FEDERAL COURT OF AUSTRALIA

Cytel Pty Limited v Mastech Asia Pacific Pty Limited [2004] FCA 1464

TRADE PRACTICES – transfer of proceedings – application for transfer of proceedings from New South Wales District Court to Federal Court – related proceedings commenced in Federal Court – whether appropriate to transfer– factors applicable to exercise of judicial discretion – judicial discretion exercised – application for transfer allowed

Federal Court of Australia Act 1976 (Cth) s 32

Trade Practices Act 1974 (Cth) s 86A(4)

Australian Competition & Consumer Commission v Glendale Chemical Products Pty Ltd [1998] FCA 108

Trade Practices Commission v Port Adelaide Wool Co Pty Ltd (1995) ATPR ¶41-441

CYTEL PTY LIMITED (ACN 098 580 815) v MASTECH ASIA PACIFIC PTY LIMITED (ACN 080 574 616)

NSD2008 OF 2003

BENNETT J

11 NOVEMBER 2004

SYDNEY

THE COURT DIRECTS THAT:

1.                  Pursuant to section 86A(4) of the Trade Practices Act 1974 (Cth), the Local Court of New South Wales proceedings 6549 of 2003 be transferred to the Sydney Registry of the Federal Court of Australia.

the court orders that:

2.                  The proceedings so transferred be heard together with Federal Court proceedings N2008 of 2003.

3.                  The costs of the Local Court proceedings be costs of the proceedings as transferred.

4.                  The costs of this motion for transfer be costs in the cause.

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

REASONS FOR JUDGMENT

1                     On 25 June 2003, the respondent (‘Mastech’) filed a Statement of Liquidated Claim in the New South Wales Local Court (Civil Jurisdiction) at the Downing Centre against the applicant (‘Cytel’). On 27 November 2003, Cytel commenced proceedings in the Federal Court of Australia against Mastech.

2                     Cytel applies for and Mastech consents to the transfer of the Local Court Proceedings to the Federal Court. It is common ground between the parties that the question of transfer is a matter for the discretion of the Court. The Notice of Motion seeking the order for transfer was filed on 27 November 2003.

3                     In the Local Court, Mastech has alleged that it is entitled to recover from Cytel various amounts of unpaid invoices by reason of an agreement entered into between the parties on 9 May 2002 (‘the Agreement’). The Agreement is the subject matter of both proceedings.

4                     In the Local Court proceedings, Mastech alleges that the unpaid invoices were for the provision of consulting services by Caren Bassi, a Consultant who was contracted by the Defendant to a third party, Metcash Pty Limited. In its defence, Cytel alleges, inter alia, that Mastech did not provide the Consultant and consulting services in accordance with the terms of the Agreement. Cytel denies that it is indebted to Mastech.

5                     In the Federal Court proceedings, Cytel alleges, inter alia, that Mastech breached the Agreement and contravened the Trade Practices Act 1974 (Cth) (‘Trade Practices Act’) inducing Cytel to obtain services from Mastech and to forego entering into arrangements with specified third parties.

6                     The subject matter of the claim brought by Mastech in the Local Court proceedings and the defence filed by Cytel in the Local Court proceedings are also the subject of the statement of claim in the Federal Court proceedings.

Jurisdictional basis for the proceedings in the Federal Court

7                     Section 32(1) of the Federal Court of Australia Act 1976 (Cth) ‘Federal Court Act’ provides that:

‘To the extent that the Constitution permits, jurisdiction is conferred on the Court in respect of matters not otherwise within its jurisdiction that are associated with matters in which the jurisdiction of the Court is invoked.’

8                     It is apparent from the pleadings and the parties agree that the claim in the Local Court proceedings and the Federal Court proceedings arise out of the same facts and circumstances and that any evidence in the two sets of proceedings would cover the same subject matter.

9                     There is no dispute that the Federal Court has jurisdiction with respect to the Federal Court proceedings. Were the Court to order the transfer of the Local Court proceedings, then under s 32 of the Federal Court Act, jurisdiction is conferred upon the Court under its “associated” jurisdiction.

Basis for Transfer

10                Relevantly s 86A(4) of the Trade Practices Act gives the Federal Court power to transfer to itself the Local Court Proceedings. Subsection 86A(4) provides:

Where:

(a) a proceeding is pending in a court (other than the Supreme Court) of a State or Territory; and
(b) a matter for determination in the proceeding arose under Part IVA or Division 1, 1A or 1AA of Part V;

the court shall, if directed to do so by the Federal Court, transfer to the Federal Court the matter referred to in paragraph (b) and such other matters for determination in the proceeding the determination of which would, apart from any law of a State or of the Northern Territory relating to cross-vesting of jurisdiction, be within the jurisdiction of the Federal Court as the Federal Court determines. (emphasis added)

11                  While it is uncommon to use s 86A of the Trade Practices Act to transfer proceedings to the Federal Court, the applicant has referred me to two such cases: Australian Competition & Consumer Commission v Glendale Chemical Products Pty Ltd [1998] FCA 108 (‘Glendale’) and Trade Practices Commission v Port Adelaide Wool Co Pty Ltd (1995) ATPR ¶41-441 (‘Port Adelaide’).

12                  In Glendale, the District Court proceedings arose out of injury and damage suffered by the plaintiff in the proceedings as a result of his use of a product supplied by the defendant (which was the respondent in the Federal Court proceedings). The Federal Court proceedings were brought by the ACCC under s 75AQ of the Trade Practices Act which allows the ACCC to commence liability actions on behalf of one or more persons identified in the application as having suffered loss. Emmett J noted that the claim in negligence arose out of precisely the same facts and circumstances as the claim brought under the Trade Practices Act. Both parties consented to the transfer order being made, and Emmett J’s decision is concerned mainly with the question of jurisdiction.

13                  In Port Adelaide, Branson J took the following factors in to account in exercising her discretion to grant an application to transfer proceedings in the New South Wales District Court to the Federal Court:

1.      Whether additional legal costs would be incurred by the parties in the event that the application for transfer was granted or dismissed.

2.      Whether the transfer would unnecessarily add length to the two proceedings.

3.      The interests of justice having regard to the inconvenience and inefficiency that would result if the two proceedings continued in different courts and where two inconsistent determinations could potentially be made.

Nothing has been put to me which indicates that the proceedings would unnecessarily be lengthened or that the parties would incur greater costs if I were to order that the Local Court proceedings be transferred to the Federal Court. Logically, greater costs would be incurred if the parties were to conduct two separate sets of proceedings.

14                  In relation to the third factor considered by Branson J in Port Adelaide, it was submitted that it is in the interests of justice for both sets of proceedings to be heard and determined together. Given the similarities between the two sets of proceedings and the fact that both parties consent to the order for transfer being made, this submission seems to me to be sound. The jurisdictional limit of the New South Wales Local Court would prevent the hearing and determination of both matters together in that court: (see Local Courts (Civil Claims) Act 1970 (NSW) s 12(1): $60,000). Accordingly it is appropriate, in these circumstances, for me to direct the transfer of the Local Court proceedings to the Federal Court.

Orders and directions

15                  The Court directs:

1.                  Pursuant to section 86A(4) of the Trade Practices Act 1974 (Cth), that Local Court of New South Wales proceedings 6549 of 2003 be transferred to the Sydney Registry of the Federal Court of Australia.

The Court orders:

2.                  That the proceedings so transferred be heard together with Federal Court proceedings N2008 of 2003.

3.                  That the costs of the Local Court proceedings be costs of the proceedings as transferred.

4.                  The costs of this motion for transfer be costs in the cause.

Associate:

Dated: 11 November 2004