Fencott v Muller

[1983] HCA 12

HIGH COURT OF AUSTRALIA

Gibbs C.J., Mason, Murphy, Brennan, Deane, Wilson and Dawson JJ.

FENCOTT v. MULLER

(1983) 152 CLR 570

28 April 1983

Constitutional Law (Cth)

Constitutional Law (Cth)—Powers of the Commonwealth Parliament—Trading and financial corporations—Trade practices legislation—Prohibition of corporations from engaging in misleading or deceptive conduct—Imposition of liability for damages on persons involved in such conduct—Imposition on persons other than corporations—Validity—The Constitution (62 &63 Vict. c. 12), s. 51(xx)—Trade Practices Act 1974 (Cth), ss. 4(1), 52(1), 75B, 82(1), 84(2). Constitutional Law (Cth)—Trading and financial corporations—Character of corporation &hich has barely begun to carry on business—Relevance of constitution including objects—The Constitution (62 &63 Vict. c. 12), s. 51(xx). Constitutional Law (Cth)—Judicial power of the Commonwealth—Federal jurisdiction—Federal Court of Australia—Non-federal claims—Whether part of same matter as federal claims—The Constitution (62 &63 Vict. c. 12), ss. 76, 77—Trade Practices Act 1974 (Cth), s. 86.

Decisions

1983, April 28
The following written judgments were delivered:-
GIBBS C.J. This is an appeal from a judgment of the Federal Court of Australia (Toohey J.) by which an objection to the jurisdiction of that Court was allowed in part but was otherwise dismissed (1982) 57 FLR 35; 39 ALR 496 . The appellants, who are three of the respondents to the proceedings in the Federal Court, contend that the proceedings are entirely outside the jurisdiction of the Federal Court, and that the objection to the jurisdiction should accordingly have been allowed in full. There is no cross-appeal against the judgment in so far as it held that certain parts of the proceedings were beyond jurisdiction. The appeal was brought to the Full Court of the Federal Court, but has been removed into this Court on the application of the Attorney-General for the Commonwealth. (at p578)

2. The proceedings were commenced in the Federal Court by Mr. Muller and Scrid Nominees Pty. Ltd. ("Scrid"), the present respondents, and the facts alleged in their amended statement of claim, as explained in some respects in the course of argument, but excluding those paragraphs which Toohey J. held raised matters not within the jurisdiction of the Court, are as follows. Scrid, as trustee of a trust called the O'Connors Unit Trust, was the assignee of the leasehold interest in premises in Hay Street, West Perth, and conducted on those premises a business of restaurateur and wine bar operator. Until 6 February 1981 the first appellants, Mr. and Mrs. Fencott, were the sole directors and shareholders of Scrid. At some time in or before January 1981, Mr. and Mrs. Fencott decided to sell the business, and gave instructions accordingly to H. &T. Holdings ("H. &T."), a company which carried on business as a real estate agent and business broker. One James John Hondros, who was employed by H. &T. as a salesman or agent, entered into negotiations with the first respondent, Mr. Muller, and in the course of those negotiations made certain false representations as to the profits, turnover and operating expenses of the business. The representations were made on behalf of Scrid, and with the intention of inducing Mr. Muller to purchase the business from Scrid, and the making of the representations was authorized or initiated by Mr. and Mrs. Fencott, or alternatively by H. &T., or alternatively by Mr. Hondros, in the knowledge that the representations were false, or alternatively with reckless indifference to their truth or without belief in their truth, or in the further alternative, negligently. In yet a further alternative, it was alleged that the representations became conditions or warranties of the contract about to be mentioned. In reliance on the representations, Mr. Muller entered into a written agreement dated 27 January 1981 for the sale and purchase of the business, for a price of $150,000 plus stock at valuation. It was a term of the agreement that Scrid should pay all debts and liabilities of the business incurred or accrued prior to transfer of possession, which in fact was given on 23 February 1981, and should indemnify Mr. Muller in respect of all claims and proceedings in respect thereof. The agreement was conditional upon either the assignment of the lease by Scrid to Mr. Muller or alternatively upon the transfer of the shareholding in Scrid to Mr. Muller. The second of these alternative conditions was satisfied by the transfer by Mr. and Mrs. Fencott of their shares in Scrid to Mr. Muller on 6 February 1981. Subsequently the second appellant, Oakland Nominees Pty. Ltd. ("Oakland"), was appointed as trustee of the O'Connors Unit Trust in place of Scrid. (at p579)

3. On or about 19 May 1981, the third appellant, Mr. Johnsen, acting as duly authorized agent of Oakland, caused to be posted to trade creditors of Scrid letters, purporting to be signed by Scrid, which stated that Scrid did not have the necessary funds to pay its debts as at 22 February 1981, because of the failure by Mr. Muller to settle the balance of outstanding moneys due in accordance with the terms of the contract, and that this failure had made it necessary for Scrid's solicitors to issue a writ. The sending of the letter constituted misleading or deceptive conduct by or on behalf of Oakland. (at p580)

4. The above allegations appear to be those on which the respondents rely; they have of course not yet been the subject of proof, and we are not concerned with the merits of any of the respondents' claims as a matter of law, but only with the question of jurisdiction. On 28 May 1981, Oakland commenced proceedings in the Supreme Court of Western Australia against Mr. Muller, claiming the balance of purchase moneys payable under the contract, and the present proceedings were commenced in the Federal Court on 10 July 1981 by Mr. Muller and Scrid against the present appellants and also against H. &T. and Mr. Hondros, who are not parties to this appeal. The claims made by Mr. Muller and Scrid in those proceedings (other than those as to which the objection to jurisdiction was allowed) are as follows:
(1) A claim by Mr. Muller against Mr. and Mrs. Fencott, H. &T. and Mr. Hondros for damages resulting from the false representations; this claim is made under ss. 75B and 82 of the Trade Practices Act 1974 (Cth), as amended, ("the Act") for damages caused by a contravention of s. 52 of that Act, in which the persons against whom the claim is made were involved, or alternatively is made at common law, i.e. as a claim for damages for fraud, negligence or breach of contract.
(2) A claim by Scrid against Mr. and Mrs. Fencott, H. &T. and Mr. Hondros for damages for breach of a fiduciary duty owed by Mr. and Mrs. Fencott as directors of Scrid to that company and broken by the making of the false representations; H. &T. and Mr. Hondros are said to be liable because they aided and abetted Mr. and Mrs. Fencott in their breach of duty.

(3) A claim by Scrid to be indemnified by Oakland out of the assets of the trust in respect of liability by Scrid which it has incurred to Mr. Muller (a) under s. 82 of the Act and at common law for deceit, negligence and breach of contract by reason of the false representations made on its behalf; and (b) pursuant to the agreement to pay the debts and liabilities incurred in the conduct of the business.

(4) A claim by Mr. Muller and Scrid against Oakland under s. 82 of the Act for damages caused by the contravention of s. 52 of the Act, constituted by the sending of the letter to the trade creditors on or about 19 May 1981, and against Mr. Johnsen, as a person involved in the contravention. (at p581)

5. The jurisdiction of the Federal Court in the present case depends on s. 86 of the Act, which appears in Pt VI and reads as follows:

"Jurisdiction is conferred on the Court to hear and determine actions, prosecutions and other proceedings under this Part and that jurisdiction is exclusive of the jurisdiction of any other court, other than the jurisdiction of the High Court under section 75 of the Constitution."

Other provisions which appear in the same Part, and which are relevant in the present case, are ss. 75B, 82(1) and 84(2). Those provisions are as follows: "75B. A reference in this Part to a person involved in a contravention of a provision of Part IV or V shall be read as a reference to a person who -

(a) has aided, abetted, counselled or procured the contravention; (b) has induced, whether by threats or promises or otherwise, the contravention; (c) has been in any way, directly or indirectly, knowingly concerned in, or party to, the contravention; or (d) has conspired with others to effect the contravention." "82. (1) A person who suffers loss or damage by conduct of another person that was done in contravention of a provision of Part IV of V may recover the amount of the loss or damage by action against that other person or against any person involved in the contravention." "84. (2) Any conduct engaged in on behalf of a body corporate by a director, agent or servant of the body corporate or by any other person at the direction or with the consent or agreement (whether express or implied) of a director, agent or servant of the body corporate shall be deemed, for the purposes of this Act, to have been engaged in also by the body corporate."

The provisions of Pt V which are said to have been contravened in the present case are those of s. 52(1), which provides as follows: "A corporation shall not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive." (at p581)

6. It is clear that it is competent for the Parliament to confer on the Federal Court jurisdiction only with respect to matters of the kinds described in ss. 75 and 76 of the Constitution: see s. 77(1) of the Constitution, and Philip Morris v. Brown (1981) 148 CLR 457, at p 491 . For present purposes, that means that the Federal Court has jurisdiction only with respect to matters arising under any laws made by the Parliament, or, to be more specific, matters arising under the Act. The Federal Court had power to decide whether the controversy lay within its jurisdiction, but its decision on that question was not conclusive: see Reg. v. Federal Court of Australia; Ex parte W.A. National Football League ("Adamson's Case") (1979) 143 CLR 190, at pp 215, 230 . We are now called upon to decide whether the learned trial judge was correct in the conclusion which he reached as to jurisdiction, and that depends upon what answers should be given to three questions which it will be necessary to discuss. (at p582)

7. The first question is whether ss. 75B and 82 of the Act are valid laws of the Commonwealth. Section 82, in its application to a case such as the present, allows the amount of any loss or damage caused by conduct done in contravention of s. 52, which, as the words of s. 52 reveal, could only be the conduct of a corporation, to be recovered not only from the corporation, but also from "any person involved in the contravention". Section 75B defines that expression, and includes within it a person who "has been in any way, directly or indirectly, knowingly concerned in, or party to, the contravention". The claim for damages under s. 82 from Mr. and Mrs. Fencott can only succeed if these provisions are validly enacted. Of course, Mr. and Mrs. Fencott can only be liable if Scrid was a corporation within the meaning of s. 52. "Corporation" is defined in s. 4(1) of the Act to include a body corporate that is a trading corporation formed within the limits of Australia or a financial corporation so formed. It appears that Scrid did conduct a business of restaurateur and wine bar operator, and traded under the name of "O'Connors Winehouse/Restaurant" but there is no evidence as to what proportion of its activities was constituted by its trading or as to what other functions if any (apart from acting as trustee) it existed to perform. However, the grounds of objection to jurisdiction did not suggest that Scrid was not a corporation within the meaning of s. 52, and it seems to have been assumed throughout that it was a trading corporation. The claim against Mr. Hondros also depends on ss. 75B and 82, but since neither he nor H. &T. objected to the jurisdiction it is unnecessary to discuss their position separately. Further, the claim against Mr. Johnsen depends on his being involved in a contravention of s. 52 by Oakland, but the question whether that company is a corporation within the meaning of s. 52 is the second question that falls for decision on the appeal. (at p582)

8. It was not, and could not be, suggested that in so far as s. 82 deals with the recovery from a trading corporation of the amount of the loss or damage caused by the conduct of that corporation in contravention of s. 52, the provision goes beyond the legislative power of the Commonwealth. It was, however, submitted that when s. 82, assisted by s. 75B, goes on to impose upon a natural person liability for damage which his conduct has caused to another natural person, it ceases to be a law with respect to corporations. It was said that, upon analysis, it can be seen that s. 82 operates in the following way: the misleading conduct of a director, servant or agent is by s. 84(2) deemed to have been engaged in by the corporation which therefore contravenes s. 52, and the director, servant or agent then is rendered liable by ss. 75B and 82 for what was in truth his own conduct but which is deemed to be a contravention by the corporation. This analysis is correct in some cases but not in all; a person may be involved in the misleading conduct of another, and the conduct may be that of the corporation not by reason of s. 84(2) but because it has been done by an agent of the company acting within the scope of his authority. However, it is true to say that the provisions in question do render one natural person liable to another, and that the conduct on which the liability is based was that of a natural person. (at p583)

9. Nevertheless, the challenged provisions are, in my opinion, within constitutional power. Every legislative power contains within itself everything which is incidental to the main purpose of the power, and the Parliament may in the exercise of any of the substantive powers given by s. 51, and without resort of s. 51(xxxix), make "all laws which are directed to the end of those powers and which are reasonably incidental to their complete fulfilment": see Burton v. Honan (1952) 86 CLR 169, at pp 177-178 and Gazzo v. Comptroller of Stamps (Vict.) (1981) 149 CLR 227 . Once it is conceded that it is within the power conferred by s. 51(xx) of the Constitution for the Parliament to provide, as it has done by s. 52, that a trading corporation shall not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or to deceive, it must follow that it is also within the power of the Parliament to adopt a means of enforcing compliance with the prohibition which it has directed to the corporations. (I speak of s. 52 in its application to trading corporations, for as will be seen I consider that it has no other application in the present case.) Since corporations must necessarily act through human agencies, it is open to the Parliament to provide for sanctions against natural persons whose conduct brings about the contravention of the law by the corporation. Clearly, a law may be one with respect to trading corporations although it casts obligations on persons who are not themselves corporations: see Actors and Announcers Equity Association of Australia v. Fontana Films Pty. Ltd. (1982) 150 CLR 169, at p 183 , and cases there cited, and pp. 194-195. It was submitted that to make a natural person liable for damages for a breach of s. 52 was neither a necessary nor an appropriate means of ensuring that corporations do not contravene s. 52. However, it was pointed out in Burton v. Honan (1952) 86 CLR, at p 179 that the question is one of degree and that "once the subject matter is fairly within the province of the Federal legislature the justice and wisdom of the provisions which it makes in the exercise of its powers over the subject matter are matters entirely for the Legislature and not for the Judiciary". By the combined provisions of ss. 75B and 82, the Parliament has made natural persons liable in damages for a contravention by the corporation only if they have been involved in the manner described by s. 75B, which, in my opinion, refers to a close rather than a remote involvement in the contravention. In the most general words of s. 75B, those of par. (c), the word "knowingly" significantly confines the operation of the provision. For these reasons, there is a sufficient connexion between the law laid down in ss. 75B and 82 and the subject of the power conferred by s. 51(xx). The present case is, indeed, in my opinion, quite indistinguishable from Reg. v. Australian Industrial Court; Ex parte C.L.M. Holdings Pty. Ltd. (1977) 136 CLR 235, at pp 246-247 , where it was said that "if a head of constitutional power enables the Parliament to legislate so as to create a particular offence, then that head of power or the incidental power will authorize a provision having the same effect as s. 5 of the Crimes Act in its application to a person who is knowingly concerned in the commission of the offence". The words of s. 75B closely resemble those of s. 5 of the Crimes Act, although, of course, the former section refers to civil and the latter to criminal liability, a circumstance which provides no ground of distinction for present purposes. (at p584)

10. For these reasons the claim by Mr. Muller against Mr. and Mrs. Fencott, H. &T. and Mr. Hondros for damages caused by a contravention of s. 52 of the Act is within the jurisdiction of the Federal Court. (at p584)

11. The second question is whether Oakland is a "corporation" within the meaning of the Act, i.e., whether it is either a trading corporation or a financial corporation. If it is, the claim by Mr. Muller and Scrid against Oakland and Mr. Johnsen for damages caused by a contravention of s. 52 is within jurisdiction. If it is not, s. 52 does not apply and there is no basis for finding that the Federal Court has jurisdiction. (at p585)

12. The facts regarding Oakland are not in dispute. It was a shelf company until Mr. and Mrs. Fencott acquired it to take the place of Scrid as trustee of the O'Connors Unit Trust. The uncontradicted evidence of Mr. Fencott is that Oakland "is a mere trustee which has not traded and which will never trade". Its sole function was to wind up the affairs of the trust. In performing that function it was to receive the balance due from the sale of the business, to pay to the creditors of the business the debts incurred prior to the sale and to distribute any surplus in its hands amongst the beneficiaries of the trust. In the exercise of this function it negotiated with the creditors for an extension of time within which to pay the debts. Toohey J. held that "receiving the purchase price for the sale of a business, suing for the balance of that purchase price, negotiating with and paying off creditors of a business and distributing whatever money remains are commercial activities, collectively if not singly", and that since the company had been incorporated to carry out, and did carry out, activities which may fairly be described as commercial, it should be held to be a trading corporation. Before us, counsel for the respondents sought to maintain this view, but relied also on the objects set out in the memorandum of association of Oakland which, it was said, disclosed that trading activities were to be a substantial or predominant purpose of its existence, and further, that its purposes include the carrying out of financial activities. (at p585)

13. The purposes for which Oakland was established are set out in cl. 2 of its memorandum of association. Paragraph (a) is as follows:
"To undertake the office of a trustee and to perform and discharge the duties and functions of a trustee incidental to any trust and to hold in its name and deal with real or personal property as trustee agent or nominee of or for any person, company or corporation."
However, as might be expected, other objects are widely expressed. The company may take part in the formation, management, supervision or control of the business or operations of any company or undertaking (par. (j)). It may carry on businesses of diverse kinds (pars. (q), (r), (t), (u), (v)), or, indeed, any business which in the opinion of the directors may be conveniently carried on by the company (par. (w)). It may advance and lend money (par. (o)). No doubt it would have been within the power of Oakland to carry on business as a trading corporation or perhaps as a financial corporation. As I have said, however, it did not do so and was not intended to do so. (at p585)

14. The power given by s. 51(xx) of the Constitution is to make laws with respect to "Foreign corporations, and trading or financial corporations formed within the limits of the Commonwealth". It is obvious that the power is not to make laws with respect to all corporations, but only with respect to corporations which answer the description contained in par. (xx). The three cases in which this Court has recently discussed the meaning of par. (xx) - Reg. v. Trade Practices Tribunal; Ex parte St. George County Council ("the St. George County Council Case") (1974) 130 CLR 533 ; Adamson's Case (1979) 143 CLR 190 ; and Superannuation Board v. Trade Practices Commission ("the Superannuation Board Case") (1982) 150 CLR 282 - have revealed differences of opinion and shifting criteria. In the St. George County Council Case, the majority of the Court (McTiernan and Menzies JJ. and myself) held that a corporation is not a trading corporation simply because it trades (1974) 130 CLR, at pp 546, 554, 562 . I went on to say (1974) 130 CLR, at p 562 , that a trading corporation is one formed for the purpose of trading. Of the minority, Barwick C.J. (1974) 130 CLR, at p 542 , in a passage to which I shall again refer, said that it would be "a misreading of the relevant parts of the definition or of the terms of s. 51(xx) to treat those words as requiring that the corporation be formed for a purpose, i.e. for trading or financial purposes". In his opinion, "the activities of a corporation at the time a law of the Parliament is said to operate upon it will determine whether or not it satisfies the statutory and therefore the constitutional description" (1974) 130 CLR, at pp 542-543 . Stephen J., who also dissented, said that " . . . it is the activity carried on or intended to be carried on that is described by the participle 'trading'" (1974) 130 CLR, at p 569 . He went on to say, that he accepted that every corporation which happens to trade is not a trading corporation, but he considered that that proposition had no relevance in the case before him since the activities of the St. George County Council, "both as contemplated by the terms of its creation and as they are in fact undertaken, are concerned with trading and with nothing else" (1974) 130 CLR, at p 572 . (at p586)

15. In Adamson's Case (1979) 143 CLR 190 the Court again divided, the majority this time consisting of Barwick C.J., Mason, Jacobs and Murphy JJ. (with Stephen and Aickin JJ. and myself in dissent). Counsel, relying on the St. George County Council Case, submitted that the purposes for which the body is incorporated determine whether it is a trading corporation (1979) 143 CLR, at p 192 . The majority rejected this argument. Barwick C.J. repeated that the activities of the corporation (assuming them to be within its powers) rather than the purpose of its incorporation will designate its character (1979) 143 CLR, at p 208 . He now regarded it as enough to satisfy the description "trading corporation" "if trading is a substantial and not a merely peripheral activity" (1979) 143 CLR, at p 208 . Mason J. (with whom Jacobs J. agreed) said (57):
"For my part, I prefer the minority view as expressed in the St George County Council Case, in particular the remarks of Barwick C.J., when his Honour said that to fall within s. 51(xx.) it is not necessary that a corporation be formed for trading of financial purposes and that 'the activities of a corporation at the time a law of the Parliament is said to operate upon it will determine whether or not it satisfies the statutory and therefore the constitutional description'."
He went on to say (1979) 143 CLR, at p 233 of the expression "trading corporation": "Essentially it is a description or label given to a corporation when its trading activities form a sufficiently significant proportion of its overall activities as to merit its description as a trading corporation." Murphy J. (1979) 143 CLR, at p 239 said: "The constitutional description of trading corporations includes those bodies incorporated for the purpose of trading; and also those corporations which trade"; he added, "As long as the trading is not insubstantial, the fact that trading is incidental to other activities does not prevent it being a trading corporation." I adhered to what I had said in the St. George County Council Case but added that if, contrary to my opinion, the activities of a corporation at the relevant time determine whether it satisfies the constitutional test, it is the "predominant and characteristic" activity that has to be considered (1979) 143 CLR, at p 213 . Stephen J. (with whom Aickin J. agreed) said that he regarded "functions, both intended and actually undertaken, as of prime importance" (1979) 143 CLR, at p 219 . (at p587)

16. In the third case, the Superannuation Board Case (1982) 150 CLR 282 , the Court considered the question whether the Superannuation Board of Victoria was a financial corporation; by a majority (Mason, Murphy and Deane JJ., with Wilson J. and myself dissenting) it was held that it was. The majority said that Adamson's Case (1979) 143 CLR 190 was important for two reasons (1982) 150 CLR, at pp 303-204 : "First, the majority of the court (Barwick C.J., Mason, Jacobs and Murphy JJ.), rejecting the argument that the purpose for which a corporation is formed is the sole or principal criterion of its character as a trading corporation, concluded that the relevant character of the football leagues and the football club was to be ascertained by reference to their established activities (1979) 143 CLR, at pp 208-211, 233-237, 237, 239-240 . In adopting this view their Honours disapproved the approach taken by the majority in St George (1974) 130 CLR 533 which placed emphasis on the purpose for which the County Council was formed (1974) 130 CLR, at p 562 .
Secondly, the judgments of the majority in Adamson make it clear that, in having regard to the activities of a corporation for the purpose of ascertaining its trading character, the court looks beyond its 'predominant and characteristic activity'." (at p588)

17. Their Honours suggested that the test is whether the corporation carries on trading activities "on a significant scale" (1982) 150 CLR, at p 304 , although they did point out that Adamson's Case (1979) 143 CLR 190 was not concerned with a corporation "which has not begun, or has barely begun, to carry on business"; in such a case it might well be necessary to look to the purpose for which such a corporation was formed. They said that the words "financial corporation" "describe a corporation which engages in financial activities or perhaps is intended so to do" (1982) 150 CLR, at p 305 but held that it was enough that the financial activities were engaged in for the purpose of carrying on some other primary or dominant undertaking. Wilson J. and I, in deference to Adamson's Case, were prepared to accept the current activities test, but held that the question is whether the trading or financial activity is predominant or characteristic (1982) 150 CLR, at p 296 . (at p588)

18. For reasons which will appear, I consider that whichever of the many and protean tests that have so far been suggested is applied, Oakland should not be held to be either a trading or a financial corporation. But since it is impossible to hold that the meaning of s. 51(xx) is finally settled, I would very briefly express my own views, shaped now, as they must be, in the light of the expressions of opinion in the three cases to which I have referred. The words "foreign", "trading" and "financial" which govern "corporations" in s. 51(xx) indicate that the paragraph refers only to corporations of particular kinds. Those words make it necessary to consider the character of the corporation, and its character may be discovered by considering what it does and what it is intended to do. But a corporation cannot take its character from activities which are uncharacteristic, even if those activities are not infrequently carried on. It may indeed be wrong to insist on finding activities that are "primary" or "predominant", but it is equally wrong to be satisfied with activities that are "substantial", if the latter activities do not, in all the circumstances, show that the corporation has a character which the Constitution requires. It is true that the question will often be one of degree. (at p589)

19. In the present case it would not assist the respondents if the test were satisfied by finding trading or financial activities that were not insubstantial, or even by finding some trading or financial activities, however few or unimportant. For the evidence shows that Oakland never has intended, and does not intend, to engage in activities that can be described as either trading activities or financial activities. Whether one regards trading as involving acts of buying or selling (as Stephen J. suggested in the St. George County Council Case (1974) 130 CLR, at p 570 ) or whether, as I think, it has a wider meaning and covers "the pursuit of a calling or handicraft" (as Dixon J. said in Bank of N.S.W. v. Commonwealth (1948) 76 CLR 1, at p 381 ) it is clear that Oakland does not trade. It is, with all respect to Toohey J., a fallacy to say that because a person who is trading may receive payment from his creditors and may pay his debtors, it therefore follows that a person who receives payment from his creditors and pays his debtors is engaging in acts of trade. Further, Oakland does not engage in financial activities in any sense relevant to s. 51(xx). The word "financial" in par. (xx), indicates that a corporation which answers that description is one which engages in the activity of commercial dealing in finance, i.e. engages in transactions in which the subject of the transaction is finance (such as borrowing and lending money); see the Superannuation Board Case (1982) 150 CLR, at p 305 , citing Re Ku-ring-gai Co-operative Building Society (No. 12) Ltd. (1978) 36 FLR 134, at p 159; 22 ALR 621, at p 642 , per Deane J. The receipt and payment of moneys in the present case were not of that character. (at p589)

20. I have said that the purposes for which a corporation is formed may be relevant in determining its character. That will be particularly so when the corporation has not yet begun, or has only just commenced, the activities which it was intended to carry on. However, in deciding what are the purposes for which a corporation is formed, the objects clause of its memorandum of association is an inadequate and may be a misleading guide. For many years it has been the practice of those drawing memoranda of association to give to companies powers to engage in multifarious activities, many of which bear no relation to the actual or intended affairs of the company. Over sixty years ago Lord Wrenbury referred to this practice when in Cotman v. Brougham (1918) AC 514, at p 522 , he said that this "pernicious practice" which was in active operation when he was a junior at the bar "has arrived now at a point at which the fact is that the function of the memorandum is taken to be, not to specify, not to disclose, but to bury beneath a mass of words the real object or objects of the company with the intent that every conceivable form of activity shall be found included somewhere within its terms". Barwick C.J. also recognized the existence of the practice when he said, in the St. George County Council Case (1974) 130 CLR, at p 542 :
"It is, in my opinion, only necessary to recall the wide spread of the objects of a company formed under the Companies Acts as expressed in its memorandum of association, particularly in days when the doctrine of ultra vires was more readily applied, to appreciate the difficulties encountered in attempting in all cases to attribute purpose to incorporation. Material extrinsic to the memorandum might for some purposes be resorted to, to decide why and to what end a body was incorporated. But it would be, to my mind, most unsatisfactory to have to follow such a course in order to identify the subject matter of constitutional power. Further, even if an object of a company seemed dominant at the date of incorporation, in the course of the company's existence it may cease to have significance and an object which seemed incidental at incorporation may become central to its current activities."
The learned Chief Justice was of course speaking in support of the view that the activities of the corporation alone should be regarded. But to accept that the intended as well as the actual functions of the corporation are relevant for the purpose of determining its character, does not mean that it is permissible to look at the memorandum of association alone for that purpose. The whole of the evidence as to the intended operations of the corporation is relevant and is likely to show, as it shows in the present case, that many of the objects in the memorandum were inserted out of an abundance of caution, with no intention of describing the activities in which the company is actually engaged or is likely to engage. (at p590)

21. In the present case the evidence shows that at no time during its existence has Oakland been intended to engage, and at no time has it engaged, in trading or financial activities. It is not a corporation of the kind to which par. 51(xx) refers. Oakland is therefore not a corporation within s. 52 of the Act, and the claim of Mr. Muller and Scrid against Oakland and Mr. Johnsen for damages under s. 82 is not within the jurisdiction of the Federal Court. (at p590)

22. The third, and remaining, question is whether the other aspects of the controversy, which, in themselves, would not lie within the jurisdiction of the Federal Court, do fall within the jurisdiction because of their association with the matter which, as I have held, does arise under the Act, viz., the claim by Mr. Muller against Mr. and Mrs. Fencott, H. &T. and Mr. Hondros for damages caused by a contravention of s. 52 of the Act. (at p591)

23. I have already said that under the Constitution jurisdiction can be conferred on a federal court only with respect to matters of the kinds mentioned in ss. 75 and 76 of the Constitution. It was held in In re Judiciary and Navigation Acts (1921) 29 CLR 257, at pp 265-266 , and is now well accepted, that "matter" in those sections of the Constitution does not mean a legal proceeding, "but rather the subject-matter for determination in a legal proceeding". It follows from the words of ss. 75 and 77 of the Constitution that a federal court can be given jurisdiction only with respect to a matter of the kind described in those sections, and that the Parliament cannot confer jurisdiction on a federal court with respect to a matter simply because it is associated, even closely associated, with one of the matters mentioned in ss. 75 and 76. I discussed this question in Philip Morris v. Brown (1981) 148 CLR, at pp 490-494 , and need not repeat what I said there. If that conclusion leads to results which are inconvenient, that is no reason to blur distinctions that the Constitution insists should be drawn. However, any inconvenience in a case such as the present arises only from the fact that the Parliament has chosen to make the jurisdiction of the Federal Court exclusive; it does not inevitably result from the constitutional provisions themselves. In any case, to attempt to mitigate the inconvenience which may result to a party who brings his proceedings in the Federal Court, by adopting a broad interpretation of the word "matter", or by otherwise according to the Federal Court an expanded jurisdiction, will have the effect of shifting the burden of inconvenience to a party who brings his proceedings in the Supreme Court of a State, since s. 86 brings about a reciprocity between the two jurisdictions, with the result that the wider the jurisdiction that is conceded to the Federal Court, the narrower is that remaining in the State Court. In those circumstances, only the adoption of precise legal tests can enable litigants to select their forum with any hope that it is the appropriate one. (at p591)

24. It is now established by Philip Morris v. Brown that once a federal court is invested with jurisdiction with respect to a matter, it may determine all the questions which form part of that matter, even though they are questions which it would have no jurisdiction to entertain if they arose in separate proceedings. Assuming, as I do, that s. 86 of the Act, despite its reference to "actions, prosecutions and other proceedings" confers jurisdiction on the Federal Court of Australia in matters arising under Pt VI of the Act, the question is whether all or some of the questions in controversy in the present case, which by themselves could not be said to arise under Pt VI of the Act, nevertheless form part of the matter which does arise under Pt VI. (at p592)

25. In Philip Morris v. Brown the members of the Court who constituted the majority in that case expressed differing views as to the test to be applied in deciding whether a matter not in itself arising under the Act can be held to be part of a matter which does arise under the Act. The order suggested by Barwick C.J. and Murphy J. was wider than that which was eventually made by the Court. Barwick C.J. appears to have thought that the jurisdiction, once attracted, would extend to any other matter which was not "separate and disparate from the matter in relation to or in connection with which federal jurisdiction has been attracted" (1981) 148 CLR, at p 474 . Murphy J. said that the Federal Court, once its jurisdiction has been attracted, "has the power and duty to decide any issue incidental to determining the matter, and has the power to determine any matter, federal or non-federal in origin, which is not completely separate and distinct from the matter which attracted federal jurisdiction" (1981) 148 CLR, at p 521 . The conclusion reached by Stephen and Mason JJ. and myself was that which was given effect in the order of the Court. Mason J., with whom Stephen J. agreed, held (1981) 148 CLR, at p 512 that "the court having jurisdiction to determine a matter falling within ss. 75 and 76 giving rise to the exercise of federal jurisdiction has jurisdiction to decide an attached non-severable claim". He said (1981) 148 CLR, at p 512 :

"The classification of a claim as 'non-severable' does not necessarily mean that it is, or must be, united to the federal claim by a single claim for relief, though this is a common illustration of a non-severable claim. The non-severable character of the attached claim may emerge from other aspects of the relationship between the federal and the attached claim. For example, it may appear that the resolution of the attached claim is essential to a determination of the federal question. 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."

My own view was expressed as follows (1981) 148 CLR, at p 499 :

" . . . if a party claims relief on two different legal grounds, but the facts on which the relief is sought on each ground are identical, and the relief sought on each ground is the same in substance if not in form, there is only one matter for determination."

The judgments of all the other members of the majority support that statement so far as it goes, although they would of course go further, and in the light of the views of the majority it seems to be going too far to insist that the relief sought on each ground should be substantially the same. It seems to me that it is not possible to select any of these expressions of opinion as stating the ratio decidendi of the case. The decision does establish that a claim which is inseverable from a federal matter committed to the jurisdiction of the Federal Court may be regarded as part of that matter and so fall within jurisdiction, even if the claim is not itself based on federal law. The question whether one claim is inseverable from another, so that both are part of one matter, is a question of fact and degree. The Constitution, however, makes it clear that the attached claim must be part of the matter that attracts jurisdiction; closeness of association is not enough. (at p593)

26. In the present case there can be no doubt that the claim by Mr. Muller for damages for fraud at common law is inseverable from his claim for damages under ss. 52 and 82 of the Act. His alternative claims for damages for negligence and for breach of contract are also inseverable from the claim under the Act. Although the elements of these various causes of action are different, all of these claims are based on the same facts; and although the relief sought is not the same in substance, the claims in negligence and contract form a natural alternative to the relief sought in the federal matter and form part of the one matter for determination, viz., what remedy, if any, should be available to Mr. Muller for the allegedly misleading conduct. The claim by Scrid for damages for breach of fiduciary duty stands in a different position. The plaintiff is not the same as the plaintiff in the purely federal matter and although some of the facts are common to both claims, the causes of action are entirely disparate. I find myself unable to conclude that this claim by Scrid raises the same subject matter for determination as, or is inseverable from, the claim by Mr. Muller. It is not in my opinion part of the same matter. The claim by Scrid to be indemnified by Oakland is in my opinion clearly severable from the claim by Mr. Muller against Mr. and Mrs. Fencott, H. &T. and Mr. Hondros. The parties on both sides of the record are different - there is no party common to both claims; the cause of action asserted by Scrid (the right of a trustee to indemnification out of the trust estate) is entirely different from that in Mr. Muller's action (damages for misleading conduct, fraud, negligence or breach of contract) and the crucial issues in Scrid's claim - whether Scrid was entitled to indemnity, and whether Oakland is possessed of any trust property - raise questions which do not arise in relation to Mr. Muller's claim. The claim by Mr. Muller and Scrid against Oakland for damages allegedly caused by the sending of the letter of 19 May 1981 is entirely separate from the matter constituted by Mr. Muller's claim against Mr. and Mrs. Fencott, H. &T. and Mr. Hondros; indeed I do not understand that the respondents contended to the contrary; their argument that the Federal Court had jurisdiction in relation to this claim was based on the contention that Oakland was a trading corporation. (at p594)

27. For the reasons I have given I conclude that the Federal Court of Australia had jurisdiction to entertain the claim by Mr. Muller against Mr. and Mrs. Fencott, H. &T. and Mr. Hondros for all the relief sought against those parties but had no jurisdiction to hear and determine any of the other claims. I would allow the appeal in part. (at p594)

MASON, MURPHY, BRENNAN AND DEANE JJ. Scrid Nominees Pty. Ltd. ("Scrid") is the lessee of premises known as O'Connors Wine Bar and Restaurant in Hay Street, West Perth. Mr. Muller owns the business carried on in those premises and he owns the shares in Scrid. Mr. Muller and Scrid instituted proceedings in the Federal Court of Australia for relief in respect of transactions connected with the purchase of the business by Mr. Muller. Objection was taken to the jurisdiction of the Federal Court to entertain the several claims for relief made by the applicants in their statement of claim. The relief which they are seeking, the parties against whom relief is sought and the facts which are said to give rise to the claims are set out, or substantially set out, in an amended statement of claim. To ascertain the jurisdiction of the Federal Court to hear and determine the issues raised by the statement of claim and to grant the relief therein claimed, it is necessary to refer to the amended statement of claim as it was expounded and modified in the course of argument in this Court. The following facts are alleged. (at p594)

2. Before Mr. Muller bought the business, it was carried on by Scrid in the Hay Street premises. At that time the shares in Scrid were owned by Mr. and Mrs. Fencott, the first respondents in the proceedings in the Federal Court. They were Scrid's only directors. Scrid was not the beneficial owner of the business or of the assets employed in the business. Scrid carried on the business as a trustee under a deed constituting the O'Connors Unit Trust, but the identity of the beneficiaries and the terms of the trust deed were not pleaded. At some time, Mr. or Mrs. Fencott gave instructions to H. &T. Holdings Pty. Ltd. ("H. &T."), a company carrying on business as a real estate agent, to sell the business "including the trade name, goodwill, and all the other assets thereof". (at p595)

3. H. &T. had an employee, Mr. Hondros, who negotiated with Mr. Muller with a view to a sale of the business. H. &T. and Mr. Hondros are the second and third respondents respectively in the proceedings in the Federal Court, but neither of them took an objection to jurisdiction and neither is a party to this appeal. It is alleged that Mr. Hondros made false representations concerning the business in the course of his negotiations with Mr. Muller to induce Mr. Muller to purchase the business and that Mr. Muller, in reliance upon those misrepresentations, agreed to purchase the business. (at p595)

4. The contract of sale was not incorporated in the statement of claim, but some of its terms were pleaded. The contract, dated 27 January 1981, was between Mr. Muller as purchaser and Scrid as vendor. The price was $150,000 plus stock at valuation, certain legal costs and $1,000 as consideration for the purported grant of an option to acquire a half interest in the freehold of the business premises. The contract was conditional upon Scrid assigning the lease to Mr. Muller or alternatively upon the issued shares in Scrid being transferred to Mr. Muller. The shareholders, Mr. and Mrs. Fencott, decided to transfer the issued shares in Scrid. On 6 February 1981 they transferred their shareholding in Scrid to Mr. and Mrs. Muller. On 10 February they resigned as directors. Mr. and Mrs. Muller became directors on the same day. It was pleaded that "possession" was given on 23 February. The contract provided that Scrid should "pay and discharge all debts and liabilities of the business incurred or accrued prior to the transfer of possession" and should indemnify Mr. Muller "in respect of all claims and proceedings in respect thereof". There are some unpaid trade debts and liabilities which were incurred by Scrid in the conduct of the business as trustee for the O'Connors Unit Trust. (at p595)

5. Mr. Muller paid only $111,000 of the purchase price, the total of which amounted to $162,975.60. It is alleged that the actual value of the business was $57,000. The statement of claim does not disclose whether the payment was made by Mr. Muller to Scrid, then the trustee of the O'Connors Unit Trust, but it is implied that the trust received the sum paid. Scrid retired as trustee and "was released from such appointment" on a date which is not specified except as subsequent to 9 February 1981. Its place as trustee was taken by Oakland Nominees Pty. Ltd. ("Oakland"), a company incorporated on 21 November 1980 with objects widely drawn, encompassing trading and financial activities, but (as the evidence showed) Oakland had not engaged in any trading or financial activity prior to becoming trustee under the O'Connors Unit Trust deed. Toohey J. found that after Oakland became trustee, it sued to recover the balance of the purchase price, had some negotiations with the unpaid trade creditors, and proposes to pay the creditors and to make a distribution to the trust beneficiaries when it receives the balance of the purchase price. A Mr. Johnsen, acting as the agent of Oakland, sent letters to Scrid's trade creditors stating that Scrid did not have the funds to pay its debts as at 22 February 1981 due to the failure of Mr Muller to settle the balance of outstanding moneys due in accordance with the contract. Oakland and Mr. Johnsen were respectively the fourth and fifth respondents in the proceedings in the Federal Court and each is an appellant. (at p596)

6. Arising out of these allegations, several claims for relief were made. Not all of them are now material. The claims which remain for consideration and the respective bases on which they are made are as follows:
1. Mr. Muller claims damages under s. 82 of the Trade Practices Act 1974 (Cth) ("the Act") against Mr. and Mrs. Fencott, H. &T. and Mr. Hondros. The basis of the claim is that the making of false representations in the negotiations for the sale of the business was a contravention by Scrid of s. 52 of the Act, that Mr. and Mrs. Fencott, H. &T. and Mr. Hondros were persons "involved in a contravention" (within the meaning of that phrase in s. 75B) and that the amount of the loss or damage suffered by the conduct that contravened s. 52 is recoverable from each of the persons involved pursuant to s. 82.

2. Mr. Muller claims damges in deceit and in negligence against the same persons. The basis of the claim is that one or other of those persons authorized or initiated the making of the false representations on behalf of Scrid and did so either fraudulently or negligently.

3. Scrid claims damages for breach of a fiduciary duty owed to it by Mr. and Mrs. Fencott. The basis of the claim is that the conduct of Mr. and Mrs. Fencott in respect of the representations and the sale of the business was in breach of the fiduciary duty owed as directors by them to Scrid, that H. &T. and Mr. Hondros aided and abetted that breach and that Scrid has incurred a liability to Mr. Muller by reason of the making of the false representations.

4. Scrid claims to be indemnified by Oakland out of the assets held by it under the O'Connors Unit Trust in respect of Scrid's several alleged liabilities to Mr. Muller. The bases of these claims are - (a) that the making of the false representations exposed it to liability to Mr. Muller for damages for controvention of s. 52, for damages in deceit or in negligence, or for breach of warranty; (b) that its failure to pay its trade creditors exposed it to liability to Mr. Muller for breach of contract, or exposed it to liability under the contractual indemnity given to Mr. Muller; (c) that it is entitled to an indemnity out of the trust assets in respect of debts and liabilities of the business incurred prior to 23 February 1981 in carrying on the business as trustee.

5. Mr. Muller and Scrid respectively claim damages under s. 82 of the Act against Oakland and Mr. Johnsen. The basis of each claim is that the sending out of the letters to Scrid's trade creditors was a contravention by Oakland of s. 52, that Mr. Johnsen was a person "involved in a contravention" (within the meaning of that phrase in s. 75B) and that the amount of the damage respectively suffered by Mr. Muller and Scrid in recoverable from Oakland and from Mr. Johnsen (as a party involved in a contravention) pursuant to s. 82. (at p597)

7. The relevant grounds of objection to the jurisdiction of the Federal Court to hear and determine the issues raised by the amended statement of claim and the claims made therein are repeated in the notice of appeal. They may be briefly stated:

1. Section 82 of the Act does not apply to natural persons (other than those to whom s. 6 applies) and it is beyond the powers of the Commonwealth Parliament by s. 82 to create a right to recover damages against natural persons in respect of a contravention of s. 52 by a corporation. 2. Oakland ought not to be categorized as a trading or financial corporation and is therefore not amenable to the jurisdiction of the Federal Court under the Act.

3. Mr. Muller's common law claims for damages in deceit, negligence and breach of warranty and Scrid's claim for indemnity out of the assets of the O'Connors Unit Trust are not within the jurisdiction of the Federal Court. (at p597)

8. The Federal Court clearly has jurisdiction to determine the issues raised by the first two grounds. Those issues were determined by Toohey J. in favour of the applicants, and as the relevant evidence as to the status of Oakland has been given and as all grounds were allowed to be argued in this Court it is right now to consider each of those grounds. The parties who appealed against the order of Toohey J. are Mr. and Mrs. Fencott, Oakland and Mr. Johnsen, each of whom is a respondent to the proceedings in the Federal Court and all of whom objected to the jurisdiction of that Court to hear and determine the proceedings. Part of their objection was allowed and part dismissed by Toohey J. (1982) 57 FLR 35, 39 ALR 496 . They appealed to the Full Court, but regrettably we do not have the assistance of the Full Court, for the Attorney-General for the Commonwealth thought it expedient to apply under s. 40 of the Judiciary Act 1903 (Cth) to remove into this Court that part of the cause which related to the validity of s. 82. That part of the cause being removed here as of course, convenience required that the whole of the proceedings be removed, and the appeal from the order of Toohey J. was argued in this Court. The grounds of appeal will be considered in the order stated.

Validity of s. 82. (at p598)

9. Section 82 confers on a person who suffers loss or damage by the conduct of a corporation that is done in contravention of a provision of Pt IV or V of the Act a right to recover the amount of the loss or damage by action against the corporation "or against any person involved in the contravention". The quoted phrase, and s. 75B which provides its dictionary, were inserted by the Trade Practices Amendment Act 1977 (Cth) (No. 81 of 1977). Section 75B provides:
"A reference in this Part to a person involved in a contravention of a provision of Part IV or V shall be read as a reference to a person who-
(a) has aided, abetted, counselled or procured the contravention; (b) has induced, whether by theats or promises or otherwise, the contravention; (c) has been in any way, directly or indirectly, knowingly concerned in, or party to, the contravention; or (d) has conspired with others to effect the contravention." (at p598)

10. It was submitted that a provision which confers a right of action against a natural person "involved in a contravention" is not a law with respect to corporations but a law with respect to natural persons. Conceding that s. 52 validly regulates the conduct of corporations and that contravention of s. 52 by a corporation exposes it to civil as well as criminal liability, it was argued that the casting of the net of civil liability over persons "involved" in the contravention does not affect the corporation's rights and duties and therefore is not a valid law. The argument is too narrow. Once it is accepted, as it now is, that the corporations power extends to the regulation of the trading activities of trading corporations, it necessarily follows that, in some circumstances at least, the power must extend to the imposition of duties on natural persons. Two considerations combine to sustain this conclusion. The first is that corporations act through natural persons. The second - and it is a consequence of the first - is that, in order to be effective, a regulation of the activities of corporations calls for the imposition of duties on those natural persons who would, or might, in the ordinary course of events, participate in the corporate activities, the subject of the intended regulation. Accordingly, when in the legitimate exercise of the corporations power duties are imposed on corporations in relation to their trading activities, breach of which creates a civil liability, the power extends to the imposition of duties on natural persons, breach of which also creates a civil liability, not to engage in conduct which assists or facilitates a contravention by a corporation of duties thus imposed upon it. Then the imposition of duties on natural persons is seen to be an element or incident in the regulation of the corporate trading activities. (at p599)

11. Another way of expressing this approach is to say that where a law prescribing the way in which corporations shall conduct their trading activities is supported by the corporations power, an ancillary provision reasonably adapted to deter other persons from facilitating a contravention of the law by a corporation is supported by the same power. It is within the competence of the Parliament to enact such a provision to secure compliance with a valid statutory command. A valid statutory command directed to a particular class may be strengthened by a provision imposing a liability upon other persons who are involved in a contravention by a person to whom the command is directed, provided that the ancillary provision is reasonably adapted to securing obedience to the command. So much was decided in Reg. v. Australian Industrial Court; Ex parte C.L.M. Holdings Pty. Ltd. (1977) 136 CLR 235, at p 245 et seq in respect of s. 5 of the Crimes Act 1914 (Cth) which was held validly to impose criminal liability upon parties to an offence defined by s. 53 of the Act. As a means of securing obedience to a statutory command, there is no material distinction between a provision imposing a criminal liability and a provision imposing a liability in civil proceedings, unless it be that the latter provision encourages private action for the recovery of whatever damages an applicant may prove irrespective of the degree of culpability of the particular respondent, and thus a provision imposing liability in civil proceedings may be a more draconian means of securing obedience to the statutory command. But that is no objection to its validity. It is, of course, within the power of the Commonwealth Parliament to give to a person injured by contravention of a federal law a right of action when injury is suffered as a result of the contravention (per Menzies J. in Redfern v. Dunlop Rubber Australia Ltd (1964) 110 CLR 194, at p 222 ). (at p600)

12. As a valid ancillary provision imposing civil liability upon a party for injury occasioned by contravention of a command directed to another must be reasonably adapted to secure obedience to the command, the ancillary provision must impose liability for injury in respect of conduct of a kind which might reasonably be thought to facilitate the contravention which occasions the injury. The conduct of a person "involved in a contravention" described in each of the categories of s. 75B shows a direct connexion between that conduct and the contravention in question. Accordingly, the imposition of civil liability by s. 82 is valid. (at p600)

13. A further argument should be noted. It was submitted that s. 84(2), which deems conduct engaged in by a director agent or servant of a corporation on behalf of the corporation to have been engaged in also by the corporation, is beyond power. This deeming provision was said to exhibit the same vice as that which brought down the deeming provision (s. 45D(5)) considered in Actors and Announcers Equity Association of Australia v. Fontana Films Pty. Ltd. (1982) 150 CLR 169 . If it were necessary to rely upon s. 84(2) in order to attribute the alleged contraventions of s. 52 to Scrid (or, subject to what is said hereafter, to Oakland), it would have been necessary to consider whether s. 84(2) is valid. But it does not appear that the pleading relies or needs to rely on s. 84(2) in order to attribute the relevant conduct - that is, the making of representations to Mr. Muller and the sending of the letters to Scrid's trade creditors - to Scrid or to Oakland, as the case may be. There is no need to determine the validity of a provision which is irrelevant to the issues raised by the amended statement of claim. The first ground of objection fails.

48. In the end, I find myself in difficulty in applying to this case the decision of this Court in the Philip Morris Case. There is no majority as to the manner in which the scope of the Federal Court's jurisdiction over non-federal matters is to be determined and, with the greatest of respect to those who comprised the majority in that case, I find no guide in their reasoning as to the proper application of the decision. It must, however, be applied and since it can be said that there was at least a majority who would have embraced, if not shared, the view of Gibbs J., it seems to me that the proper course is to apply the test which he laid down in his judgment. (at p631)

49. Relief in this case in claimed by way of damages on only one ground under the Trade Practices Act, namely, misleading or deceptive conduct in breach of s. 52. The relief which is claimed at common law for damages for fraudulent misrepresentation, negligence, breach of warranty and the claims for indemnity clearly involve the proof of additional facts which it would be unnecessary to prove in order to establish misleading or deceptive conduct. The facts on which relief is sought under the Trade Practices Act and at common law are, therefore, not identical and for that reason the Federal Court does not have jurisdiction to hear the common law claims. (at p631)

50. I would therefore hold that the Federal Court has no jurisdiction save in the claim for damages under s. 82 of the Trade Practices Act which does not involve Oakland Nominees. The appeals should be allowed accordingly. (at p631)

Orders

Appeal dismissed with costs, excluding any additional costs resulting from the removal of these proceedings (No. Wag 3 of 1982) into this Court which are to be paid by the Attorney-General for the Commonwealth under the order made by this Court on 14 May 1982.

Order that the proceedings be remitted to the Federal Court of Australia.