IN THE FEDERAL COURT OF AUSTRALIA _ ) AUSTRALIAN CAPITAL TERRITORY ) DISTRICT REGISTRY ) No. ACT G44 of 1995 GENERAL DIVISION ) ON APPEAL FROM A JUDGE OF THE FEDERAL COURT OF AUSTRALIA BETWEEN: PEGASUS LEASING LIMITED Appellant AND: CADOROLL PTY LIMITED CADOSHARE PTY LIMITED JAMES DOUGLAS BLAKE HAMERLEEN PTY LIMITED ALFRED NATHAN LESTER LESTER FIRTH ASSOCIATES PTY LIMITED JOHN WILLIAM FIRTH WALTRAME PTY LIMITED ZANDRA JOY BLAKE First Respondents ALLEGRA CORPORATION LIMITED ALLEGRA INVESTMENTS LIMITED Second Respondents MAUNTILL PTY LIMITED MICHAEL GEORGE SINCLAIR MARUTA PEARSON and MICHAEL MARKO ZIVKOVIC trading as FARNHAM SINCLAIR & ASSOCIATES Third Respondents CORAM: LEE, HIGGINS and TAMBERLIN JJ PLACE: CANBERRA DATE: 20 FEBRUARY 1996 CORRIGENDUM Amendment to the Reasons of Higgins J in the judgment delivered 20 February 1996:- Page 1, first sentence - change to read "I have had the advantage of reading in draft the reasons for judgment of Lee and Tamberlin JJ." Megan Noble Associate to Higgins J 5 March 1996 CATCHWORDS JURISDICTION OF COURTS - parallel proceedings - cross-vesting legislation - refusal of South Australian Supreme Court to transfer proceedings under cross-vesting legislation - refusal of Federal Court to transfer proceedings - whether equitable entitlement sufficient to warrant this court restraining exercise of legal right to continue proceedings in South Australia - whether contrary to interests of justice for South Australian proceedings to continue - undesirability of parallel streams of litigation with substantially the same issues of fact and law - unnecessary and onerous burden on all parties - possibility of conflicting findings of fact or law - possible perception of inconsistency - foreseeable waste if resources, time and expense - manifest "mischief" of duplicative proceedings - all matters of controversy between parties to be completely and finally determined on merits - whether contrary to principles of comity, federalism or equity - whether permits comprehensive determination - need for law reform PRACTICE AND PROCEDURE - effect of State and Territory laws on limitation period imposed by Trade Practices Act 1974 (Cth) - limitation period for cross-claim or set-off. Jurisdiction of Courts (Cross-Vesting) Act 1987 (Cth) Jurisdiction of Courts (Cross-Vesting) Act 1987 (SA) ss5(1) (4) Trade Practices Act 1974 (Cth) ss87, 82(2), 52(A) Fair Trading Act 1987 (NSW) ss72, 43 Companies Code (NSW) 1990 ss 169, 170, 171 Contracts Review Act 1980 (NSW) Federal Court Act 1976 (Cth) The Constitution s118 Limitation Act 1985 (ACT) s51 Limitation Act 1969 (NSW) s74 Limitation Act 1995 (NT) s8 Limitation of Actions Act 1994 (Qld) s42 Limitation of Actions Act 1936 (SA) s44 Limitation Act 1974 (Tas) s35 Limitation of Actions Act 1958 (Vic) s30 Limitation Act 1935 (WA) s46 Evers v Firth (1986) 10 NSWLR 22, cited Beecham (Australia) Pty Limited v Roque Pty Limited (1987) 11 NSWLR 1, cited CSR v New Zealand Insurance Co Limited (1995) 36 NSWLR 138, cited Societe Nationale Industrielle Aerospatiale v Lee Kui Jak [1987] 1 AC 871, cited National Holdings Pty Limited v Sentry Corporation (1989) 22 FCR 209, considered British Airways v Laker Airways [1985] 1 AC 58, cited Metall und Rohstoff AG v ACLI Metals Ltd [1984] 1 Lloyds Rep 598, cited Stack v Coast Securities (No 9) Pty Limited (1983) 154 CLR 261, cited Westpac Banking Corp v Eltran Pty Ltd (1987) 14 CLR 541, applied Atlantic Coast Line R.R. v Brotherhood of Locomotive Engineers (1970) 398 US 281, cited Mitchum v Foster (1972) 407 US 225, cited Bankinvest AG v Seabrook (1988) 14 NSWLR 711, applied Keen Mar Corporation Pty Ltd v Labrador Park Shopping Centre Pty Ltd & Anor (1988) 10 ATPR 40-853, cited Calmao Pty Ltd v Stradbroke Waters Co-owners Cooperative Society Ltd & Ors (1989) 21 FCR 28, cited Vink v Schering Pty Ltd & Ors (1991) 13 ATPR 41-064, cited McDonnell & East Ltd v McGregor (1936) 56 CLR 50, applied D Galambos & Son Pty Ltd v McIntyre (1974) 5 ATCR 10, cited Rv Just Juice (1992) 109 ALR 334, cited Commonwealth Trading Bank of Australia v Sidney Raper Pty Ltd (1975) 25 FLR 217, cited Wardley Australia Ltd & Anor v The State of Western Australia (1992) 175 CLR 514, applied Australia and New Zealand Banking Group Ltd v Larcos (1987) 13 NSWLR 286 Harris & Ors v Western Australian Exim Corporation (1994) 129 ALR 387 White v Eurocycle Pty Ltd & Ors (1994) 16 ATPR 41-351 Arrowcrest Group Pty Limited v Advertiser News Weekend Publishing Co Pty Limited, unreported, Supreme Court, Australian Capital Territory, Miles CJ, 19 July 1989, applied Sykes & Pryles, Australian Private International Law, (1991), 3rd edition Nygh, Conflict of Laws in Australia (1991), 5th edition Hart & Wechsler, The Federal Courts and the Federal System, (1988) 3rd edition On appeal from a Judge of the Federal Court of Australia PEGASUS LEASING LIMITED v CADOROLL PTY LIMITED and ORS Nos ACT G44, 45 and 46 of 1995 LEE, HIGGINS, TAMBERLIN JJ Sydney (Heard in Canberra) 20 February 1996 IN THE FEDERAL COURT OF AUSTRALIA ) AUSTRALIAN CAPITAL TERRITORY ) Nos. ACT G44, 45 DISTRICT REGISTRY ) & 46 OF 1995 GENERAL DIVISION ) ON APPEAL FROM A JUDGE OF THE FEDERAL COURT OF AUSTRALIA BETWEEN : PEGASUS LEASING LIMITED Appellant AND: CADOROLL PTY LIMITED CADOSHARE PTY LIMITED JAMES DOUGLAS BLAKE, HAMERLEEN PTY LIMITED ALFRED NATHAN LESTER, LESTER FIRTH ASSOCIATES PTY LIMITED JOHN WILLIAM FIRTH, WALTRAME PTY LIMITED ZANDRA JOY BLAKE, First Respondents ALLEGRA CORPORATION LIMITED ALLEGRA INVESTMENTS LIMITED Second Respondents MAUNTILL PTY LIMITED MICHAEL GEORGE SINCLAIR, MARUTA PEARSON and MICHAEL ZIVKOVIC trading as FARNHAM SINCLAIR & ASSOCIATES Third Respondents CORAM: LEE, HIGGINS, TAMBERLIN JJ PLACE: SYDNEY DATED: 20 FEBRUARY 1996 MINUTE OF ORDERS THE COURT: 1. The appeal be dismissed 2.The appellant pay the respondents' costs of the appeal. NOTE:Settlement and entry of orders is dealt with in accordance with Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA AUSTRALIAN CAPITAL TERRITORY DISTRICT REGISTRY GENERAL DIVISION CORAM: PLACE: DATED: LEE and Nos. ACT G44, 45 & 46 of 1995 ) ON APPEAL FROM A JUDGE OF THE FEDERAL COURT OF AUSTRALIA BETWEEN: PEGASUS LEASING LIMITED Appellant CADOROLL PTY LIMITED CADOSHARE PTY LIMITED JAMES DOUGLAS BLAKE, HAMERLEEN PTY LIMITED ALFRED NATHAN LESTER, LESTER FIRTH ASSOCIATES PTY LIMITED JOHN WILLIAM FIRTH, WALTRAME PTY LIMITED ZANDRA JOY BLAKE, First Respondents ALLEGRA CORPORATION LIMITED ALLEGRA INVESTMENTS LIMITED Second Respondents MAUNTILL PTY LIMITED MICHAEL GEORGE SINCLAIR, MARUTA PEARSON and MICHAEL ZIVKOVIC trading as FARNHAM SINCLAIR & ASSOCIATES Third Respondents LEE, HIGGINS, TAMBERLIN JJ SYDNEY 20 FEBRUARY 1996 REASONS FOR JUDGMENT TAMBERLIN JJ: This appeal raises an important question regarding the administration of the concurrent jurisdictions of a State Supreme Court and the Federal Court where parallel proceedings are in train in each court involving, in effect, the same issues. The question arises in this way. Separate proceedings have been brought in the Supreme Court of South Australia ("the South Australian proceeding") and in this Court. In substance each proceeding involves the same parties and issues, save for a foreshadowed limitation defence which arises in the South Australian proceeding, based on the application of the limitation periods under s 87 (1CA) of the Trade Practices Act (1974) ("the Act") and the South Australian Supreme Court Rules in relation to a counterclaim. Each court has declined to transfer the proceeding before it to the other court and, furthermore, each court has refused an application to stay the proceeding in that Court. However, by an order made by Neaves J on 23 December 1994, this Court has restrained the parties to the appeal from taking any further steps in the South Australian proceeding until the hearing and determination of the application brought in this Court. The appellant, a respondent in that proceeding, appeals from that order by leave. The limitation defence foreshadowed in the South Australian proceeding is said to be available in that Court to the appellant as a defence to a counterclaim filed by the first respondents. This defence is said to apply because' the counterclaim, which is essentially based on the Act, was not filed until 23 March 1994. Federal Court Proceeding The proceeding in this Court was commenced in the Australian Capital Territory ("ACT") Registry of the Court on 15 May 1992. The proceeding arises out of borrowing transactions entered into by a thoroughbred breeding partnership known as_ the "Capricorn Park No.2 Breeding Partnership". There were twenty- nine applicants comprising 15 corporations and 14 individuals. As a result of discontinuance by some of the applicants there are now nine applicants comprising five corporations and four individuals described in the statement of claim as "Partners" or "Guarantors". The applicants are the first respondents. In the proceeding in this Court the first respondents seek declarations pursuant to s 87 of the Act, or s 72 of the Fair Trading Act (1987) (NSW) ("Fair Trading Act"), that the agreements and guarantees into which they entered in reliance upon the misleading or deceptive conduct of the appellant and others are void. In addition, the first respondents allege breaches of fiduciary duties owed to them by the appellant and others; illegality or unenforceability of the agreements and guarantees by reason of breaches of ss 169, 170 and 171 of the Companies (New South Wales) Code relating to prescribed interests, the Companies Act 1981 (Cth) or the Companies (South Australia) Code; breaches of contract; unconscionable conduct in contravention of s 52A of the Act, (as it then stood), or s 43 of the Fair Trading Act; and unjust agreements within the meaning of subs 7(1) of the Contracts Review Act 1980 (NSW). A statement of claim and an amended statement of claim were filed. The amended statement of claim was struck out on 19 March 1993. A further amended statement of claim was filed and was the subject of further motions to have it struck out. Those motions were partly successful and the first respondents were granted liberty to file and serve a second further amended statement of claim. A further application was made to strike out the second further amended statement of claim served pursuant to the liberty. That application was dismissed by Neaves J on 23 December 1994 and at the same time the restraining orders under appeal were made. Other orders sought in relation to the sufficiency or appropriateness of the second further amended statement of claim were stood over and are not relevant for present purposes. There are at least two other proceedings pending in this Court, which seek similar relief. These arise out of agreements and guarantees concerning two other syndicates, "Capricorn Park No. 3 Breeding Partnership" and "Capricorn Park No. 4 Breeding Partnership". Supreme Court Proceeding The South Australian proceeding was commenced by the appellant as lender to the "Capricorn Park No. 2 Breeding Partnership". The proceeding consists of multiple actions directed to be heard together commenced in the Supreme Court or in inferior courts in South Australia and transferred from those courts to the Supreme Court. The proceeding in the Supreme Court was commenced on 2 April 1992 and, therefore, pre-dated the proceeding commenced in this Court by about six weeks. The South Australian proceeding originally named thirty-six defendants including the twenty-nine parties who were named as applicants in the proceeding in this Court. Federal Court Proceeding The corporate entities of the first respondents were incorporated in and carry on business in either New South Wales or the ACT. The natural person first respondents are residents of New South Wales or the ACT. The representations relied on are alleged by the first respondents to have been made in New South Wales or the ACT. The appellant is the only party that carries on business in South Australia. The second respondents are incorporated in New Zealand. Of the third respondents, Mauntill Pty Limited is incorporated in the ACT; Michael Sinclair resides in the ACT and the firm Farnham Sinclair & Associates carries on business in New South Wales and the ACT. On 9 December 1993, Debelle J of the Supreme Court of South Australia, dismissed an application under subs 5(1) of the Jurisdiction of Courts (Cross-vesting) Act (SA) 1987 by the first respondents to transfer to the Federal Court' the proceeding then pending in South Australia. His Honour considered that the issues, as between the appellant and the "partners" and "guarantors", were relatively straightforward and capable of prompt and ready prosecution and that the first respondents would be able to set aside the agreement only if they were able to establish one or more of the statutory defences on which they relied. Debelle J observed that the defences in each of the actions in the South Australian courts raised almost all of the issues which were raised as between the appellant and the first respondents in the proceeding in this Court. He noted that the only issues not raised in the South Australian actions were under the Companies Code 1990 (NSW) and the Contracts Review Act 1980 (NSW) and that they could be included in the Supreme Court proceedings by amendment. He considered that the actions in the Federal Court might be delayed by issues arising as between the syndicate members and the other four sets of parties in the Federal Court actions. Debelle J was concerned with the delay which might be caused by applications to strike out the statement of claim in the Federal Court whereas, in his view, the Supreme Court proceedings could be heard without undue delay. At the time the matter was before his Honour, the counterclaim had not been filed nor of course had any limitation defence to such counterclaim been foreshadowed. His Honour noted that the application to transfer was grounded on the basis that a determination by the Federal Court was said to be of greater convenience and lesser cost. On 17 January 1994 Neaves J dismissed a Motion by the first respondents for an order restraining the appellant from taking any steps, including entry of a default judgment, in the proceedings pending against the first respondents in South Australia. His Honour referred to the fact that at that time no evidence had been placed before him to show that the first respondents had an arguable case against the appellant. On 23 March 1994 the first respondents filed an amended defence in the South Australian proceedings raising issues against the appellant identical, for all practical purposes, with those pleaded in this Court and a counterclaim seeking identical relief to that claimed by them as applicants in the proceedings in this Court on substantially identical grounds. This relief included a claim for damages. On 7 April 1994 Kelly J of the Supreme Court of South Australia dismissed an application by the first respondents for a stay of proceedings in that court pending judgment in the proceedings of the Federal Court. An appeal from this decision to the Full Court of the Supreme Court of South Australia was dismissed on 20 September 1994. The Full Court applied the reasoning of Debelle J in refusing the application to transfer the proceeding to this Court and in addition considered that it was appropriate that a stay should not be granted after a refusal to so transfer the proceeding. In making the order restraining the parties to the appeal from prosecuting the South Australian proceeding Neaves J noted that the appellant and others had foreshadowed a defence to the counterclaim against them in the South Australian proceeding, based on the effluxion of time between the date on which the cause of action was said to have arisen and the date on which the counterclaim was filed. Neaves J considered that, on the material before him, such a defence would not be available to those parties in this Court but he did not express a concluded view. During the course of argument before Neaves J, the question was raised as to whether it was appropriate to transfer the proceedings to the Supreme Court, pursuant to subs 5(4) of the Cross-Vesting Act. His Honour was not satisfied that a transfer should be made. The Issue on Appeal The issue before this Court is whether the restraining order of Neaves J should be set aside. Principles There is no doubt that this Court has jurisdiction in an appropriate case to restrain a person or corporation within its jurisdiction from continuing an action in a foreign court. See Evers v Firth (1986) 10 NSWLR 22; Beecham (Australia) Pty Limited v Roque Pty Limited (1987) 11 NSWLR 1 at 6-7. See also Sykes and Pryles, Australian Private International Law, 3rd edn 1991 at 100 ff; Nygh, Conflict of Laws in Australia, 5th edn, 1991 at 88-89. Caution should be exercised when considering an application for an injunction to restrain parties from initiating or continuing actions in a foreign jurisdiction. See CSR v New Zealand Insurance Co Limited (1995) 36 NSWLR 138 at 152 per Rolfe J. Foreign proceedings may be restrained not only when they are vexatious, in the sense of frivolous or useless, but also where they are oppressive. However, vexation or oppression should not be regarded as the only grounds on which the jurisdiction is to be exercised. See Societe Nationale Industrielle Aerospatiale v Lee Kui Jak [1987] 1 AC 871 at 894. The fundamental requirement is that an injunction will be granted only where the interests of justice so require. The Court will not normally grant an injunction if by doing so it would deprive the plaintiff of advantages in the foreign forum, where to do so would be unjust. See Aerospatiale (supra) at 896G. The jurisdiction is attracted where there is an equitable claim on the part of an applicant which is of sufficient weight to persuade the Court that the legal right of a respondent to continue proceedings in a foreign jurisdiction should be restrained or restricted. See National Mutual Holdings Pty Limited v Sentry Corporation (1989) 22 FCR 209 at 232, per Gummow J. The equity jurisdiction in such a case operates upon the legal entitlement of a party in order to prevent the unconscientious or inequitable assertion or exercise of that entitlement. Lord Scarman observed in British Airways v Laker Airways (1985) 1 AC 58 at 95: "This equitable right not to be sued abroad arises only if the inequity is such that the English Court must intervene to prevent injustice. Cases will, therefore, be few: but the jurisdiction exists and must be sustained." In Sentry Corporation, Gummow J restrained the prosecution of a proceeding in the United States which had a tendency to interfere with the conduct of litigation in the Federal Court. In that case a party to the litigation in the Federal Court commenced a proceeding in the United States seeking to enjoin solicitors for an opposing party in that litigation from continuing to act for that party. His Honour held that the Federal Court had jurisdiction to deal with such an application and that such a step in a foreign court was an interference with the conduct of the Federal Court proceeding sufficient to attract the Court's equitable jurisdiction. It must be borne in mind that although an anti-suit injunction, such as the present, only acts in personam against the parties it is, in substance and effect, an interference with the process of another court and this must be weighed in the balance. See Laker at 95 and Metall und Rohstoff AG v ACLI Metals Ltd [1984] 1 Lloyds Rep 598 at 613. In the present case both courts can exercise the judicial power of the Commonwealth in relation to the counterclaim. This is not a case where the Federal Court has exclusive jurisdiction in respect or all or any part of the proceedings. The Court should also, in appropriate circumstances, give appropriate weight to the encouragement of comity between State and Federal Courts; cf Stack v Coast Securities (No.9) Pty Limited (1983) 154 CLR 261 at 274 where reference is made by Gibbs CJ to observations by Fitzgerald J, in this Court at first instance. However, if the decision of the restraining court is made on reasonable grounds paying due regard to the overall practicalities of the administration of the litigation under consideration, there may be no detriment to the principle of comity between State and Federal courts. See the CSR case (supra) at 153 per Rolfe J. The respondents referred to the decision of the Full Federal Court in Westpac Banking Corp v Eltran Pty Ltd (1987) 14 FCR 541. In that case, the Court, by majority, dismissed an appeal from an order of Spender J which restrained the parties from taking further steps in proceedings in the Queensland Supreme Court. At 548 Fox and Burchett JJ observed: "Spender J proceeded to consider whether an exclusively federal claim was involved. Of course, even if no such claim arose, and both this Court and the Supreme Court had jurisdiction over every aspect of the dispute, there would remain _a_ question as to which court should more appropriately exercise its jurisdiction. It should not be left to chance, or the outcome of tactical manoeuvres by the parties, to decide which Court gets to hear the case first. When this Court is confronted by such a Situation, it should generally try to achieve a _ resolution, either by restraining the parties from proceeding further in the Supreme Court, or by refusing to do so and staying its own proceedings. The choice to be made in each particular case will depend upon an evaluation of all the circumstances. But it is appropriate, in most cases, first to decide whether an aspect of the whole controversy is exclusively within the jurisdiction of this - 13 - Court because, if it is, the implications of that fact may be very significant for the choice to be made." (Emphasis added) The above decision pre-dated the 1987 "cross-vesting" legislation and was made at a time when this Court had exclusive jurisdiction with respect to the relevant trade practices issues. In the present proceedings both the Supreme Court and Federal Court are vested with jurisdiction to resolve the questions which arise from the counterclaim. (s 86(2) of the Act.) The principles applied by the United States Federal Courts which have tended against the grant of anti-suit injunctions in relation to parallel State court proceedings, are not relevant to the present case. Cf Atlantic Coast Line R. R. v Brotherhood of Locomotive Engineers (1970) 398 US 281; Mitchum v Foster (1972) 407 US 225. See Hart & Wechsler's "The Federal Courts and the Federal System" 3rd edn. 1988 at 1309-1312, 1383-1406. These decisions turn on specific anti-injunction legislation, currently embodied in 28 USC 2283, which prohibits the grant of an injunction by a United States court to stay proceedings in a State Court unless expressly authorised by an Act of Congress or where necessary in aid of its jurisdiction or to protect or effectuate its judgments. Judgment Below In his consideration as to whether an injunction should be granted, Neaves J addressed the question whether the jurisdiction of the Federal Court should be exercised to resolve the matters in dispute between the parties and the parties restrained from taking any further steps in the South Australian proceedings, or alternatively, whether the Federal Court proceeding should be transferred to the Supreme Court of South Australia for determination. His Honour set out what he considered to be the relevant considerations. These included the expense and convenience of the parties and witnesses; the public interest, (one aspect of which was federal-state court comity) ; and the degree of progress of the proceedings in each jurisdiction. He was satisfied, in all the circumstances, that the Federal Court was the more appropriate court and that it was in the interests of justice that the issue should be determined by this Court. His Honour considered that it was not in the interest of the parties nor in the public interest to allow' simultaneous proceedings raising substantially the same issues to continue to proceed in parallel in both courts. In view of the decisions of the respective courts that the proceedings not be transferred from one court to the other, a decision had to be made as to the appropriate management of the litigation thereafter. There is, of course, no appeal from a decision not to transfer a proceeding from the Federal Court or a Supreme Court. His Honour considered that there was no reason to dismiss the proceedings in the Federal Court as an abuse of process. He was concerned that if the matter did not proceed in the Federal Court, there was a possibility that there might be no determination on the merits of some of the issues raised before the Federal Court. This would, in his Honour's view, result from the foreshadowed limitation defence to the counterclaim in South Australia if no such defence applied in the Federal Court proceeding. The appellant did not offer any undertaking that it would not rely on the foreshadowed limitation defence in the South Australian proceeding if no restraining orders were made. Present Appeal Having regard to the above legal principles, the question is whether the first respondents have made out an equitable entitlement sufficient to warrant this Court restraining the exercise by the appellant of its legal right to continue the South Australian proceeding. In order to resolve this question it is necessary to examine the basis on which it can be found to be contrary to the interest of justice for the South Australian proceeding to continue. There can be no doubt that it is undesirable to have on foot two parallel streams of litigation in superior courts involving substantially the same issues of fact and law. Such a situation does not necessarily mean that either proceeding, considered individually, can be regarded as vexatious or oppressive. However, the overall consequences of such a situation, unless there is some restraint agreed or imposed, can be oppressive in placing unnecessary and onerous burdens on all parties. There is always the possibility of conflicting findings of fact or law, which can readily lead to a perception of inconsistency or confusion in the administration of justice. These problems could arise not only as a result of first instance determinations but also from appellate determinations which might be pursued in each of the jurisdictions. Moreover, there is the foreseeable waste of resources, time and expense by the courts, the parties, and the witnesses arising from inevitable duplication at all levels of the proceedings. Conflicts could readily be seen to arise at the interlocutory stage as to availability of witnesses, documents and parties at interlocutory hearings. Neither court will be certain of what the other is doing. The "mischief" inherent in duplicative proceedings is manifest and underlies the policy which led to the "cross-vesting" legislation. The purpose of that legislation was to enable one court (the appropriate court) to comprehensively deal with all the issues so as to give complete relief to the parties. See Bankinvest AG v Seabrook (1988) 14 NSWLR 711 at 713-5 and 723- 6. At present in this matter an impasse has been reached. The Federal Court has decided not to stay the proceedings before it nor to transfer the proceedings. The State Court has also refused to transfer and has reached a decision not to grant a stay. This impasse should be resolved if practicable. It was submitted on behalf of the appellant that as Debelle J had heard the first application for transfer of the South Australian proceeding and had decided not to grant' that application and as the Supreme Court of South Australia had refused a later application to stay the proceeding in that Court, then this Court should either (i) elect to transfer the proceeding before it; (ii) do nothing; or (iii) stay that proceeding. The consequence of those orders would be that the parties would be free to continue the South Australian proceeding. As to the first alternative, the filing of the counterclaim and the foreshadowed limitation defence significantly change the circumstances which were before Debelle J and the Full Court of the Supreme Court on the applications to transfer or stay the South Australian proceedings. Only in the Federal Court proceeding can the matter be fully and finally determined. Moreover, if it is decided in the Federal Court that there is substance in the claim, the limitation issue would not arise. It is quite inappropriate to determine the matter on the basis of which party has applied to the court first. Cf the observations of Fox and Burchett JJ in Eltran (supra) at 548. A more comprehensive examination of the competing considerations relating to the interests and circumstances of justice is required. The second alternative simply results in a multiplicity of proceedings and is quite unsatisfactory. The impasse should be resolved at the earliest possible stage one way or another. It is no solution to the problem to simply let it continue. The third alternative depends on sufficient reason being shown as to why this Court should not proceed to completely determine the issues before it, without the constraint of the limitation defence. No such reason has been shown. It would be an odd result if proceedings instituted within time in this Court were not to proceed towards resolution, until similar proceedings in South Australia were resolved in which a limitation bar was raised which prevented a complete determination of all the issues on the merits. Under s 23 of the Federal Court Act the mandate of this Court is to grant all remedies which any of the parties appear to be entitled in respect of a claim properly brought forward in the matter, so that as far as possible all matters in controversy between the parties may be completely and finally determined and multiplicity of proceedings concerning any of those matters might be avoided. In the instant case, all matters in controversy between the parties can be completely and finally determined and multiplicity of proceedings avoided by restraining the parties from continuing with the South Australian proceedings until determination of the proceeding in this Court. In our view, it would be contrary to the interests of justice, and an inequitable pursuit of legal rights, to permit the applicant to simultaneously pursue the duplicative South Australian proceedings. The applicants in this Court have acted in a timely manner in the pursuit of their rights and should not be faced with the conflicts inherent in two sets of proceedings, one of which will not fully resolve all the substantial issues between the parties. The restraint is not absolute but is until determination of the Federal Court proceedings. It is not suggested that it is apparent on its face that the first respondents! claim in this Court is bound to fail and it is in the interests of full and complete justice being administered between the parties, that an order restraining the parties be made in the terms of the order made by Neaves J at first instance. Such an approach accords with common sense and the practicalities of the overall administration of the litigation between the parties and is not contrary to relevant principles of comity, federalism or equity. An order restraining the parties in this way will permit the parties to focus on a single set of proceedings with a view to obtaining a single comprehensive determination of the whole matter before deciding whether to continue with the South Australian proceedings. We are not persuaded that Neaves J erred in the application of principle in making the restraining orders under appeal. Accordingly, the appeal should be dismissed with costs. I certify that this and the preceding nineteen (19) pages are a true copy of the Reasons for Judgment herein of his Honour Justice Lee and his Honour Justice Tamberlin. Associate: - 21 - Date: 20 February 1996 IN THE FEDERAL COURT OF AUSTRALIA ) AUSTRALIAN CAPITAL TERRITORY ) DISTRICT REGISTRY ) No. ACT G44 of 1995 GENERAL DIVISION ) ON APPEAL FROM A JUDGE OF THE FEDERAL COURT OF AUSTRALIA BETWEEN : PEGASUS LEASING LIMITED Appellant CADOROLL PTY LIMITED CADOSHARE PTY LIMITED JAMES DOUGLAS BLAKE HAMERLEEN PTY LIMITED ALFRED NATHAN LESTER LESTER FIRTH ASSOCIATES PTY LIMITED JOHN WILLIAM FIRTH WALTRAME PTY LIMITED ZANDRA JOY BLAKE First Respondents ALLEGRA CORPORATION LIMITED ALLEGRA INVESTMENTS LIMITED Second Respondents MAUNTILL PTY LIMITED MICHAEL GEORGE SINCLAIR MARUTA PEARSON and MICHAEL MARKO ZIVKOVIC trading as FARNHAM SINCLAIR & ASSOCIATES Third Respondents CORAM: LEE, HIGGINS and TAMBERLIN JJ PLACE: CANBERRA DATE: 20 FEBRUARY 1996 REASONS FOR JUDGMENT HIGGINS J: I have had the advantage of reading in draft the reasons for judgment of Tamberlin J. It is, therefore, unnecessary to set out the facts and history of the matter as his Honour has so adequately and clearly set them forth. The circumstances attending the progress of this litigation are extraordinary. There are now parallel proceedings in both the Supreme Court of South Australia and this Court. This Court has refused to transfer the proceedings before it to the Supreme Court of South Australia pursuant to the relevant Cross-Vesting Act. The Supreme Court of South Australia has similarly declined to transfer the proceedings before it to this Court or to stay those proceedings so as to enable the proceedings in this Court to progress to their conclusion. By the decision appealed from, Neaves J has, in effect, reversed the effect of the orders of the Supreme Court of South Australia as affirmed by a full bench of that Court. It is clear that, where there are parallel proceedings in different courts of competent jurisdiction, it is an absurdity, and contrary to the interests of justice, that each should proceed. It would also be absurd and contrary to the interests of justice for each such court to prevent the litigants before it from proceeding in the other court. Theoretically, it is now open to the Supreme Court of South Australia to make an order mirroring that made by Neaves J. That would stall the current litigation completely. In addition to the wholly unsatisfactory course the litigation has so far followed, the waste of time and resources effected by the various procedural applications leading to the present situation are a cause for serious concern. There has been no determination of any issue joined between the parties to this litigation even though the proceedings in each court were commenced in 1992. Many thousands of dollars have been expended with no substantive result. No doubt, in part, this situation, making as it does a mockery of the system of litigation in this nation, results from forensic decisions of the parties. To that extent they have only themselves to blame. However, they have been aided and abetted by a legal system which has failed promptly to prevent these parallel proceedings. The mechanisms in place to resolve the situation where parallel proceedings are commenced and continued have been shown to be defective, at least in the present circumstances. Serious consideration needs to be given to the application of a mechanical rule which would automatically transfer the second of two parallel sets of proceedings to the court in which the first of them has been commenced. It should then be entirely up to that first court to decide whether or not the proceedings should be transferred to another court. In the absence of any statutory requirement to this effect there should, at least, be a prima facie acceptance that the first court competently seized of the proceedings should, unless the interests of justice clearly dictate otherwise, proceed to conclude them. It should not be open to one court to appear to decide that a decision of an equivalent court of this country should be disregarded. The orders and proceedings of such a court are required to be given "full faith and credit" by s118 of the Constitution. Such a decision should not appear, even indirectly, to be regarded by another equivalent court as oppressive to a party or otherwise not in the interests of justice. Tamberlin J, in his judgment, has referred, however, to a change in circumstances which, it is suggested, warranted such a result. That change is said to arise from the subsequent pleading by the present appellant of limitation defences to the respondents' cross-claims in the South Australian proceedings. That defence is said not to be open in the Federal Court proceedings which had been commenced earlier than those cross- claims. The appellants decline to offer any undertaking that they will abandon such defences. Thus, it is said, it would be unjust to the respondents to allow the appellant an opportunity to rely on a procedural defence which would not be available to it in the proceedings in this Court. That contention deserves further consideration. There is no appeal from the decision of Neaves J to refuse to cross-vest the Federal Court proceedings to the Supreme Court of South Australia. An order cross-vesting the Federal Court proceedings to the Supreme Court of South Australia would have rendered the limitation defence nugatory. The limitation defence is contended to arise from s82(2) of the Trade Practices Act 1974 (Cth) (Trade Practices Act). That provides, An action under sub-section (1) may be commenced at any time within 3 years after the date on which the cause of action accrued. There is no discretion conferred to extend that time bar, see Keen Mar Corporation Pty Ltd v Labrador Park Shopping Centre Pty Ltd & Anor (1988) 10 ATPR 40-853; Calmao Pty Ltd v Stradbroke Waters Co-owners Cooperative Society Ltd & Ors (1989) 21 FCR 28. The State and Territories limitation laws do not apply to s82(2) so as, for example, to enable an extension of the time bar in the case of minors, see Vink v Schering Pty Ltd & Ors (1991) 13 ATPR 41-064. That would, presumably, exclude the operation of s47 of the Limitation of Actions Act 1936 (SA) (the SA Limitation law). The defence pleaded is supported by reference to the South Australian Limitation law. Section 44 of the SA Limitation law provides, This Act shall apply to the case of any debt or simple contract alleged in the way of set-off on the part of any defendant either by his defence or notice or otherwise. (South Australian Supreme Court Rules) In each other State and Territory other than Western Australia a set-off or cross-claim is deemed to have been commenced upon the date the original action in which it is pleaded is commenced. In Western Australia, s46 of the Limitation Act 1935 deems the date of commencement of both a set-off and cross-claim to be the date upon which the pleading raising it is delivered. The South Australian provision does not vary the common law rule as to the date upon which proceedings by way of cross-claim or set-off are deemed to have been commenced. That rule was referred to by Dixon J in McDonnell & East Ltd v McGregor (1936) 56 CLR 50, 55, namely that, . debts which have accrued within six years of the issue of the writ may be relied upon as a set-off by way of defence, while a cause of action relied upon as a counterclaim must have accrued within the period of limitation calculated from the delivery of the counterclaim. Thus, insofar as the defence and counter-claim in the South Australian proceedings seek to have the agreements founding the claim declared void and to claim damages by way of set-off, there is no apparently arguable case that the respondents will be precluded by any applicable limitation law from asserting those claims, see D Galambos & Son Pty Ltd v McIntyre (1974) 5 ACTR 10 per Woodward J and R v Just Juice (1992) 109 ALR 334 per Gummow J. The only disadvantage that could arguably be suffered by the present respondents would be if their set-off by way of damages left a surplus to be recovered by way of counter-claim. That counter-claim would be capable of being barred even if a set-off based on the same facts would not be, see Commonwealth Trading Bank of Australia v Sidney Raper Pty Ltd (1975) 25 FLR 217. Insofar as the respondents rely upon a counter-claim rather than a set-off, s82(2) of the Trade Practices Act will bar that counter-claim only if the damage of which they complain or propose to complain was suffered more than three years before the delivery of the counter-claim in question. The counter-claims in the South Australian proceedings were delivered, according to the agreed chronology, on 23 March 1994. Accordingly, unless damage flowing from the alleged breaches of the Trade Practices Act was suffered before 23 March 1991, the limitation period imposed by s82(2) would not, in any event, bar those counter-claims, see Wardley Australia Ltd & Anor v The State of Western Australia (1992) 175 CLR 514, per Mason CJ, Dawson, Gaudron and McHugh JJ at 527. There is no material before this Court which would enable the Court to conclude that any damage of which the respondents complain was, arguably, suffered before 23 March 1991. The material simply makes no reference to that question. Thus, it is by no means apparent that the limitation defences pleaded by the appellant have such arguable force as to affect the fair determination of the issues between the parties. Further, no decision about the possible viability of these defences can be determined until the date or dates upon which any damages sought by way of counter-claim is or are ascertained. No other matter of defence including set-offs, can conceivably be affected. In my view, the respondents have failed to demonstrate that the limitation defences pleaded by the appellant have any arguable substance. There is, therefore, no demonstrated point of substantive difference between the capacity of the Federal Court proceedings and the South Australian proceedings to resolve fairly all issues between the parties. Of course, that is not to say that, if an application was now to be made to cross-vest the proceedings as currently pleaded to this Court, such an application should be regarded as doomed to failure. It is to say, however, that, in my view, that is a decision which is for the South Australian Supreme Court to make. There are, no doubt, grounds for concluding that the Federal Court would be the more appropriate court in which to try what seems now, predominantly, to be a trade practices suit. Also, given the inter-State distribution of the parties, the Federal Court may well be considered to be better situated to take evidence, should that be necessary, in the ACT and the various States other than South Australia involved in the matters. Most of those matters were considered by the Supreme Court of South Australia on the cross-vesting application. The decision thereon was not subject to appeal. The considerations by reason of which a different conclusion could now be supported are not so serious as to create injustice to the respondents sufficient to warrant the serious step of issuing an injunction against the appellant to prevent it exercising its legal rights to proceed with this litigation in the Supreme Court of South Australia. Considerations arising from new issues being pleaded can be raised in a further cross-vesting application, see Arrowcrest Group Pty Limited v Advertiser News Weekend Publishing Co Pty Limited, unreported, Supreme Court, Australian Capital Territory, Miles CJ, 19 July 1989. In the latter case, Miles CJ having refused an earlier cross-vesting application, granted a later application following refinement of the issues by the pleadings. In my view, in the absence of serious injustice otherwise, the Federal Court should defer to the prior decisions of the Supreme Court of South Australia and permit that Court to continue to hear the proceedings before it. As I have noted, that Court retains the discretion to transfer the proceedings pursuant to the Cross-Vesting Act or hear them to finality. It also remains open to a Judge of this Court to determine to transfer the Federal Court proceedings to the Supreme Court of South Australia, if there appears to be any risk that the South Australian proceedings appear not to be a suitable vehicle for the final disposition of all issues between the parties. In my view, the appeal should be upheld and the proceedings in this court stayed until further order. I certify that this and the nine (9) preceding pages are a true copy of the Reasons for Judgment herein of his Honour, Justice Higgins. Associate: Date:20 February 1996 Counsel for Applicant: Mr D Jackson QC Mr R Refshauge Solicitors for Applicant: Deacons Graham & James Counsel for First Respondents : Mr G Richardson SC Solicitors for First Respondents: Minter Ellison Solicitors for Second Respondents: Phillips Fox Solicitors for First and Second-named of the Third Respondents: Blake Dawson Waldron Date of Hearing (Canberra) : 27 October 1995 Date Judgment Delivered (Sydney) : 20 February 1996