Burgundy Royale Investments Pty Ltd & Ors v Westpac Banking Corporation & Ors [1987] FCA 686

Federal Court of Australia|1987-12-11|Before: Beaumont JJ

CONSTITUTIONAL LAW - Crown - Binding effect of Commonwealth legislation on Crown in right of Territory - whether Crown in right of Northern Territory bound by Trade Practices Act 1974

whether statutory body represents Crown - whether Territory Loans Management Corporation (Northern Territory) bound by

Trade Practices Act 1974, s.2A Territory Loans Management Corporation Act (N.T.) 1986

FEDERAL COURT - - Federal jurisdiction - accrued jurisdiction - claims under Trade Practices Act 1974 - general law claims also made in same proceedings - whether non-federal claims part of same "matter"™ - common substratum of facts - determination of preliminary point oof law that some respondents not bound by Trade Practices Act - whether Federal Court then loses jurisdiction to determine non-federal claims.

BURGUNDY ROYALE INVESTMENTS PTY. LIMITED & ORS. v. WESTPAC BANKING CORPORATION & ORS.

NEW SOUTH WALES DISTRICT REGISTRY ) No. G339 of 1987 ) )

NORTHERN TERRITORY DEVELOPMENT CORPORATION (now known as the TERRITORY LOANS

The questions in the special case be answered as follows:

Q.1 Is the Northern Territory of Australia bound by the Trade Practices Act?

0.2 Is the Northern Territory Development Corporation (now known as the Territory Loans Management Corporation) bound by the Trade Practices Act?

Q.3 If either or both preceding questions are answered "no", does this Honourable Court have "accrued jurisdiction" to grant any of the relief sought by the applicants against the second and third respondents in the application dated 24 July 1987?

Costs of the special case to be costs in the application.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

) ) NEW SOUTH WALES DISTRICT REGISTRY ) No. G339 of 1987 ) )

(now known as the TERRITORY LOANS MANAGEMENT CORPORATION)

THE COURT: This is a special case referred to a Full Court pursuant to s. 25(6) of the Federal Court of Australia Act 1976

raising two questions concerning the construction of the Trade Practices Act 1974 ("the Act") and a question concerning the

The applicants have brought proceedings in the Court against the respondents seeking damages for alleged contraventions of several provisions of the Act. They also Claim that the respondents have engaged in conduct which renders them liable to pay them damages at common law. It is convenient to refer to these lastmentioned claims as "the common law claims". Declaratory relief is also sought. The applicants assert that the common law claims are within the accrued jurisdiction of the Court. The Northern Territory of Australia and the Territory Loans Management Corporation, the second and third respondents, claim that they are not bound by the Act; they further claim that it follows that the Court

cannot have accrued jurisdiction to grant any of the relief

Is_the Northern Territory of Australia bound by the Trade Practices Act?

Is the Northern Territory Bevelopment Corporation (now known as the Territory

Loans Management Corporation) bound by the Trade Practices Act?

If either or both preceding questions are answered "no", does this Honourable Court

have "accrued jurisdiction" to grant any of the relief sought by the applicants against the second and third respondents in the application dated 24 July 1987?

detailed reference to the several causes of action pleaded by the applicants. We shall defer further reference to the

Q.1- Is the Northern Territory of Australia bound by the

statute does not bind the Crown unless the Crown is expressly

named therein or unless there is a necessary implication that

it was intended to be so bound. There will be such a necessary implication if it is manifest from the very terms of

the statute that it was the intention of the legislature that

the Crown should be bound (see Province of Bombay v Municipal

Corporation of the City of Bombay (£19471 A.C. 58 at p.61;

Bradken Consolidated Ltd v Broken Hill Proprietary Company Ltd (1979) 145 CLR 107 per Gibbs A.C.J. at p.116 and per Stephen

J. at p.127; State Superannuation Board v Trade Practices

Commission (1982) 150 CLR 282 per Mason, Murphy and Deane Jd.

at p.306). In Bradken, supra, it was held that the Act did

not bind the Crown in right of a State. The present question,

whether the Territory is bound, did not then arise for

As originally enacted, the Act was silent on the question whether it was intended to bind the Crown in any right. In 1977, s.2A was introduced into the Act. The reason

for its introduction was explained by the Minister (Mr.

Howard) in his Second Reading Speech (see the Parliamentary Debates, House of Representatives, 3 May 1977 at p.1477) as

I announced last December that the Government had decided in principle that its commercial operations should be subject to the same restraints of the Trade Practices Act as apply to like operations of private enterprise. I then informed this House that the Government was studying the detailed implementation of this decision. This Bill gives effect to that decision in clause 4 which provides that the Act is to apply to all business undertakings of the Commonwealth Government and its authorities. There is only one specific exception.

Territory is specifically exempted, so as not to inhibit town planning inthe Australian Capital

Territory. Although provision is made in the Bill for regulations to provide other exemptions, the Government has no present plans to use that power."

"Application of Act to Commonwealth and Commonwealth authorities

2A.(1) Subject to this section, this Act (other than Part X) binds the Crown in right of the

Commonwealth in so far as the Crown in right of the Commonwealth carries on a business, either directly

(2) Subject to the succeeding provisions of this section, this Act applies as if -

(a) the Commonwealth, in so far as it carries on a business otherwise than by an authority of the Commonwealth; and

(b) each authority of the Commonweaith (whether or not acting as an agent of the

Crown in right of the Commonwealth) in so far as it carries on a business,

were a corporation. (3) Nothing in this Act renders the Crown in

right of the Commonwealth liable to be prosecuted for an offence.

(4) Part IV does not apply in relation to the business carried on by the Commonwealth in

developing, and disposing of interests in, land in the Australian Capital Territory."

On behalf of the Territory, it is submitted that the Act only binds the Crown to the extent and in the manner described in sub-ss. (1), (2)(a) and (4) of s.2A; that only the Crown in right of the Commonwealth, and not the Crown in vight of a State or Territory, is bound; that the expression "the Crown in right of the Commonwealth" refers to the Commonwealth in the same sense as the expression "the Crown in right of a State" refers to that body politic under the monarch as head of State; and that the Territory is a body politic under the Crown altogether distinct from the bodies

politic that are respectively the Commonwealth and the States.

That the Crown in right of the Commonwealth is distinct from the Crown in right of a Territory of the

Commonwealth was recognised by Dixon J. in Faithorn v. The

Territory of Papua (1938) 60 C.L.R. 772 at p.792 (see also The

Queen v. Toohey: Ex parte Northern Land Council (1981) 151 C.L.R. 170; per Wilson J. at p.279 and per Aickin J. at

pp.265-6). This distinction exists at every stage of the political and economic development of the Territory (cf.

Berwick Ltd. v. Gray (1976) 133 C.L.R. 603 per Mason J. at

The Crown in the right of the Northern Territory is not mentioned in s.2A of the Act (cf. the references to "the Crown in right of the Northern Territory" in the Copyright Act 1968 s.10(1) and the Aboriginal Land Rights (Northern Territory) Act 1976 s.3(6) and s.3B). The question then is whether, as a matter of necessary implication, the Crown in that right was intended to be bound. In our view, there is no

basis for such an implication. If anything, the indications

in the statute are to the contrary. The Crown in right of the Commonwealth is specifically mentioned, as is the Australian Capital Territory. As a matter of construction, the absence

of any reference to the Crown in the right of the Northern

Territory leads, we think, to the conclusion that it was not

intended to be bound: see Bradken, supra, per Mason and

It is to be observed that by sub-s.(4) of s.2A, it is provided that Part IV of the Act does not apply to certain of

the Commonwealth's activities in the Australian Capital

sore ser Territory. If the applicants' argument were right, the Northern Territory would be bound by the whole of the Act including Part IV, whereas the Crown in right of the Australian Capital Territory would not be bound by Part IV -a curious, and surely unintended result (cf. Cooper Brookes (Wollongong) Pty. Ltd. v. Commissioner of Taxation of the Commonwealth of Australia (1981) 147 C.L.R. 2937 per Mason and

Further, there is nothing in the mischief sought to be remedied by s.2A, as explained in the Second Reading Speech, which would indicate that the Crown in right of the Northern Territory was intended to he bound by the Act. The object of s.2A was to subject the Commonwealth to the provisions of the Act in respect of its business activities.

There is no indication that the Parliament had the business activities of the Northern Territory administration an

contemplation in introducing s.2A, especially since

self-government for the Territory was then imminent.

On behalf of the applicants, it was faintly suggested that the Territory was an "authority of the Commonwealth" for the purposes of s.2A(2)(b) of the Act. The submission is without substance (see the definition of "authority of the

It should also be noted that it was argued on behalf

of the applicants that if, on its true construction, the

Northern Territory (Self-Government) Act 1978 purported to create an independent Crown in right of the Territory, that

Act was, to this extent, beyond power. On the approach we

It follows, in our view, that the Territory was not intended to be bound by the Act; we would answer this

Is the Territory Loans Management Corporation bound by the Act?

The Territory Development Act established the Northern Territory Development Corporation (s.5(1)). Members of the Corporation were appointed by the Minister (s.6(2)). The function of the Corporation was to assist in the development of industry and small business in the Territory by the provision of money, resources and advice (s.15). In the exercise of its powers and the performance of its functions, the Corporation was subject to the directions of the Minister (s.17). The moneys of the Corporation consisted of such moneys as were appropriated by a law of the Territory for its purposes (s.26). For the purposes of the Financial Administration and Audit Act, the Corporation was a prescribed statutory corporation (s.26A). Under that ordinance, provision was made for the financial administration and audit

of public accounts including (by Part IV thereof) the accounts

of certain statutory corporations and other bodies.

The Territory Loans Management Corporation Act 1986

repealed the Territory Development Act and provided for the continuation of the Territory Development Corporation (under the name Territory Loans Management Corporation) as a corporate entity for the purposes of administering existing loans and loan management arrangements (see s.14). The Corporation, in the performance of its functions, is subject to the directions of the Minister (s.15). The Minister retains the power to appoint members of the Corporation (s.7(3)). Its accounts and audit are subject to the Financial

In our view, the Corporation was intended to perform

governmental functions and thus should be treated as an agent

or emanation of the Crown in right of the Territory.

It is well settled that an important question in this inquiry is whether the body whose status is in question is subject to direct ministerial control or is independent of the government and has discretionary powers of its own (see Grain Elevators Board (Vict.) v. President, Councillors and

Ratepayers of the Shire of Dunmunkle (1946) 73 C.L.R. 70 per

Latham C.J. at pp.75-6; Bradken, supra, per Gibbs A.C.J. at

p.115; Superannuation Fund Investment Trust v. Commissioner of Stamps of the State of South Australia (1979) 145 C.L.R.

330 per Stephen J. at pp. 347-350; per Mason J. at pp.354-6;

State Superannuation Board v. Trade Practices Commission, supra, per Mason, Murphy and Deane JJ. at pp.307-8).

In the present case, the legislative framework in which the Corporation operates makes it clear that it was not intended to have any significant degree of autonomy: its

members are appointed by the government; it is subject to

government control and it is publicly funded. All the available indicia point to its status as that of an instrument of government. As such, the Corporation is entitled to the

immunities of the Crown and is not bound by the Act.

Q.3 Does the Court have accrued jurisdiction in respect of

This question proceeds on the footing that, as we have held, neither the Territory nor the Corporation is bound by the Act. It must follow that, in our opinion, no cause of action under the Act will be available to the applicants as against those respondents. However, as has been noted earlier, there are common law claims made against all respondents. The applicants say that, even if the claims under the Act against the Territory and the Corporation are

dismissed, the Court still has accrued jurisdiction to deal

with the common law claims against those respondents.

In order to understand the respective contentions of

the parties, it is necessary to summarise the allegations made by the applicants in their further amended statement of claim. The allegations are as follows: The fourth applicant, Golden Gloss Properties Limited, owns all the shares in the second and third applicants, The Esplanade Pty. Limited and Kota Nominees Pty. Limited; and the second and third applicants own all the shares in the first applicant, Burgundy Royale Investments Pty. Limited (Receivers and Managers Appointed) ("Burgundy Royale"). In January 1979, a Ministerial Mission, comprising representatives of the Territory and of the Corporation, undertook an international promotion of a project known as the Darwin Centre Project and discussed the project in Malaysia with representatives of the applicants. In January and February 1981, the Territory, the Corporation and the Corporation of the City of Darwin proposed to the applicants that they and Burgundy Royale jointly develop the Darwin Centre. In these negotiations, the Territory and the

Corporation, by their agents, acting on their behalf and on

behalf of the City of Darwin Corporation, made a number of representations to the representatives of the applicants. These representations, which induced the applicants to embark upon the development of the Darwin Centre, were false. The Territory, the Corporation and the City of Darwin Corporation, it is said, thereby engaged in misleading and deceptive conduct contrary to s.52(1) of the Act; also, for the

purposes of s.75B of the Act, each of those respondents was

"involved" in the alleged contraventions by the other respondents. Similar allegations of contraventions of ss.53(c) and 59(2) are made. The same matters are relied upon to support, first, allegations of breaches of collateral warranties and secondly, negligence on the part of the Territory, the Corporation and the Darwin City Corporation (see paras. 22, 23 and 24 of the further amended statement of claim). Then it is alleged that, by 1984, the applicants experienced financial difficulties in funding the construction and development of the Darwin Centre; and that the Territory, the Corporation and the Darwin City Corporation arranged for the applicants to seek financial assistance from Westpac Banking Corporation, the first respondent. The applicants say that, in order to induce them to enter into financing arrangements with it, Westpac made a number of representations which were false and misleading and in breach of ss.52(1) and 53(c) of the Act. Similar allegations of facts said to establish negligence, breach of warranty and breach of contract on the part of Westpac, are made. It is further alleged that, in breach of s.47 of the Act, the Territory threatened to terminate or to refuse to renew a development lease to Burgundy Royale unless it or an associated company, Burgundy Royale Services Pty. Limited, acquired financial services from Westpac and building services from Jennings

The applicants' principal claims for relief are damages, pursuant to s.82 of the Act, and otherwise, and a declaration that several agreements made between certain of the applicants and certain of the respondents, together with a

mortgage granted by Burgundy Royale in favour of the

On behalf of the Territory and the Corporation, it is submitted that the only claims made against them in the Court's accrued jurisdiction are those in paras. 22, 23 and 24 of the further amended statement of claim; that these claims are within the accrued or pendent jurisdiction because they are alternatives to the statutory claims made under 5.86 of the Act - they derive from the same subject matter; and that once the statutory claims are seen to be without foundation,

there remains no substratum of facts common to them and the

common law claims: the common law claims are entirely

severable. It follows, it is said, that the Court has no

any matter arising under this Act in respect of which a civil proceeding has, whether before or

after the commencement of this section, been instituted under...CPart VIJ".

The relevant inquiry for our purposes is to determine what is comprehended within the notion of a "matter arising under Cthel] Act." In our opinion, the claims under the Act

against the Territory and the Corporation and the common law claims together constitute a matter arising under the Act. Both the federal claims and the common law claims attached to the federal claims so depend upon common transactions and facts that they arise out of a "common substratum of facts".

As Mason J. said in Philip Morris Inc. v. Adam P. Brown Male

Fashions Pty. Ltd. (1981) 148 C.L.R. 457 at p.512, in this

situation, a court which exercises federal jurisdiction will

have jurisdiction to determine the attached claim as an

element in the exercise of its federal jurisdiction.

'There was a clear difference of opinion in Philip Morris as to the meaning of "matter" in the context

of s.76(ii). The majority view was that a "matter" is a justiciable controversy which must either be constituted by or must include a claim arising under a federal law but which may also include another cause of action arising under another law, provided it is attached to and is not severable from the former claim. The proposition that a matter may include a cause of action arising under a non-federal law, though denied in the dissenting

judgments, is the ratio decidendi of Philip Morris. It follows that the ambit of a matter arising under

under that law or which are to be determined by reference to that law alone. As Windeyer J. said

"The existence of federal jurisdiction depends upon the grant of an authority to adjudicate

rather than upon the law to be applied or the subject of adjudication."'

Limited (1983) 154 C.L.R. 261, Mason, Brennan and Deane JJ. spoke (at p.294) of the Act conferring on the Court

"to determine the non-federal aspects of a single justiciable controversy of which the issues raised under the Act form an integral part."

The Court's jurisdiction is to determine each of the claims which together constitute a federal "matter". That

jurisdiction cannot be limited, as the argument of the second

and third respondents would suggest, to the determination of only those claims, federal or attached, which are successfully maintained. On the contrary, the jurisdiction is to entertain, and determine, all claims constituting a "matter", whatever their ultimate fate. Any other approach would involve the extremely inconvenient result that the existence or absence of jurisdiction to deal with a particular claim would depend upon the substantive result of that claim (cf.

Parisienne Basket Shoes Proprietary Limited v. Whyte (1938) 59

As we followed the argument, the second and third respondents accepted that there were facts common to _ the claims brought against them under the Act and at common law. It must follow that the Court had jurisdiction to entertain the federal matter thus arising. What is now said on behalf of these respondents is that, even if jurisdiction to deal with the common law claims was attracted in the first instance, that is, upon the filing of the initiating process, this jurisdiction is lost once it has been decided, as it now

It is true that in answering questions 1. and 2. in the negative, we have determined preliminary points of law in the claims under the Act brought against the second and third respondents; and that, in consequence, there will be no further trial of those issues. But it does not follow that the Court never 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 (see Moorgate

Tobacco Co, Limited v. Philip Morris Ltd. (1980) 145 C.L.R.

457 at pp. 469, 472, 477; Elna Australia Pty. Limited v.

International Computers (Australia) Pty. Limited (1987) A.T.P.R. 40.795, and Dorotea Pty. Limited v. Vancleve Pty.

Limited (1987) A.T.P.R. 40.807). 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

The position may have been different if the claims under the Act had been ""colourable" in the sense that they were made for the improper purpose of "fabricating"

jurisdiction (see Lane's Commentary on the Australian

Constitution (1986) at pp. 367-8 and the cases there cited). There is no room for such a suggestion here. The applicants' case that the second and third respondents were bound by the

Act cannot be said to be unarguable; and we think it was

pursued bona fide (cf. The Oueen v. Cook; Ex parte Twigg (1980) 147 C.L.R. 15 per Gibbs J. at p.26).

the special case should be costs in the application.

Finally, it should be noted that it was urged on behalf of the applicants that, as a matter of discretion, we should have declined to answer questions 1. and 2. It was suggested that, instead, the whole matter should have proceeded to trial at first instance. We cannot agree. Although the points raised were questions of statutory

construction, they were truly preliminary in their character

and there were obvious advantages in the Court's dealing with

importance, it was appropriate that they be referred to a Full

The questions in the special case be answered as follows:

Q.1 Is the Northern Territory of Australia bound by the Trade Practices Act?

Q.2 Is the Northern Territory Development Corporation (now known as the Territory Loans Management Corporation) bound by the Trade Practices Act?

Costs of the special case to be costs in the application.

I certify that this and the preceding 4uUWwaleer ci)

pages are a true copy of the Reasons for Judgment herein of

G. Downes Q.C., D. Barrett Solicitor for the Northern Territory by their agents, Freehill, Hollingdale & Page

At a glance

Court

Decision date

Before

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Judgment (166 paragraphs)

Cases Cited (2)