What is federal jurisdiction and how does it affect applications?

What is federal jurisdiction and how does it affect applications?

The President's video Message

Click here to view the President’s video about federal jurisdiction.

Click here to view the Federal Jurisdiction Frequently Asked Questions

What type of Commission applications can be affected by federal jurisdiction issues?

Applications for a matter concerning a compensation claim (compensation matter application – see section 26(1) of the PIC Act) can be affected – these include:

• a claim for damages under the Motor Accidents Compensation Act 1999; or
• a claim for statutory benefits or damages under the Motor Accident Injuries Act 2017; or
• a claim for damages under the Motor Accidents Injuries Act 2017; or
• a claim for compensation or work injury damages under the Workplace Injury Management and Workers Compensation Act 1998; or
• applications about a matter concerning the above claims including:
  • medical assessments;
  • merit reviews; and
  • a review or appeal against an assessment or merit review.

Determining if federal jurisdiction is involved can be difficult

It is not clear if some insurers should be treated as a State, that is; when an insurer is a party should they be treated as a particular State? As noted earlier, this is important because the Commission cannot exercise federal jurisdiction which includes the power to determine disputes between:

• States; or
• residents of different States; or
• a State and a resident of another State.

What does the case law say?

Regarding the Nominal Defendant in NSW

A Judge has determined that one insurer, namely the Nominal Defendant in NSW, is a part of the State of NSW.  Judge Gibb made this decision in Matthew Ritchie (plaintiff) v the Nominal Defendant (defendant) District Court of NSW, Sydney No 2021/117151. Judge Gibb conducted a detailed examination of how the Nominal Defendant was formed, to identify if it was “the State”.

Ritchie makes it clear that where the Nominal Defendant is a party and the other party is a resident of a State other than NSW, the Commission cannot determine the application because it would be required to exercise federal jurisdiction.

Regarding the licensed CTP Insurer, NRMA Pty Ltd in NSW

On 11 April 2022, a Judge determined that one licensed CTP insurer in NSW, namely NRMA Pty Ltd is a private corporation and so, when that insurer is a party to a proceeding they should not be treated as a particular State – see Stanton v Winning [2022] NSWDC 104.

Priestley SC, DCJ determined that NRMA, as a company limited by shares, carrying out the commercial activity of insurance, was not part of the State of NSW. NRMA’s functions were not analogous to those of the Nominal Defendant / SIRA and therefore the decision in Ritchie was not relevant.

Some commentators have said that this decision should represent a binding precedent in respect of any dispute between an interstate resident and any NSW CTP insurer. The Commission notes that this decision related specifically to NRMA Pty Ltd and its precedent value is also related specifically to NRMA Pty Ltd.

What process do you follow if you think your application may involve federal jurisdiction?

Step 1
Read Division 3.2 of the PIC Act.

Step 2
Make your application to the Commission in the usual way (see section 26(3) of the PIC Act).

Step 3
Immediately after Step 2, you can make application to the District Court, to allow you to commence proceedings in that Court to determine your application. To be clear, you are not required to wait for the Commission’s response to the application before you make application to the District Court. However, you can wait for the response if you wish.  To make the application you can:

• Use Form 4A (version 4) of the UCPR 6.2 if the filing party is legally represented which can be accessed here.
• Use Form 4B (version 4) of the UCPR 6.2 if the filing party is acting in person or by authorised officer which can be accessed here.

Step 4
Whether you make application to the District Court immediately after Step 2 or not, the Registry will assess your application to the Commission shortly after receipt and you can expect the following.

Registry will reject the application if, on its face, the dispute is potentially between any of the following:

• States; or
• residents of different States; or
• a State and a resident of another State.

In some circumstances, you will be advised that the Commission’s preliminary view is that the matter is potentially federally impacted, and subject to any comments you may make within seven days of its letter, the application will be rejected.

In some circumstances, the application will be accepted and considered by a member of the Commission, and you may be invited to make comments that will be considered by the member. In that situation, the best the Commission can do is posit an opinion (Attorney General for New South Wales v Gatsby [2018] NSWCA 254 – see, Leeming JA at [281]).

Step 5
If the Commission rejects or dismisses the application, you can make application to the District Court to allow you to commence proceedings in that Court to determine your application. You may have already made such application immediately after Step 2 above and if not, you can make that application by:

• Using Form 4A (version 4) of the UCPR 6.2 if the filing party is legally represented  which can be accessed here.
• Using Form 4B (version 4) of the UCPR 6.2 if the filing party is acting in person or by authorised officer which can be accessed here.

Note: The Commission acknowledges that it may seem confusing that an application can be made to the District Court (to allow you to commence proceedings in that Court to determine your application) immediately after Step 2 or you can wait until after Step 5, an outcome of sections 26(3) and (4) of the PIC Act.

What happens after an application is made to the District Court?

The District Court may grant leave for the application to be made to the Court only if it is satisfied that:

• an application was first made to the President or the Commission; and
• the determination of the matter by the usual decision maker would involve the exercise of federal jurisdiction; and
• the usual decision maker otherwise would have had jurisdiction enabling the decision maker to determine the application.

If the District Court does not grant leave for the application to be made to it, the Court may remit the application back to the Commission to determine it.

If the District Court grants leave for the application to be made to it, the Court may:

• determine how the proceedings (substituted proceedings) will be conducted; and
• arrange for some of its functions to be conducted by the Commission.  For example, if the relevant application is an application to resolve a medical dispute, then the Court may make orders that result in the Commission’s medical assessors performing an assessment.

Importantly, if the District Court asks the Commission to assist with some of its functions, in those circumstances:

• the District Court retains the power to either accept, reject or vary the findings made by the Commission;
• the District Court has the ultimate jurisdiction; and
• the Commission’s Certificate (in the medical assessment example) will not have any lawful effect unless it is adopted by the District Court in whole or in part.

What happens with costs in the District Court?

The Personal Injury Commission Regulation 2020 (under Part 3) sets out the fees and costs payable in connection with 'substituted proceedings', that is; proceedings conducted by the District Court because it has accepted an application asking it to determine an application that involves the exercise of federal jurisdiction.