FEDERAL COURT OF AUSTRALIA Crandell v Servier Laboratories (Aust) Pty Ltd [1999] FCA 1461 PRACTICE AND PROCEDURE – Transfer of proceedings – Application to transfer proceedings from Federal Court to Supreme Court of New South Wales – Jurisdiction of Courts (Cross-Vesting) Act 1987 (Cth), s 5(4) – Trade Practices Act 1974 (Cth), s 86A Federal Court of Australia Act 1976 (Cth), Part IVA Jurisdiction of Courts (Cross-Vesting) Act 1987 (Cth), ss 5(4), 14(2) Trade Practices Act 1974 (Cth), ss 75AS, 86A Re Wakim; Ex parte McNally (1999) 73 ALJR 839, considered Re Wilcox; Ex Parte Venture Industries Pty Ltd (1996) 66 FCR 511, cited Collings Construction Co Pty Ltd v Australian Competition and Consumer Commission (1998) 43 NSWLR 131, cited Poignand v NZI Securities Australia Ltd (1992) 37 FCR 363, considered PATRICIA CRANDELL v SERVIER LABORATORIES (AUST) PTY LIMITED NG 1411 OF 1998 JUDGE: SACKVILLE J PLACE: SYDNEY DATE: 25 OCTOBER 1999 IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NG 1411 OF 1998 BETWEEN: PATRICIA CRANDELL Applicant AND: SERVIER LABORATORIES (AUST) PTY LTD Respondent JUDGE: SACKVILLE J DATE OF ORDER: 25 OCTOBER 1999 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. Pursuant to s 86A(1) of the Trade Practices Act 1974 (Cth), the matters for determination in Federal Court proceedings NG 1411 of 1998 be transferred to the Supreme Court of New South Wales. THE COURT DIRECTS THAT: 2. Order 1 take effect on 10 December 1999. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NG 1411 OF 1998 BETWEEN: PATRICIA CRANDELL Applicant AND: SERVIER LABORATORIES (AUST) PTY LTD Respondent JUDGE: SACKVILLE J DATE: 25 OCTOBER 1999 PLACE: SYDNEY REASONS FOR JUDGMENT The Proceedings 1 The present proceedings were commenced as representative proceedings pursuant to Part IVA of the Federal Court of Australia Act 1976 (Cth) ("Federal Court Act"). By consent, an order has now been made, pursuant to s 33N(1) of the Federal Court Act, that the proceedings no longer continue as representative proceedings. At the request of the parties, this order has been expressed to take effect as from 10 December 1999. 2 The case as pleaded by the applicant seeks damages and compensation pursuant to various provisions within Parts V and VA of the Trade Practices Act 1974 (Cth) ("TP Act"). The applicant also seeks damages and other relief pursuant to ss 82 and 87 of the TP Act, by reason of what is alleged to have been misleading or deceptive conduct on the part of the respondent in contravention of s 52 of the TP Act (which is within Part V of the TP Act). In addition, the applicant claims damages at common law for negligence and breach of contract and seeks relief under those provisions of Fair Trading Acts of the States and Territories equivalent to ss 52, 82 and 87 of the TP Act. 3 When the order pursuant to s 33N(1) of the Federal Court Act was made, the parties requested that a further order be made, pursuant to s 5(4) of the Jurisdiction of Courts (Cross-Vesting) Act 1987 (Cth) ("Cross-Vesting Act"), transferring the proceedings to the Supreme Court of New South Wales. Section 5(4) of the Cross-Vesting Act provides as follows: "(4) Where: (a) a proceeding (in this subsection referred to as the 'relevant proceeding') is pending in the Federal Court...(in this subsection referred to as the 'first court'); and (b) it appears to the first court that: (i) ... (iii) ...; or (iii) it is otherwise in the interests of justice that the relevant proceeding be determined by the Supreme Court of a State or Territory; the first court shall transfer the relevant proceeding to that Supreme Court." 4 I raised with the parties whether, in the light of the decision of the High Court in Re Wakim; Ex Parte McNally (1999) 73 ALJR 839, I had power to make the order for transfer of the proceedings. I invited the parties, if they were so advised, to make a submission supporting the proposition that the validity of s 5(4) of the Cross-Vesting Act was unaffected by the decision and reasoning of the High Court in Re Wakim. 5 The parties responded to my invitation by preparing a joint submission. They pointed out that the only provisions held to be unconstitutional in Re Wakim were those purporting to confer jurisdiction on the Federal Court in relation to State matters, namely s 9(2) of the Cross-Vesting Act and s 56(2) of the Corporations Act 1989 (Cth). These provisions were held to be unconstitutional on the ground that the Commonwealth Parliament does not have power either to consent to the States conferring jurisdiction on federal courts, or itself to confer State judicial power on federal courts: Re Wakim, at 864, per Gummow and Hayne JJ, with whom Gleeson CJ and Gaudron J agreed. See also at 847–848, 851, per McHugh J. The parties submitted that the reasoning in Re Wakim does not affect the vesting of federal jurisdiction in State courts, which is expressly contemplated by Chapter III of the Constitution: Re Wakim, at 866, per Gummow and Hayne JJ. 6 The joint submission appeared to me to state correctly the effect of Re Wakim. However, the submission did not advert to the fact that s 5(4) of the Cross Vesting Act is not the only source of power to transfer proceedings involving matters arising under the TP Act. In particular, s 86A of the TP Act provides as follows: "(1) Where – (a) a civil proceeding instituted (whether before or after the commencement of this section) by a person other than the Minister or the Commission is pending in the Federal Court; and (b) a matter for determination in the proceeding arose under... Division 1, 1A or 1AA of Part V, the Federal Court may, subject to sub-section (2), upon the application of a party or of the Federal Court's own motion, transfer to a court of a State or Territory the matter referred to in paragraph (b) and may also transfer to that court any other matter for determination in the proceeding. (2) The Federal Court shall not transfer a matter to another court under sub-section (1) unless the other court has power to grant the remedies sought before the Federal Court in the matter and it appears to the Federal Court that - (a) the matter arises out of or is related to a proceeding that is pending in the other court; or (b) it is otherwise in the interests of justice that the matter be determined by the other court. (3) Where the Federal Court transfers a matter to another court under sub-section (1) – (a) further proceedings in the matter shall be as directed by the other court; and (b) the judgment of the other court in the matter is enforceable throughout Australia and the external Territories as if it were a judgment of the Federal Court." Section 75AS of the TP Act provides, inter alia, that s 86A operates in relation to "an action under [Part VA]" as if the reference in s 86A to "Division 1, 1A or 1AA of Part V" includes a reference to Part VA. 7 I thought it appropriate to extend a further invitation to the parties to explain why it was necessary to rely on s 5(4) of the Cross-Vesting Act when s 86A of the TP Act (read with s 75AS) appears to confer power on the Federal Court to transfer all matters arising for determination in the current proceedings. 8 This invitation provoked a brief second joint submission from the parties They simply asserted, without reference to authority, that the power conferred by s 86A of the TP Act is very similar to the power conferred by s 5(4) of the Cross-Vesting Act and that it is immaterial whether the order for transfer is made pursuant to the TP Act or to the Cross-Vesting Act. No reference was made to the fact that the Cross-Vesting Act contains no provision equivalent to s 86A(3)(b) of the TP Act: cf Cross-Vesting Act, s 14(2). 9 The relationship between s 86A of the TP Act and s 5(4) of the Cross-Vesting Act in fact has been considered by a Full Court, in Re Wilcox; Ex parte Venture Industries Pty Ltd (1996) 66 FCR 511. The Court there held (at 529) that s 86A of the TP Act and s 5(4) of the Cross-Vesting Act provide "separate, albeit overlapping, but additional sources...of power to transfer matters; or proceedings in respect of matters, arising under Commonwealth legislation to or from [Supreme Courts]". See also Collings Construction Co Pty Ltd v Australian Competition and Consumer Commission (1998) 43 NSWLR 131 (NSW CA). 10 The Full Court in Re Wilcox made the following observations on the effect of s 86A of the TP Act (at 520): "7. A transfer under s 86A(1) is not of a proceeding, but is of the matter for determination in a proceeding. However, it is implicit in the statutory scheme that the exercise of the power to transfer a matter for determination in a proceeding will usually have the practical effect of transferring the further hearing and determination of the proceeding to the State or Territory Court to which the matter for determination has been transferred. 8. In using a 'matter' rather than a 'proceeding' as the subject matter for conferral, investment and transfer under ss 86 and 86A of the TPA, the legislature was referring to a matter in the constitutional sense used in Ch III. For present purposes it is sufficient to state that, in that sense, a 'matter' does not mean a legal proceeding but rather the justiciable controversy or dispute, or the subject matter for determination, in a legal proceeding. (See Re Judiciary Act 1903-1920 and Navigation Act 1912-1920 (1921) 29 CLR 257 at 265 and Fencott v Muller (1983) 152 CLR 570 at 602-610.)" 11 In my view, subject to satisfying the requirements in s 86A(2) of the TP Act, s 86A(1) confers power to transfer to the Supreme Court the matters for determination in the present proceedings, insofar as they arise under Division 1 of Part V or Part VA of the TP Act. In addition, s 86A(1) confers power to transfer all other matters for determination in the proceedings. The practical effect is that the proceedings as a whole can be transferred to the Supreme Court. It follows that, provided that the requirements of s 86A(2) are satisfied, there is no need to invoke s 5(4) of the Cross-Vesting Act to achieve the result the parties seek. Moreover, if the order is made under s 86A(1) of the TP Act, any judgment in the matters will be enforceable throughout Australia as provided for in s 86A(3)(b). 12 The requirements of s 86A(2) that must be satisfied before an order for transfer can be made are, relevantly, these: (i) the Supreme Court must have power to grant the remedies sought before the Federal Court in the matter; and (ii) it must be in the interests of justice that "the matter" be determined by the Supreme Court. 13 In Poignand v NZI Securities Australia Ltd (1992) 37 FCR 363, Gummow J declined to make an order under s 86A(2) of the TP Act for the transfer of representative proceedings instituted in the Federal Court under Part IVA of the Federal Court Act. His Honour considered (at 368) that it was doubtful whether the Supreme Court had power to grant remedies of the kind available under the representative proceedings provisions of Part IVA of the Federal Court Act. However, he rested his decision upon the exercise of his discretion, expressing the view (at 369) that "[i]t cannot be in the interest of justice to make an order for such a transfer where there is a real question as to availability in the [Supreme Court] of the special procedures instituted by...the 'innovative' provisions of Part IVA of the Federal Court Act". 14 As I have explained, an order has been made that the present proceedings no longer continue as representative proceedings. However, the order does not take effect until 10 December 1999. In order to avoid possible difficulties of the kind identified by Gummow J (theoretical though they may be in the present case), I think the appropriate course is to direct that the order for transfer of the relevant matters pursuant to s 86A(1) of the TP Act should not take effect until 10 December 1999. 15 The parties have jointly submitted that it is in the interests of justice for the matters for determination in the present proceedings to be transferred to the Supreme Court. They point out that the applicant intends to join a medical practitioner in the proceedings and to plead a case against that practitioner in negligence and breach of contract. They say that, if the proceedings remain in this Court, a question may arise as to whether the claim against the medical practitioner falls within the accrued jurisdiction of the Court. That difficulty will be avoided if an order for transfer is made. They also wish to take advantage of the fact that the Supreme Court of New South Wales has a specialist list for claims of professional negligence: New South Wales Supreme Court Rules, Part 14C. 16 In these circumstances, including the fact that the parties join in seeking an order for transfer, I think that it is in the interests of justice that the matters for determination in the present proceedings be determined by the Supreme Court of New South Wales. 17 I therefore make the following orders: 1. ORDER, pursuant to s 86A(1) of the TP Act, that the matters for determination in the proceedings in this Court (NG 1411 of 1998) be transferred to the Supreme Court of New South Wales. 2. DIRECT that order 1 take effect on 10 December 1999. I certify that the preceding seventeen (17) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Sackville. Associate: Dated: 25 October 1999 Solicitor for the Applicant: Slater and Gordon Solicitor for the Respondent: Clayton Utz Date of Written Submissions: 10 and 23 September 1999 Date of Judgment: 25 October 1999