Before the Court for final hearing today was a claim by the plaintiff company against the remaining defendant, Ms Yvette Prole, relating to a guarantee signed by Ms Prole, it appears, in relation to the liability of a company to the plaintiff.
At the commencement of the hearing, the Court raised with the parties the question of the jurisdiction of the Court to hear the matter. It is the obligation of any court to consider first whether it has jurisdiction to determine a matter. That obligation arises even if the parties do not raise the jurisdiction question.
The question raised by the Court related to the jurisdiction of the Court to consider not the matters in the Statement of Claim but the matters raised in the Cross-Claim by the cross‑claimant/third defendant, which was filed on 10 December 2019. If one looks at the prayers for relief in the Cross-Claim, it will be seen that the first four prayers relate to declaratory relief, including seeking a declaration that the guarantee and indemnity in question was unconscionable and procured by unconscionability and, secondly, in paragraphs 5 and 6, orders in the nature of mandatory injunctions. Unconscionability is an equitable remedy: that is made clear in paragraph 16‑015 of the 5th Edition of Meagher, Gummow and Lehane on Equity.
The claim of the cross-claimant in the present case essentially relates to what is sometimes called an alleged "catching bargain". It would appear that the third defendant relies on the general principles stated in Garcia v National Australia Bank Ltd [1998] HCA 48; (1998) 194 CLR 395. In Hume Plasterboard Pty Limited v Brilliant Interiors Pty Limited [2019] NSWSC 679 Hoeben CJ at CL quoted Garcia and referred to the fact that the relief in unconscionability was equitable in nature: at [167]. In the light of that background, the question for determination is: does the Court have jurisdiction to grant the relief sought in the Cross-Claim?
The terms "action" and "proceedings" are defined as follows in s 4 of the District Court Act 1973 (NSW):
"action means action in the Court, but does not include any proceedings under Division 8 of Part 3 or under Part 4.
…
proceedings -
(a) where occurring in a provision of Part 3 and in subsections (3) and (5), means civil proceedings,
(b) where occurring in a provision of Part 4, means criminal proceedings, and
(c) where occurring in any other provision of this Act, shall be construed according to the context in which the expression occurs."
Sections 9(1), 44, 46 and 134(1) of the District Court Act are as follows:
"9 Jurisdiction of the Court generally
(1) The Court shall have a civil jurisdiction, consisting of -
(a) its jurisdiction conferred by Part 3, and
(b) the jurisdiction conferred by or under any other Act or law on the Court, not being its jurisdiction referred to in subsection (2).
..."
"44 Actions
(1) Subject to this Act, the Court has jurisdiction to hear and dispose of the following actions -
(a) any action of a kind -
(i) which, if brought in the Supreme Court, would be assigned to the Common Law Division of that Court, and
(ii) in which the amount (if any) claimed does not exceed the Court's jurisdictional limit, whether on a balance of account or after an admitted set-off or otherwise,
other than an action referred to in paragraph (d) or (e),
(b) (Repealed)
(c) any action brought to recover an amount not exceeding $20,000, which is the whole or part of the unliquidated balance of a partnership account, or the amount or part of the amount of the distributive share under an intestacy or of a legacy under a will,
(c1) subject to paragraph (c), any action arising out of a commercial transaction in which the amount (if any) claimed does not exceed the Court's jurisdictional limit, whether on a balance of account or after an admitted set-off or otherwise,
(d) any motor accident claim, irrespective of the amount claimed,
(d1) any work injury damages claim, irrespective of the amount claimed,
(d2) any substituted proceedings within the meaning of Part 3A of the Civil and Administrative Tribunal Act 2013, so long as the amount (if any) claimed does not exceed the Court's jurisdictional limit,
(d3) without limiting paragraphs (d) and (d1), any substituted proceedings within the meaning of Division 3.2 of the Personal Injury Commission Act 2020 irrespective of the amount claimed,
(e) any proceedings transferred to the Court under section 146 (1) of the Civil Procedure Act 2005, irrespective of the amount (if any) claimed in those proceedings.
(2) Where the amount claimed in an action includes interest (being interest which the Court could, under section 100 (1) of the Civil Procedure Act 2005, order to be included in the amount for which it could give judgment), that interest shall be disregarded for the purposes of -
(a) determining whether the maximum amount for which the action is authorised by this Act to be brought has been exceeded or not, and
(b) determining whether or not the Court has jurisdiction to hear and dispose of the action.
(3) Where -
(a) an amendment to subsection (1) which is enacted after, or was enacted before the commencement of Schedule 3 to the District Court (Procedure) Amendment Act 1984 has or had the effect of increasing the amount specified in paragraph (a) or (b) of that subsection, and
(b) an action in which an amount of money is claimed is pending at the time when the amendment has effect or, as the case may be, an action in which an amount of money is claimed was pending at the time when the amendment had effect and has not been finally determined,
the Court may, on the application of the claimant, make an order altering the amount specified in the claim to an amount not exceeding that specified in paragraph (a) or (b) of that subsection, as in force immediately after the amendment has or had effect."
"46 Ancillary equitable relief: injunctions
(1) Without affecting the generality of Division 8, the Court shall, in any action, have power to grant any injunction (whether interlocutory or otherwise) which the Supreme Court might have granted if the action were proceedings in the Supreme Court.
(2) In relation to the power of the Court to grant an injunction under this section -
(a) the Court and the Judges shall, in addition to the powers and authority otherwise conferred on it and them, have all the powers and authority of the Supreme Court and the Judges thereof in the like circumstances,
(b) the appropriate officer of the Court shall, in addition to the duties otherwise imposed on the officer, discharge -
(i) any duty which an officer of the Supreme Court would be required under the practice of the Supreme Court to discharge in the like circumstances, and
(ii) any duty imposed on the officer by the rules or by any order of the Court,
(c) the practice and procedure of the Court shall, so far as practicable and subject to this Act and the rules, be the same as the practice and procedure of the Supreme Court applicable in the like circumstances, and
(d) without affecting the generality of the foregoing provisions of this section, the powers, authority and duty conferred by paragraphs (a) and (b), and the practice and procedure of the Court referred to in paragraph (c) shall, subject to the rules, extend to the enforcement of any order of the Court made in connection with proceedings for the grant of the injunction.
(3) Without affecting the generality of any other provision of this Act authorising the making of rules, the rules may make provision for or with respect to -
(a) the procedure to be followed with respect to the granting and enforcing of an injunction under this section, and
(b) any other matter necessary or convenient for giving effect to this section."
"134 Jurisdiction in equity proceedings
(1) The Court shall have the same jurisdiction as the Supreme Court, and may exercise all the powers and authority of the Supreme Court, in proceedings for -
(a) the foreclosure or redemption of a mortgage or the enforcing of any charge or lien where the amount owing in respect of the mortgage, charge or lien does not exceed $20,000, as determined by the Court,
(b) the specific performance, rectification, delivery up or cancellation of any agreement for -
(i) the sale or purchase of any property at a price not exceeding $20,000, or
(ii) the lease of any property the value of which does not exceed $20,000, as determined by the Court,
(c) an order under section 3 of the Testator's Family Maintenance and Guardianship of Infants Act 1916 (as in force immediately before that Act was amended by the Succession Amendment (Intestacy) Act 2009) or a family provision order under Chapter 3 of the Succession Act 2006,
(d) relief against fraud or mistake where the damage sustained or the estate or fund in respect of which relief is sought does not exceed $20,000 in amount or value, as determined by the Court,
(e) the execution of a trust or a declaration that a trust subsists, where the estate or fund subject or alleged to be subject to the trust does not exceed $20,000 in amount or value, as determined by the Court, or
(f) the administration of the estate of a deceased person, where the estate does not exceed $20,000 in amount or value, as determined by the Court, or
(g) any application under the Property (Relationships) Act 1984, or
(h) any equitable claim or demand for recovery of money or damages, whether liquidated or unliquidated (not being a claim or demand of a kind to which any other paragraph of this subsection applies), in an amount not exceeding the Court's jurisdictional limit.
...."
Section 144(1) and (2) of the Civil Procedure Act 2005 (NSW) are as follows:
"144 Transfer of certain proceedings from District Court to Supreme Court
(1) This section applies to proceedings under Subdivision 2 of Division 8 of Part 3 of the District Court Act 1973.
(2) If, during proceedings to which this section applies, the District Court decides that it lacks, or may lack, jurisdiction to hear and dispose of the proceedings, the District Court must order that the proceedings be transferred to the Supreme Court."
It appears clear that the claim made by the plaintiff is an "action" under s 44 of the District Court Act, it being an "action" pursuant to the guarantee given by the third defendant for moneys allegedly owed by the corporate entity. Under s 9(1) of the District Court Act, the Court has the jurisdiction conferred by Part 3, which includes ss 44, 46 and 134.
Section 134 of the District Court Act refers to the jurisdiction of the Court in equity proceedings. Specific jurisdiction is granted. It is noted that the general reference in s 134(1)(h) refers to any equitable claim or demand "for recovery of money or damages". That is not what is sought in the Cross-Claim in the present case. It seems to me that the relief sought in the Cross-Claim, it not being referrable to specific statutory relief, seeks relief in the nature of declarations and injunctions on the basis of unconscionability and undue influence. It therefore seeks, in the circumstances, equitable relief.
To me there is at least a doubt whether the Court has jurisdiction to determine the matters in the Cross-Claim under s 134 of the District Court Act.
Having regard to the comments of the Court of Appeal in Mahommed v Unicomb [2017] NSWCA 65, particularly at paragraphs 25 and 38 and following, it appears to me that this Court, where there is a doubt or where it is clear that it does not have equitable jurisdiction under s 134, must transfer the matter to the Supreme Court.
The declaratory relief sought in the present case is not, in my view, of the very limited nature supportive of an "action" which was considered by the Court of Appeal in Kolavo v Pitsikas [2003] NSWCA 59, which was referred to in Mahommed v Unicomb in paragraph 45. In those circumstances, it appears that the Court has no option in the light of the mandatory words in section 144(2) and the statements of principle of the Court of Appeal in Mahommed v Unicomb, but to transfer the proceedings to the Supreme Court.
I make the following orders:
1. Pursuant to s 144(2) of the Civil Procedure Act 2005 (NSW), these proceedings including the Cross-Claim are transferred to the Supreme Court.
2. The costs of and incidental to today are to be costs in the cause.
[3]
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Decision last updated: 30 March 2021
Parties
Applicant/Plaintiff:
Scottish Pacific Trade Limited (a Company Incorporated in Hong Kong CR NO.: 1415813)
Respondent/Defendant:
The Motorhome Conversion Company Pty Limited ACN 122 829 789