Nova 96.9 Pty Ltd v Natvia Pty Ltd

[2018] NSWSC 1288

Supreme Court

New South Wales

Medium Neutral Citation:	Nova 96.9 Pty Ltd v Natvia Pty Ltd [2018] NSWSC 1288
Hearing dates:	7 August 2018
Date of orders:	10 August 2018
Decision date:	10 August 2018
Jurisdiction:	Equity - Duty List
Before:	Rein J
Decision:	See [34] - [37]
Catchwords:	JURISDICTION – Jurisdiction of the District Court – District Court Proceedings commenced in respect of fees said to be due pursuant to advertising contracts entered into by the parties – Defendant claimed District Court did not have jurisdiction to hear the matter as it arose from a “commercial transaction” – Plaintiffs sought a transfer of the Proceedings to the Supreme Court, and, once transferred, that it be remitted back to the District Court – District Court Proceedings fixed for hearing in September 2018; s 44 of the District Court Act 1973 (NSW) considered – Whether or not the Proceedings would have been assigned to the Common Law Division of the Supreme Court on 2 February 1998 – Whether or not the Proceedings arose from a “commercial transaction” within the meaning of Rule 14.2(1)(a) of the Supreme Court Rules as at 2 February 1998 – The NTF Group Pty Ltd v PA Putney Finance Australia Pty Ltd [2017] NSWSC 1194, considered and followed; HELD: Proceedings arose from a “commercial transaction” and would not have been assigned to the Common Law Division of the Supreme Court on 2 February 1998 – Pursuant to s 140 of the Civil Procedure Act 2005 (NSW) (“CPA”), Proceedings transferred to the Supreme Court – Proceedings could not be transferred back to the District Court pursuant to s 146(1) of the CPA. STATUTORY INTERPRETATION – The effect of disjunctive ‘or’ in Rule 14.2(1)(a) of the Supreme Court Rules as at 2 February 1998; HELD: “commercial transaction” not restricted or to be read down by “in trade or commerce” in Rule 14.2(1)(b) of the Supreme Court Rules as at 2 February 1998; discussion of principles of statutory interpretation.
Legislation Cited:	Civil Procedure Act 2005 (NSW) District Court Act 1973 (NSW) Foreign States Immunities Act 1985 (Cth) Sale of Goods Act 1923 (NSW) Supreme Court Act 1970 (NSW) Supreme Court Rules 1970 (NSW)
Cases Cited:	Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (2009) 239 CLR 27 Attorney-General (NSW) v Brewery Employees Union (NSW) (1908) 6 CLR 469 Bellmere Park Pty Ltd v Benson [2007] QCA 102 Bushby v Dixon Holmes du Pont Pty Ltd [2010] NSWSC 234 Commonwealth v Huon Channel & Peninsula Steamship Co Ltd (1918) 24 CLR 385 Firebird Global Master Fund II Ltd v Republic of Nauru (2015) 258 CLR 31 Forsyth v Deputy Commissioner of Taxation (2007) 231 CLR 531 Gamer's Motor Centre (Newcastle) Pty Ltd v Natwest Wholesale Australia Pty Ltd (1985) 3 NSWLR 475 Huddart Parker Ltd v Commonwealth (1931) 44 CLR 492 Inland Revenue Commissioners v Rowntree & Co Ltd [1948] 1 All ER 482 Jago v District Court (NSW) (1989) 168 CLR 23 Keramaniakis v Wagstaff [2005] NSWDC 14 Khatri v Price (1999) 95 FCR 287 Mahommed v Unicomb [2017] NSWCA 65 Momcilovic v The Queen (2011) 245 CLR 1 Morley v Richardson (1942) 65 CLR 512 NRMA Insurance Ltd v Flanagan [1982] 1 NSWLR 585 Parramatta Operations TC Pty Ltd trading as APX Parramatta v Consulting Professional Engineers Pty Ltd trading as Consulting Professional Engineers Pty Ltd [2018] NSWDC 202 Pelechowski v Registrar, Court of Appeal (1999) 198 CLR 435 Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 Sapphire Suite Pty Ltd v Bellini Lounge Pty Ltd [2018] NSWDC 160 The NTF Group Pty Ltd v PA Putney Finance Australia Pty Ltd [2017] NSWSC 1194 Visy Industries USA Pty Ltd v Federal Commissioner of Taxation (2011) 284 ALR 455 Williams v Pisano [2015] NSWCA 177
Texts Cited:	Statutory Interpretation in Australia (Pearce and Geddes, LexisNexis Butterworths, 8th ed, 2014) The Macquarie Dictionary (the Macquarie Library Pty Ltd, 2nd revised ed, 1990)
Category:	Procedural and other rulings
Parties:	Nova 96.9 Pty Ltd (First Plaintiff) Nova 106.9 Pty Ltd (Second Plaintiff) Nova 100 Pty Ltd (Third Plaintiff) Natvia Pty Ltd (Defendant)
Representation:	Counsel: Mr P. Doyle-Gray (Plaintiffs) Mr N. Olson (Defendant)   Solicitors: CCSG Legal Pty Ltd (Plaintiffs) DCA Lawyers (Defendant)
File Number(s):	2018/00238773
Publication restriction:	Nil

Reasons for Judgment

1. There are on foot, in the District Court, proceedings brought by the three Plaintiffs in these proceedings (District Court of NSW proceedings 2016/302220). Each of the three Plaintiffs is a subsidiary of Nova 96.9 Pty Ltd, a Sydney radio station, and I shall for present purposes refer to them collectively as “Nova”. Mr P. Doyle-Gray, of Counsel, appears for Nova.

2. Nova has sued the Defendant, Natvia Pty Ltd (“Natvia”), a producer of artificial sweetener (see paragraph one of the Amended First Cross-Claim Statement of Cross-Claim filed in the District Court proceedings), in respect of fees said to be due pursuant to contracts entered into by Natvia and Nova for commercials aired on Nova radio. Mr N. Olson, of Counsel, appears for Natvia.

3. Natvia accepts that it has not paid all of the money due pursuant to the advertising contracts, but it contends that the contracts were entered into as a result of misrepresentations made by Nova concerning the effectiveness of the radio advertising in respect of expected additional revenue. It also claims that the conversations and emails constitute a collateral contract to the effect of the representations. Nova disputes that any representations were made by it in connection with the advertising contracts.

4. The District Court proceedings have been listed for a three-day hearing commencing on 19 September 2018.

5. Natvia, through its lawyers, has claimed that the District Court has no jurisdiction to hear the matter: see the affidavit of Mr Benjamin Fry of 3 August 2018, pages 51-52.

6. Nova does not accept that the District Court does not have jurisdiction, but it, by Summons filed on 3 August 2018, seeks the following relief:

“1. An order pursuant to section 140 of the Civil Procedure Act 2005 (NSW) that District Court proceedings 2016/302220 be transferred to this Court.

2. An order pursuant to section 146 of the Civil Procedure Act 2005 (NSW) that District Court of New South Wales proceedings 2016/302220 transferred pursuant to prayer 1 be transferred to the District Court of New South Wales.

3. Costs.”

7. In support of its claim that the District Court does not have jurisdiction, Natvia relies on the decision of Parker J in The NTF Group Pty Ltd v PA Putney Finance Australia Pty Ltd [2017] NSWSC 1194, and a decision of Taylor SC DCJ in Sapphire Suite Pty Ltd v Bellini Lounge Pty Ltd [2018] NSWDC 160, in which his Honour followed NTF Group, finding it persuasive. In a further decision, Parramatta Operations TC Pty Ltd trading as APX Parramatta v Consulting Professional Engineers Pty Ltd trading as Consulting Professional Engineers Pty Ltd [2018] NSWDC 202, noting the agreement of the parties in that case that the District Court had no jurisdiction to hear the claim (a conclusion with which his Honour did not disagree), Taylor DCJ transferred the matter to the Local Court. His Honour described that case (at [1]) as:

“…another matter where the limited and uncertain commercial jurisdiction of this Court has impacted adversely on the quick, cheap, and just resolution of a dispute between parties in this Court.”

8. In an email sent on 6 August 2018, Natvia’s solicitor advised Nova’s solicitor that it consents to prayer one of the relief sought in the Summons and that it does not consent to subsequent prayers two and three: see page 9 of Mr Ashley del Corral’s Affidavit of 6 August 2018.

9. Due to the imminent hearing in the District Court, the matter was commenced in the Equity Duty Judge List last Friday (3 August 2018) and listed before me as Duty Judge on Tuesday, 7 August 2018.

10. I was informed by Mr Doyle-Gray that the issue of the jurisdiction of the District Court in commercial cases has started to assume considerable significance since NTF Group (supra) was decided. Parker J was cognisant of the very unfortunate consequences which would follow from his decision: see NTF Group at [46]. I have myself long ago drawn attention to the need for legislative attention to the question of District Court jurisdiction in civil matters: see Bushby v Dixon Holmes du Pont Pty Ltd [2010] NSWSC 234 at [34], a matter dealing with a narrower point and, particularly, ss 134-135 of the District Court Act 1973 (NSW) (“the DCA”).

11. I should note that Counsel were in agreement that the proceedings are not proceedings within subdivision 2 of Division 8 of Part 3 of the DCA and, hence, that s 144 of the CPA, to which different considerations apply, is not relevant here: see Mahommed v Unicomb [2017] NSWCA 65 at [52] per Ward JA (with whom Macfarlan JA and McDougall J agreed).

12. The position of Nova is a very unusual one because it has filed a Summons seeking to have the proceedings transferred to this Court pursuant to s 140 of the Civil Procedure Act 2005 (NSW) (“the CPA”), but seeks to persuade me that I should not grant the transfer sought by that Summons. Mr Olson made the point that there was a fundamental inconsistency in Nova’s position because it seeks to have the matter transferred to this Court pursuant to s 140 of the CPA ostensibly because of the jurisdictional problem but then have it transferred back to the District Court pursuant to s 146 of the CPA. Mr Olson contended that Nova could maintain in the District Court the argument advanced here since every Court has the power to determine whether or not it has jurisdiction: see Khatri v Price (1999) 95 FCR 287 at [15] per Katz J. I raised with Mr Doyle-Gray the possibility of Nova running the argument which he wished to advance in this Court in the District Court, but he contended that the course of action adopted by Nova was a cheaper, and more efficient, one. I also raised with him a concern as to the utility of the course he has adopted, since any decision of mine would not be binding on a District Court judge: see Keramaniakis v Wagstaff [2005] NSWDC 14 at [48]-[59]. Mr Doyle-Gray’s response was that, although not binding, my decision would be persuasive in the District Court.

13. I set out the presently relevant terms of s 44 of the DCA, s 140, s 146 and s 149 of the CPA, s 53 of the Supreme Court Act 1970 (NSW) as at 2 February 1998 (“the SCA”) and Part 14 of the Supreme Court Rules 1970 (NSW) as at 2 February 1998 (“the SCR”), which are the provisions relevant to the question now before this Court:

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,

(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,

(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.

…

140 Transfer of proceedings to higher court (cf Act No 9 1973, section 145; Act No 11 1970, section 21B)

(1) The Supreme Court may, of its own motion or on application by a party to proceedings before the District Court or the Local Court, order that the proceedings, including any cross-claim in the proceedings, be transferred to the Supreme Court.

(2) The District Court may, of its own motion or on application by a party to proceedings before the Local Court, order that the proceedings, including any cross-claim in the proceedings, be transferred to the District Court.

(3) Proceedings in the District Court on a claim for damages arising from personal injury or death are not to be transferred to the Supreme Court under this section unless the Supreme Court is satisfied:

(a) in the case of a motor accident claim or a workplace injury damages claim:

(i) that the amount to be awarded to the plaintiff, if successful, is likely to be more than $1,000,000, and

(ii) that the case involves complex legal issues or issues of general public importance, or

(b) in any other case:

(i) that the amount to be awarded to the plaintiff, if successful, is likely to exceed the jurisdictional limit of the District Court, or

(ii) that there is other sufficient reason for hearing the proceedings in the Supreme Court.

…

146 Transfer of proceedings to lower court (cf Act No 9 1973, section 143; Act No 11 1970, section 21F)

(1) If the Supreme Court is satisfied, in relation to proceedings before it:

(a) that the proceedings could properly have been commenced in the District Court or the Local Court, and

(b) that any cross-claim in the proceedings could properly have been brought as a cross-claim in the District Court or the Local Court,

the Supreme Court may order that the proceedings, including any such cross-claim, be transferred to the District Court or to the Local Court, as the case requires.

…

(3) In determining:

(a) whether any proceedings could properly have been commenced in the lower court, or

(b) whether any cross-claim could properly have been brought in the lower court,

the higher court must have regard to the current limits of the lower court’s jurisdiction as if they had been the limits of that jurisdiction when the proceedings were commenced, or the cross-claim brought, in the higher court.

…

(5) This section extends to proceedings that have been transferred to the Supreme Court or the District Court pursuant to a previous transfer order under Division 1.

149 Jurisdiction of lower court

The lower court has, and may exercise, all of the jurisdiction of the higher court in relation to any proceedings to which a transfer order relates, including jurisdiction to determine any question arising in any such proceedings.

53 Assignment of business

(1) Subject to the rules, there shall be assigned to each Division, other than the Family Law Division, the Administrative Law Division, the Criminal Division and the Commercial Division, all proceedings:

(a) which are required by or under any Act from time to time in force to be commenced, heard or determined in that Division or in the corresponding former jurisdiction, or

(b) which would have been commenced in the corresponding former jurisdiction if this Act had not been passed.

(2) In subsection (1), the expression corresponding former jurisdiction means, in relation to any Division, other than the Family Law Division, specified in the Second Column in the Table in paragraph (b) of subsection (1) of section 8, the former jurisdiction specified opposite that Division in the First Column of that Table.

(3) Without affecting the generality of subsection (1) in relation to the Equity Division, there shall, subject to the rules, be assigned to the Equity Division all proceedings for the following purposes:

(a) the administration of the estates of deceased persons,

(b) the dissolution of partnerships or the taking of partnership or other accounts,

(c) the redemption or foreclosure of mortgages,

(d) the raising of portions or other charges on land,

(e) the sale and distribution of the proceeds of property which is subject to any lien or charge,

(f) the execution of trusts, charitable or private,

(g) the rectification or setting aside or cancellation of deeds or other written instruments,

(h) the specific performance of contracts,

(i) the partition or sale of land, or

(j) the wardships of infants and the care of infants' estates.

…

(3E) Subject to the rules, there shall be assigned to the Commercial Division all proceedings of a commercial nature which are required by or under any Act, or by or in accordance with the rules, from time to time in force to be commenced, heard or determined in that Division.

…

(4) Subject to the rules, there shall be assigned to the Common Law Division all proceedings not assigned to another Division by the foregoing provisions of this section.

(5) Without limiting subsection (4), the proceedings assigned to the Common Law Division include proceedings for contempt of the Court or of any other Court (other than proceedings referred to in section 48 (2) (i) or in subsection (3F) of this section).

PART 14—COMMERCIAL DIVISION

Application

1. This Part applies to proceedings in the Commercial Division.

Assignment of business

2. (1) Subject to subrule (2), there shall be assigned to the Commercial Division proceedings in the Court:

(a) arising out of commercial transactions; or

(b) in which there is an issue that has importance in trade or commerce.

(2) Subrule (1) does not apply to any proceedings:

(a) assigned by the Act or by or in accordance with the rules or by or under any other Act to the Court of Appeal, the Equity Division, the Admiralty Division, the Family Law Division, the Protective Division, the Probate Division, the Administrative Law Division or the Criminal Division;

(b) which may be entered in the Construction List; or

(c) for defamation.

(3) In subrule (1), "issue" includes any question or issue in any proceedings, whether of fact or law or both, and whether raised by pleadings, agreement of parties or otherwise.

…

(emphasis added)

14. Notwithstanding the unusual aspect of the application and my concerns as to utility, I think I do need to address the issue raised by Nova. This is, as least in part, because I am of the view that this Court should not transfer matters to itself pursuant to s 140 of the CPA unless good reasons are advanced. That is to say, transfer is not merely a matter of consent between the parties; secondly, since Nova also seeks an order remitting the matter back to the District Court, this necessarily entails the same question of jurisdiction of the District Court.

15. There is agreement between Counsel for the parties that, on the state of the authorities in this area, the District Court does not have jurisdiction to deal with Nova’s claim. This is because of the following matters:

1. The District Court only has the jurisdiction which is conferred on it expressly, or by necessary implication, by the DCA, or by other state or Commonwealth legislation: Pelechowski v Registrar, Court of Appeal (1999) 198 CLR 435 and Jago v District Court (NSW) (1989) 168 CLR 23.

2. Section 44 of the DCA confers jurisdiction to hear a particular type of civil proceedings, namely, and relevantly, proceedings which, had they been commenced in the Supreme Court of New South Wales, would have been assigned to the Common Law Division. There is also a monetary limit in most cases imposed in s 44(1)(ii) of the DCA (a figure of $750,000 at present).

3. The relevant date for determining whether or not a matter would have been assigned to the Common Law Division is 2 February 1998 – the provision having been held by the High Court not to be “ambulatory”: see Forsyth v Deputy Commissioner of Taxation (2007) 231 CLR 531.

4. The effect of s 53 of the SCA was to assign all matters to the Common Law Division unless by some Act or other specific rule a matter was assigned to another of the Divisions which at that time were in place.

5. If s 53(3E), coupled with SCR Rule 14.2(1), applies, then the matter is not one which would have been assigned to the Common Law Division.

1. The approach taken by Parker J in NTF Group was to ask whether the proceedings (a claim for equipment owned by the Plaintiff, an equipment hire company, and leased to the Defendant for the purposes of the Defendant’s business) were “proceedings arising out of a commercial transaction”. His Honour held that they clearly were. His Honour said:

“45 Although the claim was a simple contractual claim in debt, it appears to me that the proceedings would not have been assigned to the Common Law Division. The principal claim in the proceedings is between two corporate entities and, on the face of it, the goods in question were leased for business purposes. Accordingly, the proceedings fall within the description of proceedings “arising out of commercial transactions” in SCR Pt 14 r 2(1)(a) and would have been assigned to the Commercial Division.

46 Accordingly, the District Court would not have had jurisdiction. This is (as it seems to me) a surprising and unwelcome result. But I see no alternative to it given the decision in Forsyth and the wording of the rules at the relevant time.”

7. In a later case, Sapphire Suite (supra), his Honour Taylor DCJ applied what Parker J had said in NTF Group (omitting footnotes):

“[6] Minds may differ about whether this matter before the Court today involves an issue of importance in trade or commerce, but it is plain, and was not disputed by the plaintiff, that a claim for damages under a commercial lease arises out of a commercial transaction. The disjunctive in subr (1) means that this is sufficient for the matter to be statutorily assigned to the Commercial Division, and thus not to the Common Law Division, under Pt 14 r 2, s 53(4) notwithstanding. This approach was recently taken in a considered judgment by Parker J in The NTF Group Pty Ltd v PA Putney Finance Australia Pty Ltd, with which I respectfully agree.”

16. Mr Doyle-Gray contends, however, that the approach taken by Parker J and followed by Taylor DCJ does not pay due regard to the words of SCR Rule 14.2(1) and the orthodox approach to statutory interpretation. He accepts that in neither case was the Court taken to the argument he now advances, which he described as one of statutory interpretation.

17. Mr Doyle-Gray’s argument, as I understand it, is structured as follows:

1. SCR Rule 14.2(1) has two parts, and:

1. SCR Rule 14.2(1)(a) has at its end the word ‘or’, a disjunctive word, as opposed to the word ‘and’, a conjunctive word.

2. That SCR Rule 14.2(1)(a) and (b) are “restrictive appositives”.

3. The phrase “in trade or commerce” in SCR Rule 14.2(1)(b) is one well-known to the law and considered in many cases.

4. The phrase “commercial transaction” in SCR Rule 14.2(1)(a) is not one that has any well-known or considered meaning, and that that phrase, as a matter of construction, draws its meaning from the phrase, “in trade or commerce”, or must be read as limited or controlled by those words in SCR Rule 14.2(1)(b).

5. “Commercial transaction” must mean something other than trade or commerce because, if it did not, there would be no need to have SCR Rule 14.2(1)(b).

2. The consequence, Mr Doyle-Gray submits, is that “commercial transactions” must be taken to mean something other than that which would fall within trade or commerce. Mr Doyle-Gray gave, as examples, an employment contract or an issue involving a negotiable instrument. I shall detail below why he gave those two examples.

3. A claim by a radio station for advertising fees, therefore, is, Mr Doyle-Gray submits, not a matter arising out of a commercial transaction, is a matter involving trade or commerce, but it is not a matter in which there is an issue of “importance in trade or commerce”.

4. Mr Doyle-Gray referred to what he called the orthodox approach to statutory interpretation found in what was said by O'Connor J in Attorney-General (NSW) v Brewery Employees Union (NSW) (1908) 6 CLR 469 at 531:

“Where words have been used which have acquired a legal meaning it will be taken, prima facie, that the legislature has intended to use them with that meaning unless a contrary intention clearly appears from the context. To use the words of Denman J in R v Slator (1881) 8 QBD 267 at 272: “But it always requires the strong compulsion of other words in an Act to induce the court to alter the ordinary meaning of a well known legal term”.”

He also referred in the same context to Gamer's Motor Centre (Newcastle) Pty Ltd v Natwest Wholesale Australia Pty Ltd (1985) 3 NSWLR 475 at 483F per Priestley JA:

“In considering the appropriate meaning of the words in their setting it is my view that if there is one ordinary and natural meaning of the words then that meaning must be given to them, but if as is the case here the words have a range of meanings, then the construction to be given to the words used must take into account the legal as well as the “ordinary” uses to which they have been put.”

The majority, McHugh JA and Priestley JA, held that ‘delivery’ in s 28 of the Sale of Goods Act 1923 (NSW) encompassed delivery by constructive change in possession, not simply delivery by a physical transfer of goods.

18. Mr Doyle-Gray pointed out that “in trade or commerce” first came under scrutiny in the constitutional context in Huddart Parker Ltd v Commonwealth (1931) 44 CLR 492 and, as a relatively recent example of consideration of the words “in trade or commerce”, referred to the decision in Williams v Pisano [2015] NSWCA 177, per Emmett JA (with whom Bathurst CJ and McColl JA agreed on this point). In the latter decision, his Honour said at [36]-[37] (omitting footnotes):

“36 The terms “trade” and “commerce” are ordinary terms that describe the mutual communications, negotiations, verbal and written, bargains and performance that constitute commercial arrangements. The terms are not terms of art, but are expressions of fact and terms of common knowledge. While the particular instances that may fall within them will depend upon the varying phrases of development of trade, commerce and commercial communication, the terms are clearly of the widest import. They are not restricted to dealings or communications that can properly be described as being at arm’s length, in the sense that they are within open markets or between strangers or have a dominant objective of profit making.

37 The phrase “in trade or commerce” operates to qualify the prohibitions in s 18 and s 30 against engaging in conduct of the specified kind. Those provisions were not intended to extend to all conduct, regardless of its nature, in which a person might engage in the course of, or for the purpose of, the overall trading or commercial business of that person. Section 18 and s 30 are concerned with the conduct of a person towards other persons, be they consumers or not, with whom the first person has or may have dealings in the course of trading or commercial activities of the first person that, of their nature, bear a trading or commercial character. Such conduct would include promotional activities in relation to, or for the purposes of, the supply of goods or services to actual or potential consumers, be they identified persons or merely an unidentifiable section of the public. However, the reference to “conduct in trade or commerce” must be construed as referring only to conduct that is itself an aspect or element of activities or transactions that, of their nature, bear a trading or commercial character. The words refer to the central conception of trade or commerce, and not to the immense field of activities in which persons may engage in the course of, or for the purposes of, carrying on some overall trading or commercial business.”

19. Although Mr Doyle-Gray described the phrase of “commercial transactions” as one not having a well-known or considered meaning, the phrase is one in common use in legislation and in the authorities. In Visy Industries USA Pty Ltd v Federal Commissioner of Taxation (2011) 284 ALR 455, Gordon J considered whether a Forward Exchange Contract was a commercial transaction or an adventure in the nature of trade entered into for the purpose of “making a profit”. Her Honour said:

“[80] The concept of a “commercial transaction” stands in contradistinction to a private, recreational or other non-business activity: Federal Cmr of Taxation v Haass (1999) 91 FCR 132 at [16]–[18] and Western Gold Mines NL v Cmr of Taxation (WA) (1938) 59 CLR 729; cf Paramedical Services Pty Ltd v Ambulance Service of New South Wales (2005) 217 ALR 502 at [86]; Argy v Blunts & Lane Cove Real Estate Pty Ltd (1990) 26 FCR 112 at 127–130 and Lubidineuse v Bevanere Pty Ltd (1984) 3 FCR 1 at 11–12.

[81] So, for example, where a transaction occurs in the ordinary course of, or is an incident of, carrying on a business, it will generally be stamped with the character of a commercial transaction: Myer Emporium at 209. Consistent with those principles, a one-off transaction entered into by a taxpayer may still be a commercial transaction or an adventure in the nature of trade. Moreover, it is not necessary that the sole purpose of an isolated transaction be to obtain a profit. It is enough if a not insignificant purpose of the transaction, at the time it was entered into, was to obtain a profit: Coolingat 56–57. On the other hand, windfall gains and gains from games of chance do not constitute income: cf Myer Emporium at 211.”

20. In NRMA Insurance Ltd v Flanagan [1982] 1 NSWLR 585, Hunt J (as his Honour then was), in discussing whether the proceedings before him should be entered into the Commercial List noted that the critical question was whether the issues that arose “arose out of an ordinary commercial transaction” and said (at p 591F-592A):

“Such a transaction must be one which can be recognised as something which forms part of, or is an essential incident of, the commercial activities of the community.”

21. I read SCR Rule 14.2(1)(b) as a recognition by the draftsman that there may be proceedings which are not commercial transactions but which nevertheless raise an issue of importance in trade or commerce. In Williams v Pisano (supra), the Court of Appeal held that a vendor of a residential home is not in normal circumstances acting in the course of a trade or business or in a business context (see [38]). It is possible that, even though proceedings may arise out of a sale of residential property, an issue might be raised which is of importance in trade or commerce. An example might be a claim by the purchaser that a corporate defendant on a sale of a residential property is empowered to execute the contract of sale without a resolution of the board. Whether an issue is one that has importance in trade or commerce for the purpose of SCR Rule 14.2(1)(b) involves a matter of judgment, but it is clear that the legislature recognised that there could be cases of that type. Thus, subparagraphs (a) and (b) are dealing with quite discrete and separate matters and I do not think that the interpretation of (a) is ‘governed’ or controlled by (b) as Mr Doyle-Gray contended.

22. Mr Doyle-Gray referred to Firebird Global Master Fund II Ltd v Republic of Nauru (2015) 258 CLR 31, in which the High Court gave consideration to s 11 of the Foreign States Immunities Act 1985 (Cth) which provided that:

“[a] foreign State is not immune in a proceeding in so far as the proceeding concerns a commercial transaction.”

Section 11(3) of that Act defined “commercial transaction” to mean:

“…a commercial, trading, business, professional or industrial or like transaction into which the foreign State has entered or a like activity in which the State has engaged and, without limiting the generality of the foregoing, includes:

(a) a contract for the supply of goods or services;

(b) an agreement for a loan or some other transaction for or in respect of the provision of finance; and

(c) a guarantee or indemnity in respect of a financial obligation; but does not include a contract of employment or a bill of exchange.”

23. As was noted in Firebird Global by French CJ and Kiefel J at [58] (with whom Gageler J agreed at [131]), there was no dispute that the foreign judgment obtained in Japan was based upon a commercial transaction, namely, the guarantee of bonds (issued by a Nauru statutory corporation) by the Republic of Nauru. The definition of “commercial transaction” in s 11(3) of the Foreign States Immunities Act 1985 (Cth) excludes contracts of employment and negotiable instruments. The consequence that Mr Doyle-Gray asserts on his proposed construction, namely, that SCR Rule 14.2(1)(a) deals with employment contracts and negotiable instruments itself highlights the artificiality of the approach for which he contends. Not only are these very narrowly confined, but an employment contract is something less likely, not more likely, to be viewed in ordinary parlance as a commercial transaction. I do not think the statutory exclusion in s 11(3) of the Foreign States Immunities Act 1985 (Cth) can assist Nova as to the meaning of commercial transactions in SCR Rule 14.2(1)(a).

24. That proceedings on a negotiable instrument (at least where issued by one corporation to another) would normally be regarded as a commercial transaction, gains supports from Inland Revenue Commissioners v Rowntree & Co Ltd [1948] 1 All ER 482 at 486, Tucker LJ (with whom Somervell LJ agreed) said of the words, “borrow” and “lend”:

“…they represent a transaction well known to business people which has taken its place in the law as a result of commercial transactions among the merchants of the country, and when the law, under the Bills of Exchange Act or elsewhere, has to deal with matters of this kind, it is dealing with commercial transactions…”

25. Three further examples of the use of the phrase “commercial transactions” in addition to Firebird Global, Flanagan and Rowntree (supra) are Morley v Richardson (1942) 65 CLR 512 at 519 per Starke J, where wheat purchase contracts were described as “ordinary commercial transactions”; Commonwealth v Huon Channel & Peninsula Steamship Co Ltd (1918) 24 CLR 385 at 394 per Barton J:

“…in construing a document using, but not defining, the word “port” in relation to commercial transactions, the word is to be understood in its commercial or business sense, and that the context may be used for the purpose of confirming the sense…”

and see [12], [13] and [18] of Bellmere Park Pty Ltd v Benson [2007] QCA 102.

26. As Mr Doyle-Gray pointed out, in Firebird Global (supra), Nettle J and Gordon J made reference to the approach to be taken to statutory interpretation. Their Honours said (at [186]):

“…the starting point for the proper construction of s 11(1) of the Immunities Act is not the decision in NML. It is the words of s 11(1) [footnote 159]. And, according to the plain and ordinary meaning of the words of s 11(1), a proceeding for the registration of a foreign judgment for a money sum owed under a commercial transaction is a proceeding which "concerns" a commercial transaction.”

Footnote 159 in the quote above referred to Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 381 [69] per McHugh, Gummow, Kirby and Hayne JJ; Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (2009) 239 CLR 27 at 46-47 [47] per Hayne, Heydon, Crennan and Kiefel JJ; and Momcilovic v The Queen (2011) 245 CLR 1 at 175 [441] per Heydon J. In Alcan (supra), the plurality said at [47] (omitting footnotes):

“47 This Court has stated on many occasions that the task of statutory construction must begin with a consideration of the text itself. Historical considerations and extrinsic materials cannot be relied on to displace the clear meaning of the text. The language which has actually been employed in the text of legislation is the surest guide to legislative intention. The meaning of the text may require consideration of the context, which includes the general purpose and policy of a provision, in particular the mischief it is seeking to remedy.”

27. In Project Blue Sky at [69], the majority, per McHugh, Gummow, Kirby and Hayne JJ, said (omitting footnotes):

“[69] The primary object of statutory construction is to construe the relevant provision so that it is consistent with the language and purpose of all the provisions of the statute. The meaning of the provision must be determined "by reference to the language of the instrument viewed as a whole". In Commissioner for Railways (NSW) v Agalianos [(1955) 92 CLR 390 at 397], Dixon CJ pointed out that "the context, the general purpose and policy of a provision and its consistency and fairness are surer guides to its meaning than the logic with which it is constructed". Thus, the process of construction must always begin by examining the context of the provision that is being construed.”

28. The starting point of statutory construction is “the text itself”: see Alcan (supra) and Firebird Global at [186]. The words of the SCR Rule 14.2(1) are, in my view, clear and not productive of any ambiguity.

29. Treating SCR Rule 14.2 as a form of delegated legislation, and considering that Part 14 sits within a group of rules (Parts 12-14) that seek to establish the criteria for assignment of matters to particular Divisions of the Court, against a background that, in the absence of specific assignment, a matter, by force of s 53(4) of the SCA, will be assigned to the Common Law Division, its purpose appears to be to limit the proceedings which are assigned to the Commercial Division to those of a commercial nature, or having within them an issue of importance in trade or commerce, even if the proceedings themselves do not arise out of a commercial transaction.

30. I will confess to a lack of familiarity with the phrases, “restrictive appositive” and “unrestrictive appositive”, used by Mr Doyle-Gray, and I have not located those phrases on a brief examination of the chapter, “Intrinsic or Grammatical Aids to Interpretation”, in Statutory Interpretation in Australia (Pearce and Geddes, LexisNexis Butterworths, 8th ed, 2014). Mr Doyle-Gray described an appositive as (at T16.2-6):

“…a phrase which provides additional information in relation to a noun and you can have either an unrestrictive appositive or a restrictive appositive. So an unrestricted appositive simply supplements the information, the meaning conveyed by the noun, but a restrictive appositive identifies which particular noun you are referring to…”

31. The Macquarie Dictionary (the Macquarie Library Pty Ltd, 2nd revised ed, 1990) defines an ‘appositive’ as:

“a word or phrase placed in apposition.”

and ‘apposition’ is defined as (for grammatical purposes):

“a syntactic relation between expressions, [usually] consecutive, which have the same function and the same relation to other elements in the sentence, the second expression identifying or supplementing the first. For example: Adam, the first man, has the first man in apposition to Adam.”

32. The question of whether there is in SCR Rule 14.2(1) a restrictive appositive may excite morphologists, but I find the terminology of no assistance and it, I think, obscures the obvious fact that the ‘or’ between subparagraphs (a) and (b) is disjunctive, with the consequence that there are two types of proceedings which were assigned to the Commercial Division as at February 1998, namely, proceedings arising out of commercial transactions and proceedings in which there is an issue that has importance in trade or commerce. I do not accept that the use of ‘or’ places any restriction whatsoever on what is encompassed by “commercial transaction”, or that the meaning of “in trade or commerce” is able to confine or limit what is meant by the phrase “commercial transactions”.

33. I accept that it is a firm general principle of statutory interpretation that no words used in a statute are otiose or superfluous: see Statutory Interpretation in Australia (supra) at 2.26 and Project Blue Sky (supra) at [71] per McHugh, Gummow, Kirby and Hayne JJ, and I also accept that the apparent scope of a section “may be limited by other sections in the Act” (see Statutory Interpretation in Australia (supra) at 4.3 and the cases there cited), but even accepting for the purposes of Nova’s argument that the phrase “in trade or commerce” has acquired a “legal meaning”, and accepting also that that legal meaning should be given to those words in SCR Rule 14.2(1)(b), that does not lead to the conclusion that the phrase “commercial transactions” in SCR Rule 14.2(1)(a) is to be read down or constrained by the meaning of “in trade or commerce”. Nothing in Brewery Employees (supra) or in Gamer's Motor Centre (supra), relied on by Mr Doyle-Gray as encompassing the orthodox principles which he says should be applied (and which he contends Parker J failed to apply: see T27.6-20), support such an approach. As I have said, SCR Rule 14.2(1)(b) is not concerned with commercial transactions but with matters of importance in trade or commerce which may arise in proceedings which do not stem from a commercial transaction.

32. It follows that, in my view:

1. Parker J was, with respect, correct to consider whether the proceedings in NTF Group arose out of a commercial transaction without considering whether the proceedings involved an issue of importance in trade or commerce, and his Honour did not fail to take into account any relevant principle of statutory interpretation;

2. Parker J’s conclusion that the proceedings fell within SCR Rule 14.2(1)(a) and, hence, would not have been assigned to the Common Law Division but rather to the Commercial Division and, hence, was not a matter in respect of which jurisdiction was conferred on the District Court by s 44 of the DCA was correct.

3. Taylor DCJ was, with respect, correct to follow and apply NTF Group; and

4. the proceedings brought by Nova arise out of a commercial transaction and, hence, applying NTF Group, are not proceedings which the District Court has jurisdiction to hear.

35. Like Parker J and Taylor DCJ, I regard the conclusions in NTF Group, Sapphire Suite and this case as to the limits of the District Court’s jurisdiction as a most inconvenient and unfortunate outcome for litigants in this State. If, as I understand may be the case, consideration is presently being given to legislative reform in this area, hopefully steps can be taken in the very near future to remove the lacuna identified.

36. It follows that, in my view, there is a compelling reason to order, pursuant to s 140 of the CPA, the transfer of the District Court proceedings from the District Court to this Court.

37. In relation to the second prayer for relief, namely, that the matter be transferred back to the District Court pursuant to s 146 of the CPA, it is necessary to consider the same issues to which I have already referred because an order can only be made pursuant to that provision if this Court is satisfied that the proceedings could properly have been commenced in the District Court. Obviously, in view of my conclusions expressed above, I am not satisfied that the proceedings could be properly have been commenced in the District Court. Therefore, it is not appropriate to make an order pursuant to s 146 of the CPA.

Costs

38. Mr Doyle-Gray contended that the appropriate costs order was that the costs of this application should be costs in the cause. Mr Olson contends that Nova should pay Natvia’s costs.

39. Natvia, through its solicitor, advised Nova that it had consented to the first prayer of relief sought in the Summons. Nova apparently wanted to retain the hearing date in the District Court and that is no doubt why it was not willing to simply seek a transfer of the proceedings to this Court pursuant to s 140 of the CPA. Natvia was entitled to resist Nova’s contention that the District Court does have jurisdiction and also the transfer back to the District Court. Given that Nova has failed to persuade me that the District Court does have jurisdiction to hear this matter, and has failed to persuade me that the matter can be remitted to the District Court pursuant to s 146 of the CPA, I am of the view that Natvia is entitled to its costs of this hearing since, had Nova sought only the relief in the first prayer of the Summons, Natvia would have had no need to attend and be heard.

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Decision last updated: 19 December 2018