Mazzeo v KSH Consulting Pty Ltd [1999] FCA 1057

Third Respondent

PETER EDWARD FARMER

Fourth Respondent

JUDGE: EMMETT J

DATE: 23 JULY 1999

PLACE: SYDNEY

EX TEMPORE REASONS FOR JUDGMENT 1 On 11 November 1994, Rocco Santo Mazzeo commenced proceedings in the Court against KSH Consulting Pty Limited, Frank Rudolf Borcherdt, Claude James Fra and Peter Edward Farmer. In the original application, the applicant sought relief under sections 260 and 461 of the Corporations Law. The proceedings meandered for some years before they came under my management. I have for some time endeavoured to isolate the issues for hearing and to have the matter ready for trial. 2 However, following the decision of the High Court in Re Wakim; ex parte McNally [1999] HCA 27, the applicant has now indicated to the Court that he accepts that the Court does not have jurisdiction. Some reference has been made to the possibility that the facts alleged in the amended statement of claim, could constitute circumstances giving rise to relief under the Trade Practices Act 1974 (Cth). However, the applicant does not wish to make any amendment to raise such a contention. On that basis, it appears to me that the Court has no jurisdiction to hear the matter. 3 Section 11(2) of the Federal Courts (State Jurisdiction) Act 1999 (NSW) ("the Act") provides as follows: "A person, who was a party to a proceeding in which a relevant order is made, may apply to the Supreme Court for an order that the proceeding be treated as a proceeding in the Supreme Court and the Supreme Court may make any such order." Under section 11(1), a "relevant order" includes an order of a Federal Court, whether made before or after the commencement of the section, dismissing striking out or staying a proceeding relating to a State matter for want of jurisdiction. "State matter" is defined in section 3 as including a matter in which the Supreme Court has jurisdiction otherwise than by reason of a law of the Commonwealth or of another State or a Territory. 4 The Supreme Court of New South Wales has jurisdiction under the Corporations Law to deal with the matters which are the subject of the proceedings. Accordingly, I am satisfied that the proceeding before me is a proceeding relating to a "State matter". In the absence of any contention to the contrary, I am also satisfied that the Court has no jurisdiction in relation to the matter. 5 Orders have already been made in relation to costs. Whether those orders were made with jurisdiction may, of course, be a matter of considerable doubt. If they are to be enforced, it would be necessary, it seems to me, that they be enforced pursuant to the provisions of section 11 of the Act. Under section 11(3), if the Supreme Court makes an order under section 11(2), despite the order of the Federal Court staying or dismissing the proceedings, the proceeding becomes, and must be recorded by the Supreme Court as, a proceeding in the Supreme Court and, for the purposes of any limitation law and for all other purposes, the proceeding is deemed to have been brought in the Supreme Court on the day in which the proceeding was first recorded as a proceeding in the Federal Court. 6 Without intending to pre-empt any decision that might arise in relation to any issue, it appears to me that the orders that have already been made by this Court may well be capable of being treated as orders of the Supreme Court. On that basis, the orders would fall for enforcement in the Supreme Court. However, I have not heard argument on those questions and for that reason, it appears to me to be preferable to stay the proceedings rather than to dismiss them for want of jurisdiction. Accordingly, I propose to order that the proceeding be stayed. I certify that the preceding six (6) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Emmett.