Supreme Court of SA|1993-04-29|Before: King CJ

FREDERICK JAMES CHURCHER and JEANNETTE SHIRLEY CHURCHER v. EDWARDSTOWN CARPETS (REG) and AUSTRALIAN SECURITIES COMMISSION (INTERVENER) No. SCGRG 92/1982 Judgment No. 3897 Number of pages - 19 Courts and Judges (1993) 60 SASR 503 [1993] SASC 3897 (29 April 1993)

COURT IN THE FULL COURT OF THE SUPREME COURT OF SOUTH AUSTRALIA ON APPEAL FROM A COURT OF SUMMARY JURISDICTION SITTING AT ADELAIDE KING CJ(1), OLSSON(2) AND PERRY(3) JJ

CWDS Courts And Judges - Section 42 Corporations (South Australia) Act

Magistrates Court held not to have jurisdiction in respect of civil matters arising under Corporations Law - question of District Court's jurisdiction discussed. Section 42 Corporations (South Australia) Act - Magistrates Court held not to have jurisdiction in respect of civil matters arising under Corporations Law - question of District Court's jurisidiction discussed.

HRNG ADELAIDE, 1 March 1993 #DATE 29:4:1993 Counsel for the appellant: Mr D R C Robinson Solicitors for the appellant: David Robinson Counsel for the respondent: Mr C B Hewitt Solicitors for the respondent: Cresswell and Hewitt Counsel for the intervener: Mr S T Lane with Ms S A Lock

JUDGE1 KING CJ The respondent sued the appellants in the limited jurisdiction of the Local Court of Adelaide for the sum of $16,050 for which the appellants are alleged to be liable by virtue of s.592 of the Corporations Law. The ground of the claim as alleged in the Particulars of Claim accompanying the Summons, are that a company of which the appellants were directors incurred a debt to the respondents at a time when the company was unable to pay its debts as they became due. The appellants pleaded by way of an Amended Defence that the court had no jurisdiction to determine the action because exclusive jurisdiction with respect to such claims had been conferred by statute on the Supreme Courts of the States and the Australian Capital Territory, and on the Federal Court of Australia. 2. Before the jurisdictional point fell to be determined, the Local Courts had been abolished and the Magistrates Court had been established by the Magistrates Court Act 1991. That Act came into force on 6th July 1992. Section 20(2) of the Statutes Repeal and Amendment (Courts) Act 1991 provided for the continuance in the Magistrates Court of proceedings commenced in a local court of limited jurisdiction. When the jurisdictional point was argued in the Magistrates Court it was determined by a magistrate adversely to the appellants and this is an appeal by leave against that decision. 3. The basis of the objection to the jurisdiction of the Magistrates Court is the combined effect of sections 40 and 42 of the Corporations (South Australia) Act. That Act is the statute of the Parliament of South Australia which makes the uniform Corporations Law part of the law of South Australia. The purposes of the Act are set out in s.1(2) as follows: "(2) The purposes of this Act are- (a) to apply certain provisions of the Corporations Act 1989 of the Commonwealth and the Australian Securities Commission Act 1989 of the Commonwealth and of regulations under those Acts as laws of South Australia; and (b) to apply certain other laws of the Commonwealth as laws of South Australia for the purpose of the administration and enforcement of the law relating to corporations, the securities industry, the futures industry and some other matters." 4. The uniform legislative scheme is described by Lee J in the Federal Court in Sky Channel Pty Ltd v Gray and Others (unreported, 27 November 1992) as follows:

"The Commonwealth Act does not purport to be an enactment made in exercise of the power of the Commonwealth Parliament to legislate for trading, financial or foreign corporations under s.51(xx) of the Constitution. The preamble to the Commonwealth Act says that it is law for the government of the Australian Capital Territory in relation to, inter alia, corporations and, therefore, appears to be an exercise of the legislative power contained in s.122 of the Constitution. (See Capital Duplicators Pty. Limited v. Australian Capital Territory, Unreported (High Court, 15 October 1992 per Brennan, Deane and Toohey JJ at 18-19).) However, it is the corner-stone of a scheme of interdependent legislation under which all States and Territories have made identical enactments to apply the Corporations Law of the Australian Capital Territory as set out in the Commonwealth Act and to apply other Commonwealth legislation as the law of each State or Territory thereby providing a uniform system of law and uniform administration in respect of corporations." 5. I set out sections 40 and 42 of the Corporations (South Australia) Act: "40.(1) This Division provides in relation to- (a) the jurisdiction of courts in respect of matters other than criminal matters (in this Division called 'civil' matters) arising under the Corporations Law of South Australia; and (b) the jurisdiction of the courts of South Australia in respect of civil matters arising under the Corporations Law of another State or the Capital Territory, and so provides to the exclusion of the Jurisdiction of Courts (Cross-vesting) Act, 1987. (2) Nothing in this Division affects any other jurisdiction of any court. ... 42.(1) Subject to section 9 of the Administrative Decisions (Judicial Review) Act 1977 of the Commonwealth, as it applies as a law of South Australia, jurisdiction is conferred on the Supreme Court of South Australia and of each other State and the Capital Territory with respect to civil matters arising under the Corporations Law of South Australia. (2) The jurisdiction conferred on a Supreme Court by subsection (1) is not limited by any limits to which any other jurisdiction of that Supreme Court may be subject. (3) Jurisdiction is conferred on the Federal Court with respect to civil matters arising under the Corporations Law of South Australia." 6. Section 40 introduces Division 1 of Part 9 of the Act. It makes clear that the jurisdiction of courts in respect of civil matters arising under the Corporations Law is that provided in Division 1. Section 42 confers that jurisdiction on the courts specified therein, namely the Federal Court of Australia and the Supreme Courts of the States and Territories. The jurisdiction of the Family Court of Australia and State Family Courts is provided for in s.42A. The Courts which I have mentioned are the only courts named in the conferral of jurisdiction. I think that the effect of these sections, according to their natural meaning, is that they provide a code as to the exercise of jurisdiction in respect of civil matters arising under the Corporations Law and that, in accordance with that code, such jurisdiction may be exercised only by the courts named in sections 42 and 42A. 7. That construction is reinforced by a consideration of s.55 which confers criminal jurisdiction. It provides that "the several courts of each State and the Capital Territory exercising" the various aspects of criminal jurisdiction have equivalent criminal jurisdiction under the Corporations Law. The contrast of the language of this section with that of s.42 is striking and leaves little room for doubt that if Parliament intended that the s.42 jurisdiction was to be exercised by South Australian Courts other than the Supreme Court similar language to that employed in s.55 would have been employed in s.42. 8. Mr Lane who appeared for the Australian Securities Commission, which intervened, put forward a number of considerations as displacing the natural meaning of the sections. He contended that s.42 did not confer exclusive jurisdiction but left intact the jurisdiction of the other courts of the State in accordance with the statutes establishing their respective jurisdictions. 9. Mr Lane's first point was the contrast between the language of s.42 and that of s.236 of the Australian Securities Commission Act now repealed. The latter section expressly stated that the jurisdiction conferred on the Supreme Courts was exclusive of the jurisdiction of the other courts of the State. I do not know why the express reference to exclusivity has been omitted from the present section. The omission may have a bearing on the jurisdiction of the District Court for reasons which I shall mention later. However that may be, it cannot prevail over the natural meaning of the words used in the conferral of jurisdiction. They nullify, to my mind, the jurisdiction which would otherwise exist in the other courts of the State by reason of the statutory provisions as to their jurisdiction. 10. Mr Lane cited the case of Poulos v University Union (1981) 29 SASR 78 in which the Full Court held that a conferral of jurisdiction on the Industrial Court by the Industrial Conciliation and Arbitration Act 1972 to hear and determine claims by employees for money due to them under their contract of service, did not derogate from the jurisdiction of the ordinary courts in relation to such claims. The context in which that conferral of jurisdiction was found was very different from the present. The rights upon which the claims were founded were not, as here, rights created by the statute conferring the jurisdiction. They were rights existing at common law and justiciable by the ordinary courts of the State. Without the special statutory conferral of jurisdiction the Industrial Court would not have had jurisdiction. It was plainly the conferral of a jurisdiction additional to that of the ordinary courts. In the present case, the South Australian court, namely the Supreme Court, upon which jurisdiction is conferred by s.42 would have had the jurisdiction if the special Act had been silent as to jurisdiction. There could be no point in mentioning the Supreme Court except to indicate that the general jurisdictional provisions affecting other courts do not operate to attract this particular statutory jurisdiction. The jurisdiction is to adjudicate not as to rights already existing at law, but as to matters arising under the statute and the statute confers the jurisdiction on particular nominated courts. 11. Mr Lane argued that the naming of the Supreme Courts is explained by the need to put beyond doubt that the State Supreme Courts still had jurisdiction in relation to corporations legislation just as they had under the co- operative scheme which was replaced by the present scheme. But that object could have been achieved by mentioning the Supreme Courts together with other courts of competent jurisdiction as recipients of the grant of jurisdiction. The point does not account for the omission to mention other courts. Moreover the provision in s.40(2) that "nothing in this Division affects any other jurisdiction of any court" is suggestive of exclusive jurisdiction. What is preserved is not the jurisdiction of other courts in respect of civil matters arising under the Corporations Law but any other matters. 12. It is true, as Mr Lane pointed out, that s.43 relating to appeals refers to an appeal from a decision of a court of South Australia and is therefore compatible with the existence of jurisdiction in courts other than the Supreme Court. That again may have significance in relation to the District Court by reason of subsequent legislation, but it is of little significance in the construction of s.42. It may well be, as Mr Lane predicts, that courts below the level of the Supreme Court will be making complex judgments and adjudicating in relation to very large sums of money in relation to matters arising under sections 203(4), 205(6) and 1082 of the Corporations Law. It is true too that there are sound reasons of policy why civil proceedings involving less significant sums of money should be heard in lower courts. These considerations, however, although they should attract the attention of Parliament, cannot prevail over the meaning of the language used in the conferral of jurisdiction. 13. As to whether a claim of this sort falls within the words of s.40(1) "matters other than criminal matters ... arising under the Corporations Law of South Australia", I adopt the remarks of Lee J in Sky Channel v Gray and Others relating to the New South Wales Act: "Without exploring the full meaning of 'matter' as used by the NSW Act in the course of applying Commonwealth laws, it would mean, at least, an issue between parties made justiciable in a court of law by the creation of a right of action and recourse to remedy for the purpose of resolution of that issue by that court. (Philip Morris Inc. v. Adam P. Brown Male Fashions Pty. Ltd. (1981) 148 CLR 457 per Mason J at 507-508; South Australia v. Victoria [1911] HCA 17; (1911) 12 CLR 667 per Griffith CJ at 675.) It does not follow that recognition in the Corporations Law of an existing right of action would involve a matter arising under the Corporations Law. However, s.592 of the Corporations Law has done more than acknowledge an existing right of action or provide for the facilitation of proceedings in respect of such a right. It has created a new right of action against directors and managers and provides a remedy in the form of an order for the payment of the amount of the debt. Although sub-s.592(3) speaks of proceedings for the recovery of a debt, it is not a proceeding in debt that is instituted under sub-s.592(1). In so far (sic) as an order is sought against a director or manager, notwithstanding that they may be sued jointly with a company in a proceeding in which the cause of action against the company is in debt, the jurisdiction in respect of the right to proceed against a director or manager is provided by the N.S.W. Act and is not obtained outside it. A similar result is to be found in sub-ss.592(6), 593(1) and 593(2). (See McPhersons Mefals (Rg) v. Coleman and Lena, Unreported (Supreme Court of South Australia, 28 March 1989, Legoe J at p 7)." 14. I have therefore reached the conclusion that the Magistrates Court does not have jurisdiction to hear and determine the claim and that the magistrate's decision was wrong. 15. In the view I have taken of the matter, it is unnecessary to consider whether the action is a personal action within the meaning of s.32 of the Local and District Criminal Courts Act 1926. It is also unnecessary to consider the effect of s.20(2) of the Statutes Repeal and Amendment (Courts) Act 1991 on actions instituted in the local court of limited jurisdiction which were beyond the jurisdiction of the local court of limited jurisdiction but are within the jurisdiction of the Magistrates Court. 16. I have referred above to the position of the District Court because the legal position as to the jurisdiction of that Court in respect of matters arising under the Corporations Law may be different. The intention and effect of s.42, as I have indicated, was, in my opinion, to confer jurisdiction on the Supreme Court and not on any other court. By implication it excluded the jurisdiction which would otherwise have existed in other courts. But the District Court Act, which was passed subsequently to the Corporations (South Australia) Act, provides by s.8 that the District Court "has the same civil jurisdiction (both at law and in equity) as the Supreme Court at first instance ...". The intention disclosed by this section is that the District Court is to have jurisdiction concurrent with the Supreme Court, subject to certain immaterial qualifications stated in the section, in all civil matters in which the Supreme Court has jurisdiction from whatever source the Supreme Court's jurisdiction might derive. I see no reason why the jurisdiction conferred on the Supreme Court by the Corporations (South Australia) Act should be an exception. There may seem to be an incongruity in the implied exclusion by s.42 of that Act of a jurisdiction which the District Court would otherwise have been able to exercise and its subsequent restoration by way of s.8 of the District Courts Act. But the incongruity is more apparent than real when one appreciates that s.8 formed part of a radical restructuring of the jurisdiction of the courts involving a major expansion of the jurisdiction of the District Court. It is not necessary to decide in this case the question whether the s.42 jurisdiction now vests in the District Court, but, lest the implications of this judgment be misunderstood, I indicate that, as at present advised, I consider that it does so vest. 17. For the reasons stated, I would allow the appeal, set aside the ruling appealed from and dismiss the action as incompetent for want of jurisdiction in the Magistrates Court.

JUDGE2 PERRY J I agree with the reasons published by His Honour the Chief Justice, and with the order which he proposes. 2. The question of the present jurisdiction of the District Court, pursuant to s.8 of the District Court Act which is operative from 6 July 1992, does not arise on this appeal. However, I am presently of the view that s.8 has the effect of engrafting onto the jurisdiction of the District Court the particular jurisdiction created by s.42 of the Corporations (South Australia) Act.

JUDGE3 OLSSON J This is an appeal, by leave, against the ruling of a stipendiary magistrate, sitting in the Civil Division of the Magistrates Court at Adelaide, that such court had jurisdiction to entertain a claim made by the respondent pursuant to the provisions of section 592 of the Corporations Law. 2. By summons originally issued on 29 April 1992 in the Local Court of Adelaide the respondent claimed a total sum of $16,050.25 from the appellants as persons who were said, at all material times, to have been directors of Parafield Discount City Carpets Pty Ltd ("Parafield"), a company which was compulsorily wound up by order dated 14 August 1991. 3. It is not in dispute that, between late November 1990 and mid January 1991, Parafield purchased various quantities of carpet from the respondent to the value of $16,050.25. 4. It is also not in issue that, as at the date of liquidation of Parafield, the moneys now claimed were owed by it to the respondent. 5. By its particulars of claim the respondent asserts that the present appellants are liable, as directors of Parafield at the time of the sales in question, to pay the liability of the company in respect thereof to it, having regard to the provisions of section 592 of the Corporations Law of South Australia ("the Corporations Law"). It is pleaded that, immediately prior to the time at which each debt was incurred, Parafield was not able to pay all of its debts as and when they became due or, alternatively, if Parafield incurred the debts associated with the relevant purchases, it would not have been able to pay all of its debts as and when they became due. 6. It will at once be noted that the pleading contained in the particulars of claim is an inexact reflection of the precise provisions of section 592 of the Corporations Law, although it is clear enough that the sole basis upon which the claim was brought was the civil liability created by that section. 7. When served with the summons the appellants initially filed an unconditional appearance, followed by a defence which responded to the claim on the merits. In essence they averred that, at the time at which the relevant debts were incurred, the appellants did not have reasonable cause to expect that Parafield would not be able to pay all of its debts as and when they became due or that, if it incurred the debts, it would not be able to pay all of its debts as and when they became due. 8. However, on 2 July 1992, a magistrate ordered that the appellants have leave to file a conditional appearance in the proceedings and to amend their defence. On 3 July 1992 a substituted, conditional appearance and an amended defence were in fact filed. In the latter it was asserted that the Civil Division of the Magistrates Court did not have jurisdiction to entertain a claim based upon the provisions of section 592 of the Corporations Law. 9. It was an adverse ruling by a magistrate in relation to this plea which has given rise to the present appeal. That appeal was brought by leave and then reserved, by a single Judge of this court, for the consideration of the Full Court. Section 592 of the Corporations Law, in effect, replaced section 556 of the Companies (South Australia) Code, although the detailed provisions of it are not entirely in pari materia with that section. 10. Section 592 reads as under:- "SECTION 592 OFFENCES RELATING TO INCURRING OF DEBTS OR FRAUDULENT CONDUCT 592(1) (Liability for debts etc) Where: (a) a company has incurred a debt; (b) immediately before the time when the debt was incurred: (i) there were reasonable grounds to expect that the company will not be able to pay all its debts as and when they become due; or (ii) there were reasonable grounds to expect that, if the company incurs the debt, it will not be able to pay all its debts as and when they became due; and (c) the company was, at the time when the debt was incurred, or becomes at a later time, a company to which this section applies; any person who was a director of the company, or took part in the

management of the company, at the time when the debt was incurred contravenes this subsection and the company and that person or, if there are 2 or more such persons, those persons are jointly and severally liable for the payment of the debt.

592(2) (Defence) In any proceedings against a person under subsection (1), it is a defence if it is proved: (a) that the debt was incurred without the person's express or implied authority or consent; or (b) that at the time when the debt was incurred, the person did not have reasonable cause to expect: (i) that the company would not be able to pay all its debts as and when they became due; or (ii) that, if the company incurred that debt, it would not be able to pay all its debts as and when they became due. 592(3) (Proceedings for recovery of debt) Proceedings may be brought under subsection (1) for the recovery of a debt whether or not the person against whom the proceedings are brought, or any other person, has been convicted of an offence under subsection (1) in respect of the incurring of that debt. 592(4) (Onus of proof) In proceedings brought under subsection (1) for the recovery of a debt, the liability of a person under that subsection in respect of the debt may be established on the balance of probabilities. 592(5) (Effect of payment of debt) Where subsection (1) renders a person or persons liable to pay a debt incurred by a company, the payment by that person or either or any of those persons of the whole or any part of that debt does not render the company liable to the person concerned in respect of the amount so paid. 592(6) (Fraudulent conduct) Where: (a) a company has done an act (including the making of a contract or the entering into of a transaction) with intent to defraud creditors of the company or of any other person or for any other fraudulent purpose; and (b) the company was at the time when it does the act, or becomes at a later time, a company to which this section applies; any person who was knowingly concerned in the doing of the act with that intent or for that purpose contravenes this subsection. 592(7) (Certificate re conviction prima facie evidence) A certificate issued by the proper officer of an Australian court stating that a person specified in the certificate: (a) was convicted of an offence under subsection (1) in relation to a debt specified in the certificate incurred by a company so specified; or (b) was convicted of an offence under subsection (6) in relation to a company specified in the certificate; is, in any proceedings, prima facie evidence of the matters stated in the certificate. 592(8) (Document deemed to be certificate) A document purporting to be a certificate issued under subsection (7) shall, unless the contrary is established, be deemed to be such a certificate and to have been duly issued." 11. It is at once to be seen that the section both constitutes the type of conduct referred to in it as an offence against the Corporations Law and also confers a civil right of recovery of any debt in question from persons who breach the section. It does, however, expressly stipulate that, so far as civil recovery is concerned, it is only necessary to establish the commission of a breach of the section on the balance of probabilities. 12. Section 593 of the Corporations Law is complementary to section 592. It stipulates, in effect, that, where a person has been convicted of an offence under section 592, "the Court", on proper application, may declare that the person convicted shall personally be responsible for the payment, to the party to whom the debt is payable, of an amount equal to the whole of that debt or such part of it as the court thinks proper. By virtue of the definition of "Court" contained in section 9 of the Corporations Law, jurisdiction under section 593 of the Corporations Law is exclusively vested in the Federal Court of Australia or the Supreme Court of a State. 13. It must at once be appreciated that, unlike section 593, section 592 of the Corporations Law does not make the right of civil recovery conferred by it contingent upon prior conviction of any person for a criminal breach of its provisions. Subsection (3) of it specifically says so. 14. Having created a right of civil recovery, section 592 is, unlike section 593, silent as to the issue of jurisdiction. 15. On the hearing of this appeal the principal argument focused upon the provisions of the Corporations Law and as to whether or not, on a fair reading of the statute as a totality, it is necessarily implicit that the legislature intended exclusively to vest the whole of the jurisdiction arising under the statute in the Supreme Courts and the Federal Court. 16. However, prior to embarking upon a consideration of that question, there is a threshold issue that must be addressed in the present case. 17. The Magistrates Court is an inferior court, erected by the provisions of the Magistrates Court Act 1991. 18. That statute was proclaimed to come into force with effect from 6 July 1992 and constituted the Magistrates Court a court of statewide jurisdiction, having several divisions. In its Civil Division jurisdiction was conferred upon it by section 8 in these terms:- "8. (1) The Court has jurisdiction

(a) to hear and determine an action (at law or in equity) for a
sum of money where the amount claimed does not exceed -
(i) if the claim is for damages or compensation for injury, damage
or loss caused by, or arising out of, the use of a motor

vehicle - $60,000; (ii) in any other case - $30,000; (b) to hear and determine an action (at law or in equity) to

obtain or recover title to, or possession of, real or personal property where the value of the property does not exceed $60,000; (c) to hear and determine an interpleader action where the value of the property to which the action relates does not exceed $60,000; (d) to grant any form of relief necessary to resolve a minor civil action. (2) The parties to an action may waive any monetary limit on the civil jurisdiction of the Court, and, in that event, the Court will have jurisdiction to determine, the action without regard to that limitation." 19. Prior to 6 July 1992 the Local and District Criminal Courts Act, 1926 ("the prior Act"), inter alia, erected a hierarchy of regional so-called "Local Courts" as civil courts of inferior jurisdiction. The Local Court of Adelaide was one such court, and the summons issued by the respondent sought to invoke its limited jurisdiction. 20. Section 32 of the prior Act conferred jurisdiction upon such a court in these terms:- "32. Every local court of limited jurisdiction shall have jurisdiction to hear and determine:- I. All personal actions where the sum claimed is not more than the jurisdictional limit of local courts of limited jurisdiction, whether on a balance of account or otherwise, including all actions for the recovery of a balance of account where the original claim shall have been reduced to the jurisdictional limit of local courts of limited jurisdiction or less by payment, or by any sum for which the plaintiff in his claim gives the defendant credit, or for which the defendant in his counter-claim gives the plaintiff credit: II. All actions for the recovery of any sum not exceeding the jurisdictional limit of local courts of limited jurisdiction, which is the whole or part of the unliquidated balance of a partnership account: III. All actions for the recovery of any demand not exceeding the jurisdictional limit of local courts of limited jurisdiction which is the amount, or part of the amount, of the distributive share under an intestacy, or the amount, or part of the amount, of any legacy under a will: IV. All unsatisfied judgment summonses issued in any local court, whatever the amount of the judgment may be." 21. It is immediately apparent that, to invoke the jurisdiction of the Local Court of Adelaide, it was necessary to demonstrate that the claim was, in substance, a "personal action" in the sense employed in section 32 - a topic to which I shall shortly return. The bringing into operation of the Magistrates Act was facilitated by the provisions of section 20 of the Statutes Repeal and Amendment (Courts) Act, 1991, which also came into operation on 6 July 1992. 22. That section was expressed as follows:- "20. (1) On the commencement of the Magistrates Court Act 1991 the Registrars and non-judicial staff of local courts of limited and special jurisdiction and of courts of summary jurisdiction are transferred to corresponding positions on the staff of the Magistrates Court. (2) Any proceedings commenced before a local court of limited or special jurisdiction or a court of summary jurisdiction may be continued and completed before the Magistrates Court.

(3) A preliminary examination commenced before a justice may be continued and completed before the Magistrates Court, but the Court will apply the law as in force at the commencement of the proceedings in all respects as if references in that law to a justice were references to the Court." 23. In my view the effect of the transitional provisions in subsection (2) was not, in any sense, to validate any proceeding previously filed in a Local Court, if that proceeding had failed to invoke the jurisdiction of that Court. It merely provided machinery for the disposal of valid pending proceedings, upon a Local Court ceasing to exist. 24. The initial question therefore arises as to whether, at the time of its institution, the respondent's claim could properly be described as a personal action for the purposes of the prior Act. 25. A useful commentary as to the jurisdiction of Local Courts is to be found in Hannan's "Local Court Practice" 3rd Edn pp86-87. Broadly speaking, personal actions were those in which the claim was for debt or damages arising out of contract or for the recovery of a personal chattel or for damages for an injury to person or property arising out of tort. As Napier J pointed out in Homburg v Fromm (1951) SASR 97 at 101 the "personal actions" referred to in the prior Act are the causes of action allowed (under that name) by the courts of common law, prior to the Judicature Act. 26. Personal actions were, historically, one of three classes of action which, in their totality, comprised the span of what were known as actions at law. These were real actions, personal actions or mixed actions. As their characterisation implies, real actions related to claims in which a plaintiff sought to recover lands, tenements and hereditaments. The mixed actions were those which had features both of personal and real actions, some real property right being demanded together with personal damages for a wrong said to have been sustained. (As to this see Smith's, "Action at Law" (1873) p44 et seq and Halsbury's Laws of England 3rd Edn Vol 1 p21.) As is pointed out by the learned author of Halsbury's "Laws of England", the primary division of personal actions was, historically, into those arising ex contractu and those arising ex delicto. The learned author of Hannan relies upon the old case of Stuart v Jones (1852) 1 E and B 22 as authority for the proposition that actions by individuals based on special Acts fell within the class of personal actions recognised, as such, by the common law. That decision is not referred to in Halsbury, nor is it adverted to in Smith's, "Action at Law", which was written in 1873 and expresses the same basic classification as Halsbury. Neither is it adverted to in Sutton, "Personal Actions at Common Law" (1929), which is to the same general effect as Smith. 27. The reason for the lastmentioned omissions readily becomes apparent upon a study of the legislative environment which gave rise to the decision in Stuart v Jones (supra). That case related to statutory provisions authorising the imposition of a paving rate which, inter alia, could "be sued for and recovered, together with full costs of suit, in any of Her Majesty's Courts of Record at Westminster" (1 and 2 Vic:c.xxxiii, s18 - local and personal, public). That statute amended the earlier 3 Will IV c.68 which stipulated that relevant rates or assessments, where they amounted to or exceeded the sum of Five Pounds, could be recovered by action of debt or on the case in any of His Majesty's Courts of Record at Westminster. 28. A subsequent statute 9 and 10 Vic.c.95, by section 58, revised the pre-existing system of county courts and conferred a specific right to recover debts, by way of pleas of personal actions, up to a certain limit in such courts. 29. A Full Bench held that, as the statutory provision of 1 and 2 Vic.c.xxxiii conferred a specific right of personal action in the Courts of Westminster and the later statute vested in the County Court jurisdiction "to hold a ... (similar) personal plea", the claim made was justiciable in the County Court. 30. The decision in Stuart v Jones is actually cited as authority in relation to questions of non-exclusivity of jurisdiction, rather than for the general proposition advanced in Hannan that any money claim under a special statute constitutes a personal action, within the meaning of sections 31 or 32 of the Local and District Criminal Courts Act. Stuart v Jones was, in my view, very much the product of particular legislation and did not purport to extend what was the then well settled notion of what constituted a personal action at common law, as adverted to in Halsbury and the texts to which I have referred. 31. I consider that there is a substantial basis for concluding that the claim initiated in this case in the Local Court of Adelaide did not invoke the jurisdiction of that Court because, technically, it is not a personal action; and was thus not justiciable in the Magistrates Court. However, I do not simply rest my conclusion as to the necessary fate of this appeal simply on that technical ground. 32. I now come to the arguments advanced in relation to the provisions of section 592 of the Corporations Law. 33. In essence it was pressed upon the Full Court that it should adopt the most liberal possible interpretation of this and other relevant legislative provisions, so as to avoid what was said to be the inconvenience and commercial impracticality of aggrieved creditors seeking to avail themselves of the benefit of section 592 of the Corporations Law, by having to pursue claims for only modest sums of money in a Superior Court. It was argued that, as the section is a general remedial provision which is silent as to jurisdiction, it ought to be held that any court of competent jurisdiction erected within the State judicial hierarchy is entitled to entertain claims based upon it. 34. Mr Lane, of counsel for the intervener, the Australian Securities Commission, presented a most helpful historical summary of the relevant legislative provisions in aid of such a contention. It is unnecessary fully to retraverse that ground in these reasons. 35. Suffice it to say that, ultimately, the pre-existing Companies (South Australia) Code was replaced by the provisions of the uniform Corporations Law, as originally enacted in a federal statute applicable to the Australian Capital Territory, by virtue of the provisions of the Corporations (South Australia) Act, 1990 ("the State statute") enacted by the Parliament of this State. Inter alia, the State statute, stipulated that the federal Corporations Law in force for the time being applies as a law of South Australia and, as so applying, is to be referred to as the Corporations Law of South Australia. 36. For present purposes the provisions of the State statute which are of particular importance are those found in sections 42 and 55 respectively of it. 37. The former section provides as follows:- "42. (1) Subject to section 9 of the Administrative Decisions (Judicial Review) Act 1977 of the Commonwealth, as it applies as a law of South Australia, jurisdiction is conferred on the Supreme Court of South Australia and of each other State and the Capital Territory with respect to civil matters arising under the Corporations Law of South Australia. (2) The jurisdiction conferred on a Supreme Court by subsection (1) is not limited by any limits to which any other jurisdiction of that Supreme Court may be subject. (3) Jurisdiction is conferred on the Federal Court with respect to civil matters arising under the Corporations Law of South Australia." 38. By way of contrast, the relevant provisions of the latter section, which directs its attention to criminal proceedings, stipulate that:- "55. (1) Subject to this section, the several courts of each State and the Capital Territory exercising jurisdiction - (a) with respect to - (i) the summary conviction; (ii) the examination and commitment for trial on indictment; (iii) the trial and conviction on indictment, of offenders or persons charged with offences against the laws of the State or Capital Territory, and with respect to -

(iv) their sentencing, punishment and release; (v) their liability to make reparation in connection with their offences; (vi) their forfeiture of property in connection with their offences; or (vii) the proceeds of their crimes; and (b) with respect to the hearing and determination of - (i) proceedings connected with; (ii) appeals arising out of; or (iii) appeals arising out of proceedings connected with, any such trial or conviction or any matter of a kind referred to in paragraph (a)(iv), (v), (vi) or (vii), have the equivalent jurisdiction with respect to offenders or persons charged with offences against the Corporations Law of South Australia. (2) Where a provision of a law of another State or the Capital Territory corresponding to subsection (1) is expressed to confer jurisdiction with respect to offenders or persons who are charged with offences against the Corporations Law of that State or the Capital Territory upon a court of South Australia, the court may exercise that jurisdiction. (3) The jurisdiction conferred by subsection (1) is not to be exercised with respect to the summary conviction, or examination and commitment for trial, of any person except by a magistrate." (4) ... (5) ... (6) ... (7) Subject to subsections (9) and (10), the jurisdiction conferred on a court of a State or the Capital Territory by subsection (1) is conferred despite any limits as to locality of the jurisdiction of that court under the law of that State or of the Capital Territory. (8) Subject to subsection (9), the jurisdiction conferred on a court of South Australia by a law of another State or the Capital Territory corresponding to subsection (1) may be exercised despite any limits as to locality of the jurisdiction of that court under the law of South Australia. (9) Where - (a) jurisdiction is conferred on a court of South Australia in relation to the summary conviction of persons charged with offences against the Corporations Law of this or another jurisdiction by subsection (1) or a corresponding provision of a law of another State or of the Capital Territory; and (b) the court is satisfied that it is appropriate to do so, having regard to all the circumstances including the public interest, the court may decline to exercise that jurisdiction in relation to an offence committed in another State or the Capital Territory. (10)... (11)... " 39. It should be observed that, in Part 9 of the State statute, an express cross vesting "code" is contained in relation to civil matters arising under the Corporations Law of South Australia. 40. It must be conceded that, in such context, section 43 of the State statute (inter alia) provides that an appeal may not be instituted from a decision of "a court" of South Australia to the Supreme Court of another State or the Federal Court. Whilst that may have potential relevance to the District Court, which, by virtue of the recent District Courts Act, is now invested with certain jurisdiction concurrently with the Supreme Court, it does, on the face of it, lend some support to Mr Lane's basic contention. 41. It must, of course, be borne in mind that the dictionary section of the Corporations Law does not directly apply to the State statute itself and, in particular, section 43. On the other hand section 43 may, when read in conjunction with section 40(1) simply be expressed in a precautionary fashion to ensure that, by an indirect means, actions other than those under the Corporations Law are not caught by the cross vesting provisions of the State statute. Certainly it seems merely to infer - but not confer - jurisdiction. 42. However, be that as it may, it is important to bear firmly in mind that all of the foregoing provisions are to be found in Part 9 of the State statute. That Part is commenced by section 40, which enacts that:- "40. (1) This Division provides in relation to - (a) the jurisdiction of courts in respect of matters other than criminal matters (in this Division called 'civil' matters) arising under the Corporations Law of South Australia; and (b) the jurisdiction of the courts of South Australia in respect of civil matters arising under the Corporations Law of another State or the Capital Territory, and so provides to the exclusion of the Jurisdiction of Courts (Cross-vesting) Act, 1987. (2) Nothing in this Division affects any other jurisdiction of any court." 43. The striking feature, which immediately emerges on a detailed consideration of the State statute, is that the approach adopted in section 42 is fundamentally different from that espoused in section 55. In the latter the legislature has gone to considerable lengths to render it clear that jurisdiction in relation to criminal matters arising under the Corporations Law is to be vested in the several courts of the relevant State or Territory, according to its existing judicial structures related to the hearing and determination of criminal proceedings generally. 44. By way of contrast the former expressly limits the vesting of jurisdiction in relation to civil matters to the Supreme Courts of South Australia, each other State and the Australian Capital Territory and also the Federal Court of Australia. 45. On normal canons of statutory interpretation that distinction must be accorded its due significance. Prima facie, it must be taken that such a distinction was a deliberate indication by the legislature of an intention to adopt a differential approach as between the two areas. 46. Moreover that distinction is consistent with what is contained in sections 592 and 593 of the Corporations Law itself. 47. As Lee J pointed out in Sky Channel Pty Ltd v Gray and Ors (Federal Court, 27 November 1992, unreported) section 592 involves a confluence of concepts of criminal and civil responsibility. The differential approach to be seen in sections 42 and 55 of the State statute is, in large measure, replicated in the scheme of sections 592 and 593 of the Corporations Law. Given the unambiguous operation of section 55 of the former to any criminal proceedings arising under section 592, section 593 specifically stipulates that jurisdiction to hear and determine a civil claim, consequent upon conviction of an offence, is vested in the Supreme Courts and the Federal Court. 48. There is thus a clear consistency of approach as between all of the sections in question. 49. In aid of his submission that section 42 did not necessarily intend to invest the Supreme and Federal Courts with exclusive jurisdiction to hear and determine civil claims pursuant to section 592 of the Corporations Law, Mr Lane drew attention to a series of provisions of the Corporations Law in which concurrent jurisdiction was clearly vested in both superior and inferior courts. A typical example of this is section 1318 which, in subsection (1), uses the expression "the court", whilst in subsection (2), in a related context, employs the expression "the Court". The latter is defined in the dictionary section of the Corporations Law as meaning the Federal Court or the Supreme Court, whilst the former is defined as meaning "any court when exercising the jurisdiction of this jurisdiction". 50. It seems to me that this very line of argument is necessarily a double edged sword, having regard to Mr Lane's stance. The obvious response to his submissions in that regard is that, in other sections, the Parliament has not hesitated to stipulate for the preservation or creation of concurrent jurisdictions. As to this section 203(5) stands as an excellent illustration. The fact that it has not done so in section 42 merely serves to re-inforce an argument in favour of exclusivity. 51. Mr Lane further argued that section 42 of the State statute was simply an enabling provision which was necessary "to put beyond any doubt that, with respect to national legislation, State Supreme Courts still had jurisdiction in relation to companies and securities legislation, just as they had under the former co-operative scheme". 52. It seems to me the short riposte to all of these submissions is that what is currently under consideration is not a study of the relative provisions of the Corporations Law, but of the scheme of the State statute, which erects a State Corporations Law (albeit in a nationally uniform mode) and does not exhibit other than an internally consistent approach on this topic. The content of the Corporations Law, imported as it is from elsewhere, is of limited value in construing the structural provisions of the State statute itself. 53. It is important to note that, as was stressed by McGill A/DCJ in his unreported judgment in Metal Roofing and Cladding Pty Ltd v Hain and Anor (District Court of Queensland, 11 September 1992, unreported), the object of Part 9 of what was the Queensland equivalent of the State statute is to bring the State and Territory Supreme Courts and the Federal Court together in a common jurisdictional framework. It specifically sets out to do so. Having incorporated the Corporations Law into the law of this State it then unequivocally vests the relevant civil jurisdiction in manner set out in section 42. 54. There is simply no warrant for inferring that this is to be collateral with the jurisdiction of the Magistrates Court, or the Local Courts which preceded it. On the contrary the only reasonable inference, when section 42 is contrasted with section 55, is that the legislature did positively intend to confer exclusive jurisdiction on the Supreme Court, consistently with what was a national code or scheme in that regard. This is particularly so when section 42 is read in conjunction with section 40. That, in turn, speaks of the relevant Division of the State statute being directed to "the jurisdiction of courts in respect of matters other than criminal matters ... arising under the Corporations Law of South Australia". In my opinion this is unequivocally specific and all embracing in its terms. 55. In this regard I respectfully agree with the reasoning of McGill A/DCJ in the Metal Roofing and Cladding Case (supra) when, apropos the Queensland counterpart of the State statute, he commented that there are obvious difficulties in accepting a contention that Part 9 was not intended to be a comprehensive statement of which Courts have jurisdiction to deal with matters under the Corporations Law, but is merely intended to confer additional power which would not be automatically conferred within the relevant State by the application of the Corporations Law to that State. As His Honour said at pp 11-12:- "... the difficulty ... with such an interpretation is that it would seem to render unnecessary the express conferring on the Supreme Court ... of jurisdiction with respect to civil matters arising under the Corporations Law ... " of the very State in question. He went on to make the point that:- "The reference in s.40(2) to 'any other jurisdiction' must presumably be a jurisdiction other than that referred to in sub-s.1, so that if the enforcement of the liability created by s.592 falls within s.40(1), I do not think that s.40(2) provides a basis on which it can be said that the jurisdiction of the District Court is not affected." 56. Although counsel have advanced every reasonable argument in favour of the validity of the conclusion of the learned magistrate, it seems to me that, at the end of the day, his ruling is unsupportable as being in patent conflict with the State statute. 57. It follows that, quite apart from the threshold point earlier identified, the appellant must succeed. 58. I would allow the appeal, set aside the ruling in question and substitute for it an order of dismissal of the claim for want of jurisdiction.

Magistrates Court Act 1991

Statutes Repeal and Amendment (Courts) Act 1991

Securities Commission Act 1989

Decisions (Judicial Review) Act 1977

Industrial Conciliation and Arbitration Act 1972

Local and District Criminal Courts Act 1926

Magistrates Court Act 1991

Statutes Repeal and Amendment (Courts) Act 1991

Securities Commission Act 1989

Decisions (Judicial Review) Act 1977

Industrial Conciliation and Arbitration Act 1972

Local and District Criminal Courts Act 1926

FREDERICK JAMES CHURCHER and JEANNETTE SHIRLEY CHURCHER v. EDWARDSTOWN CARPETS (REG) and AUSTRALIAN SECURITIES COMMISSION (INTERVENER) No. SCGRG 92/1982 Judgment No. 3897 Number of pages - 19 Courts and Judges (1993) 60 SASR 503 [1993] SASC 3897 (29 April 1993)

At a glance

Court

Decision date

Before

Source

Judgment (13 paragraphs)

FREDERICK JAMES CHURCHER and JEANNETTE SHIRLEY CHURCHER v. EDWARDSTOWN CARPETS (REG) and AUSTRALIAN SECURITIES COMMISSION (INTERVENER) No. SCGRG 92/1982 Judgment No. 3897 Number of pages - 19 Courts and Judges (1993) 60 SASR 503 [1993] SASC 3897 (29 April 1993)

CWDS Courts And Judges - Section 42 Corporations (South Australia) Act

Legislation Cited (12)

Cases Cited (4)