C & J Designer Homes Pty Ltd v Robey

[2006] FMCA 789

FEDERAL MAGISTRATES COURT OF AUSTRALIA

C & J DESIGNER HOMES PTY LTD v ROBEY & ANOR [2006] FMCA 789

COPYRIGHT – Jurisdiction – whether accrued or associated jurisdiction survives for cross-claim where primary copyright claim settled – relevance of exclusive jurisdiction vested in Victorian and Administrative Appeals Tribunal.

Copyright Act 1968
Domestic Building Contracts Act 1995, ss.3, 53 ,54, 57
Trade Practices Act 1974

Beck v Spalla [2005] FCAFC 82
Johnson Tiles Pty Ltd and Esso Australia Ltd (2000) 104 FCR 564
Fox v Robinson & Ors (No 1) [2005] FMCA 1310

Applicant: C & J DESIGNER HOMES PTY LTD

First Respondents: CHRISTOPHER JOHN ROBEY &
VALERIE DAWN ROBEY

Second Respondent: B & G COLE PTY LTD

File Number: MLG 1015 of 2005

Judgment of: McInnis FM

Hearing date: 30 May 2006

Delivered at: Melbourne

Delivered on: 30 May 2006

REPRESENTATION

Counsel for the First Respondents: Mr. S. Minahan

Solicitors for the First Respondents: David Stagg Tonkin & Co.

Counsel for the Second Respondent: Mr. E.J.C. Heerey

Solicitors for the Second Respondent: Bolden Lawyers

ORDERS

1. The Second Respondent shall file and serve an Amended Cross-Claim against the First Respondents together with any supporting affidavits on or before 16 June 2006.

2. The First Respondents shall file and serve a defence to the Amended Cross-Claim on or before 30 June 2006.

3. The First Respondents shall file and serve further affidavits in reply, if any, on or before 10 August 2006.

4. The proceeding be fixed for hearing at 10.15am on 28 August 2006 with an agreed hearing estimate of 2-3 days or on an earlier date if one becomes available upon 14 days notice to the parties.

5. Liberty to apply is granted to the parties in relation to any matters arising out of these orders.

6. Costs be reserved.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
MELBOURNE

MLG 1015 of 2005

C & J DESIGNER HOMES PTY LTD

Applicant

And

CHRISTOPHER JOHN ROBEY & VALERIE DAWN ROBEY

First Respondents

B & G COLE PTY LTD

Second Respondent

REASONS FOR JUDGMENT

(Revised from transcript)

1. The Application before the Court commenced by the Applicant's assertion of a copyright infringement against the First Respondents, Christopher John Robey and Valerie Dawn Robey who I shall refer to as the Owners and a claim in the alternative against

   
   

   B and G Cole Pty Ltd, the Second Respondent who I shall refer to as the Builder. 

2. The Court has been informed that the claim between the Applicant and the Respondents has resolved.  It seems to be common ground that those proceedings were resolved between the parties without an admission of liability and without evidence having been adduced in the proceedings. 

3. It appears that the Owners deny liability, and as a preliminary issue before this Court a cross-claim whereby the Builder seeks contribution against the Owners arising out of a contract set out in paragraph 20 and following in the defence and cross-claim filed 9 December 2005.  It is submitted for the Owners that this Court no longer has jurisdiction.  That submission is supported by detailed written submissions filed for and on behalf of the Owners dated 29 May 2006.  In the alternative, it is sought to be argued that this Court should not continue to hear the matter, on the basis that it would be more appropriate that the matter be dealt with by the Victorian Civil and Administrative Tribunal (“VCAT”). 

4. The cross-claim seeks to rely upon a document entitled "New Homes Contract," and that document is now exhibited to an affidavit of Gail Maree Cole filed on 29 May 2006.  To understand the main thrust of that cross-claim whereby the Builder seeks contribution by way of indemnity against the Owners, it is relevant to incorporate clauses 15.0 and 15.1 as follows:

   “15.0    If the Builder constructs the Building Works in accordance with Plans which may incorporate designs which are:

   ·    supplied by the Owner;

   ·    prepared under instruction from the Owner; or

   ·    prepared from sketches supplied by the Owner,

   then:

   ·    the Owner warrants that the Owner has the right to use the design and Plans and that no breach of copyright is involved in constructing the Building Works in accordance with the Plans;

   and

   ·    the Owner indemnifies the Builder in relation to any claim for breach of copyright.

   15.1  A claim for breach of copyright brought against the Builder is a breach of this Contract by the Owner.”

5. The Owners have submitted that once the proceedings were settled between the Applicant and the Respondents, relying essentially, as it did, upon an alleged copyright infringement, this Court's jurisdiction, either directly arising under the Copyright Act 1968 (“the Act”) or by way of what might be described as associated or accrued jurisdiction ceases. 

6. The Builders have submitted in written submissions filed this day that the Court continues to have jurisdiction.  Reference was made to the Full Court of the Federal Court decision in Beck v Spalla [2005] FCAFC 82 and in particular paragraphs 25 and 26 as follows:

   “25 In our view it follows that the appellants’ first submission must be rejected. Notwithstanding that at the time the proceedings were commenced the controversy between the parties had not revealed a federal matter on the pleadings (the immunity from suit arising from s 246 was at that stage an inchoate part of the controversy) once the defence was filed revealing the federal question the jurisdiction of the Court was attracted and the Court was obliged to hear the whole matter.

   The appellants’ second submission

   This submission can be disposed of shortly. It is well established that when the Federal Court has jurisdiction to determine a federal matter, it has authority to determine the whole controversy and not merely that part of it which attracted federal jurisdiction: Moorgate Tobacco Co Ltd v Philip Morris Ltd (1980) 145 CLR 457 at 472. It is equally well accepted that if the federal question is decided adversely, is struck out, or is found not necessary to be decided the matter does not cease to be in the jurisdiction of the Court: Burgundy Royale Investments Pty Ltd v Westpac Banking Corporation (1987) 18 FCR 212; Unilan Holdings Pty Ltd v Kerin (1993) 44 FCR 481 and Moorgate at 476 (see generally, the article by Allsop J: "Federal Jurisdiction and the Jurisdiction of the Federal Court of Australia in 2002", (2002) 23 Australian Bar Review 29 at 41 ff).

   26 It is difficult to see why there should be any different result merely because the federal part of the matter was settled, assuming that the federal claim is not colourable. There is no suggestion in the present case that this was so. Indeed a different result would give effect to a policy of discouraging settlement and could lead to proceedings having to be terminated when part heard because the federal claim was resolved.

7. The Builders further rely upon accrued jurisdiction and the decision of French J in Johnson Tiles Pty Ltd and Esso Australia Ltd (2000) 104 FCR 564 at paragraph 85 as follows:

   “[85] Jurisdiction conferred on a Federal Court in respect of a matter authorises the Court to determine all the claims, federal and non-federal, which are involved in the controversy. That the federal claim is determined adversely to the applicant does not thereby deprive the Court of jurisdiction to deal with the non-federal claims. They are all part of the federal jurisdiction conferred upon the Court. Nor does it matter to the scope of that jurisdiction whether the federal claim is defeated on a question of law or fact. That proposition is supported by a long line of authority. In R v Bevan; Ex parte Elias (1942) 66 CLR 452, the High Court assumed federal jurisdiction on a question, which it raised, involving the interpretation of the Constitution, decided it adversely to the applicants as a matter of law, but proceeded then to deal with applications for habeas corpus and prohibition in respect of which it would otherwise have had no jurisdiction. See also Moorgate Tobacco Co Ltd v Philip Morris Ltd (1980) 145 CLR 457 at 469, 472 and 477; Philip Morris Inc v Adam P Brown Male Fashions Pty Ltd at 474; Dorotea Pty Ltd v Vancleve Pty Ltd (1987) 75 ALR 629 at 632; Elna Australia Pty Ltd v International Computers (Aust) Pty Ltd (No 2) (1987) 16 FCR 410 at 415 (Gummow J) and Burgundy Royale Investments Pty Ltd v Westpac Banking Corporation at 219.”

8. Both parties had referred the Court to its own decision in the matter of Fox v Robinson & Ors (No 1) [2005] FMCA 1310. In that case, the Court again referred to the question of associated or accrued jurisdiction in paragraphs 8 and 9 as follows:

   “8.The Court on previous occasions has considered whether an application falls within the court's associated or accrued jurisdiction. In Mahoney v AGD Mining & Ors (No 2) [2003] FMCA431, I stated, after referring to s.18 of the Federal Magistrates Act, the following:-

   “13.    That section is almost identical to s.32(1) of the Federal Court of Australia Act 1976 which had been considered by the High Court in Philip Morris Inc. v Adam P Brown Male Fashions Pty Ltd (1981) 148 CLR 457.  In that case Mason J at p.506 stated:-

   “Plainly it was intended to vest a jurisdiction in the Federal Court to hear and determine matters not otherwise within its jurisdiction, matters that are ‘associated’ with matters in which the jurisdiction of the Court is invoked’. The expression ‘to the extent that the Constitution permits’ suggests that s 32 is directed, not merely to jurisdiction to hear and determine matters arising under federal laws not otherwise vested in the Federal Court, but also to jurisdiction arising under state or other non federal laws. Problems of constitutional validity arise in relation to the latter, but not in relation to the former. The opening words of section 32(1) would serve no purpose at all if the sub-section was exclusively directed to matters arising under federal laws.”

   14.  Further in the Philip Morris case at p.512 Mason J states when referring to the severability of a claim the following:-

   “Likewise, it may appear that the attached claim and the federal claim so depend on common transactions and facts that they arise out of a common substratum of facts.  In instances of this kind a court which exercises federal jurisdiction will have jurisdiction to determine the attached claim as an element in the exercise of its federal jurisdiction”.

   9.I accept as submitted by Counsel for AIIL that apart from the issue of a common substratum of facts, the following factors are relevant:-

   ·       whether a matter is a "single justiciable controversy"

   ·       the question is not a "separate and distinct matter"

   ·whether there is an "identity of facts" (see Tait v Harris [2003] FCAFC 117, referring to Phillip Morris)

   ·whether any federal jurisdiction has properly been invoked (see Hebbard v Bell Potter Securities Ltd [2005] 216 ALR 779, referring to Walker v Lifespan Financial Planning (2003) 176 FLR 166 at [16])

   ·whether the claim under the relevant federal law is a substantial part of a controversy the whole of which would be appropriately and conveniently determined by the Court vested with jurisdiction in matters arising under that law (see Mahoney v AGD Mining, referring to Fencott v Muller (1983) 152 CLR 570 at p.610)

   ·whether a matter is a justiciable controversy which must either be constituted by or must include a claim arising under a federal law but which may also include another cause of action arising under another law, provided it is attached to and is not severable from the former claim (see Mahoney v AGD Mining, referring to Phillip Morris at pp.494-495

   ·whether there is but one matter where different claims are so related that the determination of one is essential to the determination of the other (see re Wakim; Ex parte McNally (1999) 198 CLR 511 per Gummow and Hayne JJ at 585).”

9. In support of the Application made for and on behalf of the Owners, that this Court does not have jurisdiction, it was further argued that in this case the Court should have regard to the effect of the

   
   Domestic Building Contracts Act 1995

   (“the DBCA”).  Particular reference was made to ss.3, 53 and 54 of that Act as follows:

“domestic building contract” means a contract to carry out, or to arrange or manage the carrying out of, domestic building work other than a contract between a builder and a sub-contractor”

54. What is a domestic building dispute?

(1) A "domestic building dispute" is a dispute or claim arising-

(a)  between a building owner and-

(i)  a builder; or

(ii) a building practitioner (as defined in the Building Act 1993); or

(iii) a sub-contractor; or

(iv) an architect- in relation to a domestic building contract or the carrying out of domestic building work; or

…

(2) For the purposes of sub-section (1), a dispute or claim includes any dispute or claim in negligence, nuisance or trespass but does not include a dispute or claim related to a personal injury.

(3) A reference to a building owner in this section includes a reference to any person who is the owner for the time being of the building or land in respect of which a domestic building contract was made or domestic building work was carried out.”

1. It was submitted that the DBCA provides that the Domestic Building Tribunal division of VCAT is to have virtual exclusive jurisdiction over domestic building disputes and that it directs State Courts to refer such disputes to that Tribunal.  Reference was made to s.57 of the DBCA which I shall incorporate in this decision as follows:

   57. Tribunal to be chiefly responsible for resolving domestic building disputes

   (1) This section applies if a person starts any action arising wholly or predominantly from a domestic building dispute in the Supreme Court, the County Court or the Magistrates' Court.

   (2) The Court must stay any such action on the application of a party to the action if-

   (a)  the action could be heard by the Tribunal under this Subdivision; and

   (b)  the Court has not heard any oral evidence concerning the dispute itself.

   (3) This section does not apply to any matter dismissed by the Tribunal under section 77 of the Victorian Civil and Administrative Tribunal Act 1998.

   (4) If an action is stayed under this section, any party to the action may apply to the Tribunal for an order with respect to the dispute on which the action was based.

   (5) If a person applies to the Tribunal under sub-section (4) the Tribunal must notify the Court and on such notification the Court must dismiss the action.

   (6) Sub-section (5) does not apply if the Tribunal refers the matter to the Court under section 77(3) of the Victorian Civil and Administrative Tribunal Act 1998.”

2. It was submitted that the dispute currently remaining before this Court falls within the DBCA and the exclusive purview of VCAT. 

3. I should at the outset deal with the issue of the exclusivity of jurisdiction vested in VCAT and, as a consequence, the DBCA. In my view, the DBCA cannot apply to this Court, being a Federal Court created pursuant to the Constitution. It is clear to me that the exclusivity of the jurisdiction purportedly set out in that legislation can only apply to State Courts. Therefore, I reject any suggestion, if it were made, that this Court's jurisdiction is excluded by the operation of that State legislation.

4. When this Application commenced, it was clear that there was reliance upon a claimed infringement of the Copyright Act. That claim fell squarely within this Court's jurisdiction. In my view, applying the authorities to which reference has been made for and on behalf of the Builders, it is equally clear at that time that the Court, as part of its associated or accrued jurisdiction, had jurisdiction to consider and determine what I have described as the cross-claim set out in the Builder's defence and cross-claim filed 9 December 2005 and in particular paragraphs 20 and following of that document. So much is clear not only from the jurisdiction vested in the Court as a result of issues arising out of the Copyright Act but also, issues arising out of any claimed indemnity dependent upon a term of the contract between the Owners and the Builder.

5. The character and nature of that claim has not altered since the filing of the document now sought to be relied upon by the Builders on 9 December 2005.  The claim itself still relies, at least in part, upon some consideration of copyright law.  However, even if I am wrong in relation to that, the remaining contractual dispute, whereby the Builder seeks indemnity from the Owners, still falls within what I would describe as the associated or accrued jurisdiction of this Court, applying the authorities to which reference has been made earlier and in particular applying the authority of the Full Court of the Federal Court in ‘Beck v Spalla’. 

6. This case is not similar in all respects to the decision delivered by this Court in ‘Fox v Robinson’.  In this case, the surviving claim is one between the Respondents.  It is clear to me that that surviving claim is one which falls within the jurisdiction of this Court and that this Court's jurisdiction is not excluded by the State legislation to which reference was made earlier, and nor applying the appropriate authorities to which reference has been made am I satisfied that this Court, upon the settlement of the claim between the Applicant and the Respondents, does not then continue to have jurisdiction to deal with and dispose of those claims which were properly before the Court at the relevant time. 

7. Just because a claim by an Applicant against the Respondents has been settled, that does not then remove, in my view, the accrued and associated jurisdiction which had vested in this Court at the time the appropriate documents were filed by the parties, which in this case is the claim by the Builder against the Owners.  Once that jurisdiction has been vested, then in my view, it is not removed by the simple act of settlement in the terms described between the Applicant and the Respondents.  I conclude that, based upon the authorities to which reference is made, which I find to be binding on this Court, the Court currently should exercise jurisdiction in relation to the matter. 

8. In the alternative, it was submitted for and on behalf of the owners that the Court should have regard to the convenience and appropriateness of the matter being dealt with by VCAT.  Particular reliance was placed upon s.53 of the DBCA which, it was submitted, contains a wide range of powers not reflected necessarily in the common law and/or equitable powers of this Court.  Indeed, it was further submitted that those powers go beyond, as I understood it, statutory powers which may arise under the Trade Practices Act 1974, including, by way of example, unconscionable conduct. 

9. In my view, the mere fact that there may be a provision under a State Act vesting jurisdiction in VCAT and providing, as it does, what might be described as wide powers in that Tribunal to make an order, it considers fair to resolve a domestic building dispute, does not of itself persuade this Court that VCAT is therefore an appropriate forum.  It should further be noted that in any event, this Court does not have power to transfer the matter to VCAT but would simply be deciding to either stay or perhaps even consider dismissing the current Application to enable the parties to continue their dispute before VCAT. 

10. For this Court to exercise any powers at the request of the Owners in these circumstances would be an abrogation of the Court's power and role in considering disputes properly before it, which I have found to be part of the continuing accrued and associated jurisdiction of the Court.  This Court is an appropriate forum for a dispute of this kind and is a Court which is well able to consider the matter. 

11. I note in passing that reference has been made to VCAT being a specialist Tribunal established in part to consider issues concerning domestic building disputes.  Nevertheless, those issues and particularly the issues raised in the material before this Court are not issues which are matters foreign to this Court, nor are they matters which this Court should avoid as part of its associated or accrued jurisdiction.  Accordingly, the Court finds that it does have jurisdiction, and subject to further directions, the proceedings as between the remaining Respondents should continue. 

I certify that the preceding twenty (20) paragraphs are a true copy of the reasons for judgment of McInnis FM

Associate: 

Date:  30 May 2006