Commonwealth of Australia v International Air Aid Pty Ltd

[1990] FCA 274

274-7 48-

JUDGMENT NO ........ ........ . ........ .. -

IN THE FEDERAL COURT OF AUSTRALIA	)
)
AUSTRALIAN CAPITAL TERRITORY	)
) No. ACT G 66 of 1989
DISTRICT REGISTRY	)
GENERAL DIVISION

BEXIEEN: COMMONWEALTH OF AUSTRALIA

Applicant

AND:  INTERNATIONAL AIR AID PTY
LIMITED

First Respondent

PETEX WILLIAM HOCKING

Second Respondent

PFTER HOYTE CHAVE COMMINS

Third Respondent

MINUTE OF ORDER

JUDGE MAKING ORDER : Neaves J. RECEIVED

2 6 J U N 1 9 9 0

DATE OF ORDER : 22 June 1990

FEDERAL COURT OF
AUSTRALIA

WERE MADE	: Canberra	PRINCIPAL REQISTRY
THE COURT ORDERS THAT:

which is dated 16 February 1990.

1.     The applications made by the respondents by notices of motion respectively dated 15 and 16 February 1990 that the proceeding herein be transferred to the Supreme Court of the Australian Capital Territory pursuant to sub-s.5(4) of the ~urisdiction-of Courts (Cross-vestinq) Act 1987 (Cth) be dismissed.

2 .     The first and second respondents pay the costs to date of the applicant of and incidental to the motion notlce of which is dated 15 February 1990.

3.     The third respondent pay the costs to date of the

applicant of and incidental to the motion notice of

4.     The proceeding be llsted for a directions hearing on 13 July 1990 at 9.30 a-m.

5.    The applications made by the notices of motion

respectively dated 15 and 16 February 1990, in so far as they have not been dealt with in the orders set out above, be adjourned to 13 July 1990 at 9.30 a-m.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA	)
)
AUSTRALIAN CAPITAL TERRITORY	)
) No. ACT G 66 of 1989
DISTRICT REGISTRY	)
GENERAL DIVISION

BETWEEN: COMMONWEALTH OF AUSTRALIA

Applicant

AND:  INTERNATIONAL AIR AID PTY
LIMITED

First Respondent

P m WILLIAM HOCKING

Second Respondent

PETER HOYTE CHAVE COMMINS

Third Respondent

CORAM: Neaves J.

W: 22 June 1990

REASONS FOR JUDGMENT

These are two applications by motion on notice whereby

International Alr Aid Pty Limited ("the first respondent") and

application, and Peter Hoyte Chave Commins ("the third	Peter Wllliam Hocking ("the second respondent") by the first
respondent") by the second application, seek various orders including an order that a proceeding pendlng in this Court at the sult of the Commonwealth of Australia ("the Commonwealth") against the three respondents numbered ACT G 66 of 1989 be transferred to the Supreme Court of the Australian Capital Territory pursuant to sub-s.5(4) of the Jurisdiction of Courts (Cross-vestinv) Act 1987 (Cth).
In the application by which the substantive proceeding was instituted, the Commonwealth claims, as against each respondent, damages at common law and pursuant to sub-s.82(1) of the Trade Practices Act 1974 (Cth) and interest on such damages pursuant to s.51A of the Federal Court of Australia Act 1976 (Cth) and, in addition, as against the first respondent, the sum of $407,027.60 plus interest.
It appears from the amended statement of claim filed on behalf of the Commonwealth that the claims arise under or in relation to a contract, evidenced by a written document dated 10 February 1986 entitled "Agreement for Professional Services Relating to Provision of Hercules Aircraft to Ethiopia", made between the Commonwealth and the first respondent whereby the first respondent agreed to provide the Commonwealth with certain services in connection with the provision by the Commonwealth to the Government of Ethiopia of the services of a Hercules C130A aircraft. It is alleged that at all material times the second and third respondents were directors of the
first respondent. It is further alleged that between 23 December 1985 and 18 February 1986 the first respondent, representing that the supplies were required to enable it to execute the abovementioned contract, requested certain supplies from the Commonwealth and that supplies to the total value of $225,592.77 were, in consequence, transferred from the Commonwealth to the first respondent.
The further allegation is made that between about 23 December 1985 and about 15 July 1986 the first respondent submitted to the Commonwealth claims for payment pursuant to the contract, such claims totalling $1,302,359.05. The first respondent is alleged to have represented to the Commonwealth that expenditure to the value stated in the claims had in fact been incurred or that work to the value stated had in fact been carried out. The Commonwealth asserts that, by reason of those representations and acting on the bellef that they were true, the amount stated in each of the claims was paid to the first respondent. It is further alleged that the representations were false and that the amounts properly payable to the first respondent totalled no more than $907,331.45. The Commonwealth clalms the difference, $395,027.60, together with an amount of $12,000 described as "the cost of ascertaining the difference".
Those amounts total $407,027.60, the amount referred to in the application as being claimed as against the first respondent.
The claim against the first respondent is pleaded in a as against that respondent may be shortly stated as being for number of alternative ways. The causes of actlon relied upon misrepresentation, for negligent misstatement, for
contraventions of ss.52 and 53 of the Trade Practices Act, for breach of contract and for the recovery of money paid under a mlstake of fact or, alternatively, without authority of law. The relief sought against the second and third respondents is on the basis that they were involved, within the meaning of s.75B of the Trade Practices Act, in the contraventions of that Act by the flrst respondent.
The present applications are supported by the affidavit of Robert Gordon Lawton, the solicitor for the first and second respondents, sworn 16 February 1990 and the affidavit of Rodney William Commins, the solicitor for the third respondent, sworn 15 March 1990. The facts deposed to in the affidavits concern only the criminal proceedings against the second and third respondents to which reference is made hereunder.
It appears from the material before the Court and from what was said during the course of the hearing that the second and third respondents presently stand committed for trial on eight charges under the Crimes Act 1914 (Cth) arising out of the same matters that form the basis of the claims the subject of the proceeding in this Court numbered ACT G 66 of 1989. Seven of the charges allege offences of defrauding the Commonwealth contrary to s.29D of the Crimes Act. Of those, three allege that the second and third respondents defrauded the Commonwealth by dishonestly causing it to pay money to the first respondent by means of claims that the second and third
s.29D allege that the second and third respondents defrauded respondents knew to be false. The remaining four charges under
the Commonwealth by dishonestly representing that the first respondent was entltled to acquit certain expenditure against an advance of money made by the Commonwealth to the first respondent. The eighth charge alleges that the second and thlrd respondents, contrary to s.86A of the Crimes Act, conspired with each other to defraud the Commonwealth by entering into an agreement to make dishonest claims upon the Commonwealth under the agreement between the Commonwealth and the first respondent.
Sub-section 5(4) of the Jurisdiction of Courts (Cross-vesting) Act provides:

" ( 4 ) Where -

(a) a proceeding (in this sub-section referred to as the ' relevant proceeding') is pending in the Federal Court or the Family Court (in this sub-section referred to as the 'first court'); and

(b) it appears to the first court that -

(1) the relevant proceeding arises out of, or is related to, another proceeding pending in the Supreme Court of a State or Territory and it is more appropriate that the relevant proceeding be determined by that Supreme Court;

(li) having regard to -

(A) whether, in the opinion of the first court, apart from this Act and any law of a State relating t o

cross-vesting of

proceeding or a substantial jurisdiction, the relevant

part of the relevant

proceeding would have been

incapable of being

instituted in the first court and capable of being instituted in the Supreme Court of a State or Territory;

( B ) the extent to which, in the

opinion of the first court,

the matters for

determination in the relevant proceeding are matters arising under or involving questions as to

the application,

interpretation or validity of a law of the State or Territory referred to in sub-sub-paragraph ( A ) and not within the jurisdiction of the first court apart from this Act and any law of a State relating t o

cross-vesting	of
jurisdiction; and

(C) the interests of justice,

it is more appropriate that the relevant proceeding be determined by that Supreme Court; or

(iii) it is otherwise in the interests of justice that the relevant proceeding be determined by the Supreme Court of a State or Territory,

the first court shall transfer the relevant
proceeding to that Supreme Court."

Paragraph (a) of that sub-section is, of course, satisfied. Sub-paragraph (b)(i) has no application as there is no relevant proceeding pending in the Supreme Court. As to par.(b)(ii) the lurisdiction of this Court to determine all the matters in dispute between the parties arises otherwise than under the Jurisdiction of Courts (Cross-Vesting) Act. Its

Practices Act and in what is commonly referred to as its	jurisdiction has its foundation in sub-s.86(1) of the Trade
"accrued" jurisdiction, each of the causes of action alleged in the amended statement of claim having a "common substratum of facts": see Burqundy Rovale Investments Pty Ltd v. Westpac Bankins Corporation (1987) 18 F.C.R. 212 at pp.218-9. The ~urisdiction of the Supreme Court to deal with all those causes of action would need to be found in the combined operation of s.11 of the Australian Capital Territory Supreme Court Act 1933 (Cth), sub-s.86(2) of the Trade Practices Act and sub-s.4(2) of the Jurisdiction of Court (Cross-vesting) Act. It is also relevant to note that no suggestion has been made that any of the issues in the proceeding arise under or involve questions as to the application, interpretation or validity of a law of the Territory.
The questlon remains whether it is more appropriate, or otherwise in the interests of justlce within the meaning of those expressions in sub-pars (b)(ii) and (b)(iii) of sub-s.5(4) of the Jurisdiction of Courts (Cross-vesting) Act that the proceeding be determined in the Supreme Court.
Counsel for the respondents submitted that the substantive proceeding should be transferred to the Supreme Court as it essentially concerned causes of action arising in the Territory under an agreement entered into in the Territory and was based on false representations alleged to have been made in the Territory. Support for the submission was, by analogy, sought in the following statement of Northrop J. in
Mansell v. Cumminq (1989) 86 A.L.R. 637 at p.643:

"It is important that the Federal Court does not use the State cross-vestlng legislation to deprive State Supreme Courts of their

traditional jurisdiction."

It was submitted that, by instituting the proceeding in this Court, the Commonwealth was engaged in "forum shopping", the causes of action arising under the Trade Practices Act being, so it was submitted, on the periphery of the case. Counsel did not, however, go so far as to submit that the causes of action under the Trade Practices Act were "colourable" in the sense that they were included solely for the improper purpose of "fabricating" jurisdiction in this Court.

It was also submitted that the Supreme Court was in as good a position as this Court to determine the issues between the parties and was the appropriate forum. The circumstance that the proceeding might be expected to come on for hearinq more qulckly in thls Court than in the Supreme Court was said not to be a relevant consideration as, if the matter were to remain in this Court, it should not be brought on for hearinq until after the conclusion of the criminal proceedings agalnst the second and third respondents.

None of the matters relied upon by counsel for the
respondents, taken singly or in combination, satisfy me that

the proceeding should be transferred to the Supreme Court. The

To allow it to proceed in the forum chosen by the Commonwealth proceeding is clearly within the jurisdiction of this Court.	as applicant cannot, in my view, properly be seen as
usurping a jurisdiction which more appropriately belongs to the Supreme Court. I, therefore, dismiss so much of the applications the subject of the notices of motion dated respectively 15 and 16 February 1990 as sought an order that the proceeding be transferred to the Supreme Court. The first and second respondents must pay the costs to date of the

.

Commonwealth of and incidental to the motion notice of which is dated 15 February 1990. The third respondent must pay the costs to date of the Commonwealth of and incidental to the motion notice of which is dated 16 February 1990.

I direct that the substantive proceeding be listed for a directions hearing on 13 July 1990 at 9,30 a.m. The applications made by the notices of motion respectively dated 15 and 16 February 1990, in so far as they have not been dealt with in this judgment, are adjourned to the same date and time.

I certify that this and

the preceding 8 pages are a true copy of the Reasons for Judgment herein of the Honourable Mr Justice Neaves.

Associate

Dated: 22 June 1990

Counsel for the respondents	: Mr R. Mildren
Solicitors for the first	: Gallens Crowley &
and second respondents	Chamberlain

Solicitors for the third	: Patterson Houen &
respondent	Commins
Counsel for the Commonwealth	: Mr P.A. Coppel

of Australia

Solicitor for the	: Australian Government
Commonwealth of Australia	Solicitor
Date of hearing	: 16 March 1990
Date of judgment	: 22 June 1990