Fujian Xingxing Restaurant Pty Ltd v Eternity Trading Pty Ltd

Federal Court of Australia|2020-04-15|Before: Stewart J

Proceedings NSD248/2020 and NSD249/2020 are dismissed.
The Registrar is directed under r 1.37 of the Federal Court Rules 2011 (Cth) to close matters NSD248/2020 and NSD249/2020 and return to the NSW Civil & Administrative Tribunal the files received from it in its matters COM 19/15379 and COM 19/15384.
The first case management hearing listed for 23 April 2020 is vacated. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Introduction 1 On 10 March 2020, the NSW Registry of this Court accepted for filing two new proceedings purportedly transferred from the NSW Civil & Administrative Tribunal (NCAT). The NCAT proceedings the subject of the transfer are COM 19/15379 and COM 19/15384. The NCAT proceedings concern the same parties and material facts as a matter in my docket, namely matter number NSD1567/2019 (the original FCA proceeding). The new matters have thus also been allocated to my docket. 2 The question that arises for decision is whether the transfer of the proceedings from NCAT to this Court is competent.

The purported transfer of the proceedings from NCAT to this Court 10 On 10 March 2020, the NSW Registry of this Court received the original files for both NCAT proceedings under cover of the following letter from Ms Green, Director and Registrar of NCAT: Dear Registrar, Re: Transfer of NCAT proceedings to the Federal Court of Australia On 20 January 2020 Senior Member D Bluth ordered that Fujian Xingxing Restaurant Pty Ltd and Yuqing Xiao v Eternity Trading Pty Ltd and Charlie Chan under the provisions of Schedule 4, clause 6 of the NSW Civil and Administrative Act 2013. We are now referring NCAT's original file, COM 19/15379, COM 19/15384, to your Court. 11 The Registry proceeded to open new matters in this Court and generated two new matter numbers, namely NSD248/2020 (for proceeding COM 19/15379) and NSD249/2020 (for proceeding COM 19/15384). Two documents were accepted for filing and were reflected as having been filed on 5 March 2020. They were the order of NCAT which is quoted above (at [7]) and my order which includes the note that the parties had agreed that the proceedings be transferred (quoted above at [8]). As indicated (above at [1]), the documents were accepted for filing by the Registry on 10 March 2020. 12 The notice of filing in each case records the relevant document to be "Transfer Order from Another Court - Rule 27.13". In fact, that rule provides for the transfer of proceedings from the Federal Circuit Court to this Court. The rule has no application in the present circumstances. 13 Also on 10 March 2020, the Registry notified the parties by way of email that the NCAT proceedings were transferred to this Court and attached a copy of the letter from the Director and Registrar of NCAT to the email. 14 I infer that the member of the Registry staff who opened the new matters misread the note in my orders of 5 March 2020 as an order that the matters be transferred. In fact, I made no such order and the new matters were opened and documents accepted for filing without the authority of any order and without reference to me or any other judge of this Court.

The disputes in the NCAT proceedings 15 The applicant in the original FCA proceeding is the applicant in the NCAT proceedings. Eternity Trading is the respondent. 16 In NCAT proceeding COM 19/15379, the applicant sought interim orders against Eternity Trading restraining it from seeking to take possession of the restaurant property until a final decision by NCAT. 17 The relief that was originally sought by the applicant in NCAT proceeding COM 19/15384 was relief against forfeiture under s 72 of the Retail Leases Act 1994 (NSW). By amendments to the points of claim dated 15 January 2020, the applicant introduced alternative relief under s 237 of the Australian Consumer Law (NSW) (ACL (NSW)). Breaches of s 21 of the ACL (NSW) were alleged. 18 The references to the ACL (NSW) are to the Australian Consumer Law as applied as a law of the State of New South Wales by s 28(1) of the Fair Trading Act 1987 (NSW).

The applicant's submissions in support of the transfer 19 Concerned that there had been no application to this Court to transfer the matters from NCAT, and doubting that such a transfer was competent, the parties to the original FCA proceeding were invited to make submissions in support of the transfer of the NCAT matters to this Court. 20 The applicant made written submissions in support of the transfer and the respondents confirmed that they supported and adopted the applicant's submissions. 21 The applicant submits that the power to transfer proceedings from NCAT to this Court is found in cl 6(1) of Sch 4 to the Civil and Administrative Tribunal Act 2013 (NSW) (NCAT Act). Schedule 4 is the 'Division Schedule' for the Consumer and Commercial Division of NCAT, being the Division in which the NCAT proceedings were brought. That is because the functions of NCAT in relation to the Retail Leases Act and the Fair Trading Act, both being NSW statutes, are 'Division functions': Sch 4, cls 1 and 3. Schedule 4 provides for the composition and function of the Division. The Division is established by s 16 of the NCAT Act and the 'Division Schedule' is provided for in s 17 of the NCAT Act. 22 The applicant submits that this Court has jurisdiction in the dispute due to the operation of s 39B(1A)(c) of the Judiciary Act, and due to the inclusion of the claims under ss 21 and 237 of the ACL in the amended points of claim in the NCAT proceedings. 23 The applicant submits that the original FCA proceeding raises the same central issue that is at the heart of the NCAT proceedings and indeed, the matters before NCAT are merely a small part of the much broader proceeding in this Court. As a matter of practicality and in accordance with the orders of NCAT, the applicant submits that the NCAT proceedings should be transferred to this Court to avoid a multiplicity of proceedings concerning the same issues.

Consideration 24 The NCAT proceedings as pleaded do not invoke federal jurisdiction; the character of the jurisdiction being exercised is state and not federal. The reason is that there was no "matter" within ss 75 and 76 of the Constitution. As to the fundamental importance of identifying the character of the jurisdiction being exercised in every case, see CSL Australia Pty Ltd v Formosa [2009] NSWCA 363; 261 ALR 441 at [22] per Allsop P, Basten JA and Handley AJA. 25 The applicant's reference to the ACL and s 39B(1A)(c) of the Judiciary Act apparently seeks to invoke s 76(ii) of the Constitution, viz. "a matter arising under any laws made by the Parliament", but the invocation is mistaken. That is because what is relied on in the NCAT proceedings is the ACL (NSW) which, as I have said, applies as a law of the State of New South Wales by s 28(1) of the Fair Trading Act. It is not a law of the Parliament. 26 A matter will arise in federal jurisdiction if "a party on either side of the record relies upon a right, immunity or a defence derived from a federal law": Agtrack (NT) Pty Ltd v Hatfield [2005] HCA 38; 223 CLR 251 at [32] per Gleeson CJ, McHugh, Gummow, Hayne and Heydon JJ. Neither party in the NCAT proceedings did that. 27 If the NCAT proceedings were properly characterised as raising a matter within federal jurisdiction, then they would not have been competent to be pursued in NCAT: Burns v Corbett [2018] HCA 15; 353 ALR 386. In that event, under Pt 3A of the NCAT Act they could be transferred to an "authorised court" which is defined under s 34A as either the District Court or the Local Court of NSW. 28 If the NCAT proceedings were not within federal jurisdiction, as indeed they were not, then they could have been transferred to another "court" under cl 6(1) of Sch 4 to the NCAT Act, which is what the NCAT orders sought to do. The question is whether that "court" could have been the Federal Court? 29 Clause 6 of Sch 4 provides as follows: 6 Transfer of proceedings to courts or to other tribunals (1) If the parties in any proceedings for the exercise of a Division function so agree, or if the Tribunal of its own motion or on the application of a party so directs, the proceedings are - (a) to be transferred to a court (in accordance with the rules of that court) that has jurisdiction in the matter, and (b) to continue before that court as if the proceedings had been instituted there. 30 One issue that arises from this provision is what rules there are of the Federal Court "in accordance with" which the transfers could occur. 31 As indicated above, the transfers in this case were done with reference to r 27.13 of the Federal Court Rules 2011 (Cth) (FCR) which is inapplicable as it deals with transfers from the Federal Circuit Court. There is no rule in the FCR that contemplates the transfer of proceedings from a State tribunal of any kind. 32 For the sake of completeness, there is another rule, r 27.23 of the FCR, which governs the "cross-vesting" transfer of proceedings to this Court. Such transfers can take place pursuant to the cross-vesting scheme in the Jurisdiction of Courts (Cross-vesting) Act 1987 (Cth) and the associated statutes of the States and Territories. That Act and its NSW counterpart, the Jurisdiction of Courts (Cross-vesting) Act 1987 (NSW), do not provide for the transfer of any proceeding from NCAT to the Federal Court. Under s 5(1) of each Act, a proceeding can in certain circumstances be transferred from the Supreme Court of NSW to this Court, but not from any other NSW court or tribunal. 33 Section 138D of the Competition and Consumer Act provides for the transfer of proceedings arising under the ACL from State and Territory courts other than a Supreme Court to the Federal Court, but not from tribunals. In any event, such transfers can only take place if the State court is "directed" by the Federal Court to transfer the proceeding: s 138D(2). 34 But there is a more fundamental problem. It is that where "court" is used in cl 6(1) it is to be interpreted as being restricted to a court of New South Wales. That follows from s 12 of the Interpretation Act 1987 (NSW). See Solomons v District Court of New South Wales [2002] HCA 47; 211 CLR 119 at [9] per Gleeson CJ, Gaudron, Gummow, Hayne and Callinan JJ. That also accords with the general rule of construction that would confine a State enactment to State proceedings and officers: Seaegg v The King [1932] HCA 47; 48 CLR 251 at 255. See also Commissioner of Stamp Duties (NSW) v Owens [No 2] [1953] HCA 62; 88 CLR 168 at 169. The underlying idea is that where it is possible within the language chosen, courts should construe a law as operating with respect to matters of the constitutional competency of the enacting polity within the federation: BHP Billiton Ltd v Schultz [2004] HCA 61; 221 CLR 400 at [138] per Kirby J. 35 By s 5(2) of the Interpretation Act, s 12 of that Act would not apply if the contrary intention appeared in the Act being interpreted, viz. the NCAT Act. No such contrary intention appears. Rather, it appears from its terms that cl 6 of Sch 4 to the NCAT Act was not intended to be able to effect a transfer to the Federal Court. 36 It is only proceedings for the exercise of a 'Division function' that can be transferred under cl 6 of Sch 4 to the NCAT Act. By cls 1 and 3, a Division function is a function of NCAT under one or other listed NSW statutes. See The Owners-Strata Plan No 21372 v Banovic (No 2) [2017] NSWSC 734 at [6] per Darke J. Such a matter would not be within federal jurisdiction as not arising under a law of the Parliament, but under cl 6(1)(a) the transfer can only be to a court "that has jurisdiction in the matter". That can therefore not be the Federal Court. 37 Also, under cl 6(1)(b), once transferred, the proceeding would continue as if it has been commenced in the transferee court. Non-federal jurisdiction proceedings could not have been commenced in the Federal Court, and the NCAT Act could certainly not confer non-federal jurisdiction on the Federal Court: Re Wakim; Ex parte McNally [1999] HCA 27; 198 CLR 511.

Conclusion 38 For the above reasons, the purported transfer of the NCAT proceedings to this Court is not competent. The transfers should not have been accepted by the Registry and the cases should not have been opened in this Court. 39 It seems to me that the appropriate relief is to dismiss the proceedings and direct the Registrar under FCR r 1.37 to close the matters in this Court and return the files to NCAT. Obviously in dismissing the proceedings I say nothing about the merits of the claims sought to be asserted in the NCAT proceedings. 40 The parties in the existing FCA proceeding should discontinue the NCAT proceedings and plead the issues that have been raised there in the FCA proceeding. The issues can be recast as raising federal jurisdiction, although even if that is not done they can be raised in the existing FCA proceeding as being within the accrued jurisdiction of the Federal Court, i.e. as matters of non-federal jurisdiction part of the "litigious or justiciable controversy between parties of which the federal claim or cause of action forms part": Stack v Coast Securities (No 9) Pty Ltd [1983] HCA 36; 154 CLR 261 at 290 per Mason, Brennan and Deane JJ. I certify that the preceding forty (40) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Stewart.

Corporations Act 2001(Cth)ss 459H, 459J

Federal Court Rules 2011(Cth)rr 1.37, 27.13, 27.23

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