Telstra Corporation Ltd v CXA Communications Ltd [1998] VSC 72

Supreme Court of Victoria|1998-08-28|Before: Chernov J.

PRACTICE and procedure - Cross-vesting to the Federal Court - "Special Federal matter" - Whether "special reason" for retaining in the State court - Jurisdiction of Courts (Cross-Vesting) Act 1987 (Cth), ss.6(3), 6(4) - Trade Practices Act 1974 (Cth), Pt IV.

Before pronouncing an order to that effect, and in accordance with s.6(4) of the Commonwealth and Victorian Jurisdiction of Courts (Cross-Vesting) Acts, I directed that relevant notices be given to the Attorneys-General of the Commonwealth and of this State. In response to those notices, the Attorney-General for the Commonwealth has made submissions, that this proceeding should be transferred to the Federal Court, contrary to my initial indication.

I will not repeat the relevant provisions of the legislation or the basis on which it is common ground between the parties that the proceeding raises a "special Federal matter". The only question is whether there are "special reasons" within the meaning of that term in s.6(3) of the Jurisdiction of Courts (Cross-Vesting) Act 1987 (Cth) ("the Act"), for this Court to hear and determine the proceeding. In my view, this question is to be resolved having regard to the relevant circumstances applicable to this case.

As I have said, in response to the notice given to the Commonwealth Attorney-General under s.6(4) of the Act, he has put forward a number of factors which, he claims, show that there are no "special reasons" for this court to retain this proceeding. The principal factors are:

(a) The Federal Court has created a list of specialist judges who hear and determine Part IV cases. This, it is said, is likely to increase the prospect of establishing a degree of uniformity in the interpretation of this special legislation which operates nationally. This would be best achieved generally by Part IV of the Trade Practices Act 1974 (Cth) being considered and its meaning determined by, judges specialising in the matter.

(b) The scheme of the legislation is that, generally, the Federal Court is to hear "special Federal matters" unless there are special reasons applicable to the particular proceeding justifying its retention in the State Court.

(c) The principal dispute between the parties will revolve around the "special Federal matter", notwithstanding that general law claims are also raised by the parties. The proceeding, it is said, is not one where the Part IV defence has been brought in as an afterthought, nor can its bona fide be properly attacked.

(d) Hanimex Pty Ltd v Foster (unreported) Debelle J, 26 March 1996, in which His Honour refused to cross vest the proceeding before him notwithstanding that it raised a "special Federal matter", can be readily distinguished from the present case because there, the question was not aired until approximately 2 years after the issue of proceedings, whereas here, the point was raised shortly after the proceeding was issued.

In my view, the factor which is of significance in the resolution of the present question, is that the Federal Court is in a position to provide a means whereby a degree of uniformity in the interpretation of Part IV of the Trade Practices Act 1974 (Cth) could be achieved on a national basis. It is, I think, desirable to facilitate this object. It is in this context that the question, "what are the special reasons why this court should deal with the matter," is to be considered.

I should also say that on further consideration of this case, it may well be, as the Attorney-General submits, that the "special Federal matter" will form a major area of dispute between the parties. It is also likely that there will be no controversy as to the existence of the written agreement on which the plaintiff sues or as to the defendant's conduct constituting the alleged breach. In any event, on the material before me, there is nothing to suggest that the Part IV defence is anything but a bona fide defence. The question of whether there are any "special reasons" why this Court should deal with the proceeding is to be considered against the background of the statutory intention to which I referred and the circumstances surrounding this case, including the policy of the Federal Court to provide a degree of uniformity in the interpretation of the relevant legislation.

In relation to the meaning to be attributed to "special reasons", counsel for the Attorney-General referred to the second reading speech in relation to the Law and Justice Legislation Amendment Bill (No.3) 1992 which amended, inter alia, the Jurisdiction of Courts (Cross-Vesting) Act 1987 (Cth) in respect of "special Federal matters", during which it was stated:

"These are matters arising under Federal law which the Cross-Vesting Act requires, save in exceptional cases, to be heard in federal rather than State Courts."

" The Bill will make it clear that exceptional circumstances do not include the convenience of the parties."

Hence, said the Attorney-General, "special reasons should be read as meaning exceptional reasons," for the purpose of s.6(3) of the Act.

I doubt whether the use of those words governs the meaning to be given to the words "special reasons" having regard to the fact that Parliament chose those words and not those used by the Minister. There is, in my view, not sufficient ambiguity in the term "special reasons" to warrant relying on the second reading speech in order to resolve that ambiguity.

The legislation makes it clear that before the proceeding involving a "special Federal matter" is to be retained in the State Court, that Court must be satisfied that there are "special reasons" for doing so, in the context of the very case which is sought to be transferred. Thus, I take "special reasons" to mean reasons which are peculiar to the case and not general reasons of convenience, a matter to which the legislation itself refers.

In my view, in order for the reasons to be "special", the circumstances of the case must be such as to take it out of the mainstream of the legislative intent that such cases be heard in the Federal Court. For instance, it may be that in the circumstances of a particular case, having regard to the timing of the application for transfer and the prevailing context, it would be unjust to have the proceeding transferred to the Federal Court. Similarly, it may be that a Part IV defence has been raised in circumstances where there is no apparent prospect of it being made out, or that it has been raised for forum shopping purposes only. Depending on the context, such circumstances may constitute "special reasons" for the State Court to retain the proceeding. No such circumstances, however, exist here.

In the context of this case, it should be noted that:

(a) at least a significant part of it in terms of the real issues between the parties and the likely length of hearing will involve the "special Federal matter";

(b) the issue was raised in the Defence at the time it was delivered, therefore early in the proceeding;

(c) the likelihood of this application being made was also raised early in the proceeding.

In all these circumstances, I find that contrary to the tentative view which I expressed earlier, there are no "special reasons" which would permit this Court to determine this proceeding under s.6(3) of the Act. Consequently I will make an order transferring the proceeding to the Federal Court.

I certify that this and the five preceding pages are a true copy of the reasons for judgment of Chernov J of the Supreme Court of Victoria delivered on 28 August 1998.

Courts (Cross-Vesting) Act 1987

At a glance

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Before

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Judgment (20 paragraphs)

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Legislation Cited (2)