FEDERAL COURT OF AUSTRALIA Radic v Henley Properties (NSW) Pty Ltd [2000] FCA 1416 PRACTICE AND PROCEDURE – transfer of proceedings under Trade Practices Act 1974 (Cth), s 86A – dispute arising out of residential building contract – no contractual claim pleaded – whether in interests of justice to transfer to State court. Trade Practices Act 1974 (Cth), s 86A. Brooks v R & C Products Pty Ltd [1996] ATPR ¶41-537, cited. SINISA RADIC & ANOR v HENLEY PROPERTIES (NSW) PTY LTD & ORS N 624 OF 2000 SACKVILLE J 11 OCTOBER 2000 SYDNEY IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY N 624 OF 2000 BETWEEN: SINISA RADIC FIRST APPLICANT BORKA RADIC SECOND APPLICANT AND: HENLEY PROPERTIES (NSW) PTY LTD FIRST RESPONDENT PETER HAYES SECOND RESPONDENT DOUGLAS STEVENS THIRD RESPONDENT JOHN WILLIAMSON FOURTH RESPONDENT JUDGE: SACKVILLE J DATE: 11 OCTOBER 2000 PLACE: SYDNEY THE COURT ORDERS THAT: 1. The proceedings be listed for further directions on 20 October 2000 at 9:30 am. 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 N 624 OF 2000 BETWEEN: SINISA RADIC FIRST APPLICANT BORKA RADIC SECOND APPLICANT AND: HENLEY PROPERTIES (NSW) PTY LTD FIRST RESPONDENT PETER HAYES SECOND RESPONDENT DOUGLAS STEVENS THIRD RESPONDENT JOHN WILLIAMSON FOURTH RESPONDENT JUDGE: SACKVILLE J DATE: 11 OCTOBER 2000 PLACE: SYDNEY REASONS FOR JUDGMENT 1 On 12 September 2000, I delivered a judgment in these proceedings in which I declined to accede to the applicants' motion that I disqualify myself: [2000] FCA 1292. The judgment describes the proceedings between the parties in this Court and in the Local Court of New South Wales. It also sets out the history of the proceedings in this Court. My earlier judgment should be read in conjunction with this judgment. 2 Certain interlocutory issues remain outstanding. They include the following: · Whether the Court should, of its own motion, make an order transferring the proceedings to a New South Wales court, pursuant to s 86A(1) of the Trade Practices Act 1974 (Cth) ("TP Act"). · Whether an order should be made, as sought by the applicants in their Notice of Motion filed on 1 September 2000, that the Local Court proceedings, between the respondent as plaintiff and the applicants as defendants, be transferred to this Court pursuant to s 86A(4) of the TP Act. Submissions have been received from each of the parties on these questions. 3 Other issues have been raised by the applicants' motion, but they have not yet been the subject of submissions. Accordingly, they will not be addressed in this judgment. 4 For convenience, I set out the terms of ss 86A(1), (2) and (4) of the TP Act: "(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 Part IVA, IVB or 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. … (4) Where – (a) a proceeding is pending in a court (other than the Supreme Court) of a State or Territory; and (b) a matter for determination in the proceeding arose under Part IVA or Division 1, 1A, 1AA of Part V, the court shall, if directed to do so by the Federal Court, transfer to the Federal Court the matter referred to in paragraph (b) and such other matters for determination in the proceeding the determination of which would, apart from any law of a State or of the Northern Territory relating to cross-vesting of jurisdiction, be within the jurisdiction of the Federal Court as the Federal Court determines." transfer of the federal court proceedings 5 The applicants' case was initially pleaded in the statement of claim filed on 14 June 2000. It was unclear from that pleading whether the applicants intended to pursue a claim against the respondent for breach of the building contract entered into between the parties on 16 April 1998. If they did, it seemed to me that there was a serious question as to whether it was in the interests of justice that the matter in this Court be transferred to the District Court of New South Wales or to the Supreme Court of New South Wales. 6 I took the view that that question arose largely because the Federal Court is not ordinarily the appropriate forum to determine contractual disputes relating to the construction of a residential building. This is especially the case where the damages claimed are relatively modest (although this does not, of course, deny the importance of the claim to the parties themselves). In the present case, there is the additional fact that the respondent/builder has instituted a contractual claim in the Local Court of New South Wales against the applicants. It is obviously undesirable for two sets of proceedings relating to the same dispute to continue in different courts. 7 A consideration militating against transfer of the proceedings to a State court was the fact that the applicants relied on causes of action under the TP Act. If, however, the case were properly characterised as a contractual claim arising out of a building dispute, the fact that some issues arose under the TP Act was not necessarily a reason for the proceedings to remain in this Court. 8 The applicants have now filed an amended statement of claim. Both parties have filed written submissions on questions of a possible transfer. Counsel for the applicants, in his written submissions, asserts that they do not intend to rely on any contractual claim. Rather, the intention is to confine the applicants' case to causes of action arising under ss 51AA, 52, 82 and 87 of the TP Act. 9 It must be said that there are still portions of the amended statement of claim which might be read as suggesting that the applicants intend to raise contractual issues. For example, par 21(b) seeks a declaration that the applicants have properly terminated the contract. Nonetheless, it is appropriate to approach the proceedings in this Court on the basis that the applicants, whatever might have been the position with the statement of claim in its original form, now intend to rely only on causes of action arising under the TP Act. This suggests that the proceedings should remain in this Court, at least for the time being. 10 A further factor to consider is that s 86A(2) precludes a transfer of the matter to the District Court of New South Wales. This is because the District Court has no power to grant declaratory relief sought by the applicants: see Brooks v R & C Products Pty Ltd [1996] ATPR ¶41-537. 11 It follows that if the matter were to be transferred to a State court, it would have to be the Supreme Court of New South Wales. This creates the difficulty that a relatively modest claim would have to be heard in a superior court. Perhaps for this reason, the respondent adopted a neutral stance as to whether an order for transfer should be made. 12 In the circumstances I have outlined, I do not think it is in the interests of justice for the matter to be transferred to a court of New South Wales. As the parties point out, if circumstances change, the question can be reconsidered. transfer of the local court proceedings 13 As I have indicated, it is obviously undesirable that the Local Court proceedings continue while proceedings are on foot in this Court arising out of the same dispute. There are difficulties, however, in making an order pursuant to ss 86A(4) of the TP Act directing the Local Court to transfer the matter to this Court. The reason is that, on the present state of the proceedings in the Local Court, there is no "matter" for determination that arises under the TP Act. A foreshadowed cross-claim raising such issues has not been filed in the Local Court. 14 The practical difficulty, however, has been overcome as the respondent has indicated that it is willing to discontinue the Local Court proceedings. conclusion 15 I do not propose to make any order for the transfer of any matter arising in the proceedings in this Court. Nor do I propose to make an order directing the Local Court to transfer the matter before it to this Court. I note, however, the respondent's intimation that it intends to discontinue the Local Court proceedings. 16 I shall cause the matter to be listed for further directions on 20 October 2000. At that stage, consideration can be given to the balance of the applicants' motion and to any motion that the respondent may wish to file. I certify that the preceding sixteen (16) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice SACKVILLE. Associate: Dated: 11 October 2000 Counsel for the Applicants: Mr C R de Robillard Solicitor for the Applicants: Selby Anderson Counsel for the Respondent: Mr T Davie Solicitor for the Respondent: Blake Dawson Waldron Date of Hearing: 1 September 2000 Date of Judgment: 11 October 2000