What happened
Ranjit Shamsher Jung Bahadur Rana alleged that Darda and Nina Gregurev had authored material about him that was defamatory. That material was said to have been published on various websites hosted by Google Inc and to appear in Google search results. In October 2014 Mr Rana commenced proceedings in the Federal Court against Google Inc and the Commonwealth. The claims against Google Inc were framed in defamation, negligence and contravention of ss 18 and 21 of the Australian Consumer Law (ACL). The claim against the Commonwealth sought judicial review under s 5 of the Administrative Decisions (Judicial Review) Act 1977 (Cth) of a decision by the Information Commissioner under s 41 of the Privacy Act 1988 (Cth) not to investigate Google for breach of Mr Rana’s privacy. That judicial review claim was resolved by consent orders on 2 February 2015 which set aside the Commissioner’s decision and remitted the complaint for redetermination ([1]-[9]).
Earlier proceedings brought in 2012 had been discontinued after the claim against Google’s Australian subsidiary was dismissed (Rana v Google Australia Pty Ltd [2013] FCA 60). In the 2014 proceeding Mr Rana required leave under s 21 of the Defamation Act 2005 (SA) to commence against Google Inc. Mansfield J granted leave to file amended documents but stood the applications over. The amended originating application and statement of claim filed on 14 June 2016 named Google Inc, the Gregurevs and the Commonwealth, although leave to join the additional parties had not been formally sought. The defamation pleas were directed at the Gregurevs’ material but adequately cross-referenced Google’s alleged publication of it. The ACL claims were, however, “discursive and in many respects difficult to interpret” and attempted to link Google’s terms of service, alleged breaches of contract, and failure to remove the defamatory material to misleading or deceptive conduct and unconscionable conduct ([7]-[12]).
The primary judge struck out the ACL claims as embarrassing and concluded that, without a viable federal claim, the Court lacked jurisdiction to hear the defamation claims. The negligence claim was not separately addressed but would have fallen with the defamation claims. The entire proceeding was dismissed for want of jurisdiction on 25 January 2017 (Rana v Google Inc (No 2) [2017] FCA 17). Leave to appeal was granted on 19 May 2017. The Full Court (Allsop CJ, Besanko and White JJ) heard the appeal on the papers and delivered judgment on 28 September 2017. The Court held that the claims formed one justiciable controversy within federal jurisdiction from the outset. The appeal was allowed, the primary judge’s orders were set aside, the two outstanding interlocutory applications were dismissed, and the matter was remitted for case management ([5]-[6], [45]).
Why the court decided this way
The Full Court began by restating the constitutional and statutory framework. The Federal Court exercises federal jurisdiction derived from ss 75 and 76 of the Constitution as vested by laws made under s 77. Section 39B(1A)(c) of the Judiciary Act 1903 (Cth) confers jurisdiction in any matter arising under any laws made by the Parliament. Central to the analysis is the concept of a “matter”—the justiciable controversy between the parties arising out of a common substratum of facts ([15]-[17]).
Drawing directly on the joint judgment of Gummow and Hayne JJ in Re Wakim; Ex parte McNally [1999] HCA 27; 198 CLR 511 at 585-586 [139]-[140], the Court emphasised that the question is one of “impression and practical judgment” informed by what the parties have done, the relationships between them, and the laws attaching rights or liabilities to their conduct. Different claims form one matter if they arise out of “common transactions and facts” or “a common substratum of facts”, even if the facts do not wholly coincide. Claims that are “completely disparate” or “distinct and unrelated” do not ([16]).
The Court held that Mr Rana’s ACL claims, though “lacking in clarity and coherence” and properly struck out as embarrassing ([11], [28]-[29]), were not colourable. A colourable claim is one made for the improper purpose of fabricating jurisdiction. An embarrassing pleading does not equate to colourability ([22], [38]). Because a non-colourable federal claim had been made, the whole matter—including the defamation and negligence claims that shared the same underlying facts about the Gregurevs’ publications, Google’s hosting of them, and Google’s refusal to remove them—was within federal jurisdiction from the commencement of the proceeding ([25]-[27], [36]-[38]).
The Court rejected the primary judge’s view that the defects in the ACL pleas made it “difficult, if not impossible” to determine whether the claims formed one controversy. Examination of the pleading, despite its incoherence, disclosed a common substratum: the defamatory material, Google’s contractual terms of service said to have been breached by the failure to remove it, the alleged misleading representations about the utility of Google’s services, and the consequent damage to reputation and business opportunity ([28]-[35]). The negligence claim was expressly included in the same controversy because it too rested on Google’s failure to remove the material ([12], [38]).
Even if the ACL claims had not attracted jurisdiction, two further bases existed. First, the original judicial review claim against the Commonwealth, although resolved, had formed part of the same controversy and kept the entire matter within federal jurisdiction; resolution of a federal claim does not cause the Court to lose jurisdiction over the balance of the matter (Moorgate Tobacco Co Ltd v Philip Morris Ltd [1980] HCA 32; 145 CLR 457; Unilan Holdings Pty Ltd v Kerin [1993] FCA 605; 44 FCR 481) ([39]). Second, s 9(3) of the Jurisdiction of Courts (Cross-Vesting) Act 1987 (Cth) confers on the Federal Court, as federal jurisdiction, the jurisdiction of the Supreme Courts of the Australian Capital Territory and Northern Territory in defamation. Given the electronic nature of the publications and the allegation that the material had been downloaded by thousands of people in Australia, it would not be difficult to allege publication in one of those Territories ([40], citing Crosby v Kelly [2012] FCAFC 96; 203 FCR 451).
The primary judge had therefore erred in dismissing the proceeding for want of jurisdiction. The matter was remitted for determination of the applications for leave to commence, leave to serve outside the jurisdiction, and leave to join additional respondents, and for any necessary repleading ([41]-[42], [45]).
Before and after state of the law
Before this decision the law was already clear that a non-colourable federal claim attracts jurisdiction over the entire justiciable controversy. The authorities cited—Felton v Mulligan [1971] HCA 39; 124 CLR 367, Moorgate Tobacco, Burgundy Royale Investments Pty Ltd v Westpac Banking Corporation [1987] FCA 686; 18 FCR 212, Unilan Holdings v Kerin, and Re Wakim—stood for the proposition that once federal jurisdiction is engaged the Court does not lose it if the federal claim is struck out, abandoned or resolved. The distinction between accrued jurisdiction (non-federal claims within the one matter) and associated jurisdiction under s 32 of the Federal Court of Australia Act 1976 (Cth) (federal claims for which jurisdiction has not otherwise been conferred) had also been clarified in Philip Morris Inc v Adam P Brown Male Fashions Pty Ltd [1981] HCA 7; 148 CLR 457, Australian Securities and Investments Commission v Edensor Nominees Pty Ltd [2001] HCA 1; 204 CLR 559 and, most recently, Rizeq v Western Australia [2017] HCA 23; 91 ALJR 707 ([17], [20]-[23]).
What the primary judge appeared to have done was to treat the striking out of the ACL claims as retrospectively removing jurisdiction. The Full Court’s judgment reaffirms that this is not the law. Jurisdiction is not contingent on the ultimate success or adequate pleading of the federal claim; it is anterior and, once attracted, encompasses the whole matter ([21], [31]).
After the decision the law remains unchanged in principle but is reinforced in its application to poorly pleaded cases. Practitioners are reminded that an embarrassing pleading does not render a federal claim colourable. The judgment also usefully collects the multiple ways a matter can “arise under” a law of the Parliament ([18]) and confirms that s 9(3) of the Cross-Vesting Act provides a separate, though secondary, source of jurisdiction for defamation claims in the Federal Court ([24], [40]). The emphasis on “practical judgment” on the basis of the substance of the controversy, even where pleadings are “less than coherent”, lowers the bar for surviving an early jurisdictional challenge where a federal statute is genuinely invoked.
Key passages with plain-English translation
Paragraph [16] quotes Re Wakim at length: “The central task is to identify the justiciable controversy… What is a single controversy ‘depends on what the parties have done, the relationships between or among them and the laws which attach rights or liabilities to their conduct and relationships’.” In plain English: ignore the technical labels on each cause of action; look at the real dispute between the people involved and the facts that tie the claims together. If the facts overlap substantially, it is one matter.
Paragraph [21] states: “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.” Translation: making a genuine federal claim (even if it is badly drafted or later thrown out) locks the whole dispute into the Federal Court. The Court does not hand the non-federal parts back to the State courts.
Paragraph [26]: “The defamation claims remaining are in federal jurisdiction and part of the matter. Jurisdiction does not rest on any application of s 32. It is not contingent upon the ACL claim being adequately pleaded.” Translation: the defamation claim does not need its own separate federal hook, nor does the ACL claim need to be perfectly drafted. The shared facts pull everything into federal jurisdiction.
Paragraph [38]: “As a matter of practical judgment the ACL claims and the defamation claim form part of the same justiciable controversy. It could not be said that they are colourable… An embarrassing pleading does not make a claim colourable.” Translation: the judge must stand back and ask whether the claims are really about the same complaint. Poor drafting is not the same as dishonesty about jurisdiction.
Paragraph [39] notes that the resolved judicial review claim against the Commonwealth “also operates to bring the entirety of the matter into federal jurisdiction” and that resolution “does not mean that this Court loses jurisdiction”. Translation: once the whole dispute is inside federal jurisdiction, later settlement of one piece does not eject the rest.
What fact patterns trigger this precedent
This precedent is triggered whenever a proceeding commenced in the Federal Court contains at least one non-colourable claim arising under a Commonwealth statute and other claims (common-law or State statutory) that share a “common substratum of facts” with that federal claim. The factual overlap need not be complete; it is enough that the claims arise out of the same underlying events, transactions or relationships, even if the legal labels differ and even if the federal claim is later struck out for want of form ([16], [29], [36]).
Typical triggers include:
- A consumer-law or competition-law claim (federal) joined with tort claims (defamation, negligence, misleading conduct causing reputational loss) arising from the same course of conduct by the defendant.
- A federal privacy or administrative-law claim against the Commonwealth or a federal officer joined with claims against private parties arising from the same facts.
- Any proceeding in which a party pleads both a statutory federal cause of action and a common-law cause of action that could have been brought in a State court, provided the facts overlap sufficiently that determination of one is factually related to determination of the other.
The precedent does not apply if the federal claim is colourable (made solely to manufacture jurisdiction) or if the claims are “completely disparate” ([16], [22]). Electronic publication cases, where material is accessible nationwide, readily satisfy the territorial requirements for cross-vested defamation jurisdiction under s 9(3) of the Cross-Vesting Act ([40]).
How later courts have treated it
The judgment itself applies and follows the High Court authorities without purporting to change them. It treats Re Wakim, Felton v Mulligan, Moorgate, Burgundy Royale and Unilan Holdings as authoritative statements of the single-matter doctrine and cites them repeatedly to reject the notion that striking out a federal claim retrospectively removes jurisdiction ([16]-[22], [38]-[39]). The Court also follows the clarification in Rizeq v Western Australia that “accrued jurisdiction” is better understood as the non-federal part of the one matter rather than a separate head of power ([17]).
The judgment’s treatment of s 32 of the Federal Court of Australia Act as conferring jurisdiction only over associated federal matters (not non-federal claims) follows Philip Morris and Edensor Nominees and is presented as consistent with the earlier Full Court decision in Elbe Shipping SA v The Ship “Global Peace” [2006] FCA 954; 154 FCR 439 ([23]). Its discussion of s 9(3) of the Cross-Vesting Act follows Crosby v Kelly without extension ([24], [40]).
Because the decision is from 2017 and the present extract contains no subsequent cases, the judgment’s treatment of precedent is one of orthodox application rather than innovation. It reinforces the principle that practical judgment on the substance of the controversy prevails over pleading defects, a proposition later courts can be expected to apply when faced with similarly incoherently drafted but genuinely federal claims.
Still-open questions
The judgment leaves open whether, on remittal, leave to replead the ACL claims should be granted. The primary judge had refused leave on the basis of Mr Rana’s concession that he could not improve the pleading; the Full Court expressly refrained from criticising that approach given the surrounding circumstances ([11], [42]). The extent to which a self-represented litigant’s further opportunities to replead will be curtailed therefore remains a case-management question for the primary judge.
The Court did not finally decide whether the defamation claim, considered in isolation, would satisfy the territorial requirements of the Cross-Vesting Act. It observed only that “the electronic nature of the alleged publication suggests that would not be a difficult allegation to make” and noted the original pleading’s references to downloads by thousands of Australians ([40]). Whether a bare allegation of downloading in the ACT or NT is sufficient, or whether more particularised evidence of publication within the Territory is required, is left for another day.
The boundary between an embarrassing but non-colourable federal claim and a colourable one made solely to fabricate jurisdiction is acknowledged but not exhaustively mapped. The Court states that an embarrassing pleading does not make a claim colourable ([38]), yet the outer limits of what constitutes an improper purpose remain a question of fact and degree.
Finally, the interaction between the Privacy Act complaint, the resolved ADJR proceeding, and the Google claims is accepted as forming one controversy, but the precise weight to be given to a resolved federal claim against a different respondent in later proceedings is not spelt out beyond the general principle derived from Moorgate and Burgundy Royale that jurisdiction, once attracted, is not lost ([39]). These nuances will require further elucidation in subsequent cases.