FEDERAL COURT OF AUSTRALIA Zeroz Pty Ltd v Gallop Investments Pty Ltd [2002] FCA 1461 PRACTICE AND PROCEDURE – transfer of proceedings to District Court of Western Australia – whether any problems of jurisdiction or power – exercise of discretion to transfer. Trade Practices Act 1974 (Cth), ss 86(2), (3), 86A(2) District Court of Western Australia Act 1969 (WA), ss 50, 55 Jurisdiction of Courts (Cross-Vesting) Act 1987 (Cth), s 10 Vale v TMH Haulage Pty Ltd (1993) 12 ACSR 124 distinguished ZEROZ PTY LTD v GALLOP INVESTMENTS PTY LTD,LAND CAPITAL HOLDINGS PTY LTD, and KAO HOLDINGS PTY LTD W403 of 2001 CARR J 21 NOVEMBER 2002 PERTH IN THE FEDERAL COURT OF AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRY W403 OF 2001 BETWEEN: ZEROZ PTY LTD (ACN 009 273 018) Applicant AND: GALLOP INVESTMENTS PTY LTD (ACN 077 439 322) First Respondent LAND CAPITAL HOLDINGS PTY LTD (ACN 058 548 806) Second Respondent KAO HOLDINGS PTY LTD (ACN 009 467 234) Third Respondent JUDGE: CARR J DATE OF ORDER: 21 NOVEMBER 2002 WHERE MADE: PERTH THE COURT ORDERS THAT: 1. The application be transferred to the District Court of Western Australia. 2. Costs of today be costs in the cause. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRY W403 OF 2001 BETWEEN: ZEROZ PTY LTD (ACN 009 273 018) Applicant AND: GALLOP INVESTMENTS PTY LTD (ACN 077 439 322) First Respondent LAND CAPITAL HOLDINGS PTY LTD (ACN 058 548 806) Second Respondent KAO HOLDINGS PTY LTD (ACN 009 467 234) Third Respondent JUDGE: CARR J DATE: 21 NOVEMBER 2002 PLACE: PERTH EX TEMPORE REASONS FOR JUDGMENT introduction 1 The Court, of its own motion, is considering whether this application should be transferred to the District Court of Western Australia ("the District Court"). I raised this matter with the parties at a directions hearing on 21 August 2002. Counsel on each side made oral submissions today. I was also referred to an exchange of correspondence between the parties, in which the question of the jurisdiction of the District Court to hear all of the claims made in this application was discussed. factual background 2 At all material times the applicant was a lessee of certain premises in a shopping centre now owned by the third respondent. The application arises out of negotiations which led to the grant of a new lease to the applicant of extended premises at that shopping centre. In barest summary, the applicant says that by reason of a certain conversation which took place between a representative of the applicant and a representative of the third respondent during those negotiations, and by virtue of the non-disclosure of certain matters by the third respondent's representative, the third respondent engaged in misleading or deceptive conduct by which the applicant was induced to enter into the new lease. The applicant complains that it was misled or deceived about whether the principal tenant of the shopping centre, the Department of Immigration and Multicultural Affairs ("the Department"), which then held a lease of premises within the shopping centre, would continue as a tenant at the conclusion of its current lease by renewing that lease or whether it would vacate those premises. It appears that the Department moved out of the shopping centre. Part of the applicant's case is that the third respondent's representative should have disclosed to it that the Department was not proposing to remain in the shopping centre. The applicant sues on the basis that there was misleading or deceptive conduct by positive conduct or failure to convey the true situation to it. 3 The causes of action upon which the applicant relies include contravention of s 52 of the Trade Practices Act 1974 (Cth) ("the Act"), contravention of s 51AC (engaging in conduct that was in all the circumstances unconscionable) and a freestanding claim of unconscionability in equity. The applicant seeks relief which includes damages under s 82 of the Act and remedial orders under s 87 of the Act either by way of rescinding the new lease or varying its terms. There are other pleas relating to unconscionability in respect of the manner in which requests for rent variations have been dealt with, but it is not necessary to refer further to those matters. 4 It is common ground, and in particular the applicant concedes, that its monetary claims do not exceed $250,000, which is the current monetary jurisdictional limit of the District Court. 5 I should also mention that there is pending in the District Court, an action in which the respondent sues the applicant for moneys said to be owing under the new lease. Those proceedings have been "put on hold", so I was told this morning, pending the disposal of this application. 6 The respondents have raised concerns about whether the District Court has jurisdiction in relation to what I have described as the freestanding equitable claim. The respondents also submit, as a subsidiary argument, that the bulk of the claims under the Trade Practices Act are statute barred. Both parties have suggested that it might be more appropriate, instead of transferring the application to the District Court, to transfer it to the Supreme Court of Western Australia, so that there would not be even the potential for jurisdictional arguments. the statutory framework 7 Section 86(2) and (3) of the Trade Practices Act provide as follows: "(2) The several courts of the States are invested with federal jurisdiction within the limits of their several jurisdictions, whether those limits are as to locality, subject-matter or otherwise, and, subject to the Constitution, jurisdiction is conferred on the several courts of the Territories, with respect to any matter arising under Part IVA, IVB or Division 1, 1A or 1AA of Part V in respect of which a civil proceeding is instituted by a person other than the Minister or the Commission. (3) Nothing in subsection (2) shall be taken to enable an inferior court of a State or Territory to grant a remedy other than a remedy of a kind that the court is able to grant under the law of that State or Territory." 8 Section 86A(1) relevantly provides that where a civil proceeding, instituted by a person other than the Minister or the Commission, is pending in this Court and a matter for determination in the proceeding arose under Part V, Division 1A (in which ss 52 and 51AC are located) the Court may of its own motion transfer that matter to a court of a State and may also transfer to that court any other matter for determination in the proceeding. 9 Section 86A(2) provides as follows: "(2) The Federal Court shall not transfer a matter to another court under subsection (1) unless the other court has power to grant the remedies sought before the Federal Court in the matter and it appears to the Federal Court that: (a) the matter arises out of or is related to a proceeding that is pending in the other court; or (b) it is otherwise in the interests of justice that the matter be determined by the other court." 10 I now turn to the jurisdiction and powers of the District Court. Section 50 of the District Court of Western Australia Act 1969 (WA) relevantly provides: "50(1) Subject to section 51 the Court has the same jurisdiction to hear and determine and may exercise all the powers and authority that the Supreme Court has and may exercise from time to time, in relation to – (a) all personal actions, other than those of the kind referred to in subsection (2), where the amount, value or damages sought to be recovered is not more than $250,000, whether on the original claim or demand or a balance after allowing payment on account, or the amount of any set off admitted by the plaintiff;" 11 There is nothing in s 51 or s 50(2) which has any bearing on this matter. 12 Counsel for the third respondent has referred me to Vale v TMH Haulage Pty Ltd (1993) 12 ACSR 124 in which, at 129, Priestley JA expressed a view (with which Meagher and Sheller JJA agreed) that the reference in s 44(1) of the District Court Act (NSW) (which conferred jurisdiction on the District Court) to "any personal action at law" would exclude proceedings in equity. 13 In my view, that case can quite clearly be distinguished from the present circumstances. The words in s 50(1)(a) in the District Court of Western Australia Act are "all personal actions". In my opinion, the proceedings which the applicant has brought in this Court are personal actions within the meaning of that subsection. 14 No problems arise out of the qualification expressed in s 86(3) of the Act (set out above). That is because s 55 of the District Court Act, which of course is a law of this State, relevantly confers powers on the District Court which are co-extensive with the very wide powers conferred on the Supreme Court of Western Australia. 15 I take into account the pending proceedings in the District Court which I have mentioned above in which the third respondent is seeking remedies against the applicant under the new lease. 16 I take into account also the likely costs savings if these proceedings are transferred to the District Court. Counsel for the respondents has submitted that, in his experience, there are no such savings. But I suspect that if one compares taxed costs as between the District Court and this Court, one will find that there is a significant difference between the two. 17 In my view, it is in the interests of justice that the whole of this application should be transferred to the District Court of Western Australia pursuant to the powers conferred on this Court by s 86A of the Act and also s 10 of the Jurisdiction of Courts (Cross-Vesting) Act 1987 (Cth). 18 I am aware that there is a risk, which I consider to be relatively minimal, that there will be a jurisdictional dispute in the District Court. In those circumstances, if that does occur, then the problem could be resolved by the District Court, in turn, remitting the whole of the proceeding, that is the existing District Court proceeding and this proceeding so transferred, to the Supreme Court. But I do not think that there would be a basis for such a jurisdictional dispute. I certify that the preceding eighteen (18) numbered paragraphs are a true copy of the Reasons for Judgment herein of Justice Carr. Associate: Dated: 6 December 2002 Counsel for the Applicant: Mr J D Steedman Solicitor for the Applicant: Messrs Karp Steedman Ross-Adjie Counsel for the Respondents: Mr M H Solomon Solicitor for the Respondents: Messrs Gadens Lawyers Date of Hearing: 21 November 2002 Date of Judgment: 21 November 2002