Edwards v Gillespie

The causes of action in 2020/31094

1. The claims and relief sought in these proceedings have been outlined in brief written submissions by Mr Hodgson, counsel for the plaintiffs. They consist of an claim for compensation for breach of contract in terms of bailment expenditure (which Mr Hodgson states is equitable in nature), an application for declarations that the plaintiffs are the legal and beneficial owners of Oscar and thus for him to remain in their possession, care and control, and the making of permanent injunctive orders restraining future defamations and other conduct which it is not necessary to outline. In practical terms, however, Mr Hodgson's clients' desire is to get the dog rather than the damages, which are a subsidiary issue.
2. The defendant opposes these claims and, in his cross-claim, seeks return of Oscar to his care.

The jurisdictional issue before the court

1. The nature of the relief sought by the plaintiffs raises the question of this court's jurisdiction to grant relief of an equitable nature and to make permanent injunctions.
2. As an inferior court of record, the District Court has only the jurisdiction conferred on it by statute, either expressly or by necessary implication: Pelechowski v The Registrar, Court of Appeal (NSW) (1999) 198 CLR 435; [1999] HCA 19 at 121; Jago v District Court of New South Wales (1989) 168 CLR 23; [1989] HCA 46. The nature and extent of the jurisdiction of the District Court to grant equitable relief and/or permanent injunctions is a complex issue for which no suitable vehicle for argument has yet been found: Mahommed v Unicomb [2017] NSWCA 65 at [57] - [58].
3. In Karlsson v Griffith University [2020] NSWCA 176 at [7], the Court emphasised (citing Eberstaller v Poulos (2014) 87 NSWLR 394; [2014] NSWCA 211 at [20]) that it is critical to determine "at the outset" whether the court whose jurisdiction is sought to be invoked in fact has that jurisdiction. The obligation of the District Court, if the appropriate level of doubt as to jurisdiction is found, is then to transfer the proceedings to the Supreme Court, regardless of the parties' wishes (Mahommed v Unicomb at [51]).

The nature of the claims for Oscar

1. In the Statement of Claim the plaintiffs seek the following orders: "1. That the defendant pay the first plaintiff and second plaintiff damages for breach of contract. 2. That the defendant, his servants and agents, be restrained from removing the dog known as "Oscar" from the possession, care and control of the plaintiffs pending the determination of these proceedings. 3. That the first plaintiff and the second plaintiff be declared to be the legal and beneficial owners of the dog known as "Oscar" and that the said dog remain in the possession, care and control of the plaintiffs. 4. That the defendant be refrained from making any postings in respect of the first and second plaintiffs' personal property, namely their Instagram social media account which was utilised by the defendant to defame, intimidate and harass the first and second plaintiffs after it was accessed without the consent or authorisation of the first and second plaintiffs. 5. Costs on a party/party basis."
2. I also note claims for unjust enrichment and estoppel set out in paragraphs 14 and 15 of the Statement of Claim.
3. A Defence and Cross-Claim have been filed, seeking damages by reason of the cross defendant's detention of "the chattel" namely "Oscar" and (I was informed from the bar table) control of his Instagram account (which may or may not still be online, but which could still be an item of some value, due to Oscar's social media success). In other words, both parties want the dog.

The court's jurisdiction

1. Although the plaintiffs appear to bring, and the defendant defends, a claim for damages for breach of contract of bailment relating to Oscar's upkeep and care, is that enough to establish the jurisdiction of this court? The difficulty the Court faces is whether both the real cause of action (ownership of Oscar) and the relief sought (declarations and injunctions as well as a permanent injunction at the conclusion of the action) are sufficiently likely to be equitable in nature as to raise a doubt as to this court's jurisdiction.
2. The District Court's civil jurisdiction is set out in section 9 of the District Court Act 1973 (NSW). In determining what actions fall within that jurisdiction, it is necessary to look at section 44(1)(a) of the District Court Act 1973 (NSW), which provides as follows: "(1) Subject to this Act, the Court has jurisdiction to hear and dispose of the following actions: (a) any action of a kind: (i) which, if brought in the Supreme Court, would be assigned to the Common Law Division of that Court, and (ii) in which the amount (if any) claimed does not exceed the Court's jurisdictional limit, whether on a balance of account or after an admitted set-off or otherwise, other than an action referred to in paragraph (d) or (e)."
3. The definition of "action" in s 4(1) of the District Court Act and the nature of the word "proceedings" in that section have both been explained by Ward JA in Mahommed v Unicomb (at [40]). The circumstances in which actions of this kind, if brought in the Supreme Court, would be assigned to one of the Divisions, as well as the correct interpretation of Part 12 Rule 3 of the Supreme Court Rules 1970 (NSW) are described at [41] - [42], and the not inconsiderable difficulty where one or more of the causes of action still falls within the jurisdiction of the District Court is set out at [43].
4. The District Court's jurisdiction, in terms of the grant of equitable relief, is contained in section 134 of the District Court Act 1973 (NSW), which provides limited entitlements to hear small disputed estate and de facto relationship claims, as well as the following limited equitable rights: "134(1): The Court shall have the same jurisdiction as the Supreme Court, and may exercise all the powers and authority of the Supreme Court, in proceedings for … (d) relief against fraud or mistake where the damage sustained or the estate or fund in respect of which relief is sought does not exceed $20,000 in amount or value, as determined by the Court, (e) the execution of a trust or a declaration that a trust subsists, where the estate or fund subject or alleged to be subject to the trust does not exceed $20,000 in amount or value, as determined by the Court, or … whether liquidated or unliquidated (not being a claim or demand of a kind to which any other paragraph of this subsection applies), in an amount not exceeding the Court's jurisdictional limit."
5. As set out above, I note that there is no evidence before me that the value of Oscar and the cost of his upkeep fall below $20,000 (Huang v Drumm [2017] NSWCA 29; McDonough v The Owners Strata Plan No 57504 [2014] NSWSC 1708). To the contrary, the costs of his care appear to be considerable, as is the value of Oscar himself.
6. The critical factor is the mandatory (as opposed to merely hortatory) operation of s 144 of the Civil Procedure Act 2005 (NSW), the nature of which is explained by Ward JA in Mahommed v Unicomb at [49] - [50]: "49 Section 144(2) of the Civil Procedure Act 2005 (NSW) provides as follows: 'If, during proceedings to which this section applies, the District Court decides that it lacks, or may lack, jurisdiction to hear and dispose of the proceedings, the District Court must order that the proceedings be transferred to the Supreme Court.' [my emphasis] 50 Sub-section 144(1) provides that the section applies to proceedings under Sub-div 2 of Div 8 of Pt 3 of the District Court Act. Section 134 of that Act, which confers jurisdiction on the District Court in equity proceedings specified in that section, appears within that subdivision".
7. Ward JA, who emphasises the word "must" in the quotation above, goes on to state (at [51]) that section 144 "provides the short answer to the current impasse between the parties as to the disputed jurisdiction of the District Court." The fact that the plaintiff resisted invitations to transfer the proceedings to the Supreme Court was "not to the point" (at [52]) because s 144(2) was mandatory in its terms.
8. The word "must" has wide import. First, it is not necessary for the District Court to rule formally on whether or not the claim falls outside the court's jurisdiction; all that Ward JA considered to be necessary was "a doubt" (at [52]): "Moreover, it encompasses the situation not only where the District Court reaches a decision that it lacks jurisdiction to deal with claims in its equitable jurisdiction but also where there is a doubt as to that matter (as must here be the case in light of the subject matter of the forthcoming appeal in Huang)."
9. Secondly, the obligation is to transfer, as opposed to other courses such as summary dismissal (as occurred at first instance in Mahommed v Unicomb when the plaintiff refused to accept that his proceedings must be conducted in the Supreme Court).

The parties' submissions

1. Mr Hodgson, for the plaintiffs, hopes to keep these proceedings in this court. He points to several examples of s 134(1)(h) being successfully invoked to endow the District Court with equitable jurisdiction, such as Commonwealth Bank v Hadfield (2001) 53 NSWLR 614 (a claim for account in equity) and Kolavo v Pitsikas (t/as Comino and Pitsikas) & Anor [2003] NSWCA 59 (the power to make a declaration).
2. However, these decisions must be treated with caution, for two reasons. The first is that the nature of the claim may not in fact fall within s 134(1)(h). In BOC v MDL [2019] NSWSC 278 at [31], an application for transfer of a defamation claim with public interest immunity features to the Supreme Court, Hoeben CJ at CL explained the limited impact of decisions such as Kolavo v Pitsikas as follows: "There is some authority to the effect that, when exercising jurisdiction pursuant to s 134(1)(h), the District Court can in certain circumstances make declarations (Kolavo v Pitsikas (t/as Comino and Pitsikas) & Anor [2003] NSWCA 59 at [12]). However, the primary proceedings being brought in defamation do not involve any "equitable claim or demand for recovery of money or damages" which could enliven the District Court's jurisdiction under s 134(1)(h) of the District Court Act, nor do these proceedings entail any claim for relief which falls within any of the other subsections of s 134. As a result, there is doubt as to whether the District Court has jurisdiction to grant the relief which will be sought by the defendant for the purposes of resolving the question as to the application of s 10 of the PID Act."
3. The second, and perhaps more important, reason is that the decisions referred to by Mr Hodgson predate the enactment of s 144(2) of the Civil Procedure Act and its interpretation in Mahommed v Unicomb. In BOC v MDL, Hoeben CJ at CL explains (at [32] - [34]) the impact of this decision, noting (at [34]) the added impact of s 56 of the Civil Procedure Act: "From the above analysis it follows that even if the defendant had not brought the present application, it is likely that the District Court would eventually reach the view that there was sufficient doubt about whether that Court had jurisdiction to deal with the claims raised in the primary proceedings as to require the transfer of the proceedings to the Supreme Court pursuant to s 144. In line with the overriding objective of s 56 of the Civil Procedure Act, the most efficient course would be to transfer the proceedings at this early stage, rather than after the parties have expended time and resources in progressing the matter in the District Court."
4. Mr Hodgson relies upon excerpts from the Judicial Commission of NSW Trial Bench Book to the effect that, once an equitable claim for money is established, the District Court can grant equitable remedies including equitable compensation as, once the court's power has been invoked by s 134(1)(h), the Court has the power to give any order in equity, including a declaration, including incidental declarations (such as permanent injunctions at the end of the litigation). However, those observations need to be viewed in light of the issues identified above and, in particular, the provisions of s 144 of the Civil Procedure Act.
5. The defendant/cross-claimant made no submissions beyond suggesting the plaintiffs could attempt to redraft the claim, as well as noting the impact of Mahommed v Unicomb. That could create unfairness if the defendant retains his current pleading, because of the difference in rules where equitable relief is sought by a defendant. There is also the issue of the relief sought in the cross-claim.
6. I note that there is no suggestion, either in the defence or the cross-claim, that the amount in issue falls below $20,000.

Conclusions concerning jurisdiction

1. For the reasons set out in Mahommed v Unicomb at [49] - [57], this Court's hands are effectively tied, even where neither party has sought the order (or, for that matter, even where, as was the case of Mr Mahommed, such an order was strenuously resisted).
2. What must be accepted is that s 144 of the Civil Procedure Act imposes an obligation on the District Court itself to transfer the proceedings even where there is only doubt as to whether it has the equitable jurisdiction to determine the matter. In Mahommed v Unicomb at [55], Ward JA went on to warn that it was not necessary for the plaintiff to make such an application and no such limitation should be read into the section. In other words, where there is a doubt as to jurisdiction, the District Court Judge before whom the proceedings has been brought is "bound to transfer the proceedings to the Supreme Court".
3. It may seem a very minor matter for the Supreme Court to be troubled by a dispute about a dog, even a celebrity dog with its own Instagram account, but there would appear to be no alternative to transfer.
4. There are some alternative solutions to this course, but each has its difficulties. The easiest of these would be for the parties to agree that Oscar's value is below $20,000, but clearly neither party is prepared to put such a low price on his head. Counsel for the defendants suggested that the parties could endeavour to frame their cause of action to exclude orders for declarations, injunctions and the like, but I consider that the "doubt" for s 144(2) would remain and transfer would have to occur.
5. Another way forward would be for the parties to agree, once the matter has been brought within the jurisdiction of the Supreme Court, for the matter to be returned to the District Court in circumstances where this Court would then be seized with jurisdiction by the transfer back. That is a matter for the parties, as well as for the Supreme Court.
6. Since the Court of Appeal described Mahommed v Unicomb as being an unsuitable vehicle for the determination of the District Court's equitable jurisdiction and the appeal in Huang v Drumm did not ultimately deal with the issues referred to by the Court of Appeal (see Mahommed v Unicomb at [52]), hopes for appellate consideration (or preferably statutory amendment) have remained unanswered. In any event, neither of these potential interventions is likely to occur in time to assist Oscar and his asserted owners.

The future of this litigation

1. I set out below the orders for transfer of proceedings 2020/31094.
2. I do not propose to transfer the defamation actions. The parties have agreed that the other two actions should remain in this Court in the Inactive List, as they will not be the subject of further litigation until the principal cause of action, namely 2020/31094, is determined. I do, however, note that both the Statements of Claim seeking damages for defamation also seek orders for permanent injunctions, which this Court is similarly not empowered to make. Given the degree of hostility between the parties, such injunctive relief may well be advisable and a transfer of these proceedings (perhaps followed by a transfer back for case management and trial) may be desirable as well.

Orders 1. Pursuant to s 144(2) of the Civil Procedure Act 2005 (NSW), proceedings 2020/31094 are transferred to the Supreme Court of New South Wales. 2. Costs reserved.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 26 August 2020