District Court New South Wales Medium Neutral Citation: Sapphire Suite Pty Ltd v Bellini Lounge Pty Ltd [2018] NSWDC 160 Hearing dates: 24 May 2018 Date of orders: 24 May 2018 Decision date: 24 May 2018 Jurisdiction: Civil Before: P Taylor SC DCJ Decision: (1) Note that the plaintiff has made an application in the Supreme Court to transfer these proceedings to the Supreme Court because of a jurisdictional issue, returnable 5 June 2018. (2) Order that the proceedings be adjourned for further directions before the Judicial Registrar at 10am on Thursday, 28 June 2018. Catchwords: CIVIL PROCEDURE - jurisdiction – jurisdiction of the District Court – assignment to a division – Commercial Division – lack of jurisdiction - transfers to and from other courts Legislation Cited: Civil Procedure Act 2005, s 140, s 144 District Court Act 1973, Pt 3, Div 8, Subdiv 2, s 44, s 134 Supreme Court Act 1970, s 52, s 53, s 54, s 55 Supreme Court Rules 1970, Pt 14 r 2 Cases Cited: Forsyth v Deputy Commissioner of Taxation (2007) 231 CLR 531; [2007] HCA 8 May v Brahmbhatt [2013] NSWCA 309 Mega-top Cargo Pty Ltd v Moneytech Services Pty Ltd [2015] NSWCA 402 New South Wales Land and Housing Corporation v Quinn [2016] NSWCA 338. The NTF Group Pty Ltd v PA Putney Finance Australia Pty Ltd [2017] NSWSC 1194 Category: Procedural and other rulings Parties: Sapphire Suite Pty Ltd (plaintiff/cross-defendant) Bellini Lounge Pty Ltd trading as Bellini Bar (first defendant) James Giuseppe Maruzza (second defendant/first cross-claimant) Michael Scarfone (third defendant/second cross-claimant) Representation: Counsel: Mr M W E Maconachie (plaintiff) Solicitors: Stewart & Associates (plaintiff) File Number(s): 2016/89056 Publication restriction: None Judgment 1. The plaintiff has commenced proceedings in this Court seeking damages for breach of a commercial lease. The second defendant, James Maruzza, against whom the proceedings presently continue, has not appeared in recent times, including today, despite being called outside the court. The plaintiff ex parte seeks an adjournment prompted by a question of jurisdiction. As the merit of the adjournment application depends in part upon the jurisdictional question, it is appropriate that I express some brief comments in relation to it. 2. This Court's primary grant of jurisdiction to hear and dispose of actions is found in s 44(1)(a) of the District Court Act 1973. It is limited, relevantly, to actions of a kind which, if brought in the Supreme Court, would be assigned to the Common Law Division of that Court. 3. In Forsyth v Deputy Commissioner of Taxation, [1] the High Court determined that the construction of s 44(1)(a)(i) "turns on the statutory provisions governing from time to time the assignment of business within the Supreme Court of New South Wales". [2] Those statutory provisions, prior to 1 July 1999, included ss 52 to 55 of the Supreme Court Act 1970. [3] The High Court determined that the position that applied prior to 1 July 1999 was not affected by subsequent amendments to the assignment of business, so that s 44(1)(a)(i) must be construed as referring to actions which would have been assigned to the Common Law Division immediately prior to 1 July 1999, and that s 44(1)(a)(i) did not bear an "ambulatory construction". [4] 4. The relevant statutory provisions in force prior to 1 July 1999 did not include only the sections of the Supreme Court Act to which I have referred. Each of those provisions was expressed to be "[s]ubject to the rules", that is, the Supreme Court Rules 1970. One of those rules was Pt 14 r 2, which provided in subr (1) that: "…there shall be assigned to the Commercial Division proceedings in the Court: (a) arising out of a commercial transaction; or (b) in which there is an issue that has importance in trade or commerce…" 1. Although this provision was subject to subr (2), no relevant exception was there contained. 2. Minds may differ about whether this matter before the Court today involves an issue of importance in trade or commerce, but it is plain, and was not disputed by the plaintiff, that a claim for damages under a commercial lease arises out of a commercial transaction. The disjunctive in subr (1) means that this is sufficient for the matter to be statutorily assigned to the Commercial Division, and thus not to the Common Law Division, under Pt 14 r 2, s 53(4) notwithstanding. This approach was recently taken in a considered judgment by Parker J in The NTF Group Pty Ltd v PA Putney Finance Australia Pty Ltd, [5] with which I respectfully agree. 3. It may be thought that Pt 14 r 2 significantly impacts upon the commercial jurisdiction of this Court. So it may, but the rule is plain. As Parker J concluded in The NTF Group: "Accordingly, the District Court would not have had jurisdiction. This is (as it seems to me) a surprising and unwelcome result. But I see no alternative to it given the decision in Forsyth and the wording of the rules at the relevant time." [6] 1. The plaintiff referred to New South Wales Land and Housing Corporation v Quinn. [7] There the Court of Appeal held that: "an action to recover monetary sums. That is the kind of action that is typically, and was at the relevant time, assigned to the Common Law Division. There is no reason to think that the underlying source of the debt should make any difference to that result." [8] 1. Two questions arise from this passage. The first is the use of the word "typically". [9] It is, with respect, an unusual adverb to use in relation to the operation of a fixed statutory rule. The word might suggest that where an action might "usually" or, "in most cases", be heard, listed or sent by the court registry is a place to which it is assigned. But assignment to a division is not determined by the division which hears the matter, or the division to which a matter is transferred or the division in which a matter is listed, but, rather, where the statutory provisions "assign" that matter, as is explained in Forsyth. [10] In that event, thankfully, evidence from Supreme Court Registrars or specialist practitioners about where types of matters are heard is unnecessary and unhelpful in determining the jurisdiction of this Court. So also is judicial memory. 2. The circumstance that in the Supreme Court a matter arising out of a commercial transaction might, nevertheless, be transferred to "another division" [11] other than the Commercial Division, or retained in a division to which it was not assigned "by this Act or by the rules" [12] would not affect the validity of any step in the proceedings, under s 55 of the Supreme Court Act, nor would it impact upon whether the action was inside or outside the District Court's jurisdiction. Thus, whilst the term "typically" might suggest assignment is done by means other than the statutory provisions, the term cannot be so construed in this context. 3. The second and more significant question concerns the finding that an action to recover a monetary sum was assigned to the Common Law Division irrespective of the underlying source of the debt. [13] Perhaps similarly, in Mega-top Cargo Pty Ltd v Moneytech Services Pty Ltd, [14] the Court of Appeal held that "claims for contract or quasi-contract…pursuant to s 53(4) of the Supreme Court Act 1970 (NSW) as it then stood, were assigned to the Common Law Division". In Quinn, the jurisdictional dispute concerned whether an action would have been assigned to the Administrative Law Division or the Common Law Division. In that event, the circumstance that the action was for a monetary sum was relevant in determining whether the action was an application in respect of the decision of a public body. [15] 4. As the decision in Quinn was not concerned with a commercial matter, it should not be supposed that the Court of Appeal was deciding that a claim for a monetary sum arising out of a commercial transaction would not be assigned to the Commercial Division but, rather, to the Common Law Division, notwithstanding Pt 14 r 2, merely because the, "underlying source of the debt" made no difference. No reference was made to Pt 14 r 2 by the Court of Appeal in Quinn, in Mega-top or in May v Brahmbhatt. [16] And in The NTF Group, when specific consideration of Pt 14 was undertaken, the contrary was found. 5. In any event, none of Quinn, Mega-top or May [17] were dealing with a claim for damages arising out of a commercial transaction, so the statements about a "debt" [18] or "reimbursement" [19] do not have direct application here. 6. For these reasons, the jurisdiction of this Court under s 44(1)(a) to deal with this matter must be doubted. 7. Section 134(1)(h) of the District Court Act confers on this Court the same jurisdiction of the Supreme Court in proceedings for any "equitable" claim or demand for recovery of money or damages up to the District Court's jurisdictional limit. But there is no suggestion in this case that the present claim is an equitable one. 8. Thus, claims for debt, recovery of money or damages, up to the Court's jurisdictional limit are within the District Court's jurisdiction, if those claims would have been assigned to the Common Law Division [20] or, the Equity Division. [21] But, unlike now, there were other divisions of the Supreme Court besides Common Law and Equity in February 1998, and if a type of matter was then statutorily assigned to one of those other divisions, it remains outside the jurisdiction of the District Court. Part 14 rule 2 so assigned this type of matter. 9. Because of the jurisdictional problem, the plaintiff has applied to the Supreme Court for a transfer of these proceedings to that Court and for these proceedings to be adjourned pending the determination of that application. As I have found that the jurisdictional issue has substance, it follows that the application for an adjournment has merit if the matter is capable of transfer to the Supreme Court. Although the transfer provision in s 144 of the Civil Procedure Act 2005 has no application to this matter because it only applies to proceedings under Subdiv 2 of Div 8 of Pt 3 of the District Court Act, and these proceedings are not those, as indicated above in the comments concerning s 134(h) of the District Court Act, the plaintiff relies upon s 140 of the Civil Procedure Act. That provision appears to supply the statutory basis for a transfer of the proceedings and so the application for adjournment of the District Court proceedings is warranted. 10. The circumstance that this Court might have no jurisdiction to "hear and determine" the matter under s 44(1)(a) of the District Court Act does not preclude it adjourning the matter so that the transfer application in the Supreme Court can take its course. The outcome of these proceedings should await the determination of that transfer application. Orders 1. Accordingly, the orders of the Court are: 1. Note that the plaintiff has made an application in the Supreme Court to transfer these proceedings to the Supreme Court because of a jurisdictional issue, returnable 5 June 2018. 2. Order that the proceedings be adjourned for further directions before the Judicial Registrar at 10am on Thursday, 28 June 2018. ********** Endnotes 1. (2007) 231 CLR 531; [2007] HCA 8. 2. Forsyth at [24]. 3. Forsyth at [25]. 4. Forsyth at [42], [45]. 5. [2017] NSWSC 1194 at [41]-[46]. 6. At [46]. 7. [2016] NSWCA 338. 8. Quinn at [71]. 9. Quinn at [71]; see also "in the normal course" in May v Brahmbhatt [2013] NSWCA 309 at [3], [46], [57]. 10. Forsyth at [24]-[27], [43]-[45]. 11. See Supreme Court Act 1970, s 54(1). 12. See Supreme Court Act 1970, s 54(2). 13. Quinn at [71]. 14. [2015] NSWCA 402 at [47]-[49]. 15. See Quinn at [72]. 16. [2013] NSWCA 309 at [3], [46], [57]. 17. See at [1]. 18. Quinn at [71]. 19. See Mega-top at [48]. 20. By virtue of District Court Act, s 44(1)(a). 21. By virtue of s 134(1)(h) but subject to the exceptions in paragraphs (a) to (g) of s 134(1). 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. Decision last updated: 20 June 2018