Federal Court of Australia
Brittain v Reskey Pty Ltd  FCA 1724
DATE OF ORDER:
THE COURT ORDERS THAT:
1. The respondents’ interlocutory application dated 27 October 2020 be dismissed.
2. By no later than 4:00pm on Friday, 4 December 2020, the respondents shall file and serve a defence.
3. By no later than 4:00pm on Friday, 18 December 2020, the applicant shall file and serve any reply.
1 On 5 October 2020, the applicant filed an originating application in this court seeking against the respondents (and amongst other things) various remedies under the Fair Work Act 2009 (Cth) (hereafter, the “FW Act”), including compensation, declarations, penalties and damages, in respect of his former employment with the first respondent.
2 At the risk of over-simplification, the applicant alleges that the first respondent, in the operation of the real estate business within which it employed him, failed to observe the requirements of an award of the Fair Work Commission known as the Real Estate Industry Award 2020; and, by those failures, contravened ss 45 and 323 of the FW Act. He also prosecutes alleged contraventions of ss 535 and 536 of the FW Act, which pertain to the creation and provision of employee records and pay slips. The second respondent is a director of the first respondent. He is alleged to have been involved in (within the meaning attributed to that phrase by s 550 of the FW Act) the contraventions that are alleged against the first respondent. The contraventions that are alleged against the respondents are alleged to qualify as “serious contraventions” for the purposes of s 557A of the FW Act.
3 On 27 October 2020, the respondents made an application under s 32AB(1) of the Federal Court of Australia Act 1976 (Cth) (hereafter, the “FCA Act”) that the present proceeding be transferred to the Federal Circuit Court of Australia. Not long thereafter, that application (hereafter, the “Transfer Application”) was listed for hearing on Thursday, 26 November 2020. The applicant opposed it.
4 The hearing earmarked for Thursday, 26 November 2020 took place as scheduled. Two affidavits—one for each side—were filed and read without objection. It is not necessary to recite their content; there is not presently any relevant factual divide that separates the parties. Mr Minucci and Mr Denton, each of counsel, appeared for the respondents and the applicant respectively. Their submissions were of much assistance and, at the conclusion of the hearing, the court reserved its judgment on the Transfer Application. For the reasons that follow, that application will be dismissed.
The court’s power to transfer
5 Section 32AB of the FCA Act relevantly provides as follows:
32AB Discretionary transfer of civil proceedings to the Federal Circuit Court
(1) If a proceeding is pending in the Court, the Court may, by order, transfer the proceeding from the Court to the Federal Circuit Court.
(2) The Court may transfer a proceeding under subsection (1):
(a) on the application of a party to the proceeding; or
(b) on its own initiative.
(6) In deciding whether to transfer a proceeding to the Federal Circuit Court under subsection (1), the Court must have regard to:
(a) any Rules of Court made for the purposes of subsection (4); and
(b) whether proceedings in respect of an associated matter are pending in the Federal Circuit Court; and
(c) whether the resources of the Federal Circuit Court are sufficient to hear and determine the proceeding; and
(d) the interests of the administration of justice.
(7) If an order is made under subsection (1), the Court may make such orders as it considers necessary pending the disposal of the proceeding by the Federal Circuit Court.
6 Rules 27.11 and 27.12 of the Federal Court Rules 2011 govern the transfer of proceedings from this court to the Federal Circuit Court of Australia. They relevantly provide as follows:
27.11 Transfer to Federal Circuit Court of Australia
A party may apply to the Court to transfer to the Federal Circuit Court of Australia:
(a) a proceeding other than an appeal; or
(b) an appeal under the AAT Act.
27.12 Factors to be taken into account
(1) For an appeal under the AAT Act, the parties must address the matters mentioned in section 44AA(7) of that Act.
(2) For a proceeding, the parties must address the matters mentioned in section 32AB(6) of the Act.
(3) For an appeal under the AAT Act or a proceeding, the parties should address the following:
(a) whether the appeal or proceeding is likely to involve questions of general importance;
(b) whether it would be less expensive and more convenient to the parties if the appeal or proceeding were transferred;
(c) whether an appeal or proceeding would be determined more quickly if transferred;
(d) the wishes of the parties.
Note: If the Court makes an order transferring an appeal or proceeding to the Federal Circuit Court of Australia, a Registrar will send all documents filed and all orders made to the proper officer of the Federal Magistrates Court.
7 In addition to the present proceeding in this court, the parties (or, at the very least, the applicant and the first respondent) are engaged in proceedings in the Supreme Court of Victoria. There, the first respondent alleges that the applicant breached various duties that he owed it when he was in its employ. In short (and again at the risk of over-simplification), the applicant is alleged to have gone to work for a rival real estate business and, in connection with doing so, to have appropriated commercial information belonging to the first respondent. He is alleged to have breached certain obligations of confidence, diligence, good faith or the like (including obligations arising under the Corporations Act 2001 (Cth)).
8 That proceeding (hereafter, the “SCV Proceeding”) has been on foot since October 2019. As well as the applicant, its defendants comprise the applicant’s new employer and two of its officers. The applicant has filed a counterclaim within the auspices of that proceeding, by which he makes a claim against the first respondent for certain unpaid commissions. The SCV Proceeding has been the subject of (what appear to be largely unremarkable) pleading amendments, a joinder application, a discovery skirmish (which, perhaps, is not yet resolved) and a mediation. No evidence has been filed and the matter is not presently scheduled for trial. The applicant and the other defendants in that proceeding are commonly represented.
9 On 20 November 2020, the defendants (including the applicant in this proceeding) made an application in the Supreme Court of Victoria under s 5 of the Jurisdiction of Courts (Cross-Vesting) Act 1987 (Vic) and s 5 of the Jurisdiction of Courts (Cross-Vesting) Act 1987 (Cth) to transfer the SCV Proceeding to this court. That application (hereafter, the “Cross-Vesting Application”) is listed for hearing before McDonald J on 8 February 2021.
Appropriateness of transfer
10 The applicant opposes the transfer of the present proceeding to the Federal Circuit Court, primarily because his Cross-Vesting Application is yet to be determined. He also maintains that the proceeding, insofar as it alleges that the respondents committed “serious contraventions” (within the meaning attributed to the singular of that phrase by s 557A of the FW Act), is one that it is appropriate for this court to hear.
11 I am satisfied that the present proceeding poses no issues of general importance, and that it is likely to be resolved more quickly and with less cost in the Federal Circuit Court of Australia. I was not alerted to the existence of any associated matter currently pending in that court (which I take as warranting a conclusion that there aren’t any) and there is no suggestion that the resources of that court are anything but sufficient for the purposes of hearing the present matter (which is a finding I would readily draw in any event). Those factors all point in favour of the proceeding being transferred.
12 The existence of the SCV Proceeding and, in particular, the Cross-Vesting Application, however, looms large for present purposes. Plainly enough, if the SCV Proceeding is transferred to this court (as the Cross-Vesting Application contemplates), it would very likely be heard concurrently with the present proceeding. That, the applicant says, is the very end to which the Cross-Vesting Application is directed. The two sets of proceedings, he says, although plainly they do not overlap entirely, nonetheless involve common issues and common witnesses, such that it is in the interests of justice that they be heard and determined at the same time. Although, as the respondents submitted, there is room to debate the scope of that overlap, I am satisfied that there is at least some as between the two sets of proceedings.
13 Plainly, were I to transfer the present proceeding now—and were the Cross-Vesting Application to succeed—that aspiration (of the two matters being heard together) would require that an additional transfer application be made and granted. Invited to nominate what their position would likely be on whether or not a further transfer of what is presently the SCV Proceeding from this court to the Federal Circuit Court (assuming that the Supreme Court grants the Cross-Vesting Application), counsel for the respondents did not hesitate to indicate that they would oppose that and would maintain that the issues that arise in that matter should be determined by a superior court.
14 The respondents urged me to draw an inference that the animating purpose behind the Cross-Vesting Application is to attract, for the purposes of what is currently the SCV Proceeding, the protection of s 570 of the FW Act and, thereby, to inoculate the defendants in that matter against the possibility of a costs order. I confess some confusion as to how that might, even if true, inform the discretion that I must now consider; but, on the assumption that it might, the submission can be swiftly dealt with.
15 Section 570 of the FW Act provides as follows:
570 Costs only if proceedings instituted vexatiously etc.
(1) A party to proceedings (including an appeal) in a court (including a court of a State or Territory) in relation to a matter arising under this Act may be ordered by the court to pay costs incurred by another party to the proceedings only in accordance with subsection (2) or section 569 or 569A.
Note: The Commonwealth might be ordered to pay costs under section 569.
A State or Territory might be ordered to pay costs under section 569A.
(2) The party may be ordered to pay the costs only if:
(a) the court is satisfied that the party instituted the proceedings vexatiously or without reasonable cause; or
(b) the court is satisfied that the party’s unreasonable act or omission caused the other party to incur the costs; or
(c) the court is satisfied of both of the following:
(i) the party unreasonably refused to participate in a matter before the FWC;
(ii) the matter arose from the same facts as the proceedings.
16 Even assuming that the Supreme Court were to grant the Cross-Vesting Application and that the SCV Proceeding were to be heard concurrently with this proceeding (upon transfer either to this court or to the Federal Circuit Court), it would nonetheless remain a proceeding in its own right and would not, by reason of those circumstances alone, morph into one relating to a matter arising under the FW Act. Counsel for the applicant volunteered that concession and, with respect, was right to do so.
17 Nonetheless, the Cross-Vesting Application remains significant. The applicant submitted that, if this application were to succeed, it would effectively defeat the Cross-Vesting Application by side wind. That was said to be so because that application depends upon there being, in this court, a proceeding that arises out of, or that is related to, the SCV Proceeding. That, in turn, was said to reflect the wording of s 5(1) of the Jurisdiction of Courts (Cross-Vesting) Act 1987 (Cth), which provides as follows:
5 Transfer of proceedings
(a) a proceeding (in this subsection referred to as the relevant proceeding) is pending in the Supreme Court of a State or Territory (in this subsection referred to as the first court); and
(b) it appears to the first court that:
(i) the relevant proceeding arises out of, or is related to, another proceeding pending in the Federal Court or the Family Court and it is more appropriate that the relevant proceeding be determined by the Federal Court or the Family Court;
(ii) having regard to:
(A) whether, in the opinion of the first court, apart from this Act and any law of a State relating to cross vesting of jurisdiction and apart from any accrued jurisdiction of the Federal Court or the Family Court, the relevant proceeding or a substantial part of the relevant proceeding would have been incapable of being instituted in the first court and capable of being instituted in the Federal Court or the Family Court;
(B) the extent to which, in the opinion of the first court, the matters for determination in the relevant proceeding are matters arising under or involving questions as to the application, interpretation or validity of a law of the Commonwealth and not within the jurisdiction of the first court apart from this Act and any law of a State relating to cross vesting of jurisdiction; and
(C) the interests of justice;
it is more appropriate that the relevant proceeding be determined by the Federal Court or the Family Court, as the case may be; or
(iii) it is otherwise in the interests of justice that the relevant proceeding be determined by the Federal Court or the Family Court;
the first court shall transfer the relevant proceeding to the Federal Court or the Family Court, as the case may be.
18 The existence of related or derivative proceedings in this court is only one of the three bases upon which s 5(1) contemplates the transfer of proceedings from a state Supreme Court to this court. That being so, the transfer of the present matter to the Federal Circuit Court would not dictate the outcome of the Cross-Vesting Application. Nonetheless, it would likely factor as a circumstance that might inform its outcome. If the present matter were to be transferred to the Federal Circuit Court; and if (as I would assume) the Supreme Court were to be alerted to the likelihood that the plaintiff would oppose any further transfer of the SCV Proceeding from this court to the Federal Circuit Court, then the Supreme Court might well surmise that the possibility of the two hearings being heard jointly is sufficiently remote to warrant against the transfer of the SCV Proceeding under s 5(1).
19 That being so, I consider that the interests of justice presently incline against the transfer of this matter to the Federal Circuit Court. If the Supreme Court of Victoria is minded to transfer the SCV Proceeding, it will likely (or may) do so having formed the view that the two matters should ideally be heard together (a reality to which it cannot, by order, give effect; but which is in any event likely if it is minded to grant the transfer). This court should, I think, refrain from doing anything that might jeopardise the realisation of any such objective.
20 In the event that the Victorian Supreme Court is minded not to transfer the SCV Proceeding, further consideration as to whether this matter should be transferred to the Federal Circuit Court might be warranted. In the meantime, however, I am not satisfied that such a transfer is appropriate and, for that reason, the Transfer Application will be dismissed.
21 The parties were otherwise agreed as to the filing of a defence and a reply, and I will make orders reflecting their agreement. In light of s 570 of the FW Act, I will make no order as to the costs of or pertaining to the Transfer Application.