BILLS DIGEST NO. 36, 2012–13

30 October 2012

Federal Circuit Court of Australia Legislation Amendment Bill 2012

Monica Biddington and Leah Ferris
Law and Bills Digest Section

Date introduced:  20 September 2012

House:  House of Representatives

Portfolio:  Attorney-General

Commencement:  Sections 1-3 on Royal Assent. Schedules 1 and 2 on Proclamation, or six months after Royal Assent.[1]

Links: The links to the Bill, its Explanatory Memorandum and second reading speech can be found on the Bill's home page, or through http://www.aph.gov.au/Parliamentary_Business/Bills_Legislation. When Bills have been passed and have received Royal Assent, they become Acts, which can be found at the ComLaw website at http://www.comlaw.gov.au/.

Purpose

The purpose of the Federal Circuit Court of Australia Legislation Amendment Bill 2012 (the Bill) is to amend the following Commonwealth Acts:

•       Federal Magistrates Act 1999

•       Judges (Long Leave Payments) Act 1979

•       Judges’ Pensions Act 1968

•       Maternity Leave (Commonwealth Employees) Act 1973 and

•       Parliamentary Contributory Superannuation Act 1948.

The amendments will change the name of the Federal Magistrates Court of Australia (Federal Magistrates Court/the Court) to the Federal Circuit Court of Australia and will change the title of Chief Federal Magistrate to ‘Chief Judge’ and Federal Magistrate to ‘Judge’.

Note that there are extensive references to the Federal Magistrates Court across many Commonwealth Acts. Consequential amendments to those Acts will be included in a separate Bill to be introduced into the Parliament at a later time.[2]

Background

The Federal Magistrates Court of Australia was established by the Federal Magistrates Act 1999 (Cth) and commenced operation in 2000. The Court was created to deal with the less complex cases from the Federal Court of Australia and the Family Court of Australia. The Court’s work is primarily in areas of bankruptcy, migration and family law however the court’s jurisdiction extends to workplace relations, privacy, admiralty, copyright and trade practices law. The Court’s workload and number of Magistrates has grown significantly over 12 years and in 2011–12 the Court litigated 92 542 cases and delivered 5072 conciliation conferences.[3] As at October 2012, there are 63 Magistrates across Australia.[4] Since July 2012, a Federal Magistrate’s base salary is $314 230 with further allowances for travel and expenses.[5]

The Federal Magistrates Court visits many locations across Australia to ‘provide access to justice for every Australian regardless of geographic location and aims to do so in a timely and efficient manner.’[6] To reduce some costs associated with travelling, some procedural and urgent matters are held by video-link or teleconference and the introduction of eFiling has assisted both litigants and practitioners to run cases efficiently. The Federal Magistrates Court’s Annual Report notes that:

the Court conducts an extensive circuit program with visits to rural and regional locations across Australia. In 2011–12 the Court allocated approximately 145 weeks to the circuit program, enabling parties to have their matters heard locally alleviating the need to travel to major centres. The Federal Magistrates Court is the only federal court in Australia with a program of regular circuits.[7]

The proposed name change to the Federal Circuit Court of Australia would therefore seem logical and appropriate to emphasise the court’s difference to the Family Court or Federal Court.

Another difference about the Federal Magistrates Court is the superannuation arrangements for the Magistrates.  Rather than being entitled to 60 per cent of their salary as post-retirement income[8], the Commonwealth contribute 15.4 per cent of the Federal Magistrates’ income annually to their superannuation scheme.  Sections 6 and 6A of the Judges’ Pensions Act 1968 entitles judges of the High Court, Federal Court and Family Court to receive life-long non-contributory pensions fixed at a percentage of their salary at retirement. The Federal Magistrates are expressly excluded from this legislation.  This arrangement was recently challenged by Federal Magistrates and is discussed below.

Review of the Family Law System (Semple Review)

In March 2008, Attorney-General Robert McClelland requested a review of the operation of the family law system and the relationship between the Family Court and the Federal Magistrates Court. Later that year, the Semple Review was published and concluded that the ‘current arrangement does not enable the most efficient utilisation of the resources provided to the family law system.’[9] The Review concluded that:

there exists a significant level of duplication of administrative structures and corporate services across the Family Court and the [Federal Magistrates Court] and that the existing and proposed duplication is not financially sustainable and utilises resources that could be directed more effectively to assisting litigants.[10]

Further, the fundamental differences between the Federal Magistrates Court and the Family Court were noted and that while ‘competition between courts can … be a source of ‘vitality and growth’, tension over resources has distracted the Family Court and the Federal Magistrates Court from their core responsibilities.’[11]

The Semple Review did not explicitly recommend a name change for the Federal Magistrates Court and its Magistrates. However, it did note that:

having two independent courts handling largely the same work has created confusion for litigants and legal practitioners who need to choose where to file matters. The confusion appears to be exacerbated by the different names of the Courts and the titles of their judicial officers. In summary, the current framework and arrangements affecting the delivery of family law services across the Courts do not satisfy accepted principles of effective corporate governance.[12]

On 5 May 2009 Attorney-General McClelland announced that the recommendations of this Review would be implemented, including the abolition of the Federal Magistrates Court and the restructure of the Federal Court and the Family Court.[13] However, just over a year later the Government confirmed that the changes were only ‘proposed’ and the Government had since decided on different reforms to the Federal Court system, including the establishment of a new Military Court of Australia.[14]

Review of the Attorney-General portfolio agencies (Skehill Review)

By 2012, and following the publication of the Report of the Strategic Review of Small and Medium Agencies in the Attorney-General’s Portfolio (the Skehill Review), the Government announced it would not proceed with the previously announced merger of the Federal Magistrates Court into the Family Court and the Federal Court.[15] The Skehill Review did not recommend or discuss the possibility of a name change for the Federal Magistrates Court. However, in the media release relating to the Skehill Review, the Attorney-General stated that:

[i]n a related matter, the Government will also change the name of the Federal Magistrates Court and title of Federal Magistrates to better reflect their important role in the judicial system. The Government will begin by consulting with the courts as to what the name of [the] Court and the title of Federal Magistrates should change to before bringing forward legislation to make the changes.[16]

The Government says it has consulted with the federal courts and ‘particularly the views and suggestions contributed by Chief Federal Magistrate John Pascoe AO CO, on behalf of his Court.’[17]

Magistrates’ challenge to the post-retirement income arrangements

In 2012, the Full Federal Court considered whether Federal Magistrate’s post-retirement income arrangements contravened the independence of judicial officers under Chapter III of the Constitution.[18] The case was brought by 24 Federal Magistrates on the grounds that their superannuation scheme under the Federal Magistrates Act 1999 resulted in a lower percentage of their annual salary as a pension and that their income is ‘less secure, being “subject to the vagaries of the market”’.[19] Two claims were made by the Federal Magistrates:

1.       That a declaration should be made that an amendment to the Judges’ Pensions Act 1968 to specifically exclude Federal Magistrates from the definition of a judge was invalid.

2.       That ‘Ch III of the Constitution requires the provision of a life-long guaranteed pension to all Federal Magistrates as an incidence of their statuses as justices appointed under Ch III of the Constitution’.[20]

Justices Keane and Lander stated that:

in our respectful opinion, the applicants have not shown that a reasonable well-informed lay observer would apprehend that their impartiality and independence is put at risk by the want of a judicial pension, at least when regard is had to their salaries and the other safeguards of their independence and partiality.[21]

And further,

The reasonable and well-informed lay observer might also be taken to know that there are many mechanisms, apart from remuneration, which ensure judicial independence.[22]

That this case even commenced shows that the Magistrates are frustrated with the statutory limitations that are upon them. However, the case was resolved against the Magistrates and there has not been follow-up action or commentary on this aspect.  Residual irritations with administrative matters and budgetary constraints result in a tense relationship between the Magistrates and government. This Bill has been noted by the media as ‘the latest effort by Ms Roxon to improve strained relations between the court and the Government’.[23]

Basis of policy commitment

Even though this Bill has been introduced in isolation of any other court reform legislation, the Government says that:

the Bill forms part of this government’s wider court reforms which will ensure that the federal judicial system provides accessible, equitable and understandable justice for the community. To that end the government has directed an additional $38 million to the Federal Court system to ensure levels of service for the community are maintained as well as introducing a strong judicial complaints framework and actively encouraging greater diversity within judicial appointments.[24]

The Government has also introduced legislation in 2012 that forms part of this package of court reforms, including the Courts Legislation Amendment (Judicial Complaints) Bill 2012, the Judicial Misbehaviour and Incapacity (Parliamentary Commissions) Bill 2012 and the Military Court of Australia Bill 2012. Further, the Government also intends to expand ‘the diversity of judicial appointments, to better reflect the Australian community’.[25]

Committee consideration

At the time of publication of this Digest, the Bill has been not been referred to a Parliamentary Committee for consideration.[26]

Policy position of non-government parties

Debate on this Bill has been thin on the ground. Member for Fadden, Stuart Robert, took five minutes of Chamber time to voice the Coalition’s support for the Bill. Mr Robert noted that:

[The Bill] will simply change the name to reflect the wider work that the court is now doing as a great workhorse within the judicial system in our country. The Bill will not alter the jurisdiction or the status of the Federal Magistrates Court and the arrangements under which it operates. It is fabulous to see the government not touching something that works. It would be great if the government could take that degree of thoughtfulness across the rest of the areas of public policy where its current ‘Midas touch’ is turning everything into a complete disaster.[27]

Political point-scoring aside, the debate so far has failed to acknowledge the catalyst to the name change and the lobbying by magistrates, if any, behind this Bill. In August 2010, Senator Brandis said the Coalition would create a new second-tier Federal Court called the Federal Circuit Court, which would allow for pay rises for magistrates, renamed judges.[28] This is the only mention of the name change on the public record.

Financial implications

According to the Explanatory Memorandum, the Bill will not have any significant financial impact on commencement.[29]

Main issues

The provisions of this Bill do not raise any issues.  The name change from Federal Magistrates Court to Federal Circuit Court of Australia is a straightforward drafting exercise across all Acts where the name appears. Similarly with the change in terminology from Chief Magistrate to Chief Justice and Magistrate to Judge, the Bill has comprehensively omitted and substituted the terms. 

Issues about the Federal Magistrates Court’s structure and function are raised in the Background to this Bills Digest.

Key provisions

Schedule 1 of the Bill amends the following five Acts to reflect the change in the name of the Court, and the change in titles for Federal Magistrates:

•       Federal Magistrates Act 1999

•       Judges (Long Leave Payments) Act 1979

•       Judges’ Pensions Act 1968

•       Maternity Leave (Commonwealth Employees) Act 1973 and

•       Parliamentary Contributory Superannuation Act 1948.

Schedule 2 of the Bill provides for transitional arrangements to ensure that the general running of the Court is not affected by the changes in terms.

Federal Magistrates Act 1999

The Federal Magistrates Act 1999 establishes the Federal Magistrates Court of Australia and provides for the operation of the Court.[30]

Broadly speaking, items 1 to 402 of the Bill amend the Federal Magistrates Act to:

•       change the title of the Act from the ‘Federal Magistrates Act 1999’ to the ‘Federal Circuit Court of Australia Act 1999’

•       remove any reference to the ‘Federal Magistrates Court’ and replace it with the ‘Federal Circuit Court of Australia’ 

•       update any reference to the title of ‘Chief Federal Magistrate’ and replace it with ‘Chief Judge’

•       remove any reference to the term ‘Federal Magistrate’ and replace it with ‘Judge’ and

•       change any reference to the terms ‘Federal Magistrates’ or ‘Magistrates’, to ‘Judges’.

Judges (Long Leave Payments) Act 1979

The purpose of the Judges (Long Leave Payments) Act 1979 is to provide for payments, in lieu of long leave, on the retirement or death of certain judges (other than justices of the High Court and Federal Magistrates) and persons having the status of judges.

Item 403 amends the long title of the Judges (Long Leave Payments) Act to remove the term ‘Federal Magistrates’ and replace it with ‘Judges of the Federal Circuit Court of Australia’. Item 404 amends paragraph (a) of the definition of ‘Judge’, as set out under section 3, to remove a reference to ‘Federal Magistrates Court’ and replace it with a reference to ‘Federal Circuit Court of Australia’. 

The purpose of these amendments is to continue to exclude judges of the Federal Circuit Court of Australia from falling within the definition of ‘Judge’ as set out in the Judges (Long Leave Payments) Act. This means that Federal Court Magistrates, under their new title as Judges, will still receive different payments from Federal Court and Family Court judges. As stated in the Explanatory Memorandum, ‘this is consistent with the intention of the Bill to maintain entitlements currently applying to Federal Magistrates under their new title’.[31]

Judges’ Pensions Act 1968

The Judges’ Pensions Act 1968 sets out the pension arrangements for judges and their families. Currently Federal Court Magistrates receive a different level of pension from that set out under the Judges’ Pensions Act.

Item 405 of the Bill amends paragraph (a) of the definition of ‘Judge’, as set out under section 4 of the Judges’ Pensions Act, to remove the reference to the term ‘Federal Magistrates Court’ and replace it with ‘Federal Circuit Court of Australia’.

As with the amendments to the Judges (Long Leave Payments) Act, the purpose of the amendments to the Judges’ Pensions Act is to continue to exclude judges of the Federal Circuit Court of Australia from falling within the definition of ‘Judge’, and thereby ensure that they remain ineligible for pensions as provided in the Judges’ Pensions Act.

Maternity Leave (Commonwealth Employees) Act 1973

The Maternity Leave (Commonwealth Employees) Act 1973 sets out the maternity leave arrangements in respect of employees of the Commonwealth, as well as certain other persons. Currently the provisions of the Maternity Leave (Commonwealth Employees) Act do not apply to a justice or judge of a federal court, or a federal magistrate.

Item 406 amends paragraph 5(3)(ba) of the Maternity Leave (Commonwealth Employees) Act to remove the term ‘Federal Magistrate’ and replace it with ‘Judge of the Federal Circuit Court of Australia’.

Again, the effect of this amendment is to continue to exclude Federal Court Magistrates, under their new title as Judges, from accessing the maternity leave arrangements set out under the Maternity Leave (Commonwealth Employees) Act.

Parliamentary Contributory Superannuation Act 1948

The purpose of the Parliamentary Contributory Superannuation Act 1948 is to provide for contributory superannuation for persons who have served as Members of Parliament.

Items 407 and 408 of the Bill amend subsection 21B(1) of the Parliamentary Contributory Superannuation Act to change the definition of ‘holder of an office of profit under the Commonwealth’ to reflect the new title given to Federal Magistrates. In particular, item 407 repeals the words ‘(other than the Federal Magistrates Court)’ as set out in paragraph (b) of that definition, while item 408 repeals paragraph (ba) of the definition, which refers to a Federal Magistrate. As a result of these amendments, a judge of the Federal Circuit Court of Australia will now fall under paragraph (b) of the definition of ‘holder of an office of profit under the Commonwealth’ at subsection 21B(1).

The purpose of the amendments is to ensure that Federal Court Magistrates, under their new title as Judges, will retain the same entitlements they currently receive under the Parliamentary Contributory Superannuation Act.[32]

Concluding comments

The Bill will be the vehicle by which the name of the Court and titles for its judicial officers is changed. The Government believes that this will serve to ‘recognise and better reflect the court’s role in the Australian judicial system [and it] also acts as a concrete demonstration of the government’s renewed constructive relationship with the court, which can only benefit the Australian community.’[33] The Government has stated it is committed to working with the courts to address financial and administrative issues that have arisen from the Skehill Review.

Members, Senators and Parliamentary staff can obtain further information from the Parliamentary Library on (02) 6277 2784.

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ISSN 1328-8091

[1].               A consequential amendments Bill will also be introduced and the Government intends that the two Bills commence concurrently; see N Roxon, ‘Second reading speech: Federal Circuit Court of Australia Legislation Amendment Bill 2012’, House of Representatives, Debates, 20 September 2012, p. 11362, viewed 10 October 2012, http://parlinfo.aph.gov.au/parlInfo/search/display/display.w3p;query=Id%3A%22chamber%2Fhansardr%2Fa0c9c3b1-a08d-42ca-995d-7f4622b624e7%2F0005%22

[2].               Ibid., p. 11362.

[3].               Federal Magistrates Court of Australia, Annual report 2011–12, 2012, pp. 35 and 59, viewed 27 October 2012, http://www.fmc.gov.au/pubs/html/2011%20-%202012.html 

[4].               Federal Magistrates Court of Australia, 23 January 2012, viewed 18 October 2012, http://www.fmc.gov.au/html/magistrates.html

[5].               Remuneration Tribunal, Determination 2012/09, Judicial and Related Offices, viewed 18 October 2012, http://www.remtribunal.gov.au/determinationsReports/Current%20Principal%20Determinations/2012/2012-09%20Determination%204.10.2012.pdf.

[6].               Annual report, op. cit., p. 6245.

[7].               Ibid., p. 45.

[8].               Judges’ Pensions Act 1968, section 6A, viewed 30 October 2012, http://www.comlaw.gov.au/Details/C2012C00315.  Note that this applies to judges who have at least 10 years’ service. See also: Department of Finance and Deregulation website, viewed 18 October 2012, http://www.finance.gov.au/superannuation/Super-Arrangements-for-Governors-General-Judges-and-Magistrates.html

[9].               D Semple, Future governance options for federal family law courts in Australia: striking the right balance, Attorney‑General’s Department, August 2008, p. 5, viewed 18 October 2012, http://www.ag.gov.au/Documents/Report%20on%20future%20governance%20of%20federal%20family%20courts%20in%20Australia%20-%20November%202008.pdf

[10].               Ibid.

[11].               Ibid., p. 6.

[12].               Ibid., pp. 6 and 26.

[13].               R McClelland, Rudd Government to reform federal courts, media release, 5 May 2009, viewed 19 October 2012 http://parlinfo.aph.gov.au/parlInfo/search/display/display.w3p;query=Id%3A%22media%2Fpressrel%2F7WGT6%22 

[14].               N Woodley, ‘Opposition pounces on Magistrates Court “backflip”’, ABC News Online, 25 May 2010, viewed 18 October 2012, http://www.abc.net.au/news/2010-05-25/opposition-pounces-on-magistrates-court-backflip/839744?section=justin

[15].               S Skehill, Strategic review of small and medium agencies in the Attorney-General's portfolio: report to the Australian Government, Canberra, January 2012, viewed 18 October 2012, http://www.finance.gov.au/publications/strategic-reviews/docs/strategic_review_ag.pdf

[16].               N Roxon (Minister for Emergency Management), Review of Attorney-General portfolio agencies released, media release, 8 June 2012, viewed 10 October 2012, http://parlinfo.aph.gov.au/parlInfo/search/display/display.w3p;query=Id%3A%22media%2Fpressrel%2F1697932%22 

[17].               N Roxon, ‘Second reading speech: Federal Circuit Court of Australia Legislation Amendment Bill 2012’, House of Representatives, op. cit., p. 11362.

[18].               Baker v The Commonwealth [2012] FCAFC 121, http://www.austlii.edu.au/cgi-bin/sinodisp/au/cases/cth/FCAFC/2012/121.html?stem=0&synonyms=0&query=fcafc%20121

[19].               Public Law Research Community Blog, ‘Pensions, Federal Magistrates and Judicial Independence’, University of Adelaide, website, 23 September 2012, viewed 10 October 2012, http://blogs.adelaide.edu.au/public-law-rc/2012/09/23/pensions-federal-magistrates-and-judicial-independence

[20].               Baker v The Commonwealth [2012] FCAFC 121, op. cit., at para. 25.

[21].               Ibid., at para. 49.

[22].               Ibid., at para. 51.

[23].               D Harrison, ‘Roxon delivers verdict on new court’, The Age, 13 September 2012, p. 6, viewed 10 October 2012, http://parlinfo.aph.gov.au/parlInfo/search/display/display.w3p;query=Id%3A%22media%2Fpressclp%2F1910513%22

[24].               C King, ‘Second reading speech: Federal Circuit Court of Australia Legislation Amendment Bill 2012’, House of Representatives, Debates, 9 October 2012, p. 115, viewed 10 October 2012, http://parlinfo.aph.gov.au/parlInfo/search/display/display.w3p;query=Id%3A%22chamber%2Fhansardr%2F5a0ebb6b-c6c8-4a92-ac13-219423c2048d%2F0181%22

[25].               N Roxon, ‘Second reading speech: Federal Circuit Court of Australia Legislation Amendment Bill 2012’, House of Representatives, op. cit., p. 11362. 

[26].               Selection of Bills Committee, Report No. 13 of 2012, viewed 19 October 2012,  http://www.aph.gov.au/Parliamentary_Business/Committees/Senate_Committees?url=selectionbills_ctte/reports/2012/rep1312.htm 

[27].               S Robert, ‘Second reading speech: Federal Circuit Court of Australia Legislation Amendment Bill 2012’, House of Representatives, Debates, 9 October 2012, p. 115, viewed 10 October 2012,  http://parlinfo.aph.gov.au/parlInfo/search/display/display.w3p;query=Id%3A%22chamber%2Fhansardr%2F5a0ebb6b-c6c8-4a92-ac13-219423c2048d%2F0180%22

[28].               At the time, the Government responded that to do so would be to undermine the proposed Military Court.
See: Lawyer’s Weekly, ‘Labor says Libs new court would offend military’, 13 August 2010, viewed 20 October 2012, http://www.lawyersweekly.com.au/news/labor-says-libs-new-court-would-offend-military

[29].               Explanatory Memorandum, Federal Circuit Court of Australia Legislation Amendment Bill 2012, p. 1, viewed 10 October 2012, http://parlinfo.aph.gov.au/parlInfo/search/display/display.w3p;query=Id%3A%22legislation%2Fems%2Fr4900_ems_ba950d22-0a1c-4fe5-accd-91390e1b2d7c%22 

[30].               The Federal Magistrates Act 1999 is available at: http://www.comlaw.gov.au/Details/C2012C00693   

[31].               Explanatory Memorandum, op. cit., p. 71.

[32].               Ibid., p. 72.

[33].               N Roxon, ‘Second reading speech: Federal Circuit Court of Australia Legislation Amendment Bill 2012’, House of Representatives, op. cit., p. 11362.