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Commercial claims in the District Court: jurisdiction? September 11, 2018

Sapphire Suite Pty Ltd v Bellini Lounge Pty Ltd [2018] NSWSC 1366
  1. The issue that arises in these circumstances is whether a suit on a guarantee against the guarantor of the liabilities of a lessee to a lessor is one that arises out of a commercial transaction and whether if so characterised the District Court has jurisdiction to hear such a matter because it is one that would at the relevant time have been assigned to a Division other than the Common Law Division.
  2. Section 44(1)(a) has been considered recently. In Mega-top Cargo Pty Ltd v Moneytech Services Pty Ltd [2015] NSWCA 402, the Court of Appeal dismissed an appeal from the District Court in relation to an agent’s claim for reimbursement of customs duties. However, the Court held that the primary judge had erred in finding that the District Court lacked jurisdiction to determine a restitutionary claim. The primary judge had characterised the claim for restitution as an equitable claim. Leeming JA said this on that topic at [49]:

“[49] Section 44(1)(a) is to be construed in the manner indicated by Forsyth v Deputy Commissioner of Taxation [2007] HCA 8; 231 CLR 531 at [45], which is to say, historically, as at 2 February 1998. Had the claim been brought in the Supreme Court in 1998, it would have been assigned to the Common Law Division, because claims for contract or quasi-contract were not specifically assigned to any other Division of the Supreme Court, and so, pursuant to s 53(4) of the Supreme Court Act 1970 (NSW) as it then stood, were assigned to the Common Law Division: see Forsyth at [29].”

  1. In New South Wales Land and Housing Corporation v Quinn [2016] NSWCA 338, the Court of Appeal considered an appeal from the dismissal by the District Court of a claim brought by the appellant for occupation fees said to be owed to it under the relevant legislation pursuant to which it had housed the respondent. The primary judge considered that the action would have been assigned to the Administrative Law Division. The Court took a different view:

“[71] Mr Quinn’s focus is on the source of the debt claimed – whether one arising under statute as a consequence of a decision of a public body (the s 57(5) Housing Act claim) or one imposed by the Tribunal (which he described, incorrectly, as a ‘statutory fee’ under the Residential Tenancies Act …). That is not warranted by the terms of the Supreme Court Act or rules. Housing NSW’s ‘action’, for the purposes of s 44, is 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.”

  1. In my opinion, these cases are distinguishable from the present case. This distinction is helpfully and thoroughly considered and explained by the primary judge. I respectfully adopt his Honour’s reasoning and conclusions. It follows that in my view, the District Court does not have jurisdiction to hear the claim.
  2. As Parker J said in The NTF Group Pty Ltd v PA Putney Finance Australia Pty Ltd [2017] NSWSC 1194 at [46], so in this case, a conclusion that the District Court does not have jurisdiction is both “a surprising and unwelcome result”. Regrettably, however, it seems to me to follow as a simple matter of statutory construction, uninfluenced by what the primary judge perhaps somewhat wistfully described as “judicial memory.” I would have come to a different view if my experience of appearing in claims against guarantors were thought to be a permissible indicator of the outcome.

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