Riaz v Technical and Further Education Commission

1. [1]

   Rana Riaz, the plaintiff, filed a Summons in the Supreme Court on 30 January 2024, seeking an order pursuant to s 140(1) of the Civil Procedure Act 2005 (NSW) (“CPA”) to transfer proceedings from the Local Court to the Supreme Court of New South Wales. The proceedings he sought to be transferred had been initiated by him in the Local Court against the Technical and Further Education Commission (“TAFE”) by way of Statement of Claim, filed on 6 September 2023.

2. [2]

   This matter was heard before me, as the Common Law Duty Judge, on 9 April 2024.

Local Court Statement of Claim

1. [3]

   On 6 September 2023, the plaintiff filed a Statement of Claim in the Local Court, against TAFE, the defendant.

2. [4]

   The plaintiff alleged that he enrolled in a course called Certificate II in Electrotechnology (the “Electrotechnology Course”) and agreed to pay the course fees by instalments. He claims that partway into the course, he withdrew from the course and, from that point, he should not have been required to pay further instalments of the course fees to the defendant. He further claims that the defendant rejected his applications for enrolment in further courses on the incorrect basis that course fees were outstanding.

3. [5]

   It is alleged this amounted to a breach of contract, breach of duty of care or negligence, misleading or deceptive conduct, unconscionable conduct and also that the contract was unfair.

4. [6]

   The only relief sought by the plaintiff in the Local Court is damages of $100,000 and the recovery of filing fees. The pleadings identify ss losses as a result of TAFE determining that a debt was owing as: inconvenience and emotional distress; psychological harm; loss of opportunity to complete the courses; and loss of opportunity to earn an income of $100,000 per year in a career associated with the courses.

Defence

1. [7]

   The defendant filed a Defence denying any basis for the plaintiff’s claim for relief. [1] It states, amongst other things, that:

   1. (1)

      The terms of the contract, and various publicly available documents, state that students who enrol in a course (including the plaintiff):

   2. (2)

      The plaintiff did not participate in the Electrotechnology Course on or after 11 June 2019.

   3. (3)

      The plaintiff submitted an incomplete request to withdraw from the Electrotechnology Course on 23 June 2019, and that request was not processed. The withdrawal form was incomplete as it did not indicate the amount of the course fee paid, or the reason for the withdrawal request.

   4. (4)

      The plaintiff failed to pay the course fees by the due date, and the defendant was justified in refusing to accept his further enrolments.

   5. (5)

      In any event, the defendant was not under an obligation or duty (in negligence, in contract, under statute or otherwise) to accept the plaintiff’s enrolment in any further courses.

2. [8]

   In relation to the further courses, the defendant states that, on 8 May 2022, the plaintiff applied for enrolment in Certificate IV in Cyber Security (the “Cyber Security Course”), and that on 9, 11 and 13 May 2022 the defendant notified the plaintiff that enrolment would not be accepted due to non-payment of fees for the Electrotechnology Course.

3. [9]

   On 4 June 2022, the defendant referred the plaintiff’s debt, in the amount of $1,140, to Revenue NSW for debt recovery action. The defendant admits that by 13 July 2023, it had received $1,172.50 from the plaintiff.

4. [10]

   The defendant states that the Python Programming Course was a “fee free course” and on 20 July 2023, the plaintiff requested to withdraw from the course for personal reasons.

5. [11]

   The defendant also states that on 25 July 2023, the defendant made a determination in the exercise of its discretion to reduce the plaintiff’s student fees associated with the Electrotechnology Course to $80 and refunded the balance of fees paid by the plaintiff. The defendant states it was not required to make this payment under the terms of the agreement.

6. [12]

   In response to the plaintiff’s prayer for relief, the defendant also states that the Statement of Claim does not plead or disclose a contravention of the Competition and Consumer Act 2010 (Cth), Sch 2 – Australian Consumer Law (“ACL”) or breach of duty of care. Further, it states, in any event, insofar as the plaintiff alleges that the defendant breached the ACL, it is denied; and insofar as the plaintiff alleges that the defendant owed it or breached a duty of care, in the circumstances, it is denied.

7. [13]

   Further, the defendant states that the plaintiff did not suffer any loss or damage; the defendant is not liable for and did not cause the loss or damage pleaded; the plaintiff did not rely on any representation made by the defendant to their detriment; the loss or damage pleaded is not a reasonably foreseeable consequence of any action taken by the defendant; and the plaintiff failed to mitigate his loss by seeking enrolment in other institutions, seeking employment, lodging a completed withdrawal form, making a request for the defendant to waive or refund fees in the exercise of its discretion and making inquiries of the plaintiff’s purported withdrawal request.

8. [14]

   The defendant also states in the Defence filed in the Local Court that any entitlement to damages is constrained by the Civil Liability Act 2002 (NSW) and/or the Competition and Consumer Act, and no damages may be awarded for any non-economic loss suffered by the plaintiff because it is:

   1. (1)

      less than 15% of the most extreme case, in accordance with s 16 of the Civil Liability Act and/or s 87S of the Competition and Consumer Act; and/or

   2. (2)

      pure mental harm that does not amount to a recognised psychiatric illness, in accordance with s 31 of the Civil Liability Act.

9. [15]

   The defendant states the plaintiff is not entitled to damages for injured feelings or emotional distress for breach of the agreement or any contact with the defendant.

10. [16]

    Further, in relation to damages sought for personal injury in excess of $60,000 or non-monetary orders, the defendant states that the Local Court does not have jurisdiction to grant relief under ss 29 or 30(1) of the Local Court Act 2007 (NSW).

Steps taken by the plaintiff to remove the matter from the Local Court and transfer it to the Supreme Court

1. [17]

   On 27 March 2024, the plaintiff emailed the Wagga Wagga Local Court registry and requested the hearing that had been listed on 9 April 2024 be vacated, as the matter was listed at the Supreme Court on 9 April 2024. The Local Court subsequently vacated the listing on 9 April 2024, and the matter has been re-listed before the Wagga Wagga Local Court on 30 April 2024.

2. [18]

   On 30 January 2024, the plaintiff filed a Summons in the Supreme Court seeking the Local Court proceedings be transferred to the Supreme Court, pursuant to s 140(1) of the Civil Procedure Act.

3. [19]

   As noted, this matter was before me, as the Common Law Duty Judge, on 9 April 2024. At the hearing, the plaintiff represented himself, and the defendant was represented by Mr Chang of MinterEllison lawyers.

4. [20]

   Both parties prepared a tender bundle and provided it to the Court in advance of the hearing. The plaintiff’s tender bundle contained the following:

   1. (1)

      A chronology, filed in the Supreme Court on 5 April 2024;

   2. (2)

      The Summons;

   3. (3)

      Written submissions of the plaintiff, filed in the Supreme Court on 6 April 2024;

   4. (4)

      Written submissions of the plaintiff, filed in the Supreme Court on 5 April 2024;

   5. (5)

      A Reply, dated 21 December 2023 (in oral submissions the plaintiff contended that he attempted to file the Reply in the Local Court but it “refused to accept it”);

   6. (6)

      An affidavit of the plaintiff, filed in the Local Court on 16 November 2023;

   7. (7)

      An affidavit of the plaintiff, filed in the Local Court on 9 March 2024;

   8. (8)

      An affidavit of the plaintiff, filed in the Supreme Court on 6 April 2024; and

   9. (9)

      An Evidentiary Statement (which also included legal submissions), filed in the Supreme Court on 29 February 2024.

5. [21]

   The defendant’s tender bundle contained:

   1. (1)

      The Statement of Claim filed in the Local Court on 6 September 2023;

   2. (2)

      An email from MinterEllison lawyers to the Local Court Registry on 10 November 2023, regarding a request to file a Defence;

   3. (3)

      Orders of the Local Court on 4 December 2023;

   4. (4)

      The Defence, filed in the Local Court on 7 December 2023;

   5. (5)

      An affidavit of the plaintiff, filed in the Local Court on 21 December 2023;

   6. (6)

      The Summons;

   7. (7)

      An affidavit of Jason Smith, filed in the Local Court on 8 March 2024;

   8. (8)

      Exhibit JS-1, filed 8 March 2024;

   9. (9)

      An affidavit of the plaintiff, filed in the Local Court on 9 March 2024;

   10. (10)

       An email from the plaintiff to the Local Court registry on 27 March 2024; and

   11. (11)

       A letter from the Local Court registry, dated 2 April 2024.

6. [22]

   The defendant also relied upon written submissions and a chronology filed on 5 April. On 9 April, the defendant also handed up the Explanatory Memorandum and the Supplementary Explanatory Memorandum to the Trade Practices Amendment (Australian Consumer Law) Bill (No. 2) 2010 (Cth).

7. [23]

   Following the hearing, the plaintiff emailed to my chambers a Notice of Motion filed on 14 April 2024, in the following terms:

8. [24]

   I understand that this Notice of Motion has been listed for the first time before the Common Law Registrar on 16 May 2024.

9. [25]

   As noted, the plaintiff filed, amongst other things, an “Evidentiary Statement”. In addition to matters of evidence he purports to set out in that document, the plaintiff also indicates (more by way of written submission) the legal bases on which he says the matter should be transferred to the Supreme Court as follows:

   1. (1)

      The Local Court lacks the power to make non-monetary orders as set out in s 243 of the ACL, due to the jurisdiction conferred on State and Territory courts by s 138B(5) of the Competition and Consumer Act.

   2. (2)

      The Local Court does not have the power to refuse to enforce any or all provisions of the contract or arrangement between the plaintiff and defendant, including cll 2.1(g) and 2.1(h) of the agreement, which make the plaintiff liable to pay the entire amount of the course fee, even if he withdraws before completion. On the other hand, the Supreme Court has the power to make an order declaring the contract or arrangements, including these unfair clauses, void or void ab initio, after the plaintiff’s withdrawal application.

   3. (3)

      The remedies sought by the plaintiff under ss 236, 243 and 237 of the ACL fall within the jurisdiction of the Supreme Court. The Local Court lacks the power under the Fair Trading Act (“FTA”) to provide these remedies.

   4. (4)

      The Local Court is a court of statutory jurisdiction, and its jurisdiction is limited to the extent expressly conferred upon it. As such, it does not deal with claims under the ACL. The remedies claimed by the plaintiff under ss 237(1) and 243 of the ACL appear in Div 4, Pt 5-2, and the effect of s 30(3) of the FTA is that the Local Court has no power under the FTA.

   5. (5)

      The plaintiff further submitted that the amount claimed in the Local Court exceeds or is likely to exceed the jurisdictional limit.

   6. (6)

      The plaintiff also made some points about some “procedural difficulties” which occurred in the Local Court, and also addressed briefly the jurisdictional limits of the District Court. I cannot see the relevance of these to the application for transfer and will not consider these further.

   7. (7)

      The plaintiff further contends that the proceedings against the defendant are of public importance. He claims it is possible that other students have the same contentions as the plaintiff, making it a matter of public interest to address these issues in a higher court with a broader jurisdiction.

10. [26]

    The defendant contends that the Summons should be dismissed with costs.

11. [27]

    In written submissions the defendant contended that there is no sufficient reason to transfer the matter to the Supreme Court, and the ends of justice are best served by the matter remaining in the Local Court.

12. [28]

    In particular, it was submitted the circumstances relied upon by the plaintiff do not constitute a sufficient reason for transferring the matter to the Supreme Court as:

    1. (1)

       The matter is not complex and does not involve public interest or public importance.

    2. (2)

       The proceedings in the Local Court are at an advanced stage and are ready to be fixed for hearing. The transfer of the matter will likely delay the matter being heard, particularly if the plaintiff is seeking to amend his claim for relief, resulting in further pleadings and/or evidence.

    3. (3)

       The transfer of proceedings will increase the cost of defending the matter. Those additional costs are unlikely to be recoverable in circumstances where the plaintiff has previously claimed financial hardship.

    4. (4)

       The only relief claimed by the plaintiff in the pleadings is damages. The Local Court has the power to make orders for damages up to $100,000, including under s 236 of the ACL.

    5. (5)

       If the plaintiff is contending that the jurisdiction of the Local Court would be exceeded because he has an entitlement to damages in excess of the jurisdictional limit of $100,000:

    6. (6)

       To the extent that the Summons indicates the plaintiff intends to seek other relief:

13. [29]

    In oral submissions, the defendant agreed (contrary to their written submissions) that s 237 of the ACL (a compensation order on the application of an injured person who has suffered, or is likely to suffer, loss or damage because of contravening conduct) and s 243 (orders including a declaration that a contract is void ab initio) are carved out of the Local Court jurisdiction, as the sections fall within Div 4, Pt 5-2 of the ACL and, as submitted by the plaintiff, these are excluded by s 30(3) of the FTA from being able to be dealt with by the Local Court.

14. [30]

    The defendant, however, further submitted that the plaintiff does not currently have standing to seek an order pursuant to s 237 because only a person (referred to in the section as “the injured person”) who has suffered or is likely to suffer loss or damage because of the conduct of the defendant which is a contravention of Chs 2, 3 or 4 of the ACL is able to make such an application – and according to the defendant, the plaintiff has not been determined to be a relevantly injured person. Further, an order under s 243 that the contract is void ab initio, would be inutile because the contract was terminated many years ago. Accordingly, there would be no practical effect if such an order was made.

15. [31]

    The defendant further contended that the only other potential order adverted to at the time of the hearing, which would be outside the jurisdiction of the Local Court, would be the seeking of a declaration of an unfair contract term pursuant to s 250 of the ACL, but in fact no application had been made to the Supreme Court to seek such an order.

16. [32]

    As noted above, since the hearing, by the Notice of Motion filed on 14 April 2024, the plaintiff is now purporting to seek leave to make an application pursuant to s 250 of the ACL. The clauses of the contract he is purporting to claim are unfair are:

    1. (1)

       Clause 2.1(g) – Agree to pay all requisite fees associated with your course plus GST, if applicable (“Course Fee”); and

    2. (2)

       Clause 2.1(h) – Acknowledge and accept the Fees and Charges as published on the TAFE Digital website.

Legislation

1. [33]

   Sub-sections 30(2) and (3) state:

2. [34]

   Section 71 relevantly reads:

3. [35]

   Section 18 reads:

4. [36]

   Section 21 reads:

5. [37]

   Section 23 reads (relevantly):

6. [38]

   Section 26 reads (relevantly):

7. [39]

   Section 50 reads:

8. [40]

   Sections 236 and 237 provide:

9. [41]

   Section 243 provides:

10. [42]

    Section 250 relevantly reads:

11. [43]

    Section 140 of the CPA relevantly provides:

Principles concerning the transfer of matters from the Local Court to the Supreme Court

1. [44]

   The well-established principles informing a discretionary decision pursuant s 140 of the CPA are as follows: [2]

   1. (1)

      A transfer from the Local Court to the Supreme Court is precluded unless the Supreme Court is satisfied there is sufficient reason for hearing the proceedings in the higher court.

   2. (2)

      The discretion is to be exercised having regard to the circumstances of the case, and so that justice is best served between the parties. It is necessary to consider all relevant facts and circumstances.

   3. (3)

      The applicant for transfer bears the onus of satisfying the Court that there is “sufficient cause”, “sound ground” or “good reason” so that justice is best served between the parties. Such matters typically include a risk that a jurisdictional limit affecting the lower court would be exceeded; where there are complex and important issues; and where the proceedings involved allegations of significant notoriety or public importance.

   4. (4)

      The test should be considered in accordance with s 56 of the CPA, that is that the overriding purpose of the CPA and rules of the court is to facilitate the just, quick and cheap resolution of the real issues in the proceedings.

   5. (5)

      “Sufficient reason” permits a wide range of considerations, including impressionistic matters (such as the likely award of damages) and an evaluation of the matters in issue.

   6. (6)

      Absence of jurisdiction in the lower court provides a reason for transfer.

   7. (7)

      The possibility of inconsistent findings between courts can justify transfer.

   8. (8)

      The possibility of findings by lower courts on the proper interpretation of significant and widely used provisions can warrant transfer.

Consideration

1. [45]

   The defendant makes persuasive submissions as to why there is not sufficient reason to transfer the matter from the Local Court to the Supreme Court. It is apparent that the Local Court has sufficient jurisdiction to grant any monetary relief sought, and likely to be obtained, by the plaintiff.

2. [46]

   It is also apparent that any claim to have the contract found void ab initio would be of no practical effect given the contract has long been complete. As for any claim pursuant to s 237 of the ACL, such a claim requires certain findings to have been made which have not yet been made.

3. [47]

   As indicated above, the defendant concedes that the Local Court does not have power to find that a contract term is unfair under the ACL because such a claim is subject to the ‘carve out’ provisions in s 30(3) of the FTA, which includes s 250 of the ACL. As at the date of the hearing, no application had been made to the Supreme Court, pursuant to s 71 of the FTA, for leave to make an application for the Court to declare any part of the contract unfair pursuant to s 250 of the ACL. Since the hearing, as noted, the plaintiff has filed a Notice of Motion which seeks leave, pursuant to s 71 of the FTA, to make such an application.

4. [48]

   On one view, the filing of the Notice of Motion to seek leave to make an application for orders pursuant to s 250 seeking certain contract terms to be declared unfair could be said to be enough to justify the whole matter being transferred to this Court so that all issues could be dealt with together. This approach could be said to be in keeping with the overriding purpose of the CPA set out in s 56 of that Act – to facilitate the just, quick and cheap resolution of the real issues in the proceedings.

5. [49]

   However, in my view, the filing of the Notice of Motion indicating that leave is to be sought to make an application pursuant to s 250 of the ACL is not a sufficient reason for the applicant’s matter to be transferred to this Court.

6. [50]

   First, it can be noted that the Notice of Motion seeking leave to make such an application has been filed very recently, well after the initial date set down for hearing of the substantive matter in the Local Court had passed, and after the hearing of the application for transfer before me.

7. [51]

   Second, it is far from certain that the application seeking leave has any realistic chance of success. The two clauses sought to be declared unfair in the contract are as set out above at [32]. It would appear that these clauses may not be susceptible of being found unfair pursuant to s 23 of the ACL, as such clauses could be construed, on their face, as terms which set “the upfront price payable under the contract”. Accordingly, if that is correct, s 26 of the ACL would exclude them from the operation of s 23.

8. [52]

   Thirdly, it can be noted that s 86 of the FTA provides that the Minister can intervene in proceedings brought before the Supreme Court, including an application under s 71 of the FTA. This provides a potential additional hurdle to the applicant obtaining leave to make an application for a declaration under s 250 of the ACL.

9. [53]

   These last two factors in particular indicate that it is by no means certain that the applicant would obtain leave to litigate his s 250 application. To move the whole matter to this Court on this precarious basis is inappropriate in all of the circumstances.

10. [54]

    In my view, the applicant’s viable claims can be dealt with entirely satisfactorily in the Local Court. I have not been persuaded by the applicant that there is sufficient reason for me to exercise my discretion to transfer the proceedings to the Supreme Court.

11. [55]

    The Summons seeking to transfer proceeding 2023/00284329 from the Local Court to the Supreme Court of New South Wales is dismissed with costs.