Ogawa v Federal Magistrate Phipps

REASONS FOR JUDGMENT 1 I have to decide whether the Federal Magistrates Court had authority (to use a neutral term) to dismiss the prosecutrix' action against the University of Melbourne and then to order that she pay the University's costs, as it turns out, on an indemnity basis. In the action the prosecutrix made several allegations, two of which encapsulate the nature of her complaint. First, she alleged that she had been induced to enrol at the University as a candidate for the Degree of Doctor of Philosophy as a result of several misleading statements contained in the University's Handbook. The allegedly misleading statements concern, first, the "infrastructure support" which the University said would be provided to candidates and, second, the experience of the supervisor to be assigned to each candidate. It was contended that the statements were made in contravention of s 52 of the Trade Practices Act 1974 (Cth). The second complaint alleged that the circumstances in which the prosecutrix' enrolment as a candidate for a doctorate was terminated were unconscionable and in contravention of s 51AB of the Trade Practices Act. Among other relief the prosecutrix claimed damages under s 82. 2 The action had initially been instituted in the Federal Court out of the Queensland registry. From there it was transferred to the Melbourne registry and then to the Federal Magistrates Court. The transfer of the action to the Federal Magistrates Court was on the motion of the docket judge and over the objection of both parties. In her submissions, the prosecutrix said that her damages claim for "lost opportunity of gainful employment for two years" might total $417,540 and gave particulars regarding how that sum was calculated. In the course of his argument against the transfer counsel for the University also pointed out the prosecutrix' claim "may in fact exceed the $200,000 jurisdictional limit". Both parties had in mind s 86AA of the Trade Practices Act which provides that in respect of a claim for damages under s 82 the Federal Magistrates Court does not have jurisdiction to award damages exceeding $200,000. 3 The judge made the transfer order it seems for two reasons, viz (1) Ms Ogawa lives in Queensland and video conferencing facilities could be made available for any hearing free of charge if the action was heard in the Federal Magistrates Court; and (2) the judge could not list the case for trial for eight months. As to the quantum of the claim the judge said: "The Court is unable to perceive that damages in that sum are sought in the proceeding." 4 The transfer order was a mistake. When a plaintiff claims a sum by way of damages which is greater than the sum which a court of inferior jurisdiction is entitled to award, the case should not be transferred to the inferior court unless, perhaps, it is quite clear that the amount claimed will not be recovered. Indeed, where an action is commenced in an inferior court and it appears to that court that the damages which a plaintiff seeks exceed the limit which the inferior court is able to award, it is the duty of that court to transfer the case to a court of competent jurisdiction. Here it is true that the prosecutrix had not stated definitely that her claim exceeded $200,000. It was, I suppose, possible that she may have limited her claim to one that could be entertained by the Federal Magistrates Court. But that possibility was so remote that the action should not have been transferred. Nothing said in Colac Otway Workforce Pty Ltd v Dwyer [2005] VSCA 230 is inconsistent with this view. 5 When the action was transferred to the Federal Magistrates Court the statement of claim (which had already been twice amended) did not plead a contravention of s 51AB. That claim was introduced by the leave of the Federal Magistrate. The Federal Magistrate granted that leave in general terms, but he had before him the form of the proposed amendments. Thus he acted in conformity with the old practice which was that a party who seeks to raise "a fresh issue or a fresh cause of action [was required] to formulate and state in writing the exact amendment that he asks": Hyams v Stuart King [1908] 2 KB 696, 724 per Farwell LJ; see also Practice Direction, June 1947, [1947] WN 185; Derrick v Williams (1939) 55 TLR 676; J Leavey & Co Ltd v G H Hirst & Co Ltd [1944] KB 24. In Busch v Stevens [1963] 1 QB 1 Lawton J (as he then was) said that it was wrong in law to make an order giving a plaintiff leave to amend his statement of claim without specifying what the amendments were. It might be going too far to say that this is the position under modern rules of court, but even if such an order be within power it should only be made in simple cases. 6 Because the old practice was followed it was immediately apparent that the prosecutrix was seeking to introduce a cause of action which potentially was beyond the jurisdiction of the Federal Magistrates Court. The Federal Magistrate recognised the difficulty and said "[T]he claim could be inserted in the statement of claim and it would then be a matter of seeing whether it fell within the associated jurisdiction of the court. That would be the first [scil. best] way to test whether this court could deal with the application." I note that counsel who appeared for the prosecutrix had indicated that the cause of action was within jurisdiction. But of course jurisdiction in respect of a claim under s 51AB cannot be conferred by consent. 7 As things turned out no consideration was given to the question of jurisdiction. If it had been considered the Federal Magistrate might have (as he was required to do) ruled that the claim was indeed beyond jurisdiction. At that point the whole proceeding would have been transferred back to the Federal Court, being the only court with jurisdiction to entertain the claim under s 51AB and therefore the appropriate court to deal with all the prosecutrix' claims. 8 The Federal Magistrate did hear an application by the prosecutrix to return the action to the Federal Court. In an affidavit in support of that application the prosecutrix indicated that the reason for the transfer was the question of her damages claim indicating that the damages that she had particularised exceeded $200,000. The Federal Magistrate refused to make the transfer order. He was in part influenced by the fact that the action had begun in the Federal Court and had been transferred to the Federal Magistrates Court by a judge on his own motion. 9 In due course the action was dismissed by the Federal Magistrate when the prosecutrix did not appear at the trial. As a result of her absence the Federal Magistrate exercised the power conferred by O13.3A of the Federal Magistrates Court Rules to "proceed with the hearing generally". He did so and dismissed the action for "want of proof". Later he made the costs order. 10 I will now explain why the Federal Magistrates Court had no jurisdiction to entertain the claim under s 51AB. By Ch III of the Constitution federal Parliament is given power to create federal courts and to invest them with federal jurisdiction, including jurisdiction which is exclusive of the jurisdiction of other federal courts: Philip Morris Inc v Adam P Brown Male Fashions Pty Ltd (1981) 148 CLR 457. The jurisdiction which may be conferred on a federal court is in respect of federal subject matters, that is matters of the kind mentioned in ss 75 and 76 of the Constitution. The jurisdiction of a federal court is not, however, confined to matters which are expressly conferred on the court. It will include what is sometimes referred to as "accrued jurisdiction" and, in the case of both the Federal Court and the Federal Magistrates Court, it also includes "associated jurisdiction": Federal Court of Australia Act 1976 (Cth), s 32; Federal Magistrates Court Act 1999 (Cth), s 18. As to the distinction between "accrued jurisdiction" and "associated jurisdiction" see Stack v Coast Securities (No 9) Pty Ltd (1983) 154 CLR 261. (See also WMC Gummow, "Pendent Jurisdiction in Australia - Section 32 of the Federal Court of Australia Act 1976" (1979) 10 Federal Law Review 211; L Zines, "Federal, Associated and Accrued Jurisdiction" in B Opeskin and F Wheeler (eds) The Australian Federal Judicial System, Melbourne University Press, 2000, p 265). 11 Immediately before the establishment of the Federal Magistrates Court, the Federal Court had jurisdiction to deal with any matter arising under the Trade Practices Act. The jurisdiction was conferred by s 86(1) of the Trade Practices Act. When the Federal Magistrates Court was established s 86 was amended to give that court jurisdiction "in any matter arising under Division 1 or 1A of Part V in respect of which a civil proceeding is initiated by a person other than the Minister or the Commission.": see s 86(1A). Thus the Federal Magistrates Court is able to deal with claims based on a contravention of s 52, which is found in Pt V, Div 1, but not for a contravention of s 51AB, which is located in Pt VA. 12 It is now necessary to notice s 86AA(4). This sub-section relevantly provides that the jurisdiction of the Federal Court conferred by s 86(1) is "exclusive of the jurisdiction of any other court other than: (a) the jurisdiction of the Federal Magistrates Court under subsection (1A)." I think the intent of this provision is clear. Parliament has laid down that the Federal Magistrates Court is precluded from exercising jurisdiction in a matter arising under any part of the Trade Practices Act apart from a matter under Pt V. This is so whether or not an action in respect of that mater has begun in the Federal Court. Moreover, it would subvert Parliament's intention if one were to accept the University's contention that s 18 of the Federal Magistrates Court Act (the "associated jurisdiction" provision) has the effect of giving to the Federal Magistrates Court jurisdiction over a federal claim that is within the exclusive jurisdiction of the Federal Court. In my view whatever claims may be picked up as part of the Federal Magistrates Court's associated jurisdiction they do not include claims that are within the exclusive jurisdiction of another federal court. 13 The final question is whether the prosecutrix is entitled to the issue of a writ of certiorari to quash the Federal Magistrate's decision, a writ of prohibition to prevent the Federal Magistrate from further proceeding upon the action and directing the Federal Magistrate to transfer the proceeding to the Federal Court. 14 At one time it was accepted that where there had been an apparent excess of jurisdiction by an inferior court a writ of prohibition would issue as of right. Even the acquiescence of the prosecutrix in the exercise of the inferior court's jurisdiction could not preclude her from applying for the writ: see eg Farquharson v Morgan [1894] 1 QB 552. Now it is clear that the issue of any of the constitutional writs is discretionary and, in an appropriate case, relief may be refused even if the grounds for the issue of the writ be made out: Re Refugee Review Tribunal; Ex parte Aala (2000) 204 CLR 82; Re McBain; Ex parte Australian Catholic Bishops Conference (2002) 209 CLR 372. Nevertheless, I am bound to say that it would require a strong case before a supervising court would permit an inferior court to proceed with matters in respect of which it apparently has no jurisdiction. 15 However that may be, the University says that the prosecutrix is not entitled to any relief. The first point is that prohibition is not available because the order the subject of prohibition is exhausted and if prohibition is not available nor is certiorari, which is merely an ancillary remedy. Let it be assumed that it is not possible to obtain certiorari other than as an ancillary relief: as authority for this approach see Madden v Madden (1996) 65 FCR 354. The problem for the University is that the underlying premise that the Federal Magistrates Court order is exhausted is false. This is so for several reasons. First, although the action has been dismissed with costs and the costs have been taxed (it is the fact of taxation which is the basis for the contention that the order is exhausted) the costs have not been paid and unless prohibition issues, action can be taken to enforce the order: Ex parte Goodwin; Re Carruthers (1969) 70 SR (NSW) 175; cf Ex parte Browne; Re McNamara (1967) 68 SR (NSW) 188 which may have been incorrectly decided but is in any case distinguishable. Second, and more importantly, the order operates to bar the prosecutrix' claims. They have merged in the judgment. According to the High Court in R v Hibble; Ex parte Broken Hill Pty Co Ltd (1920) 28 CLR 456, 463, the test for the issue of prohibition is not whether the inferior court is functus officio or whether its order can no longer be enforced. The true question is whether the order made without jurisdiction "remains in force so as to impose liabilities on an individual". The order of the Federal Magistrates Court plainly does that. In any event, as Knox CJ and Gavan Duffy J said in their joint judgment in R v Hibble (at 463): "If … the issue of the writ be regarded as intended to keep an inferior court within the limits of its jurisdiction, it should never be too late to get rid of what might be regarded in the future as a precedent for the exercise of a jurisdiction which is not really justified by the law." See also Roberts v Humby (1837) 3 M&W 120, 127; Farquharson v Morgan [1894] 1 QB 552, 556, 559, 560. 16 Next it was submitted that the prosecutrix had not availed herself of the right to apply under r 16.05(2) of the Federal Magistrates Court Rules to set aside the judgment that was entered in her absence. The authorities say, however, that if the excess of jurisdiction of the inferior court is clearly shown the fact that there is another remedy is in general of no consequence: R v Ross-Jones; Ex parte Green (1984) 156 CLR 185, 194. 17 The prosecutrix is entitled to the relief she seeks but not, I think, to any costs, for if she incurred any that has been occasioned not by any fault of the University. I certify that the preceding seventeen (17) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Finkelstein.