Woodham & Anor v Lander & Ors [2004] ACTSC 116 (29 October 2004)

Last Updated: 29 October 2004

GEOFFREY KENNETH WOODHAM and Another

v LYN LANDER and OTHERS

[2004] ACTSC 116 (29 October 2004)

APPEAL - procedure - jurisdiction - cross-vesting - interstate service - compliance with o 78 r 6 Supreme Court Rules.

TRADE PRACTICES ACT - commencement of proceedings seeking declaratory relief only - whether ACT Supreme Court has jurisdiction.

Supreme Court Act 1933, s 9(2)(a)

Trade Practices Act 1974 (Cth), 86(2), s 163A

Fair Trading Act 1987 (NSW), s 66, s 72

Supreme Court Rules, O 29 r 5, O 78 r 6

John Pfeiffer Pty Ltd v Rogerson [2000] HCA 36; (2000) 203 CLR 503

Washington H Soul, Pattinson & Co Ltd v Ogilvy (1954) 55 SR (NSW) 143

PE Bakers Pty Ltd v Yehuda (1988) NSWLR 437

Westpac Banking Corporation v Northern Metals Pty Ltd (1989) ATPR ¶40-953

Polgardy v Australian Guarantee Corporation Ltd [1981] FCA 26; (1981) 34 ALR 391

FAI General Insurance Co Ltd v RAIA Insurance Brokers Ltd [1992] FCA 219; (1992) 108 ALR 479

P E Nygh and M Davis, Conflicts of Laws in Australia, 7^th ed, Butterworths, 2002, ch 4 and ch 9.2

Spencer-Bower and Turner, Res Judicata 2^nd ed (1969)

ON APPEAL FROM THE MASTER OF THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY

No SC 806 of 2003

Judge: Connolly J

Supreme Court of the ACT

Date: 29 October 2004

IN THE SUPREME COURT OF THE )

) No SC 806 of 2003

AUSTRALIAN CAPITAL TERRITORY )

ON APPEAL FROM THE MASTER OF THE SUPREME COURT

OF THE AUSTRALIAN CAPITAL TERRITORY

BETWEEN: GEOFFREY KENNETH WOODHAM

First Plaintiff

AND: GEOFF WOODHAM FINANCIAL SERVICES PTY LIMITED

(ACN 056 698 358)

Second Plaintiff

AND: LYN LANDER

First Defendant

AND: GDK FINANCIAL SOLUTIONS PTY LTD (ACN 033 182 341)

Second Defendant

AND: DAVID MCLEOD

Third Defendant

AND: PUTUSO PTY LTD

(ACN 002 387 420)

Fourth Defendant

AND: ROBERT WEST

Fifth Defendant

AND: TIBOR PAUL SINGER

Sixth Defendant

AND: MAXE-TEC AUSTRALIA LIMITED (ACN 058 834 343)

Seventh Defendant

AND: YALTARA NOMINEES PTY LIMITED (ACN 064 261 132)

Eighth Defendant

ORDER

Judge: Connolly J

Date: 29 October 2004

Place: Canberra

THE COURT ORDERS THAT:

1. The appeal be dismissed.

2. The 1^st, 2^nd, 3^rd, 4^th, 5^th and 7^th defendants pay the plaintiff's costs of the appeal.

1. This is an appeal from a decision of the Master of 28 May 2004 in which the learned Master dismissed a notice of motion seeking an order that the service of the originating application and statement of claim be set aside. A decision in such terms is clearly an interlocutory decision, and the unsuccessful appellant defendants filed an appeal within time. Pursuant to s 9(2)(a) of the Supreme Court Act 1933, such an appeal is heard and determined by a single judge.

2. Although the notice of motion originally focussed only on the question of service, the argument as it developed before the Master focussed on an argument that the claim by the respondent plaintiffs was fundamentally flawed, and that there was, in effect, no jurisdiction in this Court to determine the claim, which, it was said, should be struck out in its entirety.

3. The statement of claim seeks declarations that the conduct by way of representations made by the various defendants amounts to breaches of the Trade Practices Act 1974 (Cth) (the Trade Practices Act) and the Fair Trading Act 1987 (NSW) (the Fair Trading Act). It is an unusual claim. The representations went to the asserted existence of 50,000 tons of gold bullions belonging to a sultan and stored in a Townsville bank, and to a bribe which was supposed to pursue commercial success of a self-chilling beer can in the Philippine market. The first plaintiff has a residential address in Canberra, but the second plaintiff and seven of the eight defendants have addresses in Sydney. The eighth defendant has a Brisbane address. The conduct of the various defendants, which is said to amount to conduct that should be declared to be contrary to the statutory provisions, in that they are said to be misleading or deceptive, occurred at a meeting in Sydney. The statement of claim, as presently drafted, does not seek damages.

Were the proceedings properly served?

4. It was common ground that all the defendants were served with the originating application and statement of claim outside of the Australian Capital Territory. The Master found at [7] of his judgment that -

The sealed copy of the originating process served on each defendant was accompanied by a notice in terms of Form 1 under the Service and Execution of Process Act 1992 (Cth). Section 15 of that Act provides that an initiating process issued in a State may be served in another State. By virtue of s 5 of the Act, the Australian Capital Territory is to be regarded as a State for the purposes of the section. Section 12 of the Act provides that subject to the Act, service of a process under the Act has the same effect as if the process had been served in the place of issue. The Form 1 required to be attached to the service copy informs the defendant of the availability of a right to apply to this Court to have the proceeding transferred to another Supreme Court, or another superior court. This is a reference to the Jurisdiction of Courts (Cross-Vesting) Act 1993, which vests jurisdiction in respect of ACT matters in (relevantly) the Federal Court of Australia and the Supreme Courts of the States, and provides a mechanism for the transfer of a proceeding.

5. The Master in this passage has, it seems to me, succinctly stated the position in regard to interstate service of an originating application and made a finding, which is not challenged, that the service of these proceedings complied with the requirement that the defendants be advised of their rights to seek to transfer the proceedings.

6. The defendants argue that the plaintiffs failed to comply with O 78 r 6 of the Supreme Court Rules, which make special provision for the service of actions where a plaintiff seeks to invoke a jurisdiction in this Court arising from a cross-vesting law. The rule relevantly provides -

Proceedings in which jurisdiction under cross-vesting laws is or may be invoked

6 (1) If a party to a proceeding proposes to invoke a jurisdiction arising under a cross-vesting law, or relies on a cross-vesting law, in any other way -

(a) the statement of claim or the affidavit accompanying the application or a subsequent pleading (the pleading) shall include a statement of the provision on which the party relies, of the claim in relation to which the party relies on it and of the grounds on which the party relies on it; and

(b) the party must seek directions as soon as practicable on whether the proceeding should be transferred under the Act.

(2) ....

(3) Proceedings may be served out of the jurisdiction with the leave of the court if the proceedings include a matter for determination in respect of which jurisdiction under a cross-vesting law may be invoked.

(4) Leave will not be granted under subrule (3) unless the court is satisfied that the court may, having regard to the Act, be an appropriate court to determine the proceedings.

(5) Proceedings may be transferred to another court under the Act notwithstanding that leave to serve the proceedings outside the jurisdiction has been given.

7. The defendants argue that, because the plaintiffs seek declarations that certain conduct of the defendants at meetings in Sydney amount to misleading and deceptive conduct in trade or commerce as defined in the Fair Trading Act, they are seeking to invoke a cross-vested jurisdiction, and that, accordingly, they needed, pursuant to O 78 r 6(3), to obtain leave of this Court before the proceedings were served outside the jurisdiction. It is common ground that such leave was not obtained. The defendants argue that the Fair Trading Act grants certain jurisdiction to the New South Wales Supreme Court to grant injunctions (s 66) or make certain declarations (s 72), and that this is the jurisdiction sought to be invoked in these proceedings.

8. The learned Master rejected this argument and, it seems to me, that he was correct so to do. He said, at [15] that -

The submission of the applicant defendants as to the applicability of O 78 r 6 flows from their contention that the plaintiffs rely on the Fair Trading Act 1987 of New South Wales, an Act under which this Court, it is submitted, would have no jurisdiction in the absence of the cross vesting legislation of that State. The Fair Trading Act confers specific powers on the Supreme Court of New South Wales: see, for example, s 65, s 72 and s 73 of that Act. However, it does not appear to me that the plaintiffs are asking this Court to exercise a power conferred by that Act. Rather, the plaintiffs are asking this Court for declarations that specified conduct of certain of the defendants constitutes misleading and deceptive conduct as defined in that Act. This, it seems to me, is a declaration which this Court would have jurisdiction to make in the absence of the cross-vesting legislation. In making such a declaration, this Court would, in my opinion, be exercising its own jurisdiction, not cross-vested New South Wales jurisdiction.

9. The High Court in John Pfeiffer Pty Ltd v Rogerson [2000] HCA 36; (2000) 203 CLR 503 made it clear that where a plaintiff with sufficient connection to a jurisdiction such as residence, invokes the jurisdiction of a court of a state or territory in respect of conduct that occurred in another state or territory, the court in determining the claim will apply the law of the place where the claimed wrongful conduct occurred. Thus a Canberra resident may sue in this Court in respect of an alleged tort occurring in Sydney, and this Court will apply the law of New South Wales in determining that claim, and that may involve the application by this Court of New South Wales statutes that govern the resolution of personal injuries claims in that State. In no sense can this be said to be an exercise of cross-vested jurisdiction, such that O 78 r 6 is invoked requiring leave before proceedings are issued. This Court regularly determines personal injury claims arising where Canberra residents invoke the jurisdiction of this Court arising from transport or industrial accidents in surrounding areas of New South Wales, and in doing so this Court applies New South Wales law.

10. The present proceedings are pleaded in a somewhat unusual manner and relate to unusual facts. It is apparent that they were prepared by the first plaintiff without the benefit of legal advice, and both at the hearing before the Master and before me, it was conceded by counsel who now appear for the plaintiffs that some amendment to the statement of claim will be necessary. Nevertheless, the pleadings assert that certain representations were made, which are asserted to have been misleading or deceptive. The asserted facts could give rise to an action in tort for damages, and associated actions under various statutory provisions. Rather than seek damages, the plaintiffs seek declarations. There is nothing inappropriate about such relief, and indeed such relief is specifically provided for by O 29 r 5 which provides that -

Declaratory judgment

5 No action or proceeding shall be open to objection on the ground that a merely declaratory judgment or order is sought thereby, and the court may make binding declarations of right, whether any consequential relief is, or could be, claimed, or not.

11. In the action as pleaded in the statement of claim, the plaintiffs assert that the defendants engaged in certain identified conduct involving certain identified representations, which are said to have been misleading or deceptive. The first plaintiff has a Canberra address, and issues proceedings out of this Court in respect of the conduct of the defendants allegedly taking place in New South Wales. In disposing of the claim, the Court, it seems to me, will, pursuant to the principles set down in Pfeiffer v Rogerson, apply the law of New South Wales, but this is not an exercise invoking cross-vested jurisdiction, rather it is the common law principle of private international law of invoking the lex loci delicti, or law of the place of the wrong. The Master, it seems to me, was correct to hold that there was no breach of O 78 r 6, and the proceedings were properly served.

Are the proceedings soundly based?

12. Although the notice of motion was originally based on the point that the proceedings were not properly served as O 78 r 6 had not been complied with, as that argument developed it became apparent that the defendants' attack on the proceedings was more fundamental. The defendants argued that, not only were the proceedings invoking the cross-vested jurisdiction, but that the proceedings, in so far as they sought a declaration that the misleading and deceptive conduct was contrary to the Trade Practices Act, were proceedings that could only be commenced in the Federal Court of Australia.

13. It was also argued that the proceedings, in so far as they sought only declaratory relief, were properly described as actions in rem as opposed to actions in personam, and that accordingly the ordinary rules of private international law governing the service beyond the jurisdiction and the exercise of the jurisdiction of a State or Territory Court, were not applicable (see, generally, Conflicts of Laws in Australia, P E Nygh and M Davis, 7^th ed, Butterworths, 2002, ch 4 and ch 9.2). In dealing with this point the Master said that he could not see any argument that this type of action should be regarded as an action in rem, rather than an action in personam.

14. It seems to me that the Master is clearly correct on this point. The action as pleaded goes to certain representations made by certain defendants. In argument before me the defendants referred to the decision of the NSW Supreme Court in Washington H Soul, Pattinson & Co Ltd v Ogilvy (1954) 55 SR (NSW) 143, where a Full Court held that certain declarations relating to fair rent to be charged for licensed premises amounted to a judgment in rem. A similar conclusion was reached by the New South Wales Court of Appeal in PE Bakers Pty Ltd v Yehuda (1988) NSWLR 437, where it was held that certain orders of the Land and Environment Court relating to development conditions on land amounted to a judgment in rem.

15. Counsel for the defendants seem to take the bold leap that, because declaratory judgments relating to premises have been held to amount to judgments in rem (at least in the context of estoppel), it follows that any action where declaratory relief is sought is an action in rem. So stated, the proposition cannot be sustained. The significance of decisions in the context of estoppel arises because it has long been held that (per Hope JA in PE Bakers at 442) -

Estoppels resulting from judgments in personam bind only the parties to the proceedings and their privies; they do not bind other parties who may re-litigate the same issues in other proceedings. On the other hand, estoppels arising from judgments in rem bind the whole world, although the estoppels do not extend to every issue decided in the proceedings.

16. What is sought to be litigated here arises from statements made by the defendants, alleged to be misleading. Although such conduct could give rise to an action in tort, the plaintiffs at present seek only a declaration. Such an action, it seems to me, is clearly an action in personam. A judgment at the end of the day would be that the conduct would be proved, or not, and that the conduct if proved, would amount to misleading or deceptive conduct, or not. This hardly answers the description of a judgment in rem adopted by Hope JA in Spencer-Bower and Turner, Res Judicata 2^nd ed (1969) at 213 that -

A judicial decision in rem is one which declares, defines, or otherwise determines the status of a person, or of a thing, that is to say, the jural relation of the person, or thing, to the world generally, and therefore is conclusive for, or against, everybody, as distinct from those decisions which purport to determine the jural relation of the parties only to one another, and their personal rights and equities inter se, and which, therefore, are commonly termed decisions in personam.

17. The Master, it seems to me, quite properly rejected the argument that this action could not properly be commenced in this Court and served interstate in respect of conduct in New South Wales because it was an action in rem.

18. The final argument of the defendants is that this Court lacks jurisdiction to grant declaratory relief in respect of conduct said to be contrary to the Trade Practices Act. This, it is said, is due to the effect of s 163A of that Act. Section 163A(1) provides that -

163A Declarations and orders

(1) Subject to this section, a person may, in relation to a matter arising under this Act, institute a proceeding in a court having jurisdiction to hear and determine proceedings under this section seeking the making of:

(a) a declaration in relation to the operation or effect of any provision of this Act other than the following provisions:

(i) Division 2, 2A or 3 of Part V;

(ia) Part VB;

(ii) Part XIB;

(iii) Part XIC; or

(aa) a declaration in relation to the validity or any act or thing done, proposed to be done or purporting to have been done under this Act; or

(b) an order by way of, or in the nature of, prohibition, certiorari or mandamus;

or both such a declaration and such an order.

19. Section 163A(3A) provides that -

(3A) In so far as this section has effect as a law of the Commonwealth, the Federal Court has jurisdiction to hear and determine proceedings under this section.

20. Section 86(2) of the Trade Practices Act confers a general jurisdiction on State and Territory Supreme Courts -

with respect to any matter arising under Part IVA or IVB or Division 1, 1A or 1AA of Part V in respect of which a civil proceeding is instituted by a person other than the Minister or the Commission.

The defendants argue that as the power to make declarations in s 163A(1) is not found in any of those parts of the Act where jurisdiction is conferred on this Court by s 86(2), it follows that the grant of jurisdiction in s 163A(3A) to the Federal Court must be seen as an exclusive grant of jurisdiction.

21. In respect of this argument the Master said at [21] that -

Subsection 163A (3A) does not, in my opinion, deprive this Court of jurisdiction to grant declaratory relief in the circumstances of the present action, even if the declarations sought are seen as relying upon the section as opposed to the general jurisdiction of this Court under the Supreme Court Act 1933 (ACT) and under O 29 r 5.

22. With respect to the Master, while I agree with his ultimate conclusion that this Court may exercise jurisdiction with respect to the pleaded claim in so far as it seeks a declaration that certain conduct amounted to misleading or deceptive conduct, I would adopt a different process of reasoning. It seems to me that the argument that the s 163A jurisdiction is exclusively vested in the Federal Court by s 163A(3A) is sound, but there is authority to support the proposition that the type of action here pleaded is not an action that invokes the s 163A jurisdiction.

23. The Federal Court has in a line of cases drawn a distinction between declarations going to the operation of certain provisions of the Act (s 163A(1)(a)) or the validity of things done under the Act (s 163A(1)(b)), and declarations as to whether particular conduct in trade or commerce has breached a provision of the Act. In Westpac Banking Corporation v Northern Metals Pty Ltd (1989) ATPR ¶40-953, Davies and Spender JJ struck out a claim purportedly based on s 163A(1) seeking a declaration that the bank had breached the Act, saying at 50,417 -

Section 163A(1) is concerned with the Act itself, with its provisions, their interpretation and effect, and with the validity of things done or proposed to be done under the Act. The provision is not concerned with whether particular conduct in trade or commerce is conduct which has breached a provision of the Act.

24. In Polgardy v Australian Guarantee Corporation Ltd [1981] FCA 26; (1981) 34 ALR 391, Toohey J succinctly stated at 395 that -

... a reading of s 163A in its entirety and a consideration of its relationship to the Act suggest strongly that it was not intended to apply to civil litigation under the consumer protection provisions of the Trade Practices Act.

25. These views have been endorsed by Foster J in FAI General Insurance Co Ltd v RAIA Insurance Brokers Ltd [1992] FCA 219; (1992) 108 ALR 479 at 507).

26. It seems to me that, while the defendants are correct in asserting that the jurisdiction to grant declaratory relief pursuant to s 163A of the Trade Practices Act is vested exclusively in the Federal Court, the jurisdiction sought to be invoked by the plaintiffs in this action is not the jurisdiction conferred by s 163A.

27. Accordingly, it seems to me that the Master was correct in dismissing the notice of motion, and the appeal should be dismissed.

28. There was a further issue agitated in the original notice of motion, which sought orders to suppress the contents of an affidavit that had been served by the plaintiffs on the defendants. In fact, the affidavit had never been filed by the court, as it was requisitioned by the Registry due to certain procedural defects and, accordingly, it was unnecessary to make any orders. The defendants argue that, even if they are unsuccessful on the appeal, the Master should not have ordered them to pay the plaintiffs' costs, as they were justified in seeking this relief.

29. The Master's decision to award costs is of course discretionary, and an appellate court will always be cautious in disturbing such an order. It seems to me that the real substance of the argument before the Master went to the question of the service of the proceedings, and the validity of the proceedings, and on this the Master found against the defendants, and so ordered costs. While the notice of motion did refer to another issue, and that other issue did not need to be agitated due to a misapprehension as to whether the affidavit had been filed, it seems to me that the Master was quite justified in ordering the defendants to pay the plaintiffs' costs of the notice of motion in the ordinary way, the defendants having been unsuccessful in their challenge.

30. The appeal should be dismissed with costs.

I certify that the preceding thirty (30) numbered paragraphs are a true copy of the Reasons for Judgment herein of his Honour, Justice Connolly.

Associate:

Date: 29 October 2004

Counsel for the plaintiffs: Mr DJ Fagan SC with Dr R O'Hair

Solicitor for the plaintiffs: Capital Lawyers

Counsel for the 1^st, 2^nd, 3^rd, 4^th,

5^th and 7^th defendants: Mr MK Conrick

Solicitor for the 1^st, 2^nd, 3^rd, 4^th,

5^th and 7^th defendants: Phillips Fox

Date of hearing: 12 October 2004

Date of judgment: 29 October 2004