ACT 'super tribunal' may create problems for Commonwealth parties in small claims litigation

The ACT government has followed the lead of New South Wales, Victoria and Western Australia in reforming its administrative tribunal system. The creation of what are widely referred to as 'super tribunals' by these governments reflects a reform agenda to provide cheaper, quicker and more efficient access to justice. The ACT version of this 'super tribunal', the ACT Civil and Administrative Tribunal (ACAT), has now been created and will commence operation in February 2009. While ACAT has been widely welcomed, there are some tricky constitutional issues lurking for the Commonwealth and its agencies which did not receive extensive consideration during the reform process leading to the creation of the tribunal. Commonwealth officers will have to be aware of these potential jurisdictional problems when involved in any small claims litigation before ACAT.

The creation of ACAT was the result of a two year reform process, which included a government discussion paper and consultation process. The tribunal will replace 15 existing tribunals including the ACT Administrative Appeals Tribunal, the Mental Health Tribunal and the Discrimination Tribunal. In addition to the consolidation of existing tribunals, ACAT will have the small claims jurisdiction currently exercised by the ACT Magistrates Court. Although this aspect of ACAT's jurisdiction was not proposed in the ACT government's discussion paper, the government considered that 'stakeholders' had made a strong case for the transfer of the small claims jurisdiction from the ACT Magistrates Court to the new tribunal. The possibility of enhancing access to justice for small claims litigants was thought by the government to place the resolution of these claims more comfortably within the ethos of the new tribunal.

Accordingly, from February next year, ACAT will have jurisdiction to hear civil disputes including contracts claims, tort actions, debt recovery proceedings and claims relating to property, where the claim in question is less than $10,000. Litigants will be no longer permitted to file these claims in the Magistrates Court. There is also the possibility for claimants to bring themselves under the $10,000 limit by foregoing any excess claim, and for parties to agree for ACAT to hear a claim greater than $10,000. ACAT's orders will be deemed to be made by the Magistrates Court and enforceable in the same way as any other Magistrates Court order.

While all this sounds harmless, and by many accounts desirable, the reform of the judicial system in this way raises some tricky constitutional problems. Until now, there has been a reasonably clear differentiation in the ACT between the functions performed by administrative tribunals and those performed by courts. The 'super tribunal', however, breaks down that distinction. ACAT will be a hybrid body: its functions will be partly executive and partly judicial. In most proceedings, it will, like the current Administrative Appeals Tribunal, remake a decision by standing in the shoes of the original decision-maker. However, to the extent that it hears and determines common law claims like breach of contract and negligence actions, ACAT will be exercising a traditional judicial function that has, until now, been exercised by courts.

So, what's the problem? While State and Territory governments can generally do what they like with their judicial systems, there are some constitutional limits that flow from the fact that State and Territory courts are part of an integrated Australian judiciary. For example, where the Commonwealth or its officers are parties to a legal dispute before a State or Territory court, the Constitution says that the case is a federal one despite the fact that it is being heard by a State or Territory judge. And, where you have a federal case of this kind, it must be heard by a court - not a tribunal.

Of course, this raises some difficult questions of what exactly is a State or Territory 'court' for constitutional purposes. What essential characteristics must a court have? Does it have to be staffed exclusively or predominantly by judges? Apart from a requirement that courts be independent and impartial, there are, as yet, no clear answers to these questions. Recent decisions of lower courts have considered that bodies like the NSW Administrative Decisions Tribunal and the Tasmanian Anti-Discrimination Tribunal are not 'courts' in the relevant constitutional sense to hear federal cases. Thus, in one of those cases, it was considered that the Tasmanian Anti-Discrimination Tribunal did not have jurisdiction to hear a claim against the Commonwealth. The ACT scrutiny of bills committee raised some constitutional concerns about the hybrid nature of the proposed tribunal, but these concerns do not appear to have been taken further.

The end result of all of this is that, where the Commonwealth or its officers are parties to small claims disputes in the ACT, those disputes can only be determined by a court. At the moment, the small claims jurisdiction in the ACT is exercised by a court - the Magistrates Court. However, from February next year it is intended to be exercised by ACAT. And, if the weight of lower court authority is applied, then ACAT is unlikely to be considered a court and could not hear the dispute.

For Commonwealth parties to small claims disputes, this creates some difficulties. If the Commonwealth wants to institute small claims proceedings, it cannot do so in ACAT, and it will not be permitted to go the Magistrates Court. Where proceedings are taken against the Commonwealth or its officers, similar jurisdictional issues will arise. It may be that the exclusion of Magistrates Court jurisdiction will be held to be ineffective or that the matter can be removed to the ACT Supreme Court. In any event, from February 2009, there will be important jurisdictional issues that the Commonwealth and its officers will need to be aware of where they are involved in small claims litigation in the ACT.