PRACTICE AND PROCEEDURE - jurisdiction - District Court NSW - District Court Act - Ss 44(1)(a)
44(1)(c)
44(1)(d)
Source
Original judgment source is linked above.
Catchwords
PRACTICE AND PROCEEDURE - jurisdiction - District Court NSW - District Court Act - Ss 44(1)(a)44(1)(c)44(1)(d)
Judgment (3 paragraphs)
[1]
Solicitors:
Mills Oakley Lawyers, solicitor for the plaintiff/cross defendant
Fortis Law, solicitor for the defendant/cross claimant
File Number(s): 2020/00160887
[2]
Preliminary view on the preliminary argument raising the issue of jurisdiction.; see transcript p 1
HIS HONOUR: On the plaintiff's Notice of Motion filed 20 May 2022, and the defendant's Notice of Motion filed 6 June 2022, by consent I make orders in accordance with the Short Minutes of Order handed up.
1. Paragraphs 2, 3, 5, 6 and 8 only, save that the word "otherwise" in paras 2 and 5, is deleted.
2. I stand the matter over for directions before the Judicial Registrar on Friday 19 August 2022. On the question of jurisdiction of the Court, I direct the defendant/cross claimant to serve written submissions of not more than five pages, and deliver the same to my Associate, on or before 29 July 2022.
3. On issue of jurisdiction, I direct the plaintiff/cross defendant to serve written submissions of not more than five pages, and to email the same to my Associate, on or before 5 August 2022.
I express the preliminary view on the preliminary argument raising the issue of jurisdiction. The question arises from the defendant's cross claim filed 23 March 2021, entitled, "First cross claim amended statement of cross claim". Amongst the relief claimed, at para 3 is an order for equitable compensation, or equitable damages for breach of duty of confidence; and at para 4, for the taking of an account of profits made by the cross defendant by its breach of its duty of confidence.
The equitable obligation of confidence and allegation of breach are set out in paras 18 to 26, and between paras 27 and 28 the defendant/cross claimant pleads for account of profits and restraints to prevent further breaches of equitable obligations of confidence.
In the initiating process of the statement of claim, 29 May 2020, the plaintiff sues for recovery of commissions for the provision of services, which I will loosely call in the style of an agency introducing business. The defence was filed 2 July 2020, and the balance of the cross claim pleads the case in contract.
Accordingly, it is the case in which the parties join issue on what was a written contract and its application to the facts, but also in which the defendant/cross claimant seeks those forms of equitable relief.
On direct inquiry from the Court today, Mr Swanson, who appears for the defendant/cross claimant, responded that both the value of the equitable relief sought was unascertainable pending discovery, and that the real nature of the circumstantial matrix for allegations of equitable duty, breach, and extent of equitable relief is not properly ascertained until achievement of that discovery.
The parties jointly informed the Court that they have come to an accommodation as to discovery, and that is that, the Court assumes, covered in the above referred to consent orders.
By proceeding with the cross claim as it is, Mr Swanson informed the Court that the defendant/cross claimant relies on the jurisdiction of the Court under s 134(1)(h) District Court Act 1973. His preliminary position is that the equitable relief sought in the cross claim does not fall within the description of
any of the kinds of action under s 44(1)(c)(2)(e). He stated that the proceedings, as filed, were viewed as proceedings which would be assigned in the Supreme Court, Common Law Division, within the meaning of s 44(1)(a). His further position confirmed to the Court is that only s 134(1)(h) is applicable by description of the nature of the proceedings.
The Court has an obligation to deal with questions of jurisdiction early in proceedings, if not at the outset of proceedings: Huang v Drumm [2017] NSWCA 29, and Great Northern Developments Pty Ltd v Lane [2021] NSWCA 150, per Leeming JA, particularly at para [95].
Section 134(1)(h) was inserted into the legislation pursuant to a 1997 amendment. Even the taking of accounts, being a matter specifically referred to in those earlier subparts of s 131(1)(h), is a matter which might properly and exclusively fall not within that earlier subpart but within s 131(h). See, for instance, Commonwealth Bank of Australia v Hadfield [2001] NSWCA 440; but in other circumstances, the taking of accounts is not within the jurisdiction of this Court. See, for instance, s 44(1)(c): Marzec v Waclaw Marian Lysiak (No 2) [2015] NSWSC 115 at 23.
As a general principle, laws conferring jurisdiction are to be construed broadly, and laws denying jurisdiction are to be construed narrowly. In this specific application of s 134(1)(h) the words, "any equitable claim or demand for recovery of money or damages", are to be construed broadly: Great Northern Developments v Lane, per Leeming JA at 90.
Identification of the subject of proceedings, as I have said, appropriately be determined at the outset is properly based on how the party has chosen to plead, and the question does not invite an assessment of what the litigation
might otherwise involve. This was explained by Leeming JA in Great Northern Developments v Lane between paras 95 and 104 in which he gave the example that a party might choose not to plead equitable fraud, but rather to proceed by way of misrepresentation. The latter pleading well choosing, and identifying the applicability of the jurisdiction of this Court, whereas the pleading of equitable fraud would bring the proceedings outside of the jurisdiction in the event the sum of the relief sought exceeded $20,000.
In the New South Wales Court of Appeal, Beazley JA, as she then was, in Commonwealth Bank of Australia v Hadfield [2001] 53 NSWLR 614; [2001] NSWCA 440, at para 65 said:
"In my opinion, s 134(1)(h) confirms the claim made here it is an 'equitable claim...for recovery of money.' As was explained in Meagher, Gummow and Lehane, and in Sykes in the extracts quoted earlier, an action for an account is a claim to recover the surplus proceeds of sale, to which the mortgagor claims to be entitled. There is nothing in the express words of the provision, or within the context of the provisions conferring equitable jurisdiction on the Court, to exclude the claim nor is there any reason to limit the words "equitable claim or demand for recovery of money" to a claim "involving money in the form of debt" as was said in the second reading speech.
It follows from what I have said that I consider that a claim for accounts falls within s 134(1)(h). Accordingly I would refuse the application for prohibition."
Of the action brought in that proceeding, Bryson J said at para 70:
"I think too that the claim is not a claim for relief against fraud within the meaning of "fraud" in s134(1)(d). "Fraud" has many shades of meaning in contexts dealing with equitable claims and equitable remedies and has sometimes been used in ways which extend to wrongful exercise of a power. Wrongful exercises can take many forms, to some of which "fraud" could readily be applied while it could only be applied to others in rare and specialised usage. A power can be abused by concocting the appearance of the sale at a false value to an interested party, but it can also be abused by proceeding with simple indifference to the interests of the mortgagor and sacrificing those interests by entering into a sale without addressing any question other than the amount required to pay the secured debt. Some abuses of powers of sale may fall within s 134(1)(d) but the claim particularised does not do so because the allegations relate to disregard or sacrifice of the mortgagor's interests and do not relate to corrupt or dishonest purported exercise of the power of sale."
The cases to which I have referred state the plain proposition on obvious construction of s 134(1)(h) that the words within parenthesis are there to ensure that s 134(1)(h) is not used to circumvent the express limitations of jurisdiction in those earlier subparts within (a) to (g).
I have come to no conclusion on the question of jurisdiction, except to say that it is not at this preliminary point obvious to me, nor indeed may I say a matter of serious doubt that the Court does have jurisdiction to determine the claims for equitable relief as they appear in the cross claim. In these reasons, I have been assisted by the decision of Dicker DCJ SC of this Court, Glenn v Kemp [2021] NSWDC 656, which was a case on different facts in that different relief was sought in different circumstances to that here. His Honour did refer to the judgment of Leeming JA in Great Northern Developments v Lane and the passages to which I have referred.
[3]
Amendments
18 August 2022 - Case Law amendment
19 August 2022 - Legislation amendment
26 October 2022 - Formatting amendment
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 October 2022