Part 2: The Year in Review
Federal Court of Australia Annual Report 2011-2012
During the year under review the Court continued to achieve its objective of promptly, courteously and effectively deciding disputes according to law, in order to fulfil its role as a court exercising the judicial power of the Commonwealth under the Constitution. The Court's innovative approach to managing its work, and the way it operates as an organisation, brought continuing recognition of its leading role.
During 2011–12 the Court maintained its commitment to achieving performance goals for the Court's core work, while also developing and implementing a number of key strategic and operational projects. These are discussed separately below.
Significant issues and developments
Work of the Court dealing with Commercial Disputes
This Annual Report will highlight the work of the Court dealing with commercial disputes, and how that important work contributes to the economic and social wellbeing of all Australians.
During 2011–12 eighty-eight per cent of first instance cases commenced in the Court were commercial in nature. The case types included corporations law, intellectual property, competition law, consumer protection, taxation, admiralty, and bankruptcy.
This is not an unusual proportion. Over the last five years, the total percentage of commercial cases commenced (other than appeals) has varied between a low of eighty-four per cent in 2008–09 and a high of eighty-eight per cent this reporting year. Over the same period the number of commercial cases has increased from 2635 in 2007–08 to 4104 in 2011–12.
It is clear from these numbers that there has been a substantial increase in commercial disputes commenced in the Federal Court. The primary cause of that increase is not known for certain; however, an increase in corporation insolvency related cases leads to the reasonable conclusion that the increase is related to the recent and current economic climate, which could be described as fiscally restrained and uncertain.
On 22 March 2010 Chief Justice Keane at his swearing in ceremony highlighted important aspects of the history leading up to the establishment of the Court and went on to state:
'These extraordinary circumstances, among other things, led to the creation of this Court as an organ of government charged by the Australian people, through the Parliament of the Commonwealth, with the special task of ensuring that the laws of the Commonwealth are applied equally and fairly for the protection and welfare of all our citizens, to ensure not merely that the power of the State does not unlawfully interfere with the liberty of the individual, but to develop a jurisprudence in which all our citizens enjoy, in equal full measure, the beneficent effect of the laws passed by the Parliament; to ensure, for example, that the taxes with which we buy our civilisation are borne fairly and equally according to law; to ensure that the laws by which our corporations are organised and operate, and the laws which regulate the exercise of rights of intellectual property, and the laws which ensure competition and integrity in business are enforced so that the aggregation of economic power in private hands is not allowed to menace our common welfare and institutions. Similarly, this Court enforces the irreducible standards of conduct in business prescribed by the Trade Practices Act.'
From 1 January 2011 the Trade Practices Act 1974 has been replaced by the Competition and Consumer Act 2010, and the Court continues to enforce standards of conduct in business prescribed by the new Act.
While the nature of commercial disputes dealt with by the Court is important, so too is the way in which those cases are managed. The commercial dispute resolution procedures of the Court are a major aspect of the work of the Court.
The Court applies a number of techniques designed to deliver the just, quick and inexpensive disposition of commercial disputes. The individual docket system (all cases allocated to a judge upon commencement of the matter and remaining with the judge until disposed) together with an increasing array of case management techniques (including the very effective and timely use of assisted dispute resolution or fast track procedures) are techniques used to manage commercial disputes before the Court.
As well as special case management techniques, the Court is always prepared, in certain circumstances, to expedite hearings or appeals. The urgent and quick attention to commercial disputes is often very important, for the community, for government and for business interests. It is in this context, in many cases, that the Court contributes to the wellbeing of all Australians.
Information about the range of commercial cases dealt with by the Court appears in Appendix 8, Summary of Decisions of Interest found at page 149.
Native Title Review
In response to the 2009 amendments to the Native Title Act 1993 the Court put in place a number of practice initiatives to ensure, where possible, that resolution of native title cases is achieved more easily and delivered in a more timely, effective and efficient way.
The Court is proud of the results the key practice initiatives have delivered and acknowledges the substantial contribution made by the parties to these cases in maintaining the momentum required to finalise them. The outcomes clearly demonstrate the substantial effort made by all parties. In 2010–11 there were twenty-six determinations of native title and in the current reporting period 2011–12 there are thirty-seven determinations. From 1 July 2012 to 31 December 2012 there are thirty-two anticipated determinations, a significant increase.
On 8 May 2012 the Commonwealth Attorney-General announced further institutional reforms affecting the administration and mediation of native title claims which will be introduced from 1 July 2012. More information about the native title initiatives and workload appears in Part 3 at page 30.
Electronic Court File
As part of the Court's eServices strategy a major project commenced during the reporting year to develop an electronic court file (ECF). The ECF will replace the paper file and is the culmination of the Court's 'Myfiles' concept. The ECF will enable parties to lodge documents and correspondence electronically and remotely view the Court file. It will be particularly beneficial to members of the legal profession who may have multiple matters in the Court at the one time.
Work has commenced on developing a document management system which will provide the foundation for the ECF. In 2011–12 extensive consultation was undertaken within the Court to ensure that the system reflects the needs of the Court's judges and staff. External consultation (with members of the legal profession and other court users) about the electronic court file will be undertaken in the next reporting year.
Once the electronic court file is in place and the Court is satisfied that it is working as expected for the Court and the legal profession, the Court will move towards mandating the use of eLodgment (compulsory electronic filing). Measures will be put in place to ensure court users who may not have access to computers or the Internet are not disadvantaged by electronic filing. The Court will announce the date for the implementation of mandatory electronic filing with a reasonable lead time to enable everybody to be ready to participate.
Revision of the Federal Court Rules
As noted in previous Annual Reports, the Court had been undertaking a substantial project to revise its Rules. This was the first major revision of the Court's Rules since they were promulgated on 1 August 1979. The revised Rules commenced on 1 August 2011. They have been well received and have not required any amendment. More information about their operation appears in Part 3.
Heads of Jurisdiction
In late 2011, in response to a recommendation in the then draft Report of the Strategic Review of Small and Medium Agencies in the Attorney-General's Department by Mr Stephen Skehill (the Skehill Report), the Heads of Jurisdiction of the Federal Court (FCA), Family Court (FCoA) and Federal Magistrates Court (FMC) agreed to establish a Consultative Committee to formalise existing unofficial arrangements and foster greater administrative cooperation between the three Courts.
The Committee meets quarterly and is supported by the Chief Executive Officers of the three Courts. Senior officials from the Attorney-General's Department attend the Committee's meetings as observers. Three meetings were held in the reporting year (November 2011 and February and May 2012).
In addition to including information about the Committee's activities in the Courts' Annual Reports, the Committee provides a Report to the Commonwealth Attorney-General twice in each calendar year. The first of these Reports was submitted in March 2012.
Since the Committee's formation in late 2011, reviews have commenced of the Courts' Information Technology systems, library services and space utilisation within Commonwealth Law Courts (CLC) buildings. Arrangements have also been made for closer cooperation in media management, a review of library holdings to avoid duplication and increased sharing of court facilities in the Brisbane and Melbourne CLC buildings.
The review of the CLC buildings has highlighted their extensive use by bodies external to the Courts. This includes providing rooms and workspace to organisations assisting litigants, and court and conference rooms for public lectures, university mooting competitions and workshops for the legal profession. These activities highlight the important public function that CLC buildings serve.
The Court's performance
In 2011–12 the total number of filings (including appeals) in the Federal Court increased by seven per cent to 5277. Filings in the Court's original jurisdiction (excluding appeals) increased by eight per cent. The Court's corporations workload continued to grow with a seventeen per cent increase in filings. In the five year period since 2007–08 the Court's workload has increased by almost twenty per cent.
Further information about the Court's workload, including the management of appeals, can be found in Part 3 on page 24.
The Federal Court's registries also provide registry services for the Federal Magistrates Court (FMC). The overall workload has grown since 2000, when the FMC was established. In 1999−2000 the combined filings in the FMC and the original jurisdiction (i.e. not including appeals) of the Federal Court were 5885, compared with 11 656 this year.
During the reporting year there were 5277 actions (including appeals) commenced in the Court and 6993 in the general federal law jurisdiction of the FMC, a total of 12 270. This represents a six per cent increase on the combined workload in 2010–11.
It should be noted that Federal Court Registrars hear and determine a substantial number of cases in the FMC, particularly in the bankruptcy jurisdiction. During the year Federal Court Registrars dealt with, and disposed of 4594 FMC bankruptcy matters which equates to ninety-two per cent of the FMC's bankruptcy caseload, or almost sixty-eight per cent of the FMC's general federal law caseload.
Performance against time goals
The Court has three time goals for the performance of its work: the first goal concerns the time taken from filing a case to completion; the second goal concerns the time taken to deliver reserved judgments and the third goal concerns the time taken to complete migration appeals. The time goals assist the Court in managing its work to achieve the performance targets. The goals do not determine how long all cases will take, as some are very long and complex and others will, necessarily, be very short.
Time goal 1: Eighty-five per cent of cases completed within eighteen months of commencement
During the reporting year, the Court completed ninety-four per cent of cases in less than eighteen months, compared with ninety per cent in the previous year. As shown in Figure 6.5 and Table 6.5 in Appendix 6 on page 133, over the last five years the Court has consistently exceeded its benchmark of eighty-five per cent, with the average over the five years being ninety-one per cent.
Time goal 2: Judgments to be delivered within three months
The Court has a goal of delivering reserved judgments within a period of three months. Success in meeting this goal depends upon the complexity of the case and the pressure of other business upon the Court. During 2011–12 the Court handed down 2158 judgments for 1890 court files (some files involve more than one judgment being delivered e.g. interlocutory decisions and sometimes, one judgment will cover multiple files). The data indicates that seventy-seven per cent of appeals (both full court and single judge) were delivered within three months and eighty-three per cent of judgments at first instance were delivered within three months of the date of being reserved.
Time goal 3: Disposition of migration appeals and related applications within three months
The Migration Litigation Reform Act 2005 effectively gave the FMC almost all first instance jurisdiction in migration cases. Since December 2005, most matters commenced in the Federal Court from decisions arising under the Migration Act are appeals and related applications. The majority of these cases have been heard and determined by a single judge exercising the appellate jurisdiction of the Court.
Following the introduction of the amendments, the Court implemented a time goal of three months for the disposition of migration appeals and related applications. The Court introduced a number of initiatives to assist in achieving the goal, including special arrangements to ensure that all appeals and related applications were listed for hearing in the Full Court sitting periods as soon as possible after filing. Additional administrative arrangements were also made to streamline the pre-hearing procedures.
The Court carefully monitors the achievement of the three month goal in order to ensure that there are no delays in migration appeals and related applications, and that delay was not an incentive to commencing appellate proceedings.
The Court continues to achieve the disposition target of three months for most of the migration appeals and related applications dealt with by a single judge or a Full Court. In the period covered by this report, 210 migration appeals and related applications from the FMC or the Court were disposed, with the average time from filing to final disposition being 102 days, and the median time from filing to final disposition being ninety-five days. The time taken to dispose of some matters was longer where hearings were adjourned pending the outcome of other decisions in the Court or the High Court.
Financial management and organisational performance
The Court's budget position continues to be impacted by the government's tight fiscal position. Permission for an operating loss of $0.940 million was sought for 2011–12 as costs continued to rise well in excess of increases to the Court's budget appropriation. During the financial year all expenditure was closely monitored on an ongoing basis to ensure that savings were achieved wherever possible. A major issue, unrelated to the Court's normal operations, had a significant impact on the Court's end of year result. The value of the Court's liability for long service leave is based on the 10 year Commonwealth bond rate. The bond rate fell from 5.21% in June 2011 to 3.04% in June 2012. As a result the Court's long service leave liability increased by $0.764 million dollars with a reciprocating charge against the Court's operating results. Leaving this adjustment aside, the Court achieved an operating loss of $0.347 million before taking into account depreciation, a significantly better result than the original budget estimate.
In looking forward to the next three year budget cycle, the Court will continue to face limited funding increases and escalating costs. Due to the 'fixed' nature of sixty per cent of the Court's costs (such as judges and their direct staff and the requirement for purpose built court accommodation) the Court's ability to reduce these costs is extremely limited. This means the impact of the efficiency dividend on the Court's remaining cost is more than doubled.