New South Wales Supreme Court CITATION : China Shipping (Australia) Agency Co Pty Limited v D V Kelly Pty Limited [2010] NSWSC 1556 HEARING DATE(S) : 14 December 2010 JURISDICTION : Equity Division Admiralty List JUDGMENT OF : Rein J EX TEMPORE JUDGMENT DATE : 14 December 2010 DECISION : Decision of the Consumer Trader and Tenancy Tribunal dated 21 April 2010 in proceeding GEN 09/48077 was vitiated by reason of the second defendant having acted in excess of its jurisdiction (because it had no jurisdiction to hear a claim falling within s 9 of the Admiralty Act 1988 (Cth)). An order in the nature of certiorari made to quash the decision of the Tribunal dated 21 April 2010. CATCHWORDS : PRACTICE – Jurisdiction – Federal jurisdiction of State courts – Admiralty – General maritime claim – Dispute was in federal jurisdiction – Admiralty Act 1988 (Cth) ss 4(3)(f), 9(1) -- where plaintiffs challenged the jurisdiction of the Consumer Trader and Tenancy Tribunal in a determination on shipping container fees -- whether the Tribunal has jurisdiction to determine a consumer claim under the Consumer Claims Act 1998 (NSW) which is also a maritime claim under the Admiralty Act 1988 (Cth) -- whether the Tribunal is a court of the State within the meaning of s 77(iii) of the Commonwealth Constitution – whether s 9(1) of the Admiralty Act 1988 (Cth) confers jurisdiction on the Tribunal -- whether the Tribunal was precluded from exercising jurisdiction in respect of D V Kelly's claim. Admiralty Act 1988 (Cth) Commonwealth Constitution LEGISLATION CITED : Consumer Claims Act 1998 (NSW) Consumer, Trader and Tenancy Tribunal Act 2001 (NSW) Judiciary Act 1903 (Cth) Supreme Court Act 1981 (UK) CATEGORY : Principal judgment CSL Australia Pty Limited v Formosa [2009] NSWCA 363; (2009) 235 FLR 273 Felton v Mulligan [1971] HCA 39; (1971) 124 CLR 367 Heilbrunn v Lightwood plc [2007] FCA 1518; (2007) 164 FCR 1 CASES CITED : Knight v Knight [1971] HCA 21; (1971) 122 CLR 114 Kotsis v Kotsis [1970] HCA 61; (1970) 122 CLR 69 The Antonis P Lemos [1985] AC 711 Tisand Pty Limited v The Owners of the Ship MV Cape Moreton (Ex Freya) [2005] FCAFC 68; (2005) 143 FCR 43 Trust Company of Australia Limited v Skiwing Pty Limited [2006] NSWCA 185; (2006) 66 NSWLR 77 China Shipping (Australia) Agency Co Pty Limited (Plaintiff) PARTIES : D V Kelly Pty Limited (First Defendant) Consumer Trader and Tenancy Tribunal (Second Defendant) FILE NUMBER(S) : SC 2010/119420 PLAINTIFF: Ms B Nolan COUNSEL : FIRST DEFENDANT :Mr J Law (solicitor – submitting appearance) PLAINTIFF: Holman Fenwick Willan Lawyers SOLICITORS : FIRST DEFENDANT: Bennelong Legal (submitting appearance) 1 The appellant in this matter, China Shipping (Australia) Agency Co Pty Limited ("China Shipping"), is a shipping agent whose principal, China Shipping Pty Limited ("CSPL"), is a carrier of goods by sea. The first defendant, D V Kelly Pty Limited ("D V Kelly"), is an importer of furniture products. D V Kelly, arranged through China Shipping, for the transportation of furniture from Vietnam by sea on an ocean vessel, which although not named in the bill of lading, was the CSCL Qingdao (see pages 4 and 11 of Exhibit A). The goods were transported on the CSCL Qingdao in a container supplied by CSPL and arrived without incident. The bill of lading in question can be found at pages 4 and 5 of Exhibit A and a more legible form of it can be found at pages 303 to 313 of Exhibit A. The clause dealing with containers is found at page 306, and subclause 9(2) relevantly is in the following terms: "(2) If Carrier's Containers and equipment are used by the Merchant for pre-carriage or on-carriage or unpacked at the Merchant's premises, the Merchant is responsible for returning the empty Containers, with interiors brushed, clean and free of smell to the point or place designated by the Carrier, its servants or agents, within the time prescribed in the Tariff and/or required by the Carrier. Should a Container not be returned within the aforesaid time, the Merchant shall be liable for any detention, demurrage, loss or expenses which may arise from such non-return." 2 The container in which the goods were carried was retained by D V Kelly for a long period and China Shipping charged $8514 for the hire of the container. There is no dispute that the charges raised were in accordance with the applicable tariff referred to in the CSPL bill of lading and which were incorporated into the contract. There was no charge for the container for the first ten days after delivery, $40 per day for the period 11 to 40 days after delivery, and $80 per day thereafter. 3 D V Kelly paid the amount of $8514 to China Shipping. It then brought proceedings in the Consumer Trader and Tenancy Tribunal (the "Tribunal") seeking and obtaining an order that China Shipping repay to it the amount paid. The Tribunal's member, Mr G Meadows, by reasons delivered on 21 April 2010, held that the fee charged by China Shipping was a penalty. The Tribunal is the second defendant to the plaintiff's summons. It was the position of D V Kelly and accepted by the Tribunal in its determination that there was no difference in the position of China Shipping and CSPL and that the claim by China Shipping for the container fees was effectively brought as agent for its principal, CSPL, and I shall proceed on that basis. 4 The plaintiff by its summons in this Court originally sought a declaration that the Tribunal's determination was vitiated by reason of the Tribunal having erred in deciding it had jurisdiction to hear an equitable claim for relief and that the Tribunal had posed the wrong question for determination. The plaintiff sought a declaration that the relevant subclause was enforceable at law (ie not a penalty). The first defendant filed a submitting appearance, although a solicitor, Mr Law, has appeared on a number of occasions for D V Kelly and appears again today in a submitting role. The second defendant, the Tribunal, and the third defendant, the State of New South Wales, subsequently joined, do not accept that the Tribunal had no power to determine equitable defences. 5 On 2 September this year I raised with the parties the question of whether the Tribunal had jurisdiction to deal with the issue of the container charges because it seemed to involve a maritime claim, and if it did would appear to be governed by the Admiralty Act 1988 (Cth). China Shipping has amended its summons to seek relief on that basis. I was, on an earlier occasion, informed that the Crown Solicitor does not wish to be heard on that issue. I should note that because of the possibility of conflict between the Admiralty Act and the Consumer Claims Act 1998 (NSW), notices under s 78B of the Judiciary Act 1903 (Cth) were served on the attorneys-general of all the states and territories. The other states and territories have indicated they do not wish to intervene in this matter (see Exhibit B). The intervention of the State of New South Wales, as I have indicated, was on a different basis and it does not seek to be heard on the present issue and its legal representatives were excused from attendance today on that basis. 6 Ms B Nolan of counsel appears for China Shipping and has provided the Court with detailed submissions to which I have had regard. Ms Nolan concedes that the claim brought by D V Kelly was a consumer claim within the meaning of the Consumer Claims Act. However, she submits that the claim is also a general maritime claim within the meaning of s 4(3)(f) of the Admiralty Act, which defines a general maritime claim as: "(f) a claim arising out of an agreement that relates to the carriage of goods or persons by a ship or to the use or hire of a ship, whether by charterparty or otherwise." Section 9(1) of the Admiralty Act provides: "(1) Jurisdiction is conferred on the Federal Court, the Federal Magistrates Court and on the courts of the Territories, and the courts of the States are invested with federal jurisdiction, in respect of proceedings commenced as actions in personam : (a) on a maritime claim; or (b) on a claim for damage done to a ship." (emphasis added). 7 Section 77(iii) of the Commonwealth Constitution (the "Constitution") provides, after dealing with the topic of Admiralty in s 76(iii): "With respect to any of the matters mentioned in the last two sections the Parliament may make laws: … (iii) investing any court of a State with federal jurisdiction." Section 109 of the Constitution provides: "When a law of a State is inconsistent with a law of the Commonwealth, the latter shall prevail, and the former shall, to the extent of the inconsistency, be invalid." 8 The steps in the plaintiff's case are: (1) "Maritime claim" includes a claim arising out of an agreement that relates to the carriage of goods by ship; (2) The agreement in question here relates to the carriage of goods by ship; (3) The claim by DV Kelly for repayment of container charges is one "arising out of" the agreement referred to in (2) above; (4) Jurisdiction for general maritime claims in personam is conferred on the Federal Court, the Federal Magistrates Courts, the courts of territories and the courts of the states; (5) The Tribunal is not a court of a state nor is it one of the other courts specifically mentioned; (6) Where an act invests a state court with federal jurisdiction in respect of a matter, any concurrent state jurisdiction is thereby excluded; and (7) Therefore the Tribunal had no jurisdiction to hear DV Kelly's claim. 9 So far as [8](1) is concerned that is the content of s 4(3)(f) of the Admiralty Act. Nor can there be any dispute about [8](2) – the contract contained in the bill of lading relates to the carriage of goods on the CSCL Qingdao. So far as [8](3) is concerned, it should be noted that "arising out of" is a phrase of wide import. In The Antonis P Lemos [1985] AC 711, the House of Lords held that it means "connected with" in the context of "any claim arising out of any agreement relating to the carriage of goods in a ship or to the use or hire of a ship," (being the words of s 20(2)(h) of the Supreme Court Act 1981 (UK)), and that the subsection was wide enough to cover claims in contract or tort and whether or not the agreement was made directly between the two parties to the action; see also Heilbrunn v Lightwood plc [2007] FCA 1518; (2007) 164 FCR 1 at [36]-[41] per Allsop J, as his Honour then was, applying The Antonis P Lemos. 10 It has been held by the Full Court of the Federal Court of Australia that the conferral of jurisdiction by legislation should be treated amply rather than in a narrow way: see Tisand Pty Limited v The Owners of the Ship MV Cape Moreton (Ex Freya) [2005] FCAFC 68; (2005) 143 FCR 43 at [59]-[65], and this was reiterated in a more recent decision of the New South Wales Court of Appeal per Allsop P, Basten JA and Handley AJA in CSL Australia Pty Limited v Formosa [2009] NSWCA 363; (2009) 235 FLR 273, in particular [25]. 11 In relation to [8](4), I have noted the terms of s 9(1) of the Admiralty Act and s 77(iii) of the Constitution above. The next question is whether the Tribunal is a court of the State. Ms Nolan has helpfully listed all of the indicia that might support the conclusion that it is and all of those that support the contention that it is not, namely: "14. Indicia in the CTTT which operates in favour of the CTTT being regarded as a "court of the State" include: a. The Tribunal exercises the judicial power of the State in the performance of a number of its statutory functions (section 5 and section 21). b. The Chairperson and Deputy Chairperson (Determinations) have to be an Australian lawyer (sub section 8(1)). c. Members are appointed by the Governor (section 7). d. The Tribunal is expressed to have a "jurisdiction" (section 5 and section 21). e. The Tribunal's procedure is expressed in terms of a "parties to proceedings" (section 24 and section 26). f. The Tribunal may compel a person to attend to give evidence or produce documents (section 40 and section 41). g. The Chairperson or Deputy Chairperson of the Tribunal may issue a warrant to apprehend a witness (section 41). h. The Tribunal may award costs, but only in accordance with regulations (sub section 53(2)). i. There is a right of appeal from a decision of the Tribunal to the District Court if the Tribunal decides a question with respect to a matter of law (sub section 67(1)). j. An order for payment of money, other than a penalty, upon certification by the Registrar, may be filed in a court and operates as a judgment (section 51). k. The Tribunal (if constituted by or includes as a member the Chairperson or Deputy Chairperson) has the same power as the Local Court under section 24 of the Local Court Act 2007 in relation to contempt in the face of the court or at hearing (sub section 42(2)). All other matters constituting contempt of the Tribunal is listed in sub section 42(1). l. The Governor may require the Chairperson, Deputy Chairperson and senior members to take an oath (section 15, Schedule 2). m. A legal practitioner or witness appearing before the Tribunal has the same protection and immunity as if appearing in the Supreme Court (section 44). 15. Indicia operating against the proposition that the CTTT is a "court of the State" include: a. The Tribunal is not called a court. b. The Chairperson of the Tribunal does not have to be a judge (sub section 8(1)). c. Members of the Tribunal (except the Chairperson and Deputy Chairperson) do not have to be legally qualified (sub section 8(2)). d. Members appointments are not to exceed 5 years (Schedule 2). e. Members of the Tribunal are subject to performance management and review (section 9). f. The Tribunal does not have rule making power. g. Subject to the Governor's discretion to require the Chairperson, Deputy Chairperson and Senior members to take an oath, there is no general requirement that members take an oath (Schedule 2). h. The Tribunal may refer a question of law to the Supreme Court (section 66). i. Unless there are regulations which empower the Tribunal to award costs, each party bears its own costs (sub section 53(1). j. There is no general entitlement to be represented by an Australian legal practitioner (sub section 36(1)). k. Unless provided for in the regulations, the parties in any proceeding are to pay their own costs (section 53). l. The Tribunal is not bound by the rules of evidence (sub section 28(2)). m. The Tribunal may dispense with hearings in certain circumstances (section 34). n. The Tribunal is to act with as little formality as the circumstances of the case permit and according to equity, good conscience and the substantial merits of the case without regard to technicalities or legal forms (sub section 28(3)). o. Proceedings for an offence under the CTTT Act are to be disposed of summarily in the Local Court (section 82)." 12 In Trust Company of Australia Limited v Skiwing Pty Limited [2006] NSWCA 185; (2006) 66 NSWLR 77, the Court of Appeal held that the Administrative Decisions Tribunal (the "ADT") was not a court of the State for the purposes of s 77(iii) of the Constitution which permits the Commonwealth to invest any court of the State with federal jurisdiction: see also Knight v Knight [1971] HCA 21; (1971) 122 CLR 114 and Kotsis v Kotsis [1970] HCA 61; (1970) 122 CLR 69. In Skiwing, Spigelman CJ, with whom Hodgson and Bryson JJA agreed, held that the fact that the ADT was not an institution comprised of judges, was crucial to its not meeting the requirement for a conferral of federal jurisdiction in accordance with s 77(iii) of the Constitution. That is also the position with the Tribunal and I think the reasoning in Skiwing applies equally here. I would add that I regard the fact that the parties are not permitted legal representation as of right (see s 36(1) of the Consumer, Trader and Tenancy Tribunal Act 2001 (NSW)) as a further very important feature telling against the Tribunal being treated as a court. 13 If, as I hold, the Tribunal is not a court for the purposes of s 77(iii) of the Constitution, then it is not a court within the meaning of s 9 of the Admiralty Act. 14 Even where a court is invested with jurisdiction by State legislation but is also invested with jurisdiction by virtue of the Admiralty Act, the court in dealing with the matter will be exercising federal jurisdiction, and any jurisdiction otherwise granted by the State legislation will be excluded: see Felton v Mulligan [1971] HCA 39; (1971) 124 CLR 367 and CSL Australia v Formosa. Whether or not State legislation is still relevant to the substantive matter will be determined having regard to ss 79, 80 and 109 of the Constitution. 15 Since a State court invested with both state and federal jurisdiction, in hearing an admiralty claim that is also capable of being brought under some other categorisation, must be exercising federal jurisdiction, it follows axiomatically that a tribunal cannot hear what is a federal matter unless it has been granted jurisdiction by Commonwealth legislation. A claim which falls within the ambit of the Admiralty Act is a federal matter, even if not recognised by the claimant as such. 16 It may be that it is not necessary to resort to any deeper analysis, but it is possible to view the issue as being one of implicit conflict between State and Commonwealth legislation since the State legislation grants jurisdiction to the Tribunal and the Admiralty Act in respect of the same subject matter does not, with the consequence that to the extent of inconsistency, the Admiralty Act must prevail; see Felton v Mulligan at 412 per Walsh J: "In my opinion the problem must be resolved by treating the Commonwealth law as paramount and as excluding, in relation to the matters to which that law applies, the operation of the laws under which the State jurisdiction of the court would be exercised….The supremacy of the laws of the Commonwealth over the legislation of the State of New South Wales is established by covering cl 5 and s.109 of the Constitution." (see also at 393 per Windeyer J). 17 It follows that the determination of the Tribunal should be set aside. I should note that although some jurisdictional arguments were raised in the Tribunal by China Shipping, and indeed there was a reference in the Tribunal's determination to a submission by China Shipping that the governing law should be "maritime law not consumer law," the specific argument which has now been ventilated was not put to the Tribunal. 18 For the reasons given, a declaration will be made that the decision of the Tribunal dated 21 April 2010 in proceeding GEN 09/48077 was vitiated by reason of the second defendant having acted in excess of its jurisdiction. Secondly, an order in the nature of certiorari will be made quashing the decision of the Tribunal dated 21 April 2010 in the proceedings specified. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.