Kaddex Pty Ltd v Twitter Australia Holdings Pty Ltd

Preliminary matter

1. The determination of the respondents' application was originally to be determined "on the papers" and without a hearing. Following the receipt of the respondents' submissions of 24 November 2023, the applicant then sought that the interlocutory application be determined after an inperson hearing. It submitted that "significant prejudice" could occur if the Tribunal not grant that request.
2. The applicant does not identify what this prejudice. I note that he has filed approximately 50 pages of written submissions, of a complexity and detail, replete with references to many authorities and legal principles which would do justice to a lawyer.
3. I am not persuaded that there is any prejudice to the applicant by the Tribunal dealing with the respondents' application on the papers and I decline to dispense with a hearing. This is purely a legal issue not involving any determination of disputed facts of the credit of any witness.
4. In summary, as I am satisfied that the interlocutory application can be adequately determined in the absence of the parties by considering their extensive written submissions, I dispense with a hearing: Civil and Administrative Tribunal Act 2013 (NSW) (NCAT Act), s 50(2). In my view this is consistent with the guiding principle that the Tribunal facilitate the just, quick and cheap resolution of the real issues in the proceedings: NCAT Act, s 36(1).

Evidence and submissions

1. The respondents rely on:

• the submissions attached to its application for miscellaneous matters;
• the affidavit of its solicitor, Mr Bradley Strahorn sworn on 26 May 2023;
• a bundle of materials filed 10 August 2023 containing legislation and authorities; and
• its submissions of 24 November 2023.

1. Kaddex relies on:

• a bundle of materials filed on 11 August 2023, which included submissions dated 10 July 2023: and
• submissions filed 1 December 2023.

Factual findings

1. As this interlocutory application is being heard prior to the evidence to be relied on in the substantive hearing has been filed, there is limited factual material before the Tribunal.
2. I will assume for the purpose of these reasons the matters set out in Kaddex's application.

Summary of application

1. On 12 September 2022, Kaddex registered the account 'RealKaddex' on "Twitter.com".
2. After this time, Kaddex regularly tweeted from this account.
3. On 21 January 2023, Kaddex paid $135.00 to Twitter for a "Twitter Blue premium membership".
4. Part of the advertised benefits of this membership is a "Blue Checkmark".
5. On 24 January 2023, Twitter verified the RealKaddex account and provided a Blue Checkmark.
6. On 28 January 2023, Twitter suspended the RealKaddex account.
7. On 29 January 2023, after Kaddex wrote to Twitter to inquire about and appeal the suspension, Twitter said the suspension was because "Twitter prohibits accounts that portray another person or brand in a confusing or deceptive manner".
8. Kaddex says that while it is "unbelievable" that a company which owns registered trademarks across most of the globe for the brand, sometimes even the best companies make mistakes.
9. Kaddex believes Twitter made this mistake because of a complaint by an "intellectual property troll" Kaddex US Holdings, Inc. (Kush) a company incorporated in Delaware, United States, with a registered "Twitter handle" of "Kaddexofficial" as a company account.
10. Kush has one pending trademark application in the United States Patent and Trademark Office (USPTO), which is "subordinate" "to three of Kaddex's pending marks".
11. The USPTO has indicated that Kush's applications will be rejected as they are confusingly similar to the applicants' marks, which have completed their publication and opposition period and are now pending registration.
12. On 29 January 2023, Kaddex provided Twitter with a certified copy of Director Michael Williams passport along with a certified document and statement swearing that they own the rights to the "Kaddex" name along with intellectual property rights numbers to the name.
13. On 31 January 2023, Twitter stated they had reviewed Kaddex's appeal, and determined that Kaddex's account would remain suspended for violating its rules regarding impersonation.'
14. On 31 January 2023, Kaddex wrote to Twitter enquiring "How are we impersonating when we own the trademarks and brand globally?"
15. Later on 31 January 2023, to protect its rights, Kaddex wrote to Twitter, stating: This email is to inform you that every day our account is suspended, we incur AUD 1,000 in lost marketing, revenue, and brand awareness. Your actions are reasonably foreseeable and preventable, should you have reviewed the documentation we sent over. We intend to seek remedies in the NSW Tribunal.
16. As noted, on 8 June 2023, Kaddex filed application GEN 23/26695 with the Tribunal. The application states that Kaddex is seeking $29,000.00 from the respondents.
17. Relevantly, the application states that Kaddex owns the registered trademark "Kaddex" in 42 countries in the following classes of goods: 1. Class 09, being downloadable computer software for blockchain technology; 2. Class 36, being electronic funds transfer provided via blockchain technology financial transactions via blockchain; monetary exchange financial exchange exchange brokerage financial exchange services monetary exchange operations commodities; exchange services monetary; exchange services money exchange services foreign exchange services financial exchange of crypto assets; 3. class 38, being electronic data exchange; and 4. class 42, being cryptocurrency mining blockchain as a service certification of data via blockchain data; authentication via blockchain user authentication services using blockchain technology data storage via blockchain.
18. The basis of the claim for compensation is said to arise under the Australian Consumer Law (the ACL), namely ss 18 (misleading and deceptive conduct) and 60 (the guarantee that service be provided with due care and skill).
19. In relation to s 18, Kaddex states: 1. Twitter indicated that if Kaddex remitted the fee for Twitter Blue, Twitter would verify their identity and provide a blue checkmark. 2. Twitter did indeed 'verify' the identity of the Applicant only to later suspend the Applicant for impersonating itself.
20. In relation to s 60, Kaddex states: 1. a reasonable business would quickly ascertain that Kaddex has the right to at least use, if not exclusively use, the name 'Kaddex' for the activities it engaged with on Twitter; 2. on the balance of probabilities, Twitter did not properly verify Kaddex if it only suspended the Kaddex's account days late for 'impersonation' of itself; 3. on the balance of probabilities, Twitter did not exercise proper care when suspending, reviewing the suspension, and handling the appeal of Kadddex; 4. if any Twitter account should be suspended for impersonation, it should be Kush's 'kaddexofficial' account.
21. As a result of these matters, Kaddex says that Twitter is liable to compensate it for the reasonable and foreseeable losses causes by its failure to comply with the ACL.

The respondents

1. It is appropriate at this point to say something about the respondents. Mr Strahorn states in his affidavit, and I find and accept that: 8. Twitter, Inc. was an entity incorporated under the laws of the State of Delaware (USA) and headquartered in San Francisco, California. Twitter, Inc. was responsible for providing, to users in Australia, the online platform that is the subject of the NCAT Proceedings (Twitter Service). 9. On 15 March 2023, Twitter, Inc. merged into X Corp. and no longer exists. X Corp. is the successor in interest to Twitter, Inc., and all of Twitter, Inc.'s assets, rights and liabilities passed to X Corp. 10. X Corp. is an entity incorporated under the laws of Nevada (USA). As stated in the publicly available Twitter Terms of Service, the entity that provides the Twitter service in Australia is X Corp., a company based in the USA, at 1355 Market Street, Suite 900, San Francisco, CA 94103, USA.
2. Mr Strahorn then goes on to stated that "TAH", a term he does not define in his affidavit but presumably is a reference to the first respondent Twitter Australia Holdings Pty Ltd, "is an entity separate and legally distinct from Twitter. TAH does not host, operate, or control the Twitter Service. Twitter provides the Twitter Service to these users".

The respondents' objections to jurisdiction

1. The respondents' position is succinctly stated in their submissions attached to their application for miscellaneous orders. These are as follows: 5. Twitter participates in these proceedings for the sole and limited basis of contesting CAT's jurisdiction. It contends that CAT has no authority to hear and decide the matter against it, at least for the following reasons: a. the NCAT Act does not empower NCAT to conduct proceedings in respect of matters taking place outside of Australia, or involving respondents located outside Australia; and/ or b. NCAT does not have jurisdiction over these proceedings given that they contemplate issues of arising under Commonwealth laws, which preclude CAT's jurisdiction to determine the matter, as held in Burns v Corbett and Citta Hobart Pty Ltd v Cawthorn. As the Respondents intend to rely upon defences arising under Commonwealth legislation, including but not limited to the Online Safely (Basic Online Safety Expectations) Determination 2022 (Cth) and the Online Safely Act 2022 (Cth), and defences arising under the Commonwealth Constitution and involving its interpretation, the matter is in federal jurisdiction. It is accordingly beyond the jurisdiction of the Tribunal, with the consequence that the Tribunal cannot hear the matter, and the proceeding must be dismissed. 6. TAH supports Twitter's jurisdictional objections to the extent they affect its interests.
2. In its submissions of 24 November 2023, the respondents submit that the Tribunal lacks jurisdiction to exercise adjudicative authority in respect of any of the nine kinds of matter set out in ss 75 and 76 of the Commonwealth Constitution. Those kinds of matter include, relevantly, any matter "arising under the Constitution, or involving its interpretation" (s 76(i)), and any matter "arising under any laws made by the Parliament" (s 76(ii)): Burns v Corbett (2018) 265 CLR 304 at [16] - [17], [43], [45], [64].
3. The respondents submit that the matter the subject of the applicant's application falls into both those categories, for four independent reasons, each of which, on its own, is a sufficient basis for dismissal.
4. First, the applicant expressly invokes a federal statute as one basis for its claim, being the Competition and Consumer Act 2010 (Cth). The respondents submit that: 1. where a Commonwealth law is relied on as a source of a claim that is asserted in the course of the controversy, the matter will be in federal jurisdiction, and incapable of being determined by this Tribunal: Citta Hobart Pty Ltd v Cawthorn (2022) 96 ALJR 476 at [311]; 2. the matter will continue to have that character even if that federal claim is withdrawn: Citta Hobart citing Moorgate Tobacco Co Ltd v Philip Morris Ltd (1980) 145 CLR 457 at 477.
5. Secondly, the respondents rely by way of defence on the Online Safety (Basic Online Safety Expectations) Determination 2022 (Cth) (the Determination). The Determination is a legislative instrument made under the Online Safety Act 2021 (Cth) (the OS Act). [1] The OS Act deals with online safety, which is a broad concept encompassing the need to respond to a variety of different online problems, including (relevantly) the problem of fake accounts. Part 2 of the Determination specifies the basic online safety expectations for a social media service (cl 5(a)). Relevantly: 1. cl 9(2)(b) expressly requires a social media service to have "processes that require verification of identity or ownership of accounts"; 2. cl 14(l)(a) requires a social media service to have a "terms of use"; 3. cl 14(2) requires a social media service to "take reasonable steps to ensure that penalties for breaches of its terms of use are enforced against all accounts held or created by the end-user who breached the terms of use of the service".
6. Thirdly, at A.3 of the application form, the applicant contends that Twitter's Terms of Use are invalid under s 64 of the Australian Consumer Law. That contention cannot succeed, because a social media service's terms of use is a sui generis type of contract that is exhaustively regulated by the OS Act and the Determination. To the extent that there is any deficiency or unfairness in a social media service's terms of use, that is dealt with under the OS Act, including, for example, ss 49(1)(a), (2) and (5).
7. Fourthly, the second defence outlined above is not only a defence "arising under any laws made by the Parliament", but also a defence "arising under the Constitution, or involving its interpretation", for the respondents' position is that the OS Act prevails over the Fair Trading Act 1987 (NSW) (the FT Act). to the extent of any inconsistency. The respondents submit that that itself makes this a federal matter.
8. The respondents submit that in accordance with the High Court's explanation in Citta Hobart, it is not the Tribunal's role to assess the merits of the respondents' proposed defence when deciding the jurisdictional question. It is enough that the defence be genuinely raised and not incapable on its face of legal argument. The respondents submit that its arguments summarised above are genuinely raised and are well arguable. This is not a case, as the applicant asserts, of "colourable" jurisdiction (which, in any event, could only ever be an answer to the respondents' defences, and not to the applicant's federal claim).
9. Accordingly, the respondents submit that its defences are not "colourable" in the sense referred to in Rana v Google Inc (2017) 254 FCR 1 and Burgundy Royale Investments Pty Ltd (Receivers and Managers Appointed) v Westpac Banking Corporation [1987] FCA 686. To hold otherwise would require the Tribunal to find that the respondents' defences have been brought for the improper purpose of fabricating jurisdiction: a serious finding that (a) would require proof to the Briginshaw standard [2] , rather than mere assertion or speculation, and (b) is unavailable in the absence of any evidence of mala fides of which there is none.

Submissions of 10 July 2023

1. Kaddex's primary submissions of 10 July 2023 are lengthy (being a total of 34 pages), and relevantly appear in Section VI, "The Tribunal has jurisdiction to hear and determine the application". Section VI is divided into nine parts as follows.
2. First, Part A, "Introduction". Kaddex refers to the FT Act. In particular, Kaddex refers to ss 79J ("consumer claim") and 79E(2) ("meaning of consumer claim").
3. Secondly, Part B, "The Tribunal's jurisdiction to determine its jurisdiction". Kaddex submits: 1. in Burns v Corbett (2018) 265 CLR 304, the High Court held that a State tribunal that is not a "court of a State" cannot exercise judicial power in a matter in federal jurisdiction; 2. in Citta Hobart Pty Ltd v Cawthorn [2022] HCA 16, the High Court explained at [24] to [25] that a State tribunal has "incidental jurisdiction" to "form an opinion" on whether or not a dispute is in federal jurisdiction; 3. consistently with these authorities, the Tribunal must in the present case, "form an opinion" or "make up its mind" about whether or not it has jurisdiction to determine the applicant's claim.
4. Thirdly, Part C, "General jurisdiction". Here Kaddex sets out unexceptionable propositions about the FT and the Australian Consumer Law (ACL).
5. Fourthly, Part D, "Federal Jurisdiction". This is the most important part of Kaddex's submissions. In summary, Kaddex makes the following principal submissions: 1. the issue of Federal Jurisdiction would only arise if the respondents were a natural person who resided in another Australian State and the Tribunal exercising judicial power to determine a claim. Overseas parties, Corporations, and individuals who reside in a Territory do not require the exercise of Federal jurisdiction. 2. "the Respondent", (presumably a reference to Twitter) is an incorporated legal entity that resides overseas. Therefore, the Tribunal has jurisdiction.
6. Fifthly, Part E, "Respondents' intent to raise defences under commonwealth legislation are colourable, untenable, and even if accepted, do not require the exercise of Federal jurisdiction".
7. In summary, Kaddex makes the principal submission that the issue of federal jurisdiction would only arise if "the Respondent" were a natural person who resided in another Australian State and the Tribunal exercising judicial power to determine a claim. Overseas parties, corporations, and individuals who reside in a Territory do not require the exercise of federal jurisdiction.
8. This Part then sets out further submissions under the following sections: 1. The difference between "arising under" and "involving the interpretation of"; 2. The nature of judicial power; 3. Determination of a "consumer claim"; 4. The existence of a "matter"; and 5. Summary. Here Kaddex submits: 1. the Tribunal has the power to determine the consumer claim regardless of whether or not the Respondents intend to raise defences that purportedly arise under Commonwealth Legislation as the cause of action and the exercise of judicial power originates from a consumer claim through the FT Act. 2. therefore, any order entered by the Tribunal would indeed exercise juridical power; however, it would not invoke federal jurisdiction as the respondents are not the Commonwealth nor a natural person residing in another Australian state, nor do they have any tenable defences arising from Commonwealth legislation.
9. Sixthly, Part F, Service of process.
10. Seventhly, Part G, International law and enforcement of judgment.
11. Finally, Part H, "Summary", in which Kaddex submits: 142. On the balance of probabilities, [Kaddex] has proven threshold justification. 143. The Respondent marketed, sold, and conducted business within Australia and New South Wales, directly advertising and selling these digital goods and services to consumers. 144. There is no question of Federal Jurisdiction as defined by Chapter III of the Australian Constitution. 145. Service of Process has been affected directly by the Registrar as defined by the NCAT Rules and will be further affected by [Kaddex] in line with the Hague Convention after the Tribunal rules on jurisdiction. 146. Even if the Respondent argues the opposite, the question of threshold jurisdiction has been met; therefore, the exact level of contact the Respondent has with Australia would be discovered during the proceedings through Summons applications.

Submissions of 1 December 2023

1. These submissions are 15 pages in length. In summary, the applicant submits that: 1. the respondents do not cite an actionable defence giving immunity or a source of right that arises under Commonwealth Law. Instead, they try to confuse the Tribunal by "waving around" the Online Safety Act 2021 (Cth) and the Determination; 2. the respondents misunderstand and misconstrue many aspects of the law, and any claimed defences arising under the OS Act are manifestly hopeless and fictitious; 3. it is "astonished" that the respondents do not realise that there are two Australian Consumer Laws: one at the Federal level and one domesticated by each State and Territory that is the law of that State or Territory; 4. the respondents' submission that "This is not a case", as the Applicant asserts, of 'colourable' jurisdiction (which, in any event, could only ever be an answer to the Respondents' defences, and not to the applicant's own federal claim) should be discarded as absurd as it is abundantly clear the applicant's claim arises from State legislation; 5. the OS Act and Determination explicitly allow for concurrent operation of State and Territory laws; 6. the respondents' defence is distinguishable and manifestly hopeless in the instant matter; 7. the OS Act and Determination "are not in genuine dispute nor supply immunity"; 8. Parliament has not covered the field through the OS Act of the Determination; on the contrary "they did expressly the opposite"; 9. a distinction is drawn between merely interpreting a federal law, which is insufficient to attract federal jurisdiction, and arising under a federal law; the difference is not reliably placed into a universally valid test; 10. the "instant matter" does not "arise" under Federal law;
2. The applicant then submits (footnotes omitted), in what might be considered as a convenient summary of its overall position: 22. In this matter, the heart of the disputed subject matter is the [FT Act]. To reiterate the debated matter, the "right" for relief is directly driven by the Respondents' failure to use due care and skill in supplying its services. The right for the Applicant to seek a remedy owes its existence to the Australian Consumer Law as domesticated in the [FT Act]. Thus, the instant matter is a quintessential example of when a Tribunal can interpret Federal law without using judicial authority or attracting Federal jurisdiction. 23. Furthermore, the Tribunal must consider the matter in its entire contextual surroundings. According to the accepted principle, a party invoking federal authority must show that the subject matter of the claim is a matter within the courts jurisdiction. The doctrine relies principally on the constitutional notion of 'matter" the justiciable controversy between the parties and composed of the facts and claims being the controversy between them. The courts supply some clarity through their consideration of the notion of a "matter" when determining accrued jurisdiction. The doctrine applies when a non­federal claim is joined with a non-severable (and non-colourable) federal claim arising from a common substratum of transactions and facts. 24. The parties' conduct in the instant matter, the issues in controversy, and the relief sought centre around the nexus of the Respondents' Internet Platform: its business enterprise and the applicability of Australian Consumer Law to such enterprise. Given the totality of the circumstances, the instant controversy does not depend on or surround itself with federal law but rather Australian Consumer Law. The Applicant raises its claim under NSW ACL. Respondents seem unaware that all states and territories have domesticated Schedule 2 of the CCA in their legislation. … Summary 37. The Respondents have the burden of proof when invoking Federal jurisdiction. On the balance of probabilities, the Respondents have not proven the Tribunal lacks authority to hear and determine the Application. Interpreting federal laws, including a comprehensive statutory interpretation even of Commonwealth Law, is exercising the Tribunal's well-established incidental authority to decide on its own jurisdiction if the defence does not arise under Federal Law. Respondents have raised no defence or immunity that arises under Federal Law nor explained how any part of the NSW ACL is inconsistent with Federal Law. 38. The determination of jurisdiction in itself is not an exercise of judicial power' and a well-established right by the Courts, as there is no exercise of judicial power in making this determination or even considering the tenability and colourability of a raised defence if it is relevant to the establishment of jurisdiction and not the execution of judicial power

Relevant principles re Federal jurisdiction

1. Senior Member Ellis SC helpfully and accurately set out the relevant principles in Eddings v Feros Care Limited [2023] NSWCATCD 126 as follows: 32. It is clear the Tribunal does have jurisdiction to determine whether it has jurisdiction: Citta v Hobart [2022] HCA 16 (Citta) at [23]; Wilson v Chan & Naylor Parramatta Pty Ltd [2020] NSWCA 213; Dyldham Developments Pty Ltd v The Owners SP 85305 [2020] NSWCA 327. 33. It is also clear that the Tribunal does not have jurisdiction to determine a federal matter because a State parliament cannot confer on a State tribunal, which is not a court of a State, judicial power in relation to any matter covered by s 75 or s 76 of the Constitution: Burns, confirmed in Citta at [1]. 34. Despite that clarity, it is still necessary to determine whether this case involves a federal matter. As to that question, the following non-exhaustive set of principles (Principles) was set out in Murphy v Trustees of Catholic Aged Care Sydney [2018] NSWCATAP 275 at [22]: (1) Not every proceeding that is touched by a Commonwealth law is a federal matter. For instance, a matter that requires only the interpretation of a federal law will not render the proceedings a federal matter. Similarly, it is not sufficient if the federal statute arises in an incidental fashion: Felton v Mulligan (1971) 124 CLR 367 at 408 (Walsh J); [1971] HCA 39; Moorgate Tobacco Ltd v Philip Morris Ltd (1980) 145 CLR 457 at 476 (Stephen, Mason, Aickin and Wilson JJ); [1980] HCA 32; LNC Industries Ltd v BMW (Australia) Ltd (1983) 151 CLR 575 at 581 (Gibbs CJ, Mason, Wilson, Brennan, Deane and Dawson JJ); [1983] HCA 31. (2) The question of whether a federal matter arises is one of substance and not form: Australian Solar Mesh Sales Pty Ltd v Anderson (2000) 101 FCR 1; [2000] FCA 864 at [16] (Burchett J, Wilcox and Tamberlin JJ agreeing); Philip Morris Inc v Adam P Brown Male Fashions Pty Ltd (1981) 148 CLR 457 at 473 (Barwick CJ); [1981] HCA 7. (3) To identify the "matter" it is necessary to identify the justiciable controversy: Smith v Smith (1986) 161 CLR 217 at 237 (per curiam); [1968] HCA 36; Re Wakim (1999) 198 CLR 511; [1999] HCA 27 at [139] (Gummow and Hayne JJ). (4) It is sufficient if the matter could be decided by reference to the federal law, it is not necessary that the matter be disposed of in that way: Felton v Mulligan at 374 (Barwick CJ); Rana v Google Inc (2017) 254 FCR 1; [2017] FCAFC 156 at [21] (per curiam). (5) A federal issue may arise even where the parties have not directly asserted it, but where the court must nevertheless examine whether a right or duty under federal law exists: Moorgate at 476 (Stephen, Mason, Aickin and Wilson JJ). (6) A federal matter will arise whenever the right, duty or enforcement owes its existence to federal law: LNC at 581; Re McJannet; Ex parte Australian Workers' Union of Employees (Qld) (1997) 189 CLR 654 at 656-7 (per curiam); [1997] HCA 40. (7) It is not necessary for the form of relief sought to depend on federal law; it is sufficient if the source of the right or subject matter of the claim exists as a result of federal law: LNC at 581-2 (Gibbs CJ, Mason, Wilson, Brennan, Deane and Dawson JJ). (8) A federal matter will also arise where the source of a defence is a federal law: Felton v Mulligan at 375 (Barwick CJ) and 408 (Walsh J); LNC at 581 (Gibbs CJ, Mason, Wilson, Brennan, Deane and Dawson JJ). (9) Unless a federal issue is colourable, there is a federal "matter": ie: the whole of the proceedings is a federal matter requiring the exercise of federal jurisdiction: Philip Morris Inc v Adam P Brown Male Fashions Pty Ltd at 499 (Gibbs J); Felton v Mulligan at 373 (Barwick CJ) and 408 (Walsh J); Fencott v Muller (1983) 152 CLR 570 at 606 (Mason, Murphy, Brennan and Deane JJ); [1983] HCA 12; Smith at 237 (per curiam); Australian Securities and Investments Commission v Edensor Nominees Pty Ltd (2001) 204 CLR 559; [2001] HCA 1 at [7] (Gleeson CJ, Gaudron and Gummow JJ); Rana v Google at [20]. 35. To those principles must be added what was said by Allsop J (as he then was) in Macteldir Pty Ltd v Dimovski [2005] FCA 1528 (Macteldir) at [36]: It is a fundamental tenet of federal jurisdiction that once a federal claim is made, even a bad one, and even one that is abandoned, or struck out, the whole matter in which that claim is made is, and remains, federal jurisdiction. (emphasis added)
2. To this could be added the observations of the Tribunal (constituted by SM Charles) in Gleeson v Cavers; Cavers v Gleeson [2021] NSWCATCD 158: 10 Under Chapter III of the Commonwealth of Australia Constitution Act (Constitution) only a court of a State can exercise federal jurisdiction and then, only in respect of matters for which jurisdiction is not exclusive to the High Court of Australia and for which a court of a State is invested with power pursuant to s 77(iii) of the Constitution. By Part 3A of the NCAT Act (in s 34A) "federal jurisdiction" means jurisdiction of a kind referred to in s 75 or s 76 of the Constitution. Relevantly, "federal jurisdiction" includes: "any matter … arising under any law made by the [Commonwealth] Parliament": s 76(ii) of the Constitution. Such conferral is done by the Judiciary Act 1903 (Cth). 11 In Attorney General for New South Wales v Gatsby (2018) NSWCA 254 (Gatsby) the Court of Appeal declared that the Tribunal is not a "court of a State" for the purpose of Ch III of the Constitution and s 39 of the Judiciary Act. The matter before the Court of Appeal in Gatsby was then remitted to the Tribunal to be dealt with in accordance with Part 3A of the NCAT Act. 12 Since the decision in Gatsby, Part 3A of the NCAT Act has been amended. It is now titled "Federal proceedings", whereas it was formerly titled "Diversity Proceedings" and dealt with "federal diversity jurisdiction", which meant "jurisdiction of the kind referred to in s 75(iv) of the Constitution". However, the procedural requirements for leave and continuation of proceedings in an "authorised court" as defined in s 34A of the NCAT Act after leave is granted as provided in s 34B and s 34C remain the same. Section 34B provides: [The Tribunal then sets out the content of ss 34B and 34D] 14 Referring to a series of earlier authorities including Rana v Google Inc [2017] FCAFC 17 and Burgundy Royale Investments Pty Ltd (Receivers and Managers Appointed) v Westpac Banking Corporation [1987] FCA 686, the applicable principles which are applied in making the determination of what constitutes a federal matter were stated by the Appeal Panel in Murphy v Trustees of Catholic Aged Care Sydney [2018] NSWCATAP 275 (Murphy) as follows (at [22] and [38]): (1) To identify the "matter" it is necessary to identify the justiciable controversy: Murphy at [22(2)]; (2) A federal matter will arise whenever the right, duty or enforcement owes its existence to federal law: Murphy at [22(6)]; (3) A federal matter will also arise when the source of defence is a federal law: Murphy at [22(8)]; (4) It is not necessary for the form of relief sought to depend on federal law: Murphy at [22(7)]; (5) Unless a federal issue is colourable, the whole of the proceedings is a federal matter requiring the exercise of federal jurisdiction: Murphy at [22(9)]. (emphasis added) 15 In Rana v Google, the Full Federal Court said this in respect of whether a federal issue is colourable: [20] Once a matter is within federal jurisdiction, the entire matter is within federal jurisdiction: Australian Securities and Investments Commission v Edensor Nominees Pty Ltd [2001] HCA 1; 204 CLR 559 at 571 [7] per Gleeson CJ, Gaudron and Gummow JJ. There is never any concurrent exercise of federal and State jurisdiction: Felton [1971] HCA 39; 124 CLR 367 at 412-413; Moorgate 145 CLR at 471. [21] Generally, non-colourable assertion of a federal matter is enough to attract federal jurisdiction: Felton 124 CLR at 374 per Barwick CJ; Moorgate 145 CLR at 476; Burgundy Royale Investments Pty Ltd v Westpac Banking Corporation [1987] FCA 686; 18 FCR 212 at 219; Parisienne Basket Shoes Pty Ltd v Whyte [1938] HCA 7; 59 CLR 369 at 389-391 per Dixon J. Upon the existence of federal jurisdiction, the matter remains within federal jurisdiction regardless of how the federal issue or issues within it are ultimately resolved: Moorgate 145 CLR at 476. It remains federal even if the federal claim is struck out: Unilan Holdings Pty Ltd v Kerin [1993] FCA 605; 44 FCR 481 at 481-482. Nor does dismissal of the federal claim mean that a court exercising federal jurisdiction somehow loses jurisdiction over the balance of the matter: Burgundy Royale 18 FCR at 219; Johnson Tiles Pty Ltd v Esso Australia Ltd [2000] FCA 1572; 104 FCR 564 at 597 [85] per French J. The same is true if the federal claim is effectively abandoned: see Moorgate [1980] HCA 32; 145 CLR 457 Indeed, a matter remains in federal jurisdiction even if a party is added and no federal claim is made against that party, provided it is all part of the same matter, the same controversy: Re Wakim 198 CLR at 587 [145] per Gummow and Hayne JJ. The position is summarised in Macteldir Pty Ltd v Dimovski [2005] FCA 1528; 226 ALR 773 at 784 [36] as follows: It is a fundamental tenet of federal jurisdiction that once a federal claim is made, even a bad one, and even one that is abandoned, or struck out, the whole matter in which that claim is made is, and remains, federal jurisdiction (citations omitted) [22] The exception to this principle is where the federal claim that is made is "colourable" in the sense that it was "made for the improper purpose of fabricating jurisdiction" such that it was not made bona fide. In such a case, federal jurisdiction is not attracted: Burgundy Royale 18 FCR at 219. (emphasis added)

Consideration

1. As I said in the decision of 11 December 2023, the law is clear that the raising of a Commonwealth defence raises federal jurisdiction, with the result that this Tribunal, not being a court, cannot determine the dispute.
2. Aside from the assertion that the respondents do not cite an "actionable defence", and that the propounded defences are "manifestly hopeless and fictitious", the applicant's lengthy submissions do no come to grips with the central proposition that a federal matter will arise where the source of a defence is a federal law. Consistent with the principles in Macteldir Pty Ltd v Dimovski and followed and applied in Rana v Google, it is a fundamental tenet of federal jurisdiction that once a federal claim is made (here a defence) , even a bad one, and even one that is abandoned, or struck out, the whole matter in which that claim is made is, and remains, federal jurisdiction
3. I accept that one exception is where a claimed defence is colourable, in the sense referred to in Rana v Google at [22] and Burgundy Royale at [35]. The principle is a claim is "colourable" if it was "made for the improper purpose of fabricating jurisdiction" such that it was not made bona fide. In such a case, federal jurisdiction is not attracted.
4. I put the respondents on notice of this issue. In my view, they have filed persuasive issues on this issue, the applicant has not.
5. I am satisfied that the defences the respondents propose to raise arise under Commonwealth law. I am not satisfied that the defences are colourable.
6. In those circumstances, I am not satisfied that the Tribunal does not have jurisdiction to hear and determine this matter, and the respondents' application is dismissed.

Conclusion

1. The Tribunal declines to deal with application 2023/00390656 (GEN 23/23993) as it has no jurisdiction to determine these proceedings.

Costs

1. Costs are reserved.
2. Despite my conclusion that the Tribunal has no jurisdiction to determine these proceedings, it is established that the Tribunal may deal with costs Wilson v Chan & Naylor Parramatta Pty Ltd 103 NSWLR 140; [2020] NSWCA 213.
3. The respondents have been successful. If they seek costs they should provide written submissions to the applicant and the Tribunal within 14 days, the applicant may respond within a further 14 days and the respondents may reply within a further 7 days. The submissions must identify the relevant costs rule.
4. I propose to deal with costs on the papers and without a hearing. I note that in Westerweller v The Owners Strata Plan No 18482 [2023] NSWCATAP 113 the Appeal Panel stated at [85] that: [i]t is the experience of the Appeal Panel that costs decisions in the Consumer and Commercial Division and on appeal (unless dealt with at the time of the hearing) are routinely considered "on the papers", and without a hearing. The parties were given an opportunity to provide written submissions and did so. They can be presumed to have included all relevant issues in their written submissions.
5. If either party opposes that course they should address that issue in their submissions.
6. Submissions are to be limited to 5 pages.

Orders

1. The Tribunal makes the following orders: 1. A hearing is dispensed with. 2. Pursuant to s 53 of the Civil and Administrative Tribunal Act 2013 (NSW) the Tribunal's decision of 11 December 2023 is set aside. 3. The Tribunal declines to deal with application GEN 23/23993 as it has no jurisdiction to determine these proceedings. 4. If the respondents seek costs: 1. they are to file and serve submissions on or before 01 February 2024. 2. the applicant may respond 15 February 2024. 3. the respondents may reply 22 February 2024.

Endnotes

1. I note that the respondents refer to the Online Safety Act 2022 (Cth) in their submissions, presumably a typographical error.
2. Briginshaw v Briginshaw (1938) 60 CLR 336 I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales. Registrar DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 13 August 2024