Re St Justins Properties Pty Ltd; Gary Russell Slee; Glenys Lorraine Slee; Salko Cuplovic and Lucio Cuplovic v Rule Holdings Pty Ltd [1980] FCA 10 (14 February 1980)

FEDERAL COURT OF AUSTRALIA

Re: ST. JUSTINS PROPERTIES PTY. LTD.; GARY RUSSELL SLEE; GLENYS LORRAINE SLEE;
SALKO CUPLOVIC and LUCIO CUPLOVIC
And: RULE HOLDINGS PTY. LTD.
No. W.A. G1 of 1980
Practice and procedure

COURT

IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY
GENERAL DIVISION
Toohey J.

CATCHWORDS

Practice and procedure - proceedings commenced in State Supreme Court - similarity of relief sought under ss. 52, 53A, 87, Trade Practices Act, 1974 with common law issues - Jurisdiction of Federal Court - s.80, Trade Practices Act, 1974 - s.19, Federal Court Act, 1976 - inherent jurisdiction - Power of Federal Court to restrain action in State Supreme Court - s.23, Federal Court Act, 1976 - propriety of granting interlocutory relief.

HEARING

DARWIN
14:2:1980

DECISION

The applicants seek by way of interlocutory relief an order restraining the respondent from continuing proceedings in the Supreme Court of Western Australia in which the respondent is plaintiff and the applicants are defendants.

In the substantive application before this Court the applicants claim various heads of relief arising out of a lease transaction into which they entered (the first applicant as lessee, the others as guarantors) on 19 September 1977. It was a lease of buildings in a suburban shopping centre and the applicants plead representations made fraudulently or negligently which they say induced the lease and guarantee and which as well constituted a collateral warranty or condition precedent.

A declaration is sought that the lease has been validly rescinded by the applicants or that they are entitled so to rescind, a discharge from the guarantee, damages and a catch-all described as -

"further and other relief including but not restricted to variation of or termination of the subject lease, the Guarantee and any associated covenants".

No defence has yet been filed to that application.

The interlocutory application does not accurately identify the Supreme Court proceedings nor does it exhibit any of the pleadings before that Court. But it emerged that the respondent had sued both in the Local Court and in the District Court for rent claimed to have fallen due from time to time and that both actions had been transferred to the Supreme Court where they were consolidated.

In that consolidated action pleadings have closed and the matter is to appear in the call-over list for the March sittings of the Supreme Court. As already mentioned, the application throws no light on the issues before the Supreme Court but I was told by counsel that the applicants have filed a defence and counterclaim which raise "substantially the same issues which are the basis of the statement of claim in the Federal Court application". All other questions aside, if this Court is to be asked to determine a matter by consideration of similarity of issues involved in proceedings elsewhere, it is essential that all pleadings and other relevant material be before the Court to enable it to make that assessment.

The argument before this Court may be summarised thus. For the applicants it was said that the relief sought was available under ss.52 and 53A of the Trade Practices Act 1974 but was not available in the Supreme Court and that s.87 of the Trade Practices Act provides relief that cannot be granted by the Supreme Court. Put another way, the action in the Supreme Court, even though a counterclaim has been raised, will not dispose of the substantive issues between the parties.

The respondents argued that the Federal Court has no jurisdiction or power to grant the restraint asked for, that it was not apparent that the relief sought in this Court was unavailable in the Supreme Court and that it was questionable whether this Court has jurisdiction to deal with what counsel described as the "common law issues" raised by the statement of claim, in particular the allegations of fraudulent misrepresentation and breach of warranty. Finally it was said that the Supreme Court action being ready for hearing, this Court should not do anything to delay further the respondent's claim for rent.

At the forefront of the respondent's argument was the submission that the Federal Court has no jurisdiction to restrain a person from proceeding with an action properly begun in the Supreme Court. The proposition was amplified in this way.

1. Jurisdiction to make such a restraining order must be found in the Trade Practices Act.

2. There is a restraining power in s.80 of that Act but it is concerned with and limited to restraining breaches of the Act itself.

3. Section 80(2) of the Trade Practices Act, which confers a power to grant interim injunctions, is correspondingly limited.

4. It may be proper to look beyond the Trade Practices Act but only to an express relevant power in the Federal Court Act 1976; none exists.

5. Injunctions may only be granted to restrain conduct which is unlawful or in contravention of another person's rights.

6. The Federal Court has no power to restrain the Supreme Court from exercising its undoubted jurisdiction and however an order was framed this would be the effect of acceding to the present application.

The respondent's argument tended to blur the distinction between jurisdiction and power. Indeed there are three quite distinct concepts involved here, jurisdiction power and propriety. In my view it is not right to say that because the applicants seek relief under the Trade Practices Act, any power to grant the restraining order sought must be found in that statute. That Act spells out the jurisdiction of the Federal Court in the sense that it identifies subject matters with which the Court is authorised to deal.

"By "jurisdiction" is meant the authority which a court has to decide matters that are litigated before it or to take cognisance of matters presented in a formal way for its decision." (Halsbury's Law of England 4th Ed. Vol. 10 para. 715).

Given an appropriate subject matter, a question may arise as to the extent of a court's power to resolve the issues before it. That will depend upon the terms of the statute bringing it into existence, any other relevant statute, and upon the inherent jurisdiction of the court.

Counsel for the respondent denied the existence of an inherent jurisdiction in the Federal Court. The fact that a court is the creature of statute does not deprive it of inherent jurisdiction. A superior court may regulate its own proceedings (O'Toole v. Scott (1965) A.C. 939 at p.959) and protect itself from any action tending to impair its capacity to administer impartial justice (Packer v. Peacock [1912] HCA 8; (1912) 13 C.L.R. 577 at p.581). Some of the limits of that jurisdiction were noted in The Queen v. Forbes [1972] HCA 34; (1972) 127 C.L.R. 1 at p.8. It is unnecessary to explore this aspect further; the relevant power may be found in the Federal Court Act itself.

Section 19 of the Federal Court Act confers upon the Court -

"such original jurisdiction as is vested in it by law made by the Parliament, being jurisdiction in respect of matters arising under laws made by the Parliament".

And s.23 confers upon the Court -

"power, in relation to matters in which it has jurisdiction, to make orders of such kinds, including interlocutory orders, and to issue, or direct the issue of, writs of such kinds, as the Court thinks appropriate".

Here the distinction between jurisdiction and power is maintained.

In my opinion, if this Court has jurisdiction to deal with the matters placed before it by the applicants' substantive application, it may as a matter of power, restrain the respondent from proceeding further in the Supreme Court, at least until the litigation in this Court has been finalised. I do not think this view is inconsistent with anything said in Thomson Publications (Australia) Pty. Ltd. v. Trade Practices Commission (1979) A.T.P.R. 18,429.

Counsel for the respondent argued that it was contrary to public policy for one court to restrain proceedings in another. No authority was cited in support of that proposition and to me it is not self-evident, at any rate if the restraint is imposed on the litigant. After all that body of principles and rules we now know as Equity owes its existence very much to the limitations placed by the Chancellor upon those seeking to enforce a judgment obtained in a court of common law when it was inequitable to do so.

"Understand well that the Court of Chancery never asserted that it was superior to the courts of law; it never presumed to send to them such mandates as the Court of King's Bench habitually sent to the inferior courts, telling them that they must do this or not do that or quashing their proceedings - the Chancellor's injunction was in theory a very different thing from a mandamus, a prohibition, a certiorari, or the like. It was addressed not to the judges, but to the party." (Maitland's Lectures on Equity Reprinted 1947 p.9).

In Settlement Corporation v. Hochschild (1966) 1 Ch.10 it was accepted as axiomatic that the Chancery Division could restrain the prosecution of proceedings before a French court.

"It is not disputed that the court has jurisdiction to restrain the prosecution of proceedings before the foreign court, because it is a jurisdiction which applies in personam against a party and does not involve conflict between the tribunals of the two countries. But it is only exercised very rarely, with great caution, to avoid even the appearance of interfering with the foreign court, and if the foreign action is vexatious and useless." (per Ungoed-Thomas J. at p.15).

Counsel further argued that an injunction may be granted only to restrain action which is unlawful or in contravention of the rights of another. That, I think, is an unduly narrow statement of the position, at least as it relates to interlocutory injunctions. The power to grant such injunctions is often expressed in terms of what is necessary or convenient or, in the case of the Federal Court, when it is appropriate. Such an injunction may be granted to preserve the status quo because that may be the best means of ensuring that the issues between the parties are resolved and justice accordingly done.

It is unnecessary to consider whether all causes of action pleaded and all relief sought by the applicants are within the competence of the Federal Court. That is, it is unnecessary to resolve the submission based upon the existence of common law issues. Likewise there is no need to consider the extent of the judicial implied incidental power discussed by Northrop J. in Adamson v. West Perth Football Club (Inc.) (1979) A.T.P.R. 18,445. I am satisfied that in the main, the matters pleaded by the applicants are within ss.52 and 53A of the Trade Practices Act, hence within the jurisdiction of this Court. Jurisdiction and power exist.

It was said by the respondent that the appropriate course for the applicants to follow was to apply to the Supreme Court to seek a stay of those proceedings. That may well be so but the applicants have not followed that course and it is necessary to deal with the application now before this Court.

The real question here is the propriety of making the order sought by the applicants. It was the respondent who initiated action in the Local Court and in the District Court at an early stage after rent allegedly fell due.

"To restrain a man from proceeding with an action which prima facie he has a right to bring and to prosecute is a very serious thing."
(In re Connolly Brothers Limited (1911) 1 Ch. 731 per Fletcher Moulton L.J. at p. 746).

Not only were those actions begun some time ago but the applicants have pleaded to them, at any rate to the consolidated action, by way of defence and counterclaim. And they have done so, according to their counsel, in a way that raises substantially the same issues that are before this Court. I am not persuaded, indeed it is fair to say that no real attempt was made to persuade me, that the issues between the parties cannot be resolved by the Supreme Court. Although the statement of claim in the Federal Court invokes the language of ss.52 and 53A of the Trade Practices Act, the claim presented is essentially one based in tort and contract.

Counsel for the applicants did refer to the broad powers conferred by s.87(2) of the Trade Practices Act. But at least some of the relief authorised by that sub-section is within the competence of the Supreme Court. The onus lay upon the applicants to demonstrate that relief vital to their case fell outside that competence; this they failed to do.

The consolidated action in the Supreme Court is ready for trial, subject to the availability of a hearing date. No sufficient reason has been advanced why this Court should now restrain the respondent from carrying to finality the proceedings it has begun elsewhere.

The application will be dismissed.