Picos v Western Pacific Automotive Pty Ltd

Supreme Court of NSW|2018-03-21

Decision: 22 November 2017 Before: Keogh LCM File Number(s): 2017/254345

Judgment

HER HONOUR: By notice of motion filed 16 January 2018, the first defendant seeks an order pursuant to rule 50.16A of the Uniform Civil Procedure Rules 2005 (NSW) ("UCPR") that the amended summons filed by the plaintiff dated 18 December 2017 be dismissed as incompetent. The plaintiff seeks leave to appeal from the decision of a Local Court Magistrate dated 22 November 2017. This judgment addresses both the notice of motion and the summons.
The plaintiff is Connie Louise Picos ("Ms Picos"). The first defendant is Western Pacific Automotive Pty Ltd ("Western Pacific"). The second defendant is Mercedes-Benz Financial Services Australia Pty Ltd ("Mercedes Benz Financial"). Mercedes Benz Financial relied on and adopted the submissions made by Western Pacific in relation to both the notice of motion and the principal submissions on the summons. Additionally, Mercedes Benz Financial made submissions on the issue of the jurisdiction of the Local Court.

Background

In about May 2013, Ms Picos bought a metallic grey Mercedes Benz motor vehicle ("the vehicle") in Perth, Western Australia from Western Pacific under a finance agreement with Mercedes Benz Financial ("the contract"). The vehicle was not delivered to Ms Picos on the agreed date as it suffered from mechanical issues that resulted in the vehicle not being able to be driven. Ms Picos was unable to take possession of the vehicle until the repairs had been carried out. In late 2013, Ms Picos relocated to New South Wales and subsequently registered the vehicle in New South Wales.

Orders of the Registrar

On 18 July 2017, the proceedings were listed for directions in the Local Court. Short minutes of order (Ex D1/1 in this Court) were made whereby it was noted that Western Pacific had not entered an appearance because it objected to the jurisdiction of the Local Court of New South Wales. Mercedes Benz Financial had filed a defence. Western Pacific's notice of motion seeking a permanent stay of the proceedings was to be heard first. Ms Picos had filed a notice of motion seeking to amend her statement of claim. Ms Picos did not challenge the Registrar's decision. While Ms Picos complains that her notices of motion in the Local Court were not dealt with, the registrar ordered that the jurisdictional issue was to be determined first.

The Magistrate's decision

On 16 November 2017, Western Pacific's notice of motion seeking a permanent stay of the proceedings was heard by her Honour Magistrate Keogh ("the Magistrate"). On 22 November 2017, the Magistrate handed down her reasons in relation to the Local Court's jurisdiction. The Magistrate stated that Ms Picos' claim was be largely based upon s 54 of the Australian Consumer Law in Schedule 2 of the Competition and Consumer Act 2010 (Cth) ("Australian Consumer Law"), which provided a cause of action but did not extend the jurisdiction of the Local Court. (J2.6-20). The Magistrate reasoned that the Local Court, as a creature of statute, is entirely dependent upon legislation to establish its jurisdiction. (J3.8-13).
The relevant provision as to jurisdiction is contained in s 34 of the Local Court Act 2007 (NSW). It reads: "34 Jurisdiction when cause of action or defendant outside the State (cf LCA 1982, section 69) (1) The Court has jurisdiction to hear and determine proceedings with respect to a cause of action: (a) even if part of the cause of action arose outside New South Wales, so long as a material part of the cause of action arose within New South Wales, and (b) even if the whole cause of action arose outside New South Wales, so long as the defendant was resident in New South Wales at the time of service of the document that commenced the proceedings, and (c) even if the defendant is not within New South Wales, so long as: (i) the whole or a material part of the cause of action arose within New South Wales, and (ii) the defendant was within a State or a part of the Commonwealth (within the meaning of the Service and Execution of Process Act 1992 of the Commonwealth) at the time of service of the document that commenced the proceedings. (2) Subsection (1) (c) applies whether or not the defendant has ever been resident or carried on business in New South Wales. (3) In this section, defendant includes, if there are 2 or more defendants, any one of those defendants."
As both Western Pacific and Mercedes Benz Financial had their registered offices in Western Australia and not New South Wales, the Magistrate considered the only applicable provision was s 34(1)(a) of the Local Court Act which requires a material part of the cause of action to have arisen in New South Wales. (J3.8-13). The Magistrate put the issue of whether proof of loss was established to one side and emphasised the need for the claim to have a nexus to New South Wales to enliven the Local Court's jurisdiction. Her Honour concluded that while Ms Picos' vehicle was registered in New South Wales, the possibility of a defect in the vehicle did not found any cause of action in New South Wales and that all the alleged breaches and misrepresentations did not occur in New South Wales. The contract was made in Western Australia and the alleged causes of action accrued in Western Australia. Accordingly, no material part of the claim arose in New South Wales and the Local Court did not have jurisdiction to hear the matter. Ms Picos' statement of claim was dismissed and she was ordered to pay the costs of both Western Pacific and Mercedes Benz Financial as agreed or assessed. (J5.1-11; J6.1).
I shall briefly set out the pleading framework in the Local Court. I will consider firstly, whether the appeal is incompetent; and secondly, whether Ms Picos needs leave to appeal on the bases that the decision of the Magistrate is an interlocutory one or because it raises a question of mixed fact and law.

The pleading framework in the Local Court

The pleadings in the statement of claim were as follows: 1. Ms Picos acquired a car a few days after the agreed date as the vehicle was not work properly due to a mechanical defect which needed to be repaired. (S/C, [4]). 2. Ms Picos was entitled to rescind the contract because of a failure to receive a "corporate package" per a special condition in the contract or, in the alternative, was entitled to be reimbursed for its annual servicing costs. (S/C, [7] and [9]). 3. Western Pacific breached s 54 of the Australia Consumer Law as the car was not of an acceptable quality because it was unsafe and had a safety defect as defined in s 9 of the Australian Consumer Law. The particulars were that the car did not work when it was initially acquired by her (although it was subsequently repaired), the vehicle was subject to a safety recall notice, the vehicle may cause injury, the vehicle does not comply with a mandatory standard; the brakes are faulty and the connection on the brake booster vacuum hose may break, which would result in a lack of power assistance to the braking system. (S/C, [10] and [11]). 4. Ms Picos only became aware of the further defect in the vehicle on or about 14 July 2017, after she received a vehicle safety recall notice dated 11 July 2017. (S/C, [12]). I note in passing that Ms Picos referred to a recent safety recall notice received last week in relation to the steering mechanism, but this was not the subject of dispute in the Local Court. 5. Failure of Western Pacific to comply with the guarantee as to acceptable quality was a major failure and Ms Picos rejects the vehicle. (S/C, [13]). 6. The failure of Western Pacific to comply with guarantee has caused Ms Picos to suffer loss and damage. (S/C, [14]). She sought damages in the sum of $10,057.15.
Western Pacific did not enter an appearance on the basis that it objected to the jurisdiction of the Local Court of New South Wales: see UCPR 12.11. Mercedes Benz Financial filed a defence but Western Pacific's notice of motion seeking that the proceedings be dismissed was heard first.

The appeal generally

Section 39(1) of the Local Court Act provides that a party who is dissatisfied with a judgment or order of the Local Court may appeal to the Supreme Court, but only on a question of law.
Section 40(1) of the Local Court Act provides that a party who is dissatisfied with a judgment or order of the Local Court may appeal to the Supreme Court on a ground that involves a question of mixed law and fact, but only by leave of the Supreme Court. In other words an appeal under s 40(1) must be predicated upon "an identified question of law or an erroneous answer in respect of a question of law: see B & L Linings Pty Limited v Chief Commissioner of State Revenue (2008) 74 NSWLR 481; [2008] NSWCA 187 per Allsop P at [75] and Basten JA at [150].
Section 40(2) of the Local Court Act relevantly provides that a party who is dissatisfied with an order as to an interlocutory judgment or order, a judgment or order made with the consent of the parties, and an order as to costs may appeal to the Supreme Court, but only by leave of the Supreme Court.
Section 41(1) of the Local Court Act provides that this Court may determine an appeal either (a) by varying the terms of the judgment or order, or (b) by setting aside the judgment or order, or (c) by setting aside the judgment or order and remitting the matter to the Local Court for determination in accordance with the Supreme Court's directions, or (d) by dismissing the appeal.

The summons

Ms Picos seeks leave to appeal from the whole of the decision of Magistrate Keogh dated 22 November 2017. There are 29 grounds of appeal, some of which I will refer to later in this judgment. However, in oral submissions in reply, Ms Picos conceded that grounds of appeal 6 to 18 relate to an application for equitable relief, being whether the decision of the Magistrate should be set aside and the matter transferred to the Equity division of the Supreme Court. Hence, I consider that grounds of appeal 6 to 18 inclusive are not pressed in this appeal.
Aside from the relief sought in appeal grounds (1) to (3) and (20) (below) the balance of the relief sought is of an unusual nature. The relief includes: (1) The appeal be allowed; (2) Judgment of the Local Court be set aside; (3) An order setting aside the costs order made on 22 November 2017 by the Local Court in proceedings 2017/254345; (4) Additionally, and/or alternatively to (1) and (2), the proceedings be transferred to the Equity Division; (5) An order that proceedings remain and/or are transferred to the Supreme Court of New South Wales pursuant to s 140 of the Civil Procedure Act 2005 (NSW) or otherwise; (6) An order that the affidavit of Khesrinder Kaur Ludher dated 18 October 2017 be struck out; (8) A declaration that the "Declaration of purpose for which credit is provided" signed by Ms Picos on or about 16 May 2013 is ineffective; (12) A declaration that the commercial credit information enquiry dated 15 May 2013 entered by Mercedes Benz Financial on Ms Picos' credit file is misleading or deceptive; (13) An order that Mercedes Benz Financial do all things necessary to remove commercial credit information enquiry dated 15 May from Ms Picos' credit file; (14) A declaration that the commercial credit information dated 23 December 2015 entered by Mercedes Benz Financial on Ms Picos' credit file is misleading or deceptive. (20) Costs.

Dismissal and incompetency

Western Pacific in its Notice of Motion relies upon UCPR, 50.16A. It reads: "50.16A Objections to competency of appeal (1) A defendant who objects to the competency of an appeal must, by notice of motion filed and served on all other parties to the appeal within 14 days after service on the defendant of the notice of appeal, apply to the court for an order dismissing the appeal as incompetent. (2) If the defendant fails to comply with subrule (1) and the appeal is nevertheless dismissed as incompetent: (a) the defendant is not entitled to costs of the appeal unless the court otherwise orders, and (b) the court may order the defendant to pay the plaintiff any costs of the appeal proving useless or unnecessary."
Other than the orders sought in paragraphs (1) to (3) and (20) of the amended summons, this Court on appeal is not empowered to make the balance of the orders sought pursuant to s 41(1) of the Local Court Act. The relief sought in Paragraph (4) does not apply because the Local Court proceedings have already been adversely determined against Ms Picos, so the proceedings cannot be transferred to Equity division unless the appeal is successful. In my view, the orders sought in paragraphs (4) to (19), (21) to (23) are incompetent. Accordingly, these grounds are dismissed.

Relevant grounds of appeal

The relevant grounds of appeal concerning the orders sought in paragraphs (1) to (3) and (20) and for which leave is sought are grounds 1, 2, 3, 4, and 5. Ground 1 concerns whether the Magistrate erred by depriving Ms Picos of procedural fairness or natural justice. Ground 2 is whether the Magistrate erred by dismissing the Local Court proceedings on the question of jurisdiction when it did not have the power to do so. Similarly, Ground 3 concerns whether the Magistrate erred by dismissing the proceedings on the court's own motion on the question of jurisdiction. Ground 4 is whether the Magistrate erred by determining an application for the dismissal of the proceedings when the matter was listed as a "Stay Application". Finally, Ground 5 concerns whether the Magistrate erred by entertaining Western Pacific's notice of motion dated 20 October 2017 in circumstances where it had not filed a notice of appearance and the time for filing such a notice had passed, and/or the matter had already been listed for allocation of a hearing date.
So far as grounds 20, 22 and 26 are concerned, Western Pacific submitted that ground 20 concerns factual findings in relation to the significance of the recall notice received by Ms Picos in New South Wales, ground 22 concerns factual findings in relation to whether the material elements of Ms Picos' claim arose in New South Wales; and finally, ground 26 concerns whether factual matters raised by Western Pacific were supported by the evidence or the pleadings. These are purely factual matters for which there is no right of appeal. Grounds of appeal 20, 22 and 26 are dismissed.

Was the Magistrate's decision an interlocutory one?

If the Magistrate's decision is an interlocutory one, Ms Picos requires leave to appeal pursuant to s 40(2) of the Local Court Act. The test for leave to appeal pursuant to s 40(2) is the same as the leave required that for a mixed fact and law pursuant to s 40(1) of the Local Court Act.
Ms Picos submitted that the decision of the Local Court is a final judgment.
Western Pacific submitted that the Magistrate's decision is an interlocutory one for which leave is required. Western Pacific referred to the decision of SZAJB v Minister for Immigration and Citizenship (2008) 168 FCR 410; [2008] FCAFC 75 ("SZAJB"), where French J (with Allsop and Tracey JJ agreeing) considered whether the dismissal of an application by the Federal Magistrates Court for want of jurisdiction was interlocutory or final. French J at [23] stated: "[23] Where a court holds that it lacks jurisdiction to entertain an application and that the application is to be dismissed as incompetent, the dismissal order effectively disposes of the proceedings in the court in which the application is brought. The order does not "finally dispose of the rights of the parties" in the sense necessary to characterise it as a final judgment. It simply means that the court in which the proceeding is brought lacks the authority to deal with it. It says nothing about the rights which the party seeks to vindicate. It may be that an application has been brought in the wrong court. So, an application may be brought in the Federal Magistrates Court which exceeds the subject matter value by which the relevant jurisdiction of that court is defined. An order dismissing the application as incompetent would not finally dispose of the rights of the parties to it. They would simply have to go somewhere else. Similarly, an application brought before the Federal Court may be dismissed as incompetent on the basis that it lies outside the jurisdiction conferred by statute upon this Court. In the case of judicial review proceedings it may be that the matter could be entertained in the High Court in the exercise of the original jurisdiction conferred upon it by s 75(v) of the Constitution. The character of the order dismissing an application as incompetent is illustrated by these examples. It does not for that reason alone decide the rights or liabilities in issue. There may be a case like Zoya Kosmodemyanskaya 79 FCR 71 where the finding of want of jurisdiction flows from a finding on the merits. So if the finding of want of jurisdiction depends upon findings of jurisdictional fact fatal to the merits of the claim, then it may be said to be a final judgment. However the order in this case was interlocutory in character. Leave is necessary before an appeal against it can be entertained."
Western Pacific submitted that the Magistrate's decision did not "finally dispose of the rights of the parties" in the sense necessary to characterise it as a final judgment. According to Western Pacific, the Magistrate's judgment said nothing about the rights which Ms Picos sought to vindicate. Nor does the finding against jurisdiction depend upon findings of jurisdictional fact that would be fatal to the merits of her claim. Ms Picos simply commenced her proceedings in the wrong jurisdiction and remains at liberty to commence the proceedings in another court which has jurisdiction. That is to say, she can simply "go somewhere else". (SZAJB, [23]).
In Bracks v Smyth-Kirk (2009) 263 ALR 522; [2009] NSWCA 401 ("Bracks"), McColl JA (with Allsop P and Young JA agreeing) at [19], [20] and [25] made the following observations about whether a summary dismissal order is final or interlocutory: "[19] Re Luck was applied in Macatangay v State of New South Wales (No 2) [2009] NSWCA 272 where the Court (Allsop P, Tobias JA and Handley AJA) struck out as incompetent an appeal from an order made by Grove J pursuant to UCPR 13.4 summarily dismissing the putative appellant's action for damages for negligence. In holding that the summary dismissal order was interlocutory, the Court said (at [11]): "11 The order of Grove J was interlocutory. This Court decided that in Wickstead v Browne (1992) 30 NSWLR 1 in dealing with the relevantly indistinguishable provisions of Part 13 of the then Supreme Court Rules, citing relevant decisions of the High Court and Privy Council: Hall v Nominal Defendant [1966] HCA 36; 117 CLR 423 at 440; ; Tampion v Anderson (1973) 48 ALJR 11 at 12. The order for dismissal may be seen to have a degree of finality in practical effect, but the test is whether it was final in legal effect: Carr v Finance Corporation of Australia Limited [No 1] [1981] HCA 20; 147 CLR 246 at 248; ; Bienstein v Bienstein [2003] HCA 7; 195 ALR 225 at [25]; ; Hi-Fert Pty Ltd v Kiukiang Maritime Carriers Inc (1998) 155 ALR 94 at 104-105. It was not final in legal effect because there was no triable issue, and it did not finally determine the rights of the parties or create res judicata estoppels. Whatever jurisprudential complexities lie behind the analysis, as the Privy Council made clear in Tampion v Anderson, clarity and consistency in approach is vital. The courts have had a consistent approach to the status of orders for, or to the effect of, summary dismissal since the 19th century: they are interlocutory. The High Court most recently reiterated this in In the Matter of An Appeal by Luck [2003] HCA 70; 78 ALJR 177 at 178-179, where the clear rule in Tampion v Anderson was expressly affirmed." [20] According to the line of authority reflected in Carr v Finance Corporation of Australia Limited [No 1] (see also Licul v Corney [1976] HCA 6; (1976) 180 CLR 213; Hall v Nominal Defendant) referred to in Macatangay (at [11]) an order is not final in legal effect if it is theoretically open to the disappointed person to make another application for the same relief as that disposed of by the order sought to be challenged, even if any later application would as a practical matter "be doomed to failure": Carr (at 248) per Gibbs CJ; Bienstein v Bienstein (at [25]) per McHugh, Kirby and Callinan JJ. In Gibbs CJ's view (Carr at 248), if a court looked at the practical rather than the legal effect of the judgment "the question whether a judgment is final or interlocutory would be even more uncertain than it is at the present", see also Mason J (at 256). … [25] Anshun (No 1) was not referred to in Re Luck (or in Bienstein v Bienstein which was followed in Re Luck). It was not referred to expressly in Macatangay although the principle for which it is authority was implicitly acknowledged in the Court's observation (Macatangay (at [11])) that the order in that case did not "create res judicata estoppels". Anshun (No 1) was referred to in Platypus Leasing Inc v Commissioner of Taxation [2005] NSWCA 399 (at [28]) in which McClellan CJ (Handley and Tobias JJA agreeing) held that an order dismissing a summons seeking declaratory relief to determine the claimants' taxation liability on the basis that the Court was precluded by s 59 of the Taxation Administration Act 1953 (Cth) from granting the relief sought, was interlocutory. The order did not finally dispose of the claimants' rights because they could still be pursued via the statutory route s 59 afforded. McClellan CJ at CL did not refer to Re Luck."
In accordance with Bracks, a distinction must be drawn between an order for dismissal which has a degree of finality in practical effect with an order that is final in legal effect. The Magistrate held that the Local Court lacked jurisdiction to entertain Ms Picos' application. The dismissal order effectively disposes of her proceedings in the Local Court. However, this order does not "finally" dispose of the rights of the parties in the sense necessary to characterise it as a final judgment. It simply means that the Local Court lacks the authority to deal with it. It follows that, while the Magistrate's decision to dismiss the proceedings was final in a practical sense, it did not constitute a final decision in legal effect. Ms Picos maintains her right to pursue her claim in the appropriate jurisdiction, being the Western Australian courts. Therefore, it is my view that the Magistrate's decision is an interlocutory one. That being so, Ms Picos requires leave to appeal.

Whether leave should be granted on questions of mixed fact and law?

At the hearing of this appeal and its motion seeking the appeal be dismissed as incompetent, Western Pacific submitted that all the grounds of appeal concern solely findings of fact for which there is no right of appeal or, alternatively, some of the grounds of appeal involve mixed fact and law and as such leave is required and it should be refused.
In Be Financial Pty Ltd as Trustee for Be Financial Operations Trust v Das [2012] NSWCA 164 ("Das"), the Court of Appeal set out the principles to be considered in deciding whether leave to appeal should be granted. Basten JA at [32], [33] and [35] stated: "[32] The principles governing cases such as these have recently been restated in Zelden v Sewell; Henamast Pty Ltd v Sewell [2011] NSWCA 56. As Campbell JA noted (with the agreement of Young JA) at [22]: 'It is of some importance to reiterate the principles that were stated in Carolan v AMF Bowling Pty Limited [1995] NSWCA 69, where Sheller JA said that an applicant for leave must demonstrate something more than that the trial judge was arguably wrong in the conclusion arrived at. Cole JA relied on a principle that where small claims are involved, it is important that there be early finality in determination of litigation, otherwise the costs that will be involved are likely to swamp the money sum involved in the dispute.' [33] In Jaycar Pty Ltd v Lombardo [2011] NSWCA 284 Campbell JA, with the agreement of Young and Meagher JJA, expanded on his summary of Carolan, noting that Kirby P had recognised 'that ordinarily it was appropriate to grant leave to appeal only concerning matters that involve issues of principle, questions of general public importance or an injustice which is reasonably clear, in the sense of going beyond [what is] merely arguable': at [46]. [34] Kirby P in Carolan set out a number of reasons for the constraint on rights of appeal in such cases. Not all of them have been repeated in later cases. Not all are universally relevant. Thus, the delay in obtaining a hearing in this Court appears to have been greater at that time than is the case presently, although an overly liberal approach to leave applications might well result in an increase in the period between filing and hearing. [35] In Coulter v The Queen [1988] HCA 3; 164 CLR 350, dealing with a challenge to a refusal of the South Australian Full Court to grant leave to appeal in a criminal matter, the majority noted that a leave requirement was a preliminary procedure 'recognised by the legislature as a means of enabling the court to control in some measure the volume of appellate work requiring its attention': at 356 (Mason CJ, Wilson and Brennan JJ). That statement is clearly applicable to civil, as well as criminal, appellate jurisdiction."
In Das, the Court of Appeal at [38] also noted the importance of s 60 of the Civil Procedure Act, which deals with proportionality of costs.
It is important to bear in mind that the requirement that an appellant seeking leave to appeal is intended to act as a filter to ensure that unsuitable appellate proceedings are not permitted to run where it would place an undue burden on the other parties, delays to other litigants and disproportionate demands on the resources of the court. In other words, it is a "control device": see Coulter v R (1988) 164 CLR 350; (1988) 76 ALR 365 at 371-372 per Deane and Gauldron JJ.
In Lee v New South Wales Crime Commission (2012) 224 A Crim R 94; [2012] NSWCA 262, the Court of Appeal considered the principles governing leave. Bathurst CJ (with Macfarlan and Barrett JJA agreeing) at [12] stated: "The principles upon which leave to appeal is granted are well established. Ordinarily it is only appropriate to grant leave concerning matters that involve issues of principle, questions of general public importance or where it is reasonably clear there has been an injustice in the sense of going beyond it being reasonably arguable that the primary judge was in error Carolan v AMF Bowling Pty Ltd [1995] NSWCA 69, Zelden v Sewell [2011] NSWCA 56 at [22] Javcar Pty Ltd v Lombardo [2011] NSWCA 284 at [46], GKD v Director-General Attorney-General v Department [2012] NSWCA 219 at [10], Be Financial Pty Ltd v Das [2012] NSWCA 164 at [32]-[34]."
Ms Picos understood that she required leave to appeal on questions of mixed fact and law as she amended her summons to seek leave to appeal at the commencement of the hearing. She submitted that leave to appeal should be granted for the following reasons.
Firstly, Ms Picos submitted that because the Local Court is a creature of statute, it does not have the power to dismiss the proceedings for want of jurisdiction under the UCPR, the Local Court Act or the Local Court Rules 2009 (NSW). Secondly, this is something that started in 2013 and is still going in 2018. Thirdly, the matter is "very serious, not trivial", "is significant", "huge", "it is massive". Fourthly, because she is a solicitor, personal insolvency could be ruinous to her. It is also significant to other people because the Local Court does not have power to dismiss proceedings and if she is correct then the Local Court needs to know this so it does not happen again to other people. Ms Picos says that if leave is not granted for her to appeal and it is dismissed with costs or without costs, then she would file a statement of claim in the registry and all that would achieve other than a waste of all of the resources, time, paper and that they would be "back here doing the same thing." Fifthly, although she is a solicitor, she is a vulnerable person. She says there is medical evidence that she is a person with a history of disability and it is in the interests of justice that this matter be finally determined as quickly as possible as it could adversely affect her health because it could take another six month, or a year or longer and that would be an injustice that should not be permitted. Sixthly, Ms Picos says that is it not just that the Magistrate was arguably wrong in dismissing the proceedings, it is in fact wrong and conclusively wrong. Again, the injustice is not arguable, it is in fact. (T16.13-38). Finally, Ms Picos pointed out that she had not been afforded a hearing on its merits. (T13.39).
Further, Ms Picos says that it is set out in the Service and Execution Act 1992 (Cth) that the proceedings should be stayed. (T11.32-40).
Western Pacific submitted that Ms Picos has failed to point to some other factor over and above any error in principle which the Local Court is said to have made which attends some relevant injustice or detriment. In the present circumstances it is difficult to discern such a factor, or even speculate upon a hypothetical element of injustice. In this respect, the relevant injustice is not reasonably clear. Western Pacific also submitted that Ms Picos has not established that the Magistrate was arguably wrong. Mercedes Benz Financial additionally submitted that Ms Picos also retains the right "simply to go elsewhere" as the Local Court did not dispose of her substantive rights.
It is my view that the present appeal involves no issue of principle. Nor does it involve a matter of general public importance or public interest. While Ms Picos argues that the Local Court needs to be aware of whether it can dismiss a proceeding "so that it does not happen again to other people", the Magistrate's decision is not arguably wrong. The amount in dispute (being an amount of just over $10,000) is also relatively small. These proceedings have already taken up a day of the Local Court's time and half a day of this Court's time. Care must be taken to ensure that the costs of this litigation do not swamp the value of the litigation: see Carolyn v AMF Bowling Pty Limited t/as Bennetts Green Bowl [1995] NSWCA 69 and Zelden v Sewell; Henamast Pty Ltd v Sewell [2011] NSWCA 56. Also, Ms Picos is not prohibited from having a trial on its merits because if she elects to do so, she can commence proceedings in the correct jurisdiction.
For these reasons, in the exercise of my discretion, I refuse leave to appeal on the basis it is an interlocutory decision and those grounds of appeal that raise questions of mixed fact and law fail. Hence, the appeal should be dismissed.
If I am wrong and leave to appeal is not required, I will consider grounds (1), (2), (3), (4) and (5), which I think raise questions of law.

Procedural fairness (ground 1)

This ground of appeal concerns whether Ms Picos received procedural fairness or natural justice.
Ms Picos submitted that she had sought to amend her claim but her leave to amend went underdetermined as the Magistrate dismissed the proceedings on the basis of jurisdiction. This resulted in her claim being dismissed without a full awareness of what her causes of action were and therefore there was no hearing on the merits. During the hearing, Ms Picos confirmed her submission that she did not receive a hearing on the merits because Western Pacific never filed a defence and her application to amend remained undetermined. This meant the parties and the court could not properly submit that no material part of the cause of action arose in New South Wales as the parties and the Court did not know what the causes were. In other words, Ms Picos says that "the shape of [her] claim [had] to be settled before any determination was made". (T13.39-45).
Western Pacific submitted Ms Picos has not explained why she did not receive procedural fairness or natural justice.
In my view, Ms Picos has not shown that she was deprived of procedural fairness in the Local Court. Jurisdiction is a preliminary matter that should be determined first. The Local Court is a creature of statute and this issue was appropriately considered by the Magistrate following Western Pacific's application. The Magistrate was not required to first deal with Ms Picos' application for leave to amend her statement of claim before dealing with an application concerning jurisdiction.
Even if Ms Picos had been permitted to amend her claim, it does not follow that the Local Court would then gain jurisdiction to hear the matter. This ground of appeal fails.

Jurisdiction (grounds 2, 3, 4 and 5)

These grounds of appeal concern whether the Local Court had jurisdiction to dismiss Ms Picos' claim.
Ms Picos submitted that the Local Court is an inferior Court and, as a creature of statute, was not empowered to dismiss any claim other than summarily or on the merits. She says that the Local Court does not have the power to dismiss claims for want of jurisdiction. Therefore, if her claim had been dealt with on the question of jurisdiction, the required order would have been to stay the proceedings. She also submitted that the Australian Consumer Law, specifically ss 54(2)(d), 259(2), 260E, 263(4) and 278, provided the Court with adequate jurisdiction to hear her claim on its merits.
During the hearing, Ms Picos further submitted that, in any event, Western Pacific had submitted to New South Wales jurisdiction by making an application in the Local Court for a stay of proceedings. In its notice of motion, Western Pacific sought an order that the proceedings be stayed pursuant to UCPR 12.11(1)(g), or in the alternative, s 67 of the Civil Procedure Act 2005 (NSW). Ms Picos submitted that Western Pacific's reliance upon the Civil Procedure Act constituted a submission to the jurisdiction of New South Wales.
Western Pacific submitted that Ms Picos did not identify any basis for her submission that the Local Court did not have power to dismiss the proceedings on the question of jurisdiction. Nor is there an appealable error in the Magistrate dismissing proceedings when the matter was listed for hearing as a "Stay Application". Western Pacific's position was that the Local Court had no jurisdiction to hear Ms Picos' claim and this was made clear at directions, in the Local Court motion, in Western Pacific's submissions in support of its motion, and from the argument in the Local Court hearing.
During the hearing, Mercedes Benz Financial submitted that the operation of the Australian Consumer Law does not engage or effect the exercise of the Local Court's jurisdiction. Nor does s 39(2) of the Judiciary Act 1903 (Cth) extend the jurisdiction of the Local Court to hear claims failing under the Australian Consumer Law when the jurisdictional threshold provision of s 34 of the Local Court Act has not been satisfied.
Earlier in this judgment, I set out the provisions of s 34 of the Local Court Act. The issue before the Magistrate was whether the Local Court had jurisdiction to hear and determine proceedings with respect to a cause of action where part of the cause of action arose outside New South Wales, so long as a material part of the cause of action arose within New South Wales. Her Honour decided it did not for the reasons set out earlier in this judgment.

Local Court's Jurisdiction

Section 39 of the Judiciary Act provides: " Federal Jurisdiction of State Courts in other matters … (2) The several Courts of the States shall within the limits of their several jurisdictions, whether such limits are as to locality, subject-matter, or otherwise, be invested with federal jurisdiction, in all matters in which the High Court has original jurisdiction or in which original jurisdiction can be conferred upon it, except as provided in section 38, and subject to the following conditions and restrictions: (a) A decision of a Court of a State, whether in original or in appellate jurisdiction, shall not be subject to appeal to Her Majesty in Council, whether by special leave or otherwise. (b) Special leave to appeal from decisions of State Courts though State law prohibits appeal (c) The High Court may grant special leave to appeal to the High Court from any decision of any Court or Judge of a State notwithstanding that the law of the State may prohibit any appeal from such Court or Judge."
In Ly and Another v Jenkins and Others [2001] FCA 1640 ("Ly"), Sackville J considered the effect of s 39(2) of the Judiciary Act on State courts. At [56], [70], [71], [72], [87] and [88] his Honour stated: "56 Section 132(8) of the Copyright Act confers jurisdiction on the Federal Court to hear and determine prosecutions for offences against s 132. In the case of State courts, the possible sources of jurisdiction to hear and determine prosecutions for an offence under s 132(2A) of the Copyright Act are ss 39(2) and 68(2) of the Judiciary Act. Sections 39(2) and 68(1), (2) and (3) of the Judiciary Act provide as follows: "39(2) The several Courts of the States shall within the limits of their several jurisdictions, whether such limits are as to locality, subject-matter, or otherwise, be invested with federal jurisdiction, in all matters in which the High Court has original jurisdiction or in which original jurisdiction can be conferred upon it, except as provided in section 38, and subject to the following conditions and restrictions: … 70 It is "accepted constitutional doctrine" that the Commonwealth, when it invests judicial power of the Commonwealth in a State court, must take that court constituted and organised from time to time: Kable v Director of Public Prosecutions (NSW) (1996) 189 CLR at 67, per Brennan CJ. The doctrine was stated by Knox CJ, Rich and Dixon J in Le Mesurier v Connor (1929) 42 CLR 481 at 496, as follows: "[T]he power is to confer additional judicial authority upon a Court fully established by or under another legislature. Such a power is exercised and its purpose is achieved when the Parliament has chosen an existing Court and has bestowed upon it part of the judicial power belonging to the Commonwealth. To affect or to alter the constitution of the Court itself or of the organization through which its jurisdiction and powers are exercised is to go outside the limits of the power conferred and to seek to achieve a further object, namely, the regulation or establishment of the instrument or organ of Government in which judicial power is invested, an object for which the Constitution provides another means, the creation of the Federal courts." 71 Mr Roberts, in his oral submissions, seemed to suggest that this doctrine renders the Commonwealth constitutionally incapable of altering the jurisdictional limits of a State court by investing that court with federal jurisdiction. This is not so. The position was explained by Latham CJ in Peacock v Newtown Marrickville & General Co-operative Building Society No 4 Ltd (1943) 67 CLR 25 at 37: "This is a power to give new, additional, jurisdiction to State courts. The Parliament may select such State courts as it pleases. It may give them much or little new jurisdiction. It may make the jurisdiction as wide or as narrow as it pleases with respect to persons, localities or amounts involved; or, as in the Judicial Act, s 39, it may allow the State law to operate in respect of such matters. But the State court must be taken as it exists. The constitution or structure of the court cannot be changed by the Federal Parliament." (Emphasis added). Parliament may therefore affect the functions of a State court, but the "court's organization and constitution are inviolate": Russell v Russell (1976) 134 CLR 495 at 531, per Stephen J; Adams v Chas S Watson Pty Ltd (1938) 60 CLR 545 at 554-555 per Latham CJ; at 559 per Stark J; at 560 per Dixon . 72 An illustration of the power of Parliament to affect the functions of a State court is provided by s 68(5) of the Judiciary Act, which states that the jurisdiction conferred on a court of a State by s 68(2) is conferred "notwithstanding any limits as to locality of the jurisdiction of that court under the law of that State": see R v Bull (1974) 131 CLR 203 at 275, per Mason J. Another illustration is s 15C of the Acts Interpretation Act 1901 (Cth), which provides as follows: "Where a provision of an Act, whether expressly or by implication, authorizes a civil or criminal proceeding to be instated in a particular court in relation to a matter: (a) that provision shall be deemed to vest that court with jurisdiction in that matter; (b) except so far as the contrary intention appears, the jurisdiction so vested is not limited by any limits to which any jurisdiction of the court may be subject; …" Section 15C appears not to apply to s 39(2) or 68(2) of the Judiciary Act, since neither provision authorises proceedings to be instituted in a "particular court". If, however, a Commonwealth law does authorise proceedings to be instituted in a particular court, s 15 C makes it clear that the law, subject to any contrary intention, will vest jurisdiction in that court regardless of the limits of its jurisdiction under State law. … 87 In Commonwealth v Dalton (1924) 33 CLR 452, the question was whether the Tasmanian Court of Requests had jurisdiction to make a garnishee order against the Commonwealth…Their Honours addressed the significance of the words "within the limits of their several jurisdictions" in s 39(2) (at 456): "To find the limits of the jurisdiction of a State Court, we have to examine its constitution, which determines its character, the subject matter with which it is authorized to deal, the locality within which it may act or in respect of which it may adjudicate, the persons over whom its authority extends, and any other prescribed regulations limiting its exercise of judicial power. The totality of these provisions mark out the area of curial jurisdiction and therefore define the limits of the jurisdiction as adopted by the Federal Parliament for the purposes of Federal jurisdiction. The Federal jurisdiction conferred by sec 39(2) automatically covers the area occupied by State jurisdiction so adopted, and does not exceed those limits." … 88 In Commonwealth v District Court of Metropolitan District (NSW), it was held that s 39(2) of the Judiciary Act is an ambulatory provision. The Court (Dixon CJ, Kitto and Taylor JJ) observed (at 20) that s 39(2) had always been: "… regarded as ambulatory and consequently as operating upon State courts whether constituted before or after the commencement of the Judiciary Act and upon State jurisdiction according to the definition thereof under State law in forced from time to time. The view that has been tacitly accepted is that the expression "within the limits of their several jurisdictions" refers to the limits imposed by the relevant State law in operation from time to time whether enacted before or after the commencement of the Judiciary Act."
In accordance with Ly, the reference to "the limits of the relevant jurisdictions" in s 39(2) of the Judiciary Act refers to the limits imposed by the relevant State or Territory law in operation. The Commonwealth must also take a State court as it is constituted and organised from time to time when investing it with Commonwealth judicial power: see Kable v Director of Public Prosecutions (NSW) (1996) 189 CLR 51 per Brennan CJ at 67.
The relevant State law governing the Local Court's jurisdiction in the present proceedings is s 34 of the Local Court Act. Section 39(2) of the Judiciary Act therefore does not operate to extend the Local Court's jurisdiction over the Australian Consumer Law where the requirements set out in s 34 of the Local Court Act have not been satisfied. The mere fact that a claim is based upon a Commonwealth Act will not automatically result in the Local Court of New South Wales having jurisdiction to hear it.
Ms Picos referred to the High Court of Australia's decision of Wardley Australia Ltd v Western Australia (1992) 175 CLR 514 ("Wardley") as authority for extending the jurisdictional ambit of the Local Court. This authority here does not support Ms Picos' contention. Wardley is a decision which considered a limitation period and the date on which loss or damage was incurred: see Wardley per Mason CJ, Dawson, Gaudron and McHugh JJ at 253-254. Accordingly, it cannot be relied upon for the purposes of establishing jurisdiction under the Local Court Act.
In my view, the Magistrate correctly decided that Ms Picos' claim under s 54 of the Australian Consumer Law did not possess the requisite nexus to New South Wales to satisfy the jurisdictional threshold of s 34 of the Local Court Act. As a consequence, the Local Court did not have jurisdiction to hear Ms Picos' claims. I turn now to consider whether the Magistrate had the jurisdiction to dismiss proceedings which were outside its jurisdiction (Grounds 2, 3, 4, and 5).

The Local Court's power to dismiss proceedings for want of jurisdiction

UCPR 12.11 reads: "12.11 Setting aside originating process etc (cf SCR Part 11, rule 8) (1) In any proceedings, the court may make any of the following orders on the application of a defendant: … (g) an order declaring that the court has no jurisdiction over the defendant in respect of the subject-matter of the proceedings, (h) an order declining to exercise jurisdiction in the proceedings, (i) an order granting such other relief as the court thinks appropriate. ..."
UCPR 12.11 applies to Local Court proceedings pursuant to Schedule 1, which provides that the UCPR rules apply to claims falling within Part 3 of the Local Court Act, being civil claims in the Local Court's general jurisdiction.
Section 34 of the Local Court Act does not expressly refer to the power of the Local Court to dismiss proceedings for want of jurisdiction. It is my view that the effect of the interplay between s 34 and UCPR 12.11 requires the Local Court to consider jurisdiction as a preliminary issue. If it finds that it does not possess jurisdiction over a particular claim, it is permitted to declare it has no jurisdiction, decline to exercise that jurisdiction, or make any other order granting such other relief as it thinks is appropriate.
The Magistrate made an order to dismiss the statement of claim on the basis that the Court lacked jurisdiction to entertain it. Such an order was within the Court's power either as a consequence of making a finding that it has no jurisdiction over the subject matter under UCPR 12.11(1)(g), or alternatively, as an order granting such other relief as it thinks appropriate under UCPR 12.11(1)(i). My conclusion is supported in principle by the Federal Court's decision of SZAJB (referred to earlier in this judgment), in which a dismissal order was made by the Federal Magistrates Court under s 477 of the Migration Act 1958 (Cth) for want of jurisdiction. The decision is persuasive on the basis that the Federal Magistrates Court is also a creature of statute and also concerned a similar application for dismissal on the grounds of lack of jurisdiction.
Grounds 1, 2, 3, 4 and 5 of this appeal fail. Section 34(3) of the Local Court Act specifies that the defendant incudes, if there are two or more defendants, any one if these defendants. Hence, as the matter is dismissed it is dismissed against both defendants.
As the proceedings against both defendants have been dismissed and are at an end, I cannot make an order to transfer the proceedings to the Equity Division, even if it was otherwise the correct jurisdiction.
Costs are discretionary. Ms Picos asked that costs be reserved. Normally, costs follow the event. As Ms Picos was unsuccessful in her appeal, she should pay the defendants' costs of the appeal. If Ms Picos seeks a different order for costs, she should contact the parties and my Associate notifying them of her intention to make submissions that a different order be made within 14 days. I will provide a timetable for written submissions. If no notification is received within 14 days, the order for costs is confirmed.

The Court orders that: 1. Leave to appeal is refused. 2. The decision of her Honour Magistrate Keogh dated 22 November 2017 is affirmed. 3. The amended summons dated 18 December 201 is dismissed. 4. The plaintiff is to pay the defendant's costs on an ordinary basis. If the plaintiff seeks a different order for costs, she should contact the parties and my Associate notifying them of her intention to make submissions that a different costs order be made within 14 days. If notification is not received within 14 days, the order for costs is confirmed.

Amendments 14 May 2018 - Pursuant to UCPR 36.17 Order (3) made on 30 April is amended by adding the word "amended" and deleting "10 March 2018" and adding "18 December 2018" 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: 14 May 2018

Service and Execution Act 1992(Cth)

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