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  • Recent decisions in 2017 and 2018 found that since at least 1998 the District Court did not have jurisdiction to determine matters ‘arising out of commercial transactions’.
  • Amendments to the District Court Act in November 2018 have increased the District Court’s jurisdiction, retrospectively, to deal with ‘any action arising out of a commercial action’ up to $750,000.
  • For non-commercial matters, the District Court’s jurisdiction largely depends on whether the matter would have been referred to the Common Law Division if it had been filed on 2 February 1998.

On 28 November 2018, section 44 of the District Court Act 1973 (NSW) (‘DCA’) was amended to include a new section, subsection c1, which provided the District Court with the jurisdiction to determine an action arising out of a commercial transaction. The amendment was made to rectify an unfortunate circumstance that arose as a result of the High Court’s judgment in Forsyth v Deputy Commissioner of Taxation (2007) 231 CLR 531; [2007] HCA 8. In that judgment, the High Court held that the jurisdiction granted to the District Court under s 44 of the DCA was limited, relevantly, to actions which, if brought in the Supreme Court on 2 February 1998, would be assigned to the Common Law Division of the Supreme Court. As a result of changes to the Supreme Court Act, the seven divisions that existed in the Supreme Court in February 1998 no longer exist and have been amalgamated into two divisions – common law and equity. Unfortunately, as the jurisdiction of the District Court is still linked to the divisions of the Supreme Court as at 2 February 1998, this has led to a number of unfortunate circumstances where the District Court was found lacking jurisdiction to determine actions which practitioners considered fell within its jurisdiction, including actions arising out of commercial transactions (see Michelle Castle ‘Commercial Jurisdiction of the District Court: surprising, inconvenient, unfortunate?’ 49 The Law Society of NSW Journal, October 2018, 75-77 for a useful summary of matters where jurisdiction has posed an issue).

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