| JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA LOCATION : PERTH CITATION : PERTH PALLETS -v- Q A PALLETS & PACKAGING PTY LTD [2002] WADC 233 CORAM : WISBEY DCJ HEARD : 26 JUNE 2002 DELIVERED : 6 NOVEMBER 2002 FILE NO/S : CIV 3004 of 2000 BETWEEN : PERTH PALLETS Plaintiff
AND
Q A PALLETS & PACKAGING PTY LTD
Defendant
Catchwords: Practice and procedure - Jurisdiction to consider defence and counterclaim alleging breach of fiduciary duty and breach of s 232 of The Corporations Law
Legislation: District Court Act, ss 50, 53, 55, 57 & 58
Result: Court has jurisdiction to consider equitable issues raised to extent that meets
plaintiff's claim; and to entertain claim under The Corporations Law s 1317HD
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Representation:
Counsel:
Plaintiff : Mr P R Eaton
Defendant : Mr R W Richardson
Solicitors:
Plaintiff : Philip Lafferty
Defendant : Chris Stokes & Associates
Case(s) referred to in judgment(s):
Commercial Developments Pty Ltd (trading as Don Rogers Motors Pty Ltd) v Mercantile Mutual Insurance (Workers' Compensation) Ltd (1991) 5 WAR 208
Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41
Case(s) also cited:
Nil
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1 WISBEY DCJ: The plaintiff, trading as Perth Pallets, issued a summons out of the Local Court Perth on 19 October 1999 seeking the sum of $11,175 "for pallet work done on behalf of ACI". The unrepresented plaintiff at the direction of the Local Court submitted "further particulars of claim" which quantified the claim as $11,165 for work and labour, although it would seem to be a claim for moneys had and received, as it is not suggested that the work was done for the defendant.
2 On 21 June 2000 the defendant filed particulars of defence and counterclaim. The defence inter alia admitted that the defendant received $11,165 from ACI in payment for work done for ACI Glass and invoiced by the plaintiff, but alleged that pursuant to an agreement between the plaintiff and the defendant, the defendant was entitled to one-third thereof. The counterclaim alleged breach of fiduciary duty by the plaintiff and sought inter alia damages, an account of moneys received by the plaintiff on behalf of the defendant, and an account generally. 3 On 8 August 2000 the plaintiff appointed solicitors to act on his behalf, and it being considered that the matters raised in the counterclaim were beyond the jurisdiction of the Local Court and within the jurisdiction of the District Court, an application was made to transfer the action to this Court. An order was made accordingly, on 13 October 2000. 4 The action was listed for trial and came before me on 11, 12 and 13 December 2001 and was adjourned part heard because the plaintiff became incapacitated during the course of his cross-examination. I then ordered that the parties obtain an special appointment to argue the jurisdictional issues which appear to arise from the pleadings.
The present state of the pleadings 5 Notwithstanding the plaintiff is now represented, he was content at trial to rely upon the further particulars of claim referred to, which as I have already stated suggests his claim is for moneys had and received. 6 In its reamended defence and counterclaim the defendant (inter alia):
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7 It will be seen that the counterclaim is based essentially upon an alleged breach of a general fiduciary duty, and a breach of duty imposed by s 232 of The Corporations Law (Cth); and by way of relief seeks a set off equal to the plaintiff's claim; damages for breach of fiduciary duty; an account of profits; and interest. 8 The present issue is whether this Court has jurisdiction to entertain those claims. 9 The Court's civil jurisdiction is derived from s 50 of the District Court of Western Australia Act 1969 (the said Act). That section does not confer on the Court equitable jurisdiction and authority to take an account. 10 Section 53(1) of the said Act provides that in all actions, matters and causes within its jurisdiction, the Court has all the powers and authorities of a Judge of the Supreme Court. 11 The section was considered by the Full Court in Commercial Developments Pty Ltd (trading as Don Rogers Motors Pty Ltd) v Mercantile Mutual Insurance (Workers' Compensation) Ltd (1991) 5 WAR 208. His Honour the Chief Justice stated at 217: "In my opinion, the claim by the appellant against the respondent by the third party notice is an equitable claim for a declaration of an entitlement to an indemnity which should be regarded as a claim for principal relief. The question of the jurisdiction of the District Court should be determined in the same way as if it had been contained in a separate writ issued by the appellant. The District Court does have limited jurisdiction to grant equitable relief pursuant to the provisions of ss 55
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and 57 of the Act and, in particular, by virtue of s 25 of the Supreme Court Act in relation to a matter which is within jurisdiction. Thus, the power to grant such equitable remedies is in the nature of an ancillary or auxiliary power to be exercised in the determination of claims otherwise within the jurisdiction of the court. … Apart from this provision and the provisions relating to partnerships in par (b) and deceased estates in s 50(1)(ba), claims for other equitable relief as principal relief in the District Court are beyond jurisdiction." 12 Section 55 of the said Act provides that the Court has, as regards any action or matter within its jurisdiction, power to grant in the action or matter such relief, redress or remedy, and power to make any order that could be made in regard to any action or matter, and to give such and the like effect to every ground of defence or counterclaim equitable or legal in a full and ample manner as might or ought to be done in the like case by the Supreme Court. 13 Section 57 of the said Act provides that the rules of law and equity declared by the Supreme Court Act 1935 shall be in force and take effect in the Court, as far as the matters to which those rules relate are respectively cognisable by the Court. 14 Section 58 of the said Act provides that where in an action before the Court any defence or counterclaim of the defendant involves matters beyond the jurisdiction of the Court, that defence or counterclaim does not effect the competence of the Court to dispose of the whole matter in controversy, so far as it relates to the demand of the plaintiff and the defence thereto, but no relief exceeding that which the Court has jurisdiction to administer shall, subject to s 51, be given to the defendant upon the counterclaim. 15 Insofar as the counterclaim alleges breach by the plaintiff of a general fiduciary duty and seeks an account of profits, the cause of action and relief sought is equitable in nature, Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41 Dawson J at 141-142. This Court's authority to deal with that issue is limited to entertaining the claim for relief only to the extent that it meets the plaintiff's claim. 16 Insofar as the counterclaim relies upon the provisions of TheCorporations Law (Cth) the defendant contends that this Court has jurisdiction to entertain the matter. The defendant refers particularly to
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s 1317HD of TheCorporations Act (effective from 1 July 1998 to 13 March 2000) which is in the following terms: "S1317HD Recovery of profits and compensation for loss, resulting from contravention If a person contravenes a civil penalty provision in relation to a corporation or a registered scheme, the person must account to the corporation or a scheme for: (a) if that or another person has made a profit because of the act or omission constituting the contravention – an amount equal to the amount of that profit; and (b) if the corporation or scheme has suffered loss or damage as a result of that act or omission – an amount equal to the amount of that loss or damage; whether or not: (c) the first-mentioned person has been convicted of an offence in relation to the contravention; or (d) a civil penalty order has been made against the first-mentioned person in relation to the contravention. (1A) The amount for which the person is liable under subsection (1) may be recovered as a debt." 17 Section 1317DA provides that subsections 232(2), (4), (5) and (6) are civil penalty provisions. 18 Consequently it is said that the conduct alleged against the plaintiff (being the conduct which it is asserted also amounted to a breach of fiduciary duty by him) constitutes contravention of a civil penalty provision giving rise to a right of action under TheCorporations Law. 19 The defendant contends that this Court has jurisdiction to deal with such a claim pursuant to s 42B of the Corporations (Western Australia) Act 1990 which reads: "(1) Subject to s 9 of the Administrative Decisions (Judicial Review) Act 1977 of the Commonwealth, as it applies as a law of Western Australia, jurisdiction is conferred on the lower courts of Western Australia and of each other State
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and the Capital Territory with respect to civil matters, other than superior court matters, arising under the Corporations Law of Western Australia. (2) The jurisdiction conferred on a lower court by subsection (1) 20 Section 41 of the Corporations (Western Australia) Act 1990 defines "superior court" as the Federal Court of Australia, the Supreme Court of a State or Territory, the Family Court or a State Family Court. A "superior court matter" means a civil matter that the Corporations Law clearly intends (for example, by use of the expression "the Court") to be dealt with only by a superior court. 21 The defendant's contention is that there is nothing in s 1317HD of TheCorporations Law which identifies debt recovery proceedings as a superior court matter restricting the proceedings to the Federal Court of Australia or the Supreme Court of a State or Territory. 22 Section 1317HD is found within Part 9.4B of TheCorporations Law which deals with the civil and criminal consequences of contravening civil penalty provisions. Division 2 relating to civil penalty orders refers to "the Court" as the appropriate adjudicating forum. Division 5 which deals with compensation for loss suffered by a corporation or registered scheme refers to "the Court" as the adjudicating forum on an application for a civil penalty order. 23 Section 58AA of The Corporations Law provides that the term "Court" whenever appearing in the Act is taken to be a reference to the Federal Court, Supreme Court of a State or Territory, or the Family Court of Australia. 24 It follows that civil penalty orders can only be made by the Federal Court or a Supreme Court.
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25 Section 1317HD provides for the recovery of profits and/or damage suffered as a debt. The section is silent as to the jurisdiction where the recovery proceedings may be instituted. It would be unusual for the legislation not to identify the forum had there been an intention to prescribe it. It follows that recovery of the 'statutory debt' is permissible in any court of competent jurisdiction.
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