Australia: NSW Government Bulletin - 2 May 2018: Part 1 - Federal diversity jurisdiction

Last Updated: 5 May 2018
Article by Christine Jones and Eleanor Grounds
Most Read Contributor in Australia, September 2018

On 18 April 2018 the High Court handed down its much anticipated decision in Burns v Corbett; Burns v Gaynor [2018] HCA 15, which we previewed in our Summer Government Bulletin article. The Court unanimously dismissed five appeals from the Court of Appeal of the Supreme Court of New South Wales (Court of Appeal), finding that the New South Wales Civil and Administrative Tribunal (Tribunal) does not have the jurisdiction to deal with a dispute arising between two residents of different states.

Facts

Mr Burns, a resident of New South Wales, complained to the NSW Anti-Discrimination Board about remarks made by Ms Corbett, a Victorian resident, and Mr Gaynor, a Queensland resident, which Mr Burns argued were public acts vilifying homosexuals in breach of the Anti-Discrimination Act 1977 (NSW).

When the former Administrative Decisions Tribunal (now the Tribunal) ordered Ms Corbett to make a public and private apology and Ms Corbett subsequently refused to do so, Mr Burns commenced proceedings in the Supreme Court of NSW for contempt of court. Ms Corbett argued the Tribunal did not have jurisdiction to order her to apologise because, at all relevant times, she was a resident of Victoria, not New South Wales. This aspect of her defence was removed to the Court of Appeal.

Mr Burns' complaint against Mr Gaynor was referred to but dismissed by the Tribunal. Mr Burns appealed to the Tribunal's appeal panel, but before the appeal was heard an interlocutory costs order was made against Mr Gaynor. Mr Gaynor subsequently obtained leave to appeal to the Court of Appeal, likewise arguing that the Tribunal had no jurisdiction to determine matters involving residents of a state other than New South Wales.

Relevant legislation

Section 39(2) of the Judiciary Act 1903 (Cth) (Judiciary Act) provides, relevantly, that courts which are "Courts of the State" under Chapter III of the Constitution have federal jurisdiction in all matters in which the High Court has original jurisdiction.

Pursuant to section 75(iv) of the Constitution, the High Court has original jurisdiction in all matters "between States, or between residents of different States, or between a State and a resident of another State" (federal diversity jurisdiction).

Furthermore, section 76 of the Constitution empowers the Commonwealth Parliament to make laws conferring additional original jurisdiction on the High Court to determine certain other matters. Section 77 gives the Parliament the power to make laws defining the jurisdiction of any federal court other than the High Court, defining the extent to which the jurisdiction of any federal court shall be exclusive of that which belongs to or is invested in the courts of the States, and investing State courts with federal jurisdiction.

Court of Appeal decision

The Court of Appeal dealt with the appeals by Ms Corbett and Mr Gaynor together. It is relevant to note that it was common ground in the Court of Appeal matter that the Tribunal was not a Court of a State. The Court held:

A state tribunal which is not a "Court of a State" is unable to exercise judicial power to determine matters between residents of two states, because the state law which purports to authorise the tribunal to do so is inconsistent with the conditional investment by s.39(2) of the Judiciary Act (when read with s 39A) of all such jurisdiction in state courts.

High Court decision

Five separate appeals (variously commenced by Mr Burns, the state of New South Wales and the Attorney-General of New South Wales) were made to the High Court, with the Attorneys-General of Queensland, Western Australia, Tasmania and Victoria intervening. The Full Court of the High Court heard the appeals together. The Commonwealth Attorney-General filed a notice of contention advancing two arguments:

  1. That the Constitution precludes a state parliament from conferring federal diversity jurisdiction on a tribunal which is not a Court of a State; and
  2. In the alternative, a state law which purports to confer federal diversity jurisdiction on a tribunal is inconsistent with section 39(2) of the Judiciary Act and therefore invalid by operation of section 109 of the Constitution.

The High Court unanimously dismissed all five appeals, finding that the Constitution precludes a state parliament from conferring federal diversity jurisdiction on a tribunal. Such a provision would be inconsistent with the Constitution and therefore invalid. As such, the Tribunal cannot exercise federal diversity jurisdiction.

The majority of the High Court (Kiefel CJ, Bell and Keane JJ, with Gagelar J concurring generally) found:

Sections 28(2)(a) and (c), 29(1) and 32 of the NCAT Act are invalid to the extent that they purport to confer jurisdiction upon [the Tribunal] in relation to the matters between Mr Burns, and Ms Corbett and Mr Gaynor. Pursuant to s.31 of the Interpretation Act 1987 (NSW) they may be read down to avoid that conclusion so that they do not confer jurisdiction upon [the Tribunal] where the complainant and the respondent to the complaint are "residents of different States" within the meaning of s.75(iv) of the Constitution.

Furthermore, Nettle, Gordon and Edelman JJ agreed with the Attorney-General's alternative argument, holding that the Tribunal is prohibited from resolving a dispute between residents of different states as this would amount to an inconsistency with section 39(2) of the Judiciary Act.

As in the Court of Appeal, it was an agreed fact that the Tribunal is not a Court of a State. The High Court held:

"... most importantly, it is uncontroversial that [the Tribunal] is not a "court of a State" for the purposes of Ch III of the Constitution. It is, therefore, unnecessary to delve into the considerations that bear upon the question whether any given tribunal is to be recognised as a "court" for the purposes of Ch III of the Constitution."

The decision did not address Tribunal jurisdiction for disputes between two corporations operating out of different states or a dispute between a corporation and an individual resident of different states.

How will matters between residents of different states be dealt with?

The Justice Legislation Amendment Act (No 2) 2017 (NSW) has introduced amendments to the Civil and Administrative Tribunal Act 2013 (NSW) (NCAT Act) to deal with the jurisdiction gap arising from this case. The amendments, which commenced on 1 December 2017, inserted a new Part 3A into the NCAT Act dealing with federal diversity jurisdiction.

Specifically, section 34B of the NCAT Act now provides that a person with standing to make an original application or external appeal to the Tribunal may, with the leave of an authorised court, make the application or appeal to the District Court or the Local Court instead. Since these are Courts of a State and are therefore vested with federal diversity jurisdiction, this provides an avenue for disputing parties of different states whose matter would otherwise be dealt with by the Tribunal to have their matter heard.

The authorised court may only grant leave for the application or appeal to be made to the District or Local Court if satisfied that:

  1. the application or appeal was first made with the Tribunal
  2. the Tribunal does not have jurisdiction to determine the application or appeal because its determination involves the exercise of federal diversity jurisdiction
  3. the Tribunal would otherwise have had original jurisdiction or external appellate jurisdiction enabling it to determine the application or appeal
  4. substituted proceedings on the application or appeal would be within the jurisdictional limit of the court.

Furthermore, an authorised court may remit an application or appeal to the Tribunal to determine it if the court is satisfied that the Tribunal has the jurisdiction to determine it.

What does this mean?

To some extent, given the new provisions now in force in the NCAT Act, the High Court's decision is academic – but only to new applications. The amendments to the NCAT Act don't assist matters which were underway before the amendments took effect, which we expect would now be transferred to appropriate courts. While this matter only concerned the Tribunal, the High Court's ruling makes it clear that any court or tribunal which does not amount to a Court of a State under Chapter III of the Constitution cannot exercise federal diversity jurisdiction. As such, this decision is relevant to tribunals in other states.

This publication does not deal with every important topic or change in law and is not intended to be relied upon as a substitute for legal or other advice that may be relevant to the reader's specific circumstances. If you have found this publication of interest and would like to know more or wish to obtain legal advice relevant to your circumstances please contact one of the named individuals listed.

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Christine Jones
Eleanor Grounds
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