Kheir’s Financial Services Pty Ltd v Aussie Home Loans Ltd [2008] FCA 1602

FEDERAL COURT OF AUSTRALIA

Kheir's Financial Services Pty Ltd v Aussie Home Loans Ltd [2008] FCA 1602

PRACTICE AND PROCEDURE – transfer of proceedings to Federal Magistrates Court Federal Court of Australia Act 1976 (Cth) Federal Court Rules Independent Contractors Act 2006 (Cth) Trade Practices Act 1974 (Cth) Kurniadi v Loh (2002) 193 ALR 253; [2002] FCA 1021

KHEIR'S FINANCIAL SERVICES PTY LTD and GAMEL KHEIR v AUSSIE HOME LOANS LTD ACN 11 002 119 511

NSD 2384 of 2007

JAGOT J

24 OCTOBER 2008

SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY NSD 2384 of 2007

BETWEEN: KHEIR'S FINANCIAL SERVICES PTY LTD

First Applicant

GAMEL KHEIR

Second Applicant

AND: AUSSIE HOME LOANS LTD ACN 11 002 119 511

Respondent

JUDGE: JAGOT J

DATE OF ORDER: 24 OCTOBER 2008

WHERE MADE: SYDNEY

THE COURT ORDERS THAT:

1. Pursuant to s 32AB of the Federal Court of Australia Act 1976 (Cth), the proceedings be transferred to the Federal Magistrates Court. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. The text of entered orders can be located using eSearch on the Court's website. IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY NSD 2384 of 2007

BETWEEN: KHEIR'S FINANCIAL SERVICES PTY LTD

First Applicant

GAMEL KHEIR

Second Applicant

AND: AUSSIE HOME LOANS LTD ACN 11 002 119 511

Respondent

JUDGE: JAGOT J

DATE: 24 OCTOBER 2008

PLACE: SYDNEY

REASONS FOR JUDGMENT 1 These proceedings involve an application for review of a services contract under ss 12 and 16 of the Independent Contractors Act 2006 (Cth) (the applicant seeks to vary the terms of the contract on the basis that the contract is unfair and harsh) and associated claims for damages for alleged breaches of the Trade Practices Act 1974 (Cth). The claims relate to the payment of commissions with respect to loans arranged for the respondent by the applicants as part of a mortgage broking business. 2 The matter came before me for a directions hearing on 9 September 2008. I made directions pursuant to which the parties would file and serve their remaining evidence, with a further directions hearing on 11 November 2008. The parties drew to my attention an outstanding issue raised by Sackville J (when he was the docket judge for the matter) about the possible transfer of the proceedings from this Court to the Federal Magistrates Court. The parties had filed written submissions setting out their position on the issue of transfer but an order had not yet been made. The parties consented to me reading those submissions and making an order in chambers about transfer having regard to their respective positions as identified in the submissions. For the reasons set out below I have decided to order that the proceedings be transferred to the Federal Magistrates Court. 3 Section 32AB of the Federal Court of Australia Act 1976 (Cth) provides for transfer of proceedings from this Court to the Federal Magistrates Court either on application by a party or on the Court's own initiative. Under s 32AB(6) the Court, in so doing, must have regard to a number of factors (being any relevant Rules of Court, whether proceedings in respect of an associated matter are pending in the Federal Magistrates Court, whether the resources of the Federal Magistrates Court are sufficient to hear and determine the proceeding, and the interests of the administration of justice). Under s 32AB(8A) the Federal Magistrates Court has jurisdiction in respect of the transferred matter being jurisdiction "not subject to limits set by another provision". 4 Order 82 r 7 of the Federal Court Rules provides as follows: In deciding whether to transfer a proceeding or an appeal to the Federal Magistrates Court, factors that the Court or a Judge may take into account, in addition to the factors to which the Court or the Judge is required to have regard under subsection 32AB (6) of the Act or subsection 44AA (7) of the Tribunal Act, include: (a) whether the proceeding or appeal is likely to involve questions of general importance, such that it would be desirable for there to be a decision of the Federal Court on one or more of the points in issue; (b) whether, if the proceeding or appeal is transferred, it is, in the opinion of the Court or the Judge, likely to be heard and determined at less cost and more convenience to the parties than if the proceeding or appeal is not transferred; (c) whether the proceeding or appeal is, in the opinion of the Court or the Judge, likely to be heard and determined earlier in the Federal Magistrates Court; (d) the wishes of the parties. 5 The parties' position is as follows: - (i) neither opposes an order for transfer of the proceedings, and (ii) they agree that the proceedings do not (or, at least, are unlikely to) involve any questions of general importance. The applicants did not know whether the proceedings are more likely to be heard and determined earlier and at less cost in the Federal Magistrates Court and note the present quantum of their claim in the sum of $350,000 plus any amount from their entitlements to trailing commissions. The respondent noted that proceedings are conducted less formally in the Federal Magistrates Court and referred to the decision in Kurniadi v Loh (2002) 193 ALR 253; [2002] FCA 1021 at [21] in which Carr J observed that appeals from the Federal Magistrates Court were not automatically allocated to a Full Court but might be dealt with by a single judge (a trend Carr J described in 2002 as one occurring with increased frequency). This capacity involved the potential for savings in judicial resources which Carr J considered a relevant aspect of the interests of the administration of justice. In this regard I note that s 25(1A) of the Federal Court of Australia Act provides that the appellate jurisdiction of the Court in relation to an appeal from a judgment, other than a migration judgment, of the Federal Magistrates Court is to be exercised by a Full Court unless the Chief Justice considers that it is appropriate for the appellate jurisdiction of the Court in relation to the appeal to be exercised by a single Judge. Section 24(1AAA) precludes any appeal to the Court from a judgment of the Court constituted by a single Judge exercising the appellate jurisdiction of the Court in relation to an appeal from the Federal Magistrates Court. 6 I consider that an order for transfer should be made. The parties neither consent to nor oppose an order for transfer. They acknowledge that there is no issue of general importance apparent from the pleadings. The resources of the Federal Magistrates Court are sufficient to hear and determine the proceeding. I agree that it is not clear whether the matter will be heard more quickly and cheaply in the Federal Magistrates Court but there is certainly no basis to conclude that the order would result in a delayed or more expensive resolution of the dispute. The potential for resolution of an appeal by a single judge if appropriate, rather than a Full Court, is also relevant. 7 The proceedings are presently listed for mention before me on 11 November 2008. My Associate has contacted the Registry of the Federal Magistrates Court. The proceedings will be listed in that Court for mention at 9.30am on 11 November 2008 before Cameron FM. I certify that the preceding seven (7) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jagot.