Civil & Civic Corporation Pty Ltd v Nova Builders Pty Ltd

Background 3 On 31 August 2021, the adjudicator made a determination under the Security of Payment Act that Nova was liable to pay Civil & Civic approximately $462,000 under a construction contract between Civil & Civic and Nova (the first determination). Nova had already paid that sum into the Supreme Court pursuant to an order made in an interpleader proceeding in the Supreme Court brought by Nova against Civil & Civic and another party. That proceeding is apparently still on foot in the Supreme Court. 4 Nova applied to the Supreme Court for leave to appeal the first determination. On 19 August 2022, McWilliam AsJ granted Nova leave to appeal, allowed the appeal, set aside the orders made by the adjudicator in the first determination and remitted the matter to the adjudicator for further determination according to law. Her Honour held that the adjudicator's finding in respect of a jurisdictional fact, that fact being that there was a contract between Nova and Civil & Civic, was not supported by adequate reasoning: Nova Builders Pty Ltd v Civil & Civic Corporation Pty Ltd [2022] ACTSC 209 at [105]-[120]. 5 On 29 August 2022, Civil & Civic filed a notice of appeal in the Supreme Court in respect of the judgment of McWilliam AsJ. It is unnecessary to detail the grounds of appeal. That is because, as will be explained, Civil & Civic recently discontinued its appeal. 6 On 31 August 2022, the adjudicator made a second determination. The adjudicator found that there was no contract between Nova and Civil & Civic and that accordingly he had no jurisdiction to make a determination under the Security of Payment Act. 7 On 27 September 2022, Civil & Civic commenced the proceeding in this Court in which it seeks leave to appeal the second determination pursuant to s 43(3)(b) of the Security of Payment Act. The orders sought by Civil & Civic, if leave to appeal is granted, include an order that the appeal be allowed, an order that the second determination be amended pursuant to s 43(6)(a) of the Security of Payment Act and an order, in the alternative, that the determination be remitted to a new adjudicator pursuant to s 43(6)(b)(ii) of the Security of Payment Act "together with this Court's opinion on the questions of law the subject of the appeal". 8 On 21 October 2022, Nova filed a notice of cross appeal in the Supreme Court in respect of the order made by McWilliam AsJ in relation to the first determination that the matter be remitted to the adjudicator for further determination according to law. It is unnecessary to detail the grounds of the cross-appeal. It suffices to note that Nova contends that McWilliam AsJ erred in construing and applying certain provisions of the Security of Payment Act and that her Honour should have concluded that Civil & Civic's payment claims were prohibited by s 15(5) of the Security of Payment Act. Nova sought an order that the first determination be varied by omitting the remittal of the matter to the adjudicator. 9 On 29 November 2022, Civil & Civic filed a notice of discontinuance in respect of its appeal in the Court of Appeal of the Supreme Court. The following day, Elkaim J in the Supreme Court ordered that Nova's cross-appeal be expedited. While the cross-appeal has not yet been listed for hearing, Civil & Civic are seeking to have the appeal heard in the Court of Appeal sittings in the weeks of 20 and 27 February 2023.

Applicable principles 10 Section 5(4) of the Cross-vesting Act provides as follows: (4) Where: (a) a proceeding (in this subsection referred to as the relevant proceeding) is pending in the Federal Court or the Federal Circuit and Family Court of Australia (Division 1) (in this subsection referred to as the first court); and (b) it appears to the first court that: (i) the relevant proceeding arises out of, or is related to, another proceeding pending in the Supreme Court of a State or Territory and it is more appropriate that the relevant proceeding be determined by that Supreme Court; (ii) having regard to: (A) whether, in the opinion of the first court, the relevant proceeding or a substantial part of it would have been incapable of being instituted in that court, apart from this Act and any law of the Australian Capital Territory or the Northern Territory relating to cross-vesting of jurisdiction; and (B) whether, in the opinion of the first court, the relevant proceeding or a substantial part of it would have been capable of being instituted in the Supreme Court of a State or Territory, apart from this Act and any law of a State or Territory relating to cross-vesting of jurisdiction; and (C) the extent to which, in the opinion of the first court, the matters for determination in the relevant proceeding are matters arising under or involving questions as to the application, interpretation or validity of a law of the State or Territory referred to in sub-subparagraph (B) and not within the jurisdiction of the first court apart from this Act and any law of the Australian Capital Territory or the Northern Territory relating to cross-vesting of jurisdiction; and (D) the interests of justice; it is more appropriate that the relevant proceeding be determined by that Supreme Court; or (iii) it is otherwise in the interests of justice that the relevant proceeding be determined by the Supreme Court of a State or Territory; the first court shall transfer the relevant proceeding to that Supreme Court. 11 Rule 27.21 of the Federal Court Rules 2011 (Cth) provides that a party may apply to the Court for an order that a proceeding be transferred to another court. 12 The question to be determined on an application to transfer proceedings to another court is, broadly speaking, "where the balance lies in properly serving the interests of justice in each case": Amalia Investments Ltd v Virgtel Global Networks NV (No 2) (2011) 198 FCR 248; [2011] FCA 1270 at [34]. There is "no presumption in favour of or against any party and no party carries any onus": Amalia at [40], citing Bankinvest AG v Seabrook (1988) 14 NSWLR 711 at 714. 13 For the purposes of s 5(4)(b)(i), one proceeding is relevant to another where "there is some causal element between the two", or they are "associated or connected" such as where there is "a substantial common question that arises in both": see Commissioner of Taxation v Residence Riverside Proprietary Limited as Trustee for the D&J Discretionary Trust and as Trustee for the D&J Investment Trust [2013] FCA 720 at [13]-[14], citing Amalia at [41]; Mattock v Mattock (1989) 97 FLR 112 at 115. Common facts and parties may also be sufficient to satisfy the relationship requirement, although "commonality of facts does not necessarily mean that proceedings are related or arise from other proceedings": Residence Riverside at [14], citing Buckley v Gibbett (1996) 69 FCR 554 at 559. 14 For the purposes of s 5(4)(b), the considerations or circumstances that will generally be relevant to the question whether a transfer is in the interests of justice include: "the stage of the proceedings in the respective courts"; "the commonality or diversity of the parties"; "the nature of the proceedings"; the "commonality or diversity of the issues"; "the risk of conflicting findings of fact or conflicting orders"; "a cost benefit analysis"; "the potential unnecessary drain on judicial and other public and private resources"; and "whether there is any particular judicial expertise residing in one court or the other": Residence Riverside at [17]; see also Yara Pilbara Fertilisers Pty Ltd (formerly known as Burrup Fertilisers Pty Ltd) v Oswal (No 8) [2015] FCA 49 at [26] (McKerracher J) and Miller as executor of the estate of Detlef John Kirsten v Kirsten [2021] FCA 1022 at [51] (Besanko J). 15 The Court is also guided by the principle that the just resolution of disputes should be facilitated "as quickly, inexpensively and efficiently as possible": s 37M of the Federal Court of Australia Act 1976 (Cth). Savings in costs has been given significance in favour of transfers to state courts: see for example Shields v Williams [2019] FCA 413 at [6]-[8] (Derrington J); Prasad v Google LLC [2020] FCA 67 at [30] (Wheelahan J).

The competing contentions 16 Nova submitted that it was appropriate to transfer the proceeding in this Court to the Supreme Court for essentially four reasons. 17 First, the proceeding in this Court is related to or arises out of proceedings pending in the Supreme Court, being the interpleader proceeding and the appeal of the first determination: cf s 5(4)(b)(i) of the Cross-vesting Act. In Nova's submission, the proceeding in this Court involves the same subject matter as the interpleader proceeding and appears to have arisen out of that proceeding "if only in a tactical sense". 18 Second, the Court would not have jurisdiction to entertain this proceeding other than by reason of the Cross-vesting Act or a law of the Australian Capital Territory relating to cross-vesting: cf s 5(4)(b)(ii)(A) of the Cross-vesting Act. 19 Third, the proceeding in this Court could have been instituted in the Supreme Court because it involves an appeal under the Security of Payment Act, a law of the Australian Capital Territory: cf s 5(4)(b)(ii)(B) of the Cross-vesting Act. 20 Fourth, the proceeding involves the application or interpretation of a law of the Australian Capital Territory, being the Security of Payment Act: s 5(4)(b)(ii)(C) of the Cross-vesting Act 21 Fifth, it is in the interests of justice that the proceeding in this Court be transferred to the Supreme Court so that the proceedings can be case managed and disposed of "within one court system". Nova submitted that if the application for leave to appeal the second determination remained in this Court, there was a potential for conflicting or contradictory decisions. 22 Civil & Civic initially contended that it was appropriate for this Court to hear and determine its appeal from the second determination separately and before the hearing of the appeal in the Court of Appeal of the Supreme Court. It asserted that the appeal may not be able to be heard for some time and applied for the expedition of its proceeding in this Court. It subsequently did a complete U-turn and conceded that the cross-appeal in the Court of Appeal of the Supreme Court should be heard first. Civil & Civic also discontinued its appeal, ostensibly so as to secure an expedited hearing of the cross-appeal. It effectively abandoned its application for expedition of the proceeding in this Court. 23 Civil & Civic conceded that the proceeding in this Court is related to the appeal proceeding in the Supreme Court and could have been commenced in the Supreme Court. It nevertheless submitted that it was not in the interests of justice for the proceeding in this Court to be transferred to the Supreme Court because there was "no possibility of conflicting decisions". It also submitted that, even if the proceeding in this Court were transferred to the Supreme Court, it could not be heard together with the cross-appeal in the Supreme Court. That is because the application for leave to appeal the second determination would be in the original jurisdiction of the Supreme Court, whereas the appeal from the judgment of McWilliam AsJ is in the appellate jurisdiction of the Supreme Court.

Should the proceeding be transferred to the Supreme Court? 24 On balance, it is in the interests of justice to transfer the proceeding in this Court to the Supreme Court. The main considerations and circumstances that weigh in favour of transfer are as follows. 25 First, as was effectively conceded by Civil & Civic, the proceeding in this Court is related to the existing proceeding in the Supreme Court. Both sets of proceedings arise from or relate to a dispute between Civil & Civic and Nova concerning payment claims and the adjudication, or purported adjudication, or non-adjudication, of those claims under the Security of Payment Act. The parties are identical and there are common underlying facts. 26 Second, the proceeding involves the application or interpretation of a law of the Australian Capital Territory and could have been commenced in the Supreme Court. That is exactly what occurred in respect of the first determination. This Court only has jurisdiction as a result of the cross-vesting legislation. 27 Third, the proceeding in the Supreme Court in respect of the first determination was commenced before the proceeding in this Court. It appears likely that the cross-appeal in the Supreme Court will be heard and determined in the not too distant future. Civil & Civic conceded that the cross-appeal should be determined before the proceeding in this Court is heard and determined. That concession was properly made. The outcome of the cross-appeal will almost inevitably have an impact on the resolution of the proceeding concerning the second determination. In those circumstances, there is much to be said for the proposition that the case management and determination of the proceeding concerning the second determination is best handled by the Supreme Court. That will also ensure that there is no possibility of conflicting decisions. 28 Fourth, the proceeding in the Supreme Court is well advanced, whereas the proceeding in this Court is at a very early stage. Indeed, virtually nothing has occurred in this proceeding aside from the hearing and determination of the application to transfer. In all the circumstances, it would appear that the proceeding currently in this Court would be determined more expeditiously, efficiently and inexpensively in the Supreme Court. 29 It is difficult to see any particular reason why the proceeding should remain in this Court, other than that it was commenced in this Court.

Conclusion and disposition 30 The proceeding should be transferred to the Supreme Court pursuant to s 5(4) of the Cross-vesting Act. Civil & Civic's application to expedite the proceeding in this Court should be dismissed. Civil & Civic should pay Nova's costs of the successful transfer application and Civil & Civic's effectively abandoned expedition application. I certify that the preceding thirty (30) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Wigney.