Ryan v The Council of the City of Sydney

Local Court Proceedings

1. On 26 May 2017, the Council commenced proceedings against Mr Ryan for the recovery of outstanding rates and charges in the sum of $1,059.37 relating to a property at Alexandria, of which he was the registered proprietor.
2. The proceedings were commenced in the Small Claims Division of the Local Court. The reason for this was that the sum of money being claimed fell within the jurisdiction of the Small Claims Division.
3. On 17 August 2017, Mr Ryan filed a Motion seeking to have the matters permanently dismissed or: "… at least move these proceedings into a court sitting under Chapter 3 of the Commonwealth Constitution - observing all provisions in front of lawfully appointed justices with allegiance to the Crown - being Queen Elizabeth II. Not a fictitious entity like the Queen of Australia".
4. Mr Ryan argued that he did not recognise (and rejected) the validity of the Local Court, and that the matter could only be heard by a court of federal jurisdiction.
5. On 11 October 2017, that Motion was, unsurprisingly, dismissed. On 25 October 2017, default judgment was entered against Mr Ryan in the Local Court. The judgment, inclusive of costs, was for a total of $1,841.57.
6. On 3 November 2017, Mr Ryan filed a Notice of Motion seeking to set aside the default judgment. The affidavit in support of that application was in the following form: "1. I am the defendant and I reject the claims made by the plaintiff [the Council of the City of Sydney] with respect to HCA ruling HCA 11 [2015]. Made with reference to section 51 ss xx of the Commonwealth Constitution - about trading corporations or corporations. I do not have a contract with the plaintiff and contracts cannot be forced. 2. I do not recognise and so reject the authority of a court that does not sit under the provisions of Chapter 3 of the Commonwealth Constitution. Making ref to HARRIS V CALADINE (1991) 172 CLR 84 17 April 1991. 3. And all courts, magistrates, justices, judges must be impartial. 4. I don't see how I can have a fair/impartial/unbiased hearing in front of a magistrate that swears their oath of allegiance to 'the Queen of Australia' being a fictitious entity created by the Labour Party in 1986 - or thereabouts - in a court that is trading/set up as some kind of corporation when I am fighting against a corporation that purports to be government." (sic)
7. No other form of proposed defence was filed, or attached to an affidavit.
8. On 11 December 2017, the plaintiff filed a document called "a Notice of a Constitutional matter under s 78B of the Judiciary Act 1903". It was filed in the Local Court with a cover titled "Amended Defence". It nominated that it was filed in the Federal Court of Australia. The notice of constitutional matter seemed to raise three fundamental issues. They were: "(1) The Council of the City of Sydney is not a local government under the Local Government Act in the Federal Constitution; (2) Local government is constitutionally a state government and a state government does not have the right to tax private property; (3) Constitutionally, the state Parliament can create companies/corporations but not empower them."
9. The Notice of Motion seeking to set aside the judgment was heard in the Local Court (Walsh LCM) at Sutherland on 13 December 2017. His Honour received submissions from the plaintiff, who represented himself, and from the solicitor representing the Council.
10. At the conclusion of the hearing, a judgment was delivered and the Notice of Motion was dismissed. That order was formalised by the Registrar of the Local Court on 16 February 2018, when it was entered.
11. These proceedings are brought by way of appeal, or application for leave to appeal, in respect of that judgment and order. I note that neither party has put before the Court the judgment delivered by the Magistrate giving his reasons for the orders that were made.

Relevant Legislation

1. The Local Court is a court of statutory jurisdiction constituted by s 7 of the Local Court Act 2007 ("the LCA").
2. Section 10 of the LCA divides the civil jurisdiction of the Court into the General Division and the Small Claims Division. Section 29 of the LCA provides that the jurisdictional limit of the Court, when sitting in its Small Claims Division, is $10,000. Plainly, the claim by the Council against Mr Ryan fell within the monetary limit of the Small Claims Division.
3. There are limited rights of appeal from the Local Court. Section 39 provides for appeals as of right. It is in the following form: "39 Appeals as of right (1) A party to proceedings before the Court sitting in its General Division who is dissatisfied with a judgment or order of the Court may appeal to the Supreme Court, but only on a question of law. (2) A party to proceedings before the Court sitting in its Small Claims Division who is dissatisfied with a judgment or order of the Court may appeal to the District Court, but only on the ground of lack of jurisdiction or denial of procedural fairness."
4. Section 40 of the LCA provides that leave may be obtained from the Supreme Court to appeal to it on a ground that involves a question of mixed law and fact. Such appeal only lies from the Court sitting in its General Division. Section 40 does not provide for any appeal, whether by leave or by right, from the Small Claims Division of the Local Court to the Supreme Court.
5. Part 50 of the UCPR applies to appeals to the Supreme Court from, amongst other Courts, the Local Court. The provisions of Part 50, which do not need to be set out here, make it plain that the jurisdiction of this Court to hear an appeal is to be found from legislative provisions outside of Part 50. Putting it differently, Part 50 does not give this Court any jurisdiction with respect to an appeal. Rather, it provides for the procedure to be followed in the event that an appeal is able to be instituted.
6. Rule 50.4 of the UCPR requires an appellant to specify whether the appeal relates to the whole, or partly only, and what part, of the decision of the Court below, and what decision the plaintiff seeks in place of the decision of the Court below. The Summons in this case does not address these requirements.

Mr Ryan's Submissions

1. In oral submissions before this Court, Mr Ryan argued, in essence, that he had three grievances with the decision below, and the conduct of the Council.
2. First, Mr Ryan contended that the Council had failed to respond adequately to his enquiries about the rate notice which he called an invoice. He submitted that although he requested further information and evidence to support the invoice he had received, he did not obtain any response to his queries. Rather, the Council responded by commencing proceedings seeking to recover the overdue rates and legal costs.
3. Secondly, Mr Ryan contended that both the LCA and the Local Government Act 1993 ("the LGA") are invalid, and therefore, he is entitled not to pay the sum charged as purported Council rates. Mr Ryan based this submission on his reading of s 106 of the Commonwealth Constitution, which provides: "The Constitution of each State of the Commonwealth shall, subject to this Constitution, continue as at the establishment of the Commonwealth, or as at the admission or establishment of the State, as the case may be, until altered in accordance with the Constitution of the State."
4. Mr Ryan submitted that the phrase "subject to this Constitution" renders the NSW Government incapable of validly legislating to create Local Government Authorities and Local Courts. In oral submissions, Mr Ryan further argued that State Constitutions are repugnant to the Commonwealth Constitution and therefore "have no authority."
5. Thirdly, Mr Ryan submitted that the original claim in the Local Court, and the present Summons, were matters of federal jurisdiction and, accordingly, the only courts with jurisdiction were "Chapter III courts". Mr Ryan equated these courts with federal courts. He contended that when his case was heard in the Small Claims Division, his right to be heard in a "proper court with federal jurisdiction" was accordingly denied.
6. The result of these three submissions was that Mr Ryan argued that his appeal ought be upheld and the original Local Court proceedings should be dismissed.

The Council's Submissions

1. The Council submitted that the proceedings brought by Mr Ryan in this Court are hopeless and must fail, because this Court has no jurisdiction to deal with any form of appeal from the Small Claims Division of the Local Court. Counsel pointed to the provisions of 39 of the LCA and submitted that the only right of appeal that any party to proceedings in the Small Claims Division of the Local Court has is to the District Court. Even then, such an appeal is limited by s 39(2) to two grounds, namely: 1. lack of jurisdiction; or 2. denial of procedural fairness.
2. On this issue, counsel for the Council referred to the remarks of Adamson J in Singh v Owners - Strata Plan 1173 [2012] NSWSC 519 at [31], where her Honour noted that the Court had: "no jurisdiction to appropriate to itself jurisdiction which Parliament has expressly conferred on another court."
3. Given the absence of jurisdiction and, as well, that the terms of the Summons do not raise any reasonable cause of action and are obviously untenable, the Council submitted that the Court would summarily dismiss the proceedings.

Relevant Legal Principles: Summary Dismissal

1. In light of the orders sought in the Notices of Motion filed by the Council in these proceedings, it is convenient to set out the legal principles applicable to summary dismissal of proceedings.
2. I have set out these principles in a number of earlier judgments. It is useful here to repeat what I have written in, among other judgments, ANZ Banking Group Ltd v Evans [2016] NSWSC 1742; Gillies v Eastlake [2014] NSWSC 611; Hopkins v Governor General of Australia [2013] NSWSC 1068; Mahaffy v Mahaffy [2013] NSWSC 245; Young v Hones [2013] NSWSC 580; and Rahman v Dubs [2012] NSWSC 1065.
3. Under r 13.4 of the UCPR, the Court is entitled to make an order for summary dismissal where it is satisfied that: 1. the proceedings are vexatious or frivolous; or 2. no reasonable cause of action is disclosed; or 3. proceedings are an abuse of the process of the Court.
4. Making such an order involves the exercise of a discretion. It is well settled that in exercising any power given to the Court under the UCPR, the Court is obliged to further the overriding purpose which is set out in s 56 of the Civil Procedure Act 2005. That overriding purpose obliges the Court to facilitate the just, quick and cheap resolution of the real issues in the proceedings.
5. In addition to the general overriding purpose which must guide my discretion, specific principles apply to summary dismissal.
6. The test to be applied by a court when considering whether to summarily dismiss proceedings has been clearly established by the High Court. The following principles will guide the Court's judgment: 1. every litigant, prima facie, has the right to have all matters of law and fact decided at a hearing. The Court should not exercise its power to deprive a litigant of that right unless the plaintiff's claim is so obviously untenable that it cannot possibly succeed: Burton v Shire of Bairnsdale [1908] HCA 57; (1908) 7 CLR 76 at 92, per O'Connor J; 2. before summary disposal can be justified, the case must be a very clear one, in which there is no real question of fact or law to be determined at a final hearing: Dey v Victorian Railway Commissioners [1949] HCA 1; (1949) 78 CLR 62 at 91, per Dixon J; 3. the applicable test when considering summary dismissal of an action has been variously expressed as "hopeless", "so obviously untenable that it cannot possibly succeed", "manifestly groundless", or "so manifestly faulty that it does not admit of argument": General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69; (1964) 112 CLR 125 at 128-9; 4. the exercise of power to summarily terminate proceedings requires the Court to have a high degree of certainty about the ultimate outcome of the proceedings if it were allowed to go to trial in the ordinary way, and must be approached with great caution: Agar v Hyde [2000] HCA 41; (2000) 201 CLR 552 at [57] per Gaudron, McHugh, Gummow and Hayne JJ; Spencer v The Commonwealth of Australia [2010] HCA 28; (2010) 241 CLR 118 at [24], per French CJ and Gummow J.

Discernment

1. It cannot be doubted that the Small Claims Division had jurisdiction to hear and determine the Council's proceedings claiming a monetary judgment for unpaid rates. Whether the Council succeeded or not was a matter which fell within, and not outside of, the jurisdiction of the Small Claims Division of the Local Court.
2. Secondly, there is no suggestion in the Summons lodged in this Court, or in any other document, that the plaintiff was not accorded procedural fairness with respect to the hearing and determination of the Motion which is the subject of the present complaint.
3. Whilst it may be accepted that some latitude may be provided to the plaintiff as he is a litigant in person, and the Court is empowered to waive any requirement of the UCPR with respect to the documents that he has filed, it is necessary to keep in mind the remarks of Lord Sumption (with whom Lord Wilson and Lord Carnwath agreed) in Barton v Wright Hassall LLP [2018] UKSC 12, where at [18], his Lordship said: "In current circumstances, any court will appreciate that litigating in person is not always a matter of choice. … Some litigants may have little option but to represent themselves. Their lack of representation will often justify making allowances in making case management decisions and in conducting hearings. But it will not usually justify applying to litigants in person a lower standard of compliance with rules or orders of court. … The rules provide a framework within which to balance the interest of both sides. That balance is inevitably disturbed if an unrepresented litigant is entitled to greater indulgence in complying with them than his represented opponent. Any advantage enjoyed by a litigant in person imposes a corresponding disadvantage on the other side, which may be significant if it affects the latter's legal rights … Unless the rules and practice directions are particularly inaccessible or obscure, it is reasonable to expect a litigant in person to familiarise himself with the rules which may apply to any step which he is about to take."
4. These remarks are apt to also apply to the need for all litigants in this Court to identify the powers which the Court has pursuant to statute.
5. Similar principles have been expressed in decisions of the NSW Court of Appeal. In Malouf v Malouf [2006] NSWCA 83; (2006) 65 NSWLR 449, Mason P noted at [94] that: "[t]he restraints upon judicial intervention stemming from the adversary tradition are not relevantly qualified merely because one of the litigants is self‑represented."
6. Bryson JA similarly remarked at [183]: "Courts should not go so far in accommodating the positions of unrepresented litigants as to make it an advantageous procedural step to dismiss one's lawyers, or to retain none. ... Without procedure, procedural directions and compliance, justice will not be done at all. …The compliant also have an entitlement to consideration, and their compliance should not be disregarded, or mocked, by treating their opponent's obligation to comply with the court's directions as less than important, or as superfluous."
7. In Reisner v Bratt & Anor [2004] NSWCA 22 per Hodgson and Ipp JJA, Hodgson JA at [4] also addressed the content of the Court's duty to litigants in person: "Parties are entitled to appear unrepresented in proceedings in the Court, and sometimes, because of lack of funds or other reasons, they have no alternative. The Court has the duty to give such persons a fair hearing, and it may be appropriate for the Court to give some assistance to such persons in order to fulfil that duty. However, the Court hearing a case between an unrepresented litigant and another party cannot give assistance to the unrepresented litigant in such a way as to conflict with its role as an impartial adjudicator."
8. Put simply, while the Court has a duty to treat litigants in person fairly and to hear their arguments fully, the Court may not indulge the litigant with special treatment in a way that disfavours their opponent.
9. The Court is also entitled to expect that litigants in person will have regard to the issues of what jurisdiction this Court has before embarking on what is demonstrably hopeless litigation.
10. The first matter raised by Mr Ryan at [24] above, does not give rise to any legal defences. It may have been prudent or courteous for the Council to address Mr Ryan's questions, but it was under no legal obligation so to do. Such a failure does not constitute a defence to the Council's claim for unpaid rates.
11. The second argument relied upon by Mr Ryan depends on an entirely erroneous interpretation of the Commonwealth Constitution, and the lack of an accurate understanding of the legislative power of a parliament of the State.
12. Section 5 of the Constitution Act 1902 (NSW) provides that the NSW legislative shall have power to make laws for the peace, welfare and good government of New South Wales. That power is expressed to be subject to the provisions of the Commonwealth Constitution. In Union Steamship Company of Australia Pty Ltd v King [1988] HCA 55; (1998) 166 CLR 1, the High Court of Australia in dealing with this power of the legislature, described it as a plenary power which "… is as ample and plenary as the power possessed by the Imperial Parliament itself". The High Court said that the words "peace, welfare and good government" were not to be understood as words of limitation, and that the courts of a state could not strike down or invalidate laws because it formed the opinion that the legislation did not promote or secure the peace, order and good government of the State.
13. The creation of Local Government Authorities and a state-based court system are both within the plenary power of a state legislature. No provision of the Commonwealth Constitution, and certainly not s 106, as Mr Ryan submitted, prevents a state legislature from undertaking such tasks. It was not contended that the LGA and the LCA were not real laws for the peace, welfare and good government of New South Wales as they plainly are.
14. There is no merit in this second ground.
15. The third argument of Mr Ryan was that his matter involved federal jurisdiction and, accordingly, could only be heard and determined by a Chapter III court. He submitted that the Local Court did not fall within that description, nor did it have the ability to exercise federal jurisdiction. This submission is clearly mistaken in a number of respects. First, the proceedings did not involve the exercise of any federal jurisdiction at all. Federal jurisdiction is the authority to exercise the judicial power of the Commonwealth. The proceeding here involved a claim by the Council under a New South Wales law against a New South Wales resident. The judicial power of the Commonwealth was simply not engaged.
16. Secondly, even if the matter did involve federal jurisdiction, and it did not, the Local Court had jurisdiction to hear and dispose of it. Section 71 of the Commonwealth Constitution permits state courts to be invested with federal jurisdiction by the Commonwealth Parliament. Section 39(2) of the Judiciary Act 1903 invests "… the several Courts of the State" with federal jurisdiction within the limits of their own jurisdictions. Accordingly, the Local Court was properly seized with jurisdiction to hear the matter.
17. Thirdly, no federal court had exclusive jurisdiction to deal with the proceedings. This was a claim for a monetary judgment arising from an obligation of Mr Ryan to pay his local council rates. It was not a matter within the jurisdiction of any federal court, let alone within the exclusive jurisdiction of any federal court.
18. The third argument is without any substance at all.
19. The documents filed in the Local Court did not disclose, as a matter of fact, that Mr Ryan had any defence to the claim for outstanding rates. It follows that the dismissal of the Notice of Motion was plainly and inarguably correct.
20. In conclusion, it is appropriate to note that the Summons in this case did not engage the Court's jurisdiction pursuant to s 69 of the Supreme Court Act 1970. Even if it had, and it did not, having regard to the very small sum of money involved and the underlying hopelessness of the arguments which the plaintiff seeks to raise, which are frankly nonsensical, it is most unlikely that the Court would have granted any relief pursuant to this provision.
21. I now turn to the defendant's Motion. The plaintiff's Summons discloses no reasonable cause of action. The grounds pleaded are unintelligible and refer to a miscellaneous array of sections from the Commonwealth Constitution and the Judiciary Act 1908 which have no relevance in light of the nature of the plaintiff's matter in the Small Claims Division of the Local Court. It is very clear that this is a case which entirely justifies the exercise of the power of summary dismissal.

Conclusion

1. In summary, I am entirely satisfied of the following matters: 1. the plaintiff had no rational, reasonable or sensible defence to the claim by the Council in the Small Claims Division of the Local Court; 2. judgment was properly entered, and equally properly the Magistrate declined to set aside that judgment; 3. the plaintiff had a limited right of appeal to the District Court of NSW - he chose not to exercise it; 4. this Court has no jurisdiction to hear the appeal which the plaintiff asserts that it does; 5. even if it did, the content of the Summons, the grounds relied upon as a basis for the appeal are nonsense and demonstrates as a matter of law, that Mr Ryan's claim in this Court is entirely without merit; 6. these proceedings are manifestly hopeless and ought be dismissed.

Orders

1. I make the following orders: 1. Summons filed 9 January 2018 is dismissed. 2. Order the plaintiff to pay the Council's costs on an indemnity basis.

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: 09 March 2018