Residual Assco Group Ltd v Spalvins

In the High Court of Australia, Residual Assco Group Limited (the plaintiff) brought proceedings against Mr Janis Spalvins and others (the defendants). The dispute arose from proceedings commenced in the Federal Court of Australia, which relied solely on the cross-vesting legislation for jurisdiction. Following the High Court's decision in *Re Wakim* that the cross-vesting legislation was invalid, South Australian legislation, the *Federal Courts (State Jurisdiction) Act 1999* (SA) (the State Act), and a corresponding rule of the Supreme Court of South Australia, were enacted to address the consequences of *Re Wakim*. The case was presented to the High Court by way of a case stated.

The primary legal issue before the High Court was the constitutional validity of section 11 of the State Act and rule 123A.05 of the Rules of the Supreme Court of South Australia. Section 11 of the State Act provided a mechanism for the Supreme Court of South Australia to treat a proceeding commenced in a federal court, in respect of which that federal court had made an order that it had no jurisdiction, as a proceeding in the Supreme Court. The Court was also asked to consider the validity of other provisions of the State Act, though it ultimately deemed this unnecessary.

The High Court, in a joint judgment, reasoned that section 11 of the State Act and rule 123A.05 were not invalid. The Court distinguished section 11 from other provisions of the State Act that dealt with "ineffective judgments," finding that section 11 operated independently and did not suffer from the constitutional infirmities identified in *Re Wakim*. The Court held that the enactment of the State Act and the rule was a valid exercise of State legislative power, designed to provide a procedural pathway for matters that had been before federal courts under the now-invalid cross-vesting legislation.

The Court answered the questions in the case stated, declaring that section 11 of the *Federal Courts (State Jurisdiction) Act 1999* (SA) and rule 123A.05 of the Rules of the Supreme Court of South Australia were not invalid. The Court also ordered that the defendants pay the plaintiff's costs of the case stated, reserving other costs for a single Justice.