Hurford v P T Garuda Indonesia Ltd - [2004] SADC 138

District Court of South Australia
(Civil: Minor Civil Review)
HURFORD & ANOR v P T GARUDA INDONESIA LTD
Reasons for Decision of His Honour Judge Muecke (ex tempore)
28 September 2004
PROCEDURE
Minor Civil Review - plaintiffs claimed damages when defendant allegedly failed to honour business class bookings from London to Denpasar - Defence raising issues relating to the Civil Aviation (Carriers' Liability) Act 1959 (Cth) - Magistrate held that upon raising the defences the plaintiffs' action was not within the jurisdiction of the Civil (Minor Claims) Division of the Magistrates Court - Magistrate proceeded to hear the action within the Civil (General Claims) Division of the Magistrates Court and upheld the defences raised by the defendant under the Civil Aviation (Carriers' Liability) Act - Application by the plaintiffs for Minor Civil Review.
Held: The District Court has no jurisdiction to hear the application to review the proceedings (s38(6) Magistrates Court Act). Only the Supreme Court has jurisdiction to hear all issues on appeal (s40 Magistrates Court Act).
Civil Aviation (Carriers' Liability) Act (Cth) 1959; Magistrates Court Act 1991, referred to.

HURFORD & ANOR v P T GARUDA INDONESIA LTD
[2004] SADC 138

By claim dated 22 December 2003 filed in the Magistrates Court on an unknown date, the plaintiffs by solicitors Thomson Playford issued a claim in the Magistrates Court (Civil Division) in Adelaide. It was headed “Minor Civil action - Claim”. The defendant was PT Garuda Indonesia Ltd of Sydney. The defendant’s solicitors were named as Norton White of Sydney. The plaintiffs’ particulars of claim pleaded that the defendant agreed to carry both of them on business class on a return flight from Australia to London; that in July 2002 the plaintiffs paid the business class fare to the defendant; and that on 23 August 2002 the plaintiffs departed Australia and travelled business class on the defendant’s airline arriving in London on 26 August 2002.
The plaintiffs alleged that on 2 October 2002, when they arrived to check in at the defendant’s business class counter at Gatwick Airport, London, they were told by the defendant that their business class bookings would not be honoured. The plaintiffs alleged that they were offered alternative seats in the economy cabin on the flight on which they had been booked. That was a flight leaving London on 2 October 2002 and arriving in Australia on 8 Australia 2002 (with a four day stopover in Denpasar, Bali).
The plaintiffs allege that by this conduct the defendant repudiated and breached its contract with them. As a result of the defendant’s breach of contract the plaintiffs alleged they suffered loss and damage. They alleged that they suffered economic loss, being the difference in value between business class and economy class airfares, $660, and non-economic loss. It was alleged that this latter loss was anxiety and distress caused by the defendant’s counter-staff at Gatwick Airport treating them in a rude and high-handed manner; deprivation of the opportunity to enjoy business class travel from London to Denpasar; fatigue and discomfort during their holiday in Bali which was consequent upon the economy cabin being most uncomfortable for them and being cramped and their being unable to sleep; and damages for discomfort, disappointment, anxiety, distress, vexation and frustration.
The plaintiffs claimed damages from the defendant in the sum of $6000 interest pursuant to s124 of the Magistrates Court (Civil) Rules 1992 (SA), and costs.
By Defence dated 28 January 2004 filed in the Magistrates Court on 29 January 2004 by its solicitors, Norton White, the defendant admitted certain of the plaintiffs allegations and denied others. The defendant pleaded that it was, on 2 October 2002, unable to provide to the plaintiffs seats in the business class cabin of its flight from London to Denpasar. The defendant pleaded that it had offered the plaintiffs business class travel to Denpasar on another carrier on the same day, or overnight accommodation and travel to Amsterdam the next day to connect with a Garuda flight from Amsterdam to Denpasar with carriage in the business class cabin.
The defendant alleged that those alternative arrangements were offered with no additional expense to the plaintiffs. It alleged that the plaintiffs declined those alternative arrangements and travelled on the Garuda London/Denpasar flight on 2 October 2002 in the premium economy cabin.
The defendant pleaded that it had tendered to the plaintiffs the difference between business and economy class airfares between London and Denpasar for two passengers. It alleged that a refund was forwarded to the plaintiffs by letter dated 27 November 2002 and a refund was sent to the plaintiffs’ solicitors under cover of letter dated 24 February 2003.
The defendant pleaded further, in answer to the whole of the plaintiffs’ claim, that the carriage of the plaintiffs by the defendant was subject to the provisions of the Montreal No.4 Convention which pursuant to s25K of the Civil Aviation (Carriers’ Liability) Act 1959 (Commonwealth), has force of law in Australia. The defendant alleged that, to the extent that the plaintiffs claimed damages for physical injury and discomfort from sitting in seats other than in the business class cabin, their claims were pre-empted by the Montreal No.4 Convention and not maintainable.
In its particulars to that pleading the defendant referred to Article 17 of the Montreal No.4 Convention which provided that a carrier is liable for damage sustained in the event of bodily injury suffered by a passenger if the accident which caused the damage took place on board the aircraft or during embarkation or disembarkation. The defendant alleged that the plaintiffs were not entitled to recover damages as there was no accident on board its aircraft. It alleged that the plaintiffs were not entitled to maintain any other cause of action for any personal injury allegedly suffered on board the aircraft.
The defendant pleaded that the plaintiffs’ claims for damages for distress, upset, anxiety or other non-physical injury, or for disappointment, anxiety, distress, vexation and frustration were not maintainable at law.
The defendant pleaded, in further answer to the whole of the plaintiffs’ claim, that the dispute involved the application of a law of the commonwealth and the matter could only be determined by a court empowered to exercise federal jurisdiction. It pleaded that it may not be determined by the Magistrates Court as a minor civil action.
The plaintiffs’ claim came on before Mr R.H. Kleinig SM on 13 May 2004. The Magistrates Court file indicates that on 3 March 2004 leave had been “granted for deft to be represented at this hearing.” At the hearing before the learned Special Magistrate the defendant was represented by counsel. The plaintiffs were not represented. According to the reasons of the learned Special Magistrate the first plaintiff made oral submissions on behalf of himself and the second plaintiff. In addition to all parties presenting oral submissions documentation was tendered before the learned Special Magistrate.
Of the hearing on 13 May 2004 the learned Special Magistrate wrote that he considered two preliminary points. He considered the defendant’s submissions:
1 That the action was incorrectly described as a “minor civil action” and should, instead, be regarded as an action in the Civil (General Division) of the Magistrates Court;
2 That irrespective of the question of jurisdiction the provisions of the Civil Aviation (Carriers’ Liability) Act 1959 of the commonwealth parliament, which gave municipal or domestic expression to international obligations, especially arising under the Montreal No.4 Convention, precluded recovery by the plaintiffs of the damages that they had sought.
On 13 May 2004 the learned Special Magistrate published reasons for his rulings. He decided both of the preliminary issues he identified in the defendant’s favour and against the plaintiffs.
The learned special magistrate held that by the defendant raising the Civil Aviation (Carriers’ Liability) Act 1959, and matters relating to it, in its defence that “gave rise to a Federal matter that can only be heard and determined by a court in the strict sense”. The learned special magistrate found and held that the Magistrates Court had no jurisdiction to entertain an action brought as a minor civil action (or small claim), and that in an action in which a defendant puts in issue an Act of the Commonwealth Parliament, the provisions of s39 of the Judiciary Act (Commonwealth) are engaged and operate to confer Federal jurisdiction upon State bodies which are courts in the strict sense.
The learned special magistrate held that the Magistrates Court of South Australia acting in its Civil (General Division) is such a court. He held that the Magistrates Court when exercising its jurisdiction in minor civil actions is not such a court.
Having so found and held, the learned special magistrate referred to s10B of the Magistrates Court Act 1991 which provides “that if proceedings commenced in one Division of the court should have been commenced in another Division, the court may, if it thinks fit, continue to hear and determine the proceedings as if it were sitting as that other Division and as if the proceedings had been commenced in that other Division.”
The learned special magistrate then said he made all necessary orders to give effect to s10B. As I understand his reasons, the learned special magistrate proceeded on the basis that he was sitting as the Magistrates Court in its Civil (General Claims) Division.
Having made “all necessary orders to give effect to s10B”, the learned special magistrate then addressed the question of the application of the Civil Aviation (Carriers’ Liability) Act 1959. He held that that Commonwealth Act was an exclusive and exhaustive code for the determination of compensation entitlements arising out of personal injury suffered by a passenger in a position of the plaintiffs.
He found that there was no accident which caused the matters that the plaintiffs had pleaded as their compensable right of action. He held that nervous or mental distress was not compensable and he held further that “discomfort, disappointment, anxiety and so on” was also not compensable. He did not accept the plaintiffs’ argument that their contract was a “contract of enjoyment”. He held that even if he was wrong on that point, the time of the plaintiffs’ check-in at the counter at Gatwick Airport may have been “a first manifestation of disappointment” and the concept of embarkation was applicable at that stage. He held that as there was no “accident” and no “bodily injury” at that point there could be no compensation for the disappointment which arose at the time of the plaintiffs’ booking in at Gatwick Airport. The learned special magistrate concluded that the Civil Aviation (Carriers’ Liability) Act 1959 had a two-fold effect. First, it required that the matters raised in the defence be heard by a court in a strict sense, and that could only be satisfied by the Magistrates Court of South Australia sitting in its Civil (General Divison) (sic). Secondly, that the Federal Act pre-empted and precluded liability for the injury or harm that is alleged to have been sustained by the plaintiffs.
I assume that the learned special magistrate would have dismissed the action. He reserved the question of costs. He urged the plaintiffs to obtain legal advice before the matter was re-listed for hearing on the question of costs. He concluded by saying “the plaintiffs may also wish to consider their position regarding the possibility of any appeal to the Supreme Court”.
By application dated 23 June 2004 filed in this Court on 25 June 2004, the plaintiffs made “Application to Review a Minor Civil Decision”. In that application they complained of the leave that had been granted (by two special magistrates) allowing the defendant to be represented by counsel; the finding by the learned special magistrate that their claim was not properly in the jurisdiction of the Minor Civil Division of the Magistrates Court and that it was only cognisable by the Magistrates Court of South Australia (General Division); the finding that the Civil Aviation (Carriers’ Liability) Act 1959 applied to preclude a claim by the plaintiffs for breach of a contract resulting in economic loss and discomfort, disappointment, anxiety, distress, vexation and frustration; and the finding that little of substance in the pleadings was in dispute.
The plaintiffs’ application set out in detail the grounds upon which the review was sought. The orders sought by the plaintiffs were an order that the judgment and orders proposed by the learned special magistrate be set aside and an order that the minor civil division of the Magistrates Court had jurisdiction to hear and determine the action and that the plaintiffs’ claim be remitted for rehearing in the minor civil division of the Magistrates Court according to its substantial merits. In the alternative, the applicants sought an order that this Court proceed to hear and determine the action according to the principles governing the conduct of an action in the minor civil division of the Magistrates Court and that in accordance with s38 of the Magistrates Court Act the parties be not represented by lawyers at the rehearing. Finally, the applicants sought that the rehearing of the claim proceed on the basis that Civil Aviation (Carriers’ Liability) Act does not apply to limit or preclude the plaintiffs’ claim.
By Application for Directions dated 1 September 2004 the defendant, PT Garuda Indonesia Ltd, sought an order dismissing the application to review a minor civil decision as incompetent, on the grounds that the effect of orders made by the learned special magistrate on 13 May 2004 under s10B of the Magistrates Court Act that the matter should proceed in the Civil (General Claims) Division of the Magistrates Court was that the matter was heard and determined as if commenced in that Division of the court, and that an appeal from a decision made in that division of the Magistrates Court must be made to the Supreme Court pursuant to s40 of the Magistrates Court Act 1991. The defendant sought a further order on its Application for Directions that it is entitled to legal representation, or alternatively, that it have leave to be legally represented at the hearing of its Application for Directions and, if necessary, in respect to the Application to Review a Minor Civil Decision.
The two applications came on before me on 28 September 2004. I heard the defendant’s application for directions first because by that application the defendant sought an order dismissing the plaintiffs’ application as incompetent. I granted both parties leave (insofar as it was necessary to grant leave) to be legally represented on the Application for Directions.
On its Application for Directions the defendant argued that the proceeding commenced by the plaintiffs in the Magistrates Court ,was by virtue of the learned special magistrate’s orders to give effect to s10B of the Magistrates Court Act, a proceeding commenced in the Civil (General Claims) Division and the decision of the learned special magistrate was not “a judgment given in a Minor Civil Action” within the meaning of sub-s.38(6) of the Magistrates Court Act. Accordingly, so it was submitted by the defendant, the District Court does not have jurisdiction to review the decision of the magistrate, or to entertain any appeal which could only be brought in the Supreme Court pursuant to s.40 of the Magistrates Court Act. It was further submitted that whilst the plaintiffs may contend that the magistrate erred in law, his determination and the orders under s.10B remain valid and effective until set aside by a court with jurisdiction to entertain an appeal. The only court with such jurisdiction is the Supreme Court.
In his written submissions on his Application to Review a Minor Civil Decision the first plaintiff submitted that the Magistrates Court Act creates a single institution, the Magistrates Court. Whilst acknowledging that the court was divided into Divisions under s7 of the said Act, the first plaintiff submitted that they were sub-units not separate institutions. Therefore, it was submitted, either the Magistrates Court as a whole was not a Chapter III (of the Australian Constitution) Court, or as a whole it was. The first plaintiff submitted that the learned special magistrate failed to take into account the many obvious factors that point to the Civil (Minor Claims) Division of the Magistrates Court being a Chapter III court. He set out in his submissions what those factors included.
Furthermore, the first plaintiff submitted that if the learned special magistrate was correct in holding that the Magistrates Court did not have jurisdiction to hear and determine the case by virtue of the fact that the defendant had raised the possible application of a federal statute (the Civil Aviation Act) in its defence, then the minor civil jurisdiction of the Magistrates Court could be avoided by every defendant in every case by simply pleading the application of a federal law.
I do not consider that, in view of the conclusion I have reached, it is necessary for me to determine the merit of the matters raised by the plaintiffs to which I have just referred. There is no doubt that the Magistrates Court is divided into certain Divisions by the Act constituting it. Two of the Divisions are the Civil (General Claims) Division and the Civil (Minor Claims) Division. Furthermore there is no doubt that s38(6) of the Magistrates Court Act empowers this Court to review a judgment given in a minor civil action, and that s40 of the Magistrates Court Act provides that a party to a civil action (except a minor civil action) may appeal against any judgment given in that action to the Supreme Court (with leave or otherwise). It is conceivable that a plaintiff may, by filing a claim in the Civil (Minor Claims) Division of the Magistrates Court, seek to invoke that jurisdiction of the court with its special provisions applicable to trials of such actions where the claim is not, in, truth a minor civil action as defined in s3 of the Magistrates Court Act.
It seems clear that there are provisions in the Magistrates Court Act which will require magistrates from time to time to determine whether a particular action commenced in the Magistrates Court is a minor civil action or a civil action. That will be necessary in order for a magistrate to determine whether or not the provisions in s38 of the Magistrates Court Act apply or whether the judgment given by a magistrate is subject to review by the District Court or by the Supreme Court.
The District Court (constituted of a single judge) only has jurisdiction to review a judgment given in a minor civil action. The learned special magistrate determined that the plaintiffs’ action before him was not a minor civil action. He then proceeded and purported to make all orders necessary such that would entitle him to hear the other issue raised by the defendant on the plaintiffs’ claim against it. He said that he was then acting as a magistrate in the Civil (General Claims) Division of the Magistrates Court.
Yesterday I was provided with the plaintiffs’ submissions on the defendant’s Application for Directions. In those written submissions the plaintiffs submitted that the hearing before the learned special magistrate on 13 May 2004 was in substance a trial of the two preliminary points in a minor civil action. The plaintiffs submitted that on a proper analysis of the judgment of the learned special magistrate dated 13 May 2004 it was (although tainted with procedural error) a judgment given in a minor civil action.

It was submitted that the purported exercise by the learned special magistrate of the powers in s10 of the Magistrates Court Act did not change the character of the hearing or the fact that it was a hearing in the Minor Civil Division of the court. It was submitted that at the very least the learned special magistrate found that the court was not, when hearing a minor civil action, vested with federal jurisdiction and therefore did not have jurisdiction to determine the plaintiffs’ claim as a minor civil action; made a (retrospective) order purporting to give effect to s10 of the Magistrates Court Act; and found that the plaintiffs’ claim was defeated by the Civil Aviation Act and the convention.
It was submitted that all these were decisions of the court given in a minor civil action. I do not agree with those submissions. In particular, I do not agree that a finding by the Magistrates Court that it did not have jurisdiction to determine the plaintiffs’ claim as a minor civil action and the making of orders purporting to give effect to s10B of the Magistrates Court Act could be said to have been made in a minor civil action.
The orders purporting to give effect to s10 of the Magistrates Court Act were the result of the finding by the learned special magistrate that he did not have jurisdiction to determine the claim as a minor civil action. The terms of s10B do not envisage orders in the true sense, but empower a magistrate to continue to hear and determine a proceeding as if sitting in another Division of the Magistrates Court and “as if the proceedings had been commenced in that other Division”. This is what the learned special magistrate purported to do.
It was further submitted on behalf of the plaintiffs that the learned special magistrate wrongly continued to hear the defendant’s submissions on the issue of federal jurisdiction without satisfying himself that notice had been given to the Commonwealth and State Attorneys-General pursuant to s78B of the Judiciary Act. It was submitted that the learned special magistrate should have adjourned the hearing and given directions in accordance with s78B(2)(a) and (b) of the Judiciary Act. It was submitted that by continuing to hear the matter the learned special magistrate made a procedural error and made it in a minor civil action. The plaintiffs further submitted that the learned special magistrate made a further procedural error by exercising or purporting to exercise powers under s10B of the Magistrates Court Act retrospectively rather than prospectively. It was submitted that the proper course for the learned special magistrate was to make those orders and then adjourn the matter.
The plaintiff submitted that as a consequence of the erroneous manner in which the learned special magistrate proceeded the applicants were denied natural justice. In particular, it was submitted that they had no opportunity to consider and take legal advice on their position consequent upon the constitutional ruling (leaving aside the s78B issue) and the s10B order. It was submitted that that denial worked an injustice to the plaintiff.
The plaintiffs’ submission was that the judgment of the learned special magistrate was “therefore a judgment of the court in a minor civil action” and that this Court should dismiss the defendant’s Application for Directions and (if the defendant presses the constitutional issue on review) adjourn the review in accordance with s78B of the Judiciary Act.
I consider that if the learned special magistrate made a procedural error by not adjourning the hearing before him and giving directions in accordance with s78B of the Judiciary Act he made such an error whether the action before him was a minor civil action or otherwise. Similarly, if the learned special magistrate denied the plaintiffs natural justice by making an order pursuant to s10B of the Magistrates Court Act and not then adjourning the matter I consider that he made such an error whether the action before him was a minor civil action or otherwise. I do not agree with the plaintiffs’ written submission that the procedural error identified and the denial of natural justice alleged therefore made the judgment of the Magistrates Court a judgment in a minor civil action.
None of these submissions have altered my conclusion that the orders and findings made by the learned special magistrate are not reviewable other than by the Supreme Court. In my view it is nothing to the point that the learned special magistrate only made orders under s10B of the Magistrates Court Act after he determined that he had no jurisdiction to hear the plaintiffs’ claim in the Civil (Minor Claims) Division of the Magistrates Court which division hears minor civil actions or small claims.
In my view the learned special magistrate could not have made any orders which could have been the subject of review by this Court in circumstances where he had held that he had no jurisdiction to entertain the plaintiffs’ claim within the Civil (Minor Claims) Division of the Magistrates Court. I am also of the view that it would be wrong in principle (not to mention in practice) to conclude that some of the learned special magistrate’s findings or conclusions were reviewable by this Court whilst others were appealable to the Supreme Court. In my view that would at the least be contrary to the proper construction and application of s10B of the Magistrates Court Act.
It may be that the learned special magistrate was wrong in holding that there was no jurisdiction to hear the plaintiffs’ claim in the Civil (Minor Claims) Division of his court. That is something upon which I express no opinion. My view is that it is the Supreme Court that is the only court that can now consider the question as to whether the learned special magistrate was correct, or whether he erred, in his finding that he lacked jurisdiction to entertain the plaintiffs’ claim within the Civil (Minor Claims) Division of the Magistrates Court and whether or not it was necessary for him to make orders pursuant to s10B of the Magistrates Court Act so as to enliven the jurisdiction he had within the Civil (General Claims) Division of the Magistrates Court, and whether or not the plaintiffs were denied procedural fairness at the hearing, and whether or not there was procedural irregularity before the learned special magistrate.
In those circumstances I consider that this Court has no jurisdiction to review the learned special magistrate’s finding that the Magistrates Court has had no jurisdiction to hear and determine the plaintiffs’ claim within the Civil (Minor Claims) Division of that court. Furthermore, I consider that this Court has no jurisdiction to review any of the orders of the learned special magistrate, including any orders that he or any other special magistrate made as to legal representation of the defendant, or any finding or judgment of the learned special magistrate in relation to the applicability or otherwise of the Civil Aviation (Carriers’ Liability) Act (1959) or the Montreal No.4 Convention. I consider that this Court also has no jurisdiction to consider and decide any questions relating to alleged procedural irregularity or procedural unfairness.
Accordingly I dismiss the plaintiffs’ application for review as being incompetent.
I make it clear, however, that I consider that it is unnecessary for me to consider or decide whether the defendant should have been given leave to be legally represented at any of or during the Magistrates Court hearings; whether the defendant should be given leave to be represented in this Court other than on its Application for Directions; whether the learned special magistrate was wrong in deciding he did not have jurisdiction to hear the matter with the Civil (Minor Claims) Division of the Magistrates Court; whether the magistrate erred in his findings and conclusions as to the Civil Aviation (Carriers’ Liability) Act and the Montreal No.4 Convention; and whether there was procedural irregularity or whether the plaintiffs were denied procedural fairness before the learned special magistrate. The plaintiffs’ application for review is dismissed.