CATCHWORDS Trade Practices Act - misleading and deceptive conduct - application for interlocutory injunction to restrain proceedings in Local Court - conduct in contravention of Part V of Trade Practices Act - whether Federal Court has exclusive jurisdiction Trade Practices Act 1974 ss. 75(1), 80(1), 82, 86. ALLPIKE HONDA PTY. LTD. & ORS. v. MARBELLUP NOMINEES PTY. LTD. & ORS. No. WA G28 of 1982 TOOHEY J. Perth 29 March 1983 IN THE FEDERAL COURT OF AUSTRALIA ) WESTERN AUSTRALIA DISTRICT REGISTRY) No. WA G28 of 1982 GENERAL DIVISION ) BETWEEN ALLPIKE HONDA PTY. LTD. First Applicant and JOHN WILLIAM ALLPIKE, ALLAN HENRY ALLPIKE, PETER ALLAN ALLPIKE, PATRICIA ALLPIKE and ROBYN ELIZABETH ALLPIKE Second Applicants and HAWKESDALE NOMINEES PTY. LTD. Third Applicant and MARBELLUP NOMINEES PTY. LTD. First Respondent and RAVENSWORTH PTY. LTD. Second Respondent and GUARDIAN ASSURANCE COMPANY LIMITED Third Respondent O R D_ £E R JUDGE MAKING ORDER Toohey J. DATE OF ORDER 29 March 1983 WHERE MADE Perth THE COURT ORDERS: 1. The second respondent be restrained until the trial of this application or until further order from proceeding in any way with action number 3466 of 1982 pending in the Local Court of Western Australia held at Perth in which the second respondent 1s plaintiff and the second applicants are defendants. 2. Liberty to the parties to apply on the question of the costs of these proceedings. IN THE FEDERAL COURT ) OF AUSTRALIA ) WESTERN AUSTRALIA ) No. WA G28 of 1982 DISTRICT REGISTRY ) GENERAL DIVISION ) BETWEEN: ALLPIKE HONDA PTY. LTD. First Applicant and JOHN WILLIAM ALLPIKE, ALLAN HENRY ALLPIKE, PETER ALLAN ALLPIKE, PATRICIA ALLPIKE and ROBYN ELIZABETH ALLPIKE Second Applicants and HAWKESDALE NOMINEES PTY. LTD. Third Applicant and MARBELLUP NOMINEES PTY. LTD. First Respondent and RAVENSWORTH PTY. LTD. Second Respondent and GUARDIAN ASSURANCE COMPANY LIMITED Third Respondent CORAM: TOOHEY J. 29 March 1983 REASONS FOR JUDGMENT This is a claim by way of interlocutory relief in which the second applicants seek to restrain the second respondent from proceeding with an action pending in the Local Court of Western Australia in which the second respondent is plaintiff and the second applicants are defendants. The application 1s based not on considerations of convenience, as 1s usually the case, but on the proposition that by reason of the proceedings taken in the Federal Court the Local Court is deprived of jurisdiction in respect of the matter before it. Before considering the arguments addressed by counsel in support of and against that proposition, it is necessary to say something of the proceedings themselves. The first applicant ("Allpike Honda") is a motor vehicle dealer. The second applicants ("the Allpikes") are variously directors and shareholders of Allpike Honda. The third applicant ("Hawkesdale") was set up as trustee for a superannuation fund for employees and officers of Allpike Honda. The first respondent ("Marbellup") carries on business as a financial, business and taxation consultant. The second respondent ("Ravensworth") 1s in the business of providing accounting, book-keeping and related services. The third respondent ("Guardian Assurance") 1s a general life and superannuation insurer. In essence Allpike Honda and the Allpikes contend that Marbellup represented to them that it would be beneficial for them to set up an internal superannuation fund for Honda Allpike's employees and that this should be arranged through life policies issued by Guardian Insurance on terms which Marbellup would arrange. Honda Allpike and the Allpikes contend that in the course of this advice representations and warranties were made which constituted misleading or deceptive conduct within ss.52 and 55A of the Trade Practices Act 1974. The applicants seek relief under various heads in relation to damage they claim to have suffered as a result of this advice and these representations. The action in the Local Court has been brought by Ravensworth against the Allpikes for fees rendered for book-keeping, accounting and other services. The applicants plead that these services were in connection with the superannuation scheme. The respondents deny this and say that the claim in the Local Court is "totally unrelated" to the matters before this Court. Sections 52 and 55A lie within Part V of the Trade Practices Act - "Consumer Protection". The entitlement of a person to recover damages for conduct done in contravention of Part V arises from s.82 of the Act. That section is to be found in Part VI - "Enforcement and Remedies". Section 86 confers jurisdiction on the Federal Court to hear and determine actions, prosecutions and other proceedings under Part VI : "... and that jurisdiction is exclusive of the jurisdiction of any other court, other than the jurisdiction of the High Court under section 75 of the Constitution". Section 75(1) of the Act provides that, save for an exception which is not relevant to these proceedings, Part V "... is not intended to exclude or limit the concurrent operation of any law of a State or Territory". The applicants' argument runs this way. Once an application is properly commenced in the Federal Court, that Court is seized with exclusive jurisdiction in all the matters that arise thereunder. In this respect it does not matter whether the jurisdiction of which the Federal Court becomes possessed is intrinsically federal, such as arises under the Trade Practices Act, or is federal in the sense that other matters are drawn in so far as they are necessary for the resolution of the matter primarily before the Court. The applicants further submit and plead that in pursuing its claim for fees Ravensworth 1s engaging in conduct that falls within s.80 of the Trade Practices Act, the section empowering the Federal Court to grant an injunction to restrain conduct in contravention of a provision of Part V. In particular the applicants rely upon para. (h} of s.80(1) which reads : "(h) being in any way, directly or indirectly, knowingly concerned in, or party to, the contravention by a person of such a provision". 5. Ravensworth denies that any conduct on its part in suing for fees can bring it within s.80 of the Trade Practices Act. To this the applicants reply that for the purposes of the present proceedings it is enough that issue has been joined on the question whether the accounting services related to the superannuation scheme. Although reference was made in argument to the pendent or accrued jurisdiction of the Federal Court, I do not think the present application raises the sort of questions that were discussed in Philip Morris Inc. v. Adam P. Brown Male Fashions Pty. Ltd. (1980-1981) 33 ALR 465, see also Muller v. Fencott (1981) 37 ALR 310. There is an allegation against Ravensworth, in direct terms, that in performing the services 1n question and in suing for fees for those services 1t 1s knowingly concerned in a contravention of a provision of Part V of the Trade Practices Act and injunctive relief is sought against it in that regard. In the end the allegation may not be sustained but it was not contended by the respondents that the allegation was not made bona fide or that an issue had not been genuinely raised. Affidavits have been filed in support of and in opposition to the allegation. It follows, in my view, that jurisdiction is conferred on this Court to hear and determine that part of the application relating to Ravensworth's action in the Local Court as being a proceeding under Part VI of the Trade Practices Act. That jurisdiction is exclusive of the Jurisdiction of the Local Court. The question then 1s whether, in these circumstances, s.75(1) of the Trade Practices Act operates to preserve the jurisdiction of the Local Court. The scope of s.75 was discussed by Mason J. in R. v. Credit Tribunal; ex parte General Motors Acceptance Corporation (1976-77) 137 CLR 545. At p.564 his Honour said : ",.. the terms of s.75(1) are open to the objection that they refer to the concurrent operation of State laws; they do not speak of the extent of the intended operation of the Commonwealth law. None the less, there 1s to be gathered from the sub-section a very clear expression of intention that the Trade Practices Act is not an exhaustive enactment on the topics with which it deals and that 1t is not untended to operate to the exclusion of State laws on those topics. As such it does not avoid any instance of direct inconsistency which may occur between the Trade Practices Act and the two South Australian Acts, but in accordance with all that I have said, it eliminates any suggestion of inconsistency otherwise arising". Of course Mason J. was concerned with the question of inconsistency between the provisions of State and Federal legislation. The issue was not whether the Supreme Court or any other court of South Australia was precluded from exercising jurisdiction under State legislation because of the Trade Practices Act and the exclusive jurisdiction conferred upon the Federal Court by s.86 of that Act. In the applicants' submission, s.75 operates so that in the event of a cause of action arising for which a remedy is available in the Federal Court or in a State court, nothing in the Trade Practices Act restricts the choice of the litigant from proceeding in either court, assuming that otherwise jurisdiction exists. But, the argument runs, if the choice is exercised by invoking federal jurisdiction, s.86 has the consequence that the Jurisdiction of the Federal Court becomes exclusive. And its exclusiveness extends not only to what counsel described as "the central federal component which creates the jurisdiction" but to "the peripheral related matters which are essential for its resolution". Counsel for the applicants was not prepared to go so far as to say that any cause of action which the respondents might have that was in any way related to the matters before the Federal Court were excluded from the jurisdiction of State courts. In his submission : "It 1s enough ... for us to say that we allege in these proceedings that the second respondent has been knowingly involved in, or has assisted, actions in breach of the Act and that we wish to have it restrained from any course of conduct which would allow it to reap the benefit of that". I do not agree that it is enough for the applicants to allege involvement on the part of Ravensworth. If it could be demonstrated that the allegation was an abuse of process it would be struck out. But the respondents do not say that and, as mentioned earlier in these reasons, the matter must be approached on the footing that the allegation 1s genuinely made. In these circumstances it 18 appropriate that an injunction be granted against Ravensworth until the trial of the proceedings in the Federal Court or until further order. In St. Justins Properties Pty. Ltd. v. Rule Holdings Pty. Ltd. (1980) ATPR 40-146 I sought to explain the basis for such an injunction and I need not repeat what was said there. I certify that this and the 7 preceding pages are a true copy of the Reasons for Judgment herein of his Honour Mr. Justice Toohey Sven peta Associate Dated: 29 March 1983