3s « T JUDGMENT No. 224 21 CATCHWORODS PRACTICE - s.86A Trade Practices Act - transfer of matter to State Supreme Court - matter within Federal jurisdiction on pleadings but Federal claims appeared doomed to fail - whether "a matter for determination in the proceedings" - whether in the interests of justice to transfer. Trade Practices Act 1974 s.86A Jurisdiction of Courts (Miscellaneous Amendments) Act 1987 Helen Merkle & Anor. v. Volvo Australia Pty. Ltd. & Anor. Qid G9 of 1985 PINCUS J. BRISBANE 2_ OCTOBER 1987 IN THE FEDERAL COURT OF AUSTRALIA ) QUEENSLAND DISTRICT REGISTRY ) QLD G9 of 1985 GENERAL DIVISION ) BETWEEN: HELEN MERKLE and CONSTANTINE MERKLE Applicants AND: VOLVO AUSTRALIA PTY. LTD. First Respondent AND: SOUTH EASTERN TRUCKS PTY. LID. Second Respondent MINUTES OF ORDER JUDGE MAKING ORDER: PINCUS J. DATE OF ORDER: 2 OCTOBER 1987 WHERE MADE: BRISBANE THE COURT ORDERS THAT: NOTE: l. All matters for determination in this proceeding, namely application G9 of 1985 pending in this Court, be transferred to the Supreme Court of Queensland; Costs reserved on 10 September 1987 be taxed and paid by the applicants; The costs of the first respondent for today's application and appearances be taxed and paid by the applicants and by the second respondent with the intent that the first respondent may recover those costs as against either party but that between the applicant and the second respondent they be borne equally. r Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA ) QUEENSLAND DISTRICT REGISTRY ) QLD G9 of 1985 GENERAL DIVISION ) BETWEEN: HELEN MERKLE and CONSTANTINE MERKLE Applicants AND: VOLVO AUSTRALIA PTY. LTD. First Respondent AND: SOUTH EASTERN TRUCKS PTY. LTD. Second Respondent PINCUS J. 2 OCTOBER 1987 EX TEMPORE REASONS FOR JUDGMENT This is an application under s.86A of the Trade Practices Act 1974 inserted by the Jurisdiction of Courts (Miscellaneous Amendments) Act 1987, which provision came into force on 1 September 1987. The applicants seek to have transferred to the Supreme Court of Queensland a matter said to fall within the description in s.86A(1). The respondents to the application are also respondents in the principal proceedings and they resist the application, saying both that there is no jurisdiction to make an order for transfer and that, if there is such jurisdiction, it would be a wrong exercise of discretion to make such an order. It is necessary to deal with those contentions in some detail, but I should say as a preliminary comment that the case is one of some complexity, which has proceeded rather slowly in this Court and on which a considerable sum appears to have been expended to date by the parties; the most practical course seems to be to transfer it if that may lawfully be done, rather than to let the time and costs expended be wasted. The application was made on 15 March 1985, and on that day a statement of claim was filed. The application and statement of claim disclose that the case concerns the sale of a rather expensive vehicle which, according to the applicants' pleading, was sold to the first applicant by the second respondent, South Eastern Trucks Pty. Ltd. on 18 March 1982. It is unnecessary to set out further details of the allegations made in the statement of claim, other than to say that it sets up a case of misleading conduct under s.52 of the Trade Practices Act as to the characteristics of the vehicle, andalso sets up claims' under State law, that is, claims for breaches of contract. The second respondent, South Eastern Trucks Pty. Ltd., delivered its defence on 20 November 1985, and it admitted (in substance) that it agreed to sell the vehicle in question, and made a claim on that contract. Interlocutory steps of a rather elaborate kind have been taken, as I have mentioned. Voluminous particulars of the claim were sought and given. Mutual discovery was had and supplementary discovery. An order was obtained for trial on affidavit. The applicants have filed a number of affidavits intended for use at the trial. They were slow in filing those affidavits and did not comply with time limits set. As a consequence of that, on 20 August 1987 I made an order that no further affidavits be filed on behalf of the applicants after 3 September 1987. Counsel for the first respondent has expressed some anxiety about losing the benefit of that order and has suggested that, if a transfer is ordered, it should include a condition intended to preserve the effect of that order. It appears to me that, at least in general, 1t would be an intrusion into the jurisdiction of the Supreme Court, on ordering a transfer, to attempt in such a fashion to control that Court's disposition of the matter. Section B6A(3) (a) unequivocally requires that, where a matter is transferred to another court "further proceedings in the matter shall be as directed by the other court". More generally, it appears to me that 1t would be wrong to refuse an order of transfer for such a reason as suggested by Mr. Sheahan, namely a reason relating to the expected manner of disposition of the case by the Court to which the transfer is made, because I should proceed on the assumption that that Court will dispose of the matter 1n a just and proper way. That ais, I should not attempt to control its disposition of the matter directly or otherwise; I have no power to do that; nor should I make any assumption that the disposition of the matter in that Court will be unfair to any party. The argument of counsel is based on the concession that, as against the first respondent, the affidavits filed either make no case or no substantial case under the Trade Practices Act. A case is made, however, against the second respondent and it is the claim against the second respondent which has given rise to the present difficulty. On 16 July 1987, over two years after the statement of claim was delivered, counsel for the second respondent, South Eastern Trucks Pty. Ltd., told me during an interlocutory hearing that documents had come to light that satisfied the second respondent's advisers that the company did not enter into the contract mentioned in the pleadings, and that that contract appeared to have been entered into by a partnership trading as South Eastern Trucks. I have been informed that the second respondent was incorporated before the contract was made, by the principals of the partnership, but unfortunately for the applicants 1t 1s said that it was the partnership, not the company, which entered into the contract. I gather that that now appears to be common ground. Pursuant to leave given, an amended defence was delivered on 27 August 1987, in effect withdrawing the admission which had been made by the second respondent and setting out that there was no contract between that company and the applicants. It is, of course, unfortunate that the matter came to light at sucha late stage but the second respondent no doubt would desire to take advantage of the situation by getting rid of these proceedings completely. Were it not for the jurisdictional difficulty, namely that pursuing the same claim against those individuals who, while partners, made the contract, would not be possible in this court - were it not for that problem, such a mistake as has been made would be handled easily enough, no doubt, by this Court's simply removing the letters "Pty. Ltd." from the title of the proceedings, and in my experience such orders have been made to meet similar situations. Were it not for the jurisdictional difficulty, the error which has been made would not cause any serious hold-up in the proceedings. But if, on application made, the proceedings were amended so as to make a claim against the natural persons in respect of the misleading conduct alleged, it would seem clear enough that the claim would be beyond the jurisdiction of this Court. It is for that reason that counsel for the applicants has made this application, and he has suggested that it would be conducive to a just disposition of this dispute between the parties to transfer the matter to the Supreme Court. It has been argued on behalf of the respondents that such a transfer would not be within the jurisdiction of this Court, for the reason that the condition in s.86A(1)(b) is not satisfied. It appears desirable to set out the whole of s.86A(1), which says: "Where - (a) a civil proceeding instituted (whether before or after the commencement of this section) by a@ person other than the Minister or the Commission is pending in the Federal Court; and (b) a matter for determination in the proceeding arose under Division 1 or 1A of Part V, the Federal Court may, subject to sub-section (2), upon the application of a party or of the Federal Court''s own motion, transfer to a court of a State or Territory the matter referred to in paragraph (b) and may also transfer to that court any other matter for determination in the proceeding." It is argued on behalf of the respondents that there has not been, and is not, any matter for determination in the proceeding under Division 1 or 1A of Part V. Mr. Morris for the applicants says that the word "arose" 1s to be contrasted with the present tense used in paragraph (a) of the sub-section and that it is enough if, either at the time of the transfer or at any earlier time, such a matter arose for determination. At first sight there is much to be said for Mr. Morris' contention. However, I note that the terms of the grant of power to transfer assume that at least the matter mentioned in para.(b) will be transferred; there may or may not be transferred with it any other matter for determination in the proceeding. That is, the latter part of subs.(1) seems to be drawn on the assumption that there is, at the time of the transfer, still in existence such a matter as mentioned in (b). It appears to me, however, unnecessary to resolve that question as I am satisfied that on either construction of para.(b) there is a matter for determination of such a kind as to satisfy that paragraph. The parties are, in substance, at one that that matter for determination is either very likely or certain to be resolved in a particular way; but that does not mean that the matter has ceased to exist. I am therefore of the opinion that there is jurisdiction to transfer. Amore difficult question is whether it is a proper exercise of discretion to do so. It is pointed out on behalf of the respondents that the choice is not simply between the applicants starting again as plaintiffs in the Supreme Court, on the one hand, and having the matter transferred, on the other. It is said that if they do not get their transfer, they simply may not pursue the matter further, and the case may be over. It is also argued, by Mr. Sheahan on behalf of the first respondent, and the argument has substance, that the whole difficulty 1s no fault of the first respondent, and that the first respondent should not suffer as a result of the wrong admission which was made by the second respondents. On the other hand, and without attempting to predict how the Supreme Court would deal with the matter, it seems possible that the case can proceed in the Supreme Court, without any more difficulty or cost than it would have done if it had proceeded in this Court - that is, than it would have done if the error had never been made. Whether the Supreme Court would allow such an amendment as is referred to above is, of course, entirely a matter for that Court. Nevertheless, it is true that the course advocated by Mr. Morris on behalf of the applicants seems to be the only way to avoid the result that if the applicants wish to pursue the matter, all the elaborate interlocutory steps taken must be repeated elsewhere. To the ordinary person, such an outcome might seem absurd. Looking at the matter from a lawyer's point of view, of course, the second respondent is an entity quite different from South Eastern Trucks, which 1s the business name of the principals of the second respondent; but I am not obliged to ignore the fact that, commercially, precisely the same interests are involved. I am of the view that within the meaning of s.86A(1), it is in the interests of justice that the matter be determined by the Supreme Court. To summarise, without pretending to complete accuracy, what has happened is simply this: a case has been brought into this Court, which the parties helieved to be within the jurisdiction of the Court, and, on the face of the pleadings, it is. However, it appears that the matter should not have pursued in this Court, but in the Supreme Court. The error is correctable and should in fairness be corrected. The whole matter on transfer will be within the jurisdiction of the Supreme Court, and it will, of course, have the right to deal with all questions of costs. The costs of this application, however, are to be dealt with here. As to the costs reserved on 10 September 1987, that is, the costs of the hearing on that date, I order that the said costs be taxed and paid by the applicants. As to the costs of today's application, I make the following order: that the costs of the first respondent relating to the application be taxed and paid by the applicants and by the second respondent, to the intent that the first respondent may recover those costs against either party, but that as between the applicants and the second respondent the burden shall be borne equally. é the gecend-be © preceding --mig' he reasens for i. cf His Honcur f tevtee 7 OTS A ae ; Associate Decd 2 Octeter 1987