Merrifield Corporation Pty Ltd v FAL Mickleham (No 1)

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

PROPERTY LIST

S ECI 2022 00791

MERRIFIELD CORPORATION PTY LTD (ACN 111 110 813) & Ors	Plaintiffs/Defendants by counterclaim
(according to the attached Schedule)
v
FAL MICKLEHAM PTY LTD (ACN 643 550 010)	Defendant/Plaintiff by counterclaim

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JUDGE:	Harris J
WHERE HELD:	Melbourne
DATE OF HEARING:	2 April 2025 Submissions 11 October 2024, 17 and 28 April 2025
DATE OF RULING:	13 May 2025
CASE MAY BE CITED AS:	Merrifield Corporation Pty Ltd v FAL Mickleham (No 1)
MEDIUM NEUTRAL CITATION:	[2025] VSC 253

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JURISDICTION – claim seeking enforcement of a restrictive covenant pleaded to have the purpose and effect of restricting competition in sales of land – Rejoinder and counterclaim pleading that if covenant has the pleaded effect, it is a contract, arrangement or understanding the effect of which is to substantially lessen competition in breach of s 45, Competition and Consumer Act 2010 (Cth) – Declaration sought that restrictive covenant is ineffective and unenforceable on the basis of contravention of s 45 – Jurisdiction of the Supreme Court to hear a matter raising such an issue – whether the matter is a ‘special federal matter’ – Application for the Supreme Court to order that there are ‘special reasons’ why the matter should be determined by the Supreme Court.

Competition and Consumer Act 2010 (Cth), ss 45, 86 (1), 86(2), 86(4); Jurisdiction of Courts (Cross-vesting) Act 1987 (Cth), ss 3, 4(1), 6; Jurisdiction of Courts (Cross-vesting) Act 1987 (Vic) ss 3, 6; Carlton and United Breweries Ltd v Castlemaine Tooheys Ltd (1986) 161 CLR 543; Re Wilcox; Ex parte Venture Industries Pty Ltd (1996) 66 FCR 511.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr S Horgan KC with Mr D Triaca	Colin Biggers & Paisley
For the Defendant	Mr J Slattery KC with Ms X Teo	King & Wood Mallesons

TABLE OF CONTENTS

The proceeding and the jurisdictional issue................................................................................ 1

The background and the pleadings relating to s 45.................................................................... 2

The parties’ pleadings.................................................................................................................. 2

The legislation relevant to jurisdiction to determine a s 45 matter.......................................... 3

The Competition and Consumer Act 2010 (Cth)........................................................................... 3
The Jurisdiction of Courts (Cross Vesting) Acts............................................................................ 5

Submissions on whether this Court has jurisdiction to determine the s 45 issue................ 7

Analysis.............................................................................................................................................. 12

Some history regarding jurisdiction to determine matters arising under the TPA and the Competition and Consumer Act........................................................................................... 12
Relevant authority on State Supreme Court jurisdiction...................................................... 14
Carlton and United............................................................................................................ 15
Re Wilcox............................................................................................................................ 17
Computershare.................................................................................................................. 17
Metcash............................................................................................................................... 18
Epic Games......................................................................................................................... 19
Agha v Devine Real Estate............................................................................................... 20

Consideration – the source of jurisdiction to determine a s 45 matter.................................. 21

The effect of the s 45 claim made in the pleadings and the scope of the federal matter.. 22
Special federal matters............................................................................................................... 25

Application for an order that this Court determine the proceeding...................................... 26

Special reasons............................................................................................................................. 26
Submissions of FAL and Merrifield as to special reasons..................................................... 27
Conclusion – there are special reasons for this Court to determine the special federal matter 28

HER HONOUR:

The proceeding and the jurisdictional issue

The first plaintiff, Merrifield Corporation Pty Ltd, seeks in this proceeding to enforce a Restrictive Covenant registered on titles to land in the Merrifield Business Park in Mickleham. Merrifield contends that the defendant, FAL Mickleham Pty Ltd, which is registered proprietor of Lot 301 in the Merrifield Business Park, has breached the Restrictive Covenant and seeks an injunction to restrain that continuing breach.

The Restrictive Covenant prohibits the proprietor of Lot 301 from using the land for certain uses, from subdividing the land, and relevantly from creating more than one occupancy on that land without the consent of the owner of Lot P (the Occupancy Restriction). Lot P is neighbouring land in the Merrifield Business Park of which Merrifield is the registered proprietor.

A question has arisen as to whether this Court has jurisdiction to determine a claim raised by FAL in the Counterclaim to Merrifield’s claim that the Restrictive Covenant is a contract or arrangement with the purpose, effect or likely effect of substantially lessening competition contrary to s 45 of the Competition and Consumer Act 2010 (Cth).

For the following reasons, I have determined that the Court does not have jurisdiction under the Competition and Consumer Act to determine the s 45 issue. In this matter jurisdiction arises from the Jurisdiction of Courts (Cross-vesting) Act 1987 (Cth). The proceeding is a ‘special federal matter’ within the meaning of s 3 of that Act, and for the purposes of s 6 of that Act. Such a matter should as a general rule be transferred to the Federal Court of Australia. However the parties have submitted that there are special reasons why the matter should be determined in this Court, so that it is open to this Court to order that it determine the matter, pursuant to s 6(3) of that Act. I agree, and am satisfied that there are special reasons to justify the making of such an order. The following are my reasons for that determination.

The background and the pleadings relating to s 45

Merrifield contends that FAL breached the Restrictive Covenant in the following circumstances.

In 2018, Merrifield sold Lot 301 to Kaufland Australia Pty Ltd, which intended to establish a national supermarket business in Australia. For that purpose Kaufland constructed a large Warehouse and a separate large Freezer on that land. The contract of sale from Merrifield to Kaufland was subject to the Restrictive Covenant.

In January 2020, Kaufland decided that it would not proceed with its plans for expansion into Australia, and in August 2020, sold Lot 301 to FAL.[1] FAL initially leased the Warehouse and the Freezer on Lot 301 to DHL Supply Chain (Australia) Pty Ltd. However FAL later entered into a lease of the Freezer to Laverton Cold Storage Pty Ltd on 13 September 2021, while continuing to lease the Warehouse to DHL. FAL did not seek the prior consent of Merrifield before leasing the Freezer. When FAL subsequently sought consent, Merrifield refused.
[1]First Martin Statement filed on 1 September 2023 (Exhibit P4), [34]-[36].

The parties’ pleadings

Merrifield pleads by its Amended Statement of Claim that FAL is, by leasing the Warehouse and the Freezer to separate third parties, breaching the Occupancy Restriction in the Restrictive Covenant. Merrifield seeks an injunction to restrain FAL from continuing to do so. FAL in its defence denies that the Occupancy Restriction in the Restrictive Covenant is enforceable against it as it does not touch and concern the land, and denies having breached it. In a counterclaim, FAL also seeks an order from the Court pursuant to s 84 of the Property Law Act 1958 (Vic) modifying the Restrictive Covenant in one of three ways, all of which would have the effect of permitting the current situation of two tenants on the land.

The Merrifield parties, in the reply to the defence, and defence to FAL’s counterclaim, plead, in support of the position that the Restrictive Covenant runs with Lot 301, that the Covenant:

(a) affects the mode of occupation of FAL’s land;
(b)gives effect to the MBP development strategy and allows for the strategic and efficient development of Merrifield’s land;

(c) limits sales competition within [the] MBP; and
(d) is concerned with and enhances the value of Merrifield’s land.[2]

[2]Reply to Amended Defence and Defence to Further Amended Counterclaim filed on 27 November 2023, [3.2].

In its reply to Merrifield’s defence to counterclaim, and also by way of rejoinder to Merrifield’s reply, FAL pleads that if the Restrictive Covenant limits sales competition as pleaded by Merrifield, it is a contract, arrangement or understanding within the meaning of s 45 of the Competition and Consumer Act. It is pleaded that the Restrictive Covenant has the purpose, or would be likely to have the effect of, substantially lessening competition in the market of buying, selling, developing, occupying, leasing and licensing the use of land in the Merrifield Business Park.[3]
[3]Amended Reply to Defence to Further Amended Counterclaim filed on 18 September 2024, [2]; Amended Rejoinder filed on 18 September 2024, [2].

In its Second Further Amended Counterclaim, FAL pleads that it is entitled to a declaration that the Covenant is ineffective and is not enforceable against FAL both by reason of the plea in the defence that the Restrictive Covenant does not touch and concern the land, and alternatively, ‘by reason of paragraph 2 of the rejoinder’ in which the pleading based on s 45 is found.[4] That declaration is sought in paragraph A of the prayer for relief.
[4]Amended Defence to Amended Statement of Claim and Second Further Amended Counterclaim, 18 September 2024, [24].

The legislation relevant to jurisdiction to determine a s 45 matter
The Competition and Consumer Act 2010 (Cth)

Section 45 of the Competition and Consumer Act is found in Part IV of that Act which governs restrictive trade practices.

Section 45 provides, relevantly:

Contracts, arrangements or understandings that restrict dealings or affect competition
(1)A corporation must not:
(a)make a contract or arrangement, or arrive at an understanding, if a provision of the proposed contract, arrangement or understanding has the purpose, or would have or be likely to have the effect, of substantially lessening competition; or
(b)give effect to a provision of a contract, arrangement or understanding, if that provision has the purpose, or has or is likely to have the effect, of substantially lessening competition; or
(c)engage with one or more persons in a concerted practice that has the purpose, or has or is likely to have the effect, of substantially lessening competition.

…
(3) For the purposes of this section, competition means:
(a)in relation to a provision of a contract, arrangement or understanding or of a proposed contract, arrangement or understanding—competition in any market in which:
(i)a corporation that is a party to the contract, arrangement or understanding, or would be a party to the proposed contract, arrangement or understanding; or

(ii)any body corporate related to such a corporation;

supplies or acquires, or is likely to supply or acquire, goods or services or would, but for the provision, supply or acquire, or be likely to supply or acquire, goods or services; or
….

Section 4 of the Consumer and Competition Act defines a ‘contract’ as including a covenant, which in turn is defined as meaning ‘a covenant (including a promise not under seal) annexed to or running with an estate or interest in land (whether at law or in equity and whether or not for the benefit of other land)’.

Part VI of Competition and Consumer Act, dealing with Enforcement and Remedies, includes s 86 which makes provision with respect to the jurisdiction of courts with respect to matters under the Act. That section provides:

Jurisdiction of courts
(1AA)A reference in this section to this Act, or to a Part, Division or section of this Act, is a reference to this Act, or to that Part, Division or section, as it has effect as a law of the Commonwealth.
(1)Jurisdiction is conferred on the Federal Court in any matter arising under this Act, a gas market instrument or the consumer data rules in respect of which a civil proceeding has, whether before or after the commencement of this section, been instituted under this Part.

…
(2)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, subject to the Constitution, jurisdiction is conferred on the several courts of the Territories, with respect to any matter arising under Part IVB or IVBB, section 55B, subsection 56BO(1) or 56BU(1), section 56BZA, 56BZB or 56BZC, subsection 56BZD(1), section 56BZJ, Part IVE, a civil penalty provision of a gas market instrument or a civil penalty provision of the consumer data rules in respect of which a civil proceeding is instituted by a person other than the Minister or the Commission.
(3)Nothing in subsection (2) shall be 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:
…
(a)the jurisdiction of the several courts of the States and Territories under subsection (2); and
…
(b)the jurisdiction of the High Court under section 75 of the Constitution.

The Jurisdiction of Courts (Cross Vesting) Acts

Section 4(1) of the Jurisdiction of Courts (Cross-vesting) Act 1987 (Cth) (CVA (Cth)) provides a source of federal jurisdiction for State courts in a range of matters. It states:

Where:
(a)the Federal Court or the Federal Circuit and Family Court of Australia (Division 1) has jurisdiction with respect to a civil matter, whether that jurisdiction was or is conferred before or after the commencement of this Act; and
(b)the Supreme Court of a State or Territory would not, apart from this section, have jurisdiction with respect to that matter;
then:
(c)in the case of the Supreme Court of a State (other than the Supreme Court of the Australian Capital Territory and the Supreme Court of the Northern Territory) – that court is invested with federal jurisdiction with respect to that matter; or
(d)in the case of the Supreme Court of a Territory (including the Australian Capital Territory and the Northern Territory) – jurisdiction is conferred on that court with respect to that matter.

Section 4(4) provides that s 4(1) does not apply to a matter arising under certain legislation, including certain provisions of the Competition and Consumer Act, but not including s 45.

Section 6 of the CVA (Cth) deals with the procedures required with respect to ‘special federal matters’. The Jurisdiction of Courts (Cross-vesting) Act (Vic) (CVA (Vic)) is in materially the same terms.[5] Section 6 of the CVA (Cth) relevantly provides:
[5]The Commonwealth Act contains s 6(7) relating to the power of the Commonwealth Attorney to authorise payment by the Commonwealth to a party of an amount in respect of costs arising out of the adjournment of a proceeding under s 6, which is not in the Victorian Act.

6 Special federal matters: general rules
(1) If:
(a)a matter for determination in a proceeding that is pending in the Supreme Court of a State or Territory is a special federal matter; and
(b) the court does not make an order under subsection (3) in respect of the matter;

the court must transfer the proceeding in accordance with this section to the Federal Court or a court mentioned in paragraph (2)(b).
(1A)However, the court must only transfer so much of the proceeding as is, in the opinion of the court, within the jurisdiction (including the accrued jurisdiction) of the Federal Court, or the court mentioned in paragraph (2)(b), as the case may be.
(2)If the court orders that a proceeding or part of a proceeding be transferred, the proceeding or part of the proceeding must be transferred:
(a)if the matter for determination in the proceeding is a matter mentioned in paragraph (a), (b), (c) or (e) of the definition of special federal matter in subsection 3(1) - to the Federal Court; or

(b) …
(3)The Supreme Court may order that the proceeding be determined by that court if it is satisfied that there are special reasons for doing so in the particular circumstances of the proceeding other than reasons relevant to the convenience of the parties.
(4)Before making an order under subsection (3), the court must be satisfied that:
(a)a written notice specifying the nature of the special federal matter has been given to the Attorney-General of the Commonwealth and the Attorney-General of the State or Territory where the proceeding is pending; and
(b)a reasonable time has elapsed since the giving of the notice for the Attorneys-General to consider whether submissions to the court should be made in relation to the proceeding.

….
(9)Where, through inadvertence, the Supreme Court of a State or Territory determines a proceeding of the kind mentioned in subsection (1) without:
(a)the court making an order under subsection (3) that the proceeding be determined by that court; or
(b)a notice mentioned in subsection (4) being given;
nothing in this section invalidates the decision of that court.[6]

[6]Section 6(9) of the CVA (Cth) is s 6(8) of the CVA (Vic).

A ‘special federal matter’ is defined by s 3(1) of the CVA (Vic) as having the same meaning as in the CVA (Cth). That provides, as relevant to the present proceeding:

special federal matter means:
(a)a matter arising under Part IV of the Competition and Consumer Act 2010 (other than under section 45D, 45DA, 45DB, 45E or 45EA); or …

…
(e)a matter that is within the original jurisdiction of the Federal Court by virtue of s 39B of the Judiciary Act 1903;

being a matter in respect of which the Supreme Court of a State or Territory would not, apart from this Act, have jurisdiction.[7]
[7]CVA (Cth) s 3.

Submissions on whether this Court has jurisdiction to determine the s 45 issue

Following the conclusion of the trial of the proceeding it appeared to me that there was an issue whether it was open to this Court to determine the s 45 issue raised by FAL’s defence and counterclaim. No issue had been raised as to jurisdiction and the parties had not addressed in submissions the source of this Court’s jurisdiction to determine the s 45 issue.

On 2 October 2024, following the trial, I requested, via email from my chambers,[8] that the defendant confirm whether it continued to press the matter pleaded with respect to s 45 of the Competition and Consumer Act. The defendant’s solicitors confirmed by email on 3 October 2024 that it maintained its defence based on s 45. I then raised with the parties the question of whether this Court had jurisdiction to determine the issue raised by FAL’s pleadings as to whether the Restrictive Covenant was a contract or arrangement in restraint of trade within the meaning of s 45 of the Competition and Consumer Act, and therefore unenforceable or void. I directed the parties to file written submissions in respect of the jurisdiction of this Court to determine a s 45 claim, and as to the application of s 86 of the Competition and Consumer Act which deals with the jurisdiction of courts to determine matters under that Act.
[8]Email from Chambers ‘Jurisdiction with respect to s 45 of the Competition and Consumer Act 2010 (Cth)’ on 2 October 2024. The email sought submissions in particular with respect to s 86 of the Competition and Consumer Act, which deals with ‘Jurisdiction of Courts’.

The parties filed submissions the effect of which was that the Court could proceed to determine the issues relating to s 45. FAL submitted that the Court had jurisdiction to grant the declaratory relief sought by the counterclaim in this proceeding, given that it was not a proceeding instituted under Part VI of the Competition and Consumer Act, in which the Federal Court would, pursuant s 86(1), have exclusive jurisdiction. FAL referred to the High Court decision Carlton and United Breweries Limited v Castlemaine Tooheys Limited[9] in which the Court confirmed that the Supreme Court exercising ordinary jurisdiction to give relief for breach of contract did not lose that jurisdiction once it is alleged that the making or performance of the contract is prohibited by the Trade Practices Act 1974 (Cth) (TPA), the predecessor legislation to the Competition and Consumer Act. FAL also submitted that even if this is a ‘special federal matter’ which should otherwise be transferred to the Federal Court pursuant to the CVA(Cth), the Court has power to order under s 6(3) that the proceeding should be determined in this Court on the basis that there are ‘special reasons’ for doing so. FAL did not, however, seek such an order.[10]
[9](1986) 161 CLR 543, 551-554 (Gibbs CJ, Mason, Wilson, Brennan, Deane and Dawson JJ).
[10]Nor did it advise that the notices specifying the nature of the special federal issue had been given to the Attorney-General of the Commonwealth or the Attorney-General for Victoria, which is a precondition, pursuant to s 6(4) of the CVA (Cth), to the making of an order under s 6(3) of that Act.

In Merrifield’s submission it stated that it did not take a jurisdictional point. It also said that the declaratory relief sought by FAL (including insofar as it was based on s 45 of the Competition and Consumer Act) would be enabled by s 84(2) of the Property Law Act and s 36 of the Supreme Court Act 1986 (Vic).[11]
[11]Plaintiff’s submission on section 86 of the Competition and Consumer Act 2010 (Cth), 15 October 2024.

Merrifield reiterated that it did take the point already made in closing submissions that s 45 did not apply to the Restrictive Covenant in this proceeding as s 45(1) deals only with ‘competition’ as defined in s 45(3). It contends that competition is restricted to competition in markets in goods and services, not land. Merrifield did not address any question of whether the matter was a ‘special federal matter’, nor the power of this Court to proceed to exercise federal jurisdiction to determine the s 45 matter raised by FAL’s pleadings.

In April 2025, I listed the matter for mention and requested the parties to address more fully the issue of the source of this Court’s jurisdiction, noting that the provisions of the Competition and Consumer Act has been amended since the Carlton and United decision. I brought certain authorities on the issues to the parties’ attention which addressed the jurisdiction of State courts to determine matters involving s 45 and whether a proceeding raising s 45 is a ‘special federal matter’ under the CVA (Cth). At the mention FAL sought leave to make further submissions.

In the further submissions, FAL contended that the Court has jurisdiction independently of the CVA (Cth), and could exercise ‘inherent common law jurisdiction’ to determine whether the Restrictive Covenant was void ‘on the basis of the common law doctrine of illegality by reason of the fact that it contravenes s 45’.[12] FAL submitted that the proceeding was not a ‘special federal matter’. Specifically, FAL contended:

The Court has jurisdiction to determine FAL’s defence and counterclaim in reliance on s 45 of the Competition and Consumer Act 2010 (Cth) (CCA) (Section 45 Defence) pursuant to its inherent common law jurisdiction. Section 86 of the CCA does not preclude the Court from so doing. [13]

[12]Submissions of the Defendant/Plaintiff by Counterclaim on Jurisdiction filed on 17 April 2025, [2], [6] (FAL’s submissions dated 17 April 2025).

[13]FAL’s submissions dated 17 April 2025, [2(a)]

However, it also submitted that if it was, there were ‘special reasons’ within the meaning of s 6(3) of the CVA (Cth)[14] why this Court should determine the matter itself, and sought such an order.[15] FAL filed an affidavit confirming that on 8 April 2025 it had taken the step of informing the Attorneys-General of the proceeding as required by s 6(4)(a) of the CVA (Cth) in any case where a party to seeks to have a ‘special federal matter’ determined by a State court. [16]
[14]And the Jurisdiction of Courts (Cross Vesting) Act (Vic), s 6(3) which is in the same terms.
[15]FAL’s submissions dated 17 April 2025, [24].
[16]Affidavit of Peter Andrew Yeldham affirmed on 17 April 2025, [5].

FAL acknowledged that its defence and counterclaim relied on s 45 and that this informed the relief sought in its Second Further Amended Counterclaim, namely that the Occupancy Restriction was ‘ineffective and not enforceable against FAL’, which was then captured in paragraph A of the prayer for relief in the Counterclaim.[17] However it also contended, consistent with Merrifield’s earlier submission, that FAL did not seek any relief under the Competition and Consumer Act and that insofar as it seeks declaratory relief it is enabled by s 84(2) of the Property Law Act 1958 (Vic) and/or s 36 of the Supreme Court Act. FAL submitted:

6. Rather, FAL invites the Court to refuse to enforce the restrictive covenant on the basis of the common law doctrine of illegality by reason of the fact that it contravenes s 45 of the CCA. That is the common law doctrine that a court will not enforce a contract which is expressly prohibited by statute on the grounds of illegality. That is the matter the Court is being asked to consider in relation to FAL’s s 45 defence and counterclaim. It is a matter that derives from the common law jurisdiction of the Court and not any exclusive jurisdiction that the Federal Court may have under Part VI of the CCA.
7. While FAL’s defence and counterclaim involves consideration and interpretation of s 45 of the CCA, that does not make it a ‘a civil proceeding [which] has … been instituted under … Part [VI of the CCA]’ within the meaning of s 86(1). Section 86(1) is of limited compass – it only applies to civil proceedings instituted under Part VI of the CCA. It is not a provision that gives the Federal Court exclusive jurisdiction over all matters that entail consideration of any provision of the CCA.[18]

[17]FAL’s submissions dated 17 April 2025, [3]-[4].

[18]FAL’s submissions dated 17 April 2025, [6]-[7] (emphasis in original).

Merrifield in further submissions did now take a jurisdictional point. It submitted that FAL is ‘plainly seeking relief under the [Competition and Consumer Act]’ where FAL is ‘seeking, amongst other things, a declaration that the Covenant is ineffective and unenforceable against FAL by reason of the alleged breach [of] s 45…’; that the only jurisdiction to determine arguments based on s 45 was pursuant to the CVA (Cth), and that the matter was a ‘special federal matter’.[19]
[19]Plaintiff’s Submissions on Jurisdiction filed on 28 April 2025, [8]-[11].

Merrifield however agreed that there were ‘special reasons’ why the matter should be heard in this Court.[20]
[20]Plaintiff’s Submissions on Jurisdiction, [12].

Merrifield also objected to FAL’s contention that the Restrictive Covenant is void by reason of the common law doctrine of ‘illegality’ on the basis that the argument was a new argument not raised at trial.

The Attorney-General of the Commonwealth advised that no submissions would be made on the question of whether this Court should exercise jurisdiction.[21] By 13 May 2025, the date of this ruling, the Attorney-General for Victoria had not responded to the notice. As over one month had passed since the Attorney-General for Victoria had been notified of the proceeding, a ‘reasonable time’ has elapsed since the giving of the notice within the meaning of s 6(4) of the CVA (Cth) and the CVA (Vic),[22] and it was appropriate, noting the advanced stage of this proceeding to proceed to make the order.
[21]The Commonwealth Attorney-General advised on 29 April 2025 that no submissions would be made. The office of the Victorian Attorney-General confirmed that the notice had been received, however no response was received to the notice: Affidavit of Peter Andrew Yeldham affirmed on 29 April 2025, [5], [6]. A request was made that the Attorney-General for the State of Victoria be requested to advise in writing by Wednesday 8 May 2025 whether it wished to make submissions. The Victorian Attorney-General advised solicitors for FAL by telephone that no response would be provided by that date: Affidavit of Peter Yeldham dated 8 May 2025, [10].
[22]See, in the context of notices under s 78B of the Judiciary Act 1903 (Cth), decisions to the effect that a period of two weeks’ notice is an appropriate period of time during which the Attorneys-General may consider whether to intervene in a case involving a Constitutional matter, or removing that case to the High Court: Singh v Charles [2022] NSWSC 743, [43]-[45]; Ford v Commissioner for Corrective Services of New South Wales [2021] NSWSC 1541, [7] (Campbell J); Fonterra Brands (Australia) Pty Ltd v Bega Cheese Ltd [2025] NSWSC 395, [43]-[45]. See also Practice Note General 14, Notification of Matters under the Charter of Human Rights and Responsibilities Act 2006 (Vic), relating to the obligation to notify the Attorney-General for Victoria and the Victorian Equal Opportunity and Human Rights Commission of questions of law as to the application of the Charter or the interpretation of a statutory provision in accordance with the Charter. The Practice Note at [4.6] states that the Attorney-General and the Commission have indicated that in the ordinary course, 14 days is the expected response time.

Analysis
Some history regarding jurisdiction to determine matters arising under the TPA and the Competition and Consumer Act

As originally enacted, s 86 of the predecessor legislation to the Competition and Consumer Act, the TPA, was in the following terms:

Jurisdiction of Court
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.

‘Court’ was defined, in s 4(1), as ‘the Superior Court of Australia’. It was later amended to ‘the Australian Industrial Court’,[23] before (upon the establishment of the Federal Court of Australia), being defined as ‘the Federal Court of Australia’.[24] The jurisdiction expressly conferred under the TPA did not, therefore, extend to State courts.
[23]Trade Practices Amendment Act 1976 (Cth) s 3(a).
[24]Trade Practices Act 1974 (Cth) s 4(1) ‘Court’ (as at 1 February 1977).

Section 86, as it had been enacted, was repealed by the Jurisdiction of Courts (Miscellaneous Amendments) Act 1987 (Cth), with a significantly revised section being substituted in its place. That section relevantly included s 86(2) which specifically conferred jurisdiction on State courts, with respect to certain matters arising under Part V of the Act:

86 Jurisdiction of courts
(1)Jurisdiction is conferred on the Federal Court in any matter arising under this Act in respect of which a civil proceeding has, whether before or after the commencement of this section, been instituted under this Part.
(2)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, subject to the Constitution, jurisdiction is conferred on the several courts of the Territories, with respect to any matter arising under Division 1 or 1A of Part V in respect of which a civil proceeding is instituted by a person other than the Minister or the Commission.
(3)Nothing in sub-section (2) shall be 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 sub-section (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 sub-section (2) and the jurisdiction of the High Court under section 75 of the Constitution.

Relevantly, by virtue of s 86(4), the Federal Court’s previously exclusive jurisdiction was altered, with the State and Territory courts also being granted limited jurisdiction to hear certain matters under the TPA. As the Explanatory Memorandum makes clear, these amendments:

… confer jurisdiction on State courts concurrent with the Federal Court in civil matters arising under the consumer protection provisions of the Act (Divisions 1 and 1A of Part V).
The conferral of jurisdiction on State and Territory courts is accomplished by new section 86. [25]

[25]Explanatory Memorandum, Jurisdiction of Courts (Miscellaneous Amendments) Bill 1986 (Cth), 11 [42]-[43].

At the same time as this amendment, the Commonwealth enacted the CVA (Cth).[26] The objectives of the CVA (Cth) were stated in its preamble:

WHEREAS inconvenience and expense have occasionally been caused to litigants by jurisdictional limitations in federal, State and Territory courts, and whereas it is desirable, so far as is constitutionally possible:
(a)to establish a system of cross‑vesting of jurisdiction between those courts, without detracting from the existing jurisdiction of any court;
(b)to structure the system in such a way as to ensure as far as practicable that proceedings concerning matters which, apart from this Act and any law of a State relating to cross‑vesting of jurisdiction, would be entirely or substantially within the jurisdiction (other than any accrued jurisdiction) of the Federal Court or the Federal Circuit and Family Court of Australia (Division 1) or the jurisdiction of a Supreme Court of a State or Territory are instituted and determined in that court, whilst providing for the determination by one court of federal and State matters in appropriate cases; and
(c)if a proceeding is instituted in a court that is not the appropriate court, to provide a system under which the proceeding will be transferred to the appropriate court. [27]

[26]Re Wilcox; Ex parte Venture Industries Pty Ltd (1996) 66 FCR 511, 517 (The Court).

[27]CVA (Cth) Preamble (emphasis added).

As noted by the Court in Re Wilcox; Ex parte Venture Industries Pty Ltd[28], s 4(1) of the CVA (Cth) had the effect of investing State courts with jurisdiction that was otherwise in the exclusive jurisdiction of the Federal Court by virtue of s 86 of the TPA. Section 86 by that time granted State courts jurisdiction in limited matters and also conferred certain exclusive jurisdiction on the Federal Court.[29]
[28](1996) 66 FCR 511.
[29]Re Wilcox, 524, 527 (Black CJ, Cooper and Merkel JJ).

Relevant authority on State Supreme Court jurisdiction

FAL relies on the High Court’s decision in Carlton and United to contend that a Supreme Court may exercise jurisdiction to determine the defence insofar as it was based on s 45 of the Competition and Consumer Act, without restriction, and that nothing in the changes to both the Competition and Consumer Act and the CVA (Cth) altered that position.

It is necessary to consider Carlton and United closely, as there have been changes to the statutory context in which that case was decided. The terms of the Competition and Consumer Act, the successor legislation to the TPA considered in Carlton and United, and the provisions of the CVA (Cth) and CVA (Vic), involve material differences to the context of Carlton and United. It is also relevant to consider how the TPA provision was raised and relied on by the defendant in Carlton and United. Further, subsequent case law considering those provisions address the more recent statutory scheme in considering whether State courts have jurisdiction to determine a matter involving s 45.

Carlton and United

Carlton and United was concerned with the question of whether the Supreme Court of New South Wales had jurisdiction to determine a defence alleging that a sale of shares agreement was in restraint of trade, and particularised as involving a breach of ss 45 and 45D of the TPA.[30] Sections 45 and 45D of the TPA contained prohibitions on contracts, arrangements or understandings restricting dealings or affecting competition, and on boycotts. It had also been pleaded by the defendant that it was not open to imply certain terms in the sale agreement as such terms would be contrary to ss 45 and 45D. No relief was sought on the basis of ss 45 or 45D.
[30]Carlton and United, 550–1 (The Court).

The appellants appealed the findings in the Court below that the Supreme Court of New South Wales did have jurisdiction to determine the defence, and that the determination of those matters was not exclusively within the jurisdiction of the Federal Court by reason of s 86 of the TPA (as it had originally been enacted).[31]
[31]Carlton and United, 551 (The Court).

The High Court noted that the appellants’ argument involved the proposition that the defences involved a matter arising under the TPA. The Court observed:

A matter does not arise under a law of the Parliament merely because the interpretation of the law is involved, but a matter does arise under a law of the Parliament if the source of a defence which asserts that the defendant is immune from the liability or obligation alleged against him is such a law: Felton v Mulligan;[32] LNC Industries Ltd v BMW (Australia) Ltd.[33] It is unnecessary to decide whether the source of the defences raised in pars. 9(c) and (f) and 9A of the amended defence is the Trade Practices Act, and it would be unprofitable to consider that question, since the decision depends in part on the meaning of the pleadings themselves, which are rather obscure. It may be assumed that the matter raised by those defences is a matter arising under the Trade Practices Act. However, the Federal Court is not given exclusive jurisdiction in a matter simply because it arises under the Trade Practices Act.[34]

[32](1971) 124 CLR 367, 408.

[33](1983) 151 CLR 575, 581.

[34]Carlton and United, 551 (The Court) (emphasis added).

The Court observed that the relevant grant of exclusive jurisdiction to the Federal Court was contained in s 86, and that the ‘section confers jurisdiction only in those matters which answer the description which the section itself contains’.[35] In other words, it ‘does not mean that the section confers on the Federal Court, and makes exclusive, jurisdiction in all matters which arise under the Trade Practices Act’.[36]
[35]Carlton and United, 552 (The Court).
[36]Carlton and United, 552 (The Court).

The Court held that:

No matter of the kind described in s. 86 of the Trade Practices Act is embraced within the proceedings in the present case. Neither the appellants nor the respondents seek any relief under Pt VI. There is no action, prosecution or proceeding under that Part. The jurisdiction that the Supreme Court is exercising is not that jurisdiction which is conferred on the Federal Court by s. 86. The fact that the controversy could possibly result in the institution of an action or other proceeding under Pt VI does not deprive the Supreme Court of jurisdiction….[37]

[37]Carlton and United, 553-554 (The Court).

The Court considered earlier authority as to the nature of the Federal Court’s jurisdiction under the TPA, and observed that they did not provide support for the view that ‘a Supreme Court which is exercising its ordinary jurisdiction to give relief for a breach of a contract loses that jurisdiction once it is alleged that the making or the performance of the contract is prohibited by the Trade Practices Act. It is most unlikely that Parliament intended so inconvenient a result.’[38] The Court also observed that the provisions of the TPA ‘are part of the law of Australia and a Supreme Court, in the exercise of its jurisdiction, is bound to give effect to them, and it is not deprived of jurisdiction simply because it is called on to do so’.[39]
[38]Carlton and United, 554.
[39]Carlton and United, 555.

The Court concluded that the matters in the amended defence relying on ss 45 and 45D were not exclusively within the jurisdiction of the Federal Court, and the Supreme Court of New South Wales did have jurisdiction to determine them.

Re Wilcox

Re Wilcox involved an application to the Full Court of the Federal Court of Australia for the issue of writs of prohibition and/or certiorari against an order made pursuant to s 5(4) of the CVA (Cth), by Wilcox J. His Honour ordered that a civil proceeding involving claims under the TPA instituted in the Federal Court be transferred to the Supreme Court of New South Wales.[40] The applicants contended that Wilcox J had no jurisdiction to order the transfer of the proceeding as it was within the exclusive jurisdiction of the Federal Court.[41] Relevantly, the Court was required to resolve whether or not:

… the CVA confer[red] jurisdiction or power on the Federal Court to make an order transferring a proceeding to a Supreme Court notwithstanding that, under the TPA, the determination of the matter the subject of the proceedings was within the exclusive jurisdiction of the Federal Court under the TPA. [42]

[40]Re Wilcox, 514–5 (The Court).

[41]Re Wilcox, 514 (The Court).

[42]Re Wilcox, 514–5 (The Court).

The Court found that although the Federal Court had exclusive jurisdiction under s 86(4) of the TPA, as it was then enacted, s 4(1) of the CVA (Cth) gave the Supreme Court of New South Wales jurisdiction to hear the relevant claims.[43] The CVA (Cth) by s 6 required matters defined as ‘special federal matters’ (including claims under Part IV of the TPA) to be determined in the Federal Court rather than State courts unless the State court was satisfied that it was appropriate that the Supreme Court determine it.[44] The Court observed that the inclusion of Part IV matters in s 6 as ‘special federal matters' capable of being determined in a State or Territory Supreme Court ‘can only be upon the premise that the legislature intended that s 4(1) invest or confer jurisdiction in such matters on those courts, notwithstanding that under the TPA they are within the exclusive jurisdiction of the Federal Court.’[45]
[43]Re Wilcox, 527 (The Court).
[44]CVA (Cth) s 6 (as at 26 May 1987).
[45]Re Wilcox, 523–4 (The Court).

Computershare

Computershare Ltd v Perpetual Registrars Ltd (No 3)[46] relevantly concerned a proceeding commenced in this Court in which the plaintiff sought damages for alleged wrongful disclosure of confidential information supplied pursuant to an agreement.[47] Two defendants raised counterclaims that alleged, insofar as there were arrangements between them and the plaintiff, they contravened Part IV of the TPA. These defendants sought declarations of contraventions of ss 45, 46, and 47.[48] The defendants applied for the proceeding to be transferred to the Federal Court pursuant to s 6 of the CVA (Cth) and the CVA (Vic).[49] The plaintiff opposed the application on the grounds that there were ‘special reasons’ why the proceeding should be determined in the Supreme Court, in addition to claiming that s 6 of those Acts was invalid.[50]
[46](2000) 2 VR 666.
[47]Computershare, 667 [1].
[48]Computershare, 667–9 [1], [5].
[49]Computershare, 670 [9].
[50]Computershare, 667–8 [1], 670 [10]–[12].

Justice Warren (as her Honour then was) held that the claims under ss 45, 46, and 47 of the TPA were ‘special federal matters’ (being matters arising under Part IV of the TPA and thus captured by s 3(1) of the CVA (Cth)).[51] Her Honour concluded that the entirety of the proceeding, as the relevant controversy, involved a common substratum of fact so as to bring the matters in the proceeding involving State jurisdiction within the accrued jurisdiction of the Federal Court. Accordingly, and in the absence of ‘special reasons’ for the Supreme Court to retain the matter, her Honour found that the proceeding must be transferred to the Federal Court pursuant to s 6(1).[52]
[51]Computershare, 676 [34]–[36], 679 [44].
[52]Computershare, 692-693 [91]-[93].

Metcash

Metcash Ltd v Jardim (No 3)[53] involved, amongst other things, a claim that giving effect to a deed of release, which would have the effect of preventing the defendant’s company investing in a second company, contravened s 45 of the TPA.[54] Justice Ball, referring to s 6 of the Jurisdiction of Courts (Cross-vesting) Act 1987 (NSW) (CVA (NSW)), noted that this provision had not been raised by the parties during the course of the hearing. His Honour held this claim could not be dealt with, because it raised a ‘special federal matter’ under the CVA (Cth) (being a claim under s 45) and the relevant Attorneys-General had not been given the required reasonable opportunity to make submissions as to whether the matter should be determined by the Supreme Court, as required by s 6(4) of that Act.[55] The first defendant was subsequently given leave to amend his cross-claim to discontinue his claim under the TPA and rely, instead, on corresponding provisions of the New South Wales Competition Code.[56]
[53]Metcash Ltd v Jardim (No 3)(2010) 273 ALR 407; [2010] NSWSC 1096.
[54]Metcash No 3, 413–4 [31](c), 421 [56]-[57].
[55]Metcash No 3, [58].
[56]Metcash Ltd v Jardim (No 4) [2010] NSWSC 1135, [3].

Epic Games

Epic Games Inc v Apple Inc[57] was an appeal from a decision of Justice Perram granting an application by Apple seeking a stay of Federal Court proceedings in circumstances where an exclusive jurisdiction clause elected the Northern District of California as the chosen forum for litigation and earlier proceedings had been commenced in the United States District Court for the Northern District of California.[58] The judgment contains some useful observations by Justices Middleton, Jagot and Moshinsky regarding claims under Part IV of the Competition and Consumer Act, and circumstances in which they can be determined other than in the Federal Court:[59]
[57](2021) 286 FCR 105.
[58]Epic Games, 107–9 [1]–[8].
[59]Epic Games, 128–9 [115]–[121] (emphasis added).

We should address the point raised by Apple that even within the Australian context it is not the case that the Federal Court has unique standing when it comes to interpretation and enforcement of the CCA: it is said by Apple that courts other than the Federal Court are authorised to determine Pt IV claims and so the Federal Court is not the “sole arbiter” of matters under Pt IV of the CCA (even domestically) and no legislative intention to that effect can properly be inferred.
We recognise that other Australian courts may determine Pt IV claims, but within a limited compass and for specific reasons.
….
Then there are three qualifications to the Federal Court’s exclusive jurisdiction that should be noted which permit other Australian courts to determine Pt IV claims. The first is for private claims under s 46, in respect of which jurisdiction is also conferred on the Federal Circuit Court: s 86(1A). …
The second is s 4(1) of the Jurisdiction of Courts (Cross-vesting) Act 1987 (Cth) (CVA), which relevantly vests the Supreme Courts of the states with jurisdiction that they would not otherwise have where the Federal Court has jurisdiction with respect to that civil matter. This provision confers jurisdiction even in respect of matters where another Act specifies that the Federal Court’s jurisdiction is exclusive. However, this creates only a narrow exception, given that the CVA: (i) specifically excludes some provisions of Pt IV of the CCA from the conferral of jurisdiction (s 4(4)); (ii) otherwise designates a matter arising under Pt IV of the CCA as a “special federal matter” which absent “special reasons” must be transferred to the Federal Court (ss 3, 6(1), 6(3)); and (iii) in determining whether there are “special reasons” requires the court to have regard to the “general rule that special federal matters should be heard by the Federal Court …” (s 6(6)(a)).
The third is the Code, which allows claims under the Schedule version of Pt IV of the CCA to be determined by state courts. The Code was introduced by the Competition Policy Reform Act 1995 (Cth) and corresponding state and territory enabling legislation. The purpose of the Code was to extend the competition conduct rules in Pt IV to unincorporated businesses which are mostly exempt under the CCA. The Commission would remain the sole enforcement agency, and all enforcement action would continue to be brought in the Federal Court. ….
We do not accept that this Court (in relation to the proceeding now before this Court) has not been given the responsibility to determine the dispute before it, as contemplated by the legislative policy described above.

Agha v Devine Real Estate[60]

[60][2021] NSWCA 29; see, to similar effect, Creak v Ford Motor Company (2023) 112 NSWLR 272, [96] where the Court of Appeal observed that a defence to a claim for enforcement of a deed had pleaded that if the deed had the effect alleged, it contained a cartel provision which was unenforceable pursuant to s 4L and s 45AJ of the Competition and Consumer Act. The Court observed that the defence was abandoned at trial and that ‘it is surprising that neither party, nor the court in any pretrial hearing, had taken any steps for the transfer of the proceeding to the Federal Court pursuant to the [CVA (Cth)] as raising a special federal matter (s 6(1)).

In Agha v Devine Real Estate Concord Pty Ltd,[61] the appellant contended that the primary judge erred by failing to find that a sub-clause of a shareholders agreement was unenforceable by reason of s 45 of the Competition and Consumer Act. In disposing of this submission, White JA (Payne and McCallum JJA agreeing) stated:

It is true that the primary judge made no reference to s 45 of the Competition and Consumer Act. That is not surprising. No issue was raised on the pleadings in relation to s 45 of the Competition and Consumer Act. Had such an issue been raised, it would have given rise to a “special federal matter” within the meaning of the Jurisdiction of Courts (Cross-vesting) Act 1987 (Cth) and the Jurisdiction of Courts (Cross-vesting) Act 1987 (NSW) and, prima facie, the proceeding, or so much of the proceeding as was within the jurisdiction, including the accrued jurisdiction of the Federal Court, would have to have been transferred to the Federal Court. No such issue was raised on the pleadings. Section 45 was referred to in half of a single sentence of written closing submissions consisting of 66 pages.[62]
[61][2021] NSWCA 29.
[62][2021] NSWCA 29 [158] (White JA) (emphasis added).

Consideration – the source of jurisdiction to determine a s 45 matter

The Competition and Consumer Act, in s 86, specifically confers jurisdiction on the Federal Court with respect to matters arising under the Act in which civil proceedings are instituted under Part VI. It also confers jurisdiction on State and other courts with respect to certain specific matters. The matters in which jurisdiction is conferred on State courts are ‘any matter arising under’ the various sections listed in s 86(2). Section 45 is not one of those sections.

Section 86(4) provides that the jurisdiction conferred by s 86(1) is exclusive to the Federal Court, subject, relevantly, to the limited jurisdiction conferred on this Court by s 86(2). FAL was correct in submitting that s 86(1) does not bear on the jurisdiction of this Court to address the s 45 matter in this case, in that the effect of s 86(1) and s 86(4) is limited to matters ‘instituted under this Part’. This proceeding is not such a proceeding. However, that focus, in not engaging with s 86(2) by which the Competition and Consumer Act confers only limited jurisdiction on this Court, obscures the necessity to address the true source of the Court’s jurisdiction, and the limitations that the CVA (Cth) places on its exercise.

There being no jurisdiction with respect to s 45 conferred on this Court by the Competition and Consumer Act, this Court’s jurisdiction to hear a matter involving a s 45 claim arises by virtue of s 4(1) of the CVA (Cth). As the authorities discussed above, particularly Re Wilcox and Epic Games, make clear, that is the only source of jurisdiction for State courts to determine a matter in which s 45 is relied on as a source of relief. That jurisdiction is subject to the limitations identified in the CVA (Cth), including the ‘special federal matters’ regime which requires that a State court must transfer the proceeding to the Federal Court unless the State court makes an order under s 6(3) of the CVA (Cth) that proceeding be determined by it because there are ‘special reasons’ to do so.

The decision in Carlton and United does not alter that position. As observed by the Court, in that case neither party sought relief based on the TPA provisions.[63] The issue raised by the pleadings did not fall within the grant of exclusive jurisdiction of the Federal Court under the then prevailing statutory scheme.[64] In circumstances where no party sought relief based on the TPA the jurisdiction that the NSW Supreme Court would exercise in that case was not jurisdiction conferred by that Act.
[63]Carlton and United, 553.
[64]Carlton and United, 551.

The effect of the s 45 claim made in the pleadings and the scope of the federal matter

FAL contends that it does not seek any relief under the Competition and Consumer Act, because insofar as FAL seeks declaratory relief (which, as set out in paragraph 11 above, is premised on the alternative basis that the Restrictive Covenant contravenes s 45) that relief is enabled by s 84(2) of the Property Law Act and / or s 36 of the Supreme Court Act.[65]
[65]Plaintiff’s submission on section 86 of the Competition and Consumer Act 2010 (Cth) dated 15 October 2024.

It remains necessary, however, for the purposes of the definition of ‘special federal matter’ which includes a matter ‘arising under Part IV of the Competition and Consumer Act’, including s 45, to determine whether the way in which FAL relies on s 45 makes it a matter arising under that Act.

In Carlton and United, the High Court observed that ‘a matter does not arise under a law of the Parliament merely because the interpretation of the law is involved, but a matter does arise under a law of the Parliament if the source of a defence which asserts that the defendant is immune from the liability or obligation alleged against him is such a law’.[66] It is essential to focus on the manner in which the Commonwealth law is relied on in a proceeding, and whether it is relied on as a substantive defence.
[66]Carlton and United, 551.

The scope of a ‘matter’ arising under Commonwealth legislation was considered by Kourakis CJ of the Supreme Court of South Australia in the context of the ‘special federal matter’ regime in Adelaide Brighton Cement Ltd v Hallett Concrete Pty Ltd.[67] That case involved an application to strike out parts of the defendant’s defence in a breach of contract claim and,[68] in the alternative, that the entire matter should be referred to the Federal Court on the ground that it was a ‘special federal matter’ within the ambit of s 6 of the Jurisdiction of Courts (Cross-vesting) Act 1987 (SA).[69] The relevant pleadings in the defence alleged that the contract was to be construed on the basis that the parties did not intend to enter an agreement that may breach s 47 of the Competition and Consumer Act (the prohibition against exclusive dealing) and give rise to pecuniary penalty liability, and that the contract should be read down in accordance with common law principles accordingly.

[21]A matter is the matrix of laws and factual circumstances within which all the incidents of connected legal controversies may be finally and completely determined. The scope of a matter may extend beyond the particular cause of action on which a party relies and the particular relief it claims, if it is proper to address those causes of action and relief in order to finally and completely determine the legal controversies. A matter arises under a law of the Commonwealth if the law operates on the factual circumstances out of which the controversy arises to confer rights, obligations, powers, interests or privileges on a party or parties to the controversy. However a party may conduct litigation so as to eschew any reliance on a particular cause of action and disavow any rights or interests arising out of a law or laws applicable to the factual circumstances of the controversy in a way which removes that cause of action, and the laws on which it is based, from the justiciable matter.[70]

[67][2022] SASC 34.

[68]Adelaide Brighton Cement, [4].

[69]Adelaide Brighton Cement, [5].

[70]Adelaide Brighton Cement, [18]-[21] (emphasis in bold added).

His Honour dismissed the application on the ground that no ‘matter’ arose concerning s 47 of the Competition and Consumer Act.[71] His Honour observed that the defendant’s contention was that the contract should be construed in a way which avoids the potential application of s 47, and ‘should be construed in accordance with common law principles’, and that the defendant had ‘clearly and repeatedly eschewed any reliance on s 47 of the CCA … in a way which excludes any such claim from the scope of the matter in these proceedings’.[72]
[71]Adelaide Brighton Cement, [22]–[25].
[72]Adelaide Brighton Cement, [24]-[25].

In this case, FAL’s pleadings raising s 45 of the Competition and Consumer Act allege a particular legal effect based on the application of s 45 to the facts of the controversy between the parties. That is, s 45 is said be the source of the invalidity or unenforceability of the restrictive covenant. This makes it a proceeding in which s 45 is alleged to operate on the factual circumstances out of which the controversy arises to confer or deny rights or obligations on the parties to this controversy.

In order to make the declaration sought, the Court must, as acknowledged by FAL, consider and interpret s 45 of the Competition and Consumer Act.[73] It is one of FAL’s defence which (in the language of Carlton and United) ‘asserts that the defendant is immune from the liability or obligation against him’ and goes beyond mere interpretation of the law which was regarded, in Carlton and United, as being an insufficient basis on which to conclude that a matter arises under a Commonwealth law.[74] That remains the case notwithstanding that it is pleaded as an alternative source of invalidity to its pleading that the Restrictive Covenant is unenforceable as it does not touch and concern the land.
[73]FAL’s submissions dated 17 April 2025, [7].
[74]Carlton and United, 551 (Gibbs CJ, Mason, Wilson, Brennan, Deane and Dawson JJ), citing Felton v Mulligan (1971) 124 CLR 367, 408 and LNC Industries Ltd v BMW Australia Ltd (1983) 151 CLR 575, 581.

This proceeding involves, therefore, by reason of the reliance on s 45 in FAL’s pleadings, a matter arising under the Competition and Consumer Act regardless of whether the Court has a source of State statutory power to make declarations.

FAL also contended that the Court has jurisdiction to determine the s 45 matter ‘pursuant to its inherent common law jurisdiction’.[75] It submitted that the Court could refuse to enforce the Covenant on the basis of the common law doctrine of illegality arising from the fact that the Covenant contravenes s 45 of the Competition and Consumer Act.[76] This does, as complained by Merrifield, appear to be a departure from FAL’s pleaded case which, relevantly, is that:

Alternatively, by reason of paragraph 2 of the rejoinder dated 4 August 2022, FAL is entitled to a declaration that paragraph (i) of the Covenant is ineffective and not enforceable against FAL.[77]

[75]FAL’s submissions dated 17 April 2025, [2(a)].

[76]FAL’s submissions dated 17 April 2025, [6].

[77]Amended Defence to Amended Statement of Claim and Second Further Amended Counterclaim, [24].

Paragraph 2 of the rejoinder states, relevantly that the Restrictive Covenant is a contract, arrangement or understanding within the meaning of s 45 of the Competition and Consumer Act and is in contravention of s 45(a) and/or (b) of that Act and is unenforceable, further or alternatively void.[78] It is unnecessary in the context of this ruling to determine whether the way in which the claim is now put was identified in the pleading, or sufficiently raised in order for FAL now to pursue that case.[79]
[78]Amended Rejoinder dated 18 September 2024, [2].
[79]Failure to plead common law illegality, in respect of contract claims, may not be prohibitive of it later being asserted if it was sufficiently clearly raised. Note Knowles v Fuller (1947) 48 SR (NSW) 243 (Jordan CJ); cf Gozzard v McKell (1931) 32 SR (NSW) 39, 47–9 (Halse Rogers J, Harvey and Stephen JJ agreeing).

This is because regardless of how the case is now sought to be characterised, it relies on a determination of whether the Restrictive Covenant in its effect contravenes s 45. That would involve this Court determining a matter arising under the Competition and Consumer Act. This Court’s jurisdiction to do so derives from the CVA (Cth), and the manner of its exercise is circumscribed by the provisions of that Act. Relevantly, the matter as a ‘special federal matter’ must be transferred to the Federal Court unless I make an order that there are ‘special reasons’ not to do so.

Special federal matters

As observed by Chief Justice Bell in the New South Wales Court of Appeal in Huynh v Attorney General (NSW),[80] the definition of what constitutes a ‘special federal matter’ raises two issues for consideration: first, whether the matter falls within one of the categories relied upon under the definition of ‘special federal matter’ in the CVA (Cth); and secondly, if so, whether the Supreme Court would have jurisdiction only under the CVA (Cth).
[80](2023) 112 NSWLR 149, 155 [21]-[22] (Bell CJ, Kirk JA and Simpson AJA agreeing).

As to the first question, the relevant category of the definition of ‘special federal matter’ is paragraph (a) of the definition, which refers to Part IV of the Competition and Consumer Act. Section 45 of the Competition and Consumer Act falls within Part IV of that Act. It is not one of the sections identified in paragraph (a) of the definition which are excluded.

As to the second question – whether a matter involving s 45 is a matter in respect of which this Court would not, apart from the CVA (Cth), have jurisdiction – the answer is ‘yes’. As discussed above, there is no jurisdiction in a s 45 matter conferred by the Competition and Consumer Act on State courts. The source of jurisdiction for this Court is the CVA (Cth).

This proceeding is, therefore, a ‘special federal matter’ within the meaning of s 3(1)(a) of the CVA(Cth), being a matter arising under Part IV of the Competition and Consumer Act and not otherwise excluded by s 3(1)(a).[81]
[81]See also Agha v Devine Real Estate Concord Pty Ltd [2021] NSWCA 29, [158] (White JA, Payne and McCallum JJA agreeing).

Accordingly, the proceeding must be transferred to the Federal Court unless ‘special reasons’ justifying an order being made under s 6(3) of the CVA (Cth) are found to exist.[82]
[82]CVA (Cth) s 6(1), (3).

Application for an order that this Court determine the proceeding

FAL submits that if the Court finds that it does not have jurisdiction, then the Court ought to make an order under s 6(3) of the CVA (Cth) on the basis that there are ‘special reasons’ for the Supreme Court of Victoria to determine the matter.[83]
[83]FAL’s submissions dated 17 April 2025, [24].

A matter in this context bears its constitutional meaning, which means the entire justiciable controversy of which the s 45 claim forms part.[84]
[84]Computershare, [52] (Warren J).

Special reasons

Section 6(6) of the CVA (Cth) provides that in considering whether there are ‘special reasons’ for the purposes of s 6(3), the Court must have regard to the general rule that ‘special federal matters’ should be heard by the Federal Court (or in certain circumstances other specified courts).

Other considerations relevant to the determination of whether there are ‘special reasons’ for the retention of a special federal matter were recently considered by Justice Henry in Jin Niu Investments Pty Ltd v Wang:

Special reasons do not require extraordinary or unique circumstances to exist, rather there must be some matter which is unusual, uncommon or of an exceptional character, quality or degree and which differs from the ordinary or usual … .
The convenience of the parties, while not the determining factor, is not a matter which is excluded from the Court’s consideration of whether there are special reasons that justify the proceedings being heard in the Supreme Court … .
It has also been recognised that issues of costs and delay can amount to special reasons and are not matters which are purely matters of convenience to the parties… .
…
The efficient and cost effective conduct of litigation and use of the Court’s resources is not merely a matter of convenience to parties to proceedings, but are matters going to the proper administration of justice. There is a need to avoid disruptions in the court lists to avoid consequential inconvenience to the Court and prejudice to the interests of other litigants waiting to be heard … .[85]

[85][2019] NSWSC 1697, [26]–[28], [32] (citations omitted).

Also relevant to the finding that ‘special reasons’ existed in Jin Niu was that the proceedings were well advanced, the Court had time available to hear the claims, and inevitable delay and additional costs would be incurred if the proceedings were to be transferred to the Federal Court at such a late stage.[86]
[86]Jin Nui, [29]–[31].

Submissions of FAL and Merrifield as to special reasons

FAL submits that the following are ‘special reasons’ why the Supreme Court of Victoria should determine this proceeding notwithstanding it being a ‘special federal matter’. The reasons it identifies are:

… the entire proceeding has been conducted in this Court over the past two and a half years, evidence has closed, witnesses have been cross-examined, closing submissions already made on all issues including on s 45 of the CCA, the factual substratum underpinning the s 45 defence is the same as (or overlaps substantially with) that which underpins the remaining issues in the proceeding, the s 45 defence is one of several issues requiring determination (it is not the sole or primary issue in the proceeding), retention of the s 45 issue in the Supreme Court will result in a much faster and efficient determination than if it is separately determined by the Federal Court and is consistent with the overarching purpose.[87]

[87]Submissions of the Defendant / Plaintiff by Counterclaim on Section 86 of the Competition and Consumer Act 2010 (Cth) dated 11 October 2024, [15]; FAL’s submissions dated 17 April 2025, [31].

FAL submits, taking into account the observations in Jin Nui, that the reasons in this case are even stronger as the trial has already taken place, evidence closed and judgment reserved.[88]
[88]FAL’s submissions dated 17 April 2025, [31].

Merrifield agrees with the submissions of FAL that the Court ought to make an order under s 6(3) of the CVA (Cth), and that in accordance with the principles in Jin Nui, the ‘special reasons’ for the order to be made that the matter be determined in this Court are the advanced state of the case, the cost and delay and uncertainty associated with transferring part of the proceeding to the Federal Court, and the need to consider the efficient and cost effective conduct of the litigation.[89]
[89]Plaintiff’s Submission on Jurisdiction dated 28 April 2025, [12]-[13].

Conclusion – there are special reasons for this Court to determine the special federal matter

I am satisfied, taking into account that a finding of ‘special reasons’ requires a high degree of satisfaction,[90] that ‘special reasons’ exist for ordering that this proceeding be determined by this Court.
[90]Computershare, 691–2 [89].

The first reason is that the central focus of the proceeding is FAL’s claims under Victorian legislation, being the claims under s 84(1) of the Property Law Act for modification of the Restrictive Covenant. The other major issues in the proceeding involve the construction and enforceability of the Restrictive Covenant against successors in title, which is to be determined by reference to common law principles. The s 45 claim giving rise to the ‘special federal matter’ is not a large component of the proceeding. The PropertyLaw Act and common law issues and the s 45 issue are based on the same underlying body of facts and matters, making it essential that the matters be heard together.

The s 84(1) application for modification of the Restrictive Covenant engages powers conferred on the Supreme Court,[91] which have been long exercised by this Court resulting in the development by this Court of specialist expertise and practices.[92] Acknowledging the breadth of the Federal Court’s accrued jurisdiction, applications under s 84(1) are a matter within a specialised practice area of this Court. That is in my view a matter of an exceptional nature which constitutes a ‘special reason’ why the proceeding should be determined in this Court.
[91]And the County Court. See the definition of ‘Court’ (as used in s 84(1)) in s 3(1) of the Property Law Act.
[92]Note for example Guide to Practitioners, Applications for the Modification or Discharge of Restrictive Covenants, published on type="1">
A second, and important ‘special reason’ for the Supreme Court to determine this proceeding including the s 45 pleading is the interest in the efficient administration of justice. The trial of this proceeding has already occurred, with the Court having heard the evidence, and judgment is reserved. It would be inefficient and wasteful of the resources of both this Court and the Federal Court for the matter to be transferred at this point of the proceedings. Transfer of the proceeding would require a new judge to consider the evidence led in this Court and may require the parties to put on additional evidence in the event that the Federal Court required it to resolve all or part of the proceeding. This would result in delay and additional costs to the parties which would be disproportionate in circumstances where this Court, having heard the evidence and reserved its judgment, is able to resolve the matters in dispute efficiently.

This significance I have given to this factor should not be taken to indicate that raising such a matter at a late stage of trial would invariably result in a proceeding being retained in a State court, given the clear purpose evidenced by s 6 of the CVA (Cth) that ‘special federal matters’ be heard by the Federal Court. It is regrettable on my part that I did not ascertain that the matter was subject to the ‘special federal matters’ regime in the Jurisdiction of Courts (Cross Vesting) Acts until after the trial of the matter had concluded. It is also unfortunate that the matter relating to jurisdiction was not adverted to by the parties at an earlier time during the case management of the proceeding. It is to be hoped that these sorts of oversight will be rare.[93] However, the waste of resources of the parties, the time of witnesses and the time and resources of the Courts, and of the time of witnesses which would arise if the matter was now transferred is an important matter to be taken into consideration.
[93]Nevertheless, the possibility of inadvertence and oversight is anticipated in the Jurisdiction of Courts (Cross-Vesting) Acts, in s 6(8) of the Victorian Act and 6(9) of the Commonwealth Act, which provides that if the Supreme Court through inadvertence determines a proceeding which is a special federal matter without making an order that there are special reasons for the matter to be determined in that Court, or without giving the notice required by s 6(4), nothing in s 6 invalidates the decision.

Finally, although the agreement of parties alone that the proceeding should be determined by the State court is not, in my view, sufficient to give rise to ‘special reasons’ to retain a matter in that Court, nor is it of very significant weight, it is undoubtedly a relevant factor. In this case, it is relevant that Merrifield and the related Merrifield companies support the retention of the proceeding in this Court.

Accordingly, I am satisfied that there are special reasons why the proceeding should be determined by the Supreme Court, and will order that the proceeding be determined by this Court.

SCHEDULE OF PARTIES

BETWEEN:
MERRIFIELD CORPORATION PTY LTD (ACN 111 110 813)	First Plaintiff/First Defendant by counterclaim
MERRIFIELD BUSINESS PARK HOLD 1 PTY LTD (ACN 630 511 689)	Second Plaintiff/ Second Defendant by counterclaim
MERRIFIELD BUSINESS PARK HOLD 2 PTY LTD (ACN 630 511 698)	Third Plaintiff/ Third Defendant by counterclaim
MERRIFIELD BUSINESS PARK HOLD 3 PTY LTD (ACN 630 511 705)	Fourth Plaintiff/ Fourth Defendant by counterclaim
MERRIFIELD BUSINESS PARK HOLD 4 PTY LTD (ACN 630 511 723)	Fifth Plaintiff/ Fifth Defendant by counterclaim
MERRIFIELD BUSINESS PARK HOLD 5 PTY LTD (ACN 630 511 732)	Sixth Plaintiff/ Sixth Defendant by counterclaim
AND
FAL MICKLEHAM PTY LTD (ACN 643 550 010)	Defendant/ Plaintiff by counterclaim

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13 May 2025