The Lunching Pad Pty Ltd v Minister for Culture and the Arts - [2001] WASC 299

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: THE LUNCHING PAD PTY LTD -v- MINISTER FOR CULTURE AND THE ARTS & ANOR [2001] WASC 299

CORAM: PULLIN J

HEARD: 12 OCTOBER 2001

DELIVERED : 2 NOVEMBER 2001

FILE NO/S: CIV 2066 of 2001

BETWEEN: THE LUNCHING PAD PTY LTD (ACN 083 140 345)
Plaintiff
AND
MINISTER FOR CULTURE AND THE ARTS
First Defendant
MINISTER FOR LANDS
Second Defendant

Catchwords:

Courts and Judges - Courts - Inferior courts - Local Court - Equitable jurisdiction of Local Court - Application to transfer proceedings in the Local Court to the Supreme Court pursuant to s 34(1) of the Local Courts Act 1904

Legislation:

District Court of Western Australia Act 1969, s 55

Local Courts Act 1904, s 32, s 33, s 34, s 100, s 101

Result:

Order transferring proceedings in Local Court to the Supreme Court

Category: B

Representation:

Counsel:

Plaintiff:     Mr P G Kennard
First Defendant             :     Mr J F O'Sullivan
Second Defendant         :     Mr J F O'Sullivan

Solicitors:

Plaintiff:     Costantino & Co
First Defendant             :     State Crown Solicitor
Second Defendant         :     State Crown Solicitor

Case(s) referred to in judgment(s):

Commercial Developments Pty Ltd (t/as Don Rogers Motors Pty Ltd) v Mercantile Mutual Insurance (Workers’ Compensation) Ltd (1991) 5 WAR 208
Matthews v Bayview Holiday Village Pty Ltd (1989) 2 WAR 167

Case(s) also cited:

Beedham & Schiffer v The Western Australian Museum, unreported; SCt of WA; Library No 940381; 15 June 1994
Hondros & Tholet v Chesson [1981] WAR 146
Jones v Moylan [2000] WASCA 361

PULLIN J: This is an application by the plaintiff ("Lunching Pad") seeking an order that Local Court summons PE 2001‑012931 be transferred to the Supreme Court pursuant to the proviso to s 34(1) of the Local Courts Act 1904.
The Local Court proceedings were commenced by the second defendant, the Minister for Lands, seeking an order for possession of premises in King Street, Perth. There is a restaurant on the premises. The Minister's case is that the parties signed a lease agreement dated 4 May 1999, which provided a term of 10 months (with options) and a rent‑free period expiring in 1999 and that rent due under that agreement was not paid. As a result, the Minister seeks judgment in the Local Court for the unpaid rent and an order for possession.
Lunching Pad defends and counterclaims. It alleges that a disclosure statement was provided by the Minister, stating that the term of the lease was five years from the commencement date or execution of the lease, at an annual rental of $5,000 from the commencement of the lease, with annual rent reviews. Lunching Pad says it was then agreed that there would be a rent‑free period of 12 months from 4 May 1999, and that a document in conformity with the disclosure statement and the variation was prepared by the Minister and sent to Lunching Pad. Lunching Pad says that on 15 December 1998, the directors of Lunching Pad met and approved the lease and executed it. They plead that it was then returned to the Ministry.
Lunching Pad further pleads that thereafter it made a financial commitment of $800,000 to develop its business in reliance on the representation that the defendant would be granted a lease of the premises in accordance with, inter alia, the lease executed by the defendant on 15 December 1998. By that, I take it that the representation was constituted by the lease which was proffered for execution on that date.
Lunching Pad pleads, in effect, that if the agreement the Minister relies on is proved, then it seeks rectification of that agreement so that it conforms with the earlier agreement said to have been entered into between the parties.
Lunching Pad therefore seeks, in its counterclaim in the Local Court, inter alia:
(a)an injunction restraining the plaintiff from evicting the defendant from the premises;
(b)a declaration that the defendant is entitled to occupy the premises for a term of five years from 4 May 1999 with two extensions each of three years at an annual rental of $5,000 with annual rent reviews alternating between CPI and 5 per cent with a rent free period of 12 months and otherwise on the terms of the Disclosure Statement and lease executed by the defendant on 15 December 1998;
(c)rectification of the lease dated 4 May 1999 so that it conforms with the Disclosure Statement and Variations and is otherwise described as a licence, with necessary consequential amendments to reflect that it is in fact a licence and not a lease;
(d)alternatively, rescission for breach of covenant of quiet enjoyment; and
(e)damages.
The damages are claimed as compensation for the Minister's alleged negligent misrepresentation that the defendant would be granted a lease of the premises in accordance with the disclosure statement and variations and the lease proffered on 15 December 1998.
Lunching Pad brings its application to this Court under the proviso to s 34(1) of the Local Courts Act 1904. Section 34(1) reads:
"Where any defence or counterclaim of the defendant involves matter beyond the jurisdiction of the court, such defence or counterclaim shall not affect the competence or the duty of the court to dispose of the whole matter in controversy so far as relates to the demand of the plaintiff and the defence thereto, but, except as provided in subsection (2), no relief exceeding that which the court has jurisdiction to administer shall be given to the defendant upon any such counterclaim."
The proviso to s 34(1) then confers jurisdiction on the Supreme Court, in the circumstances described in s 34(1), "to order that the whole proceeding be transferred to the Supreme Court".
Section 34(2)(b) provides that the jurisdiction of the Local Court in the case of a counterclaim shall not be excluded by reason of the fact that the counterclaim is for an amount of money exceeding the jurisdiction of the court, provided the plaintiff does not object in writing, within the prescribed time, to the court giving relief exceeding that which the court would otherwise have jurisdiction to administer. In the absence of objection from the Minister, the Local Court will therefore have jurisdiction to deal with any claim for "an amount of money" in the counterclaim which exceeds the jurisdiction of the Local Court in the absence of an objection from the Minister. I was informed by counsel for Lunching Pad that its counterclaim for damages could amount to the $800,000 which was expended on the building in reliance on the representations. Counsel for the Minister correctly points out that the Minister may choose to have a claim for that amount dealt with in the Local Court.
The counterclaims for the injunction and for the rectification decree, however, are equitable claims, and s 34(2)(b) is not relevant to them.
The Minister contends that the Local Court may entertain those counterclaims by reason of s 33 of the Local Courts Act 1904. That section and s 32, to which I should also refer, read as follows:
"32. Equitable claims
In any case in which a person has an equitable claim or demand against another person in respect of which the only relief sought is the recovery of a sum of money or of damages, whether liquidated or unliquidated, and the amount claimed is not more than $25,000, the person seeking to enforce the claim or demand may sue for and recover it in a Local Court.
33.Powers of Court
A Local Court shall, as regards all causes of action within its jurisdiction, have power to grant, in any proceeding before such court, such relief, redress, or remedy, and in every such proceeding to give such and the like effect to every ground of defence or counterclaim, equitable or legal (subject to the provision next hereinafter contained) in as full and ample a manner as might be done in the like case by the Supreme Court."
Section 32 is a section which confers jurisdiction on the Local Court in relation to "an equitable claim or demand", but only if the "only relief" sought is the recovery of a sum of money or of damages, liquidated or unliquidated, and the amount claimed is not more than $25,000. Section 32 therefore has no application in this case.
Section 33 does not purport to confer jurisdiction. It assumes that resort will be had to that section only if jurisdiction can be established under some other section in the Act. Once the Local Court has jurisdiction under some other provision in the Act, the section then states what powers the court shall have in relation to the relief, redress or remedy to be ordered or decreed. The power conferred by this section has been described as being "in the nature of an ancillary or auxiliary power to be exercised in the determination of claims otherwise within the jurisdiction of the court". See Commercial Developments Pty Ltd (t/as Don Rogers Motors Pty Ltd) v Mercantile Mutual Insurance (Workers’ Compensation) Ltd (1991) 5 WAR 208 at 217 per Malcolm CJ. The Chief Justice was there referring to s 55 of the District Court of Western Australia Act 1969, which is similar to s 33 of the Local Courts Act.
Clearly, the first point that has to be established, if s 33 is to apply, is that there is a cause of action within the jurisdiction of the Local Court. It is not in dispute that the Minister's cause of action is within the Local Court's jurisdiction by reason of s 100 and s 101. The Minister then contends that because the Minister's claim is within jurisdiction, then s 33 confers power to decree the equitable relief claimed in the counterclaim.
In Matthews v Bayview Holiday Village Pty Ltd (1989) 2 WAR 167, an application was made to the Supreme Court for an order to transfer District Court proceedings to the Supreme Court. The plaintiffs had claimed possession of rented premises. The defendants had filed a defence and counterclaim seeking a declaration that they were lawfully in possession of the premises and claiming relief against forfeiture. As I read the decision of Master White (as he then was), in the last three paragraphs of his reasons on page 170 he decided that the counterclaim for a declaration and relief against forfeiture, could be decreed by reason of the provisions of s 58(1) of the District Court of Western Australia Act, which is similar in effect to s 34(1) of the Local Courts Act. The counterclaims in Matthews v Bayview Holiday Village (supra) were counterclaims which, if they succeeded, merely met and answered the plaintiff's claim, and so it was correct in those circumstances to conclude that the District Court had jurisdiction.
In this case, the counterclaim for rectification of the lease dated 4 May 1999 is not a claim which merely meets and extinguishes the Minister's claim. That counterclaim for rectification is a claim for relief, which does not pass the test of s 34(1). The claim for rectification does not merely "dispose of the whole matter in controversy so far as relates to the demand of the plaintiff and the defence thereto". Relief in the form of rectification would be relief "exceeding that which the court has jurisdiction to administer". The counterclaim for a declaration that Lunching Pad is entitled to occupy the premises for a term of five years is also a claim of the same description. In those circumstances, s 34(1) states that "no relief … shall be given to the defendant upon any such counterclaim".
Further, neither the counterclaim for rectification nor the counterclaim for the declaration, are claims ancillary to any of the other counterclaims, and therefore s 33 does not apply. To the extent that the reasoning in Matthews v Bayview Holiday Village (supra), at 170, suggests that, in these circumstances, the latter part of s 33 of the Local Courts Act (the equivalent of s 55(b) of the District Court of Western Australia Act) confers jurisdiction in this case, I would respectfully disagree with such reasoning.
As a result, it is my opinion that the Local Court has no jurisdiction to decree rectification of the agreement which is sued upon by the Minister.
The proviso to s 34(1) confers jurisdiction on the Supreme Court to order that the whole proceeding be transferred to the Supreme Court, and I so order.