Hine v New South Wales Land and Housing Corporation [2008] FCA 62 (4 February 2008)

Last Updated: 12 February 2008

FEDERAL COURT OF AUSTRALIA

Hine v New South Wales Land and Housing Corporation [2008] FCA 62

COURTS – jurisdiction – federal claims hopeless but not colourable, in the sense that they were made for the improper purpose of fabricating jurisdiction – once federal jurisdiction attracted, it remains, even though federal matters abandoned

Constitution of the Commonwealth of Australia ss 76(ii) and 77(i)

Moorgate Tobacco Company Ltd v Philip Morris Ltd [1980] HCA 32; (1980) 145 CLR 457
Beck v Spalla [2005] FCAFC 82; (2005) 142 FCR 555
Burgundy Royale Investments Pty Ltd v Westpac Banking Corporation (1987) 18 FCR 212
Unilan Holdings Pty Limited v Kerin (1993) 44 FCR 481

‘Federal jurisdiction and the jurisdiction of the Federal Court of Australia in 2002’ (2002) 23 ABR 29





















ROBERT HINE AND CPR PROPERTY PTY LTD v NEW SOUTH WALES LAND AND HOUSING CORPORATION AND STATE OF NEW SOUTH WALES
NSD 465 OF 2007

GRAHAM J
4 FEBRUARY 2008
SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NSD 465 OF 2007

BETWEEN:	ROBERT HINE First Applicant CPR PROPERTY PTY LTD Second Applicant
AND:	NEW SOUTH WALES LAND AND HOUSING CORPORATION First Respondent STATE OF NEW SOUTH WALES Second Respondent

JUDGE:	GRAHAM J
DATE OF ORDER:	4 FEBRUARY 2008
WHERE MADE:	SYDNEY

THE COURT:

1. Orders that the further Amended Notice of Motion filed 19 November 2007 be dismissed.

2. Orders that the respondents pay the applicants’ costs of the motion.

3. Directs the respondents to serve any request for further and better particulars of the Further Amended Statement of Claim on or before 18 February 2008.

4. Directs that the applicants serve a reply to any request for further and better particulars on or before Wednesday 19 March 2008.

5. Directs the respondents to file and serve Defences on or before Thursday 24 April 2008.

6. Orders that the applicants be referred to the Registrar for referral to a solicitor and also a barrister on the pro bono panel for legal assistance in relation to the proceeding up to and including the commencement of the trial in the matter.

7. Orders that the matter stand over for directions at 9.30am on Monday 28 April 2008.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NSD 465 OF 2007

BETWEEN:	ROBERT HINE First Applicant CPR PROPERTY PTY LTD Second Applicant
AND:	NEW SOUTH WALES LAND AND HOUSING CORPORATION First Respondent STATE OF NEW SOUTH WALES Second Respondent

JUDGE:	GRAHAM J
DATE:	4 FEBRUARY 2008
PLACE:	SYDNEY

REASONS FOR JUDGMENT

1 What is presently before the Court is a Further Amended Notice of Motion filed by the respondents on 19 November 2007. In that Notice of Motion the substantive prayers for relief that have been sought were as follows:

‘1. That the proceedings be dismissed pursuant to the Federal Court Rules Order 20 Rule 5 or in the alternative;

2. That Judgment be entered in favour of the First and Second Respondents pursuant to Section 31A(2) of the Federal Court of Australia Act (1976) (Cth);’

2 The proceedings have a lengthy history. On 23 March 2007 the applicants Robert Hine and CPR Property Pty Limited, filed an Application seeking relief against ‘NSW Department of Housing’ as the respondent. That application was accompanied by a Statement of Claim also filed on 23 March 2007.

3 CPR Property Pty Ltd was a company with which Mr Hine was concerned, which in the past had contracts with the New South Wales State Government. Mr Hine, if I may refer to him alone, has a grievance in respect of his exclusion from government contracting since about 2004.

4 At no stage has Mr Hine had a solicitor representing him, at least on the record. Following orders made pursuant to Order 80 rule 4 of the Federal Court Rules assistance has been provided by Mr Lancaster of counsel for the applicants. When the matter was before the Court on 10 May 2007 I granted leave to the first applicant, Mr Hine, as a director of the second applicant CPR Property Pty Ltd to represent the second applicant in the proceedings until further order. No further order has, as yet, been made in relation to the question of representation of the second applicant.

5 The original Application and original Statement of Claim were not in the form one might have expected if the documents had been drafted by a legal practitioner. For present purposes it is sufficient to note that the Application sought damages of $12.5 million from the respondent ‘AS A RESULT OF PERSONAL INJURY/DAMAGE TO ROBERT HINE AND HIS FUTURE EARNING CAPACITY AND CPR PROPERTY PTY LTD’.

6 The Application referred to claims under various provisions of the Trade Practices Act 1974 (Cth) (‘Trade Practices Act’), claims under the Fair Trading Act 1987 (NSW) and claims identified as ‘STATEMENT OF CLAIM – DIRECT V INDIRECT TORTS’.

7 The Statement of Claim provided something of a narrative of Mr Hine’s grievances in respect of his exclusion from government contracts. In paragraph 9 it included a sentence:

‘The Department of Housing, tortuously (sic) interfered with a sub contractor commercially defamed Robert Hine and CPR PROPERTY PTY LTD and breached the Trade Practices Act and Fair Trading Act.’

The Statement of Claim concluded with the words ‘The applicant claims the relief specified in the application’, before a disclosure that the pleading had been prepared by ‘ROBERT HINE AND CPR PROPERTY PTY LTD’.

8 On 10 May 2007 leave was granted to the applicants to file and serve an Amended Application and an Amended Statement of Claim on or before 6 June 2007. An Amended Application was filed on 4 June 2007 along with an Amended Statement of Claim. The Amended Application identified the respondents as ‘The Land and Housing Corporation and the State of New South Wales’. On 28 June 2007 I ordered that the name of the first respondent be changed from ‘The Land and Housing Corporation’ to ‘New South Wales Land and Housing Corporation’ and also ordered that ‘State of New South Wales’ be added as a second respondent.

9 Once again the Amended Application and Amended Statement of Claim sought relief for the applicants by way of damages in the sum of $12.5 million. Further references were made to claims under the Trade Practices Act and in the Amended Statement of Claim, paragraph 4 read:

‘4. The Respondent committed the tort of unlawful interference with the Applicant and in doing so breached sections 46(1), (a), (b) and (c) of the Trade Practices Act (1974) (Cth).’

10 It was at this stage that Mr Lancaster, of counsel, came into the matter to assist the applicants pro bono. On 30 October 2007, a Further Amended Application was filed, together with a Further Amended Statement of Claim. In his submissions, in opposition to the present application, counsel for the applicants said:

‘8. The claims made in the Further Amended Application ("FAA") and the Further Amended Statement of Claim ("FASC"), each filed on 30 October 2007, allege:

(a) causes of action in tort, that is, breach of duty to take care (paras 35-38 FASC), negligent misstatement (paras 39-47 and 48-56 FASC) and interference with contract (paras 57-66); and

(b) causes of action for damages under ss 42, 43 and 68 of the Fair Trading Act 1987 (NSW).’

Mr Lancaster’s submissions continued:

‘9. Had those been the only claims in an original pleading filed in this Court, the proceedings would not have raised a federal issue and the Court would not have had jurisdiction in the matter.

10. However, the March 2007 pleadings and the June 2007 pleadings each asserted federal causes of action: see, in particular, paras 5 and 8 of the Amended Application and para 4 of the Amended Statement of Claim. Those pleadings included bona fide claims made under the Trade Practices Act 1974 (Cth).’

11 Mr Tyndall of counsel, for the respondents, submits that the pleadings which claimed relief under the Trade Practices Act did not deal with a ‘matter’ which was a justiciable controversy. He submitted that the matter had never attracted federal jurisdiction. Mr Tyndall does not submit that the references to the Trade Practices Act in the original Application, the original Statement of Claim, the Amended Application and the Amended Statement of Claim were colourable in the sense that they were made for the improper purpose of ‘fabricating’ jurisdiction.

12 In the circumstances, the weight of authority seems to me to be against the respondent’s case on the present motion.

13 Section 76(ii) of the Constitution of the Commonwealth of Australia (‘the Constitution’) provides:

‘76. The Parliament may make laws conferring original jurisdiction on the High Court in any matter –

...

(ii.) Arising under any laws made by the Parliament:

...’

14 By s 77 of the Constitution, it was open to the Parliament to make laws with respect to such matters, defining the jurisdiction of any federal court other than the High Court. This court’s jurisdiction has been defined by the Federal Court of Australia Act 1976 (Cth), which was enacted in accordance with s 77(i) of the Constitution.

15 In his learned article on ‘Federal jurisdiction and the jurisdiction of the Federal Court of Australia in 2002’ (2002) 23 ABR 29, Allsop J said, at 34-35 under the heading ‘Matter’:

‘... The word has a wide meaning and is of particular relevance to understanding the width of federal jurisdiction as exercised by any relevant court and to understanding what is referred to as the accrued jurisdiction of any federal court, including the Federal Court.

The ‘matter’ is the justiciable controversy between the actors to it comprised of the substratum of facts and claims representing or amounting to the dispute or controversy between or amongst them. It is not the cause of action or the causes of action brought by the plaintiff. A justiciable controversy is identifiable independently of proceedings brought for its determination. It is not characterised by the form of the proceedings. It is the whole controversy in respect of which it is the function of the court (State or federal) exercising the judicial power of the Commonwealth to quell. It is the ‘subject matter for determination in a legal proceeding’.’

(Footnotes omitted)

Later, at page 45, Allsop J said:

‘Once a non-colourable assertion is made, that clothes the court with federal jurisdiction, which, once gained, is never lost.’

Earlier, at page 41, his Honour said:

‘Once a party involved in a controversy asserts its position and that amounts to the assertion of a matter arising under a federal law ... the whole matter or controversy is federal.’

16 In Moorgate Tobacco Company Ltd v Philip Morris Ltd [1980] HCA 32; (1980) 145 CLR 457 at 476, Stephen, Mason, Aickin and Wilson JJ said:

‘However, the parties were in dispute as to when a matter "arises" within the meaning of s. 76(ii.) so as to attract the exercise of federal jurisdiction. The cases establish that federal jurisdiction is attracted if the right or duty based in a federal statute is directly asserted by the plaintiff or defendant, but not if the federal question arises only in some incidental fashion. ... If a federal matter is raised on the pleading federal jurisdiction is exercised, notwithstanding that the court finds it unnecessary to decide the federal question because the case can be disposed of on other grounds.’

17 Once a matter has attracted federal jurisdiction, it does not cease to be within the jurisdiction of this court if:

(a) the federal question is decided adversely;

(b) the federal question is struck out;

(c) it is found not necessary to decide the federal question; or

(d) the federal part of the matter is settled (see Beck v Spalla [2005] FCAFC 82; (2005) 142 FCR 555 at 560 [25] – [26]).

18 In my opinion there was clearly a justiciable controversy raised by the proceedings as instituted by Mr Hine and CPR Property Pty Limited at least once the applicants identified appropriate respondents which were juristic animals. It could not be suggested that the claims as formulated by Mr Hine and CPR Property Pty Limited were fabricated for the improper purpose of attracting federal jurisdiction. There is no evidence to suggest that Mr Hine had any understanding that claims brought by him, under the Trade Practices Act sections that he relied upon, would be hopeless or would prove to be hopeless.

19 The cases make it clear that federal jurisdiction will not be attracted where the federal claim is ‘colourable’ (see Burgundy Royale Investments Pty Ltd v Westpac Banking Corporation (1987) 18 FCR 212 at 219; Unilan Holdings Pty Limited v Kerin (1993) 44 FCR 481 and Beck v Spalla at 560 [26]). In Burgundy Royale Investments Pty Ltd v Westpac Banking Corporation Bowen CJ, Morling and Beaumont JJ said at 219:

‘The position may have been different if the claims under the Act [referring to the Trade Practices Act 1974 (Cth)] had been "colourable" in the sense that they were made for the improper purpose of "fabricating" jurisdiction: see PH Lane, Lane’s Commentary on the Australian Constitution (1986), pp 367-368 and the cases there cited.’

20 In the foregoing circumstances I am of the opinion that the Further Amended Notice of Motion filed 19 November 2007 should be dismissed.

I certify that the preceding twenty (20) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Graham.

Associate:

Dated: 11 February 2008

Counsel for the Applicant:	R P L Lancaster
Counsel for the Respondents:	L R de V Tyndall
Solicitor for the Respondents:	Gregory Falk & Associates
Date of Hearing:	4 February 2008
Date of Judgment:	4 February 2008