Federal diversity jurisdiction: Administrative or judicial power?

‘Federal diversity jurisdiction’ describes matters in respect of which the High Court of Australia has original jurisdiction, including matters between: (i) a State and a resident of another State; and (ii) residents of different states. It is settled law that the Personal Injury Commission (‘PIC’) is not a Court of a State for the purposes of ss 75–77 of the Constitution and s 39 of the Judiciary Act (Cth) and it lacks judicial power to determine matters that are subject to Federal diversity jurisdiction. It is therefore necessary for the parties to consider whether Federal diversity jurisdiction is applicable before PIC proceedings are commenced. If the answer is ‘yes’, the worker will need to apply to the District Court of NSW for leave to proceed against the employer under s 26 of the Personal Injury Commission Act 2020 (NSW) (the ‘PIC Act’). The issue is whether determining the dispute involves the exercise of judicial or administrative power?

The High Court’s view

In 2018, the High Court determined that a State tribunal, which is not a Court of a State, is unable to exercise judicial power to determine matters between residents of different states (Burns v Corbett [2018] HCA 15).

In Citta Hobart Pty Ltd v Cawthorn [2022] HCA 16 (‘Citta’), a Tasmanian Anti-Discrimination Tribunal dismissed a complaint for lack of jurisdiction after a Constitutional defence was raised. On appeal, the Full Supreme Court of Tasmania found that the Constitutional defence was misconceived, but did not clearly identify any appealable error.

On appeal, the High Court held that as the Constitutional defence was genuinely raised, and ‘it was not incapable on its face of legal argument’, there was ‘a single justiciable controversy’ (being a matter described in ss 76(i) and (ii) of the Constitution), and the tribunal’s decision was correct. The Court stated that a State tribunal has the power to determine the limits of its State jurisdiction and a tribunal which is invested with non-judicial power ‘has authority to make up its mind’ or ‘decide in the sense of forming an opinion’ about the limits of its own jurisdiction ‘for the purpose of determining its own action’ (at [24]).

The Court also held that a State tribunal exercises judicial power when it decides that a claim or complaint is or is not subject to Federal diversity jurisdiction and if jurisdiction is wrongly found to exist, the order made in its purported exercise is wholly lacking in legal force.