Mahoney v AGD Mining (No. 2) - [2003] FMCA 431

FEDERAL MAGISTRATES COURT OF AUSTRALIA

MAHONEY v AGD MINING & ORS (No. 2)

[2003] FMCA 431

PRACTICE AND PROCEDURE – Trade Practice Plus – Trade practices claim – amendment of Statement of Claim to plead negligence and breach of Australian Securities and Investments Commission Act – whether Court has jurisdiction – risk that Court may not have jurisdiction insufficient basis to transfer to Federal Court – factors relevant in considering transfer to Federal Court – s.39(3) Federal Magistrates Act – Sub-rule 8.02(4) Federal Magistrates Court Rules – accrued/associated jurisdiction – relevance of ability of Court to produce judgment in a timely manner when considering transfer to Federal Court – further mediation desirable following amended Statement of Claim – costs thrown away as a consequence of amended Statement of Claim – costs of failed application to transfer matter to Federal Court to follow the event

Australian Securities and Investments Commission Act 1989
Federal Magistrates Act 1999, ss.18, 49
Federal Magistrates Court Rules, Rule 8.02

McIntosh v National Australia Bank Ltd (1988) 80 ALR 47
Philip Morris Inc v Adam P Brown Male Fashions Pty Ltd (1981) 148 CLR 457

Applicant:

TERENCE ANTHONY MAHONEY

First Respondent:

AGD MINING LIMITED

(ACN 005 482 815)

Second Respondents:

PETER GEORGE HINNEBERG,
PETER EDWARD MAHER,
ROGER MARSHALL and
IAN LESLIE PRICE

File No:

MZ 269 of 2002

Delivered on:

22 September 2003

Delivered at:

Melbourne

Hearing Date:

22 September 2003

Judgment of:

McInnis FM

REPRESENTATION

Counsel for the Applicant:

Mr D Gilbertson

Solicitors for the Applicant:

Goldsmiths

Counsel for the Respondents:

Mr G Moore

Solicitors for the Respondents:

Corrs Chambers Westgarth

ORDERS

The trial date of 22 September 2003 be vacated.
The application be fixed for final hearing, with a hearing estimate of three to five days, on 9 February 2004.
The applicant be granted leave to file and serve a further amended statement of claim on or before 23 September 2003.
The respondent shall file and serve an amended defence on or before 24 October 2003.
The respondent be granted leave to file and serve a request for further and better particulars of the amended statement of claim by 10 October 2003.
The applicant shall provide further and better particulars of the statement of claim on or before 3 October 2003.
The respondent shall file and serve the affidavit of documents previously due on 17 September 2003 by 10 October 2003.
The parties attend further mediation to be conducted on or before
14 November 2003.
The applicant shall pay the respondents' costs thrown away relating to the amended statement of claim and otherwise pay the respondents' costs of this day including costs in relation to the application filed
17 September 2003 with the costs to be pursuant to schedule 1 of the Federal Magistrates Court Rules, to be taxed in default of agreement pursuant to order 62 of the Federal Court Rules.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
MELBOURNE

MZ 269 of 2002

TERENCE ANTHONY MAHONEY

Applicant

And

AGD MINING LIMITED

First Respondent

And

PETER GEORGE HINNEBERG, PETER EDWARD MAHER, ROGER MARSHALL and IAN LESLIE PRICE

Second Respondents

REASONS FOR JUDGMENT

(Revised from transcript)

This is an application by the applicant filed 17 September 2003 seeking certain orders in relation to the application which had been listed for trial this day. In the application the applicant seeks the following orders:
“1.That the trial date of 22 September 2003 be vacated.
2.That the applicant have leave to file and serve an amended statement of claim.
3.The proceedings be transferred to the Federal Court for such other and further orders as this honourable court deems appropriate.”
In support of the application the applicant has relied upon an affidavit sworn by Gary David Goldsmith on the 17th day of September 2003.

I permitted the respondent to rely upon an affidavit filed this day by Maria Nemeth sworn 19 September 2003. Each of the applications are opposed, though it should be noted at the outset that there seems to be common ground between the parties that today's trial date as a matter of practical consequence should be vacated. The reason for vacating the trial date is clear upon the proposed amended statement of claim.
It is also claimed that by order of this court on 3 September 2003 the respondent was required to file and serve an affidavit of documents and should have done so by 17 September 2003. To that extent, it is noted by counsel for the applicant that the application would otherwise, in any event, be made to vacate the trial date in the absence of that further affidavit and discovery material.
On that narrow issue it is agreed that in the circumstances, if there were to be an amended statement of claim filed and served, then the hearing date would need to be vacated. It is noted, and I accept for the purpose of this decision, that the due date for the affidavit of documents from the respondent to some extent was superseded by the events, including the filing and serving of the application currently before the court. To that extent, whilst there might be some blame that would attach to the respondent in vacating the hearing date, that, in my view, is minimal compared to the obvious need to vacate the trial date in the light of this application. It is clear that it is in the interests of justice that I vacate the trial date.
The issue of whether the applicant should have leave to file and serve an amended statement of claim, in my view, is an issue which really ought not to be determined in a final matter until the court decides whether or not the proceedings in this instance should be transferred to the Federal Court. It is the issue of transfer which, in my view, is a critical issue in an application of this kind. It should be noted that in this matter there is a history which involved a decision by this court on 11 October 2002 where an application by the respondent was dismissed seeking to challenge the jurisdiction of this court in relation to the statement of claim then pleaded.
When I delivered a decision in the matter on 11 October 2002,

I decided to dismiss the respondents' application and effectively found, upon the pleadings then relied upon, that there was indeed jurisdiction for this court to hear and determine the matter. It is somewhat ironic therefore that the court is now faced with an application by the applicant to transfer the application to the Federal Court. That application is based upon leave being granted to file and serve an amended statement of claim. The amended statement of claim now raises in some detail other pleadings, and in particular pleadings arising out of the Australian Securities and Investments Commission Act1989 (the ASIC Act) together with pleadings in negligence said to have arisen out of the facts and circumstances otherwise described in the statement of claim.
Although it is not submitted that this court does not necessarily have jurisdiction, it is my understanding the submissions for and on behalf of the applicant are that in the circumstances there is a risk that the court may not have jurisdiction to hear and determine the matter as currently pleaded or proposed to be pleaded in the further amended statement of claim.
When the court has to consider the issue of transfer, it is appropriate to refer to s.49 of the Federal Magistrates Act 1999. That section provides a basis upon which this court may, in the exercise of its discretion, transfer a proceeding to the Federal Court. In deciding whether to transfer a proceeding to the Federal Court, the section provides that this court must have regard to any rules of the court made for the purpose of sub-section 40(2), whether proceedings in respect of an associated matter are pending in the Federal Court, whether the resources of the Federal Magistrates Court are sufficient to hear and determine the proceeding, and (d), the interests of the administration of justice.
Rule 8.02 of the Federal Magistrates Court Rules provides in addition to the factors required to be considered under s.39(3) to which I have just referred that the court should also consider the following factors as being relevant:
“(a)Whether the proceeding is likely to involve questions of general importance such that it would be desirable for there to be a decision of the Federal Court on one or more of the points in issue;
(b)Whether, if the proceeding is transferred, it is likely to be heard and determined at less cost and more convenience to the parties than if the proceeding is not transferred;
(c)Whether the proceeding would be heard earlier in the Federal Magistrates Court;
(d)The availability of particular procedures appropriate for the class of proceeding; and
(e)The wishes of the parties.”
In considering the relevant issues, I accept the submission made for and on behalf of the respondent relying upon the decision of Gummow J in the decision of McIntosh v National Australia Bank Ltd (1988) 80 ALR 47, that it would not be appropriate for this court to simply transfer a matter if it felt that in the circumstances there was an uncertainty as to the existence of jurisdiction in this court; that is, that would not be a factor which this court could properly find would constitute a matter relevant to the interests of the administration of justice.
In my view, the jurisdiction issue may have some degree of uncertainty about it, but even on the proposed amended statement of claim I am satisfied that in the circumstances where there is a pleading properly introduced in relation to the clear powers of this court under the Trade Practices Act, that the other pleadings, including negligence and the pleadings under the ASIC Act, are not sufficient to provide that this court would not in all the circumstances on the proposed pleading have jurisdiction to hear and determine the matter as part of this court's associated or accrued jurisdiction.
It seems to me that on the material before this court, that there is indeed a common substratum of facts of a kind which would otherwise attract the jurisdiction of this court to hear and determine the matter as part of its accrued or associated jurisdiction. Whilst there may be a specific vesting of powers to the Federal Court of Australia under the provisions of the legislation now sought to be relied upon, that is, the ASIC Act, it is my view that that does not in all the circumstances preclude this court from considering the matter and exercising its jurisdiction in relation to that legislation as part of this court's associated jurisdiction. The associated jurisdiction of the Court arises pursuant to s.18 of the Federal Magistrates Act which provides:-
“To the extent that the Constitution permits jurisdiction is conferred on the Federal Magistrates Court in respect of matters not otherwise within its jurisdiction that are associated with matters in which the jurisdiction of the Federal Magistrates Court is invoked.
That section is almost identical to s.32(1) of the Federal Court of Australia Act 1976 which had been considered by the High Court in Philip Morris Inc. v Adam P Brown Male Fashions Pty Ltd (1981) 148 CLR 457. In that case Mason J at p.506 stated:-
“Plainly it was intended to vest a jurisdiction in the Federal Court to hear and determine matters not otherwise within its jurisdiction, matters that are ‘associated’ with matters in which the jurisdiction of the Court is invoked’. The expression ‘to the extent that the Constitution permits’ suggests that s 32 is directed, not merely to jurisdiction to hear and determine matters arising under federal laws not otherwise vested in the Federal Court, but also to jurisdiction arising under state or other non federal laws. Problems of constitutional validity arise in relation to the latter, but not in relation to the former. The opening words of section 32(1) would serve no purpose at all if the sub-section was exclusively directed to matters arising under federal laws.”
Further in the Philip Morris case at p.512 Mason J states when referring to the severability of a claim the following:-
“Likewise, it may appear that the attached claim and the federal claim so depend on common transactions and facts that they arise out of a common substratum of facts. In instances of this kind a court which exercises federal jurisdiction will have jurisdiction to determine the attached claim as an element in the exercise of its federal jurisdiction”.
In all the circumstances, I am not satisfied that there is sufficient basis upon which this court ought to transfer the matter in terms of jurisdiction.
A matter of greater concern to this court which was canvassed between the parties was the issue of the competing resources of this court compared with the Federal Court. As I indicated during the course of submissions, there is a significant resource problem confronting this court as a direct consequence of the increased volume of general federal law matters and in particular those matters arising under migration legislation. There is a further strain on resources in terms of time being made available for justices of this court to properly reflect upon, consider and produce judgments in a timely manner. It is a matter of some significant concern to me personally that this court is finding some degree of difficulty in producing judgments in a timely manner. I regard the production of a judgment in a timely manner as being an essential part of the administration of justice.
I brought to the attention of the parties the fact that this matter now, however, may be listed, as a result of another application resolving, as early as 9 February 2004. I have made inquiries with the Federal Court and, doing the best I can, it is clear that any earlier listing would depend entirely upon the availability of a specific docketed justice in that court. It is unlikely, according to the inquiries I have made, that the application will be heard and determined any earlier than 9 February 2004.
I further take into account in the exercise of my discretion the fact that the parties have been before this court now for a considerable time. They have been subject to arguments advanced in relation to the jurisdiction issue which resolved in the judgment delivered by this court on 11 October 2002 and have otherwise incurred expenses in this court in the further conduct of these proceedings. It seems to me that in the circumstances where this court is able to provide a further hearing date in the not too distant future, that is, by 9 February 2004, that there would be increased costs of the matter now being transferred to the Federal Court. The proceeding is unlikely to be heard and determined any earlier in that court than it will be in this court.
It further seems to me that although it is relevant to take into account the wishes of the applicant, that is but one factor to take into account in all the circumstances.
In my view, one further factor which caused me some concern was the issue of the length of the hearing and the potential complexity based upon the proposed amended statement of claim. I have considered that matter and considered the proposed amended pleading. In my view, it would be difficult to identify precisely an issue which might be described as an issue of public importance in the circumstances and it is difficult to identify any other issues which in all the circumstances might properly be issues which would fall within the ambit of the interests of the administration of justice which would otherwise encourage this court to transfer the application to the Federal Court.
Had I concluded that there were insufficient resources in this court to hear, determine and deliver in a timely manner a judgment in this matter at a stage later than the Federal Court, then my decision may have been different. In all the circumstances, for the reasons I have given, it is my view that the application to transfer the proceedings to the Federal Court should be refused. As I have already indicated, it is appropriate that I vacate the trial date, and I do so now, and in lieu thereof the application is fixed for trial on an estimated three to five day hearing on 9 February 2004.
That leaves for consideration the issue of the amended statement of claim. I have deliberately avoided embarking upon a detailed analysis of the precise pleading and its deficiencies but I add for the sake of completeness that very detailed objections were taken by the solicitors for the respondent in facsimile correspondence dated 19 September 2003, which is exhibited as exhibit MAN9 to the affidavit of Maria Nemeth. I note the objections to many of the amendments now sought.
In my view, it would be in the interests of the administration of justice to allow the applicant to file and serve the proposed amended statement of claim in a form similar to the proposed further amended statement of claim which is annexure GG2 to the affidavit of Gary David Goldsmith, but in doing so I do not preclude the respondent from making further submissions in relation to certain parts of that pleading which may be argued should be struck out. I would grant leave to the respondent to file and serve a request for further and better particulars and will direct the applicant to provide those further and better particulars within a certain time frame. In my view, applying relevant High Court authorities in relation to the issue of amendment, it is otherwise in the interests of justice that I permit the amended statement of claim and I will make an order accordingly.
I raised with counsel the issue of mediation. In my view, where proceedings are pending and a significant and substantial amendment is sought and granted in relation to the statement of claim, it is appropriate that the court should, in discharging its duty to consider alternative dispute resolution, the prospect of further mediation. It has been indicated by one of the parties that there is no objection to that course being followed.
One of the other parties has indicated that it does not see much point in pursuing further mediation. Perhaps, to be fair, it is unlikely, according to the other party, that mediation might resolve the matter. In my view, it is not appropriate for the court to form an adverse view against any party that may refuse or find it to be unlikely a matter might settle and therefore not seek to participate in mediation, and I do not do so in this judgment.
It seems to me that it may well be the case that mediation is unlikely to resolve this matter, given the history of the proceedings. However, the court has a higher duty to consider the administration of justice and, in my experience, even the most unlikely cases sometimes result in a successful mediation. To the extent that that may well occur in this case in the light of the amended statement of claim, it is at least worth revisiting the issue of mediation if for no other reason than to finally exhaust the prospects of resolving this matter so that the parties know that when the matter is to proceed on 9 February 2004, they ought to be properly prepared for that event. In the circumstances, I will order that there be further mediation.
In this application I have delivered my decision in relation to the substantial issues which were essentially raised in the application filed by the applicant on 17 September 2003. It is submitted on behalf of the respondent that I should make an order that the applicant pay the respondents' costs of the day and I take it costs thrown away by reason of the amendment to the statement of claim. That application for costs is opposed by the applicant and it is submitted that I should not make any order as to costs in relation to this matter, including costs thrown away. It is submitted that part of the reason for vacating the hearing date is the noncompliance with the order for discovery by the respondent and that the issue of costs thrown away on the amended statement of claim should be left for the trial.

In my view, where there is a discrete application of the kind now before the court and having regard to the chronology of the events and the orders I have made, it is clear that although I vacated the trial date, I have done so in a sense as a consequence of the leave being granted to the applicant to amend the statement of claim at this very late stage. I am aware that there was at least a reason advanced for that, namely, that counsel had properly considered the matter in the discharge of his duty to his client and decided that an amendment was required. That of course is for the benefit of the applicant so that the case is properly before the court at the final hearing. To that extent, the costs thrown away by reason of the amendment should at the very least be awarded to the respondent.
As to the costs of this day and the costs associated with the application, it is my view that the application to transfer this matter to the Federal Court has been unsuccessful and in the circumstances I am satisfied that costs should follow the event of that failed application. Accordingly, as the time of this day has been taken primarily with dealing with the application filed 17 September 2003, I can see no reason why costs should not follow the event which effectively has meant that although vacating the trial date and granting the leave, both have been for the benefit of the applicant, I have nevertheless refused to transfer the matter to the Federal Court. In all the circumstances, despite the apparent noncompliance with the order for discovery, I am satisfied that this substantive application has overtaken those events and effectively has meant the matter has to be adjourned and relisted for next year. The orders made are otherwise for the benefit of the applicant.

I certify that the preceding twenty-nine (29) paragraphs are a true copy of the reasons for judgment of McInnis FM

Associate:

Date: 22 September 2003