Mansell v Cumming

Federal Court of Australia|1997-02-25|Before: Lehane J

Practice and Procedure - Cross-Vesting - whether under subs 5(4)(b)(ii)(c) of the Jurisdiction of Courts (Cross-Vesting) Act 1987 (Cth) it is in the interests of justice to transfer a matter arising entirely within South Australia and having to be determined in accordance with it laws to the Supreme Court of South Australia, in circumstances where judges of that court may be caused embarrassment due to the fact that the Attorney-General of South Australia is a respondent in the proceedings, which seek exemplary damages against him personally, and that he is likely to be known to members of that court. Jurisdiction of Courts (Cross‑Vesting) Act 1987 (Cth) subs 5(4)(b)(ii)(C), subs 9(2) Jurisdiction of Courts (Cross‑Vesting) Act 1987 (SA) subs 4(1)

Mansell v Cumming (1989) 86 ALR 637 Commonwealth v Silverton Ltd (1991) 103 FLR 251 Swanson v Harley (1995) 125 FLR 182 Bankinvest AG v Seabrook (1988) 14 NSWLR 711 Dawson v Baker (1994) 120 ACTR 11 TRIBOND DEVELOPMENTS PTY LTD & ORS v THE HON. TREVOR GRIFFIN, ATTORNEY‑GENERAL OF THE STATE OF SOUTH AUSTRALIA & ORS No. SG 101 of 1996 CORAM: Lehane J PLACE: Sydney DATE: 25 February 1997

CORAM: Lehane J PLACE: Sydney DATE: 25 February 1997 MINUTE OF ORDERS THE COURT ORDERS THAT: 1. The applicants' motion for leave to amend the application, by substituting for "Section 4 Subsection 2 of the Jurisdiction of Courts (Cross‑Vesting) Act 1987 of the Commonwealth" the words "subs 4(1) of the Jurisdiction of Courts (Cross‑Vesting) Act 1987 of South Australia and subs 9(2) of the Jurisdiction of Courts (Cross‑Vesting) Act 1987 of the Commonwealth", be granted. 2. The first and second respondents' notice of motion filed on 19 December 1996 be dismissed. 3. The respondents' application that, under subs 5(4) of the Jurisdiction of Courts (Cross-Vesting) Act 1987 (Cth), the proceeding be transferred to the Supreme Court of South Australia, be refused. 4. The parties' costs of the motions and application referred to in orders 1, 2 and 3 be costs in the proceeding. NOTE: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA ) SOUTH AUSTRALIA DISTRICT REGISTRY ) GENERAL DIVISION ) No. SG 101 of 1996 BETWEEN: TRIBOND DEVELOPMENTS PTY LTD (A.C.N. 008 124 445) First Applicant RODNEY ABEL Second Applicant ANNE SELINA ABEL Third Applicant AND: THE HON. TREVOR GRIFFIN, ATTORNEY‑GENERAL OF THE STATE OF SOUTH AUSTRALIA First Respondent THE STATE OF SOUTH AUSTRALIA Second Respondent NEW CORPORATION LIMITED Third Respondent

CORAM: Lehane J PLACE: Sydney DATE: 25 February 1997 REASONS FOR JUDGMENT LEHANE J: Background and nature of proceedings These proceedings arise from circumstances which followed the settlement of litigation in the Supreme Court of South Australia between the first applicant (Tribond) as plaintiff and defendants one of which was the second respondent (the State). In the Supreme Court proceedings Tribond claimed damages exceeding $23,000,000 for alleged breaches of various obligations which, it said, the defendants owed it. It is unnecessary to describe the Supreme Court proceedings in detail: it is sufficient to say that they arose from arrangements made to develop the Marineland Theme Park at West Beach, near Adelaide, and the circumstances in which those arrangements, and the development, were abandoned. It is common ground that the development of the theme park and its abandonment were matters of considerable public notoriety. In these proceedings Tribond makes, in substance, the following allegations and claims: the Supreme Court proceedings were settled on terms that the defendants pay to Tribond a sum of $700,000 (i.e. a sum substantially less than the amount which was publicly known to have been claimed by Tribond) the deed by which the Supreme Court proceedings were settled contained a provision prohibiting the disclosure of its terms except in certain agreed circumstances; by reason of statements made on behalf of Tribond in the course of negotiations leading to the settlement, the State, and in particular the first respondent (the Attorney‑General) knew that the confidentiality of the amount for which the Supreme Court proceedings were settled, and the contractual term protecting that confidence, were matters of great importance to Tribond and to the second and third applicants (Mr Abel and Mrs Abel who were, and are, directors of Tribond); following the settlement, the Attorney‑General deliberately disclosed the amount for which the Supreme Court proceedings were settled to a reporter employed by the Adelaide Advertiser and in radio interviews; as a result of the circumstances leading to the settlement of the Supreme Court proceedings, the State, in addition to owing contractual duties to Tribond, owed corresponding contractual duties to Mr and Mrs Abel and, in addition, both an equitable obligation to each applicant to maintain the confidentiality of the terms of the settlement and a common law duty of care "to ensure that the confidentiality of the information contained in the confidentiality term was maintained"; the disclosure by the Attorney‑General constituted a breach by the State of each of those obligations or, alternatively, breaches of duty (interference with a contractual relationship, procuring and assisting the breach of an equitable obligation and causing and participating in the breach of a common law duty) owed to the applicants by the Attorney‑General himself. Tribond alleges additionally that the Advertiser reporter, to whom the disclosure was made, was aware of the existence of the obligation of confidence; it is said, accordingly, that the third respondent (now, as will appear, Advertiser Newspapers Limited), as the publisher of the newspaper, is liable substantially on the same basis as that on which it is said that the Attorney‑General is liable. As a result of the particular circumstances which they allege, the applicants claim that the damages to which they are entitled against each respondent include aggravated and/or exemplary damages. Interlocutory motions and applications Before the Court on 20 February 1997 were two notices of motion set down in accordance with directions given by Mansfield J on 20 December 1996. Those were, first, a motion of the Attorney‑General and the State for an order setting aside the application and, secondly, a motion of the third respondent seeking orders setting aside the originating process or, alternatively, striking out those paragraphs of the statement of claim making allegations against the third respondent and entering judgment for the third respondent. Additionally, the applicants had filed a notice of motion dated 18 February 1997 in which they sought leave to substitute Advertiser Newspapers Limited as third respondent in lieu of News Corporation Limited, to correct the name of the Attorney‑General and to amend the title of the proceeding accordingly. The applicants also orally sought leave to amend the application by omitting the reference to subs 4(2) of the Jurisdiction of Courts (Cross‑Vesting) Act 1987 (Cth) (the Commonwealth Cross‑Vesting Act) and substituting references to subs 4(1) of the Jurisdiction of Courts (Cross‑Vesting) Act 1987 (SA) (the State Cross‑Vesting Act) and subs 9(2) of the Commonwealth Cross‑Vesting Act. For reasons which I then gave, I granted leave to make amendments as sought in the applicants' notice of motion and, on the third respondent's motion, dismissed the proceedings as against News Corporation Limited. To the extent that the applicants require leave to make consequential amendments to their statement of claim, that leave should of course be given. It was not seriously disputed that the provisions to which the application will refer, if amended in accordance with the applicants' informal motion, provide a clear basis on which the Court has jurisdiction to entertain these proceedings. There was some discussion about the effect of O 10A r 5(1)(a) of the Federal Court Rules; but in my view there could be no doubt in the mind of anyone concerned in the matter that the applicants rely on subs 4(1) of the State Cross‑Vesting Act and subs 9(2) of the Commonwealth Cross‑Vesting Act in relation to the whole of their claim; and the grounds are adequately set out in an affidavit of Mr Abel dated 10 January 1997 which the applicants had filed and which they read in support of their application and also in support of their opposition application made by the respondents, to which I shall turn, for an order that the proceedings be transferred to the Supreme Court of South Australia. Consequently, I indicated that I would grant leave to amend the application by omitting "Section 4 Subsection 2 of the Jurisdiction of Courts (Cross‑Vesting Act) 1987 of the Commonwealth" and inserting instead "subs 4(1) of the Jurisdiction of Courts (Cross‑Vesting) Act 1987 of South Australia and subs 9(2) of the Jurisdiction of Courts (Cross‑Vesting) Act 1987 of the Commonwealth"; and I give that leave. It is not evident that any consequential amendments are required. The motion of the Attorney‑General and the State to set aside the application must be dismissed. I shall deal with the question of costs at the conclusion of these reasons. Application for transfer to Supreme Court It became evident early in the interlocutory hearing that, although there was no serious question about jurisdiction, there was an issue as to whether the proceedings should continue in this Court or be transferred to the Supreme Court of South Australia. The respondents sought an order transferring the proceedings to the Supreme Court; the applicants opposed the making of such an order. The relevant provision is subs 5(4) of the Commonwealth Cross‑Vesting Act. It provides:

(4) Where: (a) a proceeding (in this subsection referred to as the "relevant proceeding") is pending in the Federal Court or the Family Court (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, apart from this Act and any law of a State relating to cross‑vesting of jurisdiction, the relevant proceeding or a substantial part of the relevant proceeding would have been incapable of being instituted in the first court and capable of being instituted in the Supreme Court of a State or Territory; (B) 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‑paragraph (A) and not within the jurisdiction of the first court apart from this Act and any law of a State relating to cross‑vesting of jurisdiction; and (C) 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.

Subparagraph (b)(i) does not apply because there are no pending proceedings in the Supreme Court out of which this proceeding arises or to which it is related. The relevant subparagraph is (b)(ii). Of the three matters to which that subparagraph requires the Court to have regard, there can be no doubt about the answers to the questions posed by (A) and (B): but for the cross‑vesting legislation this proceeding could not have been commenced in this Court, but could have been commenced in the Supreme Court; it is common ground that the matters for determination in this proceeding all arise under, or involve questions as to the application of, the law of South Australia and, apart from the cross‑vesting legislation, are not within the jurisdiction of this Court. The preamble to the legislation indicates a legislative intention that ordinarily proceedings concerning matters which, but for cross‑vesting, would be entirely or substantially within the jurisdiction of a particular court should proceed in that court; but plainly the legislation (here the State Cross‑Vesting Act, coupled with subs 9(2) of the Commonwealth Cross‑Vesting Act) gives this Court jurisdiction with respect to State matters: that is, for present purposes, matters in which the Supreme Court has jurisdiction otherwise than by reason of a law of the Commonwealth or of another State (State Cross‑Vesting Act subs 3(1)). The legislation contemplates (subs 5(4)) that there will be occasions where it is not appropriate to transfer to the relevant Supreme Court a proceeding which involves purely, or substantially, State matters. Ordinarily at least, the answer to the question whether such a proceeding should be transferred from this Court to a State Supreme Court will be answered by reference to the third matter which the Court is required to take into account, the interests of justice. Although it is the respondents who seek a transfer of the proceedings, the argument may, I think, be discussed more intelligibly by commencing with the submissions of the applicants. They say that having regard to the matters referred to in the subsection, particularly the interests of justice, I should not conclude that it is more appropriate that the proceeding be determined by the Supreme Court. The applicants seek to justify their selection of this Court as the court in which to commence these proceedings (and the court which, they say, should determine them) by reference to one set of circumstances only. They are that the Attorney‑General is, personally, a respondent; that questions may arise in the proceeding not merely as to what the Attorney‑General may have said, and to whom, but also as to his state of knowledge and motivation. It is probable, the applicants say, that the Attorney‑General will wish to give evidence and that, if he does, he will be cross‑examined. The applicants point not merely to what may be described as the institutional connection between the Attorney‑General and the Supreme Court but also to facts deposed to by Mr Abel (for instance that the Attorney‑General received his legal education in the University of Adelaide, that he practised in Adelaide as a barrister and solicitor and that he has for long been prominent in the legal and political affairs of the State) from which I should infer that he is likely to be well known to all members of the Supreme Court; and that, accordingly, there is likely to be embarrassment, at the least, if the proceeding are heard by that Court. The applicants point to observations made by Mansfield J, at the directions hearing to which I have referred, to the effect that if the matter is to be heard by this Court it should be heard by a judge resident outside South Australia. The applicants explicitly disclaim any suggestion of bias on the part of any member of the Supreme Court or that the proceeding could not in fact be tried fairly and properly by that Court. They suggest, however, that it is likely that there will be difficulty in finding a judge of the Supreme Court who is not disqualified or at least unwilling to hear the matter and that, in any event, there will at least be embarrassment in circumstances where a judge of the Supreme Court is required to hear a case in which exemplary damages are sought against the chief law officer personally. The applicant points to no reported authority dealing with the application of the cross‑vesting legislation in similar circumstances: the circumstances are, of course, and fortunately, very unusual. The respondents, on the other hand stress that this a matter arising entirely within South Australia and to be determined entirely in accordance with its laws. There is no dispute about that: the parties are resident in South Australia (one of them, of course, is the State itself) and all the relevant facts happened in South Australia; and the matter involves State law only. The respondents point to the intention of the cross‑vesting legislation, evident from the preamble, and to statements such as that of Northrop J in Mansell v Cumming (1989) 86 ALR 637 at 643: [The cross‑vesting] legislation is designed to remove difficulties from determining non‑productive or sterile arguments in relation to jurisdiction. Reference is made to s 16 of the Commonwealth Act. This suggests that if the legislation is not applied in a practical and sensible way, its operation may be brought to an end. Under s 5(7) the Federal Court, on its own motion, may exercise the power conferred by s 5(4) irrespective of the wishes of the parties. It is important that the Federal Court does not use the State cross‑vesting legislation to deprive State Supreme Courts of their traditional jurisdiction. The respondents referred also to the following observations of Gallop J, sitting in the Supreme Court of the Australian Capital Territory, in Commonwealth v Silverton Ltd (1991) 103 FLR 251 at 257: In my opinion there is much force in the submission on behalf of the respondent that in deciding what is "more appropriate" within the meaning of s 5(1)(b)(i), it is legitimate to have recourse to the preamble to the Act which provides, inter alia, that it is desirable to structure a system of cross‑vesting of jurisdiction between courts in such a way as to ensure as far as practicable that proceedings concerning matters which would be entirely or substantially within the jurisdiction of the Federal Court or the jurisdiction of a Supreme Court of a State or Territory are instituted and determined in that Court, whilst providing for the determination by one court of Federal and State matters in appropriate cases ... Whatever way the pleadings are dressed up in the Federal Court, this is an ordinary building case based upon common law claims of breach of contract and negligence and a statutory claim of misrepresentation. It is in this Court that such actions are ordinarily instituted and defended.

The respondents say also, correctly, that there is nothing unusual about proceedings in the Supreme Court against the State or its officers; they point to the lack of any suggestion that the proceedings would not in fact be tried fairly or properly in the Supreme Court; and I was referred to Swanson v Harley (1995) 125 FLR 182 at 192, 193 as an example of a case where a court declined, in vigorous terms, to act on evidence that an applicant feared that she would not obtain justice in the Supreme Court owing to alleged influence of another party within the legal profession in the State. Finally, the respondents referred me to cases, of which Bankinvest AG v Seabrook (1988) 14 NSWLR 711 and Dawson v Baker (1994) 120 ACTR 11 are examples, where matters going to the connection between a proceeding and a particular jurisdiction have been held to be significant where the question is whether the proceeding should be transferred from the Supreme Court of one State or Territory to the Supreme Court of another; but considerations of that sort are of little importance where the question, as to which court may more conveniently determine a matter, arises as between the Supreme Court of a State or Territory and this court which is a national Court and can, and does, sit in all States and Territories. There can be no doubt that ordinarily a quintessentially State matter such as this is appropriately determined by the Supreme Court of the State concerned. The question is whether, in the particular circumstances to which the applicants refer, and having regard to the matters I am required to take into account, I should conclude that it is not more appropriate that these proceedings be determined by the Supreme Court. It was put to me by the respondents that the evidence of Mr Abel is, in a sense, opinion evidence: it is probably more accurate to say that much of it is argumentative, going to inferences I should draw either from matters which are in evidence or from matters which are notorious and of which I may take notice. There is, as the respondents pointed out, no evidence as to the extent of any acquaintance between the Attorney‑General and any member of the Supreme Court: it is perhaps not easy to see how it would be possible, or appropriate, for an applicant to give evidence of that kind. There is no doubt, however, about the importance of the institutional connection between the Attorney‑General and the Court and I think it is proper to infer, on the material before me, that most if not all judges of the Supreme Court are likely to be acquainted, in varying degrees, with the Attorney‑General. In those circumstances it is, I think, probable that the matters of appearance and of embarrassment, to which the applicants refer, will arise if the matter is transferred to the Supreme Court. It by no means follows, of course, that the Supreme Court could not determine the proceeding: if the applicants had commenced it in the Supreme Court, no doubt that Court would have heard and determined it. But in fact the applicants have commenced the proceeding in this Court; it can be heard in this Court, in Adelaide if as seems likely that is the appropriate place, by a judge who has no acquaintance with the Attorney‑General. There is no material before me to suggest that it is likely that the matter will be heard more expeditiously in one court than in the other or that one court offers procedural or other advantages not available in the other. It is in those circumstances that I am required to answer the question, does it appear, in the interests of justice, more appropriate that this proceeding be determined by the Supreme Court than by this Court; and, in those very unusual circumstances, the answer in my view is "no". Costs Although no argument was directed specifically to the costs of the application to transfer the proceeding to the Supreme Court of South Australia, I heard submissions on costs from each party. The applicants have succeeded in relation to the amendments which they sought orally and informally, and the first and second respondents have been correspondingly unsuccessful on their motion. The respondents have also been unsuccessful in their application to have the proceeding transferred to the Supreme Court. The situation with which the Court was confronted, however, at the commencement of the hearing was not in all respects satisfactory. Matters relating to jurisdiction and amendment, though ostensibly those which were to be determined, in fact raised no issue of any substance or about which there was any real contention; and, as I suggested during argument, they were in my opinion matters which could easily have been resolved during, or at least shortly after, the directions hearing on 20 December. I made similar comments, during the hearing, about the matters concerning the identity of the third respondent, and I adhere to those comments.

If matters had been resolved in that way, it is likely that there would have been some saving of costs and an identification, substantially earlier than half way through the morning of the hearing, of what was really in issue between the parties, namely whether the proceeding should be transferred to the Supreme Court. I have, of course, the benefit of hindsight, and no doubt responsibility for the way matters developed is not to be attributed to any one party. It is evident, however, that if the applicants' application to amend (in relation to the basis on which they claimed that the Court had jurisdiction) had been made considerably earlier than the commencement of the hearing and if attention had been given to the requirements of O 10A r 5(1)(b), what was really in issue might have been identified at the outset and matters might have proceeded with greater expedition. Certainly there are reported instances of orders for costs made against a party which unsuccessfully seeks a transfer, at least where the application is "unmeritorious": Mansell v Cumming at 644 per Northrop J. Although, in the peculiar circumstances of this case, I have held that the respondents' application should not succeed, I would by no means describe it as "unmeritorious". I think, in all the circumstances, that justice is best served by an order that the parties' costs of the applicants' informal application to amend, the first and second respondents' notice of motion and the application to transfer the proceeding be costs in the proceeding. Orders Accordingly, the orders of the Court are that: 1. The applicants' motion for leave to amend the application, by substituting for "Section 4 Subsection 2 of the Jurisdiction of Courts (Cross‑Vesting) Act 1987 of the Commonwealth" the words "subs 4(1) of the Jurisdiction of Courts (Cross‑Vesting) Act 1987 of South Australia and subs 9(2) of the Jurisdiction of Courts (Cross‑Vesting) Act 1987 of the Commonwealth", is granted. 2. The first and second respondents' notice of motion filed on 19 December 1996 is dismissed.

The respondents' application that, under subs 5(4) of the Jurisdiction of Courts (Cross-Vesting) Act 1987 (Cth), the proceeding be transferred to the Supreme Court of South Australia, is refused. 4. The parties' costs of the motions and application referred to in orders 1, 2 and 3 will be costs in the proceeding. I certify that this and the preceding 14 pages are a true copy of the Reasons for Judgment of the Honourable Justice Lehane. Associate: Dated: 25 February 1997 Heard: 20 February 1997 Place: Adelaide Decision: Sydney Appearances:Mr K Esser of counsel instructed by Jamison & Associates appeared for the applicant. Mr J Daenke of counsel instructed by Daenke O'Donovan appeared for the first and second respondents. Mr J Short of counsel instructed by Minter Ellison appeared for the third respondents.

Jurisdiction of Courts (Cross‑Vesting) Act 1987(Cth)

Jurisdiction of Courts (Cross‑Vesting) Act 1987(SA)

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