Boren JUDGME CATCHWORDS PRACTICE & PROCEDURE - leave to serve outside jurisdiction denied in previous proceedings in Federal Court - application to transfer to Supreme Court under s.86A Trade Practices Act on ground that Supreme Court can authorise service — construction of Supreme Court rules Pt 10 r 1(1)(£),(i), rv 1(2) - whether transfer would be "in the interests of justice". Trade Practices Act 1974 s.86A Supreme Court rules Pt 10 r 1(1)(£),(i), v 1(2) Angus & Coote Pty Ltd v. Qantas Airways Ltd [1979] 2 NSWLR 398 ELDERS IXL LIMITED & ORS. v. LINDGREN PTY LIMITED & ANOR. No. G255 of 1987 4 AM AY IDO GT PIAL GP0e FEDERAL GOURT. OF "OV AUSTRALIA FRNCIPAL AEGISTRY CORAM: FOX J. 17 MAY 1988 SYDNEY IN THE FEDERAL COURT OF AUSTRALIA) ) NEW SOUTH WALES DISTRICT REGISTRY) No. G255 of 1987 ) GENERAL DIVISION ) BETWEEN: ELDERS IXL LIMITED F.J. WALKER LIMITED THE ABERDEEN BEEF CO. PTY. LIMITED Applicants AND: LINDGREN PTY. LIMITED Respondent AND: LINDGREN PTY. LIMITED Cross Claimant AND: GUNZE LIMITED Cross Respondent MINUTE OF ORDER JUDGE MAKING ORDER: FOX J. DATE OF ORDER: 17 May 1988 WHERE MADE: - Sydney THE COURT ORDERS THAT: 1. The application be dismissed, with costs. 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) No. G255 of 1987 ) GENERAL DIVISION ) BETWEEN: ELDERS IXL LIMITED F.J. WALKER LIMITED THE ABERDEEN BEEF CO. PTY. LIMITED Applicants AND; . LINDGREN PTY. LIMITED Respondent AND: LINDGREN PTY. LIMITED Cross Claimant AND: GUNZE LIMITED Cross Respondent CORAM: FOX J. DATE: 17 MAY 1988 REASONS FOR JUDGMENT FOX J. This is an application by way of notice of motion by the respondent Lindgren Pty. Limited ("Lindgren") to transfer the proceedings to the Supreme Court of New South Wales. The ground of the application is that that Court can authorise the service overseas (probably in Japan) of a cross-claim instituted by the respondent against Gunze Limited (a company apparently resident in Japan), this being a course which I held in the same proceedings was not authorised by the rules of this Court, reliance having been placed on O 8 r l(a) and (g) (unreported, 24 December 1987). It is intended, and must be the case, that the proceedings then be dealt with fully, to completion, in the Supreme Court. The application is opposed by the applicant in the principal proceedings. Reliance is placed on s.86A of the Trade Practices Act, 1974 ("the Act") which was introduced last year. It enables a transfer such as that which is sought to be made. Its operation is assisted in this case by the jurisdiction vested at the same time in the Supreme Court by s.86 of the Act, enabling it to deal with matters arising under Division 1 of Part V of the Act. The power in the Court to order a transfer is discretionary, but is also subject to limitations, the one relevant for present purposes being that it. must appear to the Court that "it is otherwise in the interests of justice that the matter be determined by the (Supreme Court)" (s.86A(2)(b)). I hesitate to rule upon the proper construction of the rules of another Court, but there was naturally at the forefront of the argument a submission that paragraphs (f) and (i) of Pt 10 x 1(1) of the rules of the Supreme Court authorise the service in question. Paragraphs (f) and (i) both have an equivalent in this Court, but it is submitted that the presence of sub-rule (2) of col in Pt 10 of the Supreme Court rules, which has no equivalent in the Federal Court rules, enables a construction of the rules in the former court which will empower it to authorise service outside the jurisdiction. In my view, however, that interpretative rule does not produce the result sought. There is no need at this juncture to say more of the process intended to be served than that it is a claim for breach of contract in relation to the sale of the goods (plastic covers or "pouches" to contain meat) which under the contract alleged by the applicant in the principal proceedings were supplied under contract to it by the respondent, and found to be defective. The complaint sufficiently appears from paragraph 13 of the cross-claim (it was filed on 2 October of last year): "13. The Cross Claimant asserts against the Cross Respondent that if the claimants suffered the losses claimed for the reasons claimed in Annexure "A" then these losses were the result of the failure of the Cross Respondent to sell to the Cross Claimant pouches and pouch tubing within the performance requirements specified in Paragraph (7) herein." Apart from an order for costs, the relief sought is expressed as follows: "1. An order that the Cross Respondent indemnify it against any liability for damages and costs found against it in favour of the claimants in these proceedings." Pt 10 r 1(1)(£) is as follows: "1(21) Subject to rule 2, originating process may be served outside the State in the following cases - (£) Where the proceedings are for contribution or indemnity in respect of a liability enforceable by proceedings in the Court;" What I said in the earlier application made it plain that the particular cross-claim is not a proceeding for "contribution or indemnity", but, because the equivalent rule in the Federal Court rules was not then relied upon (although it could have been, unaffected by any interpretative rule), any claim that it was was not pressed. Indeed, in the earlier proceedings counsel for the applicants conceded that the word "indemnity" as appearing in the cross-claim was used "in a colloquial sense, not a precise sense", The claim is an independent one in contract. On this occasion emphasis was placed on Pt 10 r 1(2): "1(2) Where an originating process to be served under subrule (1) is a cross-claim, the expression "the proceedings", where occurring in subrule (1), means the proceedings (whether under section 5 of the Law Reform (Miscellaneous Provisions) Act, 1946, or not) on the cross-claim." This sub-rule was introduced in 1982, and it is submitted, perhaps quite accurately, to overcome what was said by Sheppard J. (then a judge of the Supreme Court) in Angus & Coote Pty Ltd v. Qantas Airways Ltd [1979] 2 NSWLR 398 at p.404-5: "All these circumstances lead me to the conclusion, notwithstanding the absence of the word "indemnity" from s.5(1)(c) of the Law Reform Act, that r.1(f) was to have application only In relation to claims brought under that section. If that view be wrong, I nevertheless, think that the question of construction is doubtful and ought for that reason be resolved in favour of the foreigner, that is the proposed German cross-defendant; I refer again to The Hagen." The sub-rule made sure that the reference to "proceedings" not be confined, relevantly, to proceedings under s.5 of the Law Reform (Miscellaneous Provisions) Act, 1946 (NSW). This is not however the point with which we are presently concerned, unless the language of the paragraph, so far as it refers to "contribution or indemnity" is now to be given a very wide, almost colloquial, meaning. There is no justification for this course. Counsel asks, rhetorically, what cases are there of contribution or indemnity, when s.5 is excluded. It is argued that to give full meaning to the words "whether...or not" in sub-rule (2) it is necessary to include claims such as that sought to be pressed against Gunze Limited. This is not so. Cases of contractual indemnities, or rights to contribution, may possibly not come within the language used in para.(f) but even if this is so others arise under the general law, such as the case of a surety against a co-surety. (see Halsbury's Laws of England, [4th ed]) v.20 paras. 220 et seq; and paras. 307-309). In any case there seems to me to be no adequate basis for putting aside the ordinary legal meaning of well known terms. What Lindgren can properly claim against Gunze Limited is not, in any legal sense, an indemnity, or a contribution. It is a claim for damages for breach of its contract, which, so far as the evidence discloses, may be in very different terms, and subject to different limitations and qualifications than those alleged between the principal parties, and may have different consequences. The action does not depend on, or relate to a liability to a third party under a contract, but on the fitness of the goods. Paragraph (i) of the sub-rule is as follows: "1(1) Subject to rule 2, originating process may be served outside the State in the follwing cases - (i) where the proceedings are properly brought against a person served or to be served in the State and the person to be served outside the State is properly joined as a party to the proceedings." This paragraph is in the same terms (State being substituted for Commonwealth) as para.(g) of O 8 r 1 of the rules of this Court. I have already ruled against the present applicant on the construction of that rule. It is not necessary to repeat what I said. It is now submitted, however, that Pt 10 r 1(2) alters the construction of that rule. It is said that the first time the word "proceedings" appears in para.(i) it means the original proceedings and the second time the word "proceedings" appears it means the cross-claim and therefore as long as the cross-claim is properly brought that is sufficient. The argument therefore involves construing the word "proceedings" in two different ways in the same sub-rule. I do not think that it bears the construction submitted. The interpretative sub-rule does not affect the result. The result is that the present applicant will not benefit from the transfer sought. It is submitted that I should give it an opportunity to argue before the Supreme Court for a favourable construction of the rules and for an order permitting the service desired. If the matter appeared more arguable, I would personally be more than content to do this, but there is also the need for me first to be satisfied that the transfer would be "in the interests of justice" (s.86A(2)(b)). I have a clear view that it would not be. The main matter pressed is the cost and inconvenience of having to sue the cross—respondent in Japan, and the advantage of having it bound, in the one proceedings, by the findings of the Supreme Court. These are naturally important considerations. I do not of course know what the issues between the parties to the cross~claim would be, but it may fairly be taken at this stage, that disadvantages to Lindgren of the nature mentioned would at least be counter-balanced by disadvantage to Gunze Limited. I said in my earlier reasons for judgment that it seemed, on the scant evidence produced, that the relevant contract was concluded in Japan, that the goods were manufactured there, and that Japanese law is its proper law. These statements have not been challenged on this occasion. If it were sought to prove the cross-claim in Australia without recourse to Japanese law, but in reliance on the over-done presumption that the foreign law is the same as the law of Australia, there could be a quite unfair result. This course would probably only be used if the cross-respondent defaulted in entering an appearance or defence, but the default judgment, as well as being intrinsically unfair, could probably not be enforced in Japan (or so _ counsel anticipates). The possibility of default is indeed a matter for consideration. It may well be that the cross-respondent, if it filed a defence, would raise issues quite alien to those raised in the principal proceedings. The question of damages, and the measure of its computation may be quite different, and there may be no point in the cross-claimant continuing to limit its claim in the way set out in the cross-claim, unless, of course, it meant to disclaim any excess to which it was entitled. The cross claim is framed on a hypothetical basis, "if we are liable (which we say we are not) we claim against you". It is possibly because of that form of expression that there has been reliance upon it as seeking an indemnity. There is a further aspect in this connection, namely that the applicant was apparently only one of the purchasers from it of bags supplied by Gunze Limited. We do not know the position concerning the others. The common issues would include the make and condition of the bags, but different standards may have to be looked at. What is important is that the case be brought on for hearing without further delay. It was commenced on 12 June 1987, and a defence was filed on 29 July 1987. It has been before the Court for directions on a number of occasions, as well as being the subject of two notices of motion filed by the respondent. I am not satisfied that it is in the interests of justice that the tranfer take place. I mentioned in my earlier judgment that even if I had found that the rules of this Court were satisfied, I would not authorise service out of the jurisdiction, and, for all the reasons given, I would not now, were the exercise of my discretion to came into play, transfer the case to the Supreme Court to enable that course to be considered. It is finally put that if an application in the Supreme Court failed, Lindgren would agree to the matter being returned to this Court. I do not know whether this could be done, but it would in any event be wrong to transfer the case just to see if the rules of another Court can be construed so as to justify service not authorised by the rules of this Court. The application. should be dismissed with costs. Counsel for the Applicants: Solicitors for the Applicants: Counsel for the Respondent/ Cross Claimant: Solicitors for the Respondent/ Cross Claimant: Date of hearing: Date judgment delivered: I certify that this and the eight (8) preceding pages are a true copy of the Reasons for Judgment herein of his Honour Mr. Justice Fox. Associate: Jharm (oN bane Date: 17 May 1988 Mr D.M.J.Bennett QC, Mr D.Ryan Baker & McKenzie Mr L.G.Foster Malcolm Johns & Company Sydney; 27 April 1988 Sydney; 17 May 1988