FEDERAL COURT OF AUSTRALIA Johnson Tiles Pty Ltd (ACN 004 576 103) v Esso Australia Ltd [2000] FCA 1572 PRACTICE AND PROCEDURE – pleadings – statement of claim – cause of action in misleading or deceptive conduct – successive amendments – strike out – leave to replead – order allowing amendment – leave to appeal against order – whether necessary – whether order is interlocutory or final – criteria for grant of leave – determination whether repleaded claim tenable – criteria – representative proceeding – whether representative proceeding can continue on non-federal claim in accrued jurisdiction if federal claim untenable. TRADE AND COMMERCE – misleading or deceptive conduct – monopoly supply of essential service – supply of gas – whether pleaded assumption by users of qualified continuity tenable – failure to correct or further qualify assumptions – whether misleading or deceptive – silence or non-disclosure as misleading or deceptive conduct. NEGLIGENCE – economic loss through interruption of gas supplies to users – liability of gas producer for interruption derived from explosion and fire at gas plant – intervening chain of contracts – statutory and contractual limitations of liability – whether no reasonable cause of action – whether law is still developing. COURTS AND JUDICIAL SYSTEM – federal jurisdiction – accrued jurisdiction – scope – federal claim – whether trivial or insubstantial part of matter – whether colourable – whether strike out of federal claim deprives court of accrued jurisdiction to decide non-federal claim – criteria for definition of accrued jurisdiction – discretion to exercise – nature of discretion – functional overlap with assessment of scope of jurisdiction – principles informing discretion. Federal Court of Australia Act 1976 (Cth) Part IVA, s 24, s 33G Trade Practices Act 1974 (Cth) s 52, s 87, s 82 Fair Trading Act 1985 (Vic) s 37 Jurisdiction of Courts (Cross Vesting) Act 1987 (Cth) Jurisdiction of Courts (Cross Vesting) Act 1987 (Vic) s 4 Gas Industry Act 1994 (Vic) Johnson Tiles Pty Ltd v Esso Australia Ltd (1999) ATPR 41-679 considered Johnson Tiles Pty Ltd v Esso Australia Ltd [1999] FCA 477 considered Johnson Tiles Pty Ltd v Esso Australia Ltd [1999] FCA 569 considered Johnson Tiles Pty Ltd v Esso Australia Ltd (2000) ATPR 41-743 considered Johnson Tiles Pty Ltd v Esso Australia Ltd (No 2) (2000) 97 FCR 175 considered Burgundy Royale Investments Pty Ltd v Westpac Banking Corporation (1987) 18 FCR 212 applied Unilan Holdings Pty Ltd v Kerin (1993) 44 FCR 481 cited Hooper v Kirella Pty Ltd (1999) 96 FCR 1 cited Carr v Finance Corporation of Australia Ltd [No 1] (1981) 147 CLR 246 cited Hall v Nominal Defendant (1966) 117 CLR 423 cited Licul v Corney (1976) 180 CLR 213 cited Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc (1981) 148 CLR 170 discussed, followed In re the Will of FB Gilbert (dec) (1946) 46 SR(NSW) 318 cited Ex parte Bucknell (1936) 56 CLR 221 cited Décor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397 cited Minogue v Williams [2000] FCA 125 cited Little v State of Victoria [1998] 4 VR 596 General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 cited Empire Shipping Co Inc v Owners of the Ship "Shin Kobe Maru" (1991) 32 FCR 78 cited Coe v Commonwealth of Australia (1979) 53 ALJR 403 cited Williams & Humbert Ltd v W & H Trademarks (Jersey) Ltd [1986] 1 AC 368 cited Sun Earth Homes Pty Ltd v Australian Broadcasting Corporation (1990) 45 FCR 265 cited Allstate Life Insurance Co v Australian & New Zealand Banking Group Ltd (Fed Ct 13.9.94 Beaumont J) referred to X (Minors) v Bedfordshire County Council [1995] 2 AC 633 cited Agar v Hyde (2000) 173 ALR 665 cited Keehn v Medical Benefits Fund of Australia Ltd (1977) 14 ALR 77 cited Weitmann v Katies Ltd (1977) 29 FLR 336 cited Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191 cited Rhone-Poulenc Agrochimie SA v UMI Chemical Services Pty Ltd (1986) 12 FCR 477 cited Campomar Sociedad Limitada v Nike International Ltd (2000) 169 ALR 677 cited Taco Co of Australia Inc v Taco Bell Pty Ltd (1982) 42 ALR 177 cited Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Ltd (1978) 140 CLR 216 cited Annand & Thompson Pty Ltd v Trade Practices Commission (1979) 25 ALR 91 cited Brock v Terrace Times Pty Ltd (1982) 56 FLR 464 cited SAP Australia Pty Ltd v Sapient Australia Pty Ltd (1999) 169 ALR 1 discussed McWilliam's Wines Pty Ltd v McDonald's System of Australia Pty Ltd (1980) 49 FLR 455 discussed Fraser v NRMA Holdings Ltd (1995) 55 FCR 452 applied Demagogue Pty Ltd v Ramensky (1992) 39 FCR 31 applied Bryan v Maloney (1995) 182 CLR 609 discussed Voli v Inglewood Shire Council (1963) 110 CLR 74 cited Perre v Apand Pty Ltd (1999) 198 CLR 180 applied Astley v Austrust Ltd (1999) 197 CLR 1cited Philip Morris Inc v Adam P Brown Male Fashions Pty Ltd (1981) 148 CLR 457 discussed, followed Fencott v Muller (1983) 152 CLR 570 discussed, followed PCS Operations Pty Ltd v Maritime Union of Australia (1998) 153 ALR 520 applied Abebe v Commonwealth (1999) 197 CLR 510 cited Re Wakim; Ex parte McNally (1999) 198 CLR 511 applied R v Bevan; Ex parte Elias (1942) 66 CLR 452 cited Moorgate Tobacco Co Ltd v Philip Morris Ltd (1980) 145 CLR 457 cited Dorotea Pty Ltd v Vancleve Pty Ltd (1987) 75 ALR 629 cited Elna Australia Pty Ltd v International Computers (Australia) Pty Ltd (1987) 16 FCR 410 applied Carlton and United Breweries Ltd v Castlemaine Tooheys Ltd (1986) 161 CLR 543 cited Vietnam Veterans' Affairs Association of Australia New South Wales Branch Inc v Cohen (1996) 70 FCR 419 cited Post Office Agents Association Ltd v Australian Postal Commission (1988) 84 ALR 563 cited Buck v Comcare (1996) 66 FCR 359 cited Mercator Property Consultants Pty Ltd v Christmas Island Resort Pty Ltd (1999) 94 FCR 384 cited Khatri v Price (1999) 95 FCR 287 cited Nikolic v MGICA Ltd [1999] FCA 849 cited R v Langdon; Ex parte Langdon (1953) 88 CLR 158 cited Voth v Manildra Flour Mills Pty Ltd (1990) 171 CLR 538 discussed Spiliada Maritime Corp v Cansulex Ltd [1987] AC 460 referred to Stack v Coast Securities (No 9) Pty Ltd (1983) 154 CLR 261 discussed Commonwealth v Mewett (1997) 191 CLR 471 cited John Pfeiffer Pty Ltd v Rogerson (2000) 172 ALR 625 cited Lipohar v R (1999) 168 ALR 8 cited Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 cited Kable v Director of Public Prosecutions (NSW) (1996) 189 CLR 51 cited Australian Competition and Consumer Commissioner v CG Berbatis Holdings Pty Ltd (2000) 96 FCR 491 cited JOHNSON TILES PTY LTD AND OTHERS v ESSO AUSTRALIA PTY LTD AND ANOTHER, STATE ELECTRICITY COMMISSION OF VICTORIA AND OTHERS, BHP PETROLEUM (BASS STRAIT) PTY LTD VG 519 of 1998 VG 524 of 1998 BEAUMONT, FRENCH AND FINKELSTEIN JJ 8 NOVEMBER 2000 MELBOURNE IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY VG 519 OF 1998 VG 524 OF 1998 BETWEEN: JOHNSON TILES PTY LTD AND OTHERS Applicants AND: ESSO AUSTRALIA PTY LTD AND ANOTHER Respondents/Cross-Claimants And STATE ELECTRICITY COMMISSION OF VICTORIA AND OTHERS Cross-Respondents/Cross-Claimants And BHP PETROLEUM (BASS STRAIT) PTY LTD Cross-Respondent JUDGE: BEAUMONT, FRENCH AND FINKELSTEIN JJ DATE OF ORDER: 8 NOVEMBER 2000 WHERE MADE: MELBOURNE THE COURT ORDERS THAT: 1. The Respondents and the Cross-Respondents each has leave to appeal against: (i) the judgment of Merkel J given on 25 November 1999 and the orders made thereunder on 3 December 1999; (ii) the judgment and orders of Merkel J given on 3 March 2000. 2. The appeals against the judgment given on 25 November 1999 and the orders made thereunder on 3 December 1999 are dismissed. 3. The appeals against the judgment given on 3 March 2000 are allowed in part. 4. The orders made on 3 March 2000 whereby the Applicants were permitted to amend the Statement of Claim in respect of their claim of misleading or deceptive conduct on the part of the Respondents are set aside and in lieu thereof the application for leave to amend is refused. 5. The appeals are otherwise dismissed. 6. The parties have leave within twenty one days to file written submissions as to the costs of the motions for leave to appeal and of the appeals. 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 VG 519 OF 1998 VG 524 OF 1998 BETWEEN: JOHNSON TILES PTY LTD AND OTHERS Applicants AND: ESSO AUSTRALIA PTY LTD AND ANOTHER Respondents/Cross-Claimants AND STATE ELECTRICITY COMMISSION OF VICTORIA AND OTHERS Cross-Respondents/Cross-Claimants AND BHP PETROLEUM (BASS STRAIT) PTY LTD Cross-Respondent JUDGES: BEAUMONT, FRENCH AND FINKELSTEIN JJ DATE: 8 NOVEMBER 2000 PLACE: SYDNEY REASONS FOR JUDGMENT BEAUMONT J: 1 I agree with French J. I certify that the preceding one (1) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Beaumont. Associate: Dated: 8 November 2000 IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY VG 519 OF 1998 VG 524 OF 1998 BETWEEN: JOHNSON TILES PTY LTD AND OTHERS Applicants AND: ESSO AUSTRALIA PTY LTD AND ANOTHER Respondents/Cross-Claimants And STATE ELECTRICITY COMMISSION OF VICTORIA AND OTHERS Cross-Respondents/Cross-Claimants And BHP PETROLEUM (BASS STRAIT) PTY LTD Cross-Respondent JUDGE: BEAUMONT, FRENCH AND FINKELSTEIN JJ DATE: 8 NOVEMBER 2000 PLACE: MELBOURNE REASONS FOR JUDGMENT French J: Introduction 2 This case arises out of an explosion and fire which occurred at the Longford Gas Plant in the State of Victoria on 25 September 1998. Following the explosion gas supplies were unavailable to most consumers in the State of Victoria until 12 October 1998. The applicants, Johnson Tiles Pty Ltd, Douglas Chalmers and Gregory Alan Dean, are respectively a business user, a domestic user and a worker stood down because of interruption of supply at his place of employment. They bring these proceedings as representative parties under Part IVA of the Federal Court of Australia Act 1976 (Cth) Their claim is against Esso Australia Ltd and Esso Australia Resources Ltd ("Esso") which own, operate and conduct the Longford Gas Plant. They say that as a result of misleading and deceptive conduct and negligence on the part of Esso, they and group members have suffered loss and damage arising from the interruption of gas supplies. Esso has cross-claimed against instrumentalities and authorities of the State of Victoria (State Entities) and others involved in the distribution and sale of gas to consumers. They allege, inter alia, causes of action based upon want of an emergency plan and other issues relating to the response to the interruptions to supply. The State Entities in turn have cross-claimed for contribution against other entities involved in the distribution and sale of gas and a number of insurance companies from whom they claim a right to indemnity under various policies. They have also cross-claimed against BHP Petroleum (Bass Strait) Pty Ltd ("BHP") alleging that Esso operated the Longford plant as agents for BHP and, alternatively, that BHP was itself an operator of the plant and thereby responsible for the loss and damage said to have been suffered by the applicants and the group members. 3 The pleadings have been the subject of strike-out motions and various amendments. On 1 March 1999, Merkel J struck out the further amended statement of claim which had been filed by leave on 12 February 1999 and gave leave to the applicants to file a Second Further Amended Statement of Claim – see Johnson Tiles Pty Ltd v Esso Australia Ltd (1999) ATPR 41-679. The Second Further Amended Statement of Claim was filed on 26 March 1999. A notice of motion to strike it out was filed on 8 April and on 21 April his Honour struck out paragraphs relating to the causes of action in misleading or deceptive conduct and in negligence but gave leave to file a further amended statement of claim. In so doing his Honour observed: "Finally, I would add that I have taken a stricter, and possibly more technical, approach to pleadings in the present matter than I might usually take in respect of other matters on my docket. The reason for that is that the magnitude of the present litigation and the nature of the issues arising are such that it is appropriate in the interests of the administration of justice that the causes of action relied upon by the applicants and the defences of the respondents are pleaded with clarity and precision. Thus, I have been prepared again to exercise my discretion in favour of the respondents on their strike out motion." Johnson Tiles Pty Ltd v Esso Australia Ltd [1999] FCA 477 at par 17 4 In his decision given on 21 April 1999, Merkel J struck out critical elements of the section 52 claim. A further statement of claim was delivered and was the subject of a further strike out motion by Esso. That motion was dismissed on 4 May 1999 following minor amendments to the statement of claim made in the course of argument – Johnson Tiles Pty Ltd v Esso Australia Ltd [1999] FCA 569. Further strike out motions were heard by Merkel J on 5 November 1999 based upon the proposition that the s 52 claim as limited by particulars subsequently delivered was demonstrably untenable. Strike out motions were brought by the cross-respondents in the proceedings. 5 For reasons published on 25 November 1999, Merkel J made orders on 3 December 1999 that paragraphs of the second further amended statement of claim relating to the s 52 claim be struck out together with paragraphs of the cross-claim. Any application by the applicants for leave to replead any cause of action alleging a contravention of the Trade Practices Act 1974 (Cth) and the Fair Trading Act 1985 (Vic) was to be made by motion to be served together with any proposed pleading on all parties by 24 December 1999 and the motion was to be heard on 4 February 2000. His Honour also dismissed a motion of the cross-respondent, BHP, dated 16 August 1999. He extended the time within which leave to appeal could be sought from the dismissal of that notice to 4 February 2000. On BHP's motion he also directed that elements of the cross-claim brought by the State Entities be struck out. On 3 March 2000, his Honour gave judgment allowing amendments to the statement of claim following on from his ruling of 25 November 1999 – Johnson Tiles Pty Ltd v Esso Australia Ltd (No 2) (2000) 97 FCR 175. On 10 March an amended application and a third further amended statement of claim were filed. 6 On 2 February 2000, BHP filed a motion seeking leave to appeal against the orders made by Merkel J on 3 December 1999. The State Entities, by a motion filed on 11 February 2000, also sought leave to appeal from what was described in the motion as "…the judgment of Justice Merkel given on 25 November 1999 and certain of the consequential orders made on 3 December 1999". On 9 March 2000, the State Entities filed a further motion for leave to appeal from the judgment of Merkel J given on 3 March 2000 and the consequential orders made on that day. On 10 March 2000, Esso filed a motion seeking leave to appeal from the judgment and on the same day BHP did likewise. There are thus five motions before the Court seeking leave to appeal from the two judgments. One of those motions is filed by the respondents, the others by the cross-respondents to cross-claims brought by Esso. The Evolution of the Statement of Claim 7 These proceedings were commenced with extraordinary speed, an application and statement of claim being filed on 29 September 1998, four days after the explosion and fire at the Longford Gas Plant upon which the claims for relief are based. Predictably the precipitate initiation of proceedings in such a complex matter has had its sequel in a lengthy history of strike out motions and amendments to the pleadings. The tactic, apparent in this case, of racing to court to catch a class of persons that may be involved in representative proceedings, is to be deprecated. 8 The first statement of claim alleged negligence and misleading or deceptive conduct contrary to the Trade Practices Act. Initially the only respondent was Esso Australia Limited. The misleading or deceptive conduct was said to arise out of express or implied warranties to gas users of continuous supply and availability of treated gas to users. It was represented that the gas would be reasonably fit for the users' purposes, made known to Esso, which were specified as continuous and uninterrupted use for heating and cooking and for the powering of machinery, plant and equipment. Esso had represented that the treated gas was supplied by a facility or facilities designed to provide a continuous supply in the event of an explosion or like adverse incident and that it would properly maintain and manage the Longford facility so as to prevent or avoid incidents which would interrupt the continuous supply of treated gas. The applicant at that stage was Johnson Tiles Pty Ltd, suing for itself and representing all other persons who had suffered injury, loss or damage as at the filing of the application. 9 The applicant was said to have relied upon the representations and warranties by agreeing to take supplies of the treated gas and arranging its business operations on the assumption that it was and would be continuous. Each of the representations was misleading or deceptive or likely to mislead or deceive and the warranties were breached by Esso in that the treated gas was not supplied at all after 25 September 1998, it was not continuously available to be used by the applicant nor was it reasonably fit for the purposes made known to Esso. In addition the Longford facility was not properly maintained or managed to prevent or avoid accidents which would interrupt the continuous supply of treated gas. The negligence claim asserted various duties of care relating to the continuous supply of treated gas and the avoidance of interruptions to that supply. In addition to relying upon the Trade Practices Act and the Fair Trading Act for the misleading or deceptive conduct claims, the applicant invoked the Jurisdiction of Courts (Cross Vesting) Act 1987 and s 4 of the Jurisdiction of Courts (Cross Vesting) Act 1987 (Vic). The accrued jurisdiction was also expressly relied upon. 10 A second version of the statement of claim was proposed on 4 November 1998. It involved an alteration of the case for misleading or deceptive conduct now basing it upon representations allegedly made by Esso that "gas production, distribution and storage facilities existed and would continue to exist to ensure the availability to gas users of a secure, reliable, continuous and adequate supply of gas." The representations were based upon allegations in particulars that gas had been advertised in Victoria as a reliable source of energy and that consumers had been urged by various advertising campaigns to adopt gas as a sole or principal source of energy. Alternatively, Esso had allegedly deliberately failed to disclose that it was not able to provide a secure and reliable continuous and adequate supply of gas. 11 By an amended statement of claim dated 30 November 1998, the case in misleading or deceptive conduct previously grounded upon representations said to have been made by Esso, was altered to a case based upon assumptions allegedly induced by Esso. The positive side of the misleading or deceptive conduct case was based upon allegations that Esso was the monopoly supplier of natural gas and that for many years gas had been publicly advertised as a reliable source of energy and that gas users had been urged to use gas rather than electricity. An alternative case of non-disclosure on the part of Esso was limited to misleading conduct by failing to correct or contradict the assumptions. 12 On 5 February 1999, Merkel J ordered that the proceeding brought by Johnson Tiles Pty Ltd and a separate claim by Gregory Alan Dean be consolidated. The parties to the consolidated pleading were granted leave to file an amended application and statement of claim. That was done on 12 February 1999. As with the third version of the amended statement of claim, the misleading or deceptive conduct allegations were based on assumptions induced by reason of Esso's monopoly supply position and the public advertising campaign. That statement of claim was struck out on 1 March 1999 with leave to replead. The basis of the strike out was, in essence, that material facts were pleaded as particulars. It was not sufficient to plead only that events occurred which were contrary to assumptions or representations, there had to be a plea of property damage. 13 On 26 March 1999, a fifth version of the statement of claim, being a second further amended statement of claim, was produced. On 21 April 1999, Merkel J struck out various parts of it including certain paragraphs in the trade practices claim. The substance of the deficiency was a failure to plead all elements necessary to a case of misleading or deceptive conduct by silence. On 28 April 1999, another version of the second further amended statement of claim was produced. That modified the extent of the assumptions and added allegations concerning conduct contravening s 52. The misleading or deceptive conduct claims still depended upon assumptions derived from advertising campaigns and the fact that Esso was the monopoly supplier of natural gas in Victoria. A seventh version of the statement of claim made some changes to that of 28 April 1999 in paragraph 26, dealing with contravening conduct, and paragraph 27 dealing with loss and damage but continued to rest the trade practices claim on assumptions by gas users. The eighth version, dated 12 May 1999, was formally designated the second further amended statement of claim. This was amended pursuant to leave granted by Merkel J on 4 May 1999 and by Black CJ, North and Finkelstein JJ on 11 May 1999. The substance of the case in misleading or deceptive conduct was the same as the previous version. On 13 August 1999, further particulars were filed setting out the television and newspaper advertisements on which the s 52 case was based. 14 On 5 November 1999, Merkel J heard the strike out motions in respect of the trade practices claim previously referred to and for reasons published on 25 November 1999 made orders on 3 December 1999 that certain paragraphs relating to the misleading or deceptive conduct claim be struck out together with paragraphs of the cross-claim. The applicants were given an opportunity to file suggested amendments to their s 52 claim which they wished to make in the event that the strike out application was successful. A written submission was filed attaching three schedules each containing an alternative formulation of a trade practices case, namely: (a) Formulation "A" in which the assumptions were based on the advertisements but the absolute nature of the assumption was qualified. (b) Formulation "B" which was framed without reference to the advertisements but put on the basis that the assumptions were acted upon by the applicants and the fact was known to Esso. (c) Another formulation "C" which introduced an allegation of dependence rather than assumption. The whole of the trade practices claim was struck out on 25 November 1999 on bases elaborated later in these reasons but the applicants were granted another opportunity to submit a repleading and to seek leave to amend accordingly. As Esso now puts it, the new pleading completely abandoned the case that the assumptions were based upon its position as a monopoly supplier and the public advertising campaign. The case was said to have shifted radically to one based upon assumptions that gas supply would be uninterrupted "except in the event of circumstances which were not reasonably foreseeable and reasonably preventable by [Esso]" because Esso was a monopoly supplier, gas was an essential service and an uninterrupted supply was dependent upon an infrastructure which enabled that supply. In the judgment of 3 March 2000 Merkel J allowed the applicants to replead their s 52 claim on that basis. The Current Application and Statement of Claim 15 It is convenient to set out in summary the essential elements of the application and the statement of claim filed on 10 March 2000 as it is effectively the viability of that most recent pleading that is in issue in this case. 16 The application recites that it is brought by the applicants as representative parties pursuant to Part IVA of the Federal Court of Australia Act 1976 (Cth) and ss 52 and 87 of the Trade Practices Act 1974 (Cth). References to reliance upon cross-vesting legislation have been deleted. The group members to whom the proceeding relates are identified as "business users" and "domestic users", of gas retailers under the Gas Industry Act 1994 (Vic) and stood down workers, being persons who were stood down from their employment as a result of the September stoppage and thereby suffered pecuniary loss. Any person who is a judge of the Federal Court of Australia or the High Court of Australia is excluded. The relief claimed is by way of damages pursuant to ss 82 and 87 of the Trade Practices Act and s 37 of the Fair Trading Act 1985 (Vic) as well as damages at common law for negligence. Questions of law or fact common to the claims of the applicants and the group members are identified as: (a) What caused the September stoppage? (b) Whether the respondents processed and sold gas? (c) Whether the respondents engaged in conduct that was misleading or deceptive or likely to mislead or deceive as alleged in the third further amended statement of claim? (d) Whether the respondents owed a duty of care to the business users, the domestic users and the stood down workers? (e) Whether the September stoppage was caused by any want of due care or breach of duty by the respondents in the design and/or operation of the Longford plant? 17 The third further amended statement of claim filed on 10 March 2000 is the current pleading. It begins with identification and description of the applicants and the respondents (paragraphs 1A to 5). It then raises the cause of action in negligence alleging a duty of care owed by each of the respondents "when designing, installing, operating and maintaining the Longford plant" (paragraph 13). The content of the duty of care owed to each of the categories of applicant is "to avoid causing loss and damage to them" of a kind which is pleaded for each category in the preceding paragraphs by doing various things relating to the design, installation, operation and maintenance of the Longford gas plant set out in Schedule 1 to the statement of claim. The duty of care rests upon the pleaded propositions that: 1. The business and domestic users (including the first and second applicants) were dependent on the respondents as the sole suppliers of gas for a supply of gas which would be uninterrupted (except in the event of circumstances which were not reasonably foreseeable and reasonably preventable by the respondents). (6(a)) 2. The stood down workers (including the third applicant) were dependent on the respondents as the sole suppliers of gas for a supply of gas to their respective employers which would be uninterrupted (except in the event of circumstances which were not reasonably foreseeable and reasonably preventable by the respondents). (6(b)) 3. The respondents knew and intended or ought to have known and reasonably foreseen the pleaded dependence of the applicants and the group members (paragraph 7). There is then pleaded the explosion and fire at the Longford plant on 25 September 1998 (paragraph 8), the resulting cessation or severe diminution of the production and supply of gas from the Longford plant, the consequential cessation of the supply of gas to gas users, including the applicants and group members or their employers until 8 October 1998 and loss and damage suffered by the applicants and the group members thereby (paragraph 11). It is said that at all material times the respondents knew or ought reasonably to have known that if there were a cessation or interruption of gas supplies to the applicants and the group members or their employers, the applicants and the group members would suffer loss and damage of the kind pleaded (paragraph 12). 18 The duties of care pleaded are said to have been breached by the respondents in numerous ways relating to the design and installation of the Longford plant (14(a) to 14(b)) and its operation and maintenance (14(q) to 14(zz)). The explosion, the damage to Gas Plant 1, the cessation or severe diminution of the production and supply of gas from Longford and the cessation of supply to gas users, including the applicants and the group members (or their employers), allegedly resulted from the failures set out in paragraph 14 (paragraph 14A). Loss and damage is asserted as a consequence of the pleaded failures, albeit particulars are promised after the determination of the issue of liability under s 33Z of the Federal Court of Australia Act (paragraph 15). 19 The statement of claim then raises causes of action in misleading or deceptive conduct. It asserts that since about 1969 the respondents were the monopoly suppliers of natural gas to gas users in Victoria (paragraph 16) and that at all material times their supply of that gas was an essential service in Victoria (paragraph 17). The provision by the respondents to gas users in Victoria of a supply of gas which was uninterrupted, except in the event of circumstances not reasonably foreseeable or reasonably preventable by the respondents was dependent upon an infrastructure including the existence of gas reserves available to the respondents, their facilities for the production and processing of gas and a system for the storage and distribution of gas to users (paragraph 18). By reason of the various matters pleaded in paragraphs 6, 16, 17 and 18, the applicants and group members assumed, at all material times prior to 25 September, that: "(a) gas production, distribution and storage facilities existed, and would continue to exist, in Victoria adequate to ensure the availability to gas users of a supply of gas which would be uninterrupted (except in the event of circumstances which were not reasonably foreseeable and reasonably preventable by the Respondents). (b) persons whose premises were connected to gas would receive a supply of gas which would be uninterrupted (except in the event of circumstances which were not reasonably foreseeable and reasonably preventable by the Respondents). (c) gas users could organise their business, employment and personal affairs on the basis that the supply of gas to gas users for the foreseeable future would be uninterrupted (except in the event of circumstances which were not reasonably foreseeable and reasonably preventable by the Respondents)." (paragraph 19) The respondents were alleged to be uniquely placed to be able to contradict, correct or qualify the assumptions (paragraph 20) which the applicants are said to have acted on in various ways relevant to the nature of their use or reliance upon the provision of gas supplies (paragraph 21). The respondents are said to have known that the applicants and group members (or their employers in the case of the stood down workers) had acted on the assumptions (paragraph 22). 20 The assumptions are said to have been wrong, the falsifying facts pleaded in effect as statements negativing them (paragraph 23). And at all material times it is said the respondents knew of those falsifying facts (paragraph 24). The misleading or deceptive conduct alleged and the logic of its characterisation are reflected in paragraphs 25 and 26 of the statement of claim which should be set out in full: "25. At all material times the Respondents: (i) continued to operate, manage and control the Longford plant and supply gas as monopoly suppliers of the natural gas requirements of gas users; and (ii) failed to correct or contradict the assumptions; and/or (iii) failed to make known that: (a) The Respondents were not able to provide to gas users a supply of gas which would be uninterrupted (except in the event of circumstances which were not reasonably foreseeable and reasonably preventable by the Respondents); (b) gas users could not organize their business, employment and personal affairs on the basis that the supply of gas to gas users for the foreseeable future would be uninterrupted (except in the event of circumstances which were not reasonably foreseeable and reasonably preventable by the Respondents); (c) the supply of gas to gas users was vulnerable to the events referred to in paragraph 14A which events were reasonably foreseeable and reasonably preventable by the Respondents. 26. In all the circumstances set out in paragraphs 16-24, the Respondents' conduct in: (i) continuing to operate, manage and control the Longford plant and supply gas as monopoly suppliers of the natural gas requirements of gas users; and (ii) failing to correct or contradict the assumptions; and/or (iii) failing to make known that: (a) The Respondents were not able to provide to gas users a supply of gas which would be uninterrupted (except in the event of circumstances which were not reasonably foreseeable and reasonably preventable by the Respondents); (b) gas users could not organize their business, employment and personal affairs on the basis that the supply of gas to gas users for the foreseeable future would be uninterrupted (except in the event of circumstances which were not reasonably foreseeable and reasonably preventable by the Respondents); (c) the supply of gas to gas users was vulnerable to the events referred to in paragraph 14A which events were reasonably foreseeable and reasonably preventable by the Respondents. constituted conduct that was misleading or deceptive, or likely to mislead or deceive, in contravention of s 52 of the Trade Practices Act and s 11 of the Fair Trading Act." 21 Loss and damage is asserted in paragraph 27 on the basis that by reason of the conduct pleaded in paragraph 26 the applicants and the group members acted on their assumptions in the way pleaded in paragraph 21 and suffered loss and damage on the occurrence of the accident and sequela pleaded in paragraphs 8 to 10. So the first applicant and business users are said to have been unable to carry on their businesses, and to have been compelled to purchase or hire machinery or equipment not dependent on gas in order to do so and/or to have suffered damage to their machinery or equipment as a consequence of the interruption of supply (paragraph 27(a)). The domestic users were compelled, in order to meet the domestic hot water, cooking and heating requirements, to purchase appliances not dependent on gas for their operation (paragraph 27(b)) and the third applicant and the stood down workers were stood down from their employment and lost wages for the period of the stand down. The Judgments 22 In his judgment given on 25 November 1999, his Honour identified as the issues for determination by the Court whether the s 52 claim pleaded in paragraphs 16-27 of the second further amended statement of claim was to be struck out and whether the negligence claim in the proceeding should no longer be permitted to continue in the Federal Court on the ground that it was not a matter or part of a matter in respect of which the Federal Court had or should exercise jurisdiction. His Honour referred back to his judgment of 21 April 1999 in which he struck out critical paragraphs of the s 52 claim as it then stood on the basis that the only conduct of Esso relied upon as constituting a contravention of s 52 was a failure to correct or contradict assumptions held by gas users. That is to say the conduct of Esso relied upon was silence. His Honour identified, by reference to the authorities, first the situation where silence is an element of conduct which, in all the circumstances of a case, renders that conduct misleading or deceptive and a second situation where silence alone constitutes misleading or deceptive conduct in which event, it was said, an element of intent is necessary to bring it within the extended definition of conduct in s 4(2) of the Trade Practices Act. In the judgment of 21 April 1999 his Honour held that the applicants' pleading of misleading or deceptive conduct was deficient. It fell outside the two situations identified as it relied upon the mere silence of the respondents as constituting their contravening conduct without any allegation either that the silence was the element that resulted in their conduct being misleading or deceptive or that it was intentional or reckless. 23 In reasons for judgment given on 4 May 1999 his Honour rejected an attack on the section 52 cause of action based in part upon the contention that the pleading failed to assert material facts demonstrating the necessary causal link between misleading conduct and loss and damage. His Honour also rejected an alternative argument put by Esso that the pleading of loss and damage must be alleged to have been caused by the silence of Esso as the conduct in question rather than the operation of the plant, supply and silence as the conduct in question. That submission however misconceived the basis upon which the applicants were, in his Honour's view, putting their claim. He said: "The applicants have not pleaded that silence alone constituted the misleading conduct giving rise to their loss. Rather, they have pleaded that the operation of the Longford plant and the supply of gas as a monopoly supplier together with the "silence" is the misleading conduct upon which they relied to order their affairs which led to their reliance on continuity of supply of gas and to the loss they allege they have suffered. The fact that it is the silence that is the element that resulted in the conduct being misleading does not alter the claim that it is the totality of the conduct, rather than the silence alone, that is being relied upon as constituting the breach of s 52." ([1999] FCA 569 at par 4) 24 The motions with which his Honour was concerned in his judgment of 25 November 1999 were motions brought initially by the cross-respondents to the various cross-claims joined in their contention by the respondents. Although in the ordinary course there would have been force in the contention of the applicants that the Court, as a matter of discretion, should not consider Esso's motion at all having regard to its two previous motions, two factors made that course inappropriate. The first was that the motions were reliant upon particulars of the s 52 claim limiting the generality of the pleading which had not been the subject of previous consideration by the Court. The second was that the cross-respondents were also entitled as of right to raise the pleading issues they wanted to agitate. 25 His Honour identified the allegations central to the s 52 claim thus: 1. The assumptions made by the public were induced by reason of Esso being the "monopoly" supplier of natural gas and by certain advertising in Victoria by entities other than Esso. 2. Esso was aware of the assumptions and of the facts that made them erroneous but failed to correct the misconception of the public. He held that it was open to the cross-respondents to contend that the pleading ought to be struck out if the particulars given were incapable of supporting or sustaining the substantive allegation. He referred to the advertisements which were particularised. He observed that the applicants went no further than contending that the gist of the advertisements was to encourage reliance on natural gas as a principal energy source. Nothing in them expressly or impliedly represented that the supply of gas was and would remain secure, reliable, continuous and adequate in the sense that it was not vulnerable to a shut down or some other interference with supply. He said: "Extolling, in general terms, the reliability of gas as a source of energy does not mean that the supply of gas will not be interrupted." ((2000) ATPR 41-743 at 40,614) Part of the pleading relying upon Esso's knowledge of the advertisements as a basis for its knowledge of the assumptions relating to the reliability of supply suffered from a similar deficiency. His Honour held that if the advertisements were not capable of giving rise to the assumptions then it was difficult to accept that they could have any material role in the s 52 claim. They had been particularised and the generality of the pleading was limited by those particulars. He held that the fact that Esso is a monopoly supplier of itself could have little relevance to inducing the public to assume that its supply of gas was and would remain secure, reliable, continuous and adequate in the sense set out earlier in his reasons. These conclusions led to certain paragraphs of the statement of claim being struck out on the basis that the matters pleaded (as limited by the particulars) were not reasonably capable of giving rise to the pleaded assumptions. Other paragraphs dependent upon the assumptions also had to be struck out as a result. 26 It did not follow from this, in his Honour's opinion, that the deficiency in the paragraphs revealed a fundamental flaw in the s 52 claim or was otherwise not capable of rectification by amendment. He said: "On the basis of the limited evidence before me at this stage I would expect that a domestic or industrial consumer of any essential service, whether water, gas or electricity, would be likely to make certain assumptions when he or she turns on a tap or a switch to receive the water, gas or electricity, or acquires an appliance or equipment dependent upon the service. One of the assumptions would be that the supply of the water, gas or electricity will be secure, reliable, continuous and adequate. The assumption is inherent in the nature of the essential service provided, the infrastructure that is known to be necessary to enable the provision of the service and the known dependence of consumers of the service on its supply being secure, reliable, continuous and adequate." (at 40,614 par 21) His Honour identified as part of the infrastructure Esso's gas reserves in Bass Strait, its facilities for the production and processing of gas at Longford and the system for the distribution of gas via the State Entities to consumers. He said: "Thus, although "monopoly" supply and the advertising relied upon by the applicants may not, of themselves, be capable of inducing the assumptions, there may be more relevant factors that might have done so. I need not pursue this aspect further other than to conclude that the deficiencies complained of by the cross-respondents might be overcome by amendment." (at 40,614-5 par 22) 27 His Honour specified as the real and fundamental difficulty with the pleading of the section 52 claim, the meaning of the collocation "secure, reliable, continuous and adequate supply of gas". The words related to relative rather than absolute concepts. The central allegation in the s 52 claim, that Esso's supply of gas did not answer that description, was not able to be sustained by the particulars. His Honour was not prepared to construe the pleaded assumptions as relating to "uninterruptable supply". There was thus a significant disconformity between those parts of the pleading which related to the assumptions and those parts which related to their falsification. On this basis it would be appropriate to strike out the whole of the s 52 claim. His Honour rejected an attack on the sufficiency of the pleading to show a causal connection between contravention and loss along the same lines which he adopted in rejecting the earlier Esso contention to like effect. 28 The entire s 52 claim being struck out, the contention was then considered that the Court did not have jurisdiction in relation to the cause of action in negligence. The Court could only hear and determine that claim if it fell within the Court's accrued jurisdiction. His Honour took it to be well established that the content of justiciable controversy could be established independently of the proceedings brought for its determination and might or might not be co-extensive with the legal proceedings already instituted. He identified as the controversy the subject of the proceeding before the Court as: "…whether the applicants and the group members they represent … who suffered pecuniary loss as a result of the cessation of supply are entitled to recover from Esso the pecuniary loss they suffered." (40,617) There was, he found, a substantial common substratum of fact upon which the negligence and the s 52 claims depended albeit that the substratum in respect of each claim did not wholly coincide. He said: "Although the substratum of fact relied upon to establish breach of duty is not the same as the substratum of fact relied upon to establish the vulnerability of Esso's supply system to failure, the facts relied upon to allege breach of duty substantially overlap with the facts relied upon to establish the vulnerability. The commonality of fact in the federal and non-federal claims for the same damage arising out of substantially overlapping circumstances plainly imply that there is a single justiciable controversy or matter before the Court. As was explained in Wakim…, a third party proceeding by the respondent for contribution will usually be part of the same matter." (p 40,618 par 44) He acknowledged also the proposition that the Federal Court might have jurisdiction in respect of a matter although the federal element of the matter had failed or the federal claim had been struck out - Burgundy Royale Investments Pty Ltd v Westpac Banking Corporation (1987) 18 FCR 212 at 218-219; Unilan Holdings Pty Ltd v Kerin (1993) 44 FCR 481 at 481-482 and Hooper v Kirella Pty Ltd (1999) 96 FCR 1. The s 52 claim was not an insubstantial or trivial aspect of the matter before the Court and was not severable from the negligence claim. Moreover there were no valid reasons for the Court to exercise any discretion it might have to refuse to hear and determine the whole of the justiciable controversy. 29 His Honour rejected the proposition that the s 52 claim was colourable in the sense that it was made for the improper purpose of "fabricating" jurisdiction. He was not satisfied that the applicants had not been genuine in bringing their trade practices claim or that the claim when brought was believed by them to be unarguable. He also rejected a submission that the action should not be allowed to continue as a representative action on the basis that the federal action had been struck out. He allowed twenty one days for the applicants to apply for leave to replead the s 52 claim and added: "…although there are difficulties in the s 52 claim, a court would hesitate before exercising its discretion to finally dismiss or strike out the claim notwithstanding that the legal basis for it may be doubtful or problematic in circumstances where the court will nevertheless be required to hear and determine substantially the same factual matters in respect of the remaining cause of action: see Wickstead v Browne (1992) 30 NSWLR 1 at 5 and on appeal to the High Court (1993) 10 Leg Rep page SL 2." (p 40,620 par 61) In light of the outcome the costs of the motions were ordered to be costs in the cause. 30 In the formal orders of the Court made on 3 December 1999 there was a direction that any application for leave to replead any cause of action alleging a contravention of the Trade Practices Act and the Fair Trading Act and the relevant particulars be made by a motion to be served by 24 December 1999 and heard on 4 February 2000. As earlier noted, the repleaded statement of claim was argued on 4 February 2000 and judgment delivered on 3 March 2000 giving leave to the applicants to deliver the amended statement of claim, application and particulars in the form in which they were ultimately filed on 10 March. 31 Arguments were presented by the respondents and the cross-respondents opposing the application for leave to amend. His Honour held that in dealing with the application for leave to amend it was appropriate to consider whether the s 52 claim was so clearly untenable that it would have been appropriate to dismiss it summarily. Esso also argued at that stage, that the cause of action in negligence was untenable, as no duty in tort to take care to avoid economic loss could arise in circumstances in which the imposition of that duty would be inconsistent with the contractual chain under which goods the subject of the duty were provided to the applicants. The contracts and regulatory regime by which gas was supplied to gas users were said to have fundamentally undermined any duty of care premised upon a tortious obligation to provide uninterrupted supply in the manner pleaded. 32 His Honour noted that in so far as the s 52 claim was founded on Esso's failure to correct the pleaded assumptions, it was not founded on silence alone. There was considerable force in criticisms made by the respondents that the applicants' case in respect of the assumptions was a creation of legal drafting rather than material fact, not supported by the matters relied upon nor capable of being established by evidence. Moreover it was said there was a degree of unreality about the same set of assumptions being alleged to have been held by all applicants and group members. Ultimately, however, this was a matter of evidence. He did not accept that it was fanciful to expect that assumptions as to uninterruptability of gas supply were made by members of the public when they elected to make commercial and domestic decisions dependent upon that supply. It was likely that the public would not assume absolute uninterruptability as there remained the possibility of interruption of supply as a result of industrial stoppages, natural disasters or other similar causes. As to the contention that the assumptions were inconsistent with retail gas contracts and the regulatory system, that was a matter for evidence rather than summary dismissal. He also rejected the contention that the term "essential" used in the pleading in relation to the supply of gas was so vague and ambiguous as to be meaningless. 33 His Honour referred to the unique circumstances which had given rise to the claim and the absence of prior consideration by the Court of whether in such or analogous circumstances legal liability under s 52 could arise. He was not prepared to conclude the s 52 claim was sufficiently untenable to dismiss it summarily. Nor was he satisfied that the s 52 claims had been put forward extravagantly, carelessly or other than in good faith. He rejected a contention that he ought not to allow the amendments except on terms that they be verified on affidavit. He granted leave to amend the s 52 claim in the form proposed subject to certain minor matters relating to separately pleaded past supply and whether there was any basis for alleging Esso had failed to disclose that which was not known but "ought to have been known". 34 In relation to the negligence claim, Esso argued that gas was supplied to the applicants and group members through a chain of contracts. The proximate contract was the Gas Sales Agreement between Esso and Gascor. There was a clause in the Gas Sales Agreement which it was said expressly excluded Esso and BHP from liability for economic loss arising out of a negligent failure to supply gas to Gascor. His Honour assumed, without deciding, that the clause operated in that manner. He concluded that the principle contended for Esso was not supported by authority. He put it thus: "The current position in Australia appears to be that the contract, including any exclusionary clause, between A and B may be relevant to, but is not necessarily determinative of, A's liability in negligence for economic loss to C who has contracted with B but not A." ((2000) 97 FCR 175 at p 183) The limitation in clause 23.5 of the Gas Sales Agreement on Esso's liability in negligence for economic loss might be a relevant factor in considering whether it owed the applicants and group members a duty of care to avoid that loss. However it did not resolve that issue. Accordingly, his Honour declined to accede to Esso's claim that the negligence claim was untenable and ought not to be permitted to proceed. The Orders 35 The substantive orders made by his Honour on 3 December 1999 pursuant to the judgment of 25 November 1999 were as follows (omitting case management and other orders not directly relevant to the present appeal): "1. The whole of paragraphs 4(c) and (d), 5(c) and (d), and 16-27 (inclusive) of the Second Further Amended Statement of Claim (the "SOC") be struck out. 2. Any application by the applicants for leave to replead any cause of action alleging a contravention of the Trade Practices Act 1974 and the Fair Trading Act 1985 (Vic) and the particulars subjoined to paragraphs 4(f)(v), 5(f)(v) and 7 of the SOC be made by a motion to be served (together with any proposed pleading) on all parties by 24 December 1999 ("the applicants' motion"). 3. The applicants' motion be heard on 4 February 2000." There followed orders for the filing of submissions and the consequential striking out of various paragraphs of the cross-claim (paragraphs 4, 5 and 6). Each of the cross-claimants was granted leave to amend the cross-claim to preserve their rights to make claims for contribution and indemnity in respect of the alleged contraventions of s 52 of the Trade Practices Act and s 11 of the Fair Trading Act (paragraph 7). The balance of the orders were as follows: "8. The costs of and incidental to the 1st to 14th and the 16th to the 18th cross-respondents' motion dated 3 September 1999, the 15th and the 24th cross-respondents' motion dated 17 September 1999, the 21st to the 23rd cross-respondents' motion dated 17 September 1999, the 19th to the 20th cross-respondents' motion dated 17 September 1999, the 25th to the 27th cross-respondents' motion dated 17 September 1999 and the respondents' motion dated 6 September 1999 be costs in the cause and all questions in respect of costs thrown away as a consequence of orders 1 and 3 are reserved to be determined at a date to be fixed, otherwise those motions be dismissed. 9. On or before 31 March 2000 the respondents complete discovery in accordance with the Court orders made on 30 July 1999. 10. The time that any party may seek leave to appeal from any of these orders be extended to 4 February 2000. 11. Each party has liberty to apply." A separate order was made on the same day in respect of BHP's motion of 16 August 1999 as follows: "1. The notice of motion be dismissed and the costs of and incidental to that motion be costs in the cause. 2. The time within which leave to appeal may be sought from the dismissal of the notice of motion be extended to 4 February 2000." In the same order, his Honour made orders on the motion of BHP dated 20 August 1999 that various paragraphs of the State Entities' cross-claim be struck out with leave to replead and costs of the motion be in the cause, save for costs thrown away which were reserved. BHP's motion for leave to appeal against his Honour's orders only relates to the orders affecting its motion of 16 August 1999. 36 The formal orders made by his Honour on 3 March 2000 were in the following terms: "1. The applicants have leave to deliver within seven days an Amended Statement of Claim, Application and Particulars substantially in the form of Exhibits "NSB1", "NSB2" and "NSB3" to the Affidavit of Nicholas Styant-Browne sworn on 23 December 1999. 2(a) The costs of the parties of the applicants' motion dated 24 December 1999 be costs in the cause. (b) All other questions of costs arising by reason of this order be reserved." The Appeal Notices 37 Esso's proposed notice of appeal against the judgment of 25 November 1999 was exhibited to the affidavit of John Edward Kelly sworn 3 February 2000. Mr Kelly is a partner of Middletons Moore & Bevin, the solicitors for Esso. There are ten grounds in the notice raising issues which may be summarised thus: 1. The primary judge should have struck out the misleading or deceptive claim in its entirety rather than only striking out certain paragraphs (ground 3). 2. The primary judge should have found the claim of misleading or deceptive conduct not bona fide and fabricated to attract the court's jurisdiction to entertain the common law claim in negligence (grounds 4, 5 and 6). 3. The primary judge erred in finding the negligence claim to fall within the accrued jurisdiction of the court (ground 7 to 12). A second notice of appeal by Esso, this time against the primary judge's decision of 3 March 2000, was exhibited to an affidavit sworn by Mr Kelly on 10 March 2000. It raised 21 grounds of appeal which may be summarised thus: 1. The claims for misleading or deceptive conduct were untenable because: (a) they are based on mere silence on the part of the respondents (ground 2 to 4); (b) they are based on pleaded assumptions that are not tenable (grounds 5 to 10). 2. The claims of misleading or deceptive conduct are not bona fide (grounds 11 to 12). 3. The claims in negligence are not tenable and precluded by reason of clause 23 of the Gas Sales Contract under which Esso supplies gas to the Victorian Statutory Corporation GASCOR (grounds 13 to 17). 4. Leave should not have been granted to replead the statement of claim at all or without affidavits verifying the proposed amendments (grounds 18 to 21). 38 BHP's notice of appeal in relation to the judgment of 25 November 1999 is exhibited to the affidavit of Anthony Border sworn 14 March 2000. It raises five grounds summarised thus: 1. The State Entities' cross-claim in negligence against BHP, which reflected the applicants' like claims against Esso, were not within the accrued jurisdiction of the Court (grounds 1 to 3). 2. The State Entities' federal cross-claims having been struck out along with the applicants' federal claims were not brought genuinely but for the colourable purpose of attracting jurisdiction and that the Court lacked jurisdiction to determine the negligence claims (grounds 4 and 5). BHP also attached to its written submissions a proposed notice of appeal against the judgment of 3 March 2000. There are some eighteen grounds in the notice which are summarised in the notice itself thus: 1. The federal matter which is alleged in the amended statement of claim (namely, the alleged misleading and deceptive conduct) is not sustainable. 2. The Court does not have jurisdiction to hear and determine the non-federal matter which is alleged in the amended statement of claim (namely, the common law claim in negligence). 39 The State Entities' notice of appeal is exhibited to the affidavit of Kenneth Adams sworn 22 March 2000. The notice of appeal covers both the judgment of 25 November 1999 and that of 3 March 2000. It raises 21 grounds which may be summarised as follows: A. In respect of the judgment of 25 November 1999: 1. The Court lacks jurisdiction to deal with the negligence claim, the federal claim in misleading or deceptive conduct being colourable and advanced merely to attract jurisdiction and in any event to filing a matter which does not include the negligence claim (grounds 1 to 4 and 7 to 8). 2. The action was not validly constituted and could not continue as a representative proceeding (ground 5). 3. The same issues, save for the representative proceeding issue, are raised in respect of Esso's cross-claims in negligence against the State Entities (ground 9 to 13). B. In respect of the judgment of 3 March 2000: 1. The applicants should not have been given leave to amend their statement of claim 2. The claim in misleading or deceptive conduct was not reasonably arguable and was wholly untenable, (a) because neither the assumption relied upon nor Esso's alleged knowledge of it was supported by pleaded facts; (b) the pleading did not identify how or when Esso could or should have corrected the assumption and the consequences of such correction; and (c) the pleaded facts did not amount to a properly pleaded s 52 claim. 3. The primary judge should have required, as a condition of leave to amend, that the applicants and group members provide evidence of the making and acting upon the pleaded assumption (ground 3). 4. The Court lacked accrued jurisdiction to deal with the common law claims (grounds 5 to 8). The Issues 40 The issues for determination on the motions for leave to appeal from his Honour's decision are as follows: 1. Whether leave is required to appeal from the judgments of 25 November 1999 and 3 March 2000 and if so, whether leave to appeal should be granted? 2. Whether the causes of action in misleading or deceptive conduct are tenable? 3. Whether the cause of action in negligence is tenable? 4. Whether the causes of action in negligence lies within the accrued jurisdiction of the Court? 5. Whether, if the causes of action in misleading or deceptive conduct are untenable, the causes of action in negligence are nevertheless within the accrued jurisdiction of the Court? 6. Whether leave to amend should have been conditioned on the provision of affidavit evidence? 7. Whether the action can in any event continue as a representative proceeding? Leave to Appeal 41 Section 24 of the Federal Court of Australia Act defines the appellate jurisdiction of the Court. The parts of s 24 relevant for present purposes are: "24(1) Subject to this section and to any other Act, whether passed before or after the commencement of this Act (including an Act by virtue of which any judgments referred to in this section are made final and conclusive or not subject to appeal), the Court has jurisdiction to hear and determine – (a) appeals from judgments of the Court constituted by a single Judge; . . . (1A) An appeal shall not be brought from a judgment referred to in subsection (1) that is an interlocutory judgment unless the Court or a Judge gives leave to appeal." Section 4 defines "judgment" thus: ""judgment" means a judgment, decree or order, whether final or interlocutory, or a sentence;" The relevant rule of Court is Order 52 rule 10 which provides that an application for leave to appeal from an interlocutory judgment may be made orally to the judge who has pronounced a judgment at the time of his pronouncement (O 52 r 10(1)). Otherwise an application may be made by motion on notice to a single judge or to a Full Court (O 52 r 10(2)). 42 The application of the leave requirement should not involve the expenditure of significant intellectual energy on the distinction between final and interlocutory judgments. Admittedly that is a question "productive of much difficulty" – Carr v Finance Corporation of Australia Ltd [No. 1] (1981) 147 CLR 246 at 248 (Gibbs CJ). But the policy of the provision is plain enough. The time and resources of the Court and the parties should not lightly be taken up with appeals about decisions in connection with proceedings which do not finally determine the rights of the parties. In broad terms, of course, a judgment is treated as final if it finally disposes of the rights of the parties. Otherwise it is an interlocutory order – Hall v Nominal Defendant (1966)117 CLR 423 at 439-440 (Taylor J, Owen J agreeing) and 443 (Windeyer J); Licul v Corney (1976) 180 CLR 213 at 225 (Gibbs J, Stephen, Jacobs and Mason JJ agreeing). Under that rubric there has been much taxonomic debate. But the policy supports a general principle, applicable with or without a statutory leave requirement, to the exercise of appellate jurisdiction, including that of the Federal Court even before the enactment of s 24(1A). The principle was expressed by the High Court in Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc (1981) 148 CLR 170 at 177 in terms that: "…appellate courts exercise particular caution in reviewing decisions pertaining to practice and procedure." The policy supporting the principle was clearly stated by Jordan CJ in In re the Will of FB Gilbert (dec) (1946) 46 SR(NSW) 318 at 323, and repeated with approval by the High Court in the Philip Morris case at 177: "…there is a material difference between an exercise of discretion on a point of practice or procedure and an exercise of discretion which determines substantive rights. In the former class of case, if a tight rein were not kept upon interference with the orders of Judges of first instance, the result would be disastrous to the proper administration of justice. The disposal of cases could be delayed interminably, and costs heaped up indefinitely, if a litigant with a long purse or a litigious disposition could, at will, in effect transfer all exercises of discretions in interlocutory applications from a Judge in Chambers to a Court of Appeal." 43 Artificial distinctions may be drawn because of the requirement that the Court looks to the legal rather than the practical effect of the order in question – Carr at 248 (Gibbs CJ) 256 (Mason J). But such artificiality as may arise can be overcome by a sensible exercise of the discretion to grant leave informed by the underlying policy of that requirement. Interlocutory orders cover a spectrum from those concerned solely with the mechanics of case management and pre-trial preparation to those which may, for one reason or another, have a significant impact upon the scope and outcome of the proceedings. If the order, the subject of the application for leave to appeal, is concerned with the mechanics of the pre-trial process then the scales are likely to be weighted against the grant of leave. However if while interlocutory in legal effect it has the practical operation of finally determining the rights of the parties "… a prima facie case exists for granting leave to appeal" – Ex parte Bucknell (1936) 56 CLR 221 at 225; Décor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397 at 400; Minogue v Williams [2000] FCA 125 at par 18. If a proceeding is dismissed because it is frivolous or vexatious or because no reasonable cause of action is disclosed the decision is treated as interlocutory. However leave will usually be granted in such a case if there is any doubt about the decision at first instance – Little v State of Victoria [1998] 4 VR 596 at 598-600 and 601 (Callaway JA, Buchanan JA agreeing). 44 The Full Court in Minogue restated the two tests enunciated in Decor Corporation which have been developed to justify the grant of leave to appeal from an interlocutory order. The first is that the decision at first instance should be attended with sufficient doubt to warrant its reconsideration on appeal. The second is that substantial injustice would result if leave were refused. The present case is one in which the decisions in question have allowed causes of action to go forward which the respondents and other parties say are untenable and should be struck out. It was contended for BHP that, in so far as the decision of 3 March 2000 involves rejection of the contention that the s 52 claim is colourable and that the Court lacks accrued jurisdiction to deal with the common law claim, this was a decision that fully determined the rights of the parties and that leave to appeal was not required in respect of it. The "decisions" referred to however were findings underlying an order, the relevant order being to allow the amendments to the statement of claim. 45 The question whether a judgment, decree or order of the Court is final or interlocutory for the purposes of s 24 is to be determined by reference to the legal effect of that judgment, decree or order. It is not determined by reference to the findings which formed part of the reasons for making it. The orders in respect of the strike-out motions and the orders in respect of the amendment of the pleadings are plainly interlocutory as they do not determine finally the rights of the parties. Neither in legal effect nor practical operation do they finally resolve the matter before the Court. In that sense the threshold for the grant of leave is higher than would be the case if the decisions had struck out the causes of action in contention. Nevertheless it is difficult to escape the initial impression that the viability of the cause of action in misleading or deceptive conduct, as re-pleaded, is doubtful and that the correctness of the decision to allow it to go forward is arguable. If it stands there are serious consequences in terms of time and costs for the respondents and other parties which cannot be compensated by an order for costs if they are successful at the end of the day. That may work a substantial injustice if it is concluded ultimately that the claims were not tenable. 46 In the circumstances I am of the opinion that leave to appeal should be granted pursuant to each of the motions albeit the issues of primary interest arise in relation to the judgment of 3 March 2000. The Criteria for a Viable Statement of Claim 47 The judgment delivered on 25 November 1999 responded to strike-out motions by the respondents and cross-respondents. That delivered on 3 March 2000 responded to a motion to amend the statement of claim. Although these two interlocutory processes can involve quite different questions the questions in this case were common. Did the pleadings in each case disclose reasonable causes of action in misleading or deceptive conduct and negligence? If there were no federal cause of action disclosed in misleading or deceptive conduct, did the Court have, and should it exercise, accrued jurisdiction to determine the negligence claim? 48 The content of the requirement that a statement of claim disclose a reasonable cause of action is derived from a consideration of the rules of court. The pleading in the Federal Court must conform with Order 11 rule 2: "Subject to these Rules – (a) a pleading of a party shall contain, and contain only, a statement in a summary form of the material facts on which he relies, but not the evidence by which those facts are to be proved; and (b) paragraph (a) has effect subject to this Order and to Order 4 (which relates to commencement of proceedings) and to Order 12 (which relates to particulars)." 49 Where a pleading "discloses no reasonable cause of action or defence or other case appropriate to the nature of the pleading" or "has a tendency to cause prejudice embarrassment or delay in the proceeding" or "is otherwise an abuse of the process of the court" the Court may order that the whole or any part of the pleading be struck out (Order 11 rule 16). A pleading will disclose no reasonable cause of action if it is "so clearly untenable that it cannot succeed" – General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 at 129. The determination whether a statement of claim discloses a reasonable cause of action will be made on the assumption that the facts alleged are true – Empire Shipping Co Inc v Owners of the Ship "Shin Kobe Maru" (1991) 32 FCR 78. 50 The Court exercises a degree of restraint in responding to the contention that the pleading is so fatally flawed that it should not see the light of day at a trial of the action. It is not enough that the pleaded case is weak or has a low prospect of success – Coe v Commonwealth of Australia (1979) 53 ALJR 403. The Court should not shrink from striking out an untenable pleading because it thinks that argument is necessary to demonstrate its deficiencies – General Steel at 130 (Barwick CJ). On the other hand an application to strike-out which involves prolonged and serious argument should only be entertained if the judge not only harbours doubt about the soundness of the pleading but also is satisfied that striking out will avoid the need for a trial or substantially reduce the burden of its preparation – Williams & Humbert Ltd v W & H Trademarks (Jersey) Ltd [1986] 1 AC 368 at 436 (Lord Templeman), applied in Sun Earth Homes Pty Ltd v Australian Broadcasting Corporation (1990) 45 FCR 265. See also Allstate Life Insurance Co v Australian & New Zealand Banking Group Ltd (Fed. Ct. 13.9.94 Beaumont J) for the related proposition that where a point of law has to be decided and the judge is satisfied that this can be done appropriately, avoiding the necessity and expense of going to trial, a judge is entitled to determine the point. The determination of a point of law in this way on a dismissal may be to all intents and purposes a determination of a preliminary issue albeit the formal character of the procedure and its consequences differ. The Court should not however apply strike out procedures in a way that might stultify the development of the law. If the law is not settled but is still developing then it would be inappropriate to decide novel questions on hypothetical facts – X (Minors) v Bedfordshire County Council [1995] 2 AC 633 at 740-741. The High Court has recently referred to the difficulty in deciding upon summary termination of pleadings in negligence claims where the question is whether the pleaded facts disclose a duty of care: "…frequently the conventional form of pleading in an action of negligence will not reveal the alleged duty with sufficient clarity for a court considering an application for summary termination of the proceeding to be sure that all of the possible nuances of the plaintiff's case are revealed by the pleading. Further, and no less importantly, any finding about duty of care will often depend upon the evidence which is given at trial. Questions of reliance or knowledge of risk are two obvious examples of the kinds of question in which the evidence given at trial may take on considerable importance in determining whether a defendant owed the plaintiff a duty of care." Agar v Hyde (2000) 173 ALR 665 at 682. 51 For a representative proceeding as this is, under Part IVA of the Federal Court of Australia Act there will be an extra dimension in assessing the viability of a statement of claim, namely whether it meets the statutory criteria for such proceedings. The pleadings must disclose several persons with claims against the same person which are in respect of or arise out of the same or similar or related circumstances and give rise to a substantial common issue of law or fact (s 33C(1)). Statutory and Contractual Framework 52 Particulars of the third amended statement of claim dated 10 March 2000 refer to the statutory and contractual framework within which Esso produces and supplies gas to end users. The governing statute is the Gas Industry Act 1994 (Vic). Esso Australia Ltd is a gas producer within the meaning of the Act, namely "… a person who carries on the business of producing natural gas" (s 3). The gas is supplied by Esso not directly to end users but to a statutory corporation called GASCOR established under s 13 of the Gas Industry Act. Prior to the establishment of GASCOR Esso supplied gas to its predecessor Gas and Fuel Corporation of Victoria (GFCV). This was done pursuant to contracts between Esso, GFCV and GASCOR respectively (particulars para 14). The gas sold under the successive contracts is and since 1969, has been supplied to gas users in Victoria via the gas transmission and distribution system. Esso has been the sole supplier of gas to GASCOR and its predecessor for those purposes since 1969. GFCV and GASCOR have successively operated the gas transmission and distribution system in Victoria. The functions of GASCOR as defined in s 15 of the Act include the operation of pipelines for the distribution of gas, to undertake or provide for the undertaking of such distribution, the storage of gas and a number of related functions. 53 The end supplier to the gas user is a gas retailer which, in the case of Johnson Tiles was GASCOR from 30 June 1996 to 1 July 1997, when it acquired its gas from Energy 21 (Gas) Pty Ltd, the holder of a gas retailer's licence under the Act (particulars para 2(a)). Gas supplied to the domestic user Mr Chalmers was sold to him from about 14 June 1998 by Kinetik (Gas) Ltd which was also a licensed retailer. 54 There are provisions in the Act protecting gas retailers from liability for interruptions in supply in the following terms: "32(1) Despite anything to the contrary in this or any other Act or in any contract, a gas retailer is not liable to any penalty or damages for failing to supply gas if the failure arises out of any accident or cause beyond the control of the gas retailer. (2) A gas retailer may enter into an agreement with a person varying or excluding the operation of subsection (1) and, to the extent of that agreement, that subsection does not apply. . . . 33(1) Despite anything to the contrary in this or any other Act but subject to subsection (2) or in any contract – (a) a gas transmission company is not liable to any penalty or damages for failing – . . . (ii) to make a transmission pipeline available to accept gas for injection into it or for the withdrawal of gas from it – if the failure arises out of any accident or cause beyond the control of the gas transmission company; (b) a gas distribution company is not liable to any penalty or damages for failing to convey gas through distribution pipelines if the failure arises out of any accident or cause beyond the control of the gas distribution company. (2) A gas transmission company or a gas distribution company may enter into an agreement with a person varying or excluding the operation of subsection (1) and, to the extent of that agreement, that subsection does not apply." 55 It follows from the pleadings and particulars that on the applicant's case, which in this respect is not in dispute, gas sold by gas retailers to gas users was acquired by the retailers from GASCOR which in turn acquired the majority of that gas from Esso Australia Resources Ltd pursuant to the terms of a Gas Sales Agreement. In addition reliance was placed by the applicants in their particulars upon the Victorian Gas Customers Service Code as providing part of the basis for the implication of contractual terms into the retail supply of gas to business users (particulars para 2(a)) and of the contract for such supply to domestic users (particulars para 2(b)). The Code, a copy of which was before the Court, forms part of the gas retail licence issued under Part 4A of the Gas Industry Act 1994. 56 A Gas Sales Agreement was made between Esso Australia Resources and BHP as sellers on the one hand and GASCOR as buyer on the other on 20 November 1996. 57 Under clause 4 of the contract there is an obligation on each seller to sell to the buyer and deliver to the point of delivery gas at such times and in such manner as is specified in or determined under the contract. There is a correlative obligation on the buyer to purchase the gas (Clause 4.1). Clause 23.5 of the agreement deals with damages and consequential loss thus: "23.5 Subject to Clause 23.4(a)(iv) and, to the extent that any amount expressly included in Clauses 23.4(a)(i) or (ii) would otherwise be excluded by this Clause 23.5, Clauses 23.4(a)(i) and (ii) but without limiting Clause 23.4(b), if any Default gives a party a right to damages, such damages will be limited to damages for direct and foreseeable loss attributable to such Default and no Party will be liable to any other Party for any loss of profit or anticipated profit, business interruption, indirect loss, consequential loss or loss of use suffered by a party or any other person." 58 Clause 23 is generally concerned with default including specifically failure to deliver gas. 59 The Victorian Gas Customer Service Code in its preface is described as setting "… minimum conditions under which a gas supplier in Victoria may supply and sell reticulated gas to a customer". The Code is subject to annual review by the Office of the Regulator-General. It requires a supplier adopting the Code to prepare a Natural Gas Customer Charter which summarises the Code and any greater benefit which a supplier provides to a customer. It requires a copy of the Charter to be provided by the supplier to its customers as soon as reasonably practicable after 11 December 1997 and no later than 30 April 1998 (Clause 1.2.2). Under the heading "RELIABILITY OF GAS SUPPLY" the Code includes the following: "3.4.1 Obligations of a Supplier Subject to this Section, a supplier or distributor shall provide a reliable supply to a customer in accordance with the distribution standards. 3.4.2 Right to Interrupt Supply by a Supplier Subject to this Section and Section 5.1, a supplier or distributor may interrupt supply for maintenance or repair, for installation of a new supply to another customer, in an emergency, or for health or safety reasons. 3.4.3 Unplanned Interruptions In the case of an unplanned interruption, the supplier shall provide a 24 hour telephone number to enable customers to ascertain details, and the expected duration, of the interruption. 3.4.4 Right to Information by a Customer A supplier shall, at the request of a customer, provide an explanation for any interruption to supply to the customer's supply address and if the customer requests that the explanation be in writing, it shall be given in writing within 20 business days of the request or where the supplier does not own or operate the distribution system, within 10 business days of obtaining an explanation for the interruption from the distributor." The Cause of Action in Misleading or Deceptive Conduct 60 The central question for determination in the appeals so far as they relate to the cause of action for misleading or deceptive conduct in the third amended statement of claim is whether those pleas are tenable. The attack on the pleading in this respect was directed primarily to whether it alleged sufficient facts to establish, if proven, misleading or deceptive conduct by Esso. Questions of reliance, causation and loss were not in issue albeit the cause of action for damages for misleading or deceptive conduct arising under s 82 of the Trade Practices Act includes as an element loss or damage by reason of the conduct. 61 The starting point in assessing the viability of the pleading in this respect is the language of s 52 of the Trade Practices Act which provides relevantly: "52(1) A corporation shall not, in trade or commerce, engage in conduct that is misleading or deceptive or likely to mislead or deceive." 62 The term "engage in conduct" is defined in s 4(2) of the Act thus: "4(2) In this Act – (a) a reference to engaging in conduct shall be read as a reference to doing or refusing to do any act, including the making of, or the giving effect to a provision of, a contract or arrangement, the arriving at, or the giving effect to a provision of, an understanding or the requiring of the giving of, or the giving of, a covenant; . . . (c) a reference to refusing to do an act includes a reference to: (i) refraining (otherwise than inadvertently) from doing that act; or (ii) making it known that that act will not be done." 63 The touchstone of liability is the conduct by act or omission of Esso and its characterisation as misleading or deceptive. The analysis of the statement of claim must begin by identifying the conduct and the facts relied upon to give it that character. The principles governing characterisation are well established. Conduct is misleading or deceptive if it induces or is capable of inducing error – Keehn v Medical Benefits Fund of Australia Ltd (1977) 14 ALR 77; Weitmann v Katies Ltd (1977) 29 FLR 336; Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191 at 198 (Gibbs J); Rhone-Poulenc Agrochimie SA v UMI Chemical Services Pty Ltd (1986) 12 FCR 477. The so called "doctrine" of "erroneous assumption" referred to by the High Court in Campomar Sociedad Limitada v Nike International Ltd (2000) 169 ALR 677 at 704, is merely another way of expressing that general proposition albeit it seems to have arisen in the context of cases involving similar product names. The statement in the joint judgment of Deane and Fitzgerald JJ in Taco Co of Australia Inc v Taco Bell Pty Ltd (1982) 42 ALR 177 at 200 that "no conduct can mislead or deceive unless the representee labours under some erroneous assumption", cited in Campomar, is another way of saying that the representee must be led into error. 64 Conduct may be misleading or deceptive because it involves an express representation which is false. In the statement of claim in such a case the representation will be pleaded as a fact as will the falsifying facts. The conduct may involve an implied representation conveyed by words or conduct or some combination thereof. Such a representation will be falsified in the same way as an express representation. But the identification of a representational element is not necessary, albeit it will be involved in most cases. Conduct is to be characterised by reference to its actual or possible consequences – Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Ltd (1978) 140 CLR 216 at 228 (Stephen J). This does not require demonstration that anyone has actually been misled – Annand & Thompson Pty Ltd v Trade Practices Commission (1979) 25 ALR 91 at 102 (Franki J) and 111 (Northrop J); Brock v Terrace Times Pty Ltd (1982) 56 FLR 464; Taco Co of Australia Inc v Taco Bell Pty Ltd at 202 (Deane and Fitzgerald JJ). It does require a capacity to mislead or deceive attributable to the conduct in question. There must be a logical causal connection between the conduct and some hypothesised error. But not every case involving a logical connection between conduct and alleged error will result in the conduct being regarded as misleading or deceptive for the purposes of s 52. There is an evaluative judgment involved. As the Full Court said in SAP Australia Pty Ltd v Sapient Australia Pty Ltd (1999) 169 ALR 1 at 14: "The characterisation of conduct as "misleading or deceptive or likely to mislead or deceive" involves a judgment of a notional cause and effect relationship between the conduct and the putative consumer's state of mind. Implicit in that judgment is a selection process which can reject some causal connections, which, although theoretically open, are too tenuous or impose responsibility otherwise than in accordance with the policy of the legislation." 65 By way of example, it might be said that, strictly speaking, a causal connection exists between conduct and error where the error is based upon erroneous assumption derived from but not logically justified by the conduct. The conduct will not ordinarily be treated on that account, as misleading or deceptive in such a case. In McWilliam's Wines Pty Ltd v McDonald's System of Australia Pty Ltd (1980) 49 FLR 455 at 466, Smithers J said: "It is difficult to think that conduct is truly misleading or deceptive if it tells the truth and is such that if it is observed by persons who have no false ideas concerning extraneous matters nobody will be misled." Northrop and Fisher JJ who published separate reasons, generally agreed with Smithers J. The case concerned similar brand names, albeit in quite disparate product areas – hamburgers and wine respectively. While the similarity might lead to erroneous assumptions of affiliation by some consumers, it was not on that account to be regarded as misleading or deceptive. Nevertheless the High Court in Campomar approved the rejection in Taco Bell, at p 200, of: "[Any] general proposition of law to the effect that intervention of an erroneous assumption between conduct and any misconception destroys a necessary chain of causation with the consequence that the conduct itself cannot properly be described as misleading or deceptive or as being likely to mislead or deceive." The High Court went on to point out that in assessing the reactions or likely reactions of ordinary or reasonable members of a class of prospective purchasers of a mass marketed product for general use, the Court may well decline to regard as controlling the application of s 52 those assumptions by persons whose reactions are extreme or fanciful. It said at p 705: "The initial question which must be determined is whether the misconceptions, or deceptions, alleged to arise or to be likely to arise are properly to be attributed to the ordinary or reasonable members of the classes of prospective purchasers." It is, of course, to be borne in mind that these observations are made in the context of a consumer reaction to the impugned conduct where that conduct involved the use of a trade name on one product that is similar to the trade name of another. In the present case, the assumptions which are pleaded are logically antecedent to the conduct which is complained of. 66 There is a question whether, in non-disclosure cases, the facts which are not disclosed must be known to the party failing to make disclosure. As a general proposition it is not necessary in order to show misleading or deceptive conduct for the purposes of s 52, that the contravenor intended to mislead or deceive – Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Ltd at 228 (Stephen J, Jacobs J agreeing); 234 (Murphy J). In the case of an alleged non-disclosure it is not necessary to show that the contravenor knew of the facts not disclosed. In Fraser v NRMA Holdings Ltd (1995) 55 FCR 452 at 467, the Full Court said: "…for the purposes of s 52, if by reason of what was said and what was left unsaid the conduct of the corporation is misleading and deceptive or likely to mislead or deceive, a contravention would occur even if the corporation through its directors and officers did not have knowledge of the undisclosed facts which rendered the conduct in breach of s 52. A contravention of s 52 may occur without knowledge or fault on the part of the corporation, and notwithstanding the exercise of reasonable care: Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd [(1982) 149 CLR 191] at 197." That is not to say that knowledge may not be a relevant circumstance. For in a case where disclosure would reasonably be expected of a fact if that fact were known to the corporation, failure to make disclosure may convey the implication that that fact is not known. 67 There is in Fraser a useful general statement at 467 about what it is necessary for an applicant in a non-disclosure case to establish: "Where the contravention of s 52 alleged involves a failure to make a full and fair disclosure of information, the applicant carries the onus of establishing how or in what manner that which was said involved error or how that which was left unsaid had the potential to mislead or deceive. Errors and omissions to have that potential must be relevant to the topic about which it is said that the respondents' conduct is likely to mislead or deceive. The need for an applicant to establish materiality is of particular importance…where the proposal is complex, and involves difficult questions of commercial judgment and matters of degree and conjecture as to the future about which there is room for a range of honestly and reasonably held opinions." Those words were written in the context of a document analogous to a prospectus which was said to be incomplete. Where the question involves disclosure of risks associated with the supply of a product or service, it cannot reasonably be expected that the supplier is to inform the public of every possible risk. That can be explained simply by the proposition that in the ordinary course of human affairs things go wrong in connection with the supply of products and services and that nobody could reasonably assume, absent disclosure, that such supply will be risk free. Moreover, where complex issues are involved the question whether non-disclosure is misleading or deceptive will have to be assessed in a "practical realistic way" – Fraser at 468. 68 The pleading of the facts to raise the cause of action in misleading or deceptive conduct is set out in eleven paragraphs of the statement of claim (paragraphs 16-26). The pleading does not deal with any conduct on the part of Esso until paragraph 25, which is set out earlier in these reasons. That conduct may be broken down into the following elements: 1. Positive acts – continuing to operate, manage and control the Longford plant and supply gas. 2. Omissions – failing to contradict the pleaded assumptions and failing to disclose the susceptibility of the gas supplies to interruption. 69 There is no basis upon which the continuation of supply itself can be regarded as misleading or deceptive or likely to mislead or deceive. It could hardly be suggested that Esso's failure to stage some informative interruption of supply was necessary to dispel any false sense of security on the part of users. The continuing involvement of Esso in the supply of gas is simply a circumstance relevant to the characterisation of the conduct otherwise relied upon which in this case is the pleaded non-disclosure set out in paragraphs 25(ii) and 25(iii). In paragraph 26 also the statement of claim seeks to incorporate the continued supply as an element of the conduct characterised by that paragraph as misleading or deceptive. That is not a tenable proposition. 70 What remains is a case of misleading or deceptive conduct by non-disclosure. The omission to do a thing is a species of conduct as defined in s 4(2) of the Trade Practices Act. And as Black CJ observed in Demagogue Pty Ltd v Ramensky (1992) 39 FCR 31 at 32: "…the significance of silence always falls to be considered in the context in which it occurs. That context may or may not include facts giving rise to a reasonable expectation, in the circumstances of the case, that if particular matters exist they will be disclosed." Gummow J in similar vein (Cooper J agreeing) said at 40: "…in any case where a failure to speak is relied upon the question must be whether in the particular circumstances the silence constitutes or is part of misleading or deceptive conduct." I respectfully differ from one aspect of the observations by the Chief Justice in Demagogue when his Honour spoke ( at 32) of silence as requiring "..to be assessed as a circumstance like any other". As appears from the balance of his Honour's judgment, silence, in the context of s 52, is conduct to be assessed by reference to context or circumstances. If a corporation fails to disclose a fact which, absent disclosure in the circumstances of the case, would reasonably be expected not to exist, then that non-disclosure may convey the misleading impression that the fact does not exist. 71 The assumptions said to have been made by gas users about uninterrupted supply of gas are not based on any conduct by Esso which is said to be or could be said to be misleading or deceptive. The assumptions as pleaded are logically antecedent to the alleged failure to correct or contradict them which is at the heart of the asserted contravention of s 52. In this respect the case differs quite radically from cases of misleading or deceptive conduct where the resulting error is based in part upon an erroneous assumption which may or may not be related to the conduct in question. 72 The assumptions pleaded in paragraph 19 of the statement of claim rest upon other pleaded facts. The first of these is that set out in paragraph 6, namely the dependency of the users "on the respondents, as the sole suppliers of gas, for a supply of gas which would be uninterrupted (except in the event of circumstances which were not reasonably foreseeable and reasonably preventable by the respondents);". There is no logical connection between dependence on supply and an assumption as to its continuity. To say that somebody is dependent upon somebody else doing something does not carry with it the implication that the other person will do that thing. The dependency plea in paragraph 6 as particularised may logically demonstrate the seriousness of the consequences of an interruption of supply and it may well be relevant to the existence of a duty of care at common law on the part of the respondents but is not a basis for the assumption pleaded. Moreover the dependency pleaded is qualified to allow for interruptions of supply not reasonably foreseeable and reasonably preventable by the respondents. Those qualifications draw no bright line. The dependency is defined by reference to matters of evaluation and assessment about what is reasonably foreseeable and reasonably preventable. This pleading, with all due respect, is a logical absurdity. 73 The second of the factual bases for the assumptions pleaded is that set out in paragraph 16, namely that since about 1969 Esso has been the monopoly supplier of natural gas to gas users in Victoria. There is no logical connection apparent between that fact and the pleaded assumption and no pleading of fact to make the connection. Nor is there any such connection between the assumptions and the next pleaded fact that the supply of gas by Esso was an "essential service" in Victoria. In any event the latter "fact" is a statement of a normative kind which, as particularised, involves a revisiting of the dependency plea coupled with the allegation that interruption of supply would be likely "to have a serious adverse effect on the economy of Victoria" and "was likely to cause serious disruption, dislocation and inconvenience to persons in Victoria". The final factual basis for the assumptions asserted is that set up in paragraph 18, namely that the provision of gas by Esso to the users which was uninterrupted save for circumstances not reasonably foreseeable or preventable by Esso "… was dependent upon an infrastructure which enabled that supply". The infrastructure included gas reserves, production and processing facilities and storage and distribution facilities. Again, there is no connection apparent or pleaded between these facts and the assumptions set up in paragraph 19. 74 The assumptions which are central to the characterisation of Esso's conduct as misleading or deceptive cannot logically be derived from the factual matters identified either severally or collectively. In my respectful opinion, the pleading of the assumptions is a creation of legal drafting. 75 The focus of these reasons thus far has been upon the internal logic of the statement of claim and whether it discloses an arguable case on the critical issue of the pleaded assumptions. Such analysis is not to be informed by intuitive personal judgments about what gas users might think. But I am reinforced in the conclusion I have drawn from the pleading itself by the sense that the existence of such explicit assumptions is highly counter intuitive. It might be said that interruptions to gas supplies when they occur would be regarded by most people as unexpected. The more serious and prolonged the interruption, the more unexpected it would be. But to say that something is unexpected is not to say that there is a positive assumption or belief to the effect that it will not happen. In any event, the assumptions as pleaded are gutted of content by the qualification that the assumed supply may be subject to interruptions which were "not reasonably foreseeable and reasonably preventable by the respondents". To contradict these assumptions it would be necessary for Esso to warn the populace that it was expecting a reasonably foreseeable and preventable interruption to occur. 76 The assumptions pleaded are also framed by reference specifically to the supply of gas by Esso. Esso is, in each case, referred to in the qualification relating to foreseeable and preventable interruption. It is not in dispute that Esso was only the start point of a chain of contracts. Johnson Tiles and Mr Chalmers dealt with licensed gas retailers, Energy 21 (Gas) Pty Ltd and Kinetik (Gas) Ltd respectively. While the limitation of liability contained in clause 23.5 of the Gas Sales Agreement would not seem to have any operative effect upon the perceptions of end users, the same is not true for the Victorian Gas Customer Service Code which expressly contemplates the possibility of "unplanned interruptions" (clause 3.4.3). 77 The pleading of the assumptions being, in my opinion, fatally flawed, the conduct of failing to correct or contradict the assumptions and failing to make known the vulnerability of the gas supply could not constitute misleading or deceptive conduct. In my opinion this aspect of the statement of claim should not be permitted to go forward. The Cause of Action in Negligence 78 Esso submits that the cause of action in negligence is not tenable. They contend that the contractual and regulatory regime by which gas is supplied to gas users in Victoria fundamentally undermines any duty of care cast by reference to having a tortious obligation to provide uninterrupted supply. No duty in tort to take care to avoid economic loss may arise in circumstances in which the imposition of that duty would be inconsistent with a contractual chain whereby goods the subject of that duty are provided to the applicants. Consequently, it is said, it is not open to the applicants to cast the duty of care in the way that they seek by reference to a dependency upon an uninterrupted supply. Moreover it is submitted no factor is alleged sufficient to ground the duty of care independently of the existence of the contractual chain. Thus there is no "proximity" created by factors standing outside the contractual chain such as physical damage or injury or a representation relied upon. The only "proximity" factor properly relied on to ground the duty is said to be Esso's activities in designing, installing, operating and maintaining the Longford facilities. Esso submits that what the authorities establish is that where a contract is relevant to the scope or content of a duty of care in respect of pure economic loss, that duty cannot be inconsistent with the terms of the contract not only with respect to the parties to that contract but also any more remote third party. 79 His Honour dealt with this argument in his judgment of 3 March 2000 and in my respectful opinion dealt with it correctly. There is no doubt no little difficulty in the way of a claim for what may be characterised as pure economic loss in circumstances where the negligent conduct complained of falls within the scope of a contract. But the principles, and more importantly, their application in particular cases, are not so settled and not so clear cut that it can be said the claim is untenable. 80 Esso places reliance upon the decision of the High Court in Bryan v Maloney (1995) 182 CLR 609 which concerned the liability of a home builder for careless construction to a purchaser subsequent to the owner for whom he built. In that case, in the joint judgment of Mason CJ, Deane and Gaudron JJ, it was found "…unnecessary… to consider whether…a relationship of proximity or any consequent duty of care can be excluded or modified by the terms of the contract between the builder and the first owner". Their Honours went on to acknowledge the "obvious force" in the conclusion of Windeyer J in Voli v Inglewood Shire Council (1963) 110 CLR 74 at 85 that while a contractual exclusion of liability for the benefit of an architect would be relevant to identifying the task upon which the architect had entered, it could not directly operate to discharge the architect from a duty of care which would otherwise extend "to persons who are strangers" to the contract (p 625). It is to be noted that the decision in that case turned on the particular kind of economic loss involved which was the diminution in value of a house when the inadequacy of its footings first became manifest by reason of consequent damage to the fabric of the house. The decision was not directly decisive of the question whether a relevant relationship of proximity would exist in other categories of case or as regards other kinds of damage. 81 In Perre v Apand Pty Ltd (1999) 198 CLR 180, the Court found a duty of care owed by a supplier of potato seeds not to cause economic loss to persons living so close to purchasers of the seed that they would be prohibited by State regulations from selling their potatoes if the purchaser received and grew potatoes from seeds infected with a potato disease. Gleeson CJ discussed, at 192-3, the considerations which would limit the acceptance of a duty of care, breach of which would permit recovery of pure economic loss. One of the considerations was expressed thus: "…in those cases where the loss occurs in a commercial setting, a third party, C, may suffer financial harm as a result of conduct which is regulated by a contract between A and B. It may be that the consequences of such conduct, as between A and B, are governed and limited by the contract. This is a problem which commonly occurs in relation to maritime claims, and may help to explain the strictness with which an exclusionary rule has been applied in shipping cases." McHugh J, whose judgment is also referred to by Esso, at par 122 (page 227) said: "Australian courts must be careful before holding that the existence of obligations under a contract automatically denies liability in tort for pure economic loss. That said, if we are to aspire to a coherent law of civil obligations, courts must keep the contractual background in mind in determining whether a duty of care should be imposed on the defendant in pure economic loss cases." As the learned primary judge observed, the High Court has recognised that in certain circumstances concurrent duties in tort and contract can exist and that the law of contract and the law of negligence are informed by differing rationales. In this respect he referred to Astley v Austrust Ltd (1999) 197 CLR 1 at 20-24 and Bryan v Maloney at 620-622. 82 Neither of these cases sets out any principle so clearly and authoritatively antagonistic to the present pleading and so plainly settled that it can be said that the present pleading is untenable. The cause of action in negligence must stand. The question however remains whether it is within the accrued jurisdiction of the Court. The Accrued Jurisdiction – Existence and Scope 83 The Federal Court is given, by virtue of s 86 of the Trade Practices Act, jurisdiction in any matter arising under that Act in respect of which a civil proceeding has been instituted under Part VI of the Act. The authority of the Parliament so to confer jurisdiction on the Court derives from s 77 of the Constitution. The matter in respect of which jurisdiction is defined embodies the entire controversy which parties bring for determination by the Court – Philip Morris Inc v Adam P Brown Male Fashions Pty Ltd (1981) 148 CLR 457 at 512 (Mason J). The content of the controversy depends upon what the parties have done, their relationships and the laws attaching rights or liabilities to their conduct and relationships. It is not ascertained merely by reference to the proceedings which are instituted but may be illuminated by their conduct and by the pleadings in which issues and controversy are defined and claims for relief set out. As the majority judgment in Fencott v Muller (1983) 152 CLR 570 observed: "But in the end it is a matter of impression and of practical judgment whether a non-federal claim and a federal claim joined in a proceeding are within the scope of one controversy and thus within the ambit of a matter." In PCS Operations Pty Ltd v Maritime Union of Australia (1998) 153 ALR 520 at 524-525, Gaudron J noted the question whether different claims constitute a single matter is a question arising under ss 75, 76 and 77 of the Constitution. She said: "Since Fencott v Muller, however, that is not a question that involves any contentious question of principle. Rather, it is simply a question of "practical judgment" and one which should be determined at least in the first instance by the Federal Court." Non-federal claims that cannot be severed from a federal claim are treated as part of the matter for the purposes of federal jurisdiction. That condition is satisfied if both sets of claims arise from a common substratum of facts – Abebe v Commonwealth (1999) 197 CLR 510 at 530 (Gleeson CJ and McHugh J). Most recently in Re Wakim; Ex parte McNally (1999) 198 CLR 511, Gummow and Hayne JJ in their joint judgment (Gleeson CJ, Gaudron and McHugh JJ agreeing with them on this point) said: "What is a single controversy "depends on what the parties have done, the relationships between or among them and the laws which attach rights or liabilities to their conduct and relationships". There is but a single matter if different claims arise out of "common transactions and facts" or "a common substratum of facts", notwithstanding that the facts upon which the claims depend "do not wholly coincide". So, too, there is but one matter where different claims are so related that the determination of one is essential to the determination of the other, as, for example, in the case of third party proceedings or where there are alternative claims for the same damage and the determination of one will either render the other otiose or necessitate its determination. Conversely, claims which are "completely disparate", "completely separate and distinct" or "distinct and unrelated" are not part of the same matter." (at 586) 84 The judgment to be made in assessing the scope of the accrued jurisdiction extends to the relationship between the federal and non-federal claims said to fall within it. Further, the federal claim must be a substantial aspect of the controversy if that controversy is to attract federal judicial power. As the majority said in Fencott v Muller at 609: "A federal claim which is a trivial or insubstantial aspect of the controversy must, of course, itself be resolved in federal jurisdiction, but it would be neither appropriate nor convenient in such a case to translate to federal jurisdiction the determination of the substantial aspects of the controversy from the jurisdiction to which they are subject in order to determine the trivial or insubstantial federal aspect. Again, impression and practical judgment must determine whether it is appropriate and convenient that the whole controversy be determined by the exercise of federal judicial power." It is to be noted that the characterisation "trivial or insubstantial" is not an absolute attribute of the federal claim or a description of its strength or weakness but rather a description of its relationship to the controversy in respect of which jurisdiction is invoked. 85 Jurisdiction conferred on a Federal Court in respect of a matter authorises the Court to determine all the claims, federal and non-federal, which are involved in the controversy. That the federal claim is determined adversely to the applicant does not thereby deprive the Court of jurisdiction to deal with the non-federal claims. They are all part of the federal jurisdiction conferred upon the Court. Nor does it matter to the scope of that jurisdiction whether the federal claim is defeated on a question of law or fact. That proposition is supported by a long line of authority. In R v Bevan; Ex parte Elias (1942) 66 CLR 452, the High Court assumed federal jurisdiction on a question, which it raised, involving the interpretation of the Constitution, decided it adversely to the applicants as a matter of law, but proceeded then to deal with applications for habeas corpus and prohibition in respect of which it would otherwise have had no jurisdiction. See also Moorgate Tobacco Co Ltd v Philip Morris Ltd (1980) 145 CLR 457 at 469, 472 and 477; Philip Morris Inc v Adam P Brown Male Fashions Pty Ltd (1981) 148 CLR 457 at 474; Dorotea Pty Ltd v Vancleve Pty Ltd (1987) 75 ALR 629 at 632; Elna Australia Pty Ltd v International Computers (Australia) Pty Ltd (1987) 16 FCR 410 at 415 (Gummow J) and Burgundy Royale Investments Pty Ltd v Westpac Banking Corporation at 219. 86 In Dorotea the Full Court observed that the adverse determination of a limitation point, defeating a federal claim, would not cause the Court to lose authority over the claims in the accrued jurisdiction ( at 632). In Elna, where the respondent moved unsuccessfully to strike out federal claims arising under the Trade Practices Act and challenged the jurisdiction of the Court in respect of a related contract claim, Gummow J said, at 416: "As a matter of impression and practical judgment…the claims are within the scope of the one controversy and thus within the ambit of the one matter in the technical sense of that term…Even if, as I am not, I were minded to strike out the two trade practices claims, that would, as I have indicated, not remove or vacate the court's jurisdiction in respect of the contract claim." A like approach was adopted by the Full Court in Burgundy Royale Investments Pty Ltd v Westpac Banking Corporation. The Court, on a case stated, determined that two respondents, the Northern Territory and the Territory Loan Management Corporation, were not bound by the Trade Practices Act. Nevertheless it held there was accrued jurisdiction in respect of common law claims brought against them. The Court had determined preliminary points of law in claims under the Act brought under the Territory and its instrumentality and in consequence there would be no further trial of those issues. It said, at 219: "But it does not follow that the Court ever lacked jurisdiction to deal with such claims. Nor does it follow that the Court now loses its jurisdiction to deal with the attached common law claims…In principle, the position is no different than it would have been if the claims under the Act had proceeded to trial and had been dismissed on the merits. In that situation, it could not seriously be suggested that the dismissal of the claims under the Act had the effect of depriving the Court of jurisdiction to deal with any attached non-federal claim." It is also the case, on authority previously discussed, that the point of law could have been determined on a motion to strike out portions of the statement of claim raising the federal causes of action against the Territory respondents. In that sense it could properly have been said that the claim was not tenable as a matter of law. No relevant distinction could be drawn between the process of determining the point of law as a case stated or on a preliminary issue and determining it on a strike out motion. Indeed Burgundy Royale was cited by the Full Court in Unilan Holdings Pty Ltd v Kerin (1993) 44 FCR 481 at 481 as authority for the proposition that the striking out of a portion of a pleading relating to a claim under the Trade Practices Act did not thereby deprive the Court of jurisdiction to hear a related claim in negligent mis-statement. See also Hooper v Kirella Pty Ltd (1999) 96 FCR 1 at 15. The mere fact that a claim is found not to be tenable does not of itself deprive the Court of jurisdiction in non-federal claims comprising part of the same matter. 87 If there be no federal jurisdiction properly invoked then there can be no accrued jurisdiction – Carlton and United Breweries Ltd v Castlemaine Tooheys Ltd (1986) 161 CLR 543 at 553 and see the discussion by Professor Zines in Federal Associated and Accrued Jurisdiction, Opeskin and Wheeler(eds) – The Australian Federal Judicial System (MUP) pp 294-295 and the apparent tension between Vietnam Veterans' Affairs Association of Australia New South Wales Branch Inc v Cohen (1996) 70 FCR 419 on the one hand and Post Office Agents Association Ltd v Australian Postal Commission (1988) 84 ALR 563 at 565 (Davies J) and Buck v Comcare (1996) 66 FCR 359 at 370 (Finn J). The Court in such a case of course does have a limited jurisdiction to determine whether its jurisdiction is properly invoked – Mercator Property Consultants Pty Ltd v Christmas Island Resort Pty Ltd (1999) 94 FCR 384; Khatri v Price (1999) 95 FCR 287. 88 In the ordinary course the contention that a claim is not tenable will not go to jurisdiction unless dependent upon a submission that the claim is outside jurisdiction. And indeed, within that class a claim may be untenable because its very nature denies its character as an element of any matter or controversy in respect of which the Court can exercise jurisdiction. So a proceeding based upon the proposition that the Commonwealth Constitution is invalid does not disclose a matter arising under the Constitution or involving its interpretation – Nikolic v MGICA Ltd [1999] FCA 849. A claim may also be a sham reflecting no genuine controversy and therefore establishing no matter in respect of which the Court may exercise its jurisdiction. There has been discussion of so called "colourable" claims made under the Trade Practices Act for the improper purpose of fabricating jurisdiction. The mere fact that a claim is struck out as untenable does not mean it is colourable in that sense. The pleading of the s 52 claim in this case advanced the legitimate forensic purpose of endeavouring to establish a cause of action which would not require proof of a duty of care. Notwithstanding its precipitate initiation and chequered history, I am not satisfied that it was colourable in the sense that would deprive this Court of jurisdiction to deal with the matter including any non-federal claims that may form part of it. Whether the Negligence Claim is Within the Accrued Jurisdiction 89 The question then arises whether or not the negligence claim is part of the matter raised by the s 52 claim and therefore within the accrued jurisdiction of the Court. In my opinion, and applying the criteria already referred to, there is sufficient overlap in the factual issues, albeit they are not completely congruent, that the negligence claim may be said to form part of the same matter. Issues in the negligence claim, also reflected in the misleading or deceptive conduct claim, include the role of Esso in the design, installation, operation and maintenance of the Longford gas plant, the fact and causes of the fire and explosion and the subsequent interruption of supply. Common issues also include the dependency of the users upon supply, the foreseeable effects upon them of an interruption, the effects of the stoppage on them and the loss and damage suffered by the relevant categories of user as a result. The federal claim in misleading or deceptive conduct albeit not tenable constituted a substantial part of the controversy which was brought before the Court. As observed earlier, the question of substantiality does not go to the strength or weakness of that claim but its relationship to the other claims which constitute the alleged controversy. I am satisfied that the negligence claim is within the accrued jurisdiction. The Discretionary Character of the Accrued Jurisdiction – Whether the Court Should Entertain the Negligence Claim 90 The exercise of the accrued jurisdiction has been described as discretionary. In Philip Morris Inc v Adam P Brown Male Fashions Pty Ltd at 475, Barwick CJ said, without elaboration: "This exercise of this jurisdiction which for want of a better term I shall call "accrued" jurisdiction is discretionary and not mandatory, though it will be obligatory to exercise the federal jurisdiction which has been attracted in relation to the matter." Barwick CJ went on to say of the discretion which he had identified: "But, I would add that there would need to be very good reasons why a court which could resolve the whole matter should refuse or fail to do so. Generally speaking, one would expect that a court, once its federal jurisdiction is excited or attracted, would proceed to resolve the whole matter in relation to which federal jurisdiction had been attracted." (475-476) The notion of a federal jurisdiction concurrent with that exercised by State courts and exercisable subject to the Court's discretion is not novel. In diversity jurisdiction under section 75(iv) of the Constitution the High Court could decline to adjudicate if the matter were more appropriately dealt with by a State court which had concurrent jurisdiction by virtue of s 39(2) of the Judiciary Act 1903 – R v Langdon; Ex parte Langdon (1953) 88 CLR 158 at 161 and 163 (Taylor J) and see the discussion by Lindell, Duty to Exercise Judicial Review in Zines (ed ) Commentaries on the Australian Constitution, Butterworths (1977) pp 151-157 and Lindell, The Justiciability of Political Questions: Recent Developments, in Lee and Winterton (eds), Australian Constitutional Perspectives, LBC (1992) pp 218-223. The law relating to choice of forum and forum non-conveniens in Australia also supplies examples of circumstances in which a court having jurisdiction in a matter may nevertheless decline to exercise that jurisdiction where the court decides it is "a clearly inappropriate forum" – Voth v Manildra Flour Mills Pty Ltd (1990) 171 CLR 538 at 559. In the joint judgment in that case however the discretion to decline jurisdiction was put as an exception to a general rule: "Granted that there is an obligation on the domestic courts of this country to exercise jurisdiction which is conferred upon them – a matter on which the majority in [Oceanic Sun Line Special Shipping Co Inc v Fay (1988) 165 CLR 197] was united – it does not extend to cases where it is established that the forum is clearly inappropriate." (559) And in rejecting the approach taken by the House of Lords in Spiliada Maritime Corp v Cansulex Ltd [1987] AC 460, their Honours said: "To say, in line with the Spiliada approach, that the selected forum is justified in refraining from exercising its jurisdiction when it concludes no more than that another available and competent forum is more appropriate is to acknowledge that a court can decline to perform its obligation to exercise jurisdiction even though it is an appropriate or not inappropriate court. That proposition is by no means easy to sustain as a matter of legal principle, though we acknowledge that the argument deriving from the obligation to exercise jurisdiction has less force in its application to cases falling within the extended jurisdiction where the plaintiff is required to obtain leave to serve outside the jurisdiction. The court then has a discretion to exercise and in exercising that discretion it may have regard to appropriate forum considerations." As Lindell comments in Lee and Winterton (op cit) at 221, the existence of a duty to exercise jurisdiction does not preclude the existence of exceptions based on the availability of a more appropriate alternative court as it does not deprive a litigant of access to a court altogether. While Voth and Oceanic Sun Line were concerned with the exercise of jurisdiction by an Australian domestic court in the case where a foreign court would also have jurisdiction, the propositions for which Voth is now authority grow out of the general principle recognised in both cases that a court having jurisdiction has an obligation to exercise it. The circumstances in which it may decline that obligation are exceptional. That is also consistent with the approach taken by Barwick CJ in the passage already cited from his judgment in Philip Morris. 91 The application of the discretion in relation to accrued jurisdiction is complicated by a functional overlap, apparent from the cases, between definition of the content of the jurisdiction and the discretion whether to exercise it. The joint judgment of Mason, Brennan and Deane JJ in Stack v Coast Securities (No 9) Pty Ltd (1983) 154 CLR 261 at 294, discussed the approach to the definition of accrued jurisdiction enunciated in Fencott v Muller at 608. That approach involved the application of "impression and practical judgment" in deciding whether a federal and non-federal claim are within the ambit of the one controversy or matter before the Court. The joint judgment in Stack commented at 294: "Barwick CJ in Philip Morris had expressed a similar idea, stating that the exercise of the accrued jurisdiction "is discretionary and not mandatory". In expressing this opinion, Barwick CJ expressly acknowledged that the Federal Court had a discretion to allow the non-federal claim to be determined in a State court." Their Honours seemed to treat the evaluative assessment of the scope of the accrued jurisdiction in a particular case as overlapping with the determination whether it should or should not be exercised in that case. This appearance is reinforced by the subsequent proposition, in the joint judgment, that in exercising the discretion the Federal Court will have regard to the considerations mentioned in Fencott v Muller. The latter case had to do with the scope of the accrued jurisdiction. 92 The discretionary character of the accrued jurisdiction was the subject of observation by Gummow and Hayne JJ in Re Wakim; Ex parte McNally when they noted the alignment of the processes for defining the accrued jurisdiction and for deciding whether or not to exercise it which had emerged from the joint judgment in Stack. Their Honours said: "It is not clear what principles or criteria would inform the exercise of a discretion of this kind. It may be that the better view is that the references to "discretion" are not intended to convey more than that difficult questions of fact and degree will arise in such issues – questions about which reasonable minds may well differ. It is, however, not necessary to decide what is meant by the references to discretion in this context." (588) As a matter of logic, it is an evaluative rather than discretionary approach which must be applied in determining the content of the Court's accrued jurisdiction. No doubt there is a functional, as distinct from conceptual, convergence as assessment of the scope of the jurisdiction will involve consideration of matters of convenience particularly when deciding whether the federal claim is to be regarded as a substantial part of the controversy – Fencott v Muller at 609 quoted above. But as a matter of language the process of definition of the content of the jurisdiction logically precedes the discretion about whether to exercise the jurisdiction properly defined. And in my opinion that is how this Court, consistently with the language used by the High Court should continue to treat discretion. In doing so, it would be bound to take the functional approach indicated in the judgments of the High Court to which reference has been made. 93 This case brings out the problem quite well. For in this case the accrued jurisdiction extends to a non-federal claim which is still alive albeit the federal claim has been found not to be tenable. The considerations to be applied to the question whether the non-federal claim can proceed in this Court should be informed by general principles relating to the obligation of a court to exercise its jurisdiction where it is properly invoked and to treat departures from that obligation as exceptional. The starting point in deciding whether to deal with the non-federal claim is that the Court's authority to determine it is part of its federal jurisdiction. The term "accrued jurisdiction" is a metaphor used in the analysis of the content of the court's authority to adjudicate. It does not describe any constitutionally inferior species of federal jurisdiction. 94 The jurisdiction of the Court, including its accrued jurisdiction, is national. It is not exercised by the Court "in the State of Victoria" or in whatever other State it may sit to hear the case. The Commonwealth is a single nation. The jurisdiction of the Federal Court extends throughout the Commonwealth and it exercises that jurisdiction in Australia not in a State or Territory – Commonwealth v Mewett (1997) 191 CLR 471 at 524-5 (Gaudron J), approved in John Pfeiffer Pty Ltd v Rogerson (2000) 172 ALR 625 at 640. The national nature of that jurisdiction is reinforced in this, as in many cases involving non-federal claims by the fact that the non-federal claim relies upon the common law. That law does not belong to any particular State. It is the common law of Australia – Lipohar v R (1999) 168 ALR 8; Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 at 564; Kable v Director of Public Prosecutions (NSW) (1996) 189 CLR 51 at 112 and see other cases and references in Australian Competition and Consumer Commission v CG Berbatis Holdings Pty Ltd (2000) 96 FCR 491 at 496-498. 95 The question whether the common law claim should continue in this Court or should be stayed on the basis that it be pursued in the Supreme Court of Victoria is to be decided by determining whether or not this Court should decline to exercise its jurisdiction properly invoked in this matter. There can be no doubt that the Supreme Court of the State of Victoria is as well equipped as this Court to deal with a claim in negligence and the associated cross-claims. The action for negligence is one which could well have been commenced in the State Supreme Court. Nevertheless, the applicants having commenced their proceedings in this Court and having properly invoked federal jurisdiction, there would need to be demonstrated some reason for this Court declining to fulfil what would ordinarily be its obligation to exercise its jurisdiction. While the claim is a non-federal claim it is based not upon a statute peculiar to Victoria but upon the common law of Australia, albeit the question of liability may turn in part upon at least one Act of the Victorian Parliament, namely the Gas Industry Act 1994 (Vic) and the Victorian Gas Customer Service Code which is incorporated into the terms of gas retail licences issued under the Act. Further, and from a practical point of view, all parties have expended considerable time and incurred substantial costs in the proceedings in this Court. The statement of claim has been through a process of refinement. The discovery process is about eighty per cent complete and has cost millions of dollars according to counsel for the State Entities. The case is in the docket of a Judge who is thoroughly familiar with it. There is no reason now to impose upon the parties the additional burdens associated with this Court declining further to exercise its jurisdiction notwithstanding that it has before it an arguable claim of considerable importance and complexity. In my opinion, the Court ought not to decline the jurisdiction which it has. The negligence claim should therefore continue in this Court. Representative Proceedings 96 The State Entities submitted that if the claim under the Trade Practices Act were struck out the proceeding would not validly be constituted as a representative proceeding and ought not to proceed as such under Part IVA of the Federal Court of Australia Act. Section 33G of that Act was said to demonstrate a clear legislative intent that Part IVA can only be used where "…the original jurisdiction of the Court is enlivened (although once within the original jurisdiction) then the accrued jurisdiction can be relied upon". The implicit assumption in s 33G was said to be that the Federal Court must have original jurisdiction. It did not matter that s 33G does not now have any operation in the light of Re Wakim. Its existence demonstrated the clear legislative intent. The use of the term "original jurisdiction" in the submission appears to have been intended as a reference to jurisdiction to deal with the federal claim. That usage misconceives the nature of federal jurisdiction and suggests a dichotomy which is contrary to its constitutional foundations and the principles derived therefrom. 97 To understand the way in which the point is advanced it is necessary to refer to s 33G which provides: "33G. A representative proceeding may not be commenced if the proceeding would be concerned only with claims in respect of which the Court has jurisdiction solely by virtue of the Jurisdiction of Courts (Cross Vesting) Act 1987 or a corresponding law of a State or Territory." It can immediately be seen that the section is concerned not with the exercise of federal jurisdiction by the Court but the non-federal jurisdiction purportedly conferred upon it by the Jurisdiction of Courts (Cross Vesting) Act 1987 (Cth) and corresponding State or Territory laws. That purported conferral of jurisdiction was found in Re Wakim to be invalid. Whether it were or not, the provision has nothing to say about the exercise of federal jurisdiction albeit that jurisdiction may extend to a non-federal claim comprising part of the matter in which a federal claim is brought before the Court. There is no basis in s 33G for denying jurisdiction to the Court to proceed with this application as a representative proceeding under Part IVA. Conclusion 98 For the preceding reasons in my opinion the appeals should be allowed to the extent that his Honour's order allowing leave to amend the statement of claim in respect of the cause of action in misleading or deceptive conduct should be set aside and the cause of action in misleading or deceptive conduct stand as struck out pursuant to the orders of 3 December 1999. Otherwise the appeals should be dismissed. Given the history of this matter I see no benefit from allowing leave to amend the statement of claim yet again in order to revive the claims under s 52. The costs of the appeal and of the proceedings before his Honour should be the subject of written submissions within twenty one days. I certify that the preceding ninety seven (97) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice French . Associate: Dated: November 2000 IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY VG 519 OF 1998 VG 524 OF 1998 BETWEEN: JOHNSON TILES PTY LTD AND OTHERS Applicants AND: ESSO AUSTRALIA PTY LTD AND ANOTHER Respondents/Cross-Claimants And STATE ELECTRICITY COMMISSION OF VICTORIA AND OTHERS Cross-Respondents/Cross-Claimants And BHP PETROLEUM (BASS STRAIT) PTY LTD Cross-Respondent JUDGES: BEAUMONT, FRENCH AND FINKELSTEIN JJ DATE: 8 NOVEMBER 2000 PLACE: MELBOURNE REASONS FOR JUDGMENT Finkelstein J 99 I agree with the reasons of French J and with the orders that he proposes. I certify that the preceding one (1) numbered paragraph is a true copy of the Reasons for Judgment herein of the Honourable Justice Finkelstein . Associate: Dated: November 2000 Counsel for the Applicants: Mr JWK Burnside QC with Mr D Collins and Mr H Borenstein Solicitor for the Applicants: Slater and Gordon, Maurice Blackburn Cashman, Phillips Fox and Lander and Rogers Counsel for the Respondents and Cross-Claimants: Mr J E Middleton QC with Mr GP Harris Solicitor for the Respondents and Cross-Claimants: Middletons Moore Bevins Counsel for the State Electricity Commission of Victoria and other State Entities – Cross Respondents: Mr GAA Nettle QC and Mr JBR Beach QC with Mr SM Anderson Solicitors for the State Electricity Commission of Victoria and other State Entitles – Cross Respondents: Freehill Hollingdale & Page Counsel for BHP Petroleum (Bass Strait) Pty Ltd – Cross Respondents: Mr N Young QC and Mr Scerri QC with Mr N Mukhtar Solicitors for BHP Petroleum (Bass Strait) Pty Ltd – Cross Respondents: Mallesons Stephen Jaques Date of Hearing: 8 and 9 May 2000 Date of Judgment: 8 November 2000