CATCHWORDS EVIDENCE - estoppel - Anshun estoppel - covenants in lease - Supreme Court action by lessee for permanent injunction based on covenants - Federal Court action by third party seeking declaration covenants invalid due to special federal matter - judgment entered in Supreme Court action without special federal matter being raised - whether successful plaintiff in Supreme Court action entitled to estoppel in Federal Court action - whether evidence to support Federal Court action Commonwealth Cross‑Vesting Act, s3(1), s6(4) Contracts Review Act 1980 (NSW) Federal Court Rules, O20 r2(1) Jurisdiction of Courts (Cross‑Vesting) Act (1987) (Cth), s6, Jurisdiction of Courts (Cross‑Vesting) Act (1987) (WA), s6 Law and Justice Legislation Amendment Act (No3) 1992 Trade Practices Act 1974 (Cth), PtIV, s45B Boles v Esanda Finance Corporation Ltd (1989) 18 NSWLR 666 Bryant v Commonwealth Bank of Australia (1995) 57 FCR 287 Chamberlain v Deputy Commissioner of Taxation (1988) 164 CLR 502 Henderson v Henderson (1843) 3 Hare 100; 67 ER 313 Higgins Holdings Pty Ltd v The Commonwealth Bank of Australia (1995) ATPR 41-302 Jackson v Goldsmith (1950) 81 CLR 446 Ling v Commonwealth of Australia (Wilcox, Whitlam and Sundberg JJ, 25 July 1996, unreported) Murphy v Abi-Saab (1995) 37 NSWLR 280 NEC Information Systems Australia Pty Ltd v Iveson (1992) 36 FCR 258. Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589 Rahme v Commonwealth Bank of Australia (Court of Appeal (NSW), 20 December 1991, unreported) Tanning Research Laboratories Inc v O'Brien (1990) 169 CLR 332 Yat Tung Investment Co Ltd v Dao Heng Bank Ltd [1975] AC 581 WESTPOINT CORPORATION PTY LTD v COLES SUPERMARKETS AUSTRALIA PTY LTD NO WAG 83 OF 1996 R D NICHOLSON J PERTH 18 DECEMBER 1996 IN THE FEDERAL COURT OF AUSTRALIA ) WESTERN AUSTRALIA DISTRICT REGISTRY ) GENERAL DIVISION ) NO WAG 83 OF 1996 B E T W E E N: WESTPOINT CORPORATION PTY LTD Applicant and COLES SUPERMARKETS AUSTRALIA PTY LTD Respondent MINUTE OF ORDER JUDGE MAKING ORDER: R D NICHOLSON J DATE OF ORDER: 18 DECEMBER 1996 WHERE MADE: PERTH THE COURT ORDERS THAT: 1. The proceeding be dismissed. 2. The applicant pay the respondent's costs to be taxed. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA ) WESTERN AUSTRALIA DISTRICT REGISTRY) GENERAL DIVISION ) NO WAG 83 OF 1996 B E T W E E N: WESTPOINT CORPORATION PTY LTD Applicant and COLES SUPERMARKETS AUSTRALIA PTY LTD Respondent CORAM: R D NICHOLSON J DATE: 18 DECEMBER 1996 PLACE: PERTH REASONS FOR JUDGMENT By notice of motion the respondent seeks to have this proceeding dismissed or permanently stayed pursuant to O20 r2(1) of the Federal Court Rules on the grounds it discloses no reasonable cause of action or alternatively as being frivolous, vexatious or an abuse of process of the Court. There are two broad grounds of support for the motion - namely, that the evidence shows the case must fail and the issues between the parties have already been ventilated in another court. History of litigation On or about 17 May 1996 the respondent filed a statement of claim against Australian Retail Freeholds Pty Ltd ("Australian Retail") and the applicant in the Supreme Court of Western Australia in the expedited list. The claim recited that by a lease made on or about 18 October 1980 a lessor leased a supermarket to the predecessor of the respondent for a term of twenty years commencing on 28 October 1980, together with the right to enjoy the carpark and other common areas of the shopping centre known as Forrestfield Forum ("the premises"). It further recited that there were terms of the lease ("the covenants") providing to the following effect: " (a) subject to the rights of the lessor under the lease the lessee would of right have the use together with the lessor and all other tenants of the shopping centre (as defined therein), and the agents, servants, customers and visitors of all such persons, of the carpark and common areas (as defined therein): cl11.01; (b) except to the extent that the lessee would be required to do so under its covenants in the lease, the lessor would at all times keep and maintain the shopping centre and carpark and the common areas in a good and tenantable state of repair, order and condition and would not at any time except as expressly provided for in the lease reduce the number of carparking spaces or the situation thereof or the carpark or alter the exits or entrances to the shopping centre or the layout of the shopping centre: cl11.07; (c) the common areas would at all times be subject to the control of the lessor who would have the right from time to time to establish, modify and enforce reasonably rules and regulations with regard thereto: cl12.07b; (d) without limiting the generality of the term contained in sub-paragraph (c), the lessor might at any time and from time to time, amongst other things, change the area, level location and arrangement of the carparking areas and other facilities, subject to prior written approval of the lessee: cl12.07b(iii); (e) the lessee should peaceably possess and enjoy the premises without any interruption or disturbance from the lessor or any person or persons unlawfully claiming by or from or under it; cl11.03." It was claimed that the predecessor assigned its interest in the lease to the respondent on or about 26 April 1993. Next it was claimed Australian Retail as registered proprietor of the land on which the premises are situated had entered into an agreement with the applicant for the applicant to purchase the land, including the premises. The applicant, it was claimed, wished to redevelop the land ("the redevelopment") in a way which: " (a) would substantially alter the layout of the shopping centre including the carpark; (b) would alter the exits and entrances to the shopping centre; (c) would substantially reduce the number of car parking spaces provided for by the lease and alter the location of such spaces; (d) would substantially interfere with the plaintiff's quiet enjoyment of the premises and with its right to use the carpark and other common areas." Then it was said the respondent had not given written or any approval to the redevelopment with which the applicant intended to proceed. The respondent therefore claimed a permanent injunction preventing Australian Retail and/or the applicant from permitting and/or performing the redevelopment. On 27 June 1996 the solicitors for the applicant filed an application in this Court claiming a declaration that the covenants, being the covenants referred to in the statement of claim, are unenforceable and seeking other orders. In the statement of claim as amended in this Court the claim is put on the basis that the covenants have, or are likely to have, the effect of substantially lessening competition in the relevant market. The claim puts the market on two bases. Firstly, it is pleaded as "the market for the retail sale of food and other goods normally sold in supermarkets" subsisting in the geographical area of the shopping centre of which the premises form part. The alternate basis is that the relevant market is "the market for the retail sale of supermarket goods and goods normally sold by discount department stores" subsisting in the same geographical area. The claim is that the covenants are asserted by the respondent to preclude any person, including the applicant, from altering the construction of the premises in any, or in any significant, respect. They are asserted by the respondent to entitle it to restrain or prevent the construction of a competing supermarket or a discount department store at the shopping centre. These claims are dependant upon s45B of the Trade Practices Act 1974 (Cth) ("the TPA") which provides that covenants which have, or are likely to have, the effect of substantially lessening competition within any market in which a corporation affected by the covenant supplies or requires goods or services, are unenforceable to the extent they confer rights or benefits or impose duties or obligations. On 22-25 July 1996 the Supreme Court action was heard before Anderson J. On 2 August 1996, Anderson J delivered his judgment together with reasons. He found in favour of the respondent and granted a permanent injunction, which was entered on 14 August 1996. THE EVIDENTIARY POINT For the purposes of argument the respondent accepts the relevant market as alleged on each of the alternate basis in the amended statement of claim in this Court. For the respondent it is submitted either the covenants do not preclude the applicant from establishing a supermarket and/or a discount department store in either of the markets as claimed, or the evidence does not suggest the covenants have that effect. It is not in dispute that at the time the respondent commenced the Supreme Court action, the applicant proposed to introduce a new supermarket and/or discount department store to the shopping centre involve performing certain works on the land referred to in the covenants. After the commencement of the Supreme Court action, but before trial, the applicant sought and obtained approval for the construction of a supermarket, a discount department store and a number of speciality shops on land immediately adjacent to the shopping centre ("the adjacent land"). There is no dispute the applicant is able to proceed with the development on the adjacent land. However, as appears from the affidavit of Mr N P Carey, director of the applicant, the proposed works have not yet proved viable and no decision has yet been taken to undertake the development. The question whether or not it is viable for the development on the adjacent land to proceed is a fact of relevance to whether competition may be affected. There is the possibility that without the ability of the applicant to carry out the redevelopment in conjunction with the development of the adjacent land a substantial lessening of competition is arguable. The obtaining of a permit by the applicant to erect the supermarket and other facilities on the adjacent land is not a fact from which it can be inferred the erection of that development will be unaffected by the covenants. That being the position, it is not possible to conclude from the present state of evidence the action should be permanently stayed or dismissed. "ANSHUN" ESTOPPEL Requirements of the principle It is next argued for the respondent the action should be permanent stayed or dismissed in accordance with the principles enunciated by the majority of the High Court in Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589. In that case the question was whether the owner of a crane could bring an action against the hirer claiming an indemnity in respect of amounts paid by the owner to a workman as damages and costs when it was sued together with the hirer by the workman. The majority of the High Court (Gibbs CJ, Mason and Aiken JJ) upheld a stay of the owner's action. In their reasons the majority said the issue fell outside both res judicata and issue estoppel. The indemnity cause of action as between the owner and the hirer was not litigated in the prior proceedings brought by the worker. Furthermore the defence of indemnity had not been raised so there was no determination of that issue. The members of the Court then continued (at 598): "The critical issue, then, is whether the case falls within the extended principle expressed by Sir James Wigram VC in Henderson v Henderson (1843) 3 Hare 100; 67 ER 313. The Vice‑Chancellor expressed the principle in these terms: "where a given matter becomes the subject of litigation in, and of adjudication by, a Court of competent jurisdiction, the Court requires the parties to that litigation to bring forward their whole case, and will not (except under special circumstances) permit the same parties to open the same subject of litigation in respect of matter which might have been brought forward as part of the subject in contest, but which was not brought forward only because they have, from negligence, inadvertence, or even accident, omitted part of their case. The plea of res judicata applies, except in special cases, not only to points upon which the Court was actually required by the parties to form an opinion and pronounce a judgement, but to every point which properly belonged to the subject of litigation, and which the parties, exercising reasonable diligence, might have brought forward at the time."" The Court said this did not involve characterising the failure to raise the question as an abuse of process. It then continued (at 602): "In this situation we would prefer to say that there will be no estoppel unless it appears that the matter relied upon as a defence in the second action was so relevant to the subject matter of the first action that it would have been unreasonable not to rely on it. Generally speaking, it would be unreasonable not to plead a defence if, having regard to the nature of the plaintiff's claim, and its subject matter it would be expected that the defendant would raise the defence and thereby enable the relevant issues to be determined in the one proceeding. In this respect, we need to recall that there are a variety of circumstances, some referred to in the earlier cases, why a party may justifiably refrain from litigation an issue in one proceeding yet wish to litigate the issue in other proceedings eg expense, importance of the particular issue, motives extraneous to the actual litigation, to mention but a few. See the illustrations given in Cromwell v County of Sac (1876) 94 US 351 at 356-357; 24 Law Ed 195 at 199. It has generally been accepted that a party will be estopped from bringing an action which, if it succeeds, will result in a judgment which conflicts with an earlier judgment. In this respect the discussion in Brewer v Brewer (1953) 88 CLR 1 is illuminating." The majority concluded (at 603-4): "The likelihood that the omission to plead a defence will contribute to the existence of conflicting judgments is obviously an important factor to be taken into account in deciding whether the omission to plead can found an estoppel against the assertion of the same matter as a foundation for a cause of action in a second proceeding. By "conflicting" judgments we include judgments which are contradictory, though they may not be pronounced on the same cause of action. It is enough that they appear to declare rights which are inconsistent in respect of the same transaction. It is for this reason that we regard the judgment that the Authority seeks to obtain as on which would conflict with the existing judgment, though a new judgment would be based on a different cause of action, a contractual indemnity. Taking into consideration the relevant factors we conclude that the Full Court was right in holding that there was an estoppel. The matter now sought to be raised by the Authority was a defence to Anshun's claim in the first action. It was so closely connected with the subject matter of that action that it was to be expected that it would be relied upon as a defence to that claim and as a basis for recovery by the Authority from Anshun. The third party procedures were introduced to enable this to be done. If successful, the indemnity case would have obviated an inquiry into contribution. If reserved for assertion in a later action, it would increase costs and give rise to a conflicting judgment. The Authority did not adduce evidence at the trial to show why it failed to raise the indemnity issue at the first action." Critical to the majority reasoning in the High Court was (1) the matter sought to be raised in the second action was a defence to the first action which it could be expected would have been raised in that action; and (2) if asserted in a later action that same matter could give rise to a conflicting judgment as well as increase costs. In Chamberlain v Deputy Commissioner of Taxation (1988) 164 CLR 502 at 507, Deane, Toohey and Gaudron JJ referred to the principle in Henderson v Henderson (1843) 3 Hare 100; 67 ER 313 emphasising the qualification that the Court would not permit the same parties to open the same subject of litigation "except under special circumstances". Dawson J at 512 said: "The majority discussion of Henderson v Henderson in Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589 was upon the basis that the latter case was not one of res judicata; there was a cause of action remaining (1981) 147 CLR at 597. The question was whether the plaintiff ought to have been allowed to pursue that cause of action having regard to the fact that the right asserted could and should have been raised in the earlier action in which judgment had been entered. To have allowed it to do so may have resulted in contradictory judgment which ought not be permitted save in special circumstances." He therefore recognised the possibility of "special circumstances" preventing the application of the principle in Henderson v Henderson as applied in Anshun. Brennan and Dawson JJ in their judgment in Tanning Research Laboratories Inc v O'Brien (1990) 169 CLR 332 at 346 said: "A plaintiff who has an unadjudicated cause of action which can be enforced only in fresh proceedings (Duedu v Yiboe [1961] 1 WLR 1040 at 1046) cannot be precluded from taking fresh proceedings merely because he could have and, if you will, should have counterclaimed on that cause of action in a forum chosen by the opposite party in proceedings in which the opposite party sued him. We do not read the majority judgement in Port of Melbourne Authority v Anshun Pty Ltd as holding the contrary, except in a case where the relief claimed in the second proceeding is inconsistent with the judgment in the first: see especially at pp599-601." Toohey J's view (at 355) was that the precise scope of Anshun was a matter of some debate, referring to Chamberlain but stating none of those aspects had been canvassed fully before the Court. The Anshun principle was considered by a Full Court of this Court (Beaumont, Wilcox and Moore JJ), in Bryant v Commonwealth Bank of Australia (1995) 57 FCR 287. That was a case where the respondent sought an order that an amended application and statement of claim be dismissed or permanently stayed. In considering the scope of the Anshun principle, the Court made reference to the decision of the New South Wales Court of Appeal in Rahme v Commonwealth Bank of Australia (Court of Appeal (NSW), 20 December 1991, unreported). In that case the appellants, Mr and Mrs Rahme, had brought an action claiming damages in relation to arrangements for a foreign currency loan. The action failed. They instituted a second action in the same court claiming relief under the Contracts Review Act 1980 (NSW). The bank pleaded the Anshun principle. This was upheld by the primary judge. In dismissing the appeal, Priestley JA, with whom Meagher JA and Hope AJA agreed, analysed Anshun to be authority for the following propositions: "1, that Wigram VC's extended principle as stated in Henderson is accepted as good law by the High Court; 2, that that principle applies inter alia, to category (3) cases, that is to a proceeding in which a party is asserting a cause of action which could have been raised, but was not, in a previous proceeding in which the same party was asserting a different cause of action based on substantially the same facts against the same party as the second proceeding is being brought; and 3, that the extended principle of Henderson will be applied to the second proceeding when it was unreasonable for the party asserting the cause of action in that second proceeding to refrain from raising it in the earlier proceeding against the same opponent party."" Priestley JA said that the relevant question was: "whether the claim sought to be raised in the Supreme Court under the Contracts Review Act (a) could have been raised in the Federal Court proceedings and (b) raised matters so clearly part of the subject matter of the Federal Court proceedings that it was unreasonable on the part of the appellants not to have raised the claim in those proceedings." The Full Court of the Federal Court accepted the approach in Rahme and followed it, accepting it was not inconsistent with anything stated in Anshun. The Court said: "where, as here, a defendant's claim is intimately connected with that of the plaintiff, in the sense that each arises, substantially, out of the same matters of fact, there is every reason to require that both be litigated at the one time; thereby minimising costs and avoiding the possibility of inconsistent judgments." In Bryant the Full Court accepted that the matters sought to be raised by the appellant were matters connected with the claims and non‑pursuit due to the difficulties of discovery did not prevent the application of the Anshun principle. In Bryant reference was also made to the character and existence of "special circumstances" within the exception referred to in Henderson v Henderson. The Full Court in Bryant accepted that English authorities link "special circumstances" to notions of justice. No argument has been made in response to this application that the exception should be applicable in those terms. This Court was also taken to the decision of the Court of Appeal of New South Wales in Boles v Esanda Finance Corporation Ltd (1989) 18 NSWLR 666. The judgment of Samuels JA, in which Priestley and Meagher JJA concurred, expressed the opinion that in enunciating the Anshun principle the High Court had selected a test of reasonableness as the discretionary criterion for the application of the rule. The foundation for this test of reasonableness derives from Henderson itself which requires a consideration of whether the parties "exercising reasonable diligence, might have brought forward the point at the time". Samuels JA said that "since such a test can scarcely be regarded as a conceptual foundation for a principle of law (although it may well indicate how the principle is to be applied) it may not be incompatible (indeed I venture to think it is consistent) with the views expressed by Fullagar J in Jackson v Goldsmith (1950) 81 CLR 446 at 466 where, in a dissenting judgment, he said: "The rule as to res judicata can be stated sufficiently for present purposes by saying that, where an action has been brought and judgment has been entered in that action, no other proceedings can thereafter be maintained on the same cause of action. This rule is not, to my mind, correctly classified under the heading of estoppel at all. It is a broad rule of public policy based on the principles expressed in the maxims `interest reipublicae ut sit finis litium' and `nemo debet bis vexari pro eadem causa'." The first maxim translates as "it concerns the State that there be an end to litigation". The second translates as "no man ought to be twice vexed for the same cause". With respect I accept that this provides a more satisfactory conceptual foundation for the resolution of the issues in Anshun than the establishment of a separate doctrine extending beyond res judicata and issue estoppel. The Full Court of this Court has again considered the application of the Anshun principle in Ling v Commonwealth of Australia (Wilcox, Whitlam and Sundberg JJ, 25 July 1996, unreported). In his reasons for judgment with which the other members of the Court concurred, Sundberg J referred to the approach of the Privy Council in Yat Tung Investment Co Ltd v Dao Heng Bank Ltd [1975] AC 581 at 590 where the Council appeared to have considered "special circumstances" as an issue separate from "unreasonableness". However, Sundberg J preferred to approach the matter, as the High Court appears to have done, to ask whether the applicant's failure to raise his grievance was unreasonable. In his concurring judgment Wilcox J stated the Anshun principle was designed to minimise the burden of litigation. He said the application of the principle to a failure to plead a defence will ordinarily not present a problem because it was not unreasonable to expect people who were sued promptly to consider what defences were available to them and to put forward any that seemed to have substance. In relation to cross‑claims, the question at issue in Bryant and in Ling, questions of degree could arise and, where the additional facts are substantial, it may be appropriate to accept the reasonableness of separate proceedings. The Full Court reversed the primary judge in concluding it was not unreasonable for the cross‑claim in issue in Ling to have been pursued in the other proceedings. The question which must be answered here is whether the claim sought to be raised in the Federal Court action under s45B of the TPA (a) could have been raised in the Supreme Court action; and (b) raised matters so clearly part of the subject matter of the Supreme Court action that it was unreasonable on the part of the applicant not to have raised that claim in those proceedings. Relevant to assessing unreasonableness will be whether the assertion of the issue in the later proceeding could give rise to the possibility of conflicting judgments. On the question whether s45B of the TPA could have been raised in the Supreme Court action, there is reliance for the applicant upon dicta of Gleeson CJ in Murphy v Abi-Saab (1995) 37 NSWLR 280 at 287 where the case was that in September 1992 Mr and Mrs Abi-Saab filed a statement of claim in the Equity Division. Soon afterwards mortgagees commenced separate proceedings in the Equity Division. Gleeson CJ at 287 said, "it would be paradoxical to apply the Anshun principle to defeat a claim which had been made in proceedings earlier in time than the proceedings said to result in the estoppel, and which were still on foot when those proceedings were determined". Nothing can be extracted from that dicta in the present circumstances where the position is that the proceeding first in time has been determined. Special federal matter Then there is the issue whether the question arising under s45B of the TPA could have been raised in the Supreme Court action because it is a "special federal matter" under the Jurisdiction of Courts (Cross‑Vesting) Act (1987) (Cth), s6 and the equivalent legislation of Western Australia. Section 3(1) of the Commonwealth Cross‑Vesting Act defines "special federal matter" to mean (among other things) "a matter arising under PtIV of the Trade Practices Act 1974". Section 45B of that Act is in PtIV so that the application of it is a "special federal matter". Section 6 of the same legislation contains the following provisions: "6(1)If: (a) a matter for determination in a proceeding that is pending in the Supreme Court of a State or Territory is a special federal matter; and (b) the court does not make an order under subs(3) in respect of the matter; the court must transfer the proceeding in accordance with this section to the Federal Court or a court mentioned in paragraph(2)(b). 6(2) If the court orders that a proceeding be transferred, the proceeding must be transferred: (a) if the matter for determination in the proceeding is a matter mentioned in paragraph (a), (b), (c), (d) or (e) of the definition of "special federal matter" in subsection 3(1) - to the Federal Court; or (b) ... 6(3) The Supreme Court may order that the proceeding be determined by that court if it is satisfied that there are special reasons for doing so in the particular circumstances of the proceeding other than reasons relevant to the convenience of the parties. 6(4) Before making an order under subsection (3), the court must be satisfied that: (a) a written notice specifying the nature of the special federal matter has been given to the Attorney‑General of the Commonwealth and the Attorney‑General of the State or Territory where the proceeding is pending; and (b) a reasonable time has elapsed since the giving of the notice for the Attorney‑General to consider whether submissions to the court should be made in relation to the proceeding. 6(5) For the purposes of subsection (4), the court: (a) may adjourn the proceeding for such time as the court thinks necessary and may make such order as to costs in relation to an adjournment as it thinks fit; and (b) may direct a party to the proceeding to give a notice in accordance with that subsection. 6(6) In considering whether there are special reasons for the purposes of subsection (3), the court must: (a) have regard to the general rule that special federal matters should be heard by the Federal Court or a court mentioned in paragraph (2)(b), whichever is appropriate in the particular case; and (b) take into account any submission made in relation to the proceeding by an Attorney‑General mentioned in subsection (4). 6(7) ... 6(8) ... 6(9) Where, through inadvertence, the Supreme Court of a State or Territory determines a proceeding of the kind mentioned in subsection (1) without: (a) the court making an order under subsection (3) that the proceeding be determined by that court; or (b) a notice mentioned in subsection (2) being given; nothing in this section invalidates the decision of that court. 6(10)..." There are complementary provisions in the Jurisdiction of Courts (Cross‑Vesting) Act (1987) (WA), s6. Section 6 was introduced by the Law and Justice Legislation Amendment Act (No3) 1992 which repealed s6 in its previous form. The section in that earlier form came before the Full Court of this Court (Black CJ, Lockhart and Gummow JJ) in NEC Information Systems Australia Pty Ltd v Iveson (1992) 36 FCR 258. At 268-71 the Court described in some detail the manner in which s6 is to be understood to operate. That description is now affected by the amendments to the section but remains substantially apposite. What follows is drawn from those reasons of the Full Court so far as they are applicable to the section in its present form: (1) Section 6 is fundamental to the operation of the cross‑vesting scheme. (2) The section imposes a condition upon the exercise of invested jurisdiction in special federal matters: the Supreme Court shall order a transfer to the Federal Court of the matter unless it makes an order under subs(3) for the determination of the proceeding in the Supreme Court. It is therefore the duty of a State Supreme Court, where a matter for determination in a proceeding pending in that court is a "special federal matter", to transfer the proceeding to the Federal Court unless the Supreme Court makes an order under subs(3) - see subs(2). (3) For the Supreme Court to make an order that the proceeding be determined in the Supreme Court, it must be "satisfied that there are special reasons for doing so in the particular circumstances of the proceeding other than reasons relevant to the convenience of the parties": subs(3). In considering whether there are special reasons the Court must have regard to the general rule that special federal matters should be heard by the Federal Court and take into account any submission made by an Attorney‑General under subs(4). (4) The importance given by the Parliament to the observance of the criteria in subs(3) is emphasised by the reservation by subs(8) of the jurisdiction of the Supreme Court to grant interlocutory relief which is so urgent that it is in the interests of justice to do so. (5) The Supreme Court is bound not to proceed to determine whether there are special reasons until it is satisfied that a written notice specifying the nature of the special federal matter has been given to the Attorney‑General of the Commonwealth and the Attorney‑General of the State or Territory where the proceeding is pending and a reasonable time has elapsed since the giving of that notice for them to consider whether submission to the Court should be made in relation to the proceedings: subs(4). That requirement is supported by the provisions of subs(5) permitting the Court to make an adjournment and appropriate directions. (6) It is central to the cross‑vesting scheme that a Supreme Court, in making an order under s6(1) that a proceeding be determined by it, including the "special federal matter", and thereafter during the subsistence of the proceeding is exercising Federal, not State jurisdiction, in the proceeding. Loss of expedition This was not a case where the special federal matter was raised in the proceeding pending in the Supreme Court action. If however, it had been raised as a defence to the Supreme Court action, the Supreme Court would have been bound by the provisions of s6. That would have required the Supreme Court to transfer "the proceeding" to the Federal Court unless it made an order as provided for in subs6(3). This would have required the Court to have given notice in accordance with subs6(4) to the Attorney‑General and for reasonable time to be allowed for responses to be received. That would have had the consequence that a matter which was listed in the expedited list would necessarily have been delayed. Knowledge of other party There is a further circumstance relevant and it is that in the Supreme Court action the present respondent was aware the Federal Court action had been instituted. The present respondent may be presumed to have been aware of the effect of the law that if the applicant had raised the special federal matter in the Supreme Court action, the attempt by the respondent to have the matter dealt with on an expedited basis would have failed. Unreasonableness The conclusion which I have reached is it was unreasonable for the applicant not to have raised the defence said to arise under s45B of the TPA in the Supreme Court proceedings. It is apparent that the defence could have been raised in the Supreme Court action. The existence of the provisions for cross‑vesting previously referred to, presented no barrier to the matter being raised there. The Federal Court action raised matters clearly part of the subject matter of the Supreme Court action that it was unreasonable on the part of the applicant not to have raised the defence in the Supreme Court action. Relevant to that conclusion is the fact that assertion of the defence in the Federal Court action gives rise to the possibility of conflicting judgments. The existence of the cross‑vesting provisions previously described underlines and reinforces the purpose of the Anshun principle to minimise the burden of litigation and ensure that parties put their whole case forward at one time. In the case of special federal matters, the legislation sets out a procedure to be followed normally resulting in determination of those matters in the Federal Court. It was therefore the case that had the defence been raised in the Supreme Court action it was inevitable, in the absence of special reasons, that the whole action would have been remitted to the Federal Court in accordance with those provisions. That would have had the consequence that all issues would have been determined by the one court, thus eliminating the prospect of conflicting judgments. The fact that the raising of the defence would inevitably have led to delay both in effecting the transfer of the proceedings to the Federal and in giving notice as required by s6(4) of the Commonwealth Cross‑Vesting Act does not make reasonable the applicant's failure to raise the defence in the Supreme Court action. It was the respondent who sought expedition in that action. It was the respondent which would have been kept out of its judgment. The delay involved was reasonable because it brought with it the elimination of the possibility of conflicting judgments arising through failure to raise the defence constituting the special federal matter. Following transfer, application could have been made for expedition in the Federal Court. The knowledge which the respondent then had that the Federal Court action had been instituted is no barrier to this conclusion because the obligation to raise the defence rested on the applicant. If it be the case that consideration should be given to whether "special circumstances" prevented the application of the principle in Henderson v Henderson, I do not consider there are any such circumstances. The relevant provisions of the cross‑vesting legislation do not constitute special circumstances for non‑application of the principle: rather they reinforce the underlying curial goals of the Anshun principle. The loss of expedition in the Supreme Court action is not a special circumstance when it is appreciated that, following transfer, expedition could be sought in the Federal Court and that transfer would avoid the possibility of inconsistent judgments. The knowledge by the respondent at the time of the Supreme Court action of the institution of the Federal Court action is not a special circumstance because the onus to raise relevant defences lay on the applicant. For these reasons I consider that the Anshun principle applies. There is a question whether it is appropriate for an issue of estoppel to be raised on an application expressed to be made pursuant to FCR, O20 r2: Higgins Holdings Pty Ltd v The Commonwealth Bank of Australia (1995) ATPR 41-302 at 40,296. However, here, as there, the matter was argued. The Anshun principle applying, the cause of action can no longer be reasonably maintained. For these reasons the proceeding should be dismissed. I certify that this and the preceding 17 pages are a true copy of the Reasons for Judgment of his Honour Justice R D Nicholson. Associate: Date: APPEARANCES Counsel for the Applicant: Mr D M Stone Solicitors for the Applicant: Williams & Hughes Counsel for the Respondent: Mr R Macaw QC and Mr J Elliott Solicitors for the Respondent: Freehill, Hollingdale & Page Date of Hearing: 13 November 1996 Date of Judgment: 18 December 1996