ACAT’s Missing Powers; Episode 1: The Phantom Jurisdiction

Many of us grew up on the original ACAT trilogy and may view these new episodes as somewhat of a hollow imitation. But the future waits for no one, time and tide, the young will eat the old, whatever the expression is that means I’m going to do it anyway, so buckle up.

To reminisce, treat yourself to one or all of the original ACAT trilogy first: A New Limit, The Counterclaim Strikes Back and Return of the Enforcement Officer.


ACAT Jurisdiction – Ends at the Border

By virtue of the ACAT Act, ACAT has first jurisdiction in many matters including disputes under $25,000, residential tenancy disputes, fencing and boundary disputes, administrative review, energy and water and mental health assessments. Importantly, for reasons we will shortly discuss, first jurisdiction does not equal exclusive jurisdiction. The enacting legislation for the ACAT purported to set up a system that diverted a large proportion of matters, mostly minor and administrative matters out of the court system and into a specialist jurisdiction.

A recent decision out of the High Court has established some pretty strict limitations on the purported jurisdiction of tribunals all over Australia.  Essentially, that jurisdiction ends at the border, regardless of what the enacting legislation purports to do.

Recently in Burns v Corbett [2018] HCA 15 the High Court held that New South Wales’ civil and administrative tribunal, the NCAT, cannot purport to exercise jurisdiction over residents of other states or territories. The Burns decision effectively confirms Canberra’s status as a powerful city-state only.


Kiefel CJ, Bell and Keane JJ in the majority opinion:

  1.  The first issue in these appeals is whether the Commonwealth Constitution precludes the Parliament of a State from conferring jurisdiction in respect of a matter between residents of different States within s 75(iv) of the Constitution on a tribunal which is not one of the “courts of the States” referred to in s 77 (“the Implication Issue”). If that issue were to be resolved in the negative, the further issue would arise as to whether a State law which purports to confer jurisdiction on such a tribunal in respect of such a matter is rendered inoperative by virtue of s 109 of the Constitution on the basis that it is inconsistent with s 39 of the Judiciary Act 1903 (Cth) (“the Judiciary Act“) (“the Inconsistency Issue”).
  2. The Implication Issue should be resolved in the affirmative. Considerations of constitutional text, structure and purpose compel the conclusion that a State law that purports to confer jurisdiction with respect to any of the matters listed in ss 75 and 76 of the Constitution on a tribunal that is not one of the courts of the States is inconsistent with Ch III of the Constitution, and is, therefore, invalid.

The High Court’s reasoning appears to only apply to natural persons and not corporations (Australasian Temperance and General Mutual Life Assurance Society Limited v Howe (1922) 31 CLR 290).

Howe’s Case and several others have affirmed that the reference in s75(iv) to ‘resident’ is a reference only to natural persons. The ‘great dissenter’, Justice Kirby predicted in 2003 that the narrow definition of natural persons would be proven restrictive over time. In British American Tobacco Australia Ltd v Western Australia (2003) 217 CLR 30, 72–3 [109]–[110] Kirby J wrote:

The decisions establishing that principle involved a remarkable narrowing of the constitutional language. In my view, it is a narrowing unjustified by the text or the context. In many ways it is reminiscent of judicial holdings in Australia and elsewhere at the same time to the effect that a ‘‘person’’, when referred to in legislation (for example for the purpose of admission to professional practice) did not include a woman. The only justification for such a narrow interpretation of s 75(iv) of the Constitution was the expressed judicial fear about an extension of the jurisdiction of this Court that might result in an inundation of work that this Court could not easily deflect to other courts in the views then held concerning the obligation of this Court to discharge a jurisdiction conferred on it by the Constitution.

In a proper case, this Court should reconsider the early determination that corporations, including statutory corporations, cannot be ‘‘residents’’ of a different State for the purposes of s 75(iv) of the Constitution. Self-evidently, corporations are, and were at the time when the Constitution was made, legal persons. They were then, and still are, frequent litigants in the courts. Their existence was contemplated by the Constitution itself. Although in 1985 in Crouch v Commissioner for Railways (Q) this Court declined to reopen its early holding on the meaning of s 75(iv), the decision is open to the strongest doubt and criticism. In my view it is wrong. One day this Court will say so.

Earlier Limitations

Other jurisdictional limits have already been addressed: for example, VCAT had earlier ruled against their own jurisdiction in relation to serving process in foreign countries. In Gluyas v Google Inc [2010] VCAT 540, an Australian sought to bring an action against Google for not taking down an autism hate-blog based out of the United States. VCAT dismissed the application for other reasons but did note specifically that VCAT had no powers to effect process outside of Australia. Regardless of how well the legislation is written, it is likely the same situation here.


Victoria presents one interesting solution to the problem. There is a little-known provision in Victoria whereby proceedings can be issued in both a Court and VCAT. The President of VCAT is a Supreme Court Judge and Vice Presidents of VCAT are County Court Judges, so there are already judges who sit in both jurisdictions. Their legislation allows for special appointments whereby a Judge could continue hearing a VCAT case, out of the jurisdiction, and also wear the hat of a Judge.

The ACT position of jumping jurisdictions is somewhat more complicated.

fence jump.gif

Any party anywhere, international or interstate, can still consent to the jurisdiction. However, it appears that the only feasible solution for someone looking to bring an action in the ACT, where one party is interstate, is to bring the action in the ACT Supreme Court. The situation does get complicated though, despite the Supreme Court clearly holding inherent jurisdiction over any ACAT dispute, there is no ability to transfer proceedings. An ACAT dispute can have a question referred to the Supreme Court (s84) and an ACAT decision can be appealed to the Supreme Court (s86). But the Supreme Court would likely have to dismiss the proceedings on the basis that the original process was deficient for lack of jurisdiction.

Filing a matter in the ACAT for a natural person costs $338, filing in the Supreme Court costs $1,669. There is no specialist fee for ACAT referrals or for matters that cannot be started in the ACAT because of this deficiency.

For example, if you have a $2,000 bond, your landlord has unjustly kept it, but your landlord is based in Sydney, then you have no option but to file in the Supreme Court for $1,669.

The good news is that if you are in the right, rule 1722 would mean you are entitled to 100% of costs, as opposed to the ACAT presumption of 0% costs. Of course, if you are incorrect, then a simple bond dispute could lead to thousands of dollars of costs if, as a punter, you happen to get the law wrong.

The ACT is particularly susceptible to this problem given the size of the Territory and the increased likelihood that parties to transactions will be based in NSW or further afield. Essentially, the stakes are hugely raised the second you step into the Supreme Court jurisdiction, which is entirely against the original purpose of the ACAT.

This is a matter for the legislature but if I may,  I humbly propose three solutions:

  1. Create a low-cost filing fee with a presumption for no costs in the ACT Supreme Court to catch those cases that cannot find jurisdiction or where consent jurisdiction is lacking – this one is possibly as simple as allowing for the rules or even a practice direction to state that upon application the Court will apply the rules and practices of the ACAT (+the fee/costs structure);
  2. Amend the ACAT structure to have Supreme Court judges appointed as Presidential Members to create a new field of “two-hat” law, previously not in existence in the ACT (but at least Victoria has precedence to assist);
  3. Two Words: Singular Jurisdiction. Abolish the ACAT. Abolish the Magistrates Court. Everything is the Supreme Court only. We would have singular rules and simply have different levels of judicial officers hearing cases. Members can sit as Registrars when needed, Judges can sit as Magistrates on bail decisions etc. In a jurisdiction our size, there are great advantages to this approach. Massive administrative savings would be realised and the same rules can remain in place to dictate which officer should deal with each case and handle the appropriate costs positions and so on.

Point number 3 requires its own post, but if you catch me at the pub and have a spare hour or two I’ll do my best to convince you of the benefits of a sole jurisdiction. By the way, we will shortly have a big shiny new Court precinct building that would serve a single destination well, but I’ll also be the first to admit that this is a bit of a pipe dream…for now.

The High Court decision in Burns has huge implications for a jurisdiction the size of the ACT and once again I find myself writing about the ACAT facing difficult foundational issues that have existed since inception but are one-by-one coming to the fore, with real implications for those with cause to seek ACAT’s intervention.

ACAT’s Missing Powers; Episode 4 – A New Limit

On 15 December 2016 the ACAT will change its civil jurisdiction from $10,000 to $25,000. In the explanatory memoranda, then-Attorney-General Simon Corbell MLA, explained that this increase was to ensure that the jurisdiction of the ACAT kept up in real terms with the original jurisdiction of $10,000 as it existed in 1997 under the Small Claims Court which was then superseded by the ACAT in 2008 when it was set up.

Unfortunately, the more likely result will be that recovering debts for small businesses and individuals is about to get a lot harder and a lot more expensive.

Ulterior Reasons

The reasons behind the changes are likely more chimeric than the explanatory memoranda stated and have the serendipitous benefit of alleviating the busy court system with no additional expenditure. For numerous years, the legal fraternity and the judiciary were calling for a 5th full-time Supreme Court Judge to try to deal with the back-log and for a long time were allocated several Acting Justices and supplementary Federal and interstate judges, but even with the appointment of a 5th Justice in July 2016 the situation does not appear to have significantly eased. This is not limited to the Supreme Court with a similar situation existing in the Magistrates Court, where Special Magistrates are used to help meet the immense work load faced by the Court there.

Over the last few years there has been bandaid tweaking to the court administration such as creating new listing allocations and making it easier to transfer matters such as the simplified committal process. Some methods such as the bulk call-overs and multiple listings on the same day seem to be having limited success but overall fail to address the underlying problem that our courts are over-worked. Additionally, as the government has just committed $150 million for a new courts precinct it is unlikely that any of the more expensive fixes will be employed soon.

With this in mind, it would make sense that an easy, cheap solution would be to change the jurisdictional limits and shift a lot of the smaller litigation away from the Magistrate’s Court towards the ACAT.

Shifting the Buck

The biggest problem with this approach is that the ACAT is also overworked and in fact overworked to the point of not being fit for purpose. The ACAT is designed to resolve disputes quickly, simply and inexpensively. For those who have dealt with the ACAT, this is often simply not the case. Reasonably simple cases such as return of residential bond cases often take months, yet alone the more complex issues dealt with by ACAT such as reviewing large development application or decisions relating to the discipline of the legal profession.

The involvement of lawyers probably contributes to the back-log but at the end of the day there are real stakes on the line and the Tribunal still deals with issues in a manner mostly corresponding to the Courts such as following precedent and applying legislation making it still largely inscrutable to the average member of the public. The jurisdiction of ACAT stretches far beyond returns of bonds and it is not uncommon for multi-million dollar developments to be subjected to ACAT’s jurisdiction and with that amount of money you can guarantee that both sides will have lawyers and they will raise every possible point in favour of their client, much against the simple, inexpensive model originally envisaged.

The Impact on Business

The impact on small business should not be understated. Some of the toughest times for a small business is when they are dealing with recalcitrant debtors. Waiting 6-12 months to get paid, or not paid at all, can really put the squeeze on small businesses. Even businesses that can afford to absorb that debt still have to take on that burden; whether through reshuffling finances, allocating staff resources to recover the debt or ultimately hiring outsiders to recover that debt on their behalf.

This final step usually involves lawyers. Once lawyers get involved, very few creditors ever recover 100% of their outlay. If they are lucky, a simple quick process such as a statutory demand can be a cheap way to recover debts but the problem with this mechanism is that if the debtor raises a “genuine dispute” then Statutory Demands will usually fail. “Genuine disputes” are simple enough to raise and are often red herrings not actually deterring from whether the debt is payable. The reasoning being is that Statutory Demands are not meant to resolve disputes.

If a dispute is raised then the courts will usually need to become involved and when they do, at least there is the probability that if a creditor is successful in proving their debt that they will recover around 60-80% of the legal costs they have outlaid. Recovering 60-80% makes it commercially viable to outlay $8-10,000 in legal costs to pursue a debt of $20,000. Of course people are free to pursue their debts without lawyers, but in the courts this is usually at their own peril, especially if the debtor “lawyers up”.

This is where the real problem becomes apparent. The increased jurisdiction of ACAT hasn’t corresponded with a re-visiting of the other rules, including the practice that ACAT generally doesn’t award costs. ACAT has the ability to award costs in instances where one party has acted in such a way that causes unreasonable delay or obstruction but in practice if a losing party can prove that it had a case to argue, even if wrong, then they’ll almost never face a costs order.

This drastically changes the commercial considerations faced by small businesses. After 15 December 2016 a small business will need to assess whether they are willing to incur $10,000 in costs to pursue a $15,000 or $20,000 debt, when previously this would have been a no-brainer due to the 60-80% costs recovery.

I’ve heard it defended that this approach will encourage settlement. But generally speaking, if the debt is truly owing then this does not encourage settlement but instead just makes it harder to recover debts against those parties willing to take advantage of the system against small businesses simply trying to play by the rules.


To accept the argument that real-term jurisdiction hasn’t increased since 1997 is a valid point, but utilising the Reserve Bank calculators show that the new limit should be closer to $15,000 rather than $25,000; and this difference makes all the difference to a small business.

McCarthy Appointed to ACAT

Local Barrister Geoffrey McCarthy of Blackburn Chambers has been appointed as a Presidential member of ACAT with a term to expire in December 2022.

Along with the appointment of Mr McCarthy, the Attorney-General announced the appointment of Mary-Therese Daniel as a Presidential Member and Robert Orr PSM QC and Professor Peta Spender were appointed as acting presidential members.

Geoffrey McCarthy worked with the ACT Government Solicitor until he joined the bar 12 years ago and the Attorney-General has cited his strong community focus and strong leadership abilities as key attributes that will assist him in performing his Presidential duties.

Mr Orr, Ms Therese-Daniel and Professor Spender are currently on the ACAT and the re-appointments until 2022 and 2023 respectively are considered a show of confidence in their previous performance in the role.

As the Tribunal aims for quick and cheap delivery of justice outcomes, it regularly relies on its Presidential Members to step in to handle larger and more complex cases during times of greater case load.

Read the AG’s press release here if so inclined.