Stack v Coast Securities

In relation to the proceedings between Bargal and Janet Ann Force, the position seems to me to be different. There, the relief sought in the Federal Court (in application G18) is much more limited in character - it is simply to restrain Bargal from taking steps to complete the contract of sale or to claim damages for its breach, and to order Bargal to pay the costs of the Supreme Court proceedings. In so far as the applicant's case in the Federal Court rested on the contention that the Supreme Court had no jurisdiction, it has failed. Moreover, it appears that no cross claim has been made by Bargal in the Federal Court. In the present state of the proceedings, all the questions at issue cannot be determined in the Federal Court. In the present state of the proceedings, all the questions at issue cannot be determined in the Federal Court, and I can see no reason why the proceedings in the Supreme Court (No. 6333) should not be allowed to proceed.

Declare that the Federal Court of Australia has jurisdiction to hear and determine all the questions raised in applications Nos. G8, G9, G10 and G18.

Remit all four applications to the Federal Court of Australia. Direct that applications G9, G10 and G18 be stayed until the final determination in the Supreme Court of Queensland of actions 182 of 1983, 180 of 1983 and 6333 of 1982 respectively or earlier order.

Declare that the Supreme Court of Queensland has jurisdiction to hear and determine actions Nos. 180 of 1983, 182 of 1983, 349 of 1983 and 6333 of 1982.

Remit action No. 6333 of 1982 to the Supreme Court of Queensland.

Order that the costs of removal to and proceedings in this Court in all cases be paid by the Attorney-General of the Commonwealth.

These proceedings, which have been removed from the Federal Court into this Court by an order made under s. 40 of the Judiciary Act 1903 Cth, raise yet another problem as to the respective jurisdictions of our superior courts. The only element of novelty in this instance - and it is an unwelcome element - is that, if the applicants' argument succeeds in its entirety, its success will enable two of the applicants to take advantage of the jurisdictional complexities so as to nullify, on the grounds of lack of jurisdiction, a judgment given against them in the Supreme Court of Queensland, a judgment which is the subject of a pending appeal to the Full Court.

The respondent, Coast Securities (No. 9) Pty. Ltd., a development company, undertook the development of a property at Palm Beach on the Gold Coast on which it erected a home unit building known as "Princess Palm". Each of the applicants entered into a contract with the respondent to purchase a home unit in the building before its construction was completed. Completion of the contracts fell due in December 1982. Each contract, it is alleged, was induced by the making of misrepresentations. Each applicant gave notice of rescission in December 1982.

In January 1983 the respondent commenced actions in the Supreme Court of Queensland for specific performance. In two of the actions it sued guarantors as well as the purchaser. On 18 February 1983 in two of the actions (Nos. 182 of 1983 and 180 of 1983 which correspond to causes Nos. G9 and G10 of 1983 in the Federal Court) the Supreme Court (McPherson J.) refused to make an order for a stay and, on application for summary judgment, decreed specific performance without fixing any date for completion or making consequential orders. In seeking a stay and resisting summary judgments, the two applicants who were parties to the proceedings before McPherson J. relied on evidence as to the making of material misrepresentations by or on behalf of the respondent which induced them to enter into the contracts. His Honour held that the representations were not statements of present fact, but statements as to a future event, and that in so far as any misrepresentation was a statement of fact, it could not justify a rescission for the reasons given in Life Insurance Co. of Australia Ltd. v. Phillips [21] . He acknowledged that the misrepresentations might afford relief in the Federal Court under the Trade Practices Act 1974 Cth, as amended, ("the Act") and granted a limited stay of execution to enable the two applicants to move for an injunction or stay. Appeals from his Honour's orders for summary judgment are pending in the Full Court of the Supreme Court.

On 18 February 1983, which was the day on which the Supreme Court made decrees for specific performance in two of the actions, applications Nos. G8, G9 and G10 were filed in the Federal Court, evidently before the decrees for specific performance were pronounced. Apparently no application had then been made for summary judgment in action No. 349 of 1983 which corresponds with cause No. G8 of 1983 in the Federal Court, though it appears that the respondent has now applied for summary judgment. In the applications filed in the Federal Court in all three proceedings it is alleged that misrepresentations were made by or on behalf of the respondent which contravened ss. 52, 53(aa) and 53A of the Act. Each application seeks orders declaring the contract to be "void ab initio", for the refund of the deposit paid, for damages and for an injunction restraining the respondent from continuing the Supreme Court proceedings and in two cases from enforcing the Supreme Court judgment. Each of the applicants applied for interim injunctions in the terms of those sought in the statements of claim.

In the application for interlocutory relief in the Federal Court, as in the Supreme Court, the focal points of dispute were the making of the alleged representations, their materiality and falsity. The making of the contract, payment of the deposits, non-performance of the contracts by the applicants and the giving of the rescission notices were matters of common ground. The evidence adduced as to the matters in issue in the Federal Court was identical to the evidence presented in the Supreme Court in the two actions in which an order for summary judgment was made. It seems that if action No. 349 of 1983 is to proceed in the Supreme Court the evidence presented in that action will be the same as that already presented in the Federal Court.

On 23 March 1983 Fitzgerald J., who heard the interlocutory applications, decided that the applicants had made out a prima facie case for relief under the Act, on the footing that the representations amounted to misleading or deceptive conduct under s. 52. He considered that on the balance of convenience interim relief should not be granted, though he stated that the applicants could reapply if it should become necessary or appropriate to do so. Having concluded that the Federal Court had jurisdiction to entertain and determine the applicants' case for relief under the Act, but without deciding whether that jurisdiction was exclusive so as to deprive the Supreme Court of jurisdiction to determine the proceedings before that Court, he made orders by way of directions. He directed that the respondent file its defence and cross-claim in each application on or before 25 March 1983.

The issue for this Court is whether Fitzgerald J. was correct in deciding that the Federal Court had jurisdiction to entertain any part of the three applications except the claims for contraventions of Pt V of the Act and damages for such contraventions.

An examination of this question naturally begins with s. 86 of the Act which invests jurisdiction in the Federal Court "to hear and determine actions, prosecutions and other proceedings under this Part" and makes that jurisdiction "exclusive of the jurisdiction of any other court" except the High Court. The expression "actions, prosecutions and other proceedings" in s. 86 confers on the Federal Court jurisdiction in relation to "matters" arising under a law made by the Parliament (s. 76(ii)). Section 86 is therefore a law which defines the jurisdiction of a federal court with respect to "matters" mentioned in s. 76(ii) pursuant to s. 77(i): see Philip Morris Inc. v. Adam P. Brown Male Fashions Pty. Ltd. ("Philip Morris") [22] ; Fencott v. Muller [23] .

1. (1981) 148 C.L.R. 457, at p. 507. 2. (1983) 152 C.L.R. 570.

It is common ground in the present case that the jurisdiction conferred on the Federal Court by s. 86 embraces matters arising under ss. 52, 53(aa), 53A and 82. The question is whether the ambit of the jurisdiction thereby conferred includes the hearing and determination of all the issues raised and the claims made in the statements of claim filed in the Federal Court, when, as we have seen, the jurisdiction of the Supreme Court has been earlier invoked, and in two cases exercised, in relation to the claims made in the Federal Court, except the claims for declarations as to contraventions of Pt V of the Act and damages for such contraventions.

In argument before us much has been made of the terms in which s. 86 grants jurisdiction to the Federal Court, viz., "to hear and determine actions, prosecutions and other proceedings under this Part". These words, it is suggested, limit the jurisdiction so as to exclude any jurisdiction to hear and determine non-federal claims. This, with respect, is to fasten upon the words as if they stand in lonely isolation, divorced from Ch. III of the Constitution and the dispositions which it makes for the exercise of judicial power in the resolution of litigious controversies. Moreover, it is to pay scant attention to the legislative design involving the creation of the Federal Court as a superior court and the vesting in it of jurisdiction in relation to claims arising under the Act, claims which generally form but part of an entire litigious controversy. And it ignores the recent decisions in Philip Morris and Fencott v. Muller which establish that the jurisdiction that s. 86 confers on the Federal Court extends to non-federal aspects of the controversy of which the federal claim forms an integral part.

The source of the Parliament's legislative power to create, and confer jurisdiction on, a federal court is to be found in ss. 71, 75, 76 and 77 of the Constitution. The power to create federal courts comes from s. 71 which vests the judicial power of the Commonwealth in this Court "and in such other federal courts as the Parliament creates, and in such other courts as it invests with federal jurisdiction". The power to confer jurisdiction on a federal court comes from s. 77(i) which enables Parliament to define the jurisdiction of any federal court with respect to any of the "matters" (a) in which this Court is given original jurisdiction by s. 75, and (b) with respect to which the Parliament is given power by s. 76 to confer original jurisdiction on this Court.

It has been accepted, at least since In re Judiciary and Navigation Acts [24] , that the statement in ss. 75 and 76 of the matters in which the High Court has, or may be given, jurisdiction is "intended as a delimitation of the whole of the original jurisdiction which may be exercised under the judicial power of the Commonwealth, and as a necessary exclusion of any other exercise of original jurisdiction" per Knox C.J., Gavan Duffy, Powers, Rich and Starke JJ. [25] . This proposition, accurate though it is, does not tell us what is the content of a "matter" for the purposes of the exercise of federal jurisdiction. Their Honours later said [25] , "we do not think that the word "matter" in s. 76 means a legal proceeding, but rather the subject-matter for determination in a legal proceeding". Although this statement did not seek to define the content of a "matter" for the purposes of s. 76(ii), the generality of the comment suggests that their Honours had in mind the controversy between the parties which arose for determination in the proceedings.

1. (1921) 29 C.L.R. 257. 2. (1921) 29 C.L.R., at p. 265. 3. (1921) 29 C.L.R., at p. 265.

It is convenient to put this consideration to one side until we have examined the course of decisions in this Court which establish that the content of a "matter" in s. 76 and that the scope of federal jurisdiction in a proceeding are not restricted to the determination of the federal claim or cause of action in the proceeding, but extend beyond that to the litigious or justiciable controversy between parties of which the federal claim or cause of action forms part. We need to recollect - and this follows from the first comment which we have quoted from In re Judiciary and Navigation Acts - that a court does not begin to exercise federal jurisdiction until a "matter" within ss. 75 or 76 is raised in the proceedings and that the federal jurisdiction then exercised by the court is co-extensive with the content of that "matter". As Stephen, Mason, Aickin and Wilson JJ. pointed out in Moorgate Tobacco Co. Ltd. v. Philip Morris Ltd. [27] :

The extent, if any, to which a State court in a given case is exercising non-federal, as well as federal, jurisdiction necessarily depends upon the limits of the legislative power to invest State courts with federal jurisdiction under s. 77(iii.) of the Constitution. 1. (1980) 145 C.L.R. 457, at p. 481.

The stream of authority commences with the cases in which this Court, exercising jurisdiction in a "matter" arising under the Constitution and s. 30 of the Judiciary Act 1903 Cth, decided non-federal claims which also formed part of the controversy between the parties: see Carter v. Egg and Egg Pulp Marketing Board (Vict.) [28] ; R. v. Carter; Ex parte Kisch [29] ; Hopper v. Egg and Egg Pulp Marketing Board (Vict.) [30] ;R. v. Bevan; Ex parte Elias and Gordon [31] ; Parton v. Milk Board (Vict.) [32] . In each of these cases the claim based on the Constitution and the non-federal claims which were decided involved a single claim to relief: see the discussion in Philip Morris [33] , in which it is noted that in Carter v. Egg and Egg Pulp Marketing Board (Vict.) - the Court dealt with the claim for a declaration of the invalidity of reg. 37 notwithstanding that it contained no federal element and that its determination was not necessary for the decision of the constitutional question.

1. (1942) 66 C.L.R. 557. 2. (1934) 52 C.L.R. 221. 3. (1939) 61 C.L.R. 665, at pp. 673, 680-681. 4. (1942) 66 C.L.R. 452, at pp. 464-466, 480-482. 5. (1949) 80 C.L.R. 229, at pp. 257-258. 6. (1981) 148 C.L.R., at p. 511.

The second group of cases is that dealing with the exercise by State courts of federal jurisdiction in matters arising under a law made by the Parliament, pursuant to s. 76(ii) of the Constitution. Felton v. Mulligan [34] decided that, for the purposes of ascertaining whether the State court was exercising federal jurisdiction, the issues of law arising on the application could not be severed from the issues of law raised by the defence to that application, so that if the defence had its origin in federal law, the entire jurisdiction exercised by the State court was federal. It was not a case in which the application was put on two grounds, one federal, the other non-federal: see p. 410, per Walsh J. However, Barwick C.J. [35] observed that, if federal jurisdiction was attracted by the defence based on federal law, the jurisdiction "exercised by the Supreme Court throughout the case will be federal unless perhaps there is some completely disparate claim constituting in substance a separate proceeding".

1. (1971) 124 C.L.R. 367. 2. (1971) 124 C.L.R., at p. 373.

And Walsh J. [36] agreed with the comment in Nelungaloo Pty. Ltd. v. The Commonwealth [37] that "nothing is so apt to promote confusion and difficulty as an attempt to dissect out of an entire legal question one of the component issues it involves and to submit it for decision in artificial isolation".

1. (1971) 124 C.L.R., at p. 410. 2. (1952) 85 C.L.R. 545, at p. 571.

The unanimous decision in Moorgate [38] demonstrated that the content of "matter" in s. 76(ii) extends to non-federal aspects of the justiciable controversy between the parties when both aspects, federal and non-federal, rest upon a common substratum of facts. The applicant's case was based principally on contract, trust or breach of fiduciary obligation and unfair competition. However, the applicant did not confine its case to these grounds and to the relief which these grounds might afford, dissociated from issues arising under the Trade Marks Act 1955 Cth, as amended, and from relief directed to obtaining rights under that statute [39] . All the members of the Court held that it was not possible to isolate a non-federal question which was involved in the case [40] Stephen, Mason, Aickin and Wilson JJ. cited with approval the remarks of Barwick C.J. and Walsh J. in Felton v. Mulligan [41] , which we have already quoted.

1. (1980) 145 C.L.R. 457. 2. (1980) 145 C.L.R., at p. 479. 3. (1980) 145 C.L.R., at pp. 468, 472-473. 4. (1971) 124 C.L.R., at pp. 373, 410.

Philip Morris [42] , the next decision, is particularly important because it relates to s. 86 of the Act. The reasons of the members of the Court who constituted the majority in Philip Morris did not coincide. Barwick C.J., Gibbs, Stephen, Mason and Murphy JJ. all held that the Federal Court had jurisdiction to hear and determine non-severable claims having an origin in non-federal law, e.g., passing-off. Although the majority was united in conclusion, it was not completely united in identifying the source of this jurisdiction. Various sources were discussed, including s. 86 of the Act and s. 32 of the Federal Court of Australia Act 1976 Cth. Four members of the Court, Barwick C.J. and the dissentients, considered that s. 32 was partly or wholly invalid or inoperative, and the actual majority (Barwick C.J., Mason J., with whom Stephen J. agreed, and Murphy J.) expressed different views as to its effect and operation. These differences may be disregarded because the conclusion reached by the majority was in no way dependent on the validity or operation of s. 32. Common to each of the majority judgments was the view that a Commonwealth law conferring jurisdiction on a federal court under s. 77(i) of the Constitution with respect to proceedings under a federal statute, such as s. 86, carries with it authority to determine non-federal aspects of the controversy between the parties of which the federal element forms a significant part (per Barwick C.J. [43] ; per Mason J. [44] ; per Murphy J. [45] ). Although Barwick C.J. and Mason J., in reaching this conclusion, relied on the content of the word "matter", whereas Murphy J. was disinclined to attach much weight to it, the nature and object of the provisions made by Ch. III respecting the exercise of judicial power were a common element in the majority reasoning.

1. (1981) 148 C.L.R. 457. 2. (1981) 148 C.L.R., at p. 475. 3. (1981) 148 C.L.R., at p. 507. 4. (1981) 148 C.L.R., at p. 521.

In Fencott v. Muller [46] the Court held that the Federal Court had jurisdiction to determine the whole controversy or matter of which an issue under the Act constituted part. The majority judgment merely accepted and applied the decision in Philip Morris that the grant of jurisdiction in s. 86 carried with it jurisdiction to hear and determine the whole matter or controversy, without stating that the source of the constitutional power to vest the Federal Court with complete jurisdiction to deal with that matter or controversy was to be found in Ch. III, especially ss. 71, 75, 76 and 77, and that the source of the Federal Court's jurisdiction was that, viewed in context, the grant of jurisdiction contained in s. 86 should be construed as carrying with it jurisdiction to deal with the whole controversy or matter of which the subject-matter of the particular proceedings referred to in the section formed an integral part. So much was assumed. On this assumption, particular consideration was given to the question whether the non-federal aspects, together with the issue under the Act, formed a single matter or controversy, and to the role of the Federal Court in determining such a question.

The review of the authorities which we have undertaken enables us to say that the extended concept of "matter" where it appears in ss. 75-77 of the Constitution, especially in relation to s. 76(ii), takes its shape and content from the subject-matter of ss. 75-77 and the object which they seek to attain - delimitation of the content of federal jurisdiction and provision for its exercise by federal and State courts, with the object of making effective disposition of justiciable controversies by the means chosen by Parliament. A central element in this design for the exercise of the judicial power of the Commonwealth is the power given to Parliament to make a choice between conferring federal jurisdiction on federal courts which it creates and investing federal jurisdiction in State courts. There is no indication in Ch. III that the making of this choice was to be strongly weighted against the creation of federal courts in favour of investing federal jurisdiction in State courts, as it would be if the Constitution were to deny power to give authority to federal courts to decide the whole of a single justiciable controversy of which a federal issue forms an integral part. It would be contrary to the advice of the Judicial Committee in Nelungaloo [47] , cited by Walsh J. in Felton v. Mulligan [48] , to approach the provisions in Ch. III on the footing that they require courts exercising federal jurisdiction "to dissect out of an entire legal question one of the component issues it involves and to submit it for decision in artificial isolation".

1. (1952) 85 C.L.R., at p. 571. 2. (1971) 124 C.L.R., at p. 410.

That approach would, contrary to settled authority, preclude this Court in its original jurisdiction from deciding non-severable claims having their origin in State law. It would, again contrary to settled authority, restrict Parliament to the creation of federal courts lacking jurisdiction to determine such claims, thereby inhibiting their capacity as effective elements in the court system for which Ch. III makes provision. The preferable approach from the viewpoint of principle is that established by authority, namely, to regard Ch. III as empowering the Parliament to make sensible and practical dispositions for determination of justiciable controversies by either of the two means for which Ch. III makes provision.

The first limb of s. 86, being an exercise of the powers conferred by the constitutional provisions to which we have referred, must be read in the light of them. So read, it confers jurisdiction on the Federal Court to determine the non-federal aspects of a single justiciable controversy of which the issues rarised under the Act form an integral part. There are two constituent elements in the jurisdiction which is thereby conferred: the first element comprises the federal issues which arise for determination under the federal law, e.g., the issues which arise in these cases under ss. 52, 53(aa) and 53A of the Act and damages for contravention; the second element comprises the non-federal issues, the suggestion here being that the issues arising in the actions for specific performance in the Supreme Court are non-federal aspects of a single controversy of which the federal issues form an integral part. For want of a better term it is convenient to refer to this second element as "accrued jurisdiction".

In this, as in other cases, the recurrent problem is to identify what it is that falls within the Federal Court's accrued jurisdiction. The majority judgment in Fencott v. Muller [49] provides this assistance in reaching an answer:

What is and what is not part of the one 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. The scope of a controversy which constitutes a matter is not ascertained merely by reference to the proceedings which a party may institute, but may be illuminated by the conduct of those proceedings and especially by the pleadings in which the issues in controversy are defined and the claims for relief are set out. But in the end, it is a matter of impression and of practical judgment whether a non-federal claim and a federal claim joined in a proceeding are within the scope of one controversy and thus within the ambit of a matter. Barwick C.J. in Philip Morris [50] had expressed a similar idea, stating that the exercise of the accrued jurisdiction "is discretionary and not mandatory". In expressing this opinion, Barwick C.J. expressly acknowledged that the Federal Court had a discretion to allow the non-federal claims to be determined in a State court. His Honour was speaking with particular reference to the exercise by the Federal Court of the jurisdiction conferred by s. 86. 1. (1983) 152 C.L.R., at p. 608. 2. (1981) 148 C.L.R., at p. 475.

It is for the Federal Court to determine how the discretion should be exercised in the present causes. In exercising this discretion it will have regard to the considerations mentioned in Fencott v. Muller. In ordinary circumstances the Federal Court would also have regard to the fact that it is the one court with jurisdiction to resolve the whole of the controversy of which the federal issues are an element: see Philip Morris [50] per Barwick C.J. Here the significance of this factor is substantially diminished, if not eliminated, by the summary judgments already delivered in two of the Supreme Court actions. Obviously there is no point in the Federal Court exercising a discretion to determine non-federal issues which have already been determined by the Supreme Court, subject to the pending appeals. The Supreme Court proceedings have resulted in judgments which, unless upset on appeal, constitute determinations of the non-federal issues which are binding on the parties.

The third action stands in a somewhat different position. There is certainly stronger ground for the Federal Court to exercise its discretion in favour of exercising its accrued jurisdiction in relation to matters arising in the Supreme Court action. The matter should, however, be left to the Federal Court to determine in the light of the material presented to it.

In expressing the view that there is no point in the Federal Court exercising its accrued jurisdiction in relation to issues already determined by the Supreme Court in the two actions which have proceeded to judgment, we reject the suggestion that the making of a claim by the applicants under the Act or the commencement of proceedings in the Federal Court to enforce such a claim deprived the Supreme Court of jurisdiction in the three actions. The question here relates not to the ambit of the jurisdiction conferred upon the Federal Court by s. 86, but to the extent to which that jurisdiction is made exclusive by that section. It is a question which has not previously arisen in this Court. There is a strong argument that the two limbs in s. 86, namely that conferring jurisdiction and that making jurisdiction exclusive, should be regarded as co-extensive so that the entire jurisdiction conferred on the Federal Court, including accrued jurisdiction, is made exclusive. However, in our opinion this is not the correct construction of s. 86. The reference to "that jurisdiction" which is made exclusive should be read as a reference to the jurisdiction conferred, other than the accrued jurisdiction.

To say the least of it, it is highly improbable that Parliament intended by the second limb of s. 86 to deny to State courts the exercise of jurisdiction in relation to issues which fall within the Federal Court's accrued jurisdiction merely because they are incidental to a determination by that Court of issues arising under the Act. To attribute that intention to the section would yield complex consequences resulting in the loss of jurisdiction by a State court at any stage of a proceeding, no matter how late, when it is perceived that the proceeding involves an issue which is incidental or related to an issue arising under the Act. Problems of this kind have beset the exercise of federal jurisdiction in the past. Thus far, however, they have not resulted in the entire loss of jurisdiction by a State court; the loss has been confined to State jurisdiction which has been replaced by federal jurisdiction and in the exercise of that jurisdiction the State court has been able to determine the issues in the proceeding before it. Here the result would be to deprive the State court of its jurisdiction to determine the case at all, because, if the second limb of s. 86 has the effect contended for, it deprives the State court of any jurisdiction, State and federal. Accordingly we prefer the view that the second limb of s. 86 does not make the accrued jurisdiction of the Federal Court exclusive. We would add that it is not unlikely that the draftsman intended to achieve this result. It may well have been thought, albeit incorrectly in view of the judgments in Philip Morris, that s. 32 of the Federal Court of Australia Act conferred the accrued jurisdiction in terms which contain no suggestion of exclusivity.

In the result we would remit the three actions to the Federal Court.

The proceedings in this Court comprise an action in the Supreme Court of Queensland and a cause in the Federal Court which have been removed by orders made under s. 40 of the Judiciary Act 1903 Cth. They raise questions similar to those which arose in Stack v. Coast Securities (No. 9) Pty. Ltd.

The action in the Supreme Court is for specific performance. The plaintiff is Bargal Pty. Ltd., the vendor under a contract for sale of land. The defendant is the purchaser, Janet Ann Force. On 17 February 1983 Bargal made application for summary judgment. Before that application was dealt with the purchaser filed an application in a cause in the Federal Court (No. G18 of 1983) on 3 March 1983 claiming an injunction restraining the vendor from taking further steps to compel the purchaser to complete the contract or to claim damages from her. The application was based on the making of misrepresentations which the purchaser alleged induced her to enter into the contract and which constituted contraventions of Pt V of the Trade Practices Act 1974 Cth ("the Act"), as amended. Fitzgerald J. granted a temporary injunction on this application but this injunction was not continued after his Honour delivered judgment in Stack v. Coast Securities (No. 9) Pty. Ltd. On 23 March his Honour ordered that the purchaser file an amended statement of claim in the Federal Court by 25 March and that the vendor file and serve its defence and counterclaim (if any) by 29 March. The matter was adjourned for further directions to 30 March.

Subsequently an application by the vendor for an injunction restraining the purchaser from proceeding further with the cause in the Federal Court until determination of the Supreme Court action came before McPherson J. in the Supreme Court. In response to this application, the purchaser filed an affidavit in which she deposed to the making of representations to her and her husband by one Scott, an employee of the vendor's agents. The representations were that Scott would be able to resell the unit which was the subject of the contract before the date for settlement of the contract and that in any event the purchaser's total loss could not exceed the loss of the deposit under the contract. The purchaser asserted that she was induced to enter into the contract by the representations, that the vendor's insistence on completion was contrary to the representation and that she had given notice of rescission on 9 March 1983. McPherson J. concluded that the Federal Court did not possess exclusive jurisdiction to determine the non-federal aspects of the controversy and that exclusivity attached only to the Federal Court's jurisdiction in relation to the claim for contraventions of Pt V and damages therefor, but refrained from making any formal order for the time being to enable proceedings to be taken in this Court.

For the reasons given in our judgment in Stack v. Coast Securities (No. 9) Pty. Ltd., McPherson J. was right in holding that the Federal Court's jurisdiction to determine the non-federal aspects of the controversy is not exclusive. The consequence is that both the Federal Court and the Supreme Court have jurisdiction to proceed, the Federal Court possessing jurisdiction to determine the entire controversy, the Supreme Court possessing jurisdiction to determine the controversy shorn of its federal aspects. As it is plainly undesirable for both courts to set about a determination of the same issues, we need to decide which court is the appropriate forum. In deciding this question we have the unique advantage that the proceedings in both courts are before us. Usually a discretionary judgment of this kind is to be made by a judge of the Federal Court or a judge of the Supreme Court within the confines of the particular proceeding which is before him.

The first and paramount consideration in the exercise of this discretion is to do what is best in the interests of the litigants. In this respect the Federal Court can resolve the entire controversy; the Supreme Court cannot do so because the second limb of s. 86 of the Act stands in its way. The court which can resolve the entire controversy has an obvious advantage. Generally speaking, its determination of all the issues will be made more effectively and more expeditiously and at less expense than the resolution of the controversy which depends on determinations made by two courts in separate proceedings in which the issues are necessarily fragmented.

To offset this advantage offered by the Federal Court powerful countervailing reasons need to be shown. For example, it may appear that the federal issue is raised at such a late stage in the Supreme Court proceedings that it would be a waste of time and lead to needless expense and inconvenience not to proceed to a hearing in that Court. Or it may appear that the federal issue is so insubstantial or removed from the non-federal issues that the Supreme Court should proceed with the determination of those issues. It may even appear that the federal issue is but one of many issues making up the entire controversy and that it is indistinguishable from one of the non-federal issues in the sense that the resolution of one necessarily leads to a resolution of the other. In such a case there will be stronger ground for allowing the action to proceed in the Supreme Court.

In the present case the affidavit filed by the purchaser indicates that she has an arguable case for relief under Pt V of the Act and it is possible that if she establishes that the misrepresentations alleged constitute a contravention of Pt V she would be relieved from performance of the contract.

For these reasons the action should be remitted to the Supreme Court and the cause remitted to the Federal Court with a stay of further proceedings in the Supreme Court action until the determination of the Federal Court cause or further order by the Supreme Court.

In Philip Morris Inc. v. Adam P. Brown Male Fashions Pty. Ltd. [51] and Fencott v. Muller [52] , the Court held that the Federal Court had jurisdiction to deal with issues related to the exercise of its express exclusive jurisdiction under s. 86 of the Trade Practices Act 1974 (the Act) in order to dispose completely of any case. The question which now arises is whether the jurisdiction to deal with such related or "accrued" issues is also exclusive.

1. (1981) 148 C.L.R. 457. 2. (1983) 152 C.L.R. 570.

As I indicated in Philip Morris [53] the Federal Court has the "power and duty to decide any issue incidental to determining the matter, and has the power to determine any matter, federal or non-federal in origin, which is not completely separate and distinct from the matter which attracted federal jurisdiction. Because of the adverse consequences, Parliament should not be taken to have deprived a federal court of such jurisdiction except by the clearest words".

Parliament could have imposed on the Federal Court a duty not to determine accrued matters; that would have made the Federal Court an inefficient branch of the judiciary. Or it could have conferred an exclusive jurisdiction with respect to accrued matters; that would involve, as a practical necessity, that the court would be under a duty to exercise the jurisdiction. To deprive State courts of jurisdiction in such matters, would often prove highly inconvenient. Or it could have vested the Federal Court with non-exclusive jurisdiction with respect to accrued matters, but imposed a duty to exercise the jurisdiction; that would also sometimes be inconvenient where a State court was engaged in hearing the accrued matters.

Parliament has largely left this area open, so that the law is to a large extent decisional, and consists of the adoption of common law rules of federal judicial power. The primary goal, therefore, is the adoption of rules which facilitate the operation of the federal judicial system, and a secondary goal is the avoidance of unnecessary conflicts with the State system. In the absence of any statutory expression or necessary implication, this will best be achieved by treating the Federal Court's accrued jurisdiction as non-exclusive, and as jurisdiction which the court may, but need not, exercise.

In general, the existence in a court of an exclusive jurisdiction is a compelling reason for exercising its accrued jurisdiction. The administration of justice will generally be better if the Federal Court resolves the entire controversy, rather than that it and another court or courts make determinations in separate proceedings on fragmented issues, although there may be exceptions. The presumption therefore, is that the Federal Court should exercise its accrued jurisdiction, but this may be dislaced in exceptional circumstances.

During the case there was some discussion of the wisdom of vesting exclusive jurisdiction in federal courts, in particular the Federal Court of Australia. There are very important policy considerations which favour federal courts having exclusive jurisdiction. Much of the undoubted success of the Federal Court of Australia in dealing with specialized areas of anti-competition, consumer protection, as well as federal industrial law, is due to its having exclusive jurisdiction in those areas, generally subject to appeal only to this Court. This exclusive jurisdiction is of great public convenience. Litigants have ready access to a court experienced in these areas, with procedures specially directed to dealing with them. Concentration of the cases in the Federal Court also tends to achieve consistency in interpretation and application of federal law. Conflicts of jurisdiction between the Federal Court and other courts are marginal, and exist only until the margin is defined, usually by this Court.

If exclusive jurisdiction were abandoned and the jurisdiction of the Federal Court were vested also in State courts the benefits of a specialised court would be eroded. Also, because the jurisdiction of the Federal Court and State Courts would overlap over the whole area of the federal jurisdiction, conflicts of jurisdiction would extend across the whole area, not only between the Federal Court and State courts but between courts of one State and those of others and sometimes even between different courts of a State.

The extension of the exclusive jurisdiction of the Federal Court to deal with matters of copyright, patents, trade marks and designs, as well as passing-off by or against corporations (with the additional operation under the Act) would tend to minimize jurisdictional conflicts and to advance the public convenience. Although income tax does not present the same problems of conflict, the public convenience would also be served if the original jurisdiction which was vested in the State Courts only as an interim measure, pending the establishment of a federal court (then to be called the Superior Court of Australia) (see Parliamentary Debates (Senate), vol. 56 (1973), pp. 2301, 2596) were to be vested in the Federal Court of Australia.

I agree with Mason, Brennan and Deane JJ. that the three actions be remitted to the Federal Court, and I agree with their observations on how the Federal Court should approach the exercise of its accrued jurisdiction.

The main issue has been dealt with in Stack v. Coast Securities (No. 9) Pty. Ltd.

The purchaser has an arguable case for relief under Pt V of the Trade Practices Act 1974, which attracts the exclusive jurisdiction of the Federal Court of Australia under s. 86 of that Act. The Federal Court also has an accrued non-exclusive jurisdiction to deal with matters with are not separate and distinct from the matter within the exclusive jurisdiction. The presumption is that the Court, although not bound to exercise the accrued jurisdiction, should do so. The presumption may be displaced by showing exceptional circumstances, but these have not been shown in this case.

The action which began in the Supreme Court should be remitted there, and that which began in the Federal Court should be remitted there. Further proceedings in the Supreme Court action should be stayed until the determination of the action in the Federal Court or further order by the Supreme Court.

The facts of these cases and the issues they raise for the consideration of the Court are described in other judgments. The background and, if we may say so with respect, the genesis of the problems involved in these cases are provided by the earlier decisions of this Court in Philip Morris Inc. v. Adam P. Brown Male Fashions Pty. Ltd. [54] and Fencott v. Muller [55] . Both of those cases were concerned with defining the extent of the jurisdiction which is conferred on the Federal Court by s. 86 of the Trade Practices Act 1974 Cth, as amended, ("the Act"). That section reads as follows:

Jurisdiction is conferred on the Court to hear and determine actions, prosecutions and other proceedings under this Part and that jurisdiction is exclusive of the jurisdiction of any other court, other than the jurisdiction of the High Court under section 75 of the Constitution. 1. (1981) 148 C.L.R. 457. 2. (1983) 152 C.L.R. 570.

There is, perhaps, little to be gained from a continued examination of past differences of opinion, however fundamental and therefore important those differences may be. The two cases to which we have referred were each decided by a majority of the Court. The reasoning which supported the decisions involved construing the jurisdiction conferred upon the Federal Court by s. 86 as a jurisdiction with respect to matters arising under Pt VI of the Act. Those matters, it was said, arose under a law made by Parliament within the meaning of s. 76(ii) of the Constitution so that the jurisdiction of the Court might be defined with respect to them under s. 77(i) of the Constitution. The word "matter" in s. 76(ii) was then said to have the same breadth in the expression "matter arising under any law made by Parliament" as it has in the expression "matter arising under this Constitution, or involving its interpretation" which appears in s. 76(i). The result was said to be that the Federal Court may, under s. 86 of the Act, determine the whole of a controversy involving a question arising under Pt VI of the Act including questions not arising under that part or, indeed, any federal law: cf. Fencott v. Muller [1] .

We had the misfortune to form part of the minority in Fencott v. Muller, as did Aickin J. and Wilson J. in Philip Morris. There were two basic propositions in those dissents. The first was that, whilst a question of interpretation of the Constitution may arise in the hearing and determination of a claim arising under any law, whether State or federal, so that the whole claim is a matter involving the interpretation of the Constitution within the meaning of s. 76(i) of the Constitution, by way of contrast a matter arising under a law of the Commonwealth is necessarily confined to issues owing their existence to such a law. The second proposition was that, in any event, the meaning to be attached to the word "matter" in s. 76(ii) was irrelevant to the proper construction of s. 86 of the Act. That section did not speak of "matters" at all, but only of "actions, prosecutions and other proceedings". In the view of those who dissented, those words attracted a more limited jurisdiction than that discerned by the majority.

Notwithstanding that we remain convinced of the correctness of these propositions, it must now be accepted that neither of them finds support in the decisions to which we have referred. The result in our view is that until there is in opportunity for reconsideration, the Court may find itself committed to a course of reasoning which involves artificiality and error.

The joint judgment in Fencott v. Muller (Mason, Murphy, Brennan and Deane JJ.) described a "matter" in generous terms. Their Honours said [2] :

In identifying a s. 76(ii) matter, it would be erroneous to exclude a substantial part of what is in truth a single justiciable controversy and thereby to preclude the exercise of judicial power to determine the whole of that controversy. What is and what is not part of the one 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 But in the end, it is a matter of impression and of practical judgment whether a non-federal claim and a federal claim joined in a proceeding are within the scope of one controversy and thus within the ambit of a matter. It was re-affirmed that a distinct and unrelated non-federal claim falls outside the ambit of a "matter". 1. (1983) 152 C.L.R., at p. 608.

Applying as best we can the imprecise and unsatisfactory test of "impression and practical judgment", it seems to us to follow that the Federal Court in exercising jurisdiction in respect of the applications in the present cases was also seized of issues which included any claims by way of cross-claim that the respondents might make for specific performance of their respective contracts. Any other conclusion would seem to be a departure from the majority view in the cases to which we have referred. Each of the claims, from both vendor and purchaser, is closely related to the one transaction, namely, the contract for the sale of a home unit.

This conclusion leads immediately to the basic difficulty which arises from the provision in s. 86 that the jurisdiction that is conferred on the Federal Court "is exclusive of the jurisdiction of any other court". The question of exclusivity did not arise directly in either of the two cases. Perhaps it is a pity that it did not do so, because it identifies the serious problem which is thrown up by construing the grant of jurisdiction made by s. 86 so as to embrace non-federal issues which are thought to form part of the federal matter. In Fencott v. Muller, Dawson J. anticipated the problem which has now arisen. His Honour said [3] :

Moreover, it may be thought that solving the jurisdictional problems in the Federal Court in such a way is to create problems at the other end. The immediate source of the jurisdiction of the Federal Court under the Trade Practices Act is s. 86 of that Act and the jurisdiction which that section invests is exclusive of the jurisdiction of other courts. If then the Federal Court has under that section jurisdiction to determine the whole matter between litigating parties, whether arising under a federal law or the common law or a State law, it would seem that the jurisdiction of other courts in respect of claims which might comprise the whole matter is excluded and this may be so whether or not the jurisdiction of the Federal Court is actually invoked. Determining what comprises the matter in these circumstances may in many cases prove to be no easy task. 1. (1983) 152 C.L.R., at pp. 629-630.

It is quite clear from the earlier cases that there is only one matter in contemplation. The source of jurisdiction of the Federal Court in the present cases to determine that matter, including the non-federal issues, has not previously been clearly identified, as Dawson J. observed in Fencott v. Muller [4] . In reality it must be s. 86. There can be no other source. It cannot be the Constitution because no jurisdiction at all is conferred on the Federal Court unless and until the Parliament exercises the power conferred upon it by s. 77. And yet s. 86, having conferred jurisdiction in respect of " "matters" arising under a law made by the Parliament" (Philip Morris [5] immediately declares "that jurisdiction" to be exclusive of the jurisdiction of any other court. In terms, the section provides no basis for distinguishing, within the grant of jurisdiction, between federal and non-federal issues so that only the jurisdiction with respect to the former issues will be exclusive.

1. (1983) 152 C.L.R., at p. 628. 2. (1981) 148 C.L.R., at p. 506.

There are serious consequences attending such a construction of the section, consequences which in our view would have justified a reconsideration of the earlier decisions. However, in the course of argument the Court by majority refused an application by counsel for leave to re-argue those cases.

If the Federal Court has exclusive jurisdiction in respect of the whole of a s. 86 matter, then it may follow that the Supreme Court although otherwise validly seized of jurisdiction to hear and determine a vendor's claim for specific performance will not have that jurisdiction if it is made to appear that a claim exists under the Act such as a claim alleging a breach of s. 52. The existence of such a claim may on one view have the effect of transforming the entire proceeding into a s. 86 matter over which the Federal Court has exclusive jurisdiction. The purchaser by raising the claim may halt the proceedings in the Supreme Court and may then refrain from seeking any relief in the Federal Court, thereby denying the vendor any forum at all for the determination of his claim. It was suggested in argument, albeit faintly, that the vendor might himself commence proceedings in the Federal Court but it is not apparent how that could be done. Alternatively, a purchaser could stand by until the Supreme Court proceedings were nearing completion and then institute a claim in the Federal Court, thereby aborting the former proceedings. The claim need not be pursued immediately and, indeed, if it is not commenced until after the expiration of any period of limitation relevant to the vendor's cause of action it may preclude the vendor from pursuing that cause of action at all.

Furthermore, even when a proceeding under Pt VI of the Act has been instituted in the Federal Court, there must remain considerable uncertainty in any particular case whether jurisdiction in respect of non-federal issues exists or, if it exists, whether it will be exercised. The passage from the joint judgment in Fencott v. Muller [6] which we have already cited emphasizes the impossibility of laying down any firm guidelines as to what constitutes a "matter". The answer will depend 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. Its scope will not be ascertained merely by reference to the proceedings which may be instituted. The conduct of the proceedings, the pleadings by which the issues are defined and the claims for relief may be relevant. In the end it is said to be a mater of impression and of practical judgment whether there is one controversy and thus one matter. Later in the judgment (6) their Honours recognize that federal judicial power will be attracted to the whole of a controversy only if the federal claim is a substantial aspect of that controversy. If the federal issues are a trivial or insubstantial aspect of the controversy it would be neither appropriate not convenient to translate to federal jurisdiction the determination of the non-federal issues. It is again a matter of impression and practical judgment that will determine what is appropriate and convenient. No doubt, if the entire s. 86 jurisdiction is exclusive, the same criteria are to guide a State court confronted with Pt VI issues by way of defence to a claim under State law in determining whether it has any jurisdiction at all in the proceeding.

Moreover, it must be of the essence of exclusive jurisdiction that it exists independently of the actual institution of proceedings in the Federal Court. If that were not so, a State court would have federal jurisdiction over the Pt VI proceedings by virtue of s. 39 of the Judiciary Act 1903 Cth, as amended, unless and until the Federal Court proceedings were instituted.

What we have said is sufficient to demonstrate, without question to our minds, that it is quite impossible to attach any notion of exclusivity to a jurisdiction so dependent on contingencies and discretionary considerations. For these reasons, we would not accept the Commonwealth's submission that the jurisdiction of the Federal Court to hear and determine the non-federal issues which form part of the matter arising under Pt VI of the Act is exclusive. Although a contrary decision might be thought to follow logically from the plain words of the section construed in the light of Philip Morris and Fencott v. Muller, those decisions did not determine the question. We have made it plain why we consider those decisions to be unsatisfactory and in our view it is neither necessary nor desirable to enlarge their impact. The jurisdiction of the Federal Court which is made exclusive is the hearing and determination of claims for the penalties or relief for which Pt VI provides.

It is also to be observed that there are clear indications in the Act (see ss. 75, 75A(4), 87(5)) that the Parliament did not intend to oust the operation of State laws or the exercise of State jurisdiction except to the extent required by s. 86.

The Order for removal of these cases into this Court referred to "so much of [them] as raise the question whether the Federal Court has jurisdiction to entertain any part of them except the claims for declarations as to contraventions of Pt V of the Trade Practices Act 1974 and damages for such contraventions". In our opinion, the court has jurisdiction in relation to the non-federal issues which have arisen. However, its jurisdiction in respect of those issues is not exclusive of the Supreme Court of Queensland. The Federal Court will, in the exercise of its discretion, control the conduct of the litigation before it in the manner which seems to it both just and convenient. In doing so it will have to decide whether to stay its hand so as to allow the Supreme Court to determine the non-federal claims. There may be competing considerations. On the one hand, the Federal Court is the only tribunal with jurisdiction to determine precisely all the issues that have been raised. On the other hand, it might not be just or convenient to deny a vendor the opportunity to seek summary judgment for specific performance merely because of the institution of a federal claim. It may clearly appear that the claim is of insufficient substance to justify any purported rescission of the contract by the purchaser. It may often be the case that contraventions of Pt V of the Act will merit an award of damages but fall short of providing any basis for avoiding a contract. In that event, justice will be served by allowing the action for specific performance to proceed without delay, to be followed by a later determination in the Federal Court of the specific question of damages. This may be true of the cause removed into this Court where the Supreme Court has not yet proceeded to deal with the application for summary judgment and this will be a matter for the Federal Court to consider. In the two cases where orders for specific performance have already been made and are under appeal to the Full Court of the Supreme Court, there would seem to be no advantage in the Federal Court exercising jurisdiction in respect of those issues. Subject to the outcome of the appeals they have already been determined in a manner binding upon the parties.

It remains to observe, as it seems to us, that the injustice to the parties occasioned by these time-consuming and costly jurisdictional conflicts could be largely eliminated if s. 86 were again to receive the consideration of the Parliament. It might well be thought desirable to maintain the exclusive jurisdiction of the Federal Court in relation to the enforcement of Pt IV of the Act and remedies with respect thereto, while leaving the court to exercise jurisdiction in relation to Pt V concurrently with State courts. The complexities of Pt IV, dealing with restrictive trade practices, might be thought by some to call for the conferring of exclusive jurisdiction on a court but it is not immediately clear to us that the same considerations apply to the field of consumer protection which has long been of concern to State legislatures as well as to equity and the common law. Section 75 of the Act expressly preserves the concurrent operation of State laws.

These proceedings should be remitted to the Federal Court.

These proceedings are removed into this Court pursuant to s. 40 of the Judiciary Act 1903 Cth, as amended, from the Federal Court and the Supreme Court of Queensland respectively. The questions which require to be answered are similar to those which we have discussed in Stack v. Coast Securities (No. 9) Pty. Ltd. Our reasons for judgment in that case supply the answers which we would give in the present cases.

In our opinion, the application of Janet Ann Force ("Force") to the Federal Court for relief under Pt VI of the Trade Practices Act 1974 Cth, as amended, ("the Act") in respect of alleged breaches of Pt V of the Act attracts to that Court the exercise of jurisdiction in respect of the whole matter, including, if one should be made, a cross-claim by Bargal Pty. Ltd. ("Bargal") for specific performance of the contract of sale. On the other hand, the Supreme Court retains jurisdiction in the action for specific performance commenced in that Court by Bargal. The only issues between the parties which lie within the exclusive jurisdiction of the Federal Court are those claims for relief which Force makes under Pt VI of the Act. With respect, we think therefore that McPherson J. was correct in concluding that the Supreme Court, notwithstanding the institution of proceedings by Force in the Federal Court, continued to have jurisdiction to hear and determine the action that was before him. In the exercise of that jurisdiction the court retains the power to grant any remedies sought by the parties under the general law which are found to be appropriate, including specific performance, rectification, a declaration that the contract had been validly rescinded or damages. On the other hand, the only claim presently before the Federal Court is an application by Force for an injunction under s. 80 of the Act to restrain Bargal from taking steps to complete the contract of sale or to claim damages for its breach and for an order under s. 87 of the Act requiring Bargal to pay her costs of the Supreme Court proceedings. There is no cross-claim by Bargal. As the proceedings now stand, the Federal Court is not able to resolve all the issues outstanding between the parties. It is limited to determining whether or not, by reason of considerations arising under Pt V of the Act, Bargal is to be restrained from pursuing its action in the Supreme Court. However, it is clearly open for Bargal by way of counterclaim to seek an order for specific performance.

We think, therefore, that the matter should now be approached on the basis that it is open for the parties to have all the issues resolved in the proceedings in the Federal Court. That appears also to be substantially true of the proceedings in the Supreme Court.

In these circumstances the question arises whether this Court should determine whether one of these proceedings should be stayed in order to allow the other to proceed and if so to which party should the stay be directed. The interests of the litigants is the primary consideration and there can be little doubt that it would not be in the interests of either litigant for each proceeding to proceed to a hearing and determination independently of the other. Nor is it desirable to prolong the interlocutory procedures by our refraining from determining now which of the proceedings should take precedence. The issues being fairly open to both parties in either proceedings, it seems to us that the scales come down in favour of the Supreme Court proceedings taking precedence. They were instituted first and the possibility of securing speedy justice through the procedures for seeking summary judgment is a relevant consideration. Should other considerations emerge which point to the desirability of the Federal Court claim being accorded priority then of course it is open to the Supreme Court to stay the conduct of its own proceedings.

We would remit the proceedings to their respective Courts and stay the application to the Federal Court until the determination of the Supreme Court action or further order.

Wenlowe Pty. Ltd. and Another v. Coast Securities (No. 9) Pty. Ltd.

Wenlowe Pty. Ltd. v. Coast Securities (No. 9) Pty. Ltd.