Coutts, Andrew Reid v Ronstan International Pty Ltd

[1996] FCA 471

CATCHWORDS

Jurisdiction  - cross vesting - whether appearing to the Court that in the interests of justice proceeding should be determined by a Supreme Court - policy and purpose of cross-vesting legislation.

Jurisdiction of the Courts (Cross-vesting) Act 1987 (Cth)

ANDREW REID COUTTS v  RONSTAN INTERNATIONAL PROPRIETARY LIMITED

No VG 275 of 1996

NORTHROP J
MELBOURNE
4 JUNE 1996

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY  No VG 275 of 1996
GENERAL DIVISION

B E T W E E N :
  ANDREW REID COUTTS  Applicant
  and
  RONSTAN INTERNATIONAL PROPRIETARY LIMITED
  Respondent
COURT:         NORTHROP J
DATE: 4 JUNE 1996
PLACE:         MELBOURNE

REASONS FOR JUDGMENT

This is the second directions hearing in this matter.  On the first directions a week ago the matter was adjourned to today after the Court raised the issue of whether it should make an order under the provisions of the Jurisdiction of Courts (Cross-vesting) Act 1987 to transfer the action to the Supreme Court of Victoria. At that time, the Court referred to an unreported judgment it had given on 22 March 1996, Costa Vraca Proprietary Limited v Berrigan Weed and Pest Control Proprietary Limited, No VG 847 of 1995, when the Court made it clear that:

"The question of cross vesting would be matter which will be raised by the Court of its own motion, if appropriate, at an early stage of proceedings in this Court if the facts indicated the possibility of an order being made."

The present case came within that category.  The Court drew attention to the case of Berrigan and adjourned the first directions hearing to today.  Today counsel for the applicant and the solicitor for the respondent each submitted that the matter should continue in this Court and that this Court should not transfer the matter to the Supreme Court of Victoria.  The relevant provisions of the Cross-vesting Act, for present purposes, are contained in paragraph 5(4)(b)(iii) but it is helpful to set out the whole of subsection 5(4):-

"(4)Where:

(a)a proceeding (in this subsection referred to as the "relevant proceeding" is pending in the Federal Court or the Family Court (in this subsection referred to as the "first court"); and

(b)it appears to the first court that:

(i)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;

(ii)having regard to:

(A)whether, in the opinion of the first court, apart from this Act and any law of a State relating to cross-vesting of jurisdiction, the relevant proceeding or a substantial 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 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-subparagraph (A) and not within the jurisdiction of the first court apart from this Act and any law of a State relating to 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 5(4)(b)(iii) is the provision relevant to this matter. It is summarised as follows:-

"Where it appears (to the Federal Court) it is otherwise in the interests of justice that (this proceeding) be determined by the Supreme Court of Victoria the Federal Court shall transfer the proceeding to the Supreme Court of Victoria."

The Cross-vesting Act is to be construed and applied having regard to the preamble set out in that Act which is:-

"WHEREAS inconvenience and expense have occasionally been caused to litigants by jurisdictional limitations in federal, State and Territory courts, and whereas it is desirable:

(a)to establish a system of cross-vesting of jurisdiction between those courts, without detracting from the existing jurisdiction of any court;

(b)to structure the system in such a way as to ensure as far as practicable that proceedings concerning matters which, apart from this Act and any law of a State relating to cross-vesting of jurisdiction, would be entirely or substantially within the jurisdiction (other than any accrued jurisdiction) of the Federal Court or the Family Court or the jurisdiction of a Supreme Court of a State or Territory are instituted and determined in that court, whilst providing for the determination by one court of federal and State matters in appropriate cases; and

(c)if a proceeding is instituted in a court that is not the appropriate court, to provide a system under which the proceeding will be transferred to the appropriate court."

In the present case, the applicant is seeking damages against the respondent.  The main claim set out in the application is:

"On the grounds appearing in the accompanying statement of claim, the applicant claims:

(1)Damages pursuant to paragraphs 9, 15, 18 and 21 of the attached statement of claim."

The statement of claim raises, essentially, four different causes of action.  They all arise out of what is said to be a breach of a contract of employment made on or about 23 February 1995 and which was terminated by the respondent just over a year later.  The employment commenced in February 1995.  Terms of the agreement of employment are set out in paragraph 4.  The terms of the agreement were varied. The respondent terminated the agreement in February 1996. The damages claimed for the alleged breach of agreement amount to $448,000. In addition, there are claims based upon the Trade Practices Act 1974 (Commonwealth), the Fair Trading Act 1985 (Vic.) and in negligence.  In each case, the damages claimed are for the same amount, $448,000.

There is no doubt that the claim under the Trade Practices Act is based upon section 52 and also 51AA. This claim comes within the original jurisdiction of this Court under sub-section 86(1) of the Trade Practices Act.  It also comes within the jurisdiction of the Supreme Court of Victoria by reason of sub-section 86(2) of the Trade Practices Act.

The other claims made by the applicant do not come directly within the jurisdiction of the Federal Court. It is said they arise under its accrued jurisdiction which enables the Federal Court to deal with all matters in dispute between the parties arising out of the same set of facts.  It is also clear that, in law, the accrued jurisdiction is one which can be exercised or not at the discretion of the Federal Court.  It is also possible,
and I do not decide, that the Federal Court has jurisdiction to hear those claims under the State and Federal cross-vesting legislation.

The question arises whether, having regard to all these matters, this is a case where it appears to the Court, in the interests of justice, that the proceeding should be determined by the Supreme Court of the State of Victoria.

I proceed on the basis that the Federal Court of Australia and the Supreme Court of Victoria are each superior courts of record and of equal standing. It is invidious to try and draw comparisons between the procedures of one or the other. Each exercises jurisdiction in the same way, procedures might differ, but it is not for me to say which is a better set of procedures.  I also have regard to the fact that prima facie an applicant has a choice of the court in which to bring proceedings and weight must be given to that choice.

During the course of submissions, the Court was referred to a number of authorities including Bourke v State Bank of New South Wales (1988) 85 ALR 61 and the reasons given by Wilcox J relating to the cross-vesting legislation and the method of exercising a discretion under paragraph (iii) of subsection 5(4)(b) of the Cross-vesting Act.  I also have regard to what was said by Spender J in Teserioro v Matstar Proprietary Limited 93 ALR 607 and also the judgment of Kelly J in the Supreme Court of the Australian Capital Territory in Waterhouse v Australian Broadcasting Corporation (1988) 86 ACTR 1. I refer to what I said in the case of Berrigan, referred to earlier, and also to what I said in Mansell v Cumming (1989) 86 ALR 637 and in particular at pages 639 and
following.  Looking at the relevant provisions of sub-section 5(4) of the Cross-vesting Act, the Court is to consider whether it appears "otherwise in the interests of justice", that the proceedings be determined by the Supreme Court of Victoria, that is otherwise than those matters referred to in paragraphs 5(4)(b)(i) and (ii).  None of those other matters apply.

Therefore the issue comes down to the consideration of whether it appears to this Court that it is in the interests of justice that this proceeding be determined by the Supreme Court of Victoria.  It has been said, and I agree, that the discretion is a very wide one. The words "interest of justice" must be construed widely and the Court, in considering on its own motion, as in this case, has a broad discretion and gives a wide meaning to those words.  I should refer in this regard to sub-section 5(7) which provides:-

"(7)A court may transfer a proceeding, under this section on the application of a party to the proceeding of its own motion or on the application of the Attorney-General of the Commonwealth or of a State or Territory."

In this case the Court is exercising the power of its own motion, both parties desiring the matter to stay in the Federal Court.

In my opinion it is important to understand the purpose and policy of the cross-vesting legislation in order to consider the nature of justice to be considered in the application of the law to the present case.  The introduction of the accrued jurisdiction into the Federal Court arose because of difficulties confronted by an applicant having a
number of causes of action, some of which could be heard in the Federal Court only and others in State Courts only.  This gave rise to great injustice to the applicant concerned. As a result there developed the concept of accrued jurisdiction which enabled the Federal Court to do justice as between the parties in all the matters in issue between them.  But at the same time it is clear that the exercise of the accrued jurisdiction depended upon the discretion of the Federal Court.  As a result it became apparent that more and more cases were coming to the Federal Court in which the accrued jurisdiction was sought to be relied upon to enable to Federal Court to determine all the matters.  This had an adverse effect on the Supreme Courts of the States and the Territories. Steps were taken to try to resolve the problem of the Supreme Courts not having jurisdiction in Federal matters, while, subject to the exercise of its accrued jurisdiction, the Federal Court did have jurisdiction in State matters.

The cross-vesting legislation arose as a result of agreements between the States, and Territories on the one part, and the Commonwealth on the other, to avoid the existing imbalance.

In order to enable the cross-vesting legislation to operate fairly and justly it is important, in my opinion, that the background to the legislation be remembered. In cases of the kind presently before the Court, in the interests of justice, it is important to ensure that the State Courts deal with those matters which, essentially, are State matters, while the Federal Court deals with those matters which are, essentially, Federal matters. Otherwise the problem sought to be resolved by the cross-vesting legislation will arise again. 

In my opinion, it is important, when considering whether, in the interests of justice, a proceeding should be determined by a Supreme Court for this Court to have regard to the purpose and policy of the Cross-vesting Act.  Otherwise, the very reason for the cross-vesting legislation would be destroyed by, in substance, this Court taking work away from the Supreme Court which, in truth, should be dealt with by the Supreme Court.

One aspect of determining the issues, and this was referred to in Berrigan, is to determine what is the real nature of the dispute between the parties.  Looking at the statement of claim which has been filed in this proceeding, it is clear, in my opinion, that the real claim by the applicant is for damages for breach of contract.  That is the essential nature of the complaint by the applicant.  That is a claim which, essentially, is a State claim and does not come within the statutory jurisdiction of this court.  The contract was entered into.  The applicant commenced his employment under that agreement.  It lasted for quite a long period and was terminated, allegedly wrongly. The applicant is suing under the terms of that contract for damages.  Then in addition to that there are claims under the Fair Trading Act of the State of Victoria and also claims for negligence.  There is then added, and I use the word intentionally, the claims based upon the Trade Practices Act, under section 51AA and section 52.  But there has been no suggestion that the amount of damages being sought under those statutory provisions is any different from what is being sought under the State causes of action.  In these circumstances, in my opinion, it is in the interests of justice that the proceeding be determined by the Supreme Court of Victoria. That conclusion appearing to this Court, sub-section 5(4) of the Cross-vesting Act, requires this Court to transfer the proceeding to the Supreme Court of
Victoria.  This is necessary in the interest of justice, in order to maintain the comity between the Courts and the policy of the cross-vesting legislation.

Accordingly, it is ordered that this proceeding be transferred to the Supreme Court of Victoria.

I certify that this and the preceding eight (8) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Northrop.

Associate:

Date:

ATTACHMENT

Counsel for the Applicant:                 Mr L Kaufman

Solicitors for the Applicant:               Rigby Cooke

Counsel for the Respondent:             Mr S Amondola

Counsel for the Respondent:             Dunhill Madden Butler

Date of Hearing:  4 June 1996