Koonara Management Pty Ltd v Rockliff
[2016] FCA 1206
•7 October 2016
FEDERAL COURT OF AUSTRALIA
Koonara Management Pty Ltd v Rockliff [2016] FCA 1206
File number: NSD 1357 of 2016 Judge: GLEESON J Date of judgment: 7 October 2016 Catchwords: PRACTICE AND PROCEDURE – transfer of proceedings from District Court of New South Wales to the Federal Court of Australia – transfer order made pursuant to s 12GK(4) of the Australian Securities and Investments Commission Act 2001 (Cth) Legislation: Australian Securities and Investments Commission Act 2001 (Cth)
Australian Securities and Investments Commission Act 1989 (Cth)
Date of hearing: Heard on the papers Date of publication of reasons: 13 October 2016 Registry: New South Wales Division: General Division National Practice Area: Commercial and Corporations Sub-area: Corporations and Corporate Insolvency Category: Catchwords Number of paragraphs: 17 Counsel for the Applicants: Mr G Stapleton Solicitor for the Applicants: Minter Ellison Counsel for the Respondents: Mr JR Clark SC Solicitor for the Respondents: Curwoods Lawyers ORDERS
NSD 1357 of 2016 BETWEEN: KOONARA MANAGEMENT PTY LTD (ACN 082 883 323)
First Applicant
ROCKY CASTLE FINANCE PTY LTD (ACN 082 858 160)
Second Applicant
AND: STEPHEN JOHN ROCKLIFF
First Respondent
MICHELLE RENEE ROCKLIFF
Second Respondent
JUDGE:
GLEESON J
DATE OF ORDER:
7 OCTOBER 2016
THE COURT ORDERS THAT:
1.Pursuant to s 12GK(4) of the Australian Securities and Investments Commission Act 2001 (Cth), the Sydney Registry of the District Court of New South Wales transfer District Court proceeding 2015/00191977, Koonara Management Pty Ltd and Rocky Castle Finance Pty Ltd v Stephen John Rockliff and Michelle Renee Rockliff; Stephen John Rockliff v Burke Robert Stanley Reschke & Ors, to the Sydney Registry of this Court forthwith.
THE COURT NOTES THAT:
2.By order made on 19 May 2016, the summons in District Court proceeding 2016/00118883 was consolidated into District Court proceeding 2015/00191977.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
GLEESON J:
The applicants sought an order pursuant to s 12GK(4) of the Australian Securities and Investments Commission Act 2001 (Cth) (“ASIC Act”) directing the Sydney Registry of the District Court of New South Wales (“District Court”) to transfer District Court proceeding No 2015/00191977 (“District Court proceeding”) to the Sydney Registry of this Court.
The respondents consent to the order provided that this Court is satisfied that there is a proper basis for allowing the applicants’ application. The respondents did not submit that the Court should not be so satisfied.
Section 12GK(4) provides:
(4) If:
(a)a proceeding is pending in a court (other than the Supreme Court) of a State or Territory; and
(b) a matter for determination in the proceeding arose under:
(i) this Division; or
(ii)Part 3 in its application in relation to an investigation of a contravention of this Division;
the court must, if directed to do so by the Federal Court, transfer to the Federal Court the matter and such other matters for determination in the proceeding, as the Federal Court decides, the determination of which would, apart from any law of a State or of the Northern Territory relating to cross‑vesting of jurisdiction, be within the jurisdiction of the Federal Court.
Section 12GK(4) is in Div 2 of Pt 2 of the ASIC Act, which is entitled “Unconscionable conduct and consumer protection in relation to financial services”.
Relevantly, by s 12GF(1), a person who suffers loss or damage by conduct of another person that contravenes a provision of Subdiv C (ss 12CA to 12CC) or Subdiv D (ss 12DA to 12DN) may recover the amount of the loss or damage by action against that other person or against any person involved in the contravention.
The discretion conferred on this Court by s 12GK(4) to give a direction to the District Court arises in the context of s 12GJ of the ASIC Act, which provides:
(1) Jurisdiction is conferred on the Federal Court in any matter:
(a) arising under this Division; or
(b)arising under Part 3 in its application in relation to an investigation of a contravention of this Division;
in respect of which a civil proceeding may be instituted under this Subdivision or under Part 3 as so applying.
(2) With respect to any matter:
(a) arising under this Division; or
(b)arising under Part 3 in its application in relation to an investigation of a contravention of this Division;
in respect of which a civil proceeding is instituted under this Subdivision or under Part 3 as so applying:
(c)the several courts of the States are invested with federal jurisdiction within the limits of their several jurisdictions, whether those limits are as to locality, subject‑matter or otherwise; and
(d)subject to the Constitution, jurisdiction is conferred on the several courts of the Territories.
(3)Nothing in subsection (2) is taken to enable an inferior court of a State or Territory to grant a remedy other than a remedy of a kind that the court is able to grant under the law of that State or Territory.
(4)The jurisdiction conferred by subsection (1) on the Federal Court is exclusive of the jurisdiction of any other court other than the jurisdiction of the several courts of the States and Territories under subsection (2) and the jurisdiction of the High Court under section 75 of the Constitution.
District Court proceeding No 2015/00191977
In support of the application, the applicants relied on an affidavit of Christopher Keane, solicitor, sworn 16 August 2016. The affidavit deposes to the following facts:
(1)the applicants are the plaintiffs in the District Court proceeding;
(2)pursuant to orders made on 19 May 2016, the District Court proceeding includes proceedings brought by each of the applicants in the Local Court of New South Wales against the first respondent and each of the applicants against the second respondent;
(3)as at the date of the affidavit, defences had not been filed in answer to the various claims made by the plaintiffs in the District Court proceeding;
(4)on 10 August 2016, the first respondent filed a document entitled “First Cross-Claim Statement of Cross-Claim” (“cross-claim”) which seeks relief against each of the applicants and Mr Burke Reschke. The relief sought includes, among other things, declaratory relief concerning alleged conduct by the cross-defendants in contravention of various provisions of Div 2 of Pt 2 of the Australian Securities and Investments Commission Act 1989 (Cth) (“1989 ASIC Act”), and a claim for damages.
In his affidavit, Mr Keane states that he has satisfied himself that the District Court does not have power to grant the declaratory relief sought and, in his view, this Court is the proper forum for pursuing the relief sought in the cross-claim.
Mr Keane’s affidavit annexes an amended statement of claim filed in the District Court on 20 June 2016. The claims made in the amended statement of claim are for amounts described as debts and “contingent debts” allegedly incurred in connection with a managed investment scheme called the “Coonawarra Wine Grape Project”.
The case pleaded in the cross-claim is lengthy and complicated. The applicants submitted that the cross-claim raises complex questions that would be more appropriately resolved by this Court than by the District Court. Accepting the apparent complexity of the cross-claim, I am not convinced that this Court is a more appropriate forum for its determination. In particular, the need for declaratory relief is not obvious.
Consideration
Section 276 of the ASIC Act provides:
(1)This section applies in relation to a right or liability (the pre‑commencement right or liability), whether civil or criminal, that:
(a)was acquired, accrued or incurred under a carried over provision of the old ASIC legislation of the Commonwealth, a State in this jurisdiction or the Northern Territory; and
(b) was in existence immediately before the commencement.
However, this section does not apply to a right or liability under an order made by a court before the commencement.
(2)On the commencement, the person acquires, accrues or incurs a right or liability (the substituted right or liability), equivalent to the pre‑commencement liability, under the corresponding provision of the new ASIC legislation (as if that provision applied to the conduct or circumstances that gave rise to the pre‑commencement right or liability[)].
Note:If a time limit applied in relation to the pre‑commencement right or liability under the old ASIC legislation, that same time limit (calculated from the same starting point) will apply under the new ASIC legislation to the substituted right or liability—see subsection 278(3).
(3)A procedure, proceeding or remedy in respect of the right or liability may be instituted after the commencement under the new ASIC legislation (as if that provision applied to the conduct or circumstances that gave rise to the pre‑commencement right or liability).
Note:For pre‑commencement proceedings in respect of substituted rights and liabilities, see sections 267 and 268.
By s 254(1) of the ASIC Act, “old ASIC legislation” relevantly includes the 1989 ASIC Act.
Section 276 raises a question about whether the respondents are entitled to relief under the 1989 ASIC Act. On its face, s 276(2) seems to say that any such entitlement was replaced by a “substituted right” under the corresponding provisions of the ASIC Act.
In order to exercise the power conferred by s 12GK(4), it is necessary for the Court to be satisfied that a matter for determination in the District Court proceeding arose under Div 2 of Pt 2 of the ASIC Act.
The respondents’ lawyers submitted that, having had their attention drawn to s 276, it is the intention of the first respondent to seek to amend the cross-claim to seek relief under the provisions of Div 2 of Pt 2 of the ASIC Act which correspond with the provisions of the 1989 ASIC Act referred to in the cross-claim. Accordingly, they submitted that the current application should be considered on the basis that the cross-claim will be amended in this manner.
Taking this into account, and having regard to the matters pleaded in the cross-claim, I am satisfied that matters for determination in the District Court proceeding include whether the applicants are liable to pay damages to the respondents pursuant to s 12GF(1) of the ASIC Act by reason of contraventions of various provisions of Div 2 of Pt 2 of the ASIC Act, including ss 12CA, 12CB(1), 12DA(1), 12DB(1), 12DC(1) and 12DF. On that basis, I am satisfied that a matter for determination in the District Court proceeding, namely, the claim for damages arose, at least in part, under Div 2 of Pt 2 of the ASIC Act.
As noted earlier, the respondents consent to the transfer of the District Court proceeding to this Court provided that the Court is satisfied that there is a “proper basis” for allowing the application. I am satisfied that the Court has power to make a direction under s 12GK(4), that the Court is an appropriate forum for determination of the matters arising in the District Court proceeding, and that, if it is appropriate to grant declaratory relief of the kind sought in the cross-claim then, this Court has power to grant such relief and the District Court does not. I considered those matters to be sufficient to provide a proper basis for allowing the application. Accordingly, I made the order sought by consent.
I certify that the preceding seventeen (17) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gleeson. Associate:
Dated: 13 October 2016
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