CATCHWORDS

PRACTICE AND PROCEDURE - cross vesting - whether proceeding for damages for personal injury should be transferred to District Court of New South Wales - whether appropriate to regard proceeding as nothing more than a claim for damages for personal injury suffered from use of dangerous or defective oven cleaner - label misleading or deceptive - first "liability action" in respect of goods that "have a defect" under s 75AD of Trade Practices Act 1974 - precedential value of determination of case by Federal Court - public interest - declaratory relief sought not available in District Court - whether power to order transfer - whether transfer would be ordered in exercise of discretion.

Trade Practices Act 1974 Part VA, ss 75AS, 86, 86A

Jurisdiction of Courts (Cross-vesting) Act 1987 ss 5, 10

CHRISTOPHER JOHN BROOKS v R & C PRODUCTS PTY LTD

No NG 139 of 1996

Lindgren J

Sydney

11 October 1996

IN THE FEDERAL COURT OF AUSTRALIA)

NEW SOUTH WALES DISTRICT REGISTRY)         No NG 139 of 1996

GENERAL DIVISION                  )

          BETWEEN:

CHRISTOPHER JOHN BROOKS

                           Applicant

          AND:

R & C PRODUCTS PTY LTD

                          Respondent

CORAM:    Lindgren J

PLACE:    Sydney

DATE:     11 October 1996

                    REASONS FOR JUDGMENT

The issue before the Court is whether this proceeding should be transferred to the District Court of New South Wales ("the District Court").

The proceeding arises out of personal injury allegedly suffered by the applicant in the course of his use of a product known as "Big Boy Oven Cleaner".  Apparently the respondent manufactures that product.  For reasons which will appear, a batch of the product marked with the symbols "3008<-B->Y171" allegedly manufactured by the respondent and supplied by it "to the trade in Australia during the period January to April 1993" is called in the statement of claim, "the action goods". 

It is pleaded that the respondent packaged the action goods in a container bearing a label.  The statement of claim sets out the content of the label.  That part of the label which is of particular relevance is the following:

     "SAFETY DIRECTIONS: This product is corrosive.  Avoid contact with eyes and skin.  Wear rubber gloves at all times.  Do not spray towards face and eyes.  Try to avoid inhaling fumes.  Contents under pressure."

Shortly, it is pleaded that the label did not adequately or properly warn of what the statement of claim describes as "the extremely corrosive action of the contents of the action goods on the skin".  It is said that while the label gave a warning, it was inadequate to notify users of the danger to the skin from the product or of the steps which should be taken if skin contact occurred. 

Three causes of action are pleaded: causes of action under s 52 and s 75AC of the Trade Practices Act 1974 ("the TP Act")  and negligence under the general law.  It is pleaded that in the course of using the action goods the applicant suffered permanent and serious injury and disfigurement to his right arm, second degree burns to his right forearm and other injuries.

In the course of a directions hearing I raised the question whether the claim would be more appropriately dealt with in the District Court.  At that time it appeared that the proceeding could be described as a claim for damages for
personal injury of perhaps not the most severe kind.  The respondent, which supports the making of an order for transfer, claims that that is how the proceeding should, indeed, be regarded.  However, it has indicated that it would consent to extension of the jurisdiction of the District Court beyond the monetary limit of $250,000.

Opposing a transfer, the applicant points to the fact that he seeks, not only damages, but also declaratory relief.  He submits that the proceeding cannot be accommodated within the notion of an individual's action for damages for personal injury arising from the use of a dangerous or defective oven cleaner. 

The declarations sought go to the allegedly misleading and deceptive nature of the marketing, and in particular the labelling, of the subject batch of the product, and, more importantly for present purposes, "[a] declaration that the action goods were goods which had a defect within the meaning of s 75AC of the [TP] Act." 

It is necessary to turn to the provisions of Part VA (ss 75AA - 75AS) of the TP Act.  Part VA was introduced by the Trade Practices Amendment Act 1992 (Act No 106 of 1992) with effect from 9 July 1992.  The new Part introduced provisions relating to goods that "have a defect".  Section 75AA contains definitions.  The section provides that in Part VA, "‘action goods’, in relation to a liability action, means the goods whose supply and defect is alleged in the action".  The section defines "liability action" to mean, inter alia, an action under s 75AD (see below).  As will be seen, the present proceeding is a liability action.  The expressions "plaintiff" and "defendant" are defined, respectively, as a person by or against whom a liability action is brought (however that person may be described).

Sub-sections 75AC (1) and (2) are as follows:

     "(1)For the purpose of this Part, goods have a defect if their safety is not such as persons generally are entitled to expect.

      (2)In determining the extent of the safety of goods, regard is to be given to all relevant circumstances including:

          (a)  the manner in which, and the purposes for which, they have been marketed; and

          (b)  their packaging; and

          (c)  the use of any mark in relation to them; and

          (d)  any instructions for, or warnings with respect to, doing, or refraining from doing, anything with or in relation to them; and

          (e)  what might reasonably be expected to be done with or in relation to them; and

          (f)  the time when they were supplied by their manufacturer."

What is alleged in the present case is that the action goods have a defect because, and only because, having regard to the label, their safety was not such as persons generally were entitled to expect.  The applicant's argument will be that all identical goods manufactured with the same label are in the same position.

Section 75AD provides that if a corporation in trade or commerce supplies goods manufactured by it and they have a defect, and because of the defect an individual suffers injuries, the corporation is liable to compensate the individual for the amount of his or her loss suffered as a result of the injuries and the individual may recover that amount by action against the corporation.

Section 75AS is important for present purposes.  It provides as follows:

     "Subsection 75B(2) and sections 86, 86A and 86B operate in relation to an action under this Part as if:

     (a)  .. and;

     (b)  references in them to Division 1 or 1A of Part V included references to this Part; and ..."

This provision directs attention to, relevantly, sub-ss 86 (2) and (3) and 86A (1) and (2).  Sub-sections 86 (2) and (3) are as follows:

     "(2)The several courts of the States are invested with federal jurisdiction within the limits of their several jurisdictions, whether those limits are as to locality, subject-matter or otherwise, and subject to the Constitution, jurisdiction is conferred on the several courts of the Territories, with respect to any matter arising under Part IVA or Division 1 or 1A of Part V in respect of which a civil proceeding is instituted by a person other than the Minister or the Commission.

      (3)Nothing in sub-section (2) shall be taken to enable an inferior court of a State or Territory to grant a remedy other than a remedy of a kind that the court is able to grant under the law of that State or Territory. "

Section 86A provides for the transfer of matters by this Court to a court of a State or Territory.  Sub-sections 86A (1) and (2) are as follows:

     "(1)Where -

          (a)  a civil proceeding instituted (whether before or after the commencement of this section) by a person other than the Minister or the Commission is pending in the Federal Court; and

          (b)  a matter for determination in the proceeding arose under Part IVA or Division 1 or 1A of Part V,

          the Federal Court may, subject to sub-section (2), upon the application of a party or of the Federal Court's own motion, transfer to a court of a State or Territory the matter referred to in paragraph (b) and may also transfer to that court any other matter for determination in the proceeding.

      (2)The Federal Court shall not transfer a matter to another court under sub-section (1) unless the other court has power to grant the remedies sought before the Federal Court in the matter and it appears to the Federal Court that -

          (a)  the matter arises out of or is related to a proceeding that is pending in the other court; or

          (b)  it is otherwise in the interests of justice that the matter be determined by the other court."

It will be noted that sub-s 86A (2) provides that the Federal Court shall not transfer a matter to another court under sub-s 86A (1), unless the other court has power to grant the remedies sought before the Federal Court in the matter.  Although s 75AS and sub-s 86 (2) combine to invest the District Court with jurisdiction with respect to a matter arising under Part VA in respect of which a civil proceeding is instituted by a person other than the Trade Practices Commission, sub-s 86 (3) makes it clear that this does not enable the District Court to grant a remedy other than a remedy that it is able to grant under the law of New South Wales.  The District Court does not have power to grant the declaratory relief which is sought in the application.  Accordingly, sub-s 86A (2) prohibits this Court from exercising its power under sub-s 86A (1) to transfer this matter to the District Court.

The respondent relies on certain provisions of the Jurisdiction of Courts (Cross-vesting) Act 1987 (Cth). It relies on sub-s 5 (4) but that provision applies only where there is a proceeding pending in the Supreme Court of  a State or Territory.  It also relies on s 10 which provides as follows:

     "10  Where -

          (a)  a proceeding is pending in the Federal Court, ...;

          (b)  a matter for determination in the proceeding is a matter arising under Part
IVA or Division 1 or 1A of Part V of the Trade Practices Act 1974;

          (c)  no matter for determination in the proceeding is a special federal matter;

          (d)  the proceeding is not a proceeding by way of an appeal from a judgment of a court; and

          (e)  a court of a State or Territory, other than the Supreme Court of that State or Territory, has jurisdiction with respect to all of the matters for determination in the proceeding, 

          the court referred to in paragraph (a) may, on the application of a party to the proceeding or of its own motion, transfer the proceeding to the court referred to in paragraph (e)."

Paragraph (b) is satisfied in the present case, since a matter for determination in this proceeding is whether the respondent contravened s 52 of the TP Act and this is a matter arising under Division 1 of Part V of that Act.

But para (e) also makes it a condition of the existence of the power to transfer that, so far as relevant, the District Court has jurisdiction with respect to all of the matters for determination in the proceeding.  In my view this condition is not satisfied in the present case.  The District Court does not have the jurisdiction described in para (e) of s 10 in the present case because, it lacks jurisdiction to determine the matter of whether declaratory relief should be given.

If I had been of the view that the Court had power to order the transfer, I would not, as a matter of discretion, have ordered a transfer for the following reasons.

First, the District Court cannot grant the declaratory relief sought (the point does not depend on a conclusion at this stage that it would be appropriate to grant declaratory relief in the proceeding).

Secondly, the researches of counsel have not revealed any case yet decided under Part VA of the TP Act, and it is possible that questions of construction of s 75AC will arise for the first time in this case.  For example, the construction of the provision in sub-s 75AC (1) that for the purposes of Part VA, "goods have a defect if their safety is not such as persons generally are entitled to expect", can be expected at some time to give rise to argument, as can sub-s 75AC (2).  It would be useful if, in the present case, this Court were to have the opportunity of construing the provisions for the benefit of future cases and adjudications. 

Thirdly, the public interest aspect of the litigation suggests that it is not adequate to regard it simply as an action for damages for personal injuries.  It is true, as counsel for the respondent has submitted I have been assisted by his submissions, as I have by those of counsel for the applicant), that there is no evidence that any other individual has suffered injury from the action goods.  He submits, with some force, that for this reason the proceeding should, at the end of the day, be regarded as nothing more than an individual's claim for damages for personal injuries.  However, I think that this particular proceeding should be seen as something more than that.  The action goods are a batch of the product manufactured by the respondent.  If the applicant should succeed on liability and if it should prove appropriate to grant declaratory relief sought in respect of the action goods, that is to say, the subject batch of the product there will be a public interest dimension to the case.

In the circumstances there will be no order for transfer and the matter will remain in this Court.  Since the Court raised the matter and there is no motion for transfer, there is no occasion for the making of any order for costs or otherwise.

              I certify that this and the preceding 9 pages are a true copy of the Reasons for Judgment of the Honourable Justice Lindgren.

              Associate:

              Dated:             28 October 1996

Heard:        11 October 1996

Place:        Sydney

Decision:     11 October 1996

Appearances:  Mr D R Sibtain of counsel instructed by Crossin Barker Gosling appeared for the applicant.

              Mr A J Payne of counsel instructed by Mallesons Stephen Jaques appeared for the respondent.