The Constitutional Limits of NCAT’s Jurisdiction  

Law Society Journal Article by Richard McCullagh

Richard McCullagh is the author of Australian Elder law , Thomson Reuters. 2018 and a legal director of Patrick McHugh & Co, Solicitors & Conveyancers –

Under the Commonwealth Con­stitution (‘Constitution’), the NSW Civil and Administrative Tribunal (‘NCAT’) has no jurisdiction to hear a dispute involving ‘federal jurisdiction’ because it is not a ‘Chapter III court’. This has been confirmed by a number of recent decisions referred to below and applies independently of issues such as justiciablity, standing or the like.

What is the practical problem?

NCAT is a cheaper, faster and less formal forum for the determination of a civil dispute within its jurisdiction, compared to traditional courts.  It is the default forum for matters within its Guardianship Division. It is the only forum in which proceedings may be commenced under some legislation conferring jurisdiction upon NCAT. An example is an operator of a retirement village or manufactured home park seeking to terminate a resident’s lease.

How did the problem come to light?

In Burns v Corbett  [2018] HCA 15 (‘Burns), the appellant applied to a predecessor of part of NCAT, the Administrative Decisions Tribunal, for certain redress under the anti-discrimination Act 1977 (NSW). This related to the making of comments found to have constituted homosexual vilification in breach of that Act. The appellant resided in NSW and the respondent in Victoria. Under s 75(iv) of the Constitution, only a body invested with federal jurisdiction can deal adjudicatively, as opposed to administratively, with the matter in these circumstances. It was assumed in this case that NCAT was not a court but it was found to be acting judicially, so jurisdiction was wanting.

In Attorney General for NSW v Gatsby [2018] NSWCA 254 (‘Gatsby‘), a mother residing in Queensland applied to NCAT for an order under the Residential Tenancies Act 2010 (NSW) to terminate a lease to her daughter of her house located just south of the border, as rent was in arrears. The issue argued was whether NCAT is a ‘court’ for the purposes of Chapter III of the Constitution. If so, NCAT would have jurisdiction, despite Burns. The Appeals Panel held that NCAT was a court but the Court of Appeal overturned the decision on that issue.

Finally, in Murphy v Trustees of Catholic Aged Care Sydney [2018] NSW CATAP 275 (‘Murphy‘), a resident in a retirement village was directed by the village operator, under the Retirement Villages Act 1999 (NSW), to remove his dog, ‘Rex’, as the village rules prohibited pets. At first instance, an order for Rex’s expulsion was granted but this was quashed on appeal by the Appeal Panel of NCAT.

No interstate issue arose here,  but rather the invocation by the resident of a Commonwealth statute. Rex was registered as an ‘assistance animal’ under the Companion Animals Act­ 1998 (NSW) and his owner claimed the order sought constituted unlawful discrimination under the Disability Discrimination Act 1992 (Cth) (‘DDA‘). Under s 76(ii) of the Constitution, only a body having federal jurisdiction can deal with a matter arising under a Commonwealth Statute.

What is ‘federal jurisdiction’?

Despite the ‘street level’ factual simplicity of each of the above cases, they give rise to Constitutional issues of Kantian abstraction under Chapter III. A very simplistic summary may be:

  • Section 71 of the Constitution provides that, ‘The judicial power of the commonwealth shall be vested in the High Court and … such other courts as it [the commonwealth parliament] invests with federal jurisdiction.’ (Emphases added.) This is the fountainhead of federal judicial power created by and upon the federation of the Australian colonies.’
  • ‘Original’ federal jurisdiction is conferred upon the the High Court under s 75 about matters arising, for example, under international treaties, between consuls, whenever the Commonwealth is a party to litigation with a State and, as noted above, where parties are, or become, residents of different states or territories.
  • Original jurisdiction is also conferred as the parliament may enact, under s 76 of the Constitution, in relation to the interpretation of the Constitution or, as noted above, ‘any matter arising under any laws made by the parliament,’ such as the DDA.
  • The heads of jurisdiction under ss 75 and 76 are then divided into the ‘exclusive’ original jurisdiction of the High Court under s 38 of the Judiciary Act 1903 (Cth) and, for want of a better term, the ‘non-exclusive’ balance under s39(2) of that Act.
  • Crucially, s77(iii) of the Constitution permit the Commonwealth Parliament to make laws ‘investing any court of a state with federal jurisdiction,’ and this is implemented by s 39(2) of the Judiciary Act – comprises the non-exclusive original jurisdiction of the High Court.
  • This applies to courts only, be they State, Territory or Federal. States can invest adjudicative authority in organs other than those comprising Chapter III courts. but not as to any matter within the non-exclusive jurisdiction of the High Court (Burns, at [21]).
Interstate parties under s 75(iii) – the ‘federal diversity jurisdiction’

In Burns, the High Court held that the mere fact of interstate residency of a party to proceedings deprives NCAT of the jurisdiction it would otherwise have had to adjudicate upon the matter. Faced with the same problem in Gatsby, the Appeal Panel of NCAT in a detailed and rigorous decision held that NCAT is a ‘Chapter III court’ and that federal jurisdiction is operative. However, the NSW Court of Appeal overturned that decision in a similarly considered review of the various court-like, or ‘curial,’ features of NCAT, and the not-so-curial.

The fundamental shortcoming is that the renewable five year terms of NCAT members – very few of whom must be judges and only some of whom must be legal practitioners – falls too far short of judicial tenure that would afford the requisite degree of members’ independence from the legislative and executive limbs of government. Judges can only be removed from office by the Governor on address by both houses of Parliament in the same session for proved misbehaviour or incapacity. Further, the language of the Civil and Administrative Tribunal Act 2013 (NSW) (‘NCAT Act’) clearly refers to NCAT as a ‘tribunal’ and so, for example, it has the same powers as a ‘court of law’ in the context of contempt proceedings under s 73 of that Act. No doubt in anticipation of Burns, the NSW Parliament passed the Justice Legislation Amendment Act (No.2) 2017 (NSW), inserting Part 3A in the NCAT Act. This permits an application to be made, with leave, to the Local Court or District Court instead of NCAT where a party is not resident in NSW but the applicant is otherwise entitled to make a claim. While inconvenient, parties to disputes otherwise within NCAT’s jurisdiction do predominantly reside in NSW.

In the context of elder law, the Guardianship Division of NCAT has recently sought to avoid this problem by distinguishing its administrative character from the more judicial general jurisdiction that was the subject of Burns and Gatsby. Its procedure is inquisitorial rather than adversarial, its purpose and focus is on the best interests of a person said to be in need of protection and the outcome relates to the delegation of decision-making powers rather than the determination of rights and obligations as between contesting parties (NBL [2019] NSWCATGD 5 at [45]-[48]; see also, CQG [2018] SACAT 36 and GS [2018] WASAT 72)

Federal Statutes under s 76(ii)

Of far greater impact is likely to be the problem in Murphy, where a commonwealth discrimination statute was reasonably relied upon in good faith as a defence to order for Rex’s removal from the retirement village. Once that occurs, the whole matter is deemed to be one involving federal jurisdiction so that only a Chapter III court may deal with it, and according to Gatsby, that does not include NCAT.

There are degrees, however. In the Matter of Australian Property Custodian Holdings Limited (in liquidation) (receivers and managers appointed) (controllers appointed) [2012] NSWSC 1298, former residents of a retirement village were pursuing the insolvent operator for the overdue payment of their refund. The application was commenced in another forerunner to part of NCAT, the Con­sumer Trader and Tenancy Tribunal (‘CTTT’). The liquidator applied to the Supreme Court for orders that the CTTT lacked jurisdiction by reason that the operator was a company incorporated under a federal statute, the Corporations Act 2001 (Cth). This was rejected by the Court so the liquidator pressed the point further on the basis that the residents’ refunds were calculated by reference to the value of redeemable preference shares as provided for in the company’s constitution.  Rein J held that the obligation to pay the refund was grounded in the terms of the residents’ village contracts and the timing of payment governed by the Retirement Villages Act 1999 (NSW). In these respects, the CTTT clearly had jurisdiction to make the orders sought. Federal law did not create the rights and duties in this case, but only facilitated the underlying legal structure utilised by the operator.

The new Part 3A of the NCAT Act is expressly confined to the s 75(iii) problem of interstate residency. It could presumably be amended to address the invocation of a federal statute.

There are likely to be other instances of federal statutes being invoked in NCAT proceedings. Examples are the Competition and Consumer Act 2010 (Cth) and Credit (Commonwealth Powers) Act 2010 (Cth) in the Consumer and Commercial Division, and perhaps the National Disability Insurance Scheme Act 2013 (Cth) and the Aged Care Act 1997 (Cth) in the Guardianship Division.

Where to from here?

It is now clear that a case otherwise suitable for application to NCAT will get nowhere for want of jurisdiction if a party does not at that time reside in NSW or if a Commonwealth statute has been invoked in asserting or denying rights or obligations giving  rise to the dispute. As to the former, application by leave may be made to the Local Court or District Court instead of NCAT. As to the latter, in the absence of anything else, an application can be made to the Supreme Court under its general jurisdiction, or in some cases, an application to the Federal Circuit Court, may be necessary.

LSJ  –