FEDERAL COURT OF AUSTRALIA

Nelson v Fernwood Fitness Centre Pty Ltd [1999] FCA 802

PROCEDURE - transfer of proceedings to the District Court of New South Wales on Court's own motion - nature of District Court's jurisdiction under current legislation

Trade Practices Act (Cth) 1974, ss 86A, 86A(2), 87

District Court Act (NSW) 1973, ss 4, 44(1)(a), 46, 134

Fair Trading Act (NSW) 1987

Supreme Court Act (NSW) 1970, ss 53(1)(b), 53(4), 54

Akron Securities v ILIFFE (1997) 143 ALR 457

Pelechowski v Registrar, Court of Appeal (1999) 162 ALR 336

Radley v Nominal Defendant (1974) 1 NSWLR 135

Australian Legal Dictionary Butterworths, Sydney 1997

Ritchies' Supreme Court Procedure New South Wales 4^th ed Butterworths, Sydney 1984

CHARLES JUNIOR NELSON & ORS v FERNWOOD FITNESS CENTRE PTY LTD & ORS

NG 862 of 1997

MADGWICK J

SYDNEY

18 JUNE 1999

THE COURT ORDERS THAT:

1.                  This matter is to be transferred to the District Court of New South Wales.

REASONS FOR JUDGMENT

HIS HONOUR:

1                     In this matter, according to the Statement of Claim and what has been said in the course of preliminary hearings, the applicant claims loss and damage amounting to a sum that is considerably less than $750,000, the limit of the non-consensual jurisdiction of the District Court of New South Wales ("District Court") in civil matters.  There is power in this Court under s 86A of the Trade Practices Act (Cth) 1974 ("TPA") to transfer all matters for

determination in these proceedings to the District Court, if it is in the interests of justice to do so.

2                     Having regard to the speed with which matters are ready for hearing in the District Court, to the likely size of any award of damages, and to the nature of the issues, it seems to me that it is in the interests of justice to transfer all of the matters in these proceedings.  Further, the case appears to raise no issue of principle as to the meaning or application of the TPA.  The causes of action appear to be variously based on Parts IVA and V of that Act, which are relatively well settled areas of law, as well as on breach of contract, negligence and alleged factual misrepresentations.  These factors incline me to order the transfer.

3                     The only question remaining pertains to the application of the statutory prohibition in s 86A(2) of the TPA against transferring such matters unless the (State) Court "has power to grant the remedies sought before the Federal Court in the matter". The only remedy suggested, before I raised the question whether this case should be transferred to the District Court, was an award of damages.  It is now belatedly said that it is "possible" that the applicants, "if successful", will seek other forms of relief under s 87 of the TPA.  Experience of such cases suggests that even if liability be established, it is uncommon for all claimed losses to be reflected in an award of damages.  Therefore this case is likely to be well within the monetary limit of the District Court's jurisdiction.  There has been ample time for any re-pleading of the causes of action or relief sought.  No application for an amendment has been made.  There is no doubt that the District Court has power to grant the remedies presently sought and s 86A of the TPA fastens, in my view, upon the remedies sought as at the time the question of transfer of a matter arises.

4                     In any case, although the matter has not been fully argued, it appears to me that the District Court could deal with any likely reconstitution of these proceedings.  That Court, under s 44(1)(a) of the District Court Act (NSW) 1973 ("DCA"), now "has jurisdiction to hear and dispose of … any action of a kind … which, if brought in the Supreme Court, would be assigned to the Common Law Division of that Court".

5                     There is little doubt that these proceedings are an "action", which is now defined broadly under s 4 of the DCA (earlier versions of the Act defining the District Court's jurisdiction were in different terms and earlier cases must be read with this in mind.)  Although earlier versions of the DCA had also given "action" a broad general meaning, in particular uses of the term, a narrower meaning was sometimes considered appropriate:  see, for example, Radley v Nominal Defendant (1974) 1 NSWLR 135.  "Action" is defined (subject to contrary indication from the context or subject matter), according to s 4, to mean "action in the Court".  It was thought necessary to expressly provide that the term would not include certain equitable, land title and statutory jurisdictions of the Court (notably in relation to the Fair Trading Act (NSW) 1987).  In modern times "action" is a word broadly understood:  see, for example, Australian Legal Dictionary Butterworths, Sydney 1997.  There seems no reason to doubt that these proceedings would be generally understood by lawyers to be an action:  that is how one would naturally speak of them. 

6                     It also appears that, were these proceedings in the Supreme Court of New South Wales, under s 53(4) Supreme Court Act (NSW) 1970 ("SCA") they would be assigned to the Common Law Division, to which is assigned all business in that Court not assigned elsewhere.  According to s 53(1)(b) of the SCA, the proceedings, as presently constituted, would have been "commenced in the corresponding former jurisdiction [that is, in the Court's former common law jurisdiction] if [the said] Act had not been passed".  Upon any amendment of the proceedings, they would stay in the Common Law Division unless the Court formed a positive view that another Division could more conveniently dispose of the proceedings:  see s 54 and see the notes thereon in Ritchie's Supreme Court Procedure NSW, 4^th ed Butterworths, Sydney 1984.  In the Common Law Division, as elsewhere in the Supreme Court, all rules of law, including those of equity, are administered concurrently.  It seems highly unlikely that any real and substantial amendment of these proceedings might be made which would make a transfer of the proceedings to the Equity Division appropriate.  Under any such amendment, what would be invoked would be statutory remedies that are not controlled, though they may be informed, by equitable principles:  see, for example, Akron Securities v ILIFFE (1997) 143 ALR 457.  The evident principal concern of the applicants is and will remain their effort to recover moneys they say they have lost. 

7                     Under the DCA, the grant of jurisdiction to the District Court to "hear and dispose of" an action is, in the natural meaning of that phrase, the grant of power to bring the proceedings to a definite end, to finish and have done with them.  That plainly implies a power to grant all requisite remedies, provided that the action remains principally of a common law character and that other provisions of the DCA neither expressly nor impliedly prohibit such remedies being granted.  No narrow view of the District Court's powers should be taken, given the impressively large monetary scope of its jurisdiction.  Other sections specifically empowering relief of an equitable nature, for example s 46 which confers the same power to grant an injunction "in any action" as the Supreme Court might have granted "if the action were proceedings in the Supreme Court", and s 134, which grants a range of equitable jurisdictions, mostly in small cases, should not, unless principle or authority command it, be taken to demand an implication that s 44(1)(a) be read down from its natural meaning and connotation.  Indeed, the terms of s 46 tend to reinforce the view that the Act intended that actions should be "disposed of" in the sense just suggested.  To do otherwise would be productive of inconvenience, technicality and confusion.  The NSW Parliament should not readily be taken to have intended such a result.

8                     Pelechowski v Registrar, Court of Appeal (1999) 162 ALR 336 is authority on the subject but it does not, in my opinion, affect these conclusions.  In that case the majority (Gaudron, Gummow and Callinan JJ) examined the history of the DCA and the statutory context of s 46.  They held that:

"the injunctive remedy for which provision is made by s 46 is ancillary to the exercise of the jurisdiction of the District Court to hear and dispose of actions specified in s 44.  These are essentially in the nature of claims for damages…

A 'post-judgment remedy [in quasi-injunctive terms] was … at best, designed to preserve [certain] land as an asset of the judgment debtors … so that it would be available for … enforcement of the judgment debt.  An order of that nature is neither an injunction nor an injunction 'in an action' for the purposes of s 46… Nor was there any other provision which … provided that support" (paras 44-46)

9                     The case principally turned on the judgment creditor's rights "in an action" having "merged in the judgment" (para 45).  However, as I read the judgment of the majority, it may be consistent with the view that the District Court has no principal, as distinct from ancillary, jurisdiction to grant relief of equitable kinds except such as is expressly granted.  It seems quite clearly consistent with the view that that Court has an ancillary jurisdiction to grant requisite statutory remedies where the principal relief sought is a claim for an amount of money.  The approach I favour is quite consistent with the majority's approach, as well as with McHugh J's observation, in dissent, that "the District Court is first and foremost a common law court" (para 79) and with Kirby J's view that "actions" are "actions of a common law character" (para 124).  To say that the District Court has no general equitable jurisdiction, even in a suit principally seeking damages or the amount of a debt, does not deny that a suit principally seeking what is first and foremost a remedy of a common law character is an action of such a character, even if the proper disposition of it necessitates the incidental invocation of statutory remedies bearing some similarities to equity's traditional remedies.

10                  I conclude that there is no obstacle to the otherwise desirable transfer to the District Court of NSW of all matters arising from decisions in these proceedings.  I so order.

Associate:

Dated:              18 June 1999