ACAT’s Missing Powers; Episode 5 – The Counterclaim Strikes Back

In one of the prequels I updated y’all on ACAT recently having its civil jurisdiction updated from $10,000 to $25,000. Like all prequels  the updated ACAT powers neglected key elements that are fundamental to helping ACAT perform coherently with the other elements of the wider system. (with the exceptions of Batman Begins, Casino Royale and Temple of Doom; Rise of Planets of the Apes did not work and I won’t hear differently).


The ACAT’s civil jurisdiction limit means that any case commenced in the ACAT must be for a claim of less than $25,000. Various requirements exist for the calculation of that amount such as no interest to be included unless under contract, though this is arguable once again due to limited wording. As a claim for interest under a contract or agreed rate is really a contractual debt and not strictly interest on an unpaid amount, but maybe i’ll cover this later (The Interest Awakens, Rogue Interest…leave it with me).

Totally Not A Recent Case

So let’s say Joe Alow starts a matter for $10,001 against Joe Blow in ACAT for building work defects. Joe Alow has no choice because his amount is within the new ACAT jurisdiction. Joe Blow as the builder is owed $25,001 under the final contract payment.

Joe Blow would have normally been allowed to commence his claim in the Magistrates Court and would therefore have been allowed legal costs for his troubles. Even if Joe Blow agreed that there was about $10,001 in set-offs, he still could have commenced in the Magistrates Court and have been allowed costs because, giving each party full credit, should still result in a payment of $15,000 in his favour. So Joe Blow would get his costs, which for a matter such as this could be anywhere between $8,000 to $18,000, if not lots more or a little less, depending on the law firm and depending on the litigation philosophy of each lawyer.

What’s the Problem?

Well, because Joe Alow commenced first in the ACAT,  Joe Blow is required to bring all claims in the same action that are related to the same material facts thanks to a genuinely great principle called Anshun Estoppel. Anshun Estoppel is a principle cemented in the case Port of Melbourne Authority v Anshun Pty Ltd. The principle essentially states that, to save the parties, the courts and the public, time and money, litigation should be conducted as efficiently as possible with similar matters being dealt with concurrently. Which means that if you have matters and arguments against the same parties relating to the same material facts or matters, then those should all be brought up in the same case. If you fail to bring it up, you may be estopped (stopped) from raising it later.

This is a great principle brought about by good intentions, but then the legislature accidentally gets in the way.

So What Happens to Joe Blow?

Joe Blow is required to present his counter-claim in the ACAT action but has now brought a counter-claim that exceeds the ACAT jurisdiction. Which means that ACAT is not jurisdictionally competent to hear the claim.

Joe Blow’s claim could be transferred to the Supreme Court under s83 of the ACAT act, however this requires the parties to jointly apply to ACAT to transfer that matter. No other power of ACAT exists to transfer matters between jurisdictions. BY CONSENT ONLY.

Alternatively, the ACAT Act allows parties to drop any portion of a claim, without surrendering the right, that is over the jurisdictional limit under s21 of the ACAT act, however once again, this requires that party’s consent. So if a party refuses, there is no mechanism for resolution.

There are additional inherent powers of the Supreme Court to accept an application to transfer the matter to the Supreme Court, but nothing on the books. But even if this were to occur, the Supreme Court has the exclusive jurisdiction of $250,001 and above for civil claims, so Joe Blow may face an adverse costs order for wasting the Supreme Courts time with a claim that essentially zeros out at $15,000.

Further, s266A of the Magistrates Court Act specifically prohibits bringing claims that should be commenced in the ACAT due to the limit of $25,000.

So within the world of this legislative maze, withholding consent can be the nuclear option in litigation. How lame.


Fabian ACAT tactics

So if you are Joe Alow, and know that you will go down on the claim of $25,001 because it’s a legitimate claim, you could start a smaller claim first on a questionable basis and refuse to consent to any transfer. The matter is then permanently trapped in ACAT which has no power to adjudicate on it or transfer it to a higher court, or even award costs if it eventually goes ahead and you are unsuccessful. Joe Blow would have to drop any portion of his claim over $25,000. There are ways for the ACAT to award costs in very limited circumstances, but you could totally avoid the stage that this is even accessible by refusing to consent.

Alternatively if you are Joe Blow and doubt the veracity of your $25,001 claim then you could do the converse and refuse to consent and let Joe Alow rack up costs chasing you.

Tactically, this is the perfect time to order your lawyers to turn the dial to all-stop and allow the other side to rack up maximum costs, in a no-costs jurisdiction, until a subtle “walk-away” offer becomes amicable to both sides.



This is insane. Both Joes are bound by law to bring their claims in their jurisdictions. Both Joes are bound by law to keep their claims in ACAT and both Joes are bound by law to never have their claims resolved if the other never concedes. Like a weird Byzantine, Schopenhauer, Kafka hybrid system. Scary stuff.

A simple legislative amendment would fix this and it could be as simple as: “new s21A: all claims or counter-claims that exceed the jurisdiction of the ACAT can be transferred to any court or tribunal the ACAT considers appropriate on either the application of either party or on the ACAT’s own initiative.”  Now I’m typing off the cuff here, but on the face of it, this would probably work. Ironically, any misapplication of a rule like this would result in an application to ACAT, but let’s start with small steps.

I’ve drafted legislation previously, so I sympathise with the position that a well-meaning, well-written law can lead to distorted outcomes. But given that matters have been filed that gave rise to this issue previously, it seems unacceptable that this wouldn’t have been fixed sooner.

When Remote Evidence May Be Given

With the modern nature of the law it’s common for lawyers or their witnesses/clients to be unable to actually appear in person. Usually the courts or tribunals are pretty accomodating about the use of AV equipment, but not always.

Whether you’re called out of town, sitting on a beach or appearing in another state there are numerous reasons that you are unable to appear in person. In the instances of criminal trials it’s often more important that the jury is able to examine the witness in person. Each matter and each particular witness and their evidence will determine whether the court will allow people to present their evidence or make their appearance remotely.

Power of Court to Allow Remote Evidence 

The general power of the court to allow for remote evidence is a purely discretionary one. However there are general principles that have been set out which guide the exercise of this discretion. These could broadly be characterised as:

  • the Court will allow evidence to be given remotely when the facilities are available;
  • when it is more convenient; and
  • when there is no prejudice or that it would not be unfair.

The core power of the court stems from its inherent jurisdiction to determine the manner and means under which it considers appropriate to receive evidence. Inherent jurisdiction is of course subject to legislation. The Evidence (Miscellaneous Provisions) Act 1991 (ACT) sets out the same three factors as above at section 20(2).

The Evidence (Miscellaneous Provisions) Act was essentially designed to plug procedural holes in the Evidence Act, especially those that may evolve over time with the advancement of technology without needing to mess with the loftier goals of the Evidence Act. This includes remote audio visual provision of evidence, the ability to swear an oath without a bible, and pre-recorded evidence.

Further to the Act, the Court Procedures Rules 2006 (ACT) provides for these allowances with rules 6700-6704, including rule 6703 which governs when evidence can be given by telephone and states that:

(1)     The court may receive evidence or submissions by telephone, video link or another form of communication in a proceeding.

Further, at subs(2) the rules allow for the court to impose any conditions on this that the court considers appropriate.


Leading judgment in the ACT contains considerations that fell from Higgins CJ in Brodie v Streeter [2003] ACTSC 88:

9. The appellant, opposing the application, pointed out that the court itself had facilities to aid the hearing impaired. As to the second ground, …”more convenient” related to the adducing of the evidence not the convenience of the witness. For example, it may be “more convenient” to give evidence remotely by video link if the witness could not, without undue difficulty and expense, be brought to the courtroom. A prisoner at a remand centre, or a medical witness in a different city were examples given.

10. That interpretation is consistent with the objectives stated by the then Attorney-General, Mr Humphries, on 18 February 1999, introducing a Bill (inter alia) to enact s 30 (supra).

This decision has been re-affirmed several times including recently in R v BNS [2016] ACTSC 51 where the court held that:

12. The Respondent submitted that the witness’s evidence could not be given “more conveniently” from a remote location by video link. His Honour rejected the argument, saying at 179: [14]-[17]:

    1. Her Worship adopted a wide interpretation of ‘more convenient’. Clearly, the witness in this case was not more conveniently located in a remote witness room as opposed to being located in the courtroom. She could equally conveniently access either.
    2. The dictionary definition, adopted by her Worship, is in terms of suitability – being ‘not troublesome’ to a person. It seems to me that ‘more convenient’ is an expression used in a wide sense to include the convenience of the court, the parties and the witness in question.
    3. In the present case, it was, in my view, open to her Worship, on the evidence, to find that the witness’ stated aversion to the appellant, whether reasonably based or not, made it ‘more convenient’ for her to give the evidence remotely.
    4. It was also more convenient for the court to have the evidence given free from the stated inhibitions troubling the witness. Indeed, to an extent, it would favour the appellant that, if the witness’ evidence was nevertheless unsatisfactory, that could not be attributed to the inhibiting presence of the appellant.

The right to appear remotely will more likely be granted when the nature of the evidence to be given does not require the witness to analysed on their personality. Most cases that reject the provision of evidence remotely are related to criminal trials where it may be unfair for the jury to not have the opportunity to examine the demeanour of the person. In Brodie this was rejected because it was at the interlocutory stage but I note that this consideration led to this application of the test being rejected in several cases including in In the matter of an application by the Director of Public Prosecutions [2010] ACTSC 138:

4. On the other hand, as Mr Kukulies-Smith has pointed out, he is one of the major Crown witnesses, indeed the primary witness in relation to the case against HK. His demeanour will be central to the acceptance of his evidence by the jury and there is every likelihood that he will be asked to demonstrate particular features of the activities of the night in question, during the course of his evidence. This can create significant difficulties over the audio/visual link, and certainly lacks immediacy for the jury.


To reiterate the original 3 points the evidence must be able to be given by the facilities available, be convenient to the giving of the evidence and that there will be no prejudice to the party not relying on the evidence. If these conditions can be satisfied there should be no reason, if given that the excuse is genuine, that a lawyer or witness should not be able to appear remotely.

Partnership Obligations Surviving Retirement

Partnerships are an odd form of association. All of your debts and fortunes are your partners and vice versa. It should certainly be enough to give anyone pause before accepting to enter into a partnership with someone.

But partners retire, relationships go sour and people hit hard times. So what obligations, duties and also entitlements survive termination? Taking a leaf out of Buzzfeed’s books, let me tell you that the answer may surprise you.

A situation recently arose where a retiring partner refused to sign documents that would have put the partnerships affairs in order. The retiring partner was claiming an entitlement but refused to acknowledge any surviving duties. Putting aside the operation of any partnership deed, which will usually include some sort of duty of good faith (even though this is implied in law), it may be instructive to assess the law as abstract from any specific circumstances.


Partner’s Duties

Partners are required to act in a manner just and faithful towards one another, including a duty to produce due and fair accounts, more on this later. (Lindley & Banks on Partnership 19th Ed. (2010) pp 234-5.) Further to this, they must act in a manner that is in the utmost good faith and in accordance with their fiduciary duty. (Lindley & Banks, pp552-561; Bean Fiduciary Obligations & Joint Ventures (1995) p 143 and pp185- 196)

Upon retirement, the Partnership Act 1963 (ACT) provides in statute with section 21(3):

“A partner who retires from a firm other than an incorporated limited partnership does not by that retirement alone stop being liable for the firm’s debts and obligations incurred before the partner’s retirement.”

Also at section 44 that:

(1) After the dissolution of a partnership, the authority of each partner to bind the firm and the other rights and obligations of the partners continue, despite the dissolution, so far as necessary to wind up the affairs of the firm or to complete transactions started but unfinished at the time the partnership is dissolved, but not otherwise.

Turnbull & Abbott

Case Law

The answer to the titular question is essentially twofold: the obligations survive as far as is necessary to give a full accounting and wind up the partnership, and (linked to the first branch) a partner is restricted from taking advantage of a benefit that arose under the partnership and therefore should have been included in the accounting.

Chan v Zacharia 154 CLR 178 is the seminal case and concerns a partner who refused to sign a lease renewal on behalf of the partnerships so that he could take personal advantage of it.

  1. “… After the dissolution, the obligations of the partners continued so far as was necessary to wind up the affairs of the partnership…In those circumstances the obligation of “perfect fairness and good faith” which is owed by one partner to another continued: see Lindley on Partnership 14th ed. (1979), at p 430. 

each of the former partners owes the same obligation to the other former partner in respect of that interest as he did while the leasehold interest remained the partnership property …”. That statement is, in my respectful opinion, correct if it is understood to be limited to the case of a partnership which has not been completely wound up…”

This was further approved in John Nelson Developments Pty Ltd v Focus National Developments Pty Ltd [2010] NSWSC 150 in which a partner was determined to not only not take benefit (sorry for the double negative) but actively take positive steps to  “to finalise their obligations by working out ‘who owed what to whom’” [313]

Chan further at [21]:

“The relationship between the partners was curtailed and altered by the dissolution of the partnership. It did not however cease. In particular, and with the exception of the “goodwill” of the practice, each doctor, by reason of his position as a former partner, remained under fiduciary obligations in respect of the partnership property which was to be realized [sic] and applied in paying or discharging partnership debts and liabilities and the expenses of and incidental to the winding up of the partnership affairs…Notwithstanding the dissolution of the partnership, “the good faith and honourable conduct due” from each partner to the other persisted for the purposes of winding up the affairs of the partnership and each partner remained under a fiduciary obligation to co-operate in and act consistently with the agreed procedure for the realization [sic], application and distribution of partnership property”

This position has been affirmed in the Territory primarily in Re Ravinder Rohini Pty Ltd and Janak Raj Sharma v Ivan Krizaic [1991] FCA 318 and also notably in another High Court decision United Dominions Corporation Ltd v Brian Pty Ltd (1986) 157 CLR 1. 

It should also be noted that the same duties can be inferred into joint ventures and other situations where fiduciary obligations can be implied.

So what does that mean?

Well, it means that once a partner retires, he must still act as though he is in the partnership until such a time as a full accounting is taken and distributed of all aspects of the partnership.

This duty extends to taking proactive steps to avoid losses caused to the partnerships through your actions or omissions and alternatively your partners owe you the same duty; to effectively and efficiently do everything they can to secure the release of the retiring partner.


The same. Section 38 of the Partnership Act, provides that the death of a partner will be treated the same as any other form of dissolution. The same rights of the partner to be paid for their share accrue to their estate.

Debts are a little more complicated, but essentially they operate in the same way except that the debts of the dead partner owing to the partnership must take second priority to any other personal debts directly owing from the dead partner’s estate. [section 13]