8) including for likely uncontested matters mentioned in following paragraphs.

This elaborate pre-action protocol seems to be based on a false premise that people who are ready to litigate are reasonable and ignores the many cases that are defended on specious grounds, often with inflated counterclaims, because the defendant cannot afford to pay. For plaintiffs pursuing an insolvent defendant, this process will front load expense and help the defendant achieve the very delay that is its primary reason for defending the claim. A year or two later, the defendant has no assets and the plaintiff will have a worthless judgment and may not even recover the costs of this process. Thereby, the court system is then brought into disrepute as slow and ineffective. It is pleasing to see that the present Magistrates Court’s 21 day pre-action final notice process is preserved as an alternative (UCR 62.1 and UCR 62.2). It is limited to a plaintiff/applicant who “reasonably believes that the claim will be uncontested or is not genuinely contestable …” (UCR 62.1(1)). No doubt the boundaries of this reasonable belief will be stretched to the limit. Whether that in turn will be a fertile ground for satellite disputes remains to be seen.

Claims as opposed to other applications are defined in UCR 52.2. Without delving into the complexities of the definition and the extra matters included under Chs 19 and 22, suffice to say that the usual existing claims in the Magistrates Court will be claims under the new rules. Replies and contribution notices will make a return to the Magistrates Court. For a flavour of the pleading process, look at UCR 65–UCR 67.

The statutory and appeal jurisdictions of the Magistrates Court specially dealt with under MCCR 26 (seven jurisdictions), MCCR 37 (fourteen jurisdictions), MCCR 39 (five jurisdictions) and MCCR 40 (serious and organised crime applications) will be separately dealt with in Ch 19 and Ch 22 of the UCR. Importantly under the existing processes, the Registry ensures that the appropriate people are served and the particular listing arrangements are put in place. The instructions on the forms guide the process. It is to be hoped that this guidance will not be lost in the new processes.

Service

The UCR do permit service of claims by means other than personal service. UCR 63.4 dealing with service of claims provides as follows:

1. Unless the Court otherwise orders, service of Claim documents on a company or registered body interstate must be effected by personal service in accordance with rule 42.1.
2. Unless the Court otherwise orders, service of Claim documents out of Australia must be effected in accordance with Schedule 1 Part 1.
3. Unless the Court otherwise orders, service of Claim documents in any other case is to be served by original service in accordance with rule 42.1, 42.2, 42.3 or, if applicable, rule 42.4, 42.5, 42.6 or 42.7.
4. Claim documents will be regarded as having been served on a party in accordance with this rule if rule 42.8 applies.

Personal service is defined in UCR 42.1 for individuals by handing to the person or leaving it in their vicinity. “Individual” is not defined but in context means a human. For corporate and other non-human individuals, service includes statutory methods of service provided by the Corporations Act 2001 (Cth) or s 9 of the Service and Execution of Process Act 1992 (Cth). But for “Other body corporate served in South Australia or New Zealand”, service is deemed to be personal if a “document is left at or sent by prepaid post to the head office, a registered office or the principal place of business of the body corporate”. This appears to be simple post as opposed to “post service” as defined in UCR 42.3. There is further detail in UCR 42.1 not mentioned in this post.
UCR 42.2 provides for email service with limitations to make sure that the recipient is content to receive documents at the relevant email address. Note that attachments must be in PDF or Word (presumably Microsoft) format (UCR 42.2(2)). It is not clear what happens when serving later documents by email if they are spreadsheets or documents formatted in software other than Adobe or Microsoft.

UCR 42.3 provides for what is defined as “post service”. The sender must obtain an “article lodgement receipt” and proof of delivery “via Australia Post’s online tracking facility showing when the envelope was delivered to that address”.

Post service is available in these circumstances (UCR 42.3):

(b)    one of the following applies—

1. the recipient has consented to the document or a class of documents encompassing the document being served on the recipient by post sent to that address; or
2. the recipient communicated by post, using the address, with the party on whose behalf the document is to be served in relation to the subject matter of the proceeding or the dispute the subject of the proceeding; or
3. the recipient is an individual and resides at that address; or
4. he recipient is not an individual and has an office at that address usually attended on weekdays

It would seem that UCR 42.3(b)(iv) provides another method of service on non-human entities which exist in South Australia.

UCR 42.4 is solicitor service, UCR 42.5 is agent service, UCR 42.6 is agreed service, UCR 42.7 is substituted service and UCR 42.8 is deemed service.

A claim will have to be served within six months. This contrasts with the present time for service in the Magistrates Court of one year which was adopted to allow debtors to meet arrangements with a creditor without additional expenses being incurred to keep the claim alive. Under the UCR, a warning notice will be given to the applicant and after six months, a claim goes into an inactive claim list and then two months later, the Registrar can dismiss the claim for want of prosecution (UCR 64.3). An application can be made to reinstate it. Personal injury claimants who seek delay while injuries stabilise can seek peace in the moratorium list under UCR 64.7. Might this be the black hole of the future that case management systems got rid of in the early 1990s?

Proof of service must be by affidavit (UCR 45.1) on Form 43 which is not yet available. The old one-page claim form with the affidavit on the back will be missed.

Default judgments

An applicant is entitled to request a judgment in default of a defence being filed. Judgment can be entered by the Registrar if the applicant proves service and “is entitled to the default judgment” (UCR 142.7). What constitutes entitlement is not defined and this rule sits uneasily with UCR 15.1 which provides that the court can only grant a judgment without a hearing, by consent, after written submissions or if it has been reserved or where it will not prejudice a party. In addition, the definition of the Registrar’s role in UCR 13 is limited to administrative functions, although the Registrar is given a judicial role to hear matters under the Enforcement of Judgments Act 1991, to tax costs where the Chief Magistrate directs and to enter judgments, but only by consent (UCR 11.3(2)). In the Magistrates Court, some 80% or more of the claims are not defended so no doubt there will be clarity of the right of the Registry to enter default judgments where claims have been properly served.

The MCCR rule permitting judgment to be signed in property damage cases where the proof of damage was served with the claim has been included in UCR 142.4 but then some of the detail in the rule is applicable only to motor vehicle claims (eg referencing the Red Book for vehicle valuations) raising the query whether it was intended to limit the property damage to motor vehicle claims.

Applications to set aside default judgments

These applications may be made for irregularity of service (UCR 142.11) or if the party has a reasonable excuse for not filing a defence and “the party has a reasonable basis for defending the claim” (UCR 142.12(1)(b)). So, the extensive case law on what constitutes “an arguable defence on the merits” in the existing MCCR 87 will be largely irrelevant under this new test. Also, although the UCR 142.12(2) will permit the court to set aside the judgment “on such conditions as it considers appropriate”, the specific authority to award costs thrown away and importantly to order payment into court or other security as specified in MCCR 87(3)(b) has not been included.

Once a claim is defended, it then proceeds under the elegant complexity that lawyers are used to under the Supreme Court Rules. A later memo may explore those procedures. Litigation plans will be discretionary which will save costs for Magistrates Court litigants.

Court Experts

UCR 11.4 permits the court to appoint an expert for investigation and report. This appears to preserve the long-established role of court experts, especially in building disputes, in the Magistrates Court. The appointments may need to be more specific as there is no equivalent to MCCR 69 which presently provides some guidance to the process and payment of the court expert. The note to UCR 11.4 suggests that s 29 of the Magistrates Court Act 1991 is for appointment of a referee to investigate and report, which is not the language of the Act.

Enforcement of judgments

UCR 203.2 provides that for a judgment debt (that is not a business debt or a fine) of $12,000 or less against a natural person, the first process must be an investigation summons. A warrant of sale can then only issue if the debtor ignores an order for payment in full or is two instalments in arrears. Any warrant of sale for a judgment debt of a total of $12,000 must first be executed against goods. It should be noted that the $12,000 refers to the judgment debt, which will include costs and likely interest amounts so this cap is less that the small claims limit and once additional costs and interest accrue, a judgment debt may exceed the cap and not be so limited in enforcement process.

Investigation and Examination summons in the Magistrates Court, unless the court otherwise orders, must be returnable to “the Court nearest to the place of residence of the judgment debtor … (UCR 203.4(4) and UCR 203.8(4)). This no doubt means the registry of the court as is the case under the existing rules. Personal service by the Sheriff (unless the court orders otherwise) will still be required (UCR 206.1).

Minor Civil Actions

Parties in minor civil actions, unrepresented as they must be, will be pleased to find their rules in a special Ch 24. They will find then that Ch 24 incorporates into it rules from 16 other chapters of the UCR.

At least twenty one days notice of an intended claim must be given (UCR 332.3). The parties to a fencing dispute are exempt from the pre-action process (UCR 323.3(3)). The proposed defendant is obligated to respond within that twenty one days (UCR 332.4). The penalty is costs, a small consideration in Minor Civil claims, so no doubt most defendants will save their effort for their defence. Personal injury claimants must give notice to the potential defendant within six months of the incident where the injury was caused. Minor Civil claimants can use a short form statement of claim (UCR 63.1). If this is defended, a full statement of claim must be then filed. The filing instructions in UCR 331.1(3) do not make clear which form is used to file a short form claim electronically. At present in the Magistrates Court, all counterclaims are contested without the need to plead and there is an automatic claim of contribution between two or more defendants. This will be retained only for Minor Civil Claims.

Postal service by the registrar is a great cost saving to parties and ensures that claims are properly served, with all the requisite notices. The present rules permit postal service by a party, but costs incurred if any judgment is set aside are likely to be thrown away (MCCR 106(6)). Under the UCR, the registrar will no longer serve processes. Personal service of claims is required with proof by affidavit. This will impose a significant cost burden, especially for service interstate. There will also be some risks to parties who themselves serve claims personally. One hopes that the instruction manuals to litigants on the CAA website are to be updated to explain the requirements of service. The video explanation “Stitched Up” will require revision.

The pretrial processes for Minor Civil claims are largely consistent with the existing MCCR and the 15 minute rule permitting the entry of judgment at a directions hearing or a trial if a party fails to appear will remain. In relation to non-claim minor civil applications, there is a new requirement that any contest of fact mentioned on the application must be raised by the respondent by affidavit filed within 14 days of service of the application. So it will be that a respondent to an application under the Fences Act 1975 will have to file an affidavit contesting any facts within 14 days (see definition of “originating application” in UCR 331.4). It is to be hoped that the application form makes that clear to the neighbour who is not legally literate.

In short, the UCR adopt many of the practical elements of the MCCR. However, they front load expense in ways not really appropriate for simple debt claims which are the overwhelming majority of claims filed in the Magistrates Court, most of which are uncontested. The MCCR has imposed a simple approach to all its litigation reinforced by fixed rate cost scales. The Magistrates Court has absorbed large quantities of work from the District Court without additional resources because the MCCR discourage unnecessary activity. The UCR are primarily designed for the few cases that go to trial in higher courts and front loads costs. Whether the cost scale for Magistrates Court matters will be sufficient to retain its cost effective approach to litigation remains to be seen.