FEDERAL COURT OF AUSTRALIA

Australian Solar Mesh Sales Pty Ltd v Anderson [2000] FCA 864

CONSTITUTIONAL LAW – federal jurisdiction – whether the Federal Court had jurisdiction in an action (cross-vested from the Supreme Court of New South Wales under the invalid cross-vesting legislation) in which patent attorneys were sued for breach by negligence of their contract of retainer and in tort for negligence arising out of the retainer to advise and act upon an application for a patent – whether, though the matter was pleaded in contract and tort, it was one “arising under any laws made by the Parliament” within s 39B(1A) of the Judiciary Act and s 76(ii) of the Constitution – whether s 39B(1A) is available to support jurisdiction in respect of a claim made by a proceeding initiated before the subsection came into effect – application of the principle that a conferral of jurisdiction upon a court should be liberally construed – whether jurisdiction was conferred by a defence putting in issue the validity of the patent – what is a “matter” within s 76(ii) of the Constitution – the effect upon jurisdiction of the filing in a matter, originally in State jurisdiction, of a defence arising under a law made by the Parliament – discussion of whether such an issue has to be formally pleaded or whether it is sufficient that it come under serious examination by the Court as an issue in the proceeding – discussion of the proposition that the defence need not be correct provided it is pursued bona fide - accrued jurisdiction.

Judiciary Act 1903 (Cth), s 39B(1A)(c)

Jurisdiction of Courts (Cross-vesting) Act 1987 (the NSW and the Cth)

Patents Act 1952 (Cth), ss 40(1A)(b), 40(2), 100(1)(c)

Patents Act 1990 (Cth)

Re Wakim; Ex parte McNally (1999) 163 ALR 270 referred to

Arnhem Land Aboriginal Land Trust v Minister for Mines and Energy for the Northern Territory (1997) 78 FCR 556 applied

Walter John Bailey (No 1) Pty Ltd v Glass (1992) 36 FCR 290 referred to

Knight v F P Special Assets Limited (1992) 174 CLR 178 applied

The Owners of the Ship “Shin Kobe Maru” v Empire Shipping Company Inc (1994) 181 CLR 404 applied

PMT partners Pty Limited (in Liquidation) v Australian National Parks and Wildlife Service (1995) 184 CLR 301 applied

Oshlack v Richmond River Council (1998) 193 CLR 72 applied

Australasian Memory Pty Limited v Brien [2000] HCA 30 applied

Abebe v Commonwealth of Australia (1999) 162 ALR 1 referred to

Moorgate Tobacco Company Limited v Philip Morris Limited (1980) 145 CLR 457 discussed

L.N.C. Industries Limited v B.M.W. (Australia) Limited (1983) 151 CLR 575 applied

Felton v Mulligan (1971) 124 CLR 367 applied

Bertran v Vanstone (1999) 94 FCR 404 referred to

Fejo v Northern Territory of Australia (1998) 195 CLR 96 referred to

Re McJannet; Ex parte Australian Workers’ Union of Employees (Q) [No 2] (1997) 189 CLR 654 referred to

R v Commonwealth Court of Conciliation and Arbitration; Ex parte Barrett (1945) 70 CLR 141 referred to

Stack v Coast Securities (No. 9) Proprietary Limited (1983) 154 CLR 261 referred to

Troy v Wrigglesworth (1919) 26 CLR 305 applied

Burgundy Royale Investments Pty Ltd v Westpac Banking Corporation (1987) 18 FCR 212 applied

National Union of Workers v Davids Distribution Pty Ltd (1999) 165 ALR 595 applied

Elders Ltd v Swinbank [2000] FCA 56 discussed

Unilan Holdings Pty Limited v Kerin (1993) 44 FCR 481 referred to

Hooper v Kirella Pty Ltd (1999) 167 ALR 358 at 370-371 referred to

Philip Morris Incorporated v Adam P. Brown Male Fashions Proprietary Limited (1981) 148 CLR 457 discussed

Fencott v Muller (1983) 152 CLR 570 referred to

AUSTRALIAN SOLAR MESH SALES PTY LIMITED v NEVILLE JOHN ANDERSON & ORS

N 562 OF 1999

WILCOX, BURCHETT and TAMBERLIN JJ

SYDNEY

30 JUNE 2000

THE COURT ORDERS THAT:

1.                  It be declared that the proceeding heard by the Honourable Justice Branson, from whose judgment this appeal comes, was a matter within the jurisdiction of the Federal Court of Australia and that this Full Court has jurisdiction to hear and determine the appeal.

2.         The costs of the hearing concerning jurisdiction be the Respondents’ costs in the appeal. 

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

REASONS FOR JUDGMENT

1                     WILCOX J:  I have had the advantage of reading in draft form the reasons for judgment of Burchett J.  I adopt what his Honour has written as a statement of my reasons for joining in the ruling of the Court that the present appeal is within its jurisdiction. 

2                     I concur in the formal orders proposed by Burchett J.

Associate:

Dated:              30 June 2000

ON APPEAL FROM A JUDGE OF THE FEDERAL COURT OF AUSTRALIA

REASONS FOR JUDGMENT

BURCHETT J

3                     At the hearing of this appeal, the sole question argued was a preliminary point; whether the Court had jurisdiction to hear the appeal.  It was the appellant, ironically enough, which contended the Court lacked jurisdiction, and the respondents who asserted that jurisdiction was not lacking.  At the root of the argument, was an order made by the Supreme Court of New South Wales transferring the appellant’s claim at first instance to this Court pursuant to the Jurisdiction of Courts (Cross-vesting) Act 1987 (NSW) and the Jurisdiction of Courts (Cross-vesting) Act 1987 (Cth).  The scheme embodied in these Acts having now been held invalid by the High Court in Re Wakim; Ex parte McNally (1999) 163 ALR 270, the appellant says that the hearing, which took place in this Court before the trial judge following the transfer of the action, was without jurisdiction, and that as a consequence this Full Court also lacks jurisdiction.  It is pointed out that there were involved common law claims, based on a contract of retainer of the respondents as patent attorneys, and alleged breaches of the duty of care founded upon that retainer.  The respondents answer that the defectiveness of the cross-vesting scheme is nothing to the point, since this Court, they say, was and is in no way dependent upon the order of the Supreme Court for jurisdiction in this case; it had jurisdiction directly conferred upon it by s 39B(1A) of the Judiciary Act 1903 (Cth):

“The original jurisdiction of the Federal Court of Australia also includes jurisdiction in any matter:

…

(c)               arising under any laws made by the Parliament, other than a matter in respect of which a criminal prosecution is instituted or any other criminal matter.”

The laws made by the Parliament, on which the respondents rely, are the Patents Act 1952 (Cth) and the Patents Act 1990 (Cth).

4                     At the conclusion of the hearing, the presiding judge (Wilcox J), announced the ruling of the Court that the appeal is within its jurisdiction.  Our reasons were reserved.  I now state my reasons for joining in the decision of the Court so announced.

5                     The action was commenced in the Supreme Court of New South Wales as an action brought against the defendants, the partners in Spruson and Ferguson, by one Keith Albert George Smith and the appellant.  It was asserted that in the year 1985 Smith retained the defendants to act as the plaintiffs’ patent attorneys “in respect of rights claimed on a fine fibreglass mesh invention”, to advise on whether the invention was capable of being the subject of a patent, and if so to “effect a patent thereon”.  Implied terms of skill and care were pleaded, and it was also pleaded that there was “a duty to exercise reasonable care in ascertaining whether the said invention was capable of patent for the benefit of the Plaintiff pursuant to the Patent Act (Cth) [sic].”  It was pleaded that a petty patent issued, and that subsequently “the specification of the Petty Patent was [held to be] ambiguous”, and it was revoked.  The plaintiffs pleaded that the revocation “was caused by the breach of the duty owed pursuant to the retainer of the Defendants”.  Damages were sought on the alternative bases that the invention was never capable of patent and the patent attorneys failed to give advice of that fact, and that the invention was capable of patent but the patent attorneys failed to draft the specification properly.

6                     On 10 September 1993, Abadee J, a judge of the Supreme Court of New South Wales, made an order for the cross-vesting of the action to the Federal Court of Australia.  His Honour gave reasons, the essential statement in which is the following:

“It seems to me that in the circumstances where questions … arise as to the construction of the Patents Act and its applicability, that I should exercise my discretion.”

7                     By the time of Abadee J’s order, Mr Smith had discontinued as a plaintiff, so that the parties to the action were the appellant and the respondents.  A number of amended pleadings were filed, with the result that, ultimately, the appellant relied on a Further Further Further Amended Statement of Claim filed during the hearing, on 26 March 1999.  Long before then, of course, s 39B(1A)(c) had come into effect (it did so on 17 April 1997).  There is authority for the proposition that s 39B(1A) is available to support jurisdiction in respect of a claim made by a proceeding initiated before the subsection came into effect: Arnhem Land Aboriginal Land Trust v Minister for Mines and Energy for the Northern Territory (1997) 78 FCR 556 at 564-565 (O’Loughlin J), citing the analogous Full Court decision in Walter John Bailey (No 1) Pty Ltd v Glass (1992) 36 FCR 290.  The liberal construction of the conferral of jurisdiction upon the Court adopted in those cases is in accordance with the principle stated by Gaudron J in Knight v F P Special Assets Limited (1992) 174 CLR 178 at 205, a principle which received the endorsement of all members of the High Court in The Owners of the Ship “Shin Kobe Maru” v Empire Shipping Company Inc (1994) 181 CLR 404 at 420-421, of Brennan CJ, Gaudron and McHugh JJ in PMT Partners Pty Limited (in Liquidation) v Australian National Parks and Wildlife Service (1995) 184 CLR 301 at 313, of Gaudron and Gummow JJ in Oshlack v Richmond River Council (1998) 193 CLR 72 at 81, and of the Court in Australasian Memory Pty Limited v Brien [2000] HCA 30 at para 17.  At all events, at the time the claim was pleaded in its final form, s 39B(1A)(c) was in force, as I have said.

8                     The Further Further Further Amended Statement of Claim alleged a retainer in 1985 by the appellant of the respondents “to act as its patent attorneys in respect of rights claimed on a fine fibreglass meshing”.  Particulars of the retainer were pleaded – it required the giving of advice as to whether the invention was capable of being the subject of a patent, and as to the effect of such a patent; it involved a term to “use all reasonable care in preparing documentation in support of a patent application”; and it provided for the respondents to draft specifications and act on requisitions by the Commissioner for Patents.  The pleading alleged the lodgment of a complete specification, and the grant of a petty patent.  The revocation of the petty patent on the ground that it was “ambiguous” and so did not define the invention within s 40(1A)(b) of the Patents Act 1952, non-compliance with which was a ground of revocation under s 100(1)(c), was pleaded as having been “caused by the negligence of the Respondents”.  That negligence was particularised:

“(a)     Failing to advise the Applicant that the invention was incapable of patent. 

(b)               Further, or in the alternative, in the event that the invention was capable of patent, failing to draft the specification in such a manner that was not ambiguous and liable to revocation.”

What appears to have been an entirely new claim was also pleaded, that a duty of care in preparing the documentation in support of a patent application was “breached” by “failing to identify the existence of a combination claim”, that is, of a new combination in addition to the one the subject of the specification actually lodged, the new combination being alleged to have amounted to a patentable invention.

9                     The defence on which the respondents went to trial put almost all the allegations made by the appellant in issue, and also pleaded that the finding which had based the revocation of the petty patent was made in error.  (Since the parties to the present proceeding were not the same as the parties to that earlier proceeding, there was no res judicata or issue estoppel to bar such a pleading.)  While denying the validity of the ground on which the patent had been revoked, that being a ground the appellant relied on to show the negligent performance of their task as patent attorneys, the respondents also alleged in their defence that the petty patent was in any case invalid on other grounds, including the familiar grounds of obviousness and lack of novelty.  These defences were filed on 16 March 1999, after the amplification of the Court’s jurisdiction by the enactment of s 39B(1A)(c) of the Judiciary Act.

10                  It is now possible to come to the meat of the question in this appeal.  Causes of action in contract and negligence undoubtedly do not, in themselves, generally attract the jurisdiction of this Court.  However, here, both on the pleadings and, as the judgment under appeal makes clear, in the conduct of the case, questions were raised involving the operation of the patents legislation of the Commonwealth.  The appellant, in its own claim, relied on the revocation of the petty patent for failure to comply with a provision (or provisions – s 40(2) seems also to have been in question) of the Patents Act 1952 as an event caused by the negligence of the respondents.  It is difficult to see why that allegation did not involve a claim of rights under the legislation and of a loss of those rights by a failure to comply with the requirements of the legislation.  Similarly, the claim, added by amendment at the hearing, that the patent attorneys had negligently failed to identify a further patentable invention seems necessarily to involve an assertion of rights under the legislation, and that the patent which did issue did not cover those rights, that is to say, an assertion concerning the scope and nature of rights obtained pursuant to the legislation.  Quite apart from the implications of the statement of claim, in its final form, the respondents’ defence directly raised the validity of the petty patent, that is to say, it raised a question of the existence of an important right under the legislation, both in respect of the ground of non-compliance with s 40 of the Patents Act 1952 and in respect of the alleged lack of novelty and obviousness. 

11                  Section 39B(1A)(c) confers jurisdiction on the Federal Court pursuant to the combined operation of ss 76 and 77 of the Constitution, which was explained by Gleeson CJ and McHugh J in Abebe v Commonwealth of Australia (1999) 162 ALR 1 at 8-9.  Section 76 provides:

“The Parliament may make laws conferring original jurisdiction on the High Court in any matter –

(i)                 Arising under this Constitution, or involving its interpretation:

(ii)               Arising under any laws made by the Parliament:

…”

Section 77 then provides:

“With respect to any of the matters mentioned in the last two sections the Parliament may make laws –

(i)                  Defining the jurisdiction of any federal court other than the High Court:

…”

Save for the exception relating to a criminal prosecution or any other criminal matter, s 39B(1A) confers on the Federal Court the precise jurisdiction within the gift of the Parliament under s 76(i) and (ii) of the Constitution.  It is apparent, therefore, that the words “arising under any laws made by the Parliament” have the same meaning that they have in the Constitution.  There are two considerations which, in particular, affect that meaning.  On the one hand, s 76(ii) is to be contrasted with s 76(i); the omission of the words “or involving its interpretation” from subs (ii) narrows the jurisdictional test.  On the other hand, the test must still be given the full breadth its language will allow, both on general constitutional principle and also on the principle affirmed in Knight v F P Special Assets Limited at 205; The Owners of the Ship “Shin Kobe Maru” v Empire Shipping Company Inc at 420-421; PMT Partners Pty Limited (in Liquidation) v Australian National Parks and Wildlife Service at 313; Oshlak v Richmond River Council at 81; and Australasian Memory Pty Limited v Brien at para 17.  In an expansive statement, which carefully avoided drawing firm boundaries, the joint judgment of Stephen, Mason, Aickin and Wilson JJ in Moorgate Tobacco Company Limited v Philip Morris Limited (1980) 145 CLR 457 at 480 declared:

“Although the word ‘matter’ in s. 76(ii.), as we have seen, has often been translated as embracing ‘right’, ‘title’, ‘duty’, ‘privilege’, ‘protection’, ‘immunity’ and ‘defence’, its content should not be confined to these terms and to what they denote.  ‘Matter’ is the subject matter for determination in a legal proceeding (In re Judiciary and Navigation Acts (1921) 29 CLR 257, at p. 265:  Carter v Egg and Egg Pulp Marketing Board (Vict.) (1942) 66 CLR 557, at pp. 586-587);  in our opinion it extends to a claim that a party satisfies or does not satisfy a statutory description, whether it be a qualification or a condition, when conformity with that description is made essential to the grant of a right for which the federal statute makes provision.”

In the same judgment, it was pointed out that a “matter” within s 76(ii) of the Constitution could be raised by a plaintiff by way of claim for relief, or could be raised by a defendant in defence of the claim.  Their Honours said (at 476):

“In the result it was accepted that if in the proceedings there arose an issue as to the existence or non-existence of a right created by the Trade Marks Act the Supreme Court was exercising federal jurisdiction.

However, the parties were in dispute as to when a matter ‘arises’ within the meaning of s 76(ii) so as to attract the exercise of federal jurisdiction.  The cases establish that federal jurisdiction is attracted if the right or duty based in a federal statute is directly asserted by the plaintiff or defendant, but not if the federal question arises only in some incidental fashion.  So too federal jurisdiction is attracted if the court finds it necessary to decide whether or not a right or duty based in federal law exists, even if that matter has not been pleaded by the parties.  But the converse is not true.  If a federal matter is raised on the pleadings federal jurisdiction is exercised, notwithstanding that the court finds it unnecessary to decide the federal question because the case can be disposed of on other grounds.”

12                  In one aspect, what this means is that when a federal law is pleaded in defence of a claim that in itself lay entirely within a State jurisdiction, or even though the federal law is not pleaded, when it becomes a necessary issue in the case, a change comes over the jurisdiction the court is exercising, and the matter, though originally in State jurisdiction, turns into a matter calling for the exercise of federal jurisdiction.  In Ovid’s Metamorphoses, the fleeing Daphne was transformed into a laurel tree as a defence against the too eager suit of Apollo.  The Australian Constitution is scarcely less dramatic than the myth: upon a defendant raising a defence under federal law, or a federal issue otherwise being raised for decision, the suit itself becomes metamorphosed into a federal matter. 

13                  The plaintiff in L.N.C. Industries Limited v B.M.W. (Australia) Limited (1983) 151 CLR 575 sought, by proceedings in the Supreme Court, to enforce contractual rights with respect to an import quota which depended on regulations under the Customs Act 1901 (Cth).  It appears that the defence did not raise, and the trial judge did not decide, any question under the Act or the Regulations.  In a joint judgment, Gibbs CJ, Mason, Wilson, Brennan, Deane and Dawson JJ said (at 581-582):

“It is true to say that a matter does not arise under a law made by the Parliament merely because the interpretation of the law is involved:  Felton v Mulligan (1971) 124 C.L.R. 367, at pp. 374, 382, 396, 408, 416.  On the other hand, a matter may arise under a law of the Parliament although the interpretation or validity of the law is not involved:  R v Commonwealth Court of Conciliation and Arbitration; Ex parte Barrett (1945) 70 C.L.R. 141, at p. 154.  The conclusion reached by Latham C.J. in that case, and stated in a passage that has often been cited with approval, is ‘that a matter may properly be said to arise under a federal law if the right or duty in question in the matter owes its existence to federal law or depends upon federal law for its enforcement, whether or not the determination of the controversy involves the interpretation (or validity) of the law’. Equally, there is a matter arising under a federal law if the source of a defence which asserts that the defendant is immune from the liability or obligation alleged against him is a law of the Commonwealth:  Felton v Mulligan (1971) 124 C.L.R., at p. 408.

When it is said that a matter will arise under a law of the Parliament only if the right or duty in question in the matter owes its existence to a law of the Parliament that does not mean that the question depends on the form of the relief sought and on whether that relief depends on federal law.  A claim for damages for breach or for specific performance of a contract, or a claim for relief for breach of trust, is a claim for relief of a kind which is available under State law, but if the contract or trust is in respect of a right or property which is the creation of federal law, the claim arises under federal law.  The subject matter of the contract or trust in such a case exists as a result of the federal law. 

…

The contracts in the present matter were concerned solely with entitlements under the Regulations.  The object of the plaintiff’s claim was identified in the statement of claim as ‘any benefit accruing’ after a certain time as a result of the utilization of a quota under the Regulations.  It is common ground that the ‘benefit’ mentioned is any ‘benefit’ which might accrue under the Regulations.  The subject matter of the contracts and of the action arose under and existed only by reason of the provisions of the Regulations and the Act in pursuance of which the Regulations were made.  The Act was of course a law of the Parliament and the Regulations were made under it.

The present case is not, to use the words of Windeyer J. in Felton v Mulligan (1971) 124 C.L.R., at p. 391, one in which the Regulations are merely ‘lurking in the background’.  The very subject of the issue between the parties is an entitlement under the Regulations.  In substance the plaintiff’s primary claim is to the benefit of rights and privileges under the Regulations.  In these circumstances the matter involved in the action arose under laws made by the Parliament.”

See also Felton v Mulligan at 403, 408; Bertran v Vanstone (1999) 94 FCR 404 at 409-410.

14                  In Fejo v Northern Territory of Australia (1998) 195 CLR 96 at 120 (footnote 140), the joint judgment of Gleeson CJ, Gaudron, McHugh, Gummow, Hayne and Callinan JJ refers to the inclusion in the jurisdiction of the Federal Court, by s 39B(1A)(c), of “jurisdiction in any matter ‘arising under’ any laws made by the Parliament”, and adds:

“See as to the scope of this phrase, L N C Industries Ltd v BMW (Australia) Ltd (1983) 151 CLR 575 at 581; Re McJannet; Ex parte Australian Workers’ Union of Employees (Q) [No 2] (1997) 189 CLR 654 at 656-657.”

The passage cited from Re McJannet comes in the judgment of Brennan CJ, McHugh and Gummow JJ:

“The test for determining whether a proceeding is in a matter arising under the Act for the purposes of s 347(1) [of the Industrial Relations Act 1988 (Cth)] is whether the right or the duty that is sought to be enforced owes its existence to a provision of the Act.”

Their Honours went on to refer to R v Commonwealth Court of Conciliation and Arbitration;  Ex parte Barrett (1945) 70 CLR 141 at 154.  Similarly, in Abebe v Commonwealth of Australia at 39, Gummow and Hayne JJ cited LNC Industries Ltd v BMW (Australia) Ltd at 581 as authority for the proposition that a justiciable controversy may answer the description of a matter arising under a federal Act within s 76(ii) of the Constitution “because the determination of the controversy involves the interpretation of the Act and the rights or duties in question in the matter owe their existence to that statute”.

15                  There has been some elaboration, in the cases, of the consequences of the raising of a defence in reliance on a law of the Parliament.  In the joint judgment of Mason, Brennan and Deane JJ in Stack v Coast Securities (No. 9) Proprietary Limited (1983) 154 CLR 261 at 291, reference is made to the observation of Barwick CJ in Felton v Mulligan (1971) 124 CLR 367 at 373 that upon the attraction of federal jurisdiction by a 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”.  Their Honours put the same point slightly differently: “[T]he 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.”  Not only is this so; once the defence changes the character of the matter, it will not cease to be a federal matter simply because the defence turns out not to be decisive, or even significant.  As Barwick CJ said in Felton v Mulligan at 374:

“Further the matter arising under a law of the Parliament will have arisen if the suit could have been disposed of by deciding the matter, whether or not the suit was so disposed of … .”

And for the matter to arise under a law made by the Parliament, the proposition asserted by the defence does not have to be correct.  It is sufficient that it be raised bona fide:  Troy v Wrigglesworth (1919) 26 CLR 305 at 311, per Barton, Isaacs and Rich JJ.  This authority is of some historical interest, for their Honours commence their judgment (at 308) by recording that the case had been “very ably argued on both sides”, and counsel for the successful appellant was a very young Mr R G Menzies, presenting his first appeal to the High Court barely a year after signing the roll of counsel.  The proposition that a federal claim need only be “pursued bona fide” was examined in the light of more recent authorities and accepted by the Full Court (Bowen CJ, Morling and Beaumont JJ) in Burgundy Royale Investments Pty Ltd v Westpac Banking Corporation (1987) 18 FCR 212 at 219; see also National Union of Workers v Davids Distribution Pty Ltd (1999) 165 ALR 595 at 601; Elders Ltd v Swinbank [2000] FCA 56 at para 16; Unilan Holdings Pty Limited v Kerin (1993) 44 FCR 481 at 481-482; and Hooper v Kirella Pty Ltd (1999) 167 ALR 358 at 370-371.

16                  One question raised in Elders Ltd v Swinbank should be mentioned. Drummond, Sundberg and Marshall JJ expressed the view (at paras 17 and 18) that, although, in the absence of some explicit pleading, the identification in the course of proceedings of a matter arising under a law made by the Parliament may attract federal jurisdiction, this will be so “only if it turns out to be necessary for the Court to determine that particular claim in order to dispose of the litigation”.  With respect, I do not think it was necessary for their Honours to go so far to decide the case before them, and the proposition does appear to make very much depend on a formal and technical distinction.  It may be that, in some circumstances, the raising of an issue, though not formally pleaded, may, as a matter of substance, fall within the principle of the High Court authorities, so as to have the same effect as a pleading.  As Barwick CJ pointed out in Philip Morris Incorporated v Adam P. Brown Male Fashions Proprietary Limited (1981) 148 CLR 457 at 473, “the issues raised by the pleadings [do not] necessarily mark out the parameters of the matter”.  And “[t]he identification of the matter is very much a question of substance and not of form”.  Cf the remarks of Wilcox, Sackville and Katz JJ in Hooper v Kirella Pty Ltd at 370.  It may be that the transformation of an action in a State jurisdiction to a federal proceeding occurs when the federal issue comes under serious examination by the court as an issue in the proceeding, whatever the question on which the decision ultimately turns.  It is difficult to see how the court could examine a federal issue, as an issue in the proceeding, in the exercise of any but federal jurisdiction, and once that jurisdiction attaches, according to the authorities, it embraces the whole matter, as Barwick CJ made clear in the passage which is cited in Stack v Coast Securities (No. 9) Pty Ltd (at 291) from his judgment in Felton v Mulligan (at 373).  I do not read the statement in Moorgate Tobacco Company Limited v Philip Morris Limited at 476, which is quoted earlier in these reasons, as a restrictive statement confining the boundaries of a matter capable of arising under a federal law, but as an inclusive statement of some matters that do so arise.

17                  In the present case, I conclude that the appellant’s action sought relief for the allegedly defective performance, and for negligence in the performance, of a contract of retainer aimed at the securing of a right which was the creation of federal law, namely a right to a patent for an invention.  Such an action would fall within the principle stated in L.N.C. Industries Limited v B.M.W. (Australia) Limited at 581.  Even if that were wrong, the action would have been transformed into an action in federal jurisdiction upon the filing of a defence raising directly the question whether the appellant had an entitlement under the Patents Act 1952 or the Patents Act 1990 (ibid at 582).  This result depends on the view that issues raised in the action fell within s 39B(1A)(c) of the Judiciary Act, not upon the doctrine of accrued jurisdiction, although, once it is held the action raised federal issues, it follows that the whole matter may be determined by the Federal Court, including any issues falling within the accrued jurisdiction:  Re Wakim; Ex parte McNally at 294-295, 310-314; Fencott v Muller (1983) 152 CLR 570 at 608-610; Stack v Coast Securities (No. 9) Pty Ltd at 290-294.  Accordingly, I joined in the ruling of the Court announced by the presiding judge at the conclusion of the argument on the question of jurisdiction.

Associate:

Dated:              30 June 2000

REASONS FOR JUDGMENT

TAMBERLIN J

18                  I agree with the reasons for judgment of Burchett J.

Associate:

Dated               30 June 2000