FEDERAL COURT OF AUSTRALIA Overall v Permanent Trustee Company Ltd [1999] FCA 1385 WAYNE DOUGLAS OVERALL -v- PERMANENT TRUSTEE COMPANY LTD V 411 of 1999 RYAN J 29 SEPTEMBER 1999 MELBOURNE IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY V 411 OF 1999 BETWEEN: WAYNE DOUGLAS OVERALL Applicant AND: PERMANENT TRUSTEE COMPANY LTD Respondent JUDGE: RYAN J DATE OF ORDER: 29 SEPTEMBER 1999 WHERE MADE: MELBOURNE THE COURT ORDERS THAT: (1) That the proceedings herein be transferred to the Supreme Court of Victoria. (2) That the costs of both parties of the proceedings in this Court, including any reserved costs, and the costs of and incidental to the motion on notice dated 27 August 1999, be costs in the cause in the Supreme Court of Victoria. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY V 411 OF 1999 BETWEEN: WAYNE DOUGLAS OVERALL Applicant AND: PERMANENT TRUSTEE COMPANY LTD Respondent JUDGE: RYAN J DATE: 29 SEPTEMBER 1999 PLACE: MELBOURNE REASONS FOR JUDGMENT 1 In this matter the applicant, Mr Overall, has applied to this Court claiming relief in relation to the termination of his employment by the respondent Permanent Trustee Company Ltd ("Permanent Trustees"). The statement of claim pleads, first, a contract of employment between the applicant and Permanent Trustees. Various terms of that contract are pleaded, including some as to the circumstances in which Mr Overall's employment could be terminated before he reached normal retiring age and the consequences of termination in those circumstances. 2 Those consequences are related to matters such as severance or redundancy payments and accrued annual and long service leave. It is then pleaded that, in breach of contract, the applicant's employment was terminated and he was paid one month's salary in lieu of notice. Damages are claimed for breach of contract. There seem to be various formulations of the measure of damages claimed, but at their highest they appear to amount to $326,746. As well, it is pleaded that Permanent Trustees has been guilty of deceptive and misleading conduct under s 52 of the Trade Practices Act by representing to the applicant in March 1998 ("the Lee representation"), that if the applicant were made redundant he would receive 60 weeks' salary. On various dates between 28 May 1997 and 28 October 1998 ("the Davis representations"), another officer of Permanent Trustees allegedly told the applicant that he would have ongoing employment with that company. 3 The same loss and damage as are claimed for breach of contract are pleaded to have flowed from the alleged contraventions of s 52 of the Trade Practices Act. It is then pleaded that the Lee representation and the Davis representations were collateral warranties which induced the applicant to enter into, or continue, the contract of employment. The same damages are claimed to have flowed from breaches of those collateral warranties. It is next pleaded that Permanent Trustees is estopped from not giving effect to either or both the Lee representation and the Davis representations. 4 A further alternative cause of action is pleaded by asserting that the termination of the applicant's employment and the failure to give effect to the Lee representation and the Davis representations constituted unconscionable conduct for which the applicant seeks the same damages as are claimed for breach of the contract of employment. Finally, the statement of claim alleges that the termination of the applicant's employment was in breach of a fiduciary duty owed by Permanent Trustees to the applicant. The same damages said to have been suffered from the breach of contract are claimed for breach of fiduciary duty. 5 By notice of motion dated 27 August 1999 Permanent Trustees seeks, principally, the following orders: (1) An order pursuant to the Court's inherent jurisdiction and pursuant to Order 11 rule 6 or Order 20 rule 2 that the whole or alternatively part of the claim made by the applicant against the respondent on 22 July, 1999 be struck out or dismissed on the grounds that: (a) paragraphs 10 to 15 thereof [pleading a cause of action under the Trade Practices Act] do not disclose any reasonable cause of action or are frivolous or vexatious; (b) Further and alternately paragraphs 10-15 thereof have a tendency to cause prejudice, embarrassment or delay in the proceeding; (c) Further and alternatively the proceeding is an abuse of process of the Court. (2) Further to paragraph 1, an order that the whole proceeding be set aside on the ground that the Court does not have jurisdiction to hear and determine the matters alleged therein. (3) Alternately to paragraph 2, an order that the proceeding be transferred to the County Court of Victoria pursuant to s 5(4) of the Jurisdiction of Courts (Cross-Vesting) Act 1987 on the grounds that it is more appropriate and in the interests of justice to do so. (4) Further and alternatively to paragraph 1, an order that the whole proceeding be transferred to the County Court of Victoria pursuant to s 10 of the Jurisdiction of Courts (Cross-Vesting) Act 1987 as the County Court of Victoria has jurisdiction with respect to all of the matters." 6 The first proposition on which Permanent Trustees relies raises a question on which authorities seem to diverge. That is whether the making of a representation by a corporation as to the terms and conditions on which a person should be employed or continue to be employed by it, can amount to "conduct in trade or commerce" within the meaning of s 52 of the Trade Practices Act. 7 In Concrete Constructions (New South Wales) Pty Ltd v Nelson (1990) 169 CLR 594 it was said in a joint judgment of Mason CJ, Deane, Dawson and Gaudron JJ at 603: "Nonetheless, when the section is read in the context provided by other features of the Act, which is "An Act relating to certain Trade Practices," the narrower (i.e. the second) of the alternative constructions of the requirement "in trade or commerce" is the preferable one. Indeed, in the context of Pt V of the Act with its heading "Consumer Protection", it is plain that s 52 was not intended to extend to all conduct, regardless of its nature, in which a corporation might engage in the course of, or for the purposes of, its overall trading or commercial business. Put differently, the section was not intended to impose by a side-wind an overlay of Commonwealth law upon every field of legislative control into which a corporation might stray for the purposes of, or in connection with, carrying on its trading or commercial activities. What the section is concerned with is the conduct of the corporation towards persons, be they consumers or not, with whom it, (or those whose interests it represents or is seeking to promote) has or may have dealings in the course of those activities or transactions which, of their nature, bear a trading or commercial character. Such conduct includes, of course, promotional activities in relation to, or for the purposes of, the supply of goods or services to actual or potential consumers, be they identified persons or merely an unidentifiable section of the public. In some areas, the dividing line between what is and what is not "conduct in trade or commerce" may be less clear and may require the identification of what imports a trading or commercial character to an activity which is not, without more, of that character. The point can be illustrated by reference to the examples mentioned above. The driving of a truck for the delivery of goods to a consumer and the construction of a building for another pursuant to a building contract are, no doubt, trade or commerce insofar as the relationship between supplier and actual or potential customer or between builder and building owner is concerned. That being so, to drive a truck with a competitor's name upon it in order to mislead the customer or to conceal a defect in a building for the purpose of deceiving the building owner, may well constitute misleading or deceptive conduct "in trade or commerce" for the purposes of s 52. On the other hand, the mere driving of a truck or construction of a building is not, without more, trade or commerce and to engage in conduct in the course of those activities which is divorced from any relevant actual or potential trading or commercial relationship or dealing will not, of itself, constitute conduct "in trade or commerce" for the purposes of that section. That being so, the giving of a misleading hand signal by the driver of one of its trucks is not, in the relevant sense, conduct by a corporation "in trade or commerce". Nor, without more, is a misleading statement by one of a building company's own employees to another employee in the course of their ordinary activities. The position might well be different if the misleading statement was made in the course of, or for the purposes of, some trading or commercial dealing with the corporation and the particular employee. The alleged misleading or deceptive conduct of the Company's foreman in the present case consisted of an internal communication by one employee to another employee in the course of their ordinary activities, in and about the construction of a building. It follows from what has been said above that that conduct was not, for relevant purposes, conduct "in trade or commerce" and would not, if established, constitute a contravention of s 52 of the Act." 8 In Martin v Tasmania Development and Resources, (unreported, FCA 593 of 7 May 1999, Heerey J noted at paragraph 75: "Concrete Constructions was considered by Wilcox J in Barto v GPR Management Services Pty Ltd (1991) 105 ALR 339. The applicant alleged wrongful dismissal by his employer. Part of the statement of claim included allegations that in negotiating the applicant's terms of employment the employer made certain representations said to constitute a breach of s 52, including an alleged desire for the applicant to continue in its service "for many years to come. The employer brought a strikeout application in respect of those allegations. After discussing Concrete Constructions Wilcox J concluded (at 344): "...it seems to me correct to hold that the conduct of a corporation in the course of negotiations for the employment of senior staff is conduct potentially falling within s 52. It is true that an employment contract does not directly product income, but the making of such a contract is part of the total activities in trade or commerce of the corporation. Critically, it is intrinsically commercial conduct. It is directed to the creation of a contractual relationship. His Honour then referred to his own earlier decision in Patrick v Steel Mains Pty Ltd (1987) 77 ALR 133, to Wright v TNT Australia Pty Ltd (1988) 80 ALR 221(on appeal (1989) 15 NSWLR 679) and to three other first instance judgments in the Federal Court which referred to Patrick without disapproval, Orison Pty Ltd v Strategic Minerals Corp NL (1987) 77 ALR 141 at 157; Finucane v NSW Egg Corp (1988) 80 ALR 486 at 508 and Merman Pty Ltd v Cockburn Cement Pty Ltd (1988) 84 ALR 521 at 529 to 30. Wilcox J concluded (at 345): "Having regard to these authorities it seems to me that the better view is that conduct of a corporation which occurs in the course of negotiations with a prospective or present employee in respect of that persons employment contract, is conduct capable of falling within s 52 of the Trade Practices Act. Certainly it cannot be said, without an investigation of the facts, that this proposition is so clearly untenable as to justify striking out a pleading which relies upon it."" 9 Heerey J continued in para 77: "As the last-mentioned passage makes clear, Wilcox J was deciding a strikeout application. Even if the claim was just arguable, the application had to fail. In the present case I am of course considering the issue at a final hearing. But in any event I would respectfully disagree with Wilcox J. Patrick and the other authorities referred to by his Honour were all before the decision of the High Court in Concrete Constructions. The majority in that case clearly rejected the wider construction of "in trade or commerce," which would extend to virtually any activity of a corporation. It is true that a building company could not earn income unless it had workers who received instructions from foremen. But that was not enough to bring the alleged misrepresentation within the concept of "trade or commerce". Similarly, TDR could not carry out its activities of promoting Tasmanian trade and development (which activities themselves I assume for present purposes to be in trade or commerce) unless it engaged staff. Nevertheless such engagements and the necessary associated incidental negotiations, however necessary, are not in themselves of a trading or commercial nature. They are internal affairs of TDR." 10 For reasons which I shall explain, it is unnecessary for me to resolve, on the stringent test applicable to a strikeout motion, whether a representation as to the terms and tenure of employment of a senior employee can ever be conduct "in trade or commerce" for the purposes of s 52 of the Trade Practices Act. In my view, the case as pleaded in the statement of claim is essentially one for damages for breach of contract or for equitable relief. I do not accept, as Mr Murphy of Counsel for the applicant contended, that the claim under the Trade Practices Act is at the "core" of the present action. 11 It is also to be borne in mind that State Supreme and County or District Courts have concurrent jurisdiction, or have jurisdiction concurrent with that of this Court over matters arising under s 52 of the Trade Practices Act. This Court is not a court of general commercial or equitable jurisdiction. It is true that it is empowered by s 22 of the Federal Court of Australia Act 1976 to grant all remedies to which any party appears to be entitled in respect of a legal or equitable claim properly brought forward by him or her in the matter. However, that power is conferred in aid of the exercise of the Court's original jurisdiction which is described in s 19 of the Federal Court Act as being "any jurisdiction vested in it by a law of the Commonwealth Parliament or by laws made by the Parliament of the Commonwealth". Here the Commonwealth Act which is invoked by the applicant relevantly confers concurrent jurisdiction on State courts of competent jurisdiction and all of the other causes of action relied on involve the application of general common law or equitable principles. There are no special features, such as several applicants resident in different States, which make the application more appropriate to be litigated in this Court. 12 Mr Murphy instanced the fact that legislative power over industrial matters has now been referred by the State of Victoria to the Commonwealth. However, that observation serves only to point up more starkly that this application involves no question of legislative regulation of the relations of employer and employee. It is squarely confined to incidents of that relationship as defined by the common law, including general principles of the law of contract. The doubts which have been shown to exist as to whether s 52 of the Trade Practices Act is applicable to the circumstances of this case, although not fatal to the accrued jurisdiction of this Court, have also influenced me to make an order under s 5(4)(b) of the Jurisdiction of Courts (Cross-Vesting) Act 1987. 13 Those doubts make it appropriate to focus attention more closely on the other non-statutory causes of action which, as I have said, but for the accrued jurisdiction, would not be justiciable in this Court. Mr Murphy referred me to Perpetual Holdings Pty Ltd v Leviathan Pty Ltd (1991) 30 FCR 524 where there were parallel proceedings in a State Supreme Court and this Court, the Supreme Court proceedings having been instituted first. O'Loughlin J, at 530, referred to the judgment of Spender J in Teserioro v Matstar Pty Ltd (1990) 93 ALR 607 and continued: "In the case, a vendor of land sued for specific performance in the Supreme Court of Queensland. A week later the purchaser instituted proceedings against the vendor and the vendor's agent in the Federal Court alleging misleading or deceptive conduct and claiming damages for breaches of s 52 and/or s 53A of the Trade Practices Act as well as common law relief. As his Honour pointed out there was a time when trade practices matters were exclusively within the jurisdiction of the Federal Court. But that has changed. Jurisdiction under Pt V of the Trade Practices Act is no longer exclusive to the Federal Court: see for example, s 86A of that Act. Furthermore there are the consequences of the Cross-vesting legislation to consider. Spender J came to the conclusion (at 608) that: "...in the absence of special circumstances, the litigation should be pursued in the court in which it was first commenced." When, as in the case here, all else is equal, I agree with his Honour's conclusion. It was for these reasons that an order was made that the within action be transferred from the Federal Court of Australia to the Supreme Court of South Australia. " 14 I doubt, with respect, that there is any prima facie force in the applicant's choice of forum which a respondent has the onus of overcoming by demonstrating some overriding objective factor. The existence of such a prima facie force was suggested by Wilcox J in Bourke v State Bank of New South Wales (1988) 22 FCR 378. However, Rogers J in Seymour Smith v Electricity Trust of South Australia (1989) 97 FLR 160, after referring to the observations of Wilcox J in Bourke, said, at 174: "With respect, I do not accept there is any weight to be ascribed to the fact that the court may be overriding the plaintiffs' choice of venue. The court is, in my view, required to carry out a balancing exercise to determine the appropriate court." 15 In my view, no question of onus arises in cases of this kind. Rather the task of the court in which the proceeding has been instituted, as Rogers AJA with whom Street CJ and Kirby p agreed, observed in the well-known case of Bankinvest AG v Seabrook (1988) 90 ALR 407 at 421: "Mr Nicholas submitted that consideration of the question whether an order for transfer should be made should follow two steps. First, there is a prima facie presumption that the court, the jurisdiction of which was properly invoked, should exercise it. The litigant invoking the jurisdiction had an entitlement and the court had a corresponding obligation to exercise jurisdiction. Secondly, there is an onus resting on the person moving to transfer to show some positive basis on which it could be contended that the entitlement of the other party to the exercise of jurisdiction should be displaced. In my view, this approach should be firmly rejected. If accepted it would entrench the concept of one Australian jurisdiction being "foreign" to another. No allowance would be made for the fact that the Australian States are a federation. Most relevantly, the purpose of the legislation would be lost. The cross-vesting legislation does not call for this approach. Indeed, it positively rejects it. The only lodestar that a judge may steer by is what do the interests of justice dictate should be done? It is inapt to speak in terms of onus. Bearing in mind that the court may make an order of its own motion, the language of onus being discharged is inapplicable." 16 In any event, the objective factors for and against an order transferring this action are not evenly balanced. The applicant has pointed to nothing, apart from his own subjective preference, as reflected in the institution of the proceedings, which makes this Court the more appropriate or convenient forum. It is equally true that the respondent has not sought to demonstrate that any procedural or evidentiary advantage will flow from an exercise of jurisdiction by a Victorian State court. 17 However, there remains the distinct impression created by the statement of claim that this case, in its essence, is essentially one for damages for wrongful dismissal or breach of contract. As Gummow and Hayne JJ said in another context in Re Wakim Ex Parte McNally (1999) 163 ALR 270 at 312: "Considerations of impression and practical judgment are relevant because the question of jurisdiction usually arises before evidence is adduced and often before the pleadings are complete. Necessarily, then, the question will have to be decided on limited information. But the question is not at large." 18 Here the relevant question is which causes of action are central to the relief which the applicant seeks. My impression is that they are those arising at common law or equity in respect of which this Court has no jurisdiction apart from its accrued jurisdiction. When there is added to that impression a genuinely arguable doubt as to the availability of the single statutory cause of action which attracts the accrued jurisdiction of this Court, the case for transferring the action to a State court of general jurisdiction, in the absence of any countervailing factors, is compelling. 19 Although the respondent seeks by its notice of motion a transfer to the County Court of Victoria, it is clear that the highest amount of damages claimed from the present statement of claim exceeds the pecuniary limit of $200,000 on the jurisdiction of that Court. Accordingly, since there has been no consent to the exercise of unlimited jurisdiction by the County Court of Victoria, I have regarded it as appropriate to transfer the present proceedings to the Supreme Court of Victoria. 20 For these reasons the order of the Court is: (1) That the proceedings herein be transferred to the Supreme Court of Victoria. (2) That the costs of both parties of the proceedings in this Court, including any reserved costs, and the costs of and incidental to the motion on notice dated 27 August 1999 be costs in the cause in the Supreme Court of Victoria. I certify that the preceding twenty (20) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice RYAN. Associate: Dated: 29 September 1999 Counsel for the Applicant: Mr M D Murphy Solicitor for the Applicant: A J Macken & Co Counsel for the Respondent: Mr I Fehring Solicitor for the Respondent: Septimus Jones & Lee Date of Hearing: 29 September 1999 Date of Judgment: 29 September 1999