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Local Court Practice

Toni Bartush-Peek

Revised 21 March 2008

Jurisdiction

1. The Local Court‟s jurisdiction is derived from s 9 Local Court Act 2007 NSW (“LCA”).

2. Because the Local Court is a creature of statute and an inferior court, it has no

inherent jurisdiction, i.e. the Court has no powers, jurisdictions or authorities other

than those authorised by statute.

3. As a result the Local Court does not have jurisdiction in:

(a) proceedings relating to wills or settlements: s 33(1)(a) Local Court Act 2007;

(b) actions for passing-off, wrongful arrest, false imprisonment or malicious

prosecution, or defamation: s 33(1)(b) LCA;

(c) infringement of letters patent or copyright: s 33(1)(c) LCA;

(d) detention of goods comprised in a hire purchase agreement: s 33(1)(d)(i) LCA or

the goods are detained by their owner or by some other person acting on the

owner‟s behalf: s 33(1)(d)(ii) LCA.;

(e) proceedings in which the title to land is in question: s 33(1)(e) LCA, other than

proceedings in which the question of title to land is merely incidental: s 33(1)(e)

LCA;

(f) to make declarations; or

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(g) to grant injunctions.

4. The Civil Procedure Act 2005 and Uniform Civil Procedure Rules provide the

procedure for conduct of proceedings in the Court. The Court also issues Practice

Notes, which should be your first point of reference when briefed to appear in the

Court.

5. The Local Court‟s civil jurisdiction is in two Divisions (i) the Small Claims Division and

(ii) the General Division.

6. The monetary limits of the Court‟s jurisdiction are set out in: s 29 Local Court Act

2007:

(a) In the General Division the Court can hear claims where the amount in issue is

up to $60,000: s 29 Local Court Act 2007

(b) Where the parties file a memorandum of consent or no objection to the Local

Court‟s jurisdiction is taken the limit may be exceeded by 20%: s 31(2) Local

Court Act 2007.

(c) In the Small Claims Division the Court has jurisdiction to hear claims where the

amount in issue is $10,000 or less: s 29(b) Local Court Act 2007.

7. The Local Court has jurisdiction:

(a) to hear and determine proceedings to recover detained goods or to recover the

assessed value of the goods: s 30(1)(b) Local Court Act 2007 but not where the

goods are the subject of a hire purchase agreement or where the goods are

detained by their owner or by some other person acting on the owner‟s behalf: s

30 Local Court Act 2007;

(b) without limit as to amount, to make consent orders under the Family Law Act

1975 (Cth);1

1 Note that the Local Court will refer any dispute about “consent orders” to the Federal Magistrate’s Court: it will not engage in determinations.

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(c) for damages in an action referred to in section 68 Fair Trading Act 1987;

(d) in an action for damages simpliciter under the Trade Practices Act 1975 Cth;

(e) actions under the Corporations Act 2001 subject to the Local Court‟s

jurisdictional limits: s 1337E Corporations Act 2001;

(f) a claim to recover a sum of money in a foreign currency whether the sum

claimed is to recover a debt: Miliangos v George Frank (Textiles) Ltd [1976] AC

443 or represents damages for breach of contract and for tort: The Despina R

[1979] AC 685;

(g) Proceedings for relief under s7(i)(a) Contracts Review Act 1980: s 32 Local Court

Act 2007 in which the Court has the same jurisdiction as the Supreme Court up

to the Local Court‟s jurisdictional limit2;

(h) Where the cause of action or part of it arose outside New South Wales and

where the whole cause of action arose outside New South Wales so long as the

defendant was resident in New South Wales at the time of service of the

originating process: s 34 Local Court Act 2007. The issue is service within

Australia pursuant to s 15(1) Service and Execution of Process Act 1982.

Correct form of address

8. Since 3 May 2004 Magistrates are addressed as „Your Honour‟ and not as „Your

Worship‟3.

Special Jurisdiction - Part 4 Local Court Act 2007 - Application proceedings

2 Even if the amount in issue were under $10,000 and commenced in the Small Claims Division, the Court would refer it to the General Division for determination by a Magistrate. 3 Local Court Practice Note No. 1 of 2004.

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9. The Court also has a further statutory jurisdiction in relation to any proceedings with

respect to matters for which jurisdiction is conferred on the court by or under any

other Act for law, other than (a) criminal proceedings and (b) proceedings for which

jurisdiction is conferred on the court by Part 3 Local Court Act 2007: s 44 Local Court

Act 2007.

10. This can be a confusing area as the Application procedure is used for what appear to

be statutory applications that may not have the flavour of the usual civil claims.

Examples are actions under the Uncollected Goods Act 1995, the Landlord and

Tenant Amendment Act 1948, orders for payment of unpaid entitlements under the

Annual Holidays Act 1944, licensing appeals from decisions of the RTA and

applications for Apprehended Violence Orders under the Crimes (Domestic and

Personal Violence) Act 2007.

11. The proceedings are commenced by Application: s 45 Local Court Act 2007. The

application notice must be for one cause of action only: s 48 Local Court Act 2007. If

in doubt as to whether the claim should be commenced by Application first consider

the enabling Act and if that does not clarify the position contact the Local Court

Registry.

Procedure

12. The General Division‟s procedure is set out the Uniform Civil Procedure Rules as in

the District and Supreme Court and will, in many respects, be familiar to counsel in

those jurisdictions. However, there are differences for instance in the (often

exercised) power of Magistrates to summarily strike out claims and defences where

there are defaults in compliance. If you are briefed early in a Local Court matter to

settle statements and appear on call-over keep a watch on compliance and if

necessary assist and prompt your instructing solicitor to get the work done. It is you

that will have to appear and attempt to explain any default and deal with an irritated

Bench.

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Pleading in the General Division

13. Three points need to be highlighted:

(a) Pleadings must comply with Part 14 UCPR, so that a party must plead his case

in such a manner as will enable the opposite party to identify the case he or she

is required to meet and so that it is not embarrassing (see UCPR r 14.28) so

there is no allowance for imprecise pleading in the Local Court. If you are faced

with a non-complying pleading from the other side you can advise your

instructing solicitor as to steps to take to file and serve a Notice to Plead Facts

and Issues or bring a motion to strike out.

(b) Defences must disclose the grounds upon which the plaintiff‟s claim is denied or

not admitted.

(c) Pleadings in the Local Court are not required to be verified by affidavit: UCPR r

14.23.

14. As to disclosing a defence, to a count in contract, a plea of “never indebted as

alleged” is insufficient as a defence in that it is potentially embarrassing since it does

not throw up any issue to be tried by the court: Cook Hills Investments Pty Ltd v

Rodriguez (No 2) (SC(NSW) 5200 of 1986 10 December 1986, Young J; BC8600480.

15. Defences of the non-admit variety or those which simply deny assertions in the

plaintiff‟s pleading without advancing a case of the defendant‟s own, or the real

issues in dispute, fall into the same category. Such pleas are likely to be struck out

under UCPR r 8.3.

Cross-Claims & Third Parties

16. Cross-claims may be issued by defendants against plaintiffs or against third parties.

However, where the claim is against a third party the relief claimed must relate to or

be connected with the plaintiff‟s claim in the original proceedings: see UCPR 9.1.

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17. Issuing cross-claims allows all issues to be tried in one set of proceedings to which

all interested persons are parties. Each successive cross-claim must be numbered

“First Cross-Claim”, “Second Cross-Claim” and so on: UCPR r 9.1(4), in the order in

which they are filed.

18. A Defendant is entitled to bring any cross-claim against the Plaintiff: s 22 Civil

Procedure Act 2005; UCPR r 9.8 whether or not it arises out of the same facts and

circumstances as the Plaintiff‟s claim.

19. A Defendant can also bring cross-claims against third parties where the relief

claimed in the cross-claim is related or there is sufficient connection with the claim

pleaded in the Statement of Claim. Ensure the Defendant has a genuine cross-claim

and not just a right of set-off which should have been pleaded in the Defence.

20. Cross-claims increase the complexity and cost of proceedings. Proportionality of

costs is always an issue in Local Court proceedings.

21. The practical result is that the cross-defendant will be bound by the result as

between the plaintiff and defendant, which may preclude the necessity for separate

proceedings between the defendant and a third party.

22. Claims for contribution or indemnity between joint and several tort-feasers are made

by cross-claim: see UCPR r 9.11. However, judgment on a cross-claim for

contribution or indemnity pursuant to s 5 Law Reform (Miscellaneous Provisions) Act

1946 cannot be entered until judgment against the defendant in the proceedings has

been satisfied: UCPR r 9.11.

23. UCPR r 19.4 provides that a third party has the same rights and is subject to the

same liabilities as any other party. However, if a defendant has judgment entered

against a third party it cannot be enforced until judgment given in favour of the

plaintiff against the defendant has been satisfied: UCPR r 19.5.

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24. When pleading the cross-claim if the cross-defendant is already a party the cross-

defendant may plead all or any of the facts on which they rely by reference to the

previous pleadings in the proceedings giving rise to the cross-claim: UCPR r 9.3.

Discovery

25. With the introduction of the Civil Procedure Act 2005 and Uniform Civil Procedure

Rules discovery is available in the General (but not Small Claims) Division of the

Local Court. All of the rules as to Discovery in UCPR Part 21 apply in the General

Division. You will need to ensure discovery is limited to relevant categories by

advising as to and settling categories of documents for your instructing solicitor.

Case Management of Civil Actions

26. Case management of civil actions is provided for in Practice Note 1 of 2005. Make it

your first point of reference.

27. The first Call-Over will be about six weeks after the Defence is filed. At the first Call-

Over before the Registrar the Court will make directions for the speedy determination

of the real issues between the parties including orders (paragraph 7.3.1 Practice

Note No 1 of 2005):

(a) For compliance with the Standard Directions (see below, which include

orders for preparation and exchange of statements. This may include affidavits

of experts who will be required to comply with the expert witness code of

conduct. Please refer to the commentary below and to the Expert Witness

Code of Conduct);

(b) For a return date for subpoenas. Subpoenas must issue as early as possible

so that documents can be produced and inspected and are available for the

proper preparation of the case, including submission to experts;

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(c) For the preparation and filing of the agreed list of exhibits that are page

numbered and indexed;

(d) Such other directions as it considers appropriate;

(e) Any other matter mentioned in Part 6 Civil Procedure Act 2005 (“CPA”)

(f) Referral of the proceedings to mediation: s 26 CPA;

(g) Referral of the proceedings to arbitration: s 38 CPA;

(h) Directions for the calling of expert witnesses pursuant to UCPR Part 31.

The Local Court’s Standard Directions are:

(a) Each party shall serve upon all other parties copies of written statements or

affidavits of the intended evidence of all witnesses, together with copies of any

annexures, reports or other documentation (all of which should be numbered)

intended to be relied upon, on a day at least 14 days prior to the Review date of this

matter (being a date at least 42 days prior to the day fixed for trial).

(b) Each party or their legal representative is directed to attend on the Review

date allocated by the Court. On the review date each party shall file a written

summary of the case, including a reference to any relevant case law or statute.

(c) The Plaintiff shall prepare and file a statement of agreed facts and issues 7

days prior to the date fixed for hearing.

(d) Unless there is more than one defendant, each party must prepare four copies

of all statements or affidavits and other documents. In the case of each additional

party, one additional copy should be provided.

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(e) Where a written statement or affidavit of a witness has not been filed and

exchanged, evidence may not be admitted, unless the non-complying party satisfies

the Court that it is in the interests of justice to do so (see s 58 Civil Procedure Act).

(f) Parties can expect that failure to comply with the Court‟s directions may result

in the statement of claim or cross claim being dismissed, or the defence being struck

out, with costs.

(g) Where a legal practitioner acts as agent for a party he/she must forward a

copy of the directions to the principal legal practitioner immediately.

(i) The Court always has discretion to vary Standard Directions and may give

directions in circumstances not covered by the rules: s 28 Local Court Act 2007

(cf CPA, section 16; LCA 1982, section 26).

28. Any variation, for which you should have a sufficient reason, if necessary supported

by an affidavit from the client or your instructing solicitor, should be sought from the

Registrar.

29. At the Call-Over the Court will make orders in accordance with paragraph 7.3.1 of

Practice Note No 1 of 2005 (see above) and fix a date for trial and a date for pre-trial

review or to a second call-over within 28 days where, for instance there are

outstanding matters.

Arbitration and Mediation

30. The Local Court will, of its own motion, refer “suitable proceedings” such as property

damage claims arising out of motor vehicle accidents or other uncomplicated

proceedings estimated to take 3 hours or less at hearing to Arbitration.

31. This severe limitation on referrals has come about due to the Court‟s perception of

parties previously providing inaccurate estimates of the time a matter will take to

hear and a failure to appreciate that complex matters should not go to arbitration. As

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a consequence arbitrators will now revoke a referral to arbitration where the matter is

likely to last more than a day and where complex issues of fact or law are involved.

32. Where proceedings are referred to arbitration and determined and a request for

rehearing before a Magistrate is lodged, the parties will be advised of a Call-Over

date to be held within 28 days of the request.

33. Mediation may be ordered whether the parties consent or not: s 26 Civil Procedure

Act 2005. The test is whether the court considers the circumstances appropriate. If

the parties agree to mediate they should seek an order from the Registrar or

Magistrate at Call-Over or Review.

Witness Statements

34. Directions regarding exchange of witness statements and the filing of Statements of

Issues (UCPR Form 12) can be expected in virtually all cases where matters are to

be determined by the court. If a party alleging fraud (where the evidence would

usually be given orally) opposes an order for the serving of witness statements, the

matter should be referred to a Magistrate for determination on a date convenient to

the Court. The parties must file and serve the Statement of Issues (and if possible

written submissions) prior to the Review, together with copies of the relevant

authorities upon which they rely.

35. Witness statements are to be exchanged at least 14 days before the Review and in a

manner arranged by the parties. They must also be filed in Court. Note that this

differs from the procedure in the District and Supreme Courts where affidavit

evidence is unless specifically provided for in the Rules, is not filed, only served and

the originals are handed up at hearing.

36. Written witness statements are to include relevant evidence only, and to record that

evidence in admissible form. If objection is raised to any material in the witness

statements, the party objecting should notify their opponent(s) of those objections

before the date for Review in order to allow negotiations over what evidence is

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pressed, and what portion of the statement can be deleted. If a witness refers to a

document, in his or her statement, a copy of the document is to be annexed to the

statement.

37. At the Review the parties are to inform the Court what witnesses are required to

attend for cross examination. At the hearing, application may be made to supplement

the written evidence of a witness with oral evidence, or to clarify matters within the

written statement by further oral evidence, (which is within in the discretion of the

Court). Parties should not assume that they will be permitted to call oral evidence.

38. Applications to call further witnesses should be made by notice of motion.

39. If there is default in compliance with directions, the Magistrate may make orders

including dismissing the proceedings, striking out a defence or cross-claim, UCPR rr

12.7, 12.9; making costs orders in relation to the whole or part of the costs of another

party or such orders as it considers appropriate: Civil Procedure Act sub-sections

61(3), (4), UCPR r 12.10. The issue with costs orders is that they do not always

await the outcome of the proceedings and can be made payable, say within 14 days.

40. Beware! Magistrates do strike out claims and dismiss defences. Your client is then in

the position of having to pay the other side‟s costs and seek leave to recommence or

continue.

41. If this occurs application for reinstatement of the claim is made by filing a Notice of

Motion pursuant to UCPR Pt 18 and seeking orders pursuant to the Local Court (Civil

Procedure) Rules cl 12 (d). They are not always successful.

Expert witnesses

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42. The amended Practice Note 1 of 2005 contains specific directions as to expert

evidence. Parties are, as far as it is practicable without compromising the interests of

justice, to agree to instruct a single expert.

43. Parties must seek directions from the Court at Call-over before a Magistrate before

calling any expert witness. If the Call-over is before a Registrar the Registrar cannot

make the directions and the matter must be referred to a Magistrate.

44. If you decide after the Call-over that it is necessary to call an expert witness you

must make your application for directions by filing a Notice of Motion or by using

liberty granted to restore. This means if you are of the view at any stage that you

may need expert evidence seek directions early. If you are unsure make the

Registrar aware and have a direction made that your client (the Plaintiff or

Defendant) has liberty to restore on say 7 days notice to seek directions for the

calling of expert evidence.

45. Given parties must now attempt to agree on a single expert you will have to be clear

on the issue the expert has to deal with in their report. Write to the other side and set

out the reasons the expert evidence is required and nominate your preferred expert.

You may have to negotiate before you agree. If there is no agreement under the

terms of the Practice Note you will have to seek directions from a Magistrate for the

filing of competing reports. Be prepared for the Court to be reluctant to allow

competing experts so you will have to satisfy the Court that “it is not practicable” and

“the interests of justice would be compromised” for a single expert to be appointed.

46. If the parties agree on a single expert there will have to be an agreed letter of

instructions to the expert.

47. Whether it is a single expert or an expert appointed by your client your instructing

solicitor must instruct the expert in writing as to the matters to be addressed in their

report which will be the matters in issue in the proceedings that come within the

expert‟s area of expertise. You should settle the instructions by reference to the

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pleadings and limiting the instructions to those matters the expert must address.

Remember it forms part of the expert‟s affidavit and will be closely read by the Bench.

48. A copy of the letter of instructions should be annexed to the report and any

documents you provide to the expert should be referred to in the report. Take care

when settling the instructions as it will be closely considered by the Bench at hearing.

49. The report only becomes admissible when it is annexed to an affidavit sworn by the

expert in the proceedings.

50. When instructing the expert in the General Division the expert must adhere to the

Witness Expert Code of Conduct as required by UCPR r 31.17.

51. Your instructing solicitor must provide the expert with a copy of the Expert Witness

Code of Conduct and in your letter of instructions specifically request them to

acknowledge in the Report that they have read and agree to abide by the Code in

providing their report. A failure to do so will render the report inadmissible.

52. The Expert Witness Code of Conduct is set out at Schedule 7 to the UCPR.

Vacation of hearing dates - Practice Note 1 of 2005

53. Any application for vacation of the trial date must be made by Notice of Motion filed

not less than 21 days prior to the allocated trial date, unless there are unforeseen

circumstances such as illness.

54. Such applications must be made as soon as practicable and not later than the next

working day after a party becomes aware of the unforeseen circumstances.

55. If the trial is within 21 days a party seeking to vacate the date should not await the

consent of the other party before approaching the court by filing a Notice of Motion.

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Costs

56. Practice Note No. 1 of 2000 provides guidelines to be used:

(i) by the parties in reaching an agreement on costs; and

(ii) a party making application to have the court determine the amount of costs.

57. A party seeking an order that the court determine the quantum of costs must present

evidence of time spent, such as copies of time ledger printouts, file notes and

memoranda. In any event the court will not engage in a taxing exercise.

58. Magistrates seem to engage in a reasonableness test and often “weigh up” the

material in the file in making their orders. This may entail a heaving of the file up from

the Bench and allowing it to drop with a thud. Which may be a warning shot in

relation to the quantum of your application.

59. Be prepared to provide the Court with enough material on which to base the costs

order you seek but always beware of seeking costs disproportionate to the sum in

issue. You will have difficulty.

60. In the absence of agreement at that time as to an order or the quantum of costs the

usual order is costs as agreed or assessed.

Small Claims Division –

Procedure

61. The procedure in the Small Claims Division is radically different to the General Division

and warrants some examination:

61.1 The monetary limit of the Small Claims Division‟s jurisdiction is $10,000: s 12(3),

(4) and (5) LCA.

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61.2 The jurisdiction in the Small Claims Division is exercised by an Assessor at the

Downing Centre (or by a Magistrate in the suburbs and country) sitting alone.

61.3 Parties have a right of representation: s 57 Local Court Act 2007 but costs will

only be awarded in exceptional circumstances4.

61.4 Claims in the General Division must be formally pleaded by Statement of Claim

and Defence, are adversarial, subject to the Rules of Evidence and heard either

by a Magistrate or referred to arbitration.

61.5 In hearing matters in the Small Claims Division the Assessor, who may a

Magistrate in the suburbs and country areas, has a duty to conciliate between the

parties before giving judgment or making a final order: s 71(1) Local Courts Act

2007. The Assessor will therefore talk to the parties about the issues and attempt

to have them engage in discussions with a view to settlement before determining

the matter.

61.6 In the Small Claims Division proceedings are conducted with as little formality

and technicality as the proper consideration of the matter permits: s 70(1) Local

Courts Act 2007. This is reflected in the Small Claims Division Practice Note

discussed below.

61.7 The Rules of Evidence do not apply in the Small Claims Division: s 70 (3) Local

Courts Act 2007, but proceedings are subject to the rules of natural justice.

61.8 Witnesses may not be cross-examined except in circumstances authorised by

the Practice Note: s 62(4)(d) CPA; s 70(4) Local Courts Act. See Practice Note

No. 2 of 2005.

62.9 The Assessor or Magistrate may inform themselves on any matter being heard

as they think fit: s 70(5) Local Courts Act 2007.

4 The general prohibition is in s 37 of the Local Court Act.: Except as may be provided by the rules, a court sitting in the Small Claims Division has no power to award costs to or against a party to proceedings in the Division. Costs are dealt with below.

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61.10 The proceedings may be heard and determined in the absence of a party: Local

Courts (Civil Procedure) Rules 10(3).

61.11 Actions in the Small Claims Division may not be referred to:

(a) Arbitration;

(b) Mediation; or

(c) A Referee: UCPR 1.5, 1.6 Schedule 1 column 4, UCPR rr 14.4, 14.5.

61.12 Offers of Compromise cannot be relied upon in the Small Claims Division: UCPR

1.5, 1.6 Schedule 1 column 4.

61.13 Very limited motions can be brought in the Small Claims Division: LCR Pt 15

r1(2) and in particular no motions to strike out pleadings. The exceptions are:

i. an application for an order that the matter be heard in the General

Division5: Pt 3 r9(4)(b)

ii. applications for orders for inspection of property: Pt 20 r8

iii. applications to set aside judgments or orders entered irregularity or

against good faith: Pt 26 r 3

iv. interpleader by sheriff or bailiff: Pt 32 r2(1)

v. motions under Pt 35 r6 seeking the variation of a judgment or order

against a person in a business name so as to make it a judgment or order

against that person in their own name.

5 An order transferring the matter to the General Division shall not be made unless the court is of the opinion “that the issues likely to arise in the action or cross-claim are so complex or difficult as to law or fact, or that the action or cross-claim is of such unusual importance, that it should not be heard and determined in the Small Claims Division: Pt 3 r9(2). Such an order can be made of the Court’s own motion or on the application of any of the parties at any time before judgment: Pt 3 r9(3). The application can be made by way of notice of motion (accompanied by an affidavit setting out the grounds) to the Registrar at the time of filing the Statement of Claim: Pt 3 r9(4)(a). The application will be dealt with in chambers. The commentary to the Local Court procedure states that the threshold test to be passed in order to litigate in the General Division is an onerous one. In every case the question to be determined is whether the parties should be entitled to litigate their dispute, with all its alleged complexities, “with the full procedure and panoply of the court”. See the commentary at [10,540].

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Hearing in the Small Claims Division6

62. Proceedings are commenced by Statement of Claim: UCPR Form 3A. Pleadings are not

verified by affidavit in the Local Court.

63. The pre-trial review procedure is a significant area of difference with the General

Division. There is only one listing before trial.

64. If a Defence is filed, on the filing of the first defence the proceedings will be given a Pre-

Trial Review date within six weeks.

65. The Pre-Trial Review will be before an Assessor or Magistrate who will hear the matter.

66. The Assessor or Magistrate will direct the parties to prepare and exchange witness

statements and hear any application to have a witness or witnesses attend for cross-

examination.

67. In determining whether a direction may be given that a witness attends the trial of the

proceedings or be orally examined, the Magistrate, Assessor or Registrar will have

regard to the particular circumstances of the case, including the amount involved and

whether there is a real issue as to credibility or a significant conflict in the evidence.

68. Procedure, case management and hearing in the Small Claims Division is subject to

Practice Note No. 2 of 2005 which sets out the Court‟s objectives in relation to case

management of proceedings.

69. The purpose of the Practice Note is to make parties and their legal representatives

aware of the Court‟s case management procedures which are designed to “to facilitate

the just, quick and cheap resolution of the real issues in the proceedings”: s 56(1)

Civil Procedure Act 2005. In the Local Court that means the Court aims to finalise 90%

of all matters within 6 months of commencement and 100% within 12 months.

6 See the Practice and Procedural Guide at [13205] in the Local Court Practice.

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70. Parties must plan when commencing proceedings to meet these time standards

because a party to civil proceedings is under a duty to assist the Court to further the

overriding purpose of s 56(1) CPA and to that effect, to participate in the processes of

the Court and to comply with the directions of the Court: s 56(3) CPA.

71. The Practice Note provides for dismissal by the Court of its own motion, not by

intervention of any party, of inactive proceedings where no defence or cross claim is filed,

default judgment entered or the proceedings are otherwise disposed of within 9 months

of the filing of the statement of claim.

72. No proceedings are stood over generally: see s 66(1) Civil Procedure Act 2005.

73. The Court may give such directions as it thinks fit for the speedy determination of the

real issues between the parties to the proceedings.

74. The Small Claims Division Case Management Order (relevant to the large number of

litigants in person in the Small Claims Division) is:

(a) The hearing will be conducted in a way which gives each party the opportunity to properly present his or her case, and, where necessary, test the other party‟s case, but without unduly prolonging the hearing or rigidly applying rules or procedures.

(b) The rules of evidence will not apply and the Magistrate or Assessor who hears the case will determine the procedure at the hearing. (However, note the comments above in relation to the requirement for natural justice).

(c) Each person who has something relevant to say about the matter should prepare a signed witness statement. Each party shall exchange copies of witness statements simultaneously and file a copy in the Local court registry no later than 14 days before the hearing.

(d) No witnesses need come to court unless the Magistrate, Assessor or Registrar who

conducted the pre-Trial Review gave a direction that a witness should attend to be cross-examined. If no such direction has been given, the case will be heard and determined on the written statements of the witnesses and any other documentary evidence or material produced at the hearing. (So if you wish to cross-examine a witness for the other side you will have to seek a direction at the Pre-Trial Review.)

(e) If the Magistrate or Registrar gave a direction at the Pre-Trial review that a particular witness should attend for the purpose of cross-examination that witness must attend. Otherwise, his or her statement may not be admitted, or no weight

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may be attached to its contents. If you think that the witness will not attend court voluntarily, please attend the court office well in advance of the hearing in order to arrange for the issue of the relevant process (ie a subpoena that the witness appear to give evidence, UCPR Form 25, and if necessary produce documents UCPR Form 27).

(f) At the hearing, the parties or their legal representatives should be in attendance to make comments, present arguments and to make final submissions.

(g) If you or your opponent do not file and exchange statements of relevant witnesses, this may result in the action, defence or cross claim being dismissed or struck out, and/or an order for costs may be made against the defaulting party.

(h) If you are uncertain about any aspect of this Notice or the procedures to be followed in preparing your case or at the hearing, you should seek advice prior to the hearing date from the Chamber Magistrate, LawAccess or a legal practitioner.

Expert Witnesses

75. Although the monetary amount at stake in a proceeding in the Small Claims Division

may be small it may be part of a wider circle of litigation between the parties or there are

other issues that require expert evidence such as contributory negligence. If that is the

case or the matter is likely to go on appeal it is wise and good practice to have the

expert adhere to the Witness Expert Code of Conduct as required by UCPR r 31.17.

76. Your instructing solicitor must instruct the expert in writing as to the matters to be

addressed in the report which will be the matters in issue in the proceedings that come

within the expert‟s area of expertise. A copy of the letter of instructions (which you

should settle by reference to the pleadings) should be annexed to the report and any

documents you provide to the expert should be referred to in the report.

77. When instructing the expert you must also provide them with a copy of the Expert

Witness Code of Conduct and in your letter of instructions specifically request them to

acknowledge in the Report that they have read and agree to abide by the Code in

providing their report. A failure to do so will render the report inadmissible.

78. For the Expert Witness Code of Conduct see Schedule 7 UCPR.

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Subpoenas

79. The monetary limit of $10,000 in the Small Claims Division does not reflect the

increasing complexity of matters that come before the Assessor or Magistrate for

determination and may require significant preparation, including access to subpoenaed

material.

80. As from 7 July 2006 parties in the Small Claims Division may issue subpoenas to third

parties in appropriate circumstances. However, parties require leave.

81. At the Downing Centre an application to issue subpoenas is referred to an Assessor or

Magistrate. In suburban and country courts make the application to the Magistrate at

Pre-Trial Review.

Preparing for Trial

82. The aim of the practice procedures adopted in the Small Claims Division is to ensure

time and cost-effective resolution of small claims.

83. Strict compliance with directions is regarded as a matter of importance and enables the

parties to know where they stand. See Oliveri Legal Pty Limited v Lohning International

Pty Limited [2004] NSWSC 987; Hassett v Vrzina [2006] NSWSC 22.

84. A „formal trial‟, that is, the normal adversarial trial where oral evidence is taken on oath

and witnesses cross-examined is generally not available in the Small Claims Division.

85. This places heavy reliance upon the papers filed by the parties and read by the

Assessor or Magistrate as emphasised in the Court‟s Case Management Order, set out

below. If you are briefed in a matter in the Small Claims Division this is where your

expertise in pleading and filing relevant evidence will have the most impact.

86. A failure to completely articulate the client‟s case in the papers cannot be remedied by

cross-examination of the other party.

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87. All necessary documents should be attached to clear and concise statements.

88. Subpoenaed documents should be tendered.

89. Strict compliance with the Court‟s directions as to the filing of witness statements is

mandatory if a party wishes to rely upon a witness statement at hearing.

90. Where statements are filed late a refusal of the Assessor or Magistrate hearing the

proceedings to allow the statement to be read is not an error of law or a denial of natural

justice that would allow a party a right of appeal.

Complex or Difficult Proceedings

91. Where the Court sitting in the Small Claims Division is of the opinion that the issues

likely to arise in the proceedings are so complex or difficult as to law or fact, or that the

action or cross-claim is of such importance that it should not be heard in the Small

Claims Division, the court may order its transfer to the General Division. Such an order

may be made at any time before judgment on the Court‟s own motion or on the

application of any of the parties: Pt 2 rule 7 Local Courts (Civil Procedure) Rules 2005.

92. Proceedings can also be transferred where the Division‟s jurisdictional limit of $10,000 is

exceeded: Pt 2 rule 6 Local Courts (Civil Procedure) Rules 2005.

93. The Application for Transfer is made by Notice of Motion in accordance with Part 18

UCPR; Local Court Civil Procedure Rule 12(2)(a).

94. The Court will have to be satisfied that there is a sound basis for the transfer. If the

matter is complex you will have to articulate the grounds by reference to the issues. If for

instance there is a contested claim for contribution or indemnity from a third party that

would be an appropriate case for transfer.

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The Trial

95. The proceedings will be heard and determined by each party tendering the written

statements of witnesses together with any other relevant documentation or material in

support of the party‟s case.

96. There will be no right to examine or cross-examine any witness.

97. Parties will be entitled to make comments, present arguments and make final

submissions on the evidence.

98. Where a direction has been given at the Pre-Trial Review that a witness attend for cross-

examination, the proceedings will be heard and determined on the oral evidence and the

written statements and other documents and materials which have been tendered.

Submissions on the evidence will also be allowed.

99. The procedure at the trial of the proceedings in the Small Claims Division will be

determined by the Magistrate or Assessor as he or she thinks fit.

100. The Rules of Evidence do not apply so don‟t take unnecessary objections; focus on

arguing the issues in a precise manner and assisting the Court. Where the other side is

a litigant in person this is particularly so and the Court will rely upon you as counsel to

speak to the other side, at times at length, in an attempt to settle the dispute. When

dealing with litigants in person always adhere to the Bar Association‟s guidelines on the

issue. Even if you are irritated to the point of exploding, don‟t. Go back to the Assessor

or Magistrate and deal with unreasonableness there.

101. The Assessor or Magistrate hearing the matter has a duty to conciliate so the Assessor

or Magistrate will initiate and encourage discussion between the parties in an attempt to

resolve the matter before they make a determination.

102. If the parties reach a settlement the Assessor or Magistrate can enter consent orders

giving effect to any agreement and disposing of the proceedings.

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Hearing - Rules of Evidence

103. The rules of evidence do not apply to proceedings being heard in the Small Claims

Division.

104. However, the technical rules of evidence form no part of the rules of natural justice, now

usually referred to as procedural fairness, which must be observed in hearing the matter.

Lack of jurisdiction or denial of procedural fairness are the only available grounds for an

appeal from a decision in the Small Claims Division.

105. In determining the matter the Assessor must take a reasoned approach to determination

of the issue by reference to relevant facts not some notion of doing justice between the

parties.

Costs in the Small Claims Division

106. Despite the general prohibition on awards of costs in the Small Claims Division: s 4

CPA, r 1.6 and Sch 1 UCPR, some costs are recoverable.

107. A party can recover fixed costs prescribed under cl 112 Legal Profession Regulation

2005 and set out in Schedule 2 Legal Profession Regulation 2005 of:

(a) Preparing and issuing originating process; or

(b) entering a default judgment on a liquidated or unliquidated claim.

The amounts are alternatives and only one amount is recoverable. There is a

percentage scale of recoverable costs, fixed to the amount at issue in the proceedings.

For example, where the amount at issue exceeds $1,000 but does not exceed $5,000,

60% of the fixed amount is recoverable.

(c) An Order for examination

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(d) Examination of judgment debtor

(e) Arrest of judgment debtor

(f) Writ of execution

Appeals from the Small Claims Division

108. Appeals are to a single judge of the Supreme Court Common Law Division and are

limited to (i) lack of jurisdiction, or (ii) a denial of natural justice7: s 39(2) Local Court Act

2007.

109. The ultimate test of a denial of natural justice is whether each of the parties have been

given a fair opportunity to put their case and point of view: Beveridge v Dontan Pty Ltd

(1991) 23 NSWLR 13.

110. Appeals must be brought within 28 days of “the material date”, ie the date of the court‟s

decision: UCPR r 50(3)(a). Part 50 UCPR contains the time and machinery provisions

for appeals, including the form of the appeal document.

Appeals from the General Division

111. Subject to Division 4 Local Court Act 2007, judgments and orders of the Court are final

and conclusive: s 38 Local Court Act 2007.

112. A party to proceedings in the General Division may appeal to the Supreme Court, but

only on a question of law: s 39(1) Local Court Act 2007.

7 See Wakim v Mathiew Pty Ltd [2002] NSWSC 405, O’Keefe J; BC200202361 where the principles of natural justice are discussed at [20] to [30].

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113. A party to proceedings in the Small Claims Division may appeal to the Supreme Court

but only on the ground of lack of jurisdiction or denial of procedural fairness: s 39(2)(b)

Local Court Act 2007.

114. The rules as to appeals to the Supreme Court are set out in UCPR Pt 50.

115. Appeals are to the Supreme Court Common Law Division and will usually be heard by

an Associate Justice.

116. Appeals of:

a. an interlocutory judgment or order

b. a judgment or order made with the consent of the parties

c. an order as to costs

can only be made with the leave of the Supreme Court: s 40 Local Court Act 2007.

117. Appeals must be commenced within 28 days of the material date: UCPR r 50.3(a). Time

can be extended:

(a) if the appeal relates to the decision of a judicial officer, within such further time as

the judicial officer may allow so long as the application for such further time is

filed within 28 days of the material date: r 50(3)(b), or

(b) within such further time as the higher court may allow: r 50.3.

118. An application for an extension of time under r 50(3)(c) must be included in the

Summons commencing the appeal.

119. A copy of the Summons commencing the Appeal must be filed in the Registry of the

Court appealed from: r 50.6.

120. Filing of an appeal does not operate as a stay of the judgment or order appealed from

and does not invalidate any intermediate act or proceedings (such as levy under a writ of

execution), except so far as the court (or, subject to any direction of the court, the court

below) may direct: r 50.7.

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121. UCPR r 50.14ff detail the requirements as to the contents of an appeal.

122. The Plaintiff must serve with the Summons commencing the appeal a statement as to:

(a) whether the appeal relates to the whole, or part only, and what part, of the

decision of the court below, and

(b) briefly but specifically, the grounds relied on in support of the appeal including, in

particular, any grounds on which it is contended that there is an error of law in

the decision of the court below, and

(c) what decision the plaintiff seeks in place of the decision of the court below: r 50.4.

123. In addition, not later than three days before the date fixed for the hearing of the

summons an affidavit must be filed, which includes:

(a) a copy of the reasons given for the decision by the magistrate;

(b) a copy of the transcript;

(c) a copy of any exhibit, affidavit or other document from the proceedings in the

court below that the plaintiff wishes to be considered at the hearing of the appeal

or proposed appeal: r 50.14.

124. The Supreme Court may make further directions for the filing and service of the affidavits

under the Rule. The supreme Court Registrars case manage appeals and insist on all

evidence being on before the proceedings are given a hearing date.

125. The Summons will be made returnable in the Common Law Division on a Friday or in the

Administrative Law Division on a Tuesday, three weeks after the day of filing.

126. A defendant can file a Notice of Contention that the decision below should be affirmed

on grounds other than those relied upon by the Local Court but does not seek a

discharge or variation of any part of the decision of the Local Court.

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127. The Notice of Contention must state briefly but specifically the grounds relied upon in

support of the contention and serve a copy on each other party to the appeal within 14

days after service of the summons commencing the appeal or within such further time as

the court may allow: UCPR r 50.11.

Hearing of the Appeal

128. Section 75A Supreme Court Act 1970 applies to hearing of appeals to the Court from

other bodies, including the Local Court.

129. Section 75A(2) provides that with specific exceptions for actions heard by a jury s

75A(2)(c),

130. Appeals are to be way of rehearing but subject to the legislation that confers the right of

appeal: s 75A(5). So the Court shall have the powers and duties of the court, body or

other person from whom the appeal is brought, including powers and duties concerning-

(a) amendment;

(b) the drawing of inferences and the making of findings of fact; and

(c) the assessment of damages and other money sums

(6) The Court may receive further evidence: s 75A(6).

131. However, notwithstanding subsection (7) where the appeal is from a judgment after a

trial or hearing on the merits, the Court shall not receive further evidence except on

special grounds: s75A(8).8

132. Subsection 75A(8) does not apply to evidence concerning matters occurring after the

trial or hearing: s 75a (9).

8 In a situation where the only practical guidance to be obtained is that afforded by the combined effect of r 7, 8, 9 of Pt 51B, it seems to me that the better view is that this court should approach the hearing of an appeal brought properly to the court pursuant to s 69 Local Courts (Civil Claims) Act upon the basis and only upon the basis, of the material that was in evidence in the relevant local court coupled with the express reasons for its decision of that Local Court: Cecil Comfort Insulation Pty Ltd v ARM Equipment Pty Ltd [2001] NSWSC 619 BC 200104168.

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133. The Court may make any finding or assessment, give any judgment, make any order or

give any direction which ought to have been given or made or which the nature of the

case requires: s 75A(10).

134. Ritchie comments that the Part itself does not indicate whether the appeal is by way of

rehearing or hearing de novo or appeal in the strict sense. Indeed the nature of the

appeal involved may not be limited to these two alternatives. In any particular case the

precise extent of the right of appeal must depend on the wording of the statute

conferring the right to appeal. See Ritchie at [50.16.5] and the authorities therein.

135. The Applicant for leave to appeal shall file with or subscribe to the Summons a

statement of-

a. the nature of the case

b. the questions involved; and

c. the reasons why leave should be given: r 50.12(3).

136. Proceedings in the Local Court are recorded. If separate written reasons are not

provided by the magistrate, a transcript of the judgment containing the reasons must be

obtained and filed.

137. A party served with a Summons for leave to appeal who wishes to apply for leave to

cross-appeal may do so by cross-summons on the hearing of the summons, supported

by statement of:

(a) the nature of the case, and

(b) the reasons why leave should be given, and

(c) if applicable, the reasons why time for leave should be extended, and

(d) in respect of the proposed cross-appeal:

a. whether the cross appeal relates to the whole or part only, and what part of

the decision of the court below, and

b. briefly, but specifically, the grounds relied on in support of the cross-appeal

including, in particular, any grounds on which it is contended that there is an

error of law in the decision of the court below, and

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c. what decision the defendant seeks in place of the decision of the court below:

r 50.13.

The Nature of the Appeal

On grounds of error of law

138. Appeals are as of right on an error of law: s 39 Local Court Act 2007.

139. In dealing with an appeal from the Local Court Kirby J in RL & D Investments Pty Ltd v

Bisby & Anor [2002] NSWSC 1082 considered the authorities on what is an error of law:

“(3) A finding of fact by a tribunal of fact cannot be disturbed if the facts inferred by

the tribunal, upon which the finding is based, are capable of supporting its finding,

and there is evidence capable of supporting its inferences.

(4) Such a finding can be disturbed only (a) if there is no evidence to support its

inferences, or (b) if the facts inferred by it and supported by evidence are

incapable of justifying the finding of fact based upon those inferences, or, (c) if it

has misdirected itself in law”: Australian Gaslight Co v Valuer-General (1940) 40

SR (NSW) 126.

140. There is no error of law:

“…In simply making a wrong finding of fact unless there is no evidence to support that

finding (Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321, 341.

“If the finding of fact, or the inference (or the refusal to make a finding of fact or draw an

inference) is perverse, in the sense that it is contrary to the overwhelming weight of

evidence”: Azzopardi v Tasman UEB Industries Ltd (1985) 4 NSWLR 139, 155.

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“Even if the reasoning process by which the court reaches its conclusion of fact is

demonstrably unsound or illogical”: R v District Court: Ex Parte White (1966) 116 CLR

644, 654.

141. There is a limited exception in relation to decisions of fact in the context of a statutory

description.

“There may be an error of law if the decision on the facts is one which could not be

reasonably entertained, or supported, if the tribunal had properly understood the true

construction of the relevant enactment”: Mahoney v Industrial Registrar of NSW & Anor

(1986) 8 NSWLR 1.

142. There will be an error of law:

“The question whether there is any evidence of a particular fact is a question of law.

Likewise, the question whether a particular inference can be drawn from facts found or

agreed is a question of law. This is because, before the inference is drawn, there is the

preliminary question whether the evidence reasonably admits of different conclusions.

So, in the context of judicial review, it has been accepted that the making of findings and

the drawing of inferences in the absence of evidence is an error of law”: Australian

Broadcasting Tribunal v Bond, above at 355.

143. These authorities are applicable on questions of evidence.

Appeal on ground of mixed fact and law

144. Section 39 Local Court Act 2007 provides that appeals that involve questions of mixed

law and fact can only be brought with leave of the Supreme Court.

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Mixed questions of law and fact – general propositions

145. The distinction between issues/questions of fact and issues/questions of law is neither

natural or easy:

“That is it not absolute is illustrated by the many cases said to turn on a mixed

question of law and fact. Then there is the choice between two propositions- on

the one hand that of Dixon J in this court in Thomas v R (1937) 59 CLR 279 at

306 that a “mistake as to the existence of a compound event consisting of law

and fact is in general one of fact and not a mistake of law”- on the other hand the

rule that, when the facts are ascertained it is a question of law whether a thing or

place answers a particular description in a statute: e.g. Hoddinott v Newton,

Chambers & Co Ltd [1901] AC 49 at 56”: Ianella v French (1968) 119 CLR 84,

114-115.

146. The difficulty of drawing the distinction has led to it being characterised as meaningless:

Nizich v Federal Commissioner of Taxation [1991] ATC 4,747.

147. And to judicial recommendations that the distinction should not be made the basis for

limiting rights of appeal: Commissioner of Taxation v Roberts (1992) 37 FCR 246;

Cowell v Electric Supply Co Limited v Collector of Customs (1995) 54 FCR 1, 6, 10.

Questions of fact

148. The meaning of particular ordinary English words is a question of fact:

Chatmay v Brazilian Submarine Telegraph Co [1891] 1 QB 79, 85; Australian Gas Light

Co v Valuer General (1940) 40 SR 126, 137, 143; Ho Tung v Man On Insurance Co Ltd

[1902] AC 232, 235; Federal Commissioner of Taxation v broken Hill South Ltd (1941)

65 CLR 150, 155.

149. Where words do not bear any technical or special meaning the question whether they

include or apply to some particular fact situation is itself a question of fact: Inland

Revenue Commissioners v Lysaght [1928] AC 234, 250-251.

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150. The question whether the facts found are capable of falling within the meaning of

particular words is a question of law: Griffin v Marsh (1992) 122 ALR 552, 568; Farmer v

Cottons Trustees [1915] AC 922, 932; Commissioner of Taxation v Cooper (1991) 29

FCR 177, 193-4; Fetter v Lake Macquarie (2000) 178 ALR 1; Collector of Customs v

Pozzolanic Enterprises Pty Ltd (1993) 43 FCR 280, 287.

151. A question that involves compound events consisting of matters of both law and fact is,

in general, to be categorised as a question of fact and a mistake about that event is to

be regarded as a mistake of fact: Thomas v R (1937) 59 CLR 279 at 304-5.

Security for Costs

152. The Supreme Court can order security for costs of the appeal in special circumstances9:

UCPR r 50.8.

9 See the extensive notes on security for costs generally in Ritchie’s Supreme Court Procedure.