Philip Ruddock (Berowra, Liberal Party, Attorney-General) Share this | Link to this | Hansard source

I move:

That this bill be now read a second time.

This bill amends the Trade Practices Act 1974, the Family Law Act 1975, the Federal Court of Australia Act 1976, the Admiralty Act 1988 and the Child Support (Registration and Collection) Act 1988 to confer new jurisdiction on the Federal Magistrates Court.

The Federal Magistrates Court, which commenced hearing cases in July 2000, is intended to provide a quicker, cheaper and simpler option for litigants and to enable both the Federal Court and the Family Court to concentrate on more complex and longer matters.

A review of the Federal Magistrates Court’s first two years of operation was carried out in 2002-03. The review concluded that the court was making a valuable contribution to an improved federal civil justice system.

The review recommended that consideration be given to conferring on the court concurrent jurisdiction with lower level state courts in trade practices matters. It also recommended that the court be given jurisdiction to hear any civil matter remitted from the Federal Court or the Family Court in which the Federal Magistrates Court does not otherwise have jurisdiction. This bill implements those recommendations.

There are many matters that come before Commonwealth courts that are less complex and do not need to be dealt with by superior court judges. The government continues to consider proposals for new jurisdiction that may be appropriate for the Magistrates Court. This bill implements a number of such proposals in addition to those recommended by the review.

The review’s recommendation that the government consider additional trade practices jurisdiction for the Federal Magistrates Court followed the release in August 2001 of a consultation paper issued jointly by the Attorney-General’s Department and the Treasury. The consultation paper included proposals that the Federal Magistrates Court be given additional jurisdiction under the Trade Practices Act.

In March 2004, the Senate Economic References Committee report Effectiveness of the Trade Practices Act 1974 in protecting small business also recommended that the jurisdiction of the Federal Magistrates Court under the Trade Practices Act be extended. The committee believed that the court would provide a more accessible forum for small businesses to take action against companies that engage in unconscionable conduct and parties in breach of prescribed industry codes. In June 2004, the government accepted the recommendation that the Federal Magistrates Court jurisdiction should be extended to enable it to consider proceedings relating to parts IVA and IVB of the Trade Practices Act.

The court currently has some jurisdiction in relation to consumer protection matters under the Trade Practices Act. This bill contains an amendment to extend the court’s consumer protection jurisdiction to pyramid selling claims and claims involving manufacturers and importers of goods. It also confers new jurisdiction in relation to claims about defective goods, unconscionable conduct and contraventions of prescribed industry codes.

The proposed amendments also increase the monetary limit on damages by the Federal Magistrates Court under the Trade Practices Act from $200,000 to $750,000. This will make available to more litigants a simpler and more accessible forum for instituting proceedings.

The Family Court and the Federal Court may already transfer proceedings to the Federal Magistrates Court. However, a proceeding can only be transferred if the Federal Magistrates Court already has jurisdiction in relation to the matter that is the subject of the proceeding to be transferred. The bill allows for the transfer of matters in which the Federal Magistrates Court does not otherwise have jurisdiction. This amendment implements the recommendation of the FMC review which I referred to earlier. The Federal Court and Family Court must continue to have regard to the existing factors they take into account when transferring a proceeding. Those factors include the interests of the administration of justice and the resources of the Federal Magistrates Court. The government expects few matters to be transferred under this new provision. However, the transfer of appropriate matters will ensure that matters are heard in the most appropriate court.

The amendments to the Admiralty Act would confer jurisdiction on the Federal Magistrates Court in relation to all in personam actions under the act—these are actions enforceable against the defendant personally—and confer jurisdiction in rem actions, which are actions enforceable against a ship, freight or cargo, remitted from the Federal Court or a State Supreme Court. This conferral of this jurisdiction will give litigants a simpler and more accessible forum to redress admiralty matters. The jurisdiction is also appropriate for the Federal Magistrates Court as state and territory and lower level courts already possess this jurisdiction.

The Child Support (Registration and Collection) Act allows for an aggrieved person to appeal to the Federal Court against the making of a departure prohibition order. This is an order that essentially prevents a person from departing Australia where they have an outstanding child support liability and certain other conditions are satisfied. The bill confers the same jurisdiction on the Federal Magistrates Court as is currently possessed by the Federal Court. As the Child Support (Registration and Collection) Act already confers jurisdiction on the Federal Magistrates Court in relation to other matters, the proposed amendments merely extend that jurisdiction to include the ability to hear appeals against departure prohibition orders. There are no operational or policy reasons why the court’s jurisdiction should not be so extended, as these appeals do not generally raise any complex factual or legal issues.

The Federal Magistrates Court was established because of the need for a lower level Commonwealth court that could handle less complex federal matters in a more efficient and effective way. As was the case when the Federal Magistrates Court was first established, the government is keen to ensure that all Australians and Australian businesses are provided with suitable access to the justice system according to their needs and within their means. This bill contributes to achieving the goal of a more accessible and flexible justice system.

I commend the bill to the chamber and I table an explanatory memorandum.

Nicola Roxon (Gellibrand, Australian Labor Party, Shadow Attorney-General) Share this | Link to this | Hansard source

As the Attorney has already outlined in his second reading speech, the Jurisdiction of the Federal Magistrates Court Legislation Amendment Bill 2005 is going to amend several acts, with the effect of extending the jurisdiction of the Federal Magistrates Court. I will cover some of the detail, but, given that the main issues have already been flagged by the Attorney, I simply indicate that Labor support this bill. He has noted that the jurisdiction of the court will be extended for certain trade practices matters, any federal matters remitted from the Federal Court or Family Court, certain admiralty matters and certain child support matters. These are sensible changes which will improve the flexibility and efficiency of the federal judiciary, so we are pleased to be supporting the bill.

I note that the Attorney also referred to a number of reviews and consultations that have led to these changes being put forward in this bill. We do have one serious criticism of the bill, and that is that it has taken too limited an approach to extending the Federal Magistrates Court’s jurisdiction over matters arising under the Trade Practices Act. The provisions in schedule 1 extending the Magistrates Court jurisdiction over trade practices matters will be a great help to small business and consumers, as the Magistrates Court has a lower costs regime than the Federal Court. As the minister noted, this follows a recommendation from the Senate Economic References Committee report on the effectiveness of the Trade Practices Act in protecting small business.

However, what the minister did not note was that the government has chosen to accept only part of that recommendation which came from the Senate references committee’s report about protecting small business. The government has refused to accept the recommendation that the FMC have jurisdiction over matters arising under sections 46 and 46A of the Trade Practices Act. Those are the sections that relate to the misuse of market power. Instead, it has limited the extended Magistrates Court jurisdiction to matters involving unconscionable conduct, industry codes, pyramid selling and actions against manufacturers and importers of goods and defective goods.

Of course, we welcome that those matters have been included in the extended jurisdiction, but we think that the gap and the selective acceptance of the recommendations from the Senate committee are going to leave small businesses at a disadvantage. Small businesses clearly do need protection from the misuse of market power. We know that they can instigate their complaints in the Federal Court, but it is exactly those small businesses that might be deterred from taking such an action by the higher costs involved in Federal Court litigation compared to a proceeding before the Magistrates Court.

It is particularly ironic that we are debating this in the very week that the government’s workplace relations changes come into effect, where the government has been pretending to be such a friend of small business. It has been advocating its changes in the industrial relations area, arguing that these are advantages for small business. I am not going to have a debate about industrial relations, although I actually think the complexity of the legislation that the government has introduced is going to be a serious cost to small business. But I flag that as a point to say that you cannot on the one hand in one policy area say that you are a friend of small business and then neglect to pick up what is a serious recommendation from a Senate references committee to extend the Magistrates Court’s jurisdiction in a number of areas to ensure that small business can have access to justice. There does not seem to be any rationale as to why the government has chosen to pick up half of the recommendations but not the other half.

Labor are going to be moving an amendment to address this gap. We have given notice to the government on that, and it will be our intention to ensure that the amendment is moved in the House and not in the Main Committee. I flag my intention to move a motion to that effect at the end of this second reading debate. I also flag my intention that the amendment that we will be moving in the House will go to this issue of extending the jurisdiction of the Federal Magistrates Court to those misuse of market power matters that the government did not pick up. This should be no surprise to the government, given that this amendment has also been moved in the other place.

Labor supports the remainder of this bill. Schedule 2 will give the Federal Court and Family Court the option to remit any matter within their jurisdiction to the Magistrates Court. This will give those courts more flexibility over how they manage their workloads. Schedule 3 is going to amend the admiralty acts to give the FMC jurisdiction over a range of maritime claims, and they can be remitted by the Federal Court or a state supreme court. This will effectively give the Magistrates Court an equivalent jurisdiction to that held by the state and territory lower courts.

Schedule 4 will give the Magistrates Court jurisdiction to hear appeals against departure prohibition orders made by the Child Support Agency. It is appropriate that appellants against these orders should have access to a cheaper and quicker forum, such as the Magistrates Court.

Although we note these changes, with the exception of the gap that I have already indicated, we also note that the government did not take the opportunity to include in this bill a number of other matters that it could have in extending the jurisdiction of the court. Early last year, we were told that the government was planning to extend the jurisdiction of the Magistrates Court to include certain consumer protection and insolvency matters arising under the ASIC Act and the Corporations Act respectively. This is what was proposed in an exposure draft that was circulated in 2004. I ask the Attorney: where have these amendments gone? What are the government’s intentions in this area? Why have consumers and creditors had to wait longer for the government to consider its view in this area?

Similarly, we see nothing in this bill that came out of the report of the Advisory Council on Intellectual Property on extending the Magistrates Court’s jurisdiction to cover patent, trademark and design matters. The report came out in late 2003. We are now in 2006. It seems to us that this issue has possibly been put in the ‘too hard’ basket. Perhaps in summing up, the Attorney might advise where the government is at on these matters and why, although it is using this bill to extend the jurisdiction of the Magistrates Court, these other matters have not been included in this bill. We will continue to monitor these issues and look forward to seeing the government taking some action on them in the future.

Lastly, I would like to note that, obviously, these changes have the potential to significantly increase the workload of the Magistrates Court. We hope that the government is actively monitoring the workload, the resources and the performance of the Magistrates Court to ensure that on its current resources it is able to meet not only its current demands but also increases that will result from this bill. The Magistrates Court did receive an increase in resources in the last budget, which was flagged to help pay for increased family law work, but this bill will add jurisdiction which goes well beyond family law. We will be monitoring this closely, because we believe that, if these reforms are to be meaningful and the Magistrates Court is to fulfil its promise of being a cheaper, more accessible forum where people can get access to justice quickly, it needs to be resourced properly to be able to do that.

It is clear that the funding of the federal judiciary in general does need urgent government attention. I was staggered when the Productivity Commission recently found that the Federal Court’s expenditure per case finalised has recently increased by around $5,000 per case to nearly $17,000 per case in just one year from 2003-04 to 2004-05. I was even more surprised not just to find that in the Productivity Commission report but to be told by the Attorney-General’s Department in answers to questions in additional estimates that they were quite unconcerned about this matter, simply saying that they may at some stage talk to the court about this issue. Of course we understand that the courts must be responsible for the administration of their own finances, but the government always has responsibility for assessing and meeting the overall costs of providing justice. This includes making sure that it is allocating resources appropriately across the federal courts. This bill will lighten the load of the Federal Court in terms of sheer numbers of cases and it will increase the load of the Magistrates Court. This does have resource implications. We would like to be confident that the government is going to keep an eye on the impact that its legislative decisions have on the costs of matters going before any range of federal courts. We expect more concern and government action over this issue than was evident at additional estimates.

The Magistrates Court was set up to be a quicker and cheaper forum for less complex matters, but we need to make sure that it does not develop into simply an overworked poor cousin of the Federal Court. That will not be in the interests of small business, consumers, families and others who hope that the federal Magistrates Court service can actually provide them with quicker and cheaper access to justice. Labor supports those bills, and I flag my intention to move that proceedings after the second reading debate return to the House.

Peter Slipper (Fisher, Liberal Party) Share this | Link to this | Hansard source

Firstly, I would like to congratulate the Federal Magistrates Court for its success over the past five years in its handling of less complex family law matters and general federal law disputes. The Magistrates Court is, of course, only as good as its judicial officers; we have read about difficulties in one area, but I hope that the government will look at the appointment of an additional magistrate in Brisbane. I understand that the government might be looking sympathetically at the workload of the court, because the court has done a wonderful job. It deserves to be properly resourced, and I know that that is a matter very close to the heart of the Attorney-General.

The court, I believe, has been one of the outstanding success stories of the Australian judicial system. I am very pleased to see it continue to operate. I am pleased that the Jurisdiction of the Federal Magistrates Court Legislation Amendment Bill 2005 is currently before the chamber, because it will build on the already obvious success of the Federal Magistrates Court to date.

The diligence and achievements of the Federal Magistrates Court have helped to free up the Family Court and the Federal Court to focus on more intricate and lengthy matters. This is an example of one section of the court system being able to work closely and effectively with another section. Often it is the case that when people do a good job they find themselves with additional responsibilities, and so it is with the Federal Magistrates Court, which will get additional responsibilities under the provisions of the legislation currently before the chamber. This will—and I think it is widely accepted in the community—bring about an overall improvement in the provision of court services in this country.

The Federal Magistrates Court currently has jurisdiction for issues involving family law, divorce, child support, bankruptcy, unlawful discrimination, privacy law, migration and copyright. It also has some jurisdiction under small parts of the Trade Practices Act 1974 dealing with consumer protection, product safety and bankruptcy issues arising under some legislation. Under this bill, the court will be granted further responsibilities under the Trade Practices Act. These changes will enable the Federal Magistrates Court to deal with claims under certain sections of the Trade Practices Act and will increase the amount of damages that the court is able to award. Currently, I gather, it is $200,000, but this bill will raise that figure to $750,000. The court will also get additional responsibilities as delegated from the Federal Court and the Family Court and responsibilities regarding specific individuals under the Admiralty Act 1988. These new powers involve the simple issues that arise under the act. Also under this bill, the Federal Magistrates Court will gain jurisdiction over certain appeals under the Child Support (Registration and Collection) Act 1988.

The Federal Magistrates Court, which came into existence in 2001, came under a planned two-year review in 2003. The review found that the Federal Magistrates Court was operating successfully and it was therefore suggested that its jurisdiction could be extended. This has always been one of the thoughts of the government. Extending the responsibilities of the court would help to enable the superior courts to deal with more convoluted matters. Overall, it means a more efficient court system that is better able to meet the needs of Australia and Australians in 2006.

The Federal Magistrates Court operates as an independent court. Its establishment effectively brought in a lower level federal court, and much of the federal law work that has been taken on was previously carried out by the state courts in the respective jurisdictions. The Jurisdiction of the Federal Magistrates Court Legislation Amendment Bill 2005 will not only increase the responsibilities of the court but also provide easier access to the streamlined operation of the court. This is a very important and worthwhile piece of legislation and I am pleased to be able to commend it to the chamber.

Philip Ruddock (Berowra, Liberal Party, Attorney-General) Share this | Link to this | Hansard source

in reply—I thank the members for Gellibrand and Fisher for their contributions to this debate on the Jurisdiction of the Federal Magistrates Court Legislation Amendment Bill 2005. In my second reading speech I spelt out fully what we were seeking to do, so I will go straight to the four issues that have been raised in the debate.

Firstly, I say to the member for Fisher that I am looking at additional appointments to the magistracy. I certainly envisage that it will be possible to make a further appointment in Brisbane, but I think it is also important to recognise that, when you transfer significant additional jurisdiction to the court, it can have an impact on workloads across the board—some impact on the Family Court; some impact upon the Federal Court. If it increases the work of the magistracy but diminishes the work of the others if you have judicial resources that are still there—with judges appointed until age 70 and with there being no capacity other than in exceptional circumstances to ask them to move on—you can see that one is confronted with some difficulty about the way in which one manages workloads and the extent of limitation in relation to the transfer of jurisdiction.

I offer those comments to the member for Gellibrand about why I look at these questions over time. It is not a ‘finished canvas’; I have used that term in other debates. There are matters that I will consider, and I will continue to look at whether or not there are other areas of jurisdiction that should be transferred. I have to say that you have to look at the nature and the complexity of the issues as to whether they are appropriate for referral to a court that operates under much simpler procedures and provides a quicker and less comprehensive consideration of some of the more technical issues.

In looking at these matters, I will be conscious of the workload of all the federal courts, but I do recognise that not all the areas that have been mentioned are straightforward. That brings me to the issues in relation to section 46 of the Trade Practices Act. We did carefully consider conferring jurisdiction on the magistrates in relation to sections 46 and 46A, but we came to the view that, notwithstanding the recommendations that might occur, it was not desirable to do so in relation to those cases involving sections 46 or 46A where section 83 of the Trade Practices Act is relied on. Section 83 provides that a finding of fact by a court made in certain proceedings under the Trade Practices Act may be relied on as prima facie evidence of fact in other proceedings under the Trade Practices Act.

Non-government members of the Senate Economics References Committee acknowledged that these cases were likely to be very complex. They are difficult; they involve huge amounts of evidence. It is for that reason that the government has come to the view that it has: that it will not support the more limited proposal of giving jurisdiction in section 46 cases where section 83 is relied upon. We considered then, as we do now, that sections 46 and 46A cases, even those placing some reliance on section 83, are likely to raise issues that are complex and more appropriately considered by the Federal Court. For that reason we will be opposing the measure. I could give the member some more detailed commentary on some of the cases where that might have been relevant, but I suspect that it would not alter the course that the debate is going to follow, so I will not take that extra time.

I want to deal with one other matter that the honourable member raised. I am sorry in a sense if the answers at estimates by officials were less than fulsome. It is very important to understand that the courts are funded for their administration—unusually, I might say, in Australia, in comparison to other jurisdictions—as a one-line item. The courts administer their own funding; each of them, separately. If you go to the United Kingdom, they have set up a separate courts administration body that administers all the courts and gives them some greater flexibility. If you go to the States, they do not operate the same one-line system in relation to the totality of matters.

When I was speaking to the Chief Justice of the Federal Court about this very question of the comparison that the honourable member made, he made the point I think quite strongly that the Productivity Commission was not comparing apples with apples; it was comparing apples with pears. We all know the old line about lies and statistics and so on. I think it is important to recognise that, for instance, the very substantial upgrade of computer systems for case management purposes that the Federal Court has been funding was in fact in New South Wales funded out of the state Attorney General’s Department. So in that sense it is very unfair to the Federal Court to be comparing the costs per case when their one-line budget is meeting all of those computer upgrades for case management and in New South Wales is being paid for out of a separate budget appropriation.

I would simply make the point that I do not think that the comparisons are appropriate. I turned my mind to whether I should give a much more detailed commentary to some of those writers in the Financial Review and the Australian about the legal profession when they drew upon these matters, and I did not get the opportunity to do so. I think there are very good and full reasons, and I apologise if my officers in the estimates hearings were not fully across those to be able to brief you on them. But it was a matter that I had followed up myself; it was not a matter that I was uninterested in. I thank the chamber for the support generally for the bill. I recognise that there may be an amendment that will be proposed in another place and we will deal with that then. But the government is not minded to accept it.

Question agreed to.

Bill read a second time.

Nicola Roxon (Gellibrand, Australian Labor Party, Shadow Attorney-General) Share this | Link to this | Hansard source

I move:

That further proceedings on the bill be conducted in the House.

Question agreed to.