Woodham & Anor v Lander & Ors [2004] ACTSC 34 (28 May 2004)

Last Updated: 23 June 2004

GEOFFREY KENNETH WOODHAM & ANOR v LYN LANDER & ORS

[2004] ACTSC 34 (28 May 2004)

PROCEDURE - jurisdiction - interstate service - setting aside - cross-vesting of jurisdiction

TRADE PRACTICES - declaration - whether within exclusive jurisdiction of Federal Court - whether Territory Court has jurisdiction

Trade Practices Act 1974 (Cth),

Fair Trading Act 1987 (NSW)

Supreme Court Rules, Order 13 rule 17

Service and Execution of Process Act 1992 (Cth), s 15

Jurisdiction of Courts (Cross-vesting) Act 1993, s 5

Australian Constitution, s 51(xxiv)

Fair Trading Act 1992

Supreme Court Act 1933

Stevens v Head [1993] HCA 19; (1993) 176 CLR 433

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

British South Africa Co v Companhia de Mocambique [1893] AC 602

Re Wakim ex parte McNally [1999] HCA 27; (1999) 198 CLR 511

Stack v Coast Securities (No. 9) Pty Limited [1983] HCA 36; (1983) 154 CLR 261

No. SC 767 of 2003

Judge: Master Harper

Supreme Court of the ACT

Date: 28 May 2004

IN THE SUPREME COURT OF THE )

) No. SC 767 of 2003

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 LIMITED

(ACN 033 182 341)

Second defendant

AND: DAVID McLEOD

Third defendant

AND: PUTUSO PTY LIMITED

(ACN 002 387 426)

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: Master Harper

Date: 28 May 2004

Place: Canberra

THE COURT ORDERS THAT:

1. The application be dismissed.

2. The applicants (the 1^st, 2^nd, 3^rd, 4^th, 5^th and 7^th defendants) pay the plaintiffs' costs of the application.

1. This is an application made by six of the eight defendants to the action, seeking an order that service of the originating application and statement of claim be set aside. The notice of motion also seeks an order that an affidavit sworn by the plaintiff be struck out and taken off the court file, or alternatively, that the affidavit be sealed and its inspection be prohibited other than by order. As it turns out, the affidavit had been lodged but rejected for filing and returned to the plaintiffs with a requisition: the requisition has not been complied with and the affidavit has not been filed, although a copy was made available to me without objection on the hearing of the application, to assist me in understanding the background. At this stage, the order sought in relation to the affidavit is unnecessary and is not pursued.

2. As the argument on behalf of the applicant defendants developed on hearing and through subsequent written submissions, it is now contended on their behalf that regardless of issues of service and jurisdiction, the claim by the plaintiffs is fundamentally flawed, and is not justiciable in this Court. A further order is accordingly sought that the action should be struck out in its entirety.

3. The action was commenced on 25 November 2003 by the first plaintiff in person, purporting to represent also the second plaintiff, a company of which he is the sole director. The statement of claim annexed to the originating application seeks declaratory but no other substantive relief.

4. By the time of the hearing of the application, the plaintiffs were represented by a solicitor and by counsel, and it was acknowledged that some amendments to the statement of claim would be required. The statement of claim asserts that certain of the defendants made representations to the first plaintiff which amounted to misleading or deceptive conduct in trade or commerce as defined, in respect of some representations, in the Trade Practices Act 1974 (Cth), and in respect of others, in the Fair Trading Act 1987 of New South Wales. The relief sought includes declarations that some of the defendants have engaged in misleading or deceptive conduct. Declarations are also sought that the plaintiffs (and some of the defendants) suffered loss as a result of the misleading or deceptive conduct, and that one of the defendants is under a duty to report specified matters to the Australian Stock Exchange. It is not clear whether the plaintiffs had the benefit of legal assistance in the preparation of the statement of claim, but there is no doubt that the pleading would benefit from professional input if the action is to proceed further.

5. The first plaintiff has a residential address in Canberra, but the second plaintiff and seven of the eight defendants have addresses in Sydney, in the State of New South Wales. The other defendant has its address in Brisbane, Queensland. The representations are said to have been made at a meeting in Sydney. Other than the residence of the first plaintiff, there is no apparent connection between any of the parties or the events surrounding the cause of action, and the Australian Capital Territory. Indeed, considerable doubt emerges from the affidavit material as to whether the first plaintiff in fact resides at the stated address, or in Canberra at all.

6. The applicants rely on Order 13 rule 17 of the Rules of this Court, which is in the following terms -

17 Setting aside originating process etc

(1) On application by a defendant to an originating application, the court may , by order -

(a) set aside the originating application; or

(b) set aside the service of the originating application on the defendant; or

(c) declare that the originating application has not been duly served on the defendant; or

(d) discharge an order giving leave to serve the originating application outside the ACT or confirming service of the originating application outside the ACT; or

(e) discharge an order extending the validity for service of the originating application; or

(f) protect or release -

(i) property seized, or threatened with seizure, in the proceedings; or

(ii) property subject to an order restraining its disposition or disposal, or in respect of which such an order is sought; or

(g) declare that the court has no jurisdiction over the defendant in respect of the subject matter of the proceedings; or

(h) in its discretion, decline to exercise its jurisdiction in the proceedings; or

(i) grant any other relief that it thinks appropriate.

(2) If an application for an order under subrule (1) is made by a defendant on whom the originating application was served outside Australia, the court may make the order on the ground that -

(a) the service of the originating application is not authorised by these rules; or

(b) the court is an inappropriate forum for the proceedings.

(3) An application for an order under subrule (1) shall be by notice of motion -

(a) filed within the time limited for entering an appearance; and

(b) bearing a note `The defendant's address for service is' that states the defendant's address for service.

(4) An application for an order under subrule (1) may be made without entering an appearance and is not taken to be a voluntary submission to the jurisdiction of the court.

7. 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 transfer of a proceeding. The applicable subsections of s 5 provide as follows:

Transfer of proceedings

5. (2) Where -

(a) a proceeding (in this subsection called the "relevant proceeding") is pending in the Supreme Court (in this subsection called the "first court"); and

(b) it appears to the first court that -

(ii) having regard to -

(A) whether, in the opinion of the first court, apart from this Act and a law of the Commonwealth or another State relating to cross-vesting of jurisdiction, the relevant proceeding or a substantial part of the relevant proceeding would have been incapable of being instituted in the first court and capable of being instituted in the Supreme Court of another State or Territory;

(B) the extent to which, in the opinion of the first court, the matters for determination in the relevant proceeding are matters arising under or involving questions as to the application, interpretation or validity of a law of that other State or Territory and not within the jurisdiction of the first court apart from this Act and a law of the Commonwealth or another State relating to cross-vesting of jurisdiction; and

(C) the interests of justice;

it is more appropriate that the relevant proceeding be determined by that other Supreme Court; or

(iii) it is otherwise in the interests of justice that the relevant proceeding be determined by the Supreme Court of another State or Territory;

the first court shall transfer the relevant proceeding to that other Supreme Court.

(7) A court may transfer a proceeding under this section on the application of a party to the proceeding, of its own motion or on the application of the Attorney-General of the Commonwealth or of a State or Territory.

8. The Jurisdiction of Courts (Cross-vesting) Act 1993 is replicated in largely identical terms in the legislation of the Commonwealth, the Northern Territory and each of the States. Each of the Acts vests original and appellate jurisdiction in respect of local non-criminal matters in the Federal Court of Australia and the Supreme Courts of the States and the Northern Territory. The ACT Act defines an ACT matter, relevantly, as a matter in which the ACT Supreme Court has jurisdiction otherwise than by reason of a law of the Commonwealth or of another State. The States have a definition in equivalent terms.

9. The Service and Execution of Process Act 1992 (Cth) replaced an Act with the same name of 1901, one of the first Acts passed by the Commonwealth Parliament, pursuant to the specific power conferred by s 51(xxiv) of the Australian Constitution. The 1901 Act contained a section, s 13, which provided that the Act did not confer jurisdiction on the issuing court unless it would have had that jurisdiction if the originating process had been served within its home State. Section 13 made it clear that the effect of the 1901 Act was to permit service elsewhere in Australia, outside the boundaries of the State, but not to extend jurisdiction. That is to say, the old rule continued to apply, that a State court had jurisdiction over a defendant served within its boundaries. This rule was not to be expanded to confer jurisdiction where service was validly effected under the Commonwealth statute outside those boundaries. Indeed, the 1901 Act went further: following interstate service under the Act, the plaintiff could not proceed further in the action without applying to the court for leave to proceed. To obtain leave, the plaintiff had to show a sufficient nexus with the place of issue.

10. The 1992 Act does not contain a provision equivalent to s 13 of the 1901 Act, nor does it require a plaintiff to obtain leave to proceed after interstate service.

11. By the time the 1992 Act came into effect, the cross-vesting scheme was in operation. It appears that the legislative intention was that a civil action could be instituted in any State or Territory Supreme Court, and that service of the originating process could be effected anywhere in Australia. The remedy available to a defendant sued in an inconvenient or inappropriate court was to make application to the issuing court for transfer of the action to another Supreme Court. The position was a little more complicated in relation to lower courts, but this need not be considered for the purposes of the present application. One can discern a legislative intent that an action brought in a court of general jurisdiction was not to be defeated on grounds related to geography. Indeed, the years following the passage of the legislation were marked by a considerable degree of forum-shopping, particularly after the March 1993 decision of the High Court in Stevens v Head [1993] HCA 19; 176 CLR 433, accepted for the next seven years as authority for the proposition that a court determining an interstate cause of action in tort should apply the law governing the assessment of damages applicable in the forum. The option was effectively closed when the court overruled this decision in John Pfeiffer Pty Ltd v Rogerson [2000] HCA 36; (2000) 203 CLR 503. Defendants sued in a forum which would have been unavailable prior to the Service and Execution of Process Act 2002 during the intervening period regularly, and with varying success, applied for transfer to other courts argued to be more appropriate; I have not been referred by counsel to, and have been unable to identify, any instance of a court of issue in such circumstances setting aside service for want of jurisdiction.

12. It is submitted on behalf of the applicant defendants that s 12 of the 1992 Act substantially reflects the provisions of s 13 of the 1901 Act. I cannot agree. It seems to me that effectively, the 1992 Act confers Australia-wide jurisdiction on each State and Territory Supreme Court. Transfer may be ordered pursuant to the cross-vesting legislation but this is done not on the basis that the court of issue lacks jurisdiction, but rather, that the court of transfer is the more appropriate court to hear the action.

13. The applicants submit that the plaintiffs have failed to comply with O.78 r.6. The rule is in the following terms -

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

(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 proceedings should be transferred under the Act.

(2) [Not relevant]

(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.

14. I should make it clear that there has been no application by the applicant defendants, or any other party, for an order for transfer of the action under the cross-vesting legislation to any other court. Although it is open to the Court to order a transfer of its own motion (Jurisdiction of Courts (Cross-vesting) Act 1993, subs 5(7)) such an order would not be within my powers as Master (O.61A r.1(k), O.78 r.4).

15. 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.

16. It may be noted that the NSW Fair Trading Act, in relation to misleading and deceptive conduct, is in relevantly identical terms to the Trade Practices Act 1974 (Cth), and the Fair Trading Act 1992 of this Territory. A finding that particular conduct was misleading or deceptive would not require specialised judicial skills, knowledge or experience likely to be found among judges of the Supreme Court of New South Wales but not of this Court.

17. The applicant defendants also submit that the plaintiffs, in asking for declarations that the actions of the defendants were misleading and deceptive, are effectively seeking a judgment in rem. The plaintiffs concede that actions in rem give rise to complexities which might be relevant to an application of the present kind, but the position of the plaintiffs is that the present action is an action in personam. The plaintiffs have made reference in their submissions to British South Africa Co v Companhia de Mocambique [1893] AC 602 but purely by way of noting that as the action is one in personam, there is no occasion for consideration of the rule in that case. The defendants have cited no authority in support of their submission that the relief sought in the action is in rem, and I cannot see any argument to the effect that it should be so regarded. The action appears to me very much one between the parties, and the relief sought is in the same category. A judgment in the action would give rise to a res judicata between the parties, but not against non-parties.

18. The final submission of the applicant defendants is that this Court lacks jurisdiction because of the provisions of s 163A of the Trade Practices Act 1974 (Cth), which, it is said, vests exclusive jurisdiction in the Federal Court of Australia in relation to certain of the declarations sought. Subsection 163A(1) provides as follows -

(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 [specified provisions not presently relevant]

(aa) a declaration in relation to the validity of 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. The section of the Trade Practices Act conferring jurisdiction on courts in matters arising under the Act is s 86, which vests jurisdiction generally in the Federal Court, and, subject to certain limitations, in the Federal Magistrates Court and the courts of the States and Territories. Specifically, jurisdiction is conferred on the courts of the Territories with respect to any matter arising under specified provisions of the Act in respect of which a civil proceeding is instituted by a person other than the Minister or the Commission (subs 86(2)). Section 52, which prohibits misleading or deceptive conduct, is one of the provisions in respect of which jurisdiction is conferred on this Court, as a court of the Territory. The High Court held in 1999 that the cross-vesting legislation was constitutionally incapable of vesting State jurisdiction in Federal courts, and that the provisions of the legislation which purported to do so were invalid: re Wakim ex parte McNally [1999] HCA 27; 198 CLR 511. The decision had no effect on the provisions of the legislation which vested the jurisdiction of other Australian courts in this Court, but it created significant practical difficulties for the Commonwealth. Following the decision, s 86 of the Trade Practices Act was amended by adding subs (1AA) which provided as follows:

(1AA) A reference in this section to this Act, or to a Part or Division of this Act, is a reference to this Act, or to that Part or Division, as it has effect as a law of the Commonwealth.

20. At the same time, a new subsection (3A) was added to s 163A, as follows -

(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.

21. It is the newly introduced subs 163A (3A) which, the applicant defendants submit, confers exclusive jurisdiction on the Federal Court and deprives this Court of jurisdiction to entertain an application for declaratory relief under the Trade Practices Act. The plaintiffs submit that the subsection does not have that effect, and is not inconsistent with s 86. The latter submission appears more soundly based: it is a long-standing principle that very clear words are required to displace the existing jurisdiction of a State or Territory court - see, for example, the remarks of Mason, Brennan and Deane JJ in Stack v Coast Securities (No. 9) Pty Limited [1983] HCA 36; (1983) 154 CLR 261 at 295-296. 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. It follows that I am not persuaded that this Court lacks jurisdiction to entertain the claim by the plaintiffs, or that any grounds have been made out for the setting aside under O.13 r.17 of the originating application or of service of the originating application on any of the applicant defendants. The application must be dismissed. The applicants (the first, second, third, fourth, fifth and seventh defendants) are to pay the plaintiffs' costs of the application.

I certify that the preceding twenty-two (22) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Master.

Associate:

Date: 28 May 2004

Counsel for the plaintiffs: Dr R O'Hair

Solicitor for the plaintiffs: Mr P R Glover

Counsel for the first, second, third,

fourth, fifth and seventh defendants: Mr M K Conrick

Solicitor for the first, second, third,

fourth, fifth and seventh defendants: Phillips Fox

Date of hearing: 12 March 2004

Date of judgment: 28 May 2004