FEDERAL COURT OF AUSTRALIA

Polar Aviation Pty Ltd v Civil Aviation Safety Authority [2010] FCA 367

CORRIGENDUM

1.         On page 11 of the judgment, in sub-paragraph 3 of paragraph 31, replace the words ‘s 30DI of the Judiciary Act’ with ‘s 30DI of the Civil Aviation Act’.

Associate:

Dated:         27 April 2010

THE COURT ORDERS THAT:

1.                  The motion, notice of which is dated 20 October 2009, be dismissed.

Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using Federal Law Search on the Court’s website.

REASONS FOR JUDGMENT

introduction

1                                             The applicants, Polar Aviation Pty Ltd (‘Polar’) and Polar’s director, Clark Andrew Butson, wish to bring an action for damages against the Civil Aviation Safety Authority (‘CASA’) and some of its officers.  The respondents claim that any such proceeding is statute-barred by reason of s 47A of the Limitation Act 1935 (WA) (‘the Limitation Act’).  The applicants seek to overcome this difficulty by their present application, which was filed on 15 September 2009 under O 4 r 1 of the Federal Court Rules (‘the Rules’). 

2                                             By way of a notice of motion dated 20 October 2009, the respondents challenge the jurisdictional basis of the applicants’ application, moving the Court for orders that:

(a)        the applicants’ application be set aside for want of jurisdiction;

(b)        alternatively, the matter be stayed or stood out of the list pending a final determination of the application made by the first and second respondents under s 31A of the Federal Court of Australia Act 1976 (Cth) (‘the Federal Court Act’) and O 20 r 5 of the Rules in proceeding WAD 51 of 2009;

(c)        the applicants pay the first to seventh respondents’ costs of the application; and

(d)        such further or other orders as the Court deems fit.

3                                             Also on 20 October 2009, the respondents filed a document entitled “Respondents’ Outline of Position”, briefly explaining their contention as to lack of jurisdiction.   In support of their motion, the respondents relied on an affidavit of their solicitor, Navid Farsi Manuchehri, which was sworn on 19 October 2009.  Mr Manuchehri deposed to the applicants’ making a pre-action discovery application in September 2008 in the Supreme Court of Western Australia and to Federal Court proceeding WAD 51 of 2009 (referred to in the application).  The Court heard the respondents’ motion on 30 November 2009.

4                                             For the reasons stated below, I conclude that the Court has jurisdiction and would dismiss the respondents’ motion.  The respondents’ alternative position that the case be stayed pending delivery of judgment in Federal Court proceeding WAD 51 of 2009 was overtaken by the delivery of judgment: see Repacholi Aviation Pty Ltd v Civil Aviation Safety Authority (2009) 263 ALR 93 (‘Repacholi’). 

The respondents’ motion and the applicants’ application

5                                             The primary question raised by the respondents’ motion is whether the Court has jurisdiction to entertain the applicants’ application.   Of course, whatever the outcome, the Court has jurisdiction to decide this question: see Petrotimor Companhia de Petroleos SARL v Commonwealth of Australia (2003) 128 FCR 507 (‘Petrotimor’) at 510 [11] per Black CJ and Hill J; Re Macks; Ex parte Saint (2000) 204 CLR 158 at 177-78 [22]-[23] per Gleeson CJ, 215 [150] per McHugh J, 235 [214] per Gummow J, 259-60 [285]-[286]  per Kirby J, 275 [330] per Hayne and Crennan JJ; and Johnson Tiles Pty Ltd v Esso Australia Pty Ltd (2000) 104 FCR 564 (‘Johnson Tiles’) at 598 [87] per French J (with whom Beaumont and Finkelstein JJ agreed).

6                                             To understand the respondents’ jurisdictional challenge, it is necessary to say something of the applicants’ application.  The application refers to a proposed proceeding against CASA and its officers, which is to include claims for breach of the Civil Aviation Act 1988 (Cth) (‘the Civil Aviation Act’), misfeasance in public office, and negligence.  Jurisdiction is said to arise by virtue of s 39B(1A)(c) of the Judiciary Act 1903 (Cth) (‘the Judiciary Act’) and “in respect of this application as ancillary to the proposed proceeding”.   The relief sought includes a declaration that s 47A of the Limitation Act does not apply to the proposed proceeding; or, alternatively, an order under s 47A(3) of the Limitation Act granting the applicants leave to bring the proposed proceeding.

7                                             Omitting formal parts, the application reads as follows:

The applicants propose to issue proceedings for damages against the respondents in respect of the respondents’ purported exercise of powers pursuant to the Civil Aviation Act 1988 (‘the Act’) and the regulations and orders made thereunder (‘the Regulations and Orders’) alleging:

1.       The respondents have wrongfully and in breach of the Act, the Regulations and Orders infringed the rights given to the applicants by and pursuant to the Act, the Regulations and Orders.

2.       Misfeasance in office.

3.       Negligence in purported exercise of the respondents’ powers under the Act, the Regulations and Orders.

The respondents contend and the applicants deny that s 47A of the Limitation Act 1935 (WA) applies to the proposed proceeding.

The Federal Court of Australia has jurisdiction in respect of the proposed proceeding by virtue of s 39B(1A)(c) of the Judiciary Act 1903.

The Federal Court of Australia has jurisdiction in respect of this application as ancillary to the proposed proceeding.

DETAILS OF CLAIM

On the grounds stated in the affidavit of Edward John Maitland sworn 31 August 2009 the applicants’ claim:

1.                  A declaration that Section 47A of the Limitation Act 1935 (WA) does not apply to the proposed proceeding.

2.                  Alternatively, an order under sub-section (3) of s 47A of the Limitation Act 1935 (WA) that the applicants have leave to bring the proposed proceeding.

3.                  An order that the respondents pay the costs of this Application.

8                                             In conformity with O 4 r 6(2) of the Rules, the application (as it stated) was accompanied by an affidavit sworn on 31 August 2009 by the applicants’ solicitor, Edward John Maitland.   An affidavit sworn on 29 September 2009 by Mr Butson was filed a little later, but nothing presently turns on it.  In argument on the motion, the applicants relied on Mr Maitland’s affidavit, which also had exhibited to it “the draft statement of claim proposed to be filed in this proceeding” (as described by Mr Maitland and referred to in the application).  

9                                             Since Mr Maitland’s affidavit accompanied the applicants’ application in accordance with the Rules, the character of the application and, therefore, the challenge to jurisdiction is to be determined by reference not only to the application, but also Mr Maitland’s affidavit, including the draft statement of claim (and the later version to which the applicants took the Court without any objection from the respondents).  It follows too that the precise nature of the claims to be made in the action for damages mentioned in general terms in the applicants’ application is to be understood by reference to Mr Maitland’s affidavit and the proposed pleading: cf Philip Morris Inc v Adam P Brown Male Fashions Pty Ltd (1981) 148 CLR 457 (‘Philip Morris’) at 473 per Barwick CJ.

10                                          The circumstances said to give rise to the controversy between the parties and the specific nature of the proposed proceeding are also set out in Mr Maitland’s affidavit.  Mr Maitland deposed to a dispute between May 2004 and late September 2006 between the applicants and CASA, and the applicants’ intention to sue CASA and its officers for damages “arising from the events” between these dates.  The remainder of Mr Maitland’s affidavit concerned the notification given to CASA of the applicants’ intention to sue and CASA’s response; and difficulties in instituting the proceeding due to the applicants’ inability to identify the relevant CASA officers and the steps taken to overcome these difficulties.   As to any delay in instituting the proposed action for damages, Mr Maitland deposed as follows:

Although the actions of CASA the subject of the proposed proceeding date back to May 2004, it was only when the matters occurring in 2004 were seen in the context of later events in 2005 and 2006 that I, as legal adviser to the Applicants formed the view that there was a clearly viable cause of action against CASA and the relevant officers.  It was the formation of this view that caused me to write to CASA on 9 November 2006.  

11                                          The draft or proposed pleading (both as exhibited to Mr Maitland’s affidavit and as later supplied to the Court) relied on CASA’s status under ss 8 and 9 of the Civil Aviation Act and affirmed the individual respondents’ status as officers of CASA.  The pleading stated that Polar conducted a commercial flight operations business in Western Australia pursuant to an Air Operations Certificate and, up to 18 January 2005 and after 14 September 2006, operated a flying school at Port Hedland.  This pleading also said that, amongst other things, Mr Butson held an airline transport pilot licence and CASA approval to be a Chief Flying Instructor and, up to 18 January 2005 and after 14 September 2006, Mr Butson also held CASA approval to be Polar’s Chief Pilot.  Furthermore, the pleading said that, until December 2005 and after December 2007, Mr Butson was approved by CASA as an Approved Testing Officer to flight test candidates for the issue of the General Flying Progress Test, private pilot licence and pilots seeking to qualify to conduct flights at night in visual flight conditions.

12                                          In conformity with Mr Maitland’s affidavit filed in support of the application, the proposed causes of action were based on events occurring between May 2004 and November 2006.  The draft pleading referred to audits of Polar by CASA, requests for correction, and notices issued by CASA, the upshot of which was the cancellation of Polar’s Air Operations Certificate and Mr Butson’s approval as Chief Pilot and Chief Flying Instructor.     

13                                          The proposed pleading is intended to claim that (amongst other things) the cancellations and subsequent refusals to renew constituted: (1) breaches of the statutory regime governing CASA’s operations (including breaches of statutory duty); (2) acts in excess of the respondents’ statutory authority; (3) unlawful interference with rights and privileges held by Polar and Mr Butson under the Civil Aviation Act; (4) unlawful interference with the trade and business of Polar and Mr Butson; and (4) negligence.  The pleading is also to contend that actions of the individual respondents constituted misfeasance in public office; and is to make similar claims with regard to conditions subsequently placed by CASA on the approval of Polar’s Air Operations Certificate, and with respect to an alleged refusal to appoint Mr Butson as an Approved Testing Officer. 

14                                          Senior counsel for the applicants explained that the applicants’ application was drafted in its present somewhat unusual form because of the difficulty occasioned by the interaction of s 47A of the Limitation Act and the decision of the Full Court of the Supreme Court of Western Australia in Matheson v Commissioner of Main Roads (2001) 25 WAR 269;[2001] WASCA 402 (‘Matheson’). 

15                                          Section 47A of the Limitation Act relevantly provides as follows:

(1)               Notwithstanding the foregoing provisions of this Act but subject to the provisions of subsection (2) and (3), no action shall be brought against any person (excluding the Crown) for any act done in pursuance or execution or intended execution of any Act, or of any public duty or authority, or in respect of any neglect or default in the execution of the Act, duty or authority, unless –

(a)        the prospective plaintiff gives to the prospective defendant, as soon as practicable after the cause of action accrues, notice in writing giving reasonable information of the circumstances upon which the proposed action will be based and his name and address and that of his solicitor or agent, if any; and

(b)        the action is commenced before the expiration of one year from the date on which the cause of action accrued,

and for the purposes of this section, where the act, neglect, or default is a continuing one, no cause of action in respect of the act, neglect, or default accrues until the act, neglect or default ceases but the notice required by paragraph (a) may be given and an action may thereafter be brought while the act, neglect or default continues.

(2)               A person may consent in writing to the bringing of an action against him at any time before the expiration of 6 years from the date on which the cause of action accrued whether or not the notice as required by subsection (1) has been given.

(3)        (a)        Notwithstanding the foregoing provisions of this section application

may be made to the Court which would but for the provisions of this section have jurisdiction to hear the action, for leave to bring an action at any time before the expiration of 6 years from the date on which the cause of action accrued, whether or not notice as required by subsection (1) has been given to the prospective defendant.

(b)        Where the Court considers that the failure to give the required notice or the delay in bringing the action as the case may be, was occasioned by mistake or by any other reasonable cause or that the prospective defendant is not materially prejudiced in his defence or otherwise by the failure or delay, the Court may if it thinks it is just to do so, grant leave to bring the action, subject to such conditions as it thinks it is just to impose.

(c)        Before an application is made under the provisions of paragraph (a), the party intending to make the application shall give notice in writing of the proposed application and the grounds on which it is to be made to the prospective defendant, at least 14 days before the application is made.

(4)        (a)        In this section person includes a body corporate, Crown agency or

instrumentality of the Crown created by an Act or an official or person nominated under an Act as a defendant on behalf of the Crown.

(b)        This section is to be construed so as not to affect the provisions of the Crown Suits Act 1947.

…       

16                                          The applicants maintained, and the respondents did not deny, that the respondents have refused to consent to the bringing of the proposed action against them.  Thus, if the Limitation Act applies, then the applicants cannot benefit from s 47A(2).

17                                          Senior counsel explained that the applicants’ primary position was that s 47A of the Limitation Act did not apply to the claims that they wished to make, but that, if they were wrong in this, Matheson required them to seek leave before proceeding further with their action, because, according to Matheson, leave to file outside the limitation period cannot be granted nunc pro tunc.

18                                          I agree with the applicants that is the import of Matheson.  Practically speaking, the applicants were, therefore, obliged to seek leave before proceeding further with their action for damages (assuming the applicability of s 47A of the Limitation Act).

19                                          In Matheson, the appellant, who had been injured in a car accident, sought to bring an action for damages in the State District Court against the respondents, based on their alleged failure to take appropriate traffic control measures.  The claims were ones to which s 47A of the Limitation Act applied.  As the appellant sought to bring the proceeding more than one year after the cause of action accrued, the appellant was required by s 47A(3) to seek leave in the District Court.  The appellant filed an application for leave four days before the expiration of the six-year period provided by s 47A(3).  The District Court heard and denied the application on the final day before expiration.  The appellant thereafter issued a writ and statement of claim without leave, and appealed the denial of leave in the District Court.  The six-year period had expired by the time the appeal was heard.

20                                          On the appeal, the applicant argued that the appellate Court should make an order for leave, to operate retrospectively to a date immediately before the expiration of the six-year period, as well as a declaration that the writ and statement of claim issued without leave be construed as an exercise of the leave granted by the order:  see Matheson at 277 [33]-[34].   After reviewing the authorities, the Court concluded (at 280 [45]-[46]) that it could not grant the relief sought by the appellant, because leave under s 47A(3) could only be granted, and could only operate, prospectively:

It is therefore my opinion that the ordinary and natural meaning of s 47A is that if leave is to be granted it must be granted prospectively. No question of backdating the grant of leave or making the order nunc pro tunc can arise because no matter what date leave was granted from, the clear purpose and intention of the legislation is that what may then be done with leave is the bringing of the action and the writ would then need to issue or the other appropriate proceedings would need to be instituted. If by that time the six-year period has expired, then no grant of leave may be effectively made because the action has become statute-barred upon the expiry of the six-year period.

It follows necessarily that no remedy could be provided in a case such as this by backdating the grant of leave and making an order which purported to validate the commencement of proceedings already invalidly commenced without leave by the use of process which is therefore a nullity, devoid of legal effect. The Court will not, indeed could not lawfully, make an order validating ex post facto process of that kind because such an order would necessarily proceed upon the basis that the process which is its subject was a nullity by reason of the operation of s 47A. In those circumstances the Court is frankly asked by a litigant who seeks such an order to make it for the purpose of subverting the operation of the law.

21                                          Matheson clearly holds that leave under s 47A(3) may not be granted retrospectively, and the reported cases show that this has not infrequently occasioned difficulties. The present is one further illustration.  Whilst the applicants in this case were not bound to take the approach they chose and other possibilities were canvassed in argument at the hearing, I accept that, as the applicants submitted, once they chose to proceed in this Court, there were potential difficulties with any of the procedural options contemplated.

Parties’ respective positions

22                                          The applicants seek to invoke the jurisdiction of this Court on the basis of claims that are not yet formally before the Court.  The respondents argue that it was not open to them to proceed in this fashion and their current application has no jurisdictional support.

23                                          The respondents’ primary argument is that the Court has no jurisdiction because the applicants are essentially seeking declaratory relief in relation to the operation of a State Act.  Further, according to the respondents, the Court cannot have accrued, associated or other jurisdiction because no federal jurisdiction has been properly invoked.  The respondents note that the original jurisdiction of the Court to entertain the applicants’ application depends on s 39B(1A)(c) of the Judiciary Act; and submit that “[a]t best, the threshold ‘matter’ … concerns a controversy as to the operation of a provision of a Western Australian statute and a right, asserted by the applicants, to a judicial declaration that s 47A of the Limitation Act does not apply to a proposed proceeding”.  The respondents argue that:

[T]he nature of any right asserted by the applicants in the present Application does not fall to be determined by reference to a Commonwealth Act.  Any justiciable controversy to be presently identified falls only to be determined under a State statute.

According to the respondents, s 79 of the Judiciary Act cannot transform s 47A of the Limitation Act into a “surrogate federal law” (if at all) until there is a proceeding over which the Court has jurisdiction.  It follows, so the respondents say, that s 39B(1A)(c) of the Judiciary Act does not confer any jurisdiction on the Court to entertain the applicants’ current application. 

24                                          The respondents further submit that the proposed pleading does not raise any relevant matter.  The respondents maintain that:

The applicants’ proposed claims may involve reference to, and interpretation of, Commonwealth legislation in considering whether a purpose for which statutory power under the civil aviation legislation was conferred on any of the respondents was to protect the economic interests of the applicants.  However, the subject matter of the proposed proceeding in tort does not arise under a law of the Commonwealth Parliament.  The subject matter for determination of the Court concerns the elements of a cause of action arising at common law.  To the extent that the applicants assert that a private cause of action for breach of statutory duty is accorded by the civil aviation legislation that assertion is simply not sustainable and if agitated only for the purpose of seeking to raise an argument as to the existence of such a cause of action for the purpose of founding jurisdiction, it is ‘colourable’ ….

25                                          The respondents argue that the applicants might have brought their application in the Supreme Court of Western Australia or have commenced a substantive proceeding in this Court that lay within jurisdiction and have failed to do so. 

26                                          Jurisdictional issues aside, the respondents also argue that the applicants are wrong in their primary position that the Limitation Act is inapplicable to an action brought against CASA and its officers.

CONSIDERATION

27                                          Section 77of the CommonwealthConstitution authorises the making of laws defining the jurisdiction of this Court with respect to the matters mentioned in ss 75 and 76.  Section 76(ii) provides for jurisdiction in matters “arising under any laws made by the Parliament”.  Paragraph (c) of s 39B(1A) of the Judiciary Act is an exercise of the power conferred by s 77, conferring jurisdiction on this Court “in any matter … 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 exceptions are inapplicable here. 

28                                          I accept that, as the applicants would have it, by virtue of s 39B(1A)(c) of the Judiciary Act, the Court has jurisdiction to entertain the substantive claims that the applicants want to raise.  As a consequence, for the reasons stated below, the Court has jurisdiction to hear and determine the applicants’ current application, upon the basis that the determination of the issues raised by it are ancillary or incidental to the exercise of judicial power in relation to the matter: cf Airservices Australia v Transfield Pty Ltd (1999) 92 FCR 200 (‘Airservices’) at 208 [25] per Finn J. 

29                                           In order to make good these conclusions, it is first necessary to consider what is meant by the term ‘matter’ in the relevant constitutional provisions (see above) and therefore in s 39B(1A) of the Judiciary Act. As stated in Von Arnim v Group 4 Correctional Services Pty Ltd (2002) 117 FCR 346 at 352 [22]:

 The word ‘matter’ in s 39B(1A)(c) has the same meaning as it possesses in s 76 of the Constitution of the Commonwealth:  see Transport Workers’ Union v Lee (1998) 84 FCR 60 at 66 per Black CJ, Ryan and Goldberg JJ.  The ‘matter’ is “the subject matter for determination in a legal proceeding”, “a justiciable controversy, identifiable independently of the proceedings which are brought for its determination and encompassing all claims made within the scope of the controversy”:  see Re Judiciary and Navigation Acts (1921) 29 CLR 257 at 265-266; Fencott v Muller (1983) 152 CLR 570 at 591 per Gibbs CJ and at 603 per Mason, Murphy, Brennan and Deane JJ; Croome v Tasmania (1997) 191 CLR 119 at 125 per Brennan CJ, Dawson and Toohey JJ.  A matter is ordinarily concerned with “some immediate right, duty or liability to be established by the determination of the Court”:  see Re Judiciary and Navigation Acts at 265 and Abebe v Commonwealth (1999) 197 CLR 510 at 524 per Gleeson CJ and McHugh J and at 570 per Gummow and Hayne JJ.

30                                          The gist of the applicants’ substantive claims, as set out in their proposed pleading, is that the respondents violated rights and/or privileges conferred on them by the Civil Aviation Act, regulations under that Act, and/or the Civil Aviation Orders (as defined in s 3 of that Act) by virtue of events occurring between May 2004 and late September 2006.  The claims evidently form part of a single controversy between the applicants and the respondents relating to the respondents’ conduct during this period (whether individually or as CASA’s agents). 

31                                          By this pleading, the applicants would advance five key propositions, namely:

1.                  Polar was entitled to retain its Air Operator’s Certificate subject only to cancellation or suspension in accordance with s 28BC(2A) of the Civil Aviation Act; and CASA and/or the other respondents cancelled Polar’s Air Operator’s Certificate otherwise than in accordance with that provision.

2.                  Polar was entitled to renewal of its Air Operator’s Certificate provided Polar satisfied s 28(1) of the Civil Aviation Act; and CASA failed to renew Polar’s Air Operator’s Certificate notwithstanding that Polar satisfied s 28(1) – as acknowledged by the second respondent, Mr Farquharson.

3.                  Under the Civil Aviation Act, Mr Butson was entitled to retain his approval as Chief Pilot subject only to cancellation or suspension in accordance with: (a) s 30DI of the Judiciary Act; (b) regulation 269 of the Civil Aviation Regulations 1988 (Cth) (‘the Regulations’); and/or (c) clause 6 of Appendix 1 to Civil Aviation Order 82.0; and CASA and/or the other respondents cancelled his approval otherwise than in accordance with these provisions.

4.                  The approval of Mr Butson as a Chief Flying Instructor was a right or privilege granted to him under the Civil Aviation Act, which could be terminated only in accordance with: (a) s 30DI of the Judiciary Act; and/or (b) regulation 269 or regulation 5.58(5) of the Regulations; and CASA and/or other respondents terminated that right or privilege otherwise than in accordance with these provisions.

5.                  Generally, CASA owed to the applicants duties “arising out of the terms and ambit” of the Civil Aviation Act; and the CASA had breached these duties: see par [15(b)] of the Proposed Statement of Claim.

32                                          CASA owes its existence to s 8 of the Civil Aviation Act, and has the functions delineated in s 9 of that Act.  Essentially, a proceeding in which the applicants’ substantive claims were advanced would be one in which the applicants sought to vindicate the statutory rights and privileges they claim were conferred on them by federal law, CASA’s violation of which entitles them to an award of damages.  Thus, the ‘matter’ would include those rights and privileges that, under the Civil Aviation Act, Polar claims against CASA through holding an Air Operator’s Certificate and Mr Butson claims through being approved as Chief Pilot and/or Chief Flying Instructor.  The matter would also include the duties that, under the Civil Aviation Act, the applicants claim that CASA has breached.  The nature of these claimed statutory rights and privileges and/or duties, including whether breach of these rights and privileges and/or duties justifies an award of damages, would fall to be determined under and by reference to the Civil Aviation Act (as well as the Regulations and Orders).  Such a proceeding would thus give rise to the question whether the applicants have an entitlement to damages against the CASA “arising under” the Civil Aviation Act. 

33                                          Put another way, the source of any entitlement as against CASA to damages for claimed violation of statutory rights, privileges, or duties owed by CASA to the applicants is the Civil Aviation Act (and the Regulations and Orders made under it).  This gives rise to a federal ‘matter’  for the purposes of s 39B(1A)(c) of the Judiciary Act, as indicated by the authorities: see, for example, R v Commonwealth Court of Conciliation and Arbitration; Ex parte Barrett (1945) 70 CLR 141 at 154 per Latham CJ; Felton v Mulligan (1971) 124 CLR 367 at 373-4 per Barwick CJ, 382 per Menzies J, 403 per Walsh J and 416 per Gibbs J; Kable v Director of Public Prosecutions (NSW) (1996) 189 CLR 51 at 95 per Toohey J and 136 per Gummow J; and Austral Pacific Group Ltd (in liq) v Airservices Australia (2000) 203 CLR 136 at 141 [9] per Gleeson CJ, Gummow and Hayne JJ. 

34                                          The Court would also have jurisdiction to entertain the non-federal claims contemplated by the proposed pleading, such as the negligence and misfeasance in public office claims.  When the proposed pleading is examined, it appears that the common law claims form part of the one matter and fall within the accrued federal jurisdiction of the Court. 

35                                          That is to say, where the Court has jurisdiction over a matter (as it would over the federal claims here), then the Court has jurisdiction to consider the whole of the controversy, including any non-federal claims forming part of the matter: see Petrotimor at 509 [3] per Black CJ and Hill J, citing Philip Morris and Fencott v Muller (1983) 152 CLR 570 (‘Fencott v Muller’).  This ‘accrued’ jurisdiction (as it is generally called today) is governed by well-established principles: see, e.g., Philip Morris at 474-5 per Barwick CJ; Fencott v Muller at 607-8; Stack v Coast Securities (No 9) Pty Ltd (1983) 154 CLR 261 at 294 per Mason, Brennan Deane JJ; Re Wakim; Ex parte McNally (1999) 198 CLR 511 at 585-6 per Gummow and Hayne JJ; Abebe v Commonwealth (1999) 197 CLR 510 (‘Abebe’) at 530 per Gleeson CJ and Hayne J; and Australian Securities and Investments Commission v Edensor Nominees Pty Ltd (2001) 204 CLR 559 at 585-6 per Gleeson CJ, Gaudron and Gummow JJ.  Broadly speaking, a non-federal claim will fall within the accrued federal jurisdiction if the claim arises out of common transactions and facts, although they may not entirely coincide: see Fencott v Muller at607-8.  In their joint judgment in that case, Mason, Murphy, Brennan and Deane JJ went on to say (at 608):

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.

In short, this Court will have jurisdiction to hear and determine a non-federal claim, if it shares a ‘common substratum of facts’ with a federal claim, or if the claims are related in the sense that the determination of one is essential for the determination of the other.  The non-federal claims foreshadowed in the proposed pleading apparently satisfy this test.

36                                          Whilst, for reasons to be explored shortly, McKerracher J’s decision in Repacholi proceeds on a different basis from the decision in this case, I note that his Honour was prepared to accept that at least some of the claims advanced in that case could attract the jurisdiction conferred by s 39B(1A)(c) of the Judiciary Act, though the issue was not much argued: see Repacholi at 117 [112]-118 [116].

37                                          Analysis of the pleading does not support the respondents’ submission that the pleading raise claims under the common law and not federal law.  Further, there is little in this analysis to justify a finding that the applicants’ claim is ‘colourable’ as that word was used in Burgundy Royale Investments Pty Ltd v Westpac Banking Corporation (1987) 18 FCR 212 at 219.  That is, there is nothing to suggest that the federal claims in this case have been made for the improper purpose of fabricating jurisdiction. The federal claims may prove untenable or otherwise fail, but that will not deprive the Court of jurisdiction to deal with the non-federal claims: see Johnson Tiles at 597-8 [85]-[86] and the authorities there cited; and Petrotimor at 509 [6].

38                                          The latter proposition is important in view of McKerracher J’s decision in Repacholi, in which the pleaded case against CASA resembled the case that the applicants also wish to make: see Repacholi at 107 [51]-115 [107].  In an application for summary judgment, his Honour held that a claim for damages for breach of statutory duty against CASA was untenable because there were “no indicia in the statutory regime that such a claim should lie”: see Repacholi at 128 [162].  His Honour also held that a misfeasance in public office claim was not maintainable, there being no disclosed basis for the claim, although his Honour noted that if discovery were given, the position “may theoretically change”: Repacholi at 130 [167].  His Honour declined to strike out the negligence plea.

39                                          It must be borne in mind that Repacholi and this case, though arising out of similar facts, raise different issues, first, because the motions before the Court were different and, secondly, Repacholi unlike this case was transferred to this Court from the State Supreme Court, where it had begun.  There is no application for summary judgment before the Court in this case, and nor could there be.  Instead, the respondents have made a direct challenge to the Court’s jurisdiction to deal with the applicants’ current application.  Repacholi does, however, indicate considerations that that the applicants may wish to take into account before formally delivering a pleading.

40                                          The critical question raised by the respondents’ motion is whether the applicants have enlivened federal jurisdiction.  If not, then there can be no federal jurisdiction (whether original, accrued, or associated) to support the applicants’ current application:  see Johnson Tiles at 598; Carlton & United Breweries Ltd v Castlemaine Tooheys Ltd (1986) 161 CLR 543 at 553; and Petrotimor at 509 [4]-[5] and 512 [23]. In Petrotimor the controversy that was said to constitute the federal matter was held to be non-justiciable, so that there was no federal matter at all and thus no accrued federal jurisdiction.

41                                          In this case, the applicants have not yet served a statement of claim in the form of the proposed pleading in accordance with the Rules.   Nor have they filed any application for substantive relief.  It follows, so the respondents say, that there are no federal claims that can form a controversy constituting a ‘federal’ matter within s 39A(1A)(c) of the Judiciary Act.  According to the respondents, there is therefore nothing to support the Court’s entertaining non-federal claims in the accrued jurisdiction, and therefore nothing to support consideration of the issues raised by the applicants’ application, which require the interpretation of State legislation.  Further, according to the respondents, since there is no federal matter within jurisdiction, there can be no associated jurisdiction and, therefore, no other basis upon which the Court might deal with the applicants’ application.   For the reasons I am about to give, I would reject the respondents’ submissions.

42                                          The respondents’ argument depends on the proposition that there can be no controversy constituting a ‘federal’ matter when there is no federal claim being made in a proceeding; alternatively, as counsel put it:

“it has to be a matter to be determined by the court and … it’s only to be determined by the court if the matter is actually before the court ….”

43                                          These propositions are not borne out by the authorities.  A ‘matter’ (which has the same meaning in s 39B(1A) of the Judiciary Act as in ss 75-77 of the Constitution) is constituted by a justiciable controversy between the parties: see Fencott v Muller at 608.  In this context, a controversy may exist independently of the proceeding brought for resolving it.  Thus, the joint judgment in Fencott v Muller at 603 stated that:

The concept of ‘matter’ as a justiciable controversy, identifiable independently of the proceedings which are brought for its determinationand encompassing all claims made within the scope of the controversy, was accepted by a majority of the Court in Philip Morris. (Emphasis added)

See Philip Morris at 475, 512.  See also Crouch v Commissioner for Railways (1985) 159 CLR 22 at 37; Croome v Tasmania (1997) 191 CLR 119 at 125; and Abebe at 523-4 [24].  Indeed, the meaning of the word ‘matter’ has always been said to be broad.  In South Australia v Victoria (1911) 12 CLR 667 at 675, Griffith CJ stated that “[t]he word ‘matters’ was in 1900 in common use as the widest term to denote controversies which might come before a Court of Justice” (emphasis added).  As the Full Court accepted in Hooper v Kirella Pty Ltd (1999) 96 FCR 1 (‘Hooper v Kirella’), this statement recognized that a relevant controversy and therefore a ‘matter’ may exist independently of a claim actually before a court. 

44                                          Hooper v Kirella held (amongst other things) that s 39B(1A)(c) of the Judiciary Act validly conferred jurisdiction on the Court to entertain applications for preliminary discovery under O 15A of the Rules in matters arising under the Trade Practices Act 1974 (Cth): 20 [73]-[75].  In so holding, the Full Court dismissed appeals against the judgments of Tamberlin J in Kirella Pty Ltd v Hooper (1999) 92 FCR 90 (‘Kirella v Hooper’) and Finn J in Airservices 92 FCR 200. Critical to the Full Court’s judgment was acceptance of the proposition that a federal ‘matter’ can exist even though a proceeding claiming substantive rights has not been instituted in the court (and there is thus no claim actually before the court).

45                                          To appreciate Kirella v Hooper it is first necessary to say something about the identity and information discovery procedure in O 15A.  An order made under O 15A r 3 is made to enable a would-be litigant to identify the person or persons against whom the litigant considers he or she has a claim or claims.  An order made under O 15A r 6 is designed to enable the would-be litigant to obtain information to enable the litigant to make a decision as to whether to commence a proceeding, where (amongst other things) there is reasonable cause to believe that the litigant may have a right to obtain relief from a person whose description has been ascertained.

46                                          Secondly, it is helpful to refer to the reasons for the judgments of Tamberlin J in Kirella v Hooper and Finn J in Airservices, because the Full Court substantially agreed with them and both stated their reasons with particular clarity.  Both rejected the proposition that, at the stage at which preliminary discovery was sought, there was no ‘matter’ in existence within the meaning of ss 76 and 77 of the Constitution and thus nothing to support any statutory conferral of jurisdiction.  Tamberlin J said (at 96-97 [29]):

The present orders are sought to enable the court to exercise its jurisdiction in the administration of justice concerning an existing right under the [Trade Practices Act].  The claim arises under that Act because the right to the remedy is conferred by it …. It is true that one fact, namely the identity of the appropriate respondent or respondents, is not known with certainty, and therefore legal proceedings making the substantive claim for relief have not yet been initiated ….  Nevertheless, in my view, within the principles expressed in the Re Judiciary and Navigation Acts [(1921) 29 CLR 257 at 265], there is a ‘matter’ presently in existence, namely the accrued and fully constituted right to claim relief under the [Trade Practices Act].  The mechanism of preliminary discovery enables the court to determine and enforce that claim of right in exercise of its jurisdiction with respect to it.

47                                          In Airservices, Finn J explained (at 208 [24]):

The events giving rise to the prospective claim have occurred and they provide reasonable cause to believe that [Airservices] has or may have a right to obtain relief against Transfield under the [Trade Practices] Act.  This Court clearly has jurisdiction to determine whether those events actually have given rise to a right in [Airservices], a liability in Transfield, under the [Trade Practices] Act these being questions arising under a law made by the Commonwealth Parliament: Constitution, s 76(ii).  A claim properly initiated with that object in mind would be one seeking the establishment of an actual right and liability by the court and not merely an advisory opinion: cf Re Judiciary and Navigation Acts; it would relate to an apprehended wrong for which the law provides a remedy: cf Abebe v Commonwealth [(1999) 197 CLR 510 at 526-528]; it would not involve merely a hypothetical question: cf Bass v Permanent Trustee Co Ltd [(1999) 198 CLR 334 at 359 [56] ff].  I would add that the court’s jurisdiction in relation to that matter would not depend upon the applicant actually being successful in establishing its right – or for that matter in commencing a proceeding that disclosed a reasonable cause of action: cf O 20, r 2 of the Federal Court Rules.  (Emphasis added.)

Concluding that Airservices’ complaint had the capacity to constitute a matter, Finn J perceived the “real question” as “not whether there is a matter, but how the jurisdiction in respect of that matter can properly be enlivened”.  At 208 [25]-[26], his Honour said:

That involves a question of judicial power.  In this particular setting the answer to that question depends upon whether preliminary discovery of the type envisaged by O 15A, r 6 is an incident of the exercise of judicial power in relation to the matter …. In my view it clearly is.

Ordinarily a court’s jurisdiction is enlivened by initiating process seeking a determination of the substantive claim one party alleges it has against another.  But … such need not necessarily be the case.  Necessity may require otherwise if a person’s right is to be vindicated in a substantive claim.  Preliminary discovery of the types provided in O 15A, rr 3 and 6 have long been accepted as a proper and appropriate precursor to the making of a substantive claim – and appropriate because it assists in the administration of justice in relation to the making of the claim itself.  There is no reason for present purposes to distinguish between the two types of discovery.  Each reflects a different necessity. (Emphasis added.)

48                                          The Full Court (Wilcox, Sackville and Katz JJ) agreed, upholding the conferral of jurisdiction to resolve applications for preliminary discovery.  Their Honours also rejected the proposition that there could be no ‘matter’ unless a legal proceeding defining the dispute and identifying the claim for a remedy had been instituted.  As the Full Court recognized (at 14 [49]-[50]) one must bear in mind the context in which discussions of the word ‘matter’ appear in judgments of the High Court, including in Re Judiciary and Navigations Acts (1921) 29 CLR 257 (‘Re Judiciary and Navigations Acts’) at 265.  The Full Court said (at 14-15 [50]-[55]:

The seminal passage in Re Judiciary and Navigation Acts also rejects the proposition that a matter, in the constitutional sense, is co-extensive with a legal proceeding.  The passage is as follows (at 265-266):

“It was suggested in argument that ‘matter’ meant no more than legal proceeding, and that Parliament might at its discretion create or invent a legal proceeding in which this Court might be called on to interpret the Constitution by a declaration at large.  We do not accept this contention; 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.  In our opinion there can be no matter within the meaning of the section unless there is some immediate right, duty or liability to be established by the determination of the Court. If the matter exists, the Legislature may no doubt prescribe the means by which the determination of the Court is to be obtained, and for that purpose may, we think, adopt any existing method of legal procedure or invent a new one.  But it cannot authorise this Court to make a declaration of the law divorced from any attempt to administer that law.”

The reference to an “immediate right, duty or liability” was used by the Court to distinguish a genuine controversy from a desire to obtain an advisory opinion from the Court divorced from such a controversy.  It was not intended to, and cannot be read as, denying the existence of a matter unless proceedings claiming substantive rights have been instituted.

….

Of course, if a controversy is the subject of existing proceedings claiming substantive relief the scope of the controversy (or ‘matter’) is likely to depend, in part, on what the parties allege in the pleadings and how they have conducted the litigation: Abebe at 561 [139] … per Gummow and Hayne JJ.  But that does not mean that unless a party has instituted proceedings claiming substantive relief there can be no matter in respect of which jurisdiction can be conferred on the Federal Court.  It is the justiciable controversy which constitutes the matter.  That controversy may or may not be co-extensive with legal proceedings already instituted.

….

In determining whether there is a “subject matter for determination in a legal proceeding” in respect of which Parliament can define the jurisdiction of a federal court, it is doubtless necessary for the relevant matter to be capable of identification.  Doubtless, too, there can be no matter unless a claim is made that can be seen to involve “an immediate right, duty or liability to be established by the determination of the Court”.  But it is only a claim (with the necessary federal elements) that is necessary.  A matter can exist even though a right, duty or liability has not been established and, indeed, may never be established: Abebe at 528 [32] … per Gleeson CJ and McHugh J ….  (Emphasis added.)

49                                          Hooper v Kirella has been regularly followed and applied in preliminary discovery applications in this Court: see, e.g., Allphones Retail Pty Ltd v Australian Competition & Consumer Commission (2009) 259 ALR 354; Wyeth v Secretary, Department of Health and Ageing (2009) 255 ALR 352; Optiver Australia Pty Ltd v Tibra Trading Pty Ltd (2007) 163 FCR 554 (‘Optiver’); Rush v Commissioner of Police (2006) 150 FCR 165; and Kennedy v Wallace (2004) 208 ALR 424. 

50                                          Hooper v Kirella has not, however, been confined to the preliminary discovery context.  The Full Court (Heerey, Sackville and Siopis JJ) applied the reasoning in that case in Employers Reinsurance Corporation v Ashmere Cove Pty Ltd (2008) 166 FCR 398.  This was an appeal against the grant of leave to investors to join insurers in a suit by investors to recover losses from a registered management scheme, in which the investors sought (amongst other things) a declaration that the insurers were liable to indemnify the responsible entity of the scheme.  Focussing on the distinction between a ‘matter’ and the legal proceedings in which the matter is determined, the Full Court rejected the submission that there was no ‘matter’ or justiciable controversy because no declaration could be made in the proceeding to bind the insurers and the insured: see 408-410 [43]-[51].

51                                          In the present case, the respondents submit that the applicants may in fact never bring their claims before the Court.   In this event, so they say, the Court would have dealt with non-federal questions raised by the current application without a federal claim having ever enlivened the Court’s jurisdiction.  Hooper v Kirella deprives this argument of much of its force.  As Tamberlin J helpfully remarked in Optiver at 559-60, Hooper v Kirella held that “[t]he ‘matter’ was the underlying substantive claim, and not the ancillary application for preliminary discovery” and that “[b]eing ancillary, the preliminary discovery decision was deemed to be within the scope of the substantive ‘matter’”.  Hooper v Kirella shows that the jurisdiction may be enlivened even though there has been no initiating process seeking determination of substantive federal claims. Rather, federal jurisdiction will be enlivened in the absence of an initiating process where vindication of a right in a substantive federal claim depends on the resolution of a prior preliminary application (as here and in the case of a preliminary discovery application).

52                                          As the affidavit of Mr Maitland and the proposed pleading shows, the applicants have existing claims against the respondents arising out of events between May 2004 and late September 2006.  The applicants clearly have standing to bring them. The claims are ones that in due course can be determined by the Court by reference to legal rules, principles and standards: cf Abebe at 524-5 [25].   These existing claims constitute a federal matter, being a justiciable controversy in respect of which this Court would have jurisdiction. The controversy constituting the federal matter is defined by the claims in the proposed pleading.  These claims are to enforce an “immediate right, duty or liability” as that expression appears in Re Judiciary and Navigation Acts at 265; they are not seeking a merely advisory opinion and do not involve a hypothetical question.  The affidavit evidence of Mr Maitland shows that the applicants intend to advance these claims in a proceeding in this Court and that they bring their current application in order that they are not barred by the Limitation Act from so doing. 

53                                          In the present case, the federal matter is the underlying substantive claims, not the ancillary application for leave under s 47A of the Limitation Act, and this ancillary application is to be considered as within the scope of the federal matter.   The relief sought is incidental to the controversy between the parties, in that, if granted, it allows the applicants to pursue their claims in the Court. The fact that preliminary discovery has a distinct curial history does not make the reasoning in Hooper v Kirella inapplicable in this case. Just as an application for preliminary discovery enlivens federal jurisdiction, so too this application for leave under s 47A(3) of the Limitation Act enlivens federal jurisdiction, because, as for a preliminary discovery application, it is brought of necessity before an initiating process to vindicate a federal claim.  That is, since leave cannot be granted retrospectively, the applicants apply for leave in order that they might properly bring their action, vindicate their rights, and establish the respondents’ liability.  To adapt what Finn J said in Airservices, this application is appropriate because it assists in the administration of justice in relation to the making of the federal claims, which would be instituted if leave were granted. 

54                                          The applicants might, as the respondents say, walk away from further litigation, but this possibility is not enough to deny a finding that there are identified existing federal claims constituting a single justiciable controversy that, according to the affidavit sworn by the applicants’ solicitor, the applicants wish to bring into this court.  The relief sought is such that, if granted, will remove a bar that would prevent the applicants from pursuing a substantive remedy.

55                                          I would, therefore, answer the question raised by the respondents’ motion – does the Court have jurisdiction to deal with the applicants’ present application – in the affirmative.  This application is properly treated as incidental to any exercise of judicial power over the federal ‘matter’ presented by the underlying existing federal claims disclosed in Mr Maitland’s affidavit and the proposed pleading; and, in the circumstances disclosed, federal jurisdiction has been enlivened.  For the reasons stated, I would dismiss the respondents’ motion.

56                                          Before the hearing, the parties agreed that, in addition to the issues raised by the respondents’ motion, the applicability of the Limitation Act should be argued as well, although they did not address the question whether, if the Limitation Act applied, it would be appropriate to make an order granting the applicants the leave under s 47A(3) that they sought.  No order was sought under O 29 r 2 of the Rules; and I doubt that any such order would have been made even if sought.  In Repacholi McKerracher J considered the arguments as to whether or not s 47A of the Limitation Act applied to similar proceedings, saying there was force in CASA’s submission that it did but declining to decide the issue on the basis that it was premature to do so: 263 ALR at 123 [140].  In all the circumstances, having concluded that the Court has jurisdiction with respect to the applicants’ leave application, it is not appropriate to express any definitive view as to the applicability of s 47A of Limitation Act before hearing the applicants on the question whether they should be granted leave under s 47A(3) of that Act.

57                                          Accordingly, bearing in mind the passage of time, the applicants will be afforded an opportunity to be heard on this latter question at the nearest opportunity.  I would also afford the parties an opportunity to be heard on the question of costs of the respondents’ motion at that time too.

Associate:

Dated:         16 April 2010