Stewart v Pegasus Investments & Holdings Pty Ltd

[2004] FMCA 712

FEDERAL MAGISTRATES COURT OF AUSTRALIA

STEWART v PEGASUS INVESTMENTS & HOLDINGS PTY LTD [2004] FMCA 712

PRACTICE AND PROCEDURE – TRADE PRACTICES – Claim under Part V Division 2A of Trade Practices Act – whether application can be transferred to Federal Court when Federal Magistrates Court does not have jurisdiction.

Trade Practices Act1974 (Cth), ss.52, 53, 71, 74B, 74D, 74AA, 75AC, 75AD, 86, 86AA
Federal Magistrates Act 1999(Cth), ss.10, 39
Federal Magistrates Court Rules 2001, r.8.02

Dunn v Bevan 1 Ch. 276
McGuinness v Cowie (2002) 29 Fam LR 441

Johnson Tiles Pty Ltd v Esso Australia Ltd (2001) 113 FCR 42, [2001] FCA 421
Bell Group Ltd  Westpac Banking Corp (2000) 104 FCR 305, [2000] FCA 439
McIntosh v National Australia Bank (1988) 17 FCR 482

Applicant: TERESA STEWART

Respondent: PEGASUS INVESTMENTS AND HOLDINGS PTY LTD

File No: MZ 1064 of 2003

Delivered on: 29 October 2004

Delivered at: Melbourne

Hearing date: 19 October 2004

Judgment of: Phipps FM

REPRESENTATION

Counsel for the Applicant: Ms Duggan

Solicitors for the Applicant: Arnold Thomas & Becker

Counsel for the Respondent: Mr Boston

Solicitors for the Respondent: Phillips Fox by their agents, Landers & Rogers

ORDERS

1. That Pursuant to section 39 of the Federal Magistrates Act 1999 the application be transferred to the Federal Court of Australia.

2. That all questions of costs be reserved to the Federal Court.

3. That it was reasonable for each party to employ an advocate.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
MELBOURNE

MZ 1064 of 2003

TERESA STEWART

Applicant

And

PEGASUS INVESTMENTS & HOLDINGS PTY LTD

Respondent

REASONS FOR JUDGMENT

1. The applicant has applied to transfer the proceeding to the Federal Court. Section 39 (1) of the Federal Magistrates Act1999 (Cth) provides:

   If a proceeding is pending in the Federal Magistrates Court, the Federal Magistrates Court may, by order, transfer the proceeding from the Federal Magistrates Court to the Federal Court or the Family Court.

2. The application is opposed.  Mr Boston, who appeared for the respondent, submitted that the Court does not have jurisdiction over the claim made by the applicant, therefore no proceeding is pending in the Court so there is nothing to transfer.

3. By an amended statement of claim, the applicant alleges that the respondent is deemed to be a manufacturer pursuant to s.74AA of the Trade Practices Act1974 (Cth) of shoes styled "Girlhouse Shoes". She alleges that she purchased the shoes from Payless Shoes in Charlestown Square, New South Wales, in September 2002. She alleges that the shoes were defective within the meaning of s.75AC of the Trade Practices Act. She alleges that on or about 21 October 2003, while wearing the shoes, she stepped down out of her caravan, rolled her ankle, fell over and broke it. She alleges that she suffered various injuries and loss and damage as a consequence of the accident. She relies on ss.71, 74B, 74D 74AA, 75AC and 75AD to claim damages from the respondent.

4. Pursuant to s.10 of the Federal Magistrates Act, the Federal Magistrates Court has such original jurisdiction as is expressly or impliedly vested in it by Acts of the Commonwealth Parliament.

5. By ss.86(1A) and 86AA of the Trade Practices Act, jurisdiction is conferred on the Federal Magistrates Court under Division 1 or 1A of Part V of the Trade Practices Act.

6. None of the sections of the Trade Practices Act on which the applicant seeks to found her claim are in Division 1 or 1A of Part V of the Trade Practices Act. Except for s.71, which is in Division 2, all the sections are in Division 2A – actions against manufacturers and importers of goods.

7. When the proceeding first came before the Court the respondent had filed a conditional appearance and objected to jurisdiction. I raised the question of whether the applicant might have a claim under Division 1, such as a claim for misleading or deceptive conduct under s.52 or a claim under s.53.

8. Ms Duggan, who appeared for the applicant, now says that the applicant cannot make out another claim and so seeks to have the proceeding transferred to the Federal Court of Australia restriction and claims under Division 2A.

9. The dictionary definition of "pending" is "remaining undecided, awaiting decision or settlement."  In Dunn v Bevan 1 Ch. 276, judgment had been given.  The plaintiff subsequently issued a circular letter containing misleading comments on the judgment.  The defendant sought an injunction to restrain the issue of the circular.  It was held that the action being ended by judgment delivered there could be no possible interference with the course of justice and so no basis for the issuing of an injunction.  Sargant J said at 284:

   Proceedings are pending immediately a writ is issued, and as long as any proceedings can be taken.

10. In McGuinness v Cowie (2002) 29 Fam LR 441, Kay J. considered the phrase "pending in court having jurisdiction under this Act". He referred to the dictionary definition and to Dunn v Bevan and concluded at [35], "Once instituted therefore, until dealt with, any application may properly be described as "pending".

11. Mr Boston submitted that a proceeding over which the Court has no jurisdiction cannot be "pending". He submitted that for the purposes of s.39(1) reference to a proceeding that is pending in the Court implies that the Court has jurisdiction to hear and determine the matter. Without jurisdiction, the proceeding is a nullity and never came within the jurisdiction of the Court. Therefore, it could never be pending in the Court.

12. Johnson Tiles Pty Ltd v Esso Australia Ltd (2001) 113 FCR 42, [2001] FCA 421, and Bell Group Ltd  Westpac Banking Corp (2000) 104 FCR 305, [2000] FCA 439 are cases where judges of the Federal Court transferred cases to state Supreme Courts in circumstances where there was doubt about jurisdiction. In an earlier case of McIntosh v National Australia Bank (1988) 17 FCR 482, Gummow J. discussed the problem of the Federal Court transferring a case to a court where there were no parallel proceedings on the ground that there was real doubt as to the Court’s jurisdiction.  He considered it anomalous to suggest that it was in the interests of justice to order the transfer on the ground that there is a real doubt as to whether there is jurisdiction.

13. McIntosh v National Australia Bank was distinguished by Carr J in Bell Group Ltd  Westpac Banking Corp and Merkel J. in Johnson Tiles Pty Ltd v Esso Australia Ltd.  In both of these cases, their Honours referred to it being possible that it might be held on appeal that the Court did not have jurisdiction.  Both were complicated cases with many other factors involved in the consideration of whether the application should be transferred.  Nevertheless, in both, their Honours held that they had power to transfer to another Court even though the Court might not have jurisdiction.

14. In the current case, the applicant accepts that the Court does not have jurisdiction.  I do not consider that that is a relevant distinction between this case and Bell Group Ltd  Westpac Banking Corp and Johnson Tiles Pty Ltd v Esso Australia Ltd.  Both of those cases are authority for the proposition that a proceeding can be transferred in circumstances where there might not be jurisdiction.

15. I consider that there is a proceeding pending in the Court within the meaning of s.39(1) of the Federal Magistrates Act.  The proceeding commenced when the application was filed and it remains undecided.  The respondent raised the question whether the Court had jurisdiction.  As I have already said, at the first Court date I raised the question whether the applicant might have a claim for misleading or deceptive conduct. A court may decide whether it has jurisdiction when that is raised as an issue.  That means there was something to be dealt with and so the proceeding was still pending.

16. Transfer to the Federal Court is a matter of discretion. Section 39(3) and r.8.02 of the Federal Magistrates Court Rules, 2001 set out matters to be taken into account in exercising the discretion to transfer. Rule 8.02(4)(b) is cost and convenience. An affidavit filed by the applicant on the question of costs shows that she has limited financial resources. I do not consider cost to be the determining factor. By s.39 (3) (d) the court must have regard to the interests of the administration of justice. The significant factor is that the Federal Magistrates Court does not have and the Federal Court does have jurisdiction. For that reason I consider that it is in the interests of justice to transfer the application to the Federal Court.

I certify that the preceding sixteen (16) paragraphs are a true copy of the reasons for judgment of Phipps FM

Associate:  Sherryn Kwong

Date:  29^th October 2004