Federal Court of Australia

QE Family Pty Ltd v Peter Warren Automotive Pty Ltd trading as Mercedes-Benz Macarthur [2022] FCA 1481

ORDERS

THE COURT ORDERS THAT:

1.    Pursuant to s 32AB(1) of the Federal Court of Australia Act 1976 (Cth), this proceeding be transferred from this Court to the Federal Circuit and Family Court of Australia.

THE COURT NOTES THAT:

1.    Given that the proceeding was commenced in the Australian Capital Territory registry of this Court, it may be appropriate for the proceeding to be transferred to the equivalent registry in the Federal Circuit and Family Court of Australia and placed in the docket of a Division 2 Judge of that Court in the general federal law area.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

(Revised from transcript)

1    The applicant in this matter, QE Family Pty Ltd, has commenced a proceeding in this Court against Peter Warren Automotive Pty Ltd, trading as Mercedes-Benz Macarthur, in which it seeks relief under the Australian Consumer Law (sch 2 to the Competition and Consumer Act 2010 (Cth) (ACL). QE contends that a Mercedes-Benz that Peter Warren sold to it in February 2019 had defects and that Peter Warren therefore was in breach of the statutory guarantee of acceptable quality under s 54 of the ACL.

2    The proceeding is at a fairly early stage, though a number of procedural issues have arisen. Those procedural issues essentially stem from the fact that QE is not represented by a lawyer and has not formally applied for dispensation of r 4.01(2) of the Federal Court Rules 2011 (Cth), which provides that a “corporation must not proceed in the Court other than by a lawyer”. QE endeavoured to side-step that rule by applying to amend its originating application and statement of claim by changing the identity of the applicant to QE’s director, Dr Michael Van Thanh Quach. There are, however, issues in respect of that amendment application, particularly as Dr Quach concedes that the vehicle was purchased and registered in QE’s name. To make matters worse, QE’s claim is quite poorly pleaded and particularised.

3    The present issue that has arisen is whether in all the circumstances the proceeding should be transferred to the Federal Circuit and Family Court of Australia (FCFCA). That issue was first raised by the Court. Peter Warren effectively supported the transfer of the proceeding. QE maintained that it was appropriate for the proceeding to remain in this Court.

4    For the reasons that follow, I have determined that the proceeding should be transferred to the FCFCA.

Discretion to transfer to the FCFCA

5    The Court had a discretion to transfer a proceeding to the FCFCA pursuant to s 32AB of the Federal Court of Australia Act 1976 (Cth) (the Act). Section 32AB(1) to (5) provides:

32AB    Discretionary transfer of civil proceedings to the Federal Circuit and Family Court of Australia

(1)    If a proceeding is pending in the Court, the Court may, by order, transfer the proceeding from the Court to the Federal Circuit and Family Court of Australia.

(2)    The Court may transfer a proceeding under subsection (1):

(a)    on the application of a party to the proceeding; or

(b)    on its own initiative.

(3)    The Rules of Court may make provision in relation to transfers of proceedings to the Federal Circuit and Family Court of Australia under subsection (1).

(4)    In particular, the Rules of Court may set out factors that are to be taken into account by the Court in deciding whether to transfer a proceeding to the Federal Circuit and Family Court of Australia under subsection (1).

(5)    Before Rules of Court are made for the purposes of subsection (3) or (4), the Court must consult the Federal Circuit and Family Court of Australia.

6    Section 32AB(6) of the Act provides for the factors that the Court must consider when contemplating an exercise of the discretion to transfer in s 32AB(1):

(6)    In deciding whether to transfer a proceeding to the Federal Circuit and Family Court of Australia under subsection (1), the Court must have regard to:

(a)    any Rules of Court made for the purposes of subsection (4); and

(b)    whether proceedings in respect of an associated matter are pending in the Federal Circuit and Family Court of Australia; and

(c)    whether the resources of the Federal Circuit and Family Court of Australia are sufficient to hear and determine the proceeding; and

(d)    the interests of the administration of justice.

7    Rules have been made for the purposes of s 32AB(6)(a) of the Act. Rule 27.12(3) of the Rules provides for the factors to be taken into account when exercising the discretion:

Factors to be taken into account

(1)    For an appeal under the AAT Act, the parties must address the matters mentioned in section 44AA(7) of that Act.

(2)    For a proceeding, the parties must address the matters mentioned in section 32AB(6) of the Act.

(3)    For an appeal under the AAT Act or a proceeding, the parties should address the following:

(a)    whether the appeal or proceeding is likely to involve questions of general importance;

(b)    whether it would be less expensive and more convenient to the parties if the appeal or proceeding were transferred;

(c)    whether an appeal or proceeding would be determined more quickly if transferred;

(d)    the wishes of the parties.

The proceeding should be transferred to the FCFCA

8    It is appropriate to transfer this proceeding to the FCFCA. That is so for a number of reasons.

9    First, the proceeding does not raise any questions of law or principle which could be seen as being of general importance in the sense contemplated by r 27.12(3)(a) of the Rules. As has already been noted, this proceeding concerns, in essence, a claim in respect of an alleged breach of a statutory guarantee under the ACL based on alleged defects in respect of a motor vehicle. There does not appear to be any issue in respect of the existence, nature or scope of the statutory guarantee. Rather, it is readily apparent that the main issue in the proceeding is whether the motor vehicle was in fact defective. It is tolerably clear that it involves “questions of fact and the application of law to those facts, and do[es] not involve a point of principle”: Sampson as the trustee of the Bankrupt Estate of Wei Chen v Huang [2020] FCA 545 at [15]. The proceeding also does not raise any novel or controversial issues: Currie v Joffe [2020] FCA 68 at [12]. QE suggested that the proceeding somehow raised questions of contract law, though that is plainly not the case.

10    Second, QE’s claim is likely to be relatively small in monetary terms, at least insofar as claims in this Court are concerned. If QE is able to make out a breach of the statutory guarantee, the relief in respect of that breach is likely to be limited to the cost of repairing or fixing the defects, though QE apparently maintains that Peter Warren should provide a replacement vehicle. Either way, it is not a large claim. The original rationale for the Federal Magistrates Court (later the Federal Circuit Court and now the FCFCA) was that it could hear and determine smaller claims: see Fair Work Ombudsman v Ecosway Pty Ltd [2015] FCA 102. This is such a claim.

11    It should perhaps be noted in this context that when the proceeding first came before the Court, Peter Warren expressed a willingness to inspect the vehicle in question and repair any defects. QE, through Dr Quach, appeared unwilling to facilitate the inspection of the vehicle and demonstrated a somewhat regrettable attitude of intransigence. In those circumstances, and given the nature and size of the claim, the Court determined that it would be appropriate to refer the matter to a Registrar for mediation. The mediation occurred, however the proceeding did not settle.

12    Third, there is every reason to believe that it would be less expensive and more convenient for the proceeding to be heard and determined by the FCFCA: r 27.12(3)(b) of the Rules. Transfer to the FCFCA may well overcome the problem raised by the fact that QE is not represented by a lawyer and has not sought dispensation of r 4.01(2) of the Rules. I should perhaps add that, if the proceeding were to remain in this Court, as presently advised I would not be disposed to dispense with r 4.01(2) of the Rules. It would follow that QE would not be able to pursue its claim in this Court unless it retained a lawyer, which Dr Quach is apparently unwilling to do. I note that there is a rule equivalent to r 4.01 of the Rules in the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth), however a corporation can seek leave to proceed other than by way of a lawyer.

13    Even putting r 4.01 of the Rules to one side, it might reasonably be expected that the proceeding would proceed in the FCFCA with a lesser degree of formality than in this Court. The relevant rules in the FCFCA which govern the conduct of smaller civil claims like this one are not as complex or comprehensive as the rules in this Court. The FCFCA in all the circumstances is perhaps less likely to insist on strict compliance with the rules and requirements relating to pleadings. As noted earlier, the current pleadings are somewhat deficient. It would almost certainly be easier for a party that is not legally represented, as is the case with QE, to conduct the proceeding in the FCFCA – assuming that QE seeks and obtains leave to proceed in that Court other than by way of a lawyer.

14    It would also be convenient to transfer the proceeding because QE chose to commence it in the ACT Registry of the Court. If transferred to the FCFCA, it is understood that there is a resident FCFCA Judge in Canberra. No Judge of this Court sits full time in Canberra. It would, in all the circumstances, be appropriate for the matter to be placed in the docket of a Division 2 Judge of the FCFCA in the general federal law area. Division 2 Judges were formerly, or are equivalent to, Judges of the former Federal Circuit Court.

15    Fourth, there is also reason to believe that the proceeding may be determined more quickly if transferred to the FCFCA: r 27.12(3)(c) of the Rules. At the very least, it is unlikely that the proceeding would be heard significantly later in the FCFCA as compared to this Court: Rixon v Business Parcel Express Pty Ltd [2006] FCA 969 at [4]; Beetham v Cortra Pty Ltd [2003] FCA 150 at [2]. The proceeding is currently in my docket as the Judge responsible for case managing proceedings commenced in the ACT Registry. Once all interlocutory steps have been completed and the matter is ready for trial, it would likely be allocated to the docket of the Judge who would conduct the trial. Given the workload of Judges in this Court, it is unlikely that the matter would be in a position to be heard until the latter part of next year. There is no reason why this proceeding would be given any priority or expedition if it were to be heard and determined in this Court.

16    Fifth, the respondent is amenable to the proceeding being transferred to the FCFCA: r 27.12(3)(d) of the Rules. While the applicant appeared to maintain that the proceeding should remain in this Court, he was unable to advance any persuasive reason why the proceeding should not be transferred.

17    Sixth, given the nature of the claim in this proceeding, I am satisfied that the resources of the FCFCA are sufficient to hear and determine this proceeding: cf s 32AB(6)(c) of the Act. As already noted, the claim does not raise any difficult or novel questions of law and principle. Rather it essentially raises a question of fact concerning alleged defects in the motor vehicle. It is also a relatively small claim.

Conclusion and disposition

18    In all the circumstances, the interests of the administration of justice weigh in favour of transferring this proceeding to the FCFCA: s 32AB(6)(d) of the Act. The proceeding is a relatively small claim which essentially only raises factual issues about alleged defects in a motor vehicle. It raises no complex or novel questions of law. It is likely that the proceeding could more conveniently, expeditiously, efficiently and economically be conducted in the FCFCA. There is also a potential roadblock to the matter proceeding in this Court given that the applicant is a corporation and that a corporation cannot proceed in this Court other than by a lawyer. QE has failed to provide any persuasive reason why that requirement should be dispensed with in this case. Nor has QE given any persuasive reason why the proceeding should remain in this Court in all the circumstances.

Associate:

Dated:    19 December 2022