Court of Appeal Supreme Court New South Wales

• Medium Neutral Citation: Rossmick No 1 Pty Ltd v Bank of Queensland [2012] NSWCA 85
• Hearing dates: 4 April 2012
• Decision date: 04 April 2012
• Before: Basten JA at 1; Meagher JA at 1; Sackville AJA at 1

Decision

(1) Stay the application for leave to appeal from the orders of Logan J made in the Federal Court on 19 September 2008, being the proceedings in matter QUD 309/2008 transferred to the Supreme Court of New South Wales by the Full Court of the Federal Court by order made on 26 November 2008.

(2) On application made by the OMB Parties, stay the underlying proceedings, being matter QUD 227/2007 in the Federal Court, transferred to the Supreme Court of New South Wales by the Full Court of the Federal Court on 26 November 2008.

(3) Direct that the costs of the parties in this Court be costs in the three proceedings transferred from the Industrial Court and pending in the Equity Division in which the operation of s 106 of the Industrial Relations Act 1996 was sought to be challenged on constitutional grounds, being matters 2008/282304, 2008/279848 and 2008/282126.

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

• Catchwords: COSTS - interlocutory appeal - application for leave to appeal in relation to pleadings in separate proceedings which might have been raised by way of defence in principal proceedings - application for leave to appeal cross-vested from Full Court of the Federal Court - separate proceedings stayed - whether costs of application for leave to appeal should be determined by the trial judge in the principal proceedings; PROCEDURE - civil - abuse of process - proceedings commenced in Federal Court seeking prohibition against Industrial Court of NSW - proceedings to be heard together in Supreme Court - constitutional issue to be pleaded in defence in principal proceedings - whether separate proceedings should be stayed; PROCEDURE - civil - interlocutory appeal - application for leave to appeal in relation to pleadings in separate proceedings which might have been raised by way of defence in principal proceedings - whether application for leave to appeal should be stayed - Civil Procedure Act 2005 (NSW), s 56(1); PROCEDURE - civil - proceedings cross-vested from the Full Court of the Federal Court of Australia to the Supreme Court - orders of single judge of Federal Court to be treated as orders of Supreme Court - application for leave to appeal from orders made by a judge of the Federal Court to be treated as an application for leave to appeal from a judge of the Supreme Court - Jurisdiction of Courts (Cross-vesting) Act 1987 (Cth)
• Legislation Cited: Civil Procedure Act 2005 (NSW), s 56; Constitution, s 109; Jurisdiction of Courts (Cross-vesting) Act 1987 (Cth), ss 7, 11, 13; Independent Contractors Act 2006 (Cth), s 7; Industrial Relations Act 1996 (NSW), s 106; Judiciary Act 1903 (Cth), ss 39B, 78B; Jurisdiction of Courts (Cross-vesting) Act 1987 (NSW), s 8; Supreme Court Act 1970 (NSW), ss 51, 101; Uniform Civil Procedure Rules 2005 (NSW), r 1.21
• Cases Cited: Bank of Queensland Ltd v Industrial Court of New South Wales [2008] FCA 324; Bank of Queensland Ltd v Industrial Court of New South Wales (No 2) [2008] FCA 1435; Rossmick No 1 Pty Ltd v Bank of Queensland Ltd [2008] FCAFC 81
• Category: Procedural and other rulings
• Parties: Rossmick No 1 Pty Ltd - First Appellant; Rossmick No 2 Pty Ltd - Second Appellant; Michael Bradley - Third Appellant; Ross Chapman - Fourth Appellant; Luke Nolan - Fifth Appellant; Jude Financial Services Pty Ltd - Sixth Appellant; Russell Jude Edward Gardner - Seventh Appellant; Penelope Ann Gardner - Eighth Appellant; SME Business Assist Pty Ltd - Ninth Appellant; Scott Rolfe McCoy - Tenth Appellant; Tomala No 1 Pty Ltd - Eleventh Appellant; Casmick Pty Ltd - Twelfth Applicant; Nolan No 1 Pty Ltd - Thirteenth Appellant; Nadine Nolan - Fourteenth Appellant; Bank of Queensland Ltd - First Respondent; David Liddy - Second Respondent; Donna Quinn - Third Respondent; Garry Allsop - Fourth Respondent; Industrial Court of New South Wales - Fifth Respondent
• Representation: Counsel: N Cotman SC - Appellants; J V Gooley/G A F Connolly - First Respondent; Solicitors: McCabe Terrill Lawyers Pty Ltd - Appellants; HWL Ebsworth Lawyers - First-Fourth Respondents; Crown Solicitors Office - Fifth Respondent
• File Number(s): CA 2009/287362

Decision under appeal

• Citation: Bank of Queensland Ltd v Industrial Court of New South Wales (No 2) [2008] FCA 1435
• Date of Decision: 2008-09-19 00:00:00
• Before: Logan J, Federal Court of Australia
• File Number(s): QUD 227 of 2007

Judgment

1 JUDGMENT of the COURT delivered by BASTEN JA: In 2004 and 2005 Bank of Queensland Ltd ("the Bank") sought to expand its franchise arrangements in New South Wales by the establishment of agencies pursuant to owner-manager branch agency agreements. The applicants in the proceedings before this Court entered into such agreements and, in the conventional language adopted by the parties, are referred to as the "OMB parties".

2 In 2007 the OMB parties commenced proceedings in the Industrial Court of New South Wales seeking relief with respect to the agency arrangements pursuant to s 106 of the Industrial Relations Act 1996 (NSW). On 2 November 2007, Hamilton J, in the Equity Division, made orders for the transfer of those proceedings from the Industrial Court to the Supreme Court. The orders were made pursuant to s 8(1) of the Jurisdiction of Courts (Cross-vesting) Act 1987 (NSW). The evident purpose of the orders was to consolidate in one court a number of proceedings then pending in different courts.

3 Prior to the removal of the Industrial Court proceedings to the Supreme Court, the Bank had commenced proceedings in the Federal Court, by application filed in the Queensland District Registry. The first respondent was, remarkably, the Industrial Court. In addition to various declarations, the primary order sought was one prohibiting the Industrial Court from hearing and determining the proceedings brought under s 106 of the Industrial Relations Act. The ostensible basis for such relief was that the "jurisdiction or power" of the Industrial Court under s 106 was removed by the operation of s 7 of the Independent Contractors Act 2006 (Cth) and s 109 of the Constitution.

4 Despite the fact that the sole purpose of the proceedings in the Federal Court appears to have been to resolve a constitutional issue, no party sought to satisfy this Court that notices had been issued to Attorneys General pursuant to s 78B of the Judiciary Act 1903 (Cth). No doubt such notices have been given at some point: it is inconceivable that at least seven judges of the Federal Court would have proceeded to deal with the matter in any way if not so satisfied. That, however, does not remove the obligation to satisfy this Court that such a step was taken. However, for reasons which will become apparent, nothing presently turns on that omission.

5 Why the proceedings in the Federal Court did not constitute an abuse of process when commenced and why they were not promptly disposed of as such is not apparent from the material before this Court.

6 On 27 March 2008 the Bank amended its application to add additional parties, but still sought prohibition against the Industrial Court, despite the fact that orders removing the proceedings from the Industrial Court had been made four months earlier. A statement of claim (and, on 27 March 2008, an amended statement of claim) were filed in the Federal Court in Queensland. An amended defence, dated 7 July 2008, was filed by the OMB parties. On 14 July 2008 the Bank sought to strike out various parts of the amended defence, the broad effect of which was to raise the facts and legal issues the subject of the Industrial Court proceedings as matters to be addressed in the Federal Court proceedings.

7 This was not the first pleading dispute which had arisen in the Federal Court; an earlier motion was dealt with by Greenwood J: Bank of Queensland Ltd v Industrial Court of New South Wales [2008] FCA 324. That case was subject to an appeal to the Full Court: Rossmick No 1 Pty Ltd v Bank of Queensland Ltd [2008] FCAFC 81. Greenwood J had declined to make an order transferring the proceedings to the Supreme Court under the Jurisdiction of Courts (Cross-vesting) Act 1987 (Cth) ("the Cross-vesting Act"). The first Full Court (Moore, Lindgren and Stone JJ), although aware of the unsuccessful cross-vesting application, made no comment about the propriety of the proceedings continuing in the Federal Court, beyond noting the unavailability of any appeal from the refusal of such an order: [6]-[7].

8 Following repleading, a further notice of motion seeking to strike out parts of the defence was heard by Logan J; various paragraphs of the amended defence were struck out: Bank of Queensland Ltd v Industrial Court of New South Wales (No 2) [2008] FCA 1435. Again, there was no comment on the propriety of the proceedings remaining in the Federal Court. Dissatisfied with that judgment, the OMB parties sought leave to appeal to the second Full Court. The application was listed for hearing before Spender, Moore and Gilmour JJ on 26 November 2008. The application did not proceed far: the members of the Court raised with counsel the difficulties they perceived in maintaining proceedings of the kind before them in the Federal Court. Following an adjournment to allow the parties to obtain instructions, orders were made in the following terms:

"(1) Pursuant to section 5, sub-section (4) of the Jurisdiction of Courts Cross-vesting Act, 1987, Commonwealth, the matters to be determined in the subject proceedings in this Court numbered QUD 309/2008 and QUD 227/2007, be transferred to the Supreme Court of New South Wales.

(2) The costs of the proceedings, thus far in this court, be reserved to the Supreme Court of New South Wales."

9 The first matter referred to in the orders (QUD 309/2008) was the application for leave to appeal; the second matter (QUD 227/2007) was the principal application, from orders in which the application for leave to appeal was brought. (The orders have been taken from the transcript, no formal copy of the orders being before this Court.) It is convenient to refer to the principal application as the "constitutional proceeding".

10 There were two matters before this Court, namely the application for leave to appeal from the interlocutory judgment of Logan J and a motion filed by the Bank to have the application for leave to appeal dismissed, either because it was incompetent, pursuant to s 7(1) of the Cross-vesting Act, or for want of prosecution.

11 The Bank's motion, if upheld, would have a startling result. The proposition that the cross-vesting to this Court of the appeal proceeding by a Full Court of the Federal Court was a futility because this Court was incompetent to deal with the appeal, would not be lightly accepted. That the Bank should raise and rely upon such a proposition was also startling. The scope and purpose of s 7(1) of the Cross-vesting Act is by no means self-evident: if this Court were required to deal with it, it would. However, it is not necessary to deal with that question because there is an antecedent question as to the utility of the constitutional proceeding, now pending in the Equity Division. That question is relevant to the Bank's allegation of want of prosecution of the appeal and also to the OMB parties' application for leave to appeal.

12 If the Industrial Court lacked the power to grant relief sought by the OMB parties under s 106 of the Industrial Relations Act, it might have been thought that such a matter would have been raised by way of defence in those proceedings. If the Industrial Court lacked power to grant such relief, it might also be thought that the Equity Division would lack power to grant that relief, the transfer of jurisdiction being irrelevant to the operation of the Independent Contractors Act and its effect, through s 109 of the Constitution on the validity of s 106 of the Industrial Relations Act. However, instead of raising the matter as a defence in the Industrial Court proceedings, the Bank commenced separate proceedings in a different jurisdiction, purely to agitate that question. The Bank asserted that the Federal Court had jurisdiction to deal with such a question under s 39B(1A) of the Judiciary Act. No doubt it did and does. So do both the Industrial Court and this Court, though not pursuant to s 39B. When asked why the Bank had commenced separate proceedings in the Federal Court, counsel for the Bank was unable to provide an answer.

13 This Court was told without demur, although the supporting material was not before it, that the OMB parties had sought directions in the Equity Division that the Bank, if it wished to pursue the constitutional issue, should plead it as a defence to the claims for relief under s 106 of the Industrial Relations Act. That course was apparently resisted by the Bank, presumably because it would have been a clear abuse of process for it then to maintain separate proceedings seeking to litigate the same point. However, that merely raises a question as to why the separate proceedings were not an abuse of process from the outset. That is not a question this Court needs to determine, although it may be highly relevant to the costs of those proceedings, in due course.

14 The Court was informed that all of the proceedings in the Equity Division have been listed for trial before Ball J, with a direction that they be heard together. The hearing, which is apparently expected to take 30 weeks, is now due to commence in September 2012. There has, apparently, been no direction that the constitutional issue should be determined separately and before the other issues in the proceedings. That is a matter to be dealt with in the trial court, but the absence of any such direction disposes of the last vestige of practical utility which could conceivably support continuation of the separate proceedings. (It is not intended to imply that an order for a separate trial of the issue would give rise to any justification for resuscitating the constitutional proceeding.)

15 These issues were agitated at some length on the hearing of the application in this Court. The Court adjourned to allow the parties to obtain instructions as to the appropriate course to be followed. On resumption, counsel for the Bank indicated that he had instructions to consent to the Bank's notice of motion and the application for leave to appeal being stayed. On being invited to indicate what prejudice his clients might suffer if the constitutional proceeding were also stayed, he was unable to identify any element of prejudice. While it appears that the s 106 claims may have been incorporated into consolidated proceedings filed on behalf of the OMB parties, there was no suggestion that the defences could not deal discretely with those issues as, no doubt, they would need to deal discretely with other separate causes of action. The Court was informed that the Bank is in the course of preparing amended defences to the various proceedings in the Equity Division; it would presumably be a matter of transposing the existing claims in the constitutional proceeding to the defences to be filed in relation to the s 106 claims. Counsel did not suggest otherwise.

16 Senior counsel for the OMB parties sought to have the whole of the constitutional proceeding stayed.

17 The management of the litigation must reflect the overriding purpose of facilitating the just, quick and cheap resolution of the real issues in dispute: Civil Procedure Act 2005 (NSW), s 56(1). If the constitutional proceeding were permanently stayed, the Bank would be required, if so minded, to incorporate the constitutional issues into its defences to the s 106 claims. To the extent that such a course would require leave, the OMB parties indicated, through counsel, that they would not object to the relevant amendments. That might well, as counsel foreshadowed, give rise to a further pleading by way of reply, but the reply is not likely to raise the same issues as were raised before Logan J in the Federal Court. That is because the factual matters which the OMB parties had sought to raise as part of their reply in the Federal Court have, it would appear, been pleaded in any event in relation to the s 106 claims. To the extent that there remains any disputation in respect of the pleadings, it is a matter which can be dealt with by the trial judge, if and when it arises.

18 The fact that the Bank has so far declined to plead a defence in this form (assuming it does not wish to abandon the defence) may call into question its compliance with s 56(3) of the Civil Procedure Act and raise a question as to the compliance of its solicitors and counsel with s 56(4).

19 In these circumstances, the proper course is, as indicated at the hearing, to order that the constitutional proceeding be stayed, with the consequence that the application for leave to appeal and the notice of motion seeking to strike out that application should also be stayed. This will allow the real issues in dispute in the substantive proceedings to be dealt with in the Equity Division.

20 There remains a question as to the appropriate order for the costs of the proceedings in this Court. Upon the Court indicating that it was minded to direct that the costs be costs in the proceedings in the Equity Division in which the constitutional issue would arise, senior counsel for the OMB parties suggested that they should be entitled to their costs of the proceedings in this Court in any event. The outcome was, they submitted, that for which they had contended at all stages.

21 It is undoubtedly arguable that primary responsibility for the costs of the constitutional proceeding should be borne by the Bank. Not only did it commence the proceedings in the Federal Court, but it resisted the transfer sought by the OMB parties under the Cross-vesting Act, persuading Greenwood J that such an order should not be made. The parties appear to have accepted that s 13 of the Cross-vesting Act precluded a challenge to the decision of Greenwood J by way of appeal. It would not, arguably, have precluded a fresh application in the Full Court, which was ultimately how the matter came to be transferred. This Court lacks full knowledge of the steps taken in other places and therefore how they should be viewed. It would not be a useful exercise for this Court to undertake an analysis of those procedural steps on the papers, which are not all before this Court. If, at the end of the day, there is reason to separate out particular costs for special orders, that can be done by the trial judge. As the costs of the constitutional proceeding in the Federal Court were reserved for determination in the Equity Division, it is convenient that the costs in this Court, which depend primarily on steps taken prior to the hearing in this Court, should also be determined by the trial judge.

22 One final matter requires comment. The transfer of proceedings ordered by the Full Court of the Federal Court was, correctly, to the Supreme Court of New South Wales. How proceedings were to be disposed of in the Supreme Court was a matter to be determined in accordance with the relevant laws locating jurisdiction with respect to classes of matters within the Court: Cross-vesting Act, s 11(1). Once the proceeding had been transferred to this Court, the orders made by Logan J were to be treated as if they were orders made in a Division of this Court: s 11(3). It followed that the application for leave to appeal from orders made by a judge of the Federal Court was to be treated as an application for leave to appeal from a judge of the Supreme Court. The proceeding was, accordingly, assigned to the Court of Appeal: Supreme Court Act 1970 (NSW), s 101(1)(a). Leave was required: s 101(2)(e).

23 In the Equity Division, there appears to have been some doubt as to how the application for leave to appeal was to be determined. On 18 August 2011, Ball J was invited to make an order removing the application for leave to appeal into the Court of Appeal, pursuant to s 51(1)(b) of the Supreme Court Act. Alternatively, consideration was given to making an order stating questions to be determined by this Court, pursuant to Uniform Civil Procedure Rules 2005 (NSW), r 1.21(1). In the event, both courses were adopted, Ball J stating:

"7 The questions which, in my opinion, should be stated for determination by the Court of Appeal are:

(1) Whether the applicants in this proceeding should have leave to appeal from the orders of Logan J made on 19 September 2008 striking out paragraphs 117 to 120, 124, 125, 127 to 136 and 137 to 148 of the applicants' amended defence filed in what is now proceeding 2009/287360 in the Equity Division of the court.

(2) If so, what orders should be made on the appeal.

8 I order that this proceeding be removed into the Court of Appeal."

24 For the reasons already given, those orders were unnecessary, the application for leave to appeal otherwise being assigned to this Court. A different view may have been based on the assumption that there was only one matter transferred to the Supreme Court by the Full Court of the Federal Court. In a sense, that was correct, because the powers of the Full Court extended to making such orders as were appropriate in respect of the whole of the proceedings in that Court. Nevertheless, the order of transfer distinguished the two matters pending in the Federal Court, dealing separately with each. It was also correct to assume that a single judge of the Supreme Court was not the appropriate forum for dealing with an application for leave to appeal from orders made by a single judge of the Federal Court. However, as already indicated, the assignment of that matter occurred by force of the Supreme Court Act, without the need for orders of a judge.

25 For that reason, and because of the nature of the orders staying the proceedings in any event, it is unnecessary to answer the questions stated by Ball J.

26 It is convenient to restate in these reasons the orders which were made on 4 April 2012, namely:

(1) Stay the application for leave to appeal from the orders of Logan J made in the Federal Court on 19 September 2008, being the proceedings in matter QUD 309/2008 transferred to the Supreme Court of New South Wales by the Full Court of the Federal Court by order made on 26 November 2008.

(2) On application made by the OMB Parties, stay the underlying proceedings, being matter QUD 227/2007 in the Federal Court, transferred to the Supreme Court of New South Wales by the Full Court of the Federal Court on 26 November 2008.

(3) Direct that the costs of the parties in this Court be costs in the three proceedings transferred from the Industrial Court and pending in the Equity Division in which the operation of s 106 of the Industrial Relations Act 1996 was sought to be challenged on constitutional grounds, being matters 2008/282304, 2008/279848 and 2008/282126.

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Decision last updated: 13 April 2012