Federal Court Dismisses Cross-Claim Against Solicitors for Lack of Jurisdiction

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TRADE PRACTICES - Fendent juriscictien - Clain under Part V sf Practices Act - Cross-claim in contract and in tork hy

respondents against the solicitors actine on their benaif in

celation to the transaction out of which tne princiral proceeding arises - [ADDRESS] has jurisaicctien to deve-minc cross-clain against person not already a party - Whether the

subject cross-claim 15 within tne accrued jurisdicticn of the

Court - Costs

Trace Practices Act 1374 ss. 52, 5 BOA, 59, 30 Federal Court of Australia Act 197 » 22, 22, 43 [COMPANY] V [NAME] ! Fashions Fry 52 (1981) i148 CLP 457; Fancott 7 Muil 1992: 46 ALP 41, [NAME] (No 2) [NAME] 983° 49 AIP 193, v_ Gladstone Pack Shopoindg Centes P amited (1984) 55

yrererred to.

[COMPANY] AND [NAME] liszants), [COMPANY] AND [NAME] \[NAME], [COMPANY] AND [NAME] (Cross Clazvarts; AND [NAME] AND [NAME] (Cross

Fespondents) S.7 of 1984

IN THE PEDERAL COURT OF AUSTRALSA

NEW SOUTH WALES DISTRICT REGISTRY No. G.

sd ia)

Fh fe Lo om nea

we ween

GONERAL DIVISION

BETAEER . [COMPANY] AND

[NAME] ¢TY LIMITS) AFD GEOFFP=ay [COMPANY]

AND: PHIL=I? [NAME] AND [NAME]. [NAME] ¢ DATS: 15 MARCH 1965 PLACE SYDNEY THE CCURT ORDEPS THAT 1 The cross-cla:nm of dismissec for want of jurisdictisn,

th S Qa fb BP tmim m th pr $2 ry iy rnQ a p ot A Oo c el ae) ty ti) ray c ch rwb a oO uyaf rs H 2] 1] + ) myy an

a rs QO ul Le) t Qo fan mm B Et jwct wv +r [e) u rs fe) a Fh * oO u ne a) Nn a a a iy fu mnQ wu Ppwwrat n a c x a ie] Ay

2. The crcss-ciainants pay co the cress-ressoncents theic costs cf the cross-claim and of the Notice of Motzron dated 36

July 1984 other than the costs of the day of 25 Sextember 1:4.

3. The aoplicants ray to the respondents (crcss-claimants) and to the cross-respondents their respective costs cf the day 25 September 1984. ' '" , ~ fF 1 atta 1' ' } ~ . . ay at . 7 4 ' ee | are er ae :

IN THE FEDEPAL

COUPT OF AUSTRALIA

NEW SOUTH WALES

Isv

el

DISTPICT REGISTRY

co

we ee

oy

BETKESN : QBACELO POY LIMTED ND

[NAME] [NAME] ann [NAME]

esecnderts

[COMPANY]! SUCNS

Cross Claimants AND: [NAME] AND [NAME] eress Fespondents REASCMNS FOR [NAME]: [NAME[NAME]: 15 MARCH 19385 PLACE: SYDNEY This is the hearing of a Notica of Meticn by which cross-respondents seek the striking out of & crcss-tiaim brought against them by the respondents to tha Applictation The

princical prcceedings are brought by [COMPANY] and its [NAME] Director, [NAME] [NAME] [NAME], against [COMPANY] anc & director of that company, [NAME] [NAME] [NAME]. Sy therr Amentedc Statement of Claim the aopirtcants allege that [NAME] i as the

owner of land used as a caravan back together with various 1ite8Mns cf equioment and that, by two seoarate agreements, [NAME] agreed to sell the land and equipment to [NAME] for a tatal sum of $200,000. The apolicants further allece that [NAME] [NAME] oawnel

two Mercedes Benz cars which were agreed by the parties to be

ion

u

+Ss im i?) hom Dp fu) yy

worth $50,900

$25,009, this agreement being collat

1D nm o a co is] fo ie] qa cal a ar] fay rm cr rr ia)9 I- L i ) o

the completion of, the agreement for the sale of the land. The various sales were completed so that, acccrding to tne

applicants, they pari - aither in cash or by concession cn tne

acquirirg from the local council land within a punlic roac 'inte: was proosed to be closed. These varisus rapresentations ace far

to be antrue.

The applicants allege that th

a

CSR SRSSS1TAvLlIie wert "aas

in veage or commerce and rely [NAME]

td

difference between the value of what ther obtained and the:

ity w oO

purch price, together with certain expenses said tc have

Dorne and profits said to have been lost.

The respondents admit the making of the various

T

ts but ny the making of the representations and th

a ct n.3

ra

a

co

(3

il

a

ged Draach of contract. Thev also brirg a cross-clair

against the solicitors whe acted on their behalf in connecticn

with the matter, [NAME] R [NAME] and [NAME], the

fu

a ican

bral ic) c

P t

hav

(D0

a

aq

ib

ad alss on behalf of the applicants anc, 1n that

ecconnection, were initially named by the applicants 4s resro

e

S in the oresent motion. The salicitscrys were said +

to the principal proceeding. However, pursuant to leave, Lhe

applicants amended their statement of claim so a5 to omit £

"Whilst the First an@ Secone Cross Clai deny making the representations or any them contained in the Statement cf [NAME], and

deny that they are liable to the aprlicants

as alleged or at all, the Cecess Tlaimants seek fuil andemnity from the Crass

ib

Resoondents in the event they or either of them aro [NAME] to the Applicants or ezther oz them on the following bases -

(a) the [NAME] faiied to include in any relevant agreement a srevision wheraby the First Applicant acknovledged that no warranties or representations had been diver or made in respect of the

rem1lses, Dusiness, Income, taxings and or occupancy

(b, alternatively [NAME] did not include in any relevant agreement provision wnereby the first applicant acknowledged chat 1c dic not rely usoon any warranties of representations referred to in paragraph 'a) apcve;

(c) alternatively 1£ there were any wacrantles or revresentations upon which the First Applicant reitecé the [NAME] farled to include 4 provision in any relevant agreement ssitting out the warranties and represen tatzrons;

(d) failure to make any or any proper enquiry of the parties in relation coo the subject matter of the sale, the busines¢ and any term upon whicn elther party intendad the sales to be subject inclucing varrant163 cr representations in relation to the business occuvancy of tne prenises, income and taxings;

(e) fallure to make any or any avopropriate provisior fcr the [NAME] 'sic, nok ceceiving the land, or any part thereor, referred to in special conaition 27 of

the Contract for Saie;

(f) faziure ts ensure that if there aad been pre-contractual negotiations any term of those negotiaticns upon which the voarties tended (sic) to cealy was itnctluded in any relevant agreement;

(g) faliure to make any or any apprcpriate enauiry of [COMPANY] concernins the basis upon which it had agreed ta purchase the premises and busiress, Q

(h)

(1)

ul

fatlure to make any or any appropriate enquiries of [COMPANY]

concerning the basis upon which it had agreed to sell the oremises anc busine

a «

fa) a0 ns

wity Oo arto o0a

[NAME] in any relevant agreen provision whereby che Fi confirmed and acknowledcec tha entering into the relevant agreem relied entirely upon investigati enquiries made other than oat purchaser 1ts zervants and

concerning the business and

P fh Pb FF (om emame] mo i) ied

+ U1 ct wo ~ oa PHA por ct

+ uw

i

c pe] ct

D

fu ch aQ

# pe wo "a ue et mH uw

the [NAME] did not include any relevant agreement between the

parties a orovision or condition where the [NAME] in acknowledeing that 1t relied upon 1ts own investigations and enquiries acknowledged that the [NAME] would not be responsible for cr liable

t

the [NAME] for any financial ioss o¢

consequential aamage caused directiy o andirect or inv

sticaticns being incorrect.

Sc;

co

fur

in

oF

one)

+

c

ly as a result of the enquirzres

Noa allegatisn 1s made of any insteuctian tc the soliciters to taxe any of the steps the cmission of +hicth is complainea of in para 6. There may =x1st questiors, firstly, whether - especially in the absence of Such an allegation - un varag¢eapn discloses a gocd caus 3f action anc, seccndiy, whetner contractual pravisions such as those rcerterred to would aave bo effective to save the respondents from any liability vhich the might otherwise nave incurred in respect of contravenctians of Trag= Practices Act. Nezrther of tncose matters has been arqued and I express mo view about them.

Tne cross-claim contains no allegation of breach of contract or of the existence, cc breach, cf a duty of care but counsel agreed that these were matters tyhich right ne caced ay appropriate amendments. The [NAME] is based on mere fundamental matters, the applicant cross-ressonécents arquing tnrat the Court has 19 jurisdiction to entertain the claim or, alternatively, that in the exercise of its discretion it sheu

not do 50.

The claim made hy [NAME] against the sol-citor3 _=

ced in contract and, alternatively, in tore. It 15 mot 2

"Gi a o rH)

claim which, in the absence of the principal proceeding, vould he

1s mul otnerwise a party to the peinciral procseaing in one Court; whether or nct the cross-claim relates to the sane

"Mattec" as the principal preceeding, whether or not it relates

to a claim which, 1f brought by way of principal oraceedint, would be within the jurisdiction cf the Court and 'ynetners of nat

the cross-respondent was party when tne cross-claim was frled.

fu

Counsel points out that the Court 15 a court of statutory Jurisdiction, in the sense that 1t5 jurisdictictn _¢

cecs committed to it by statute. in

et

confined te thos

Oo a relation to crose-claims, he says, there 1s no relevant provirion

other than s.22 of the Federal Court of Australia Act 1976 whictn

1s corftined to a proceecing hetween existing cartiss. Section 22 reads:

"22. The Courc shall, in every matter Lefore

the Court, grant, either absolutely or cn

Buch terms and condicions as the Court things

Just, all remedies to which anv cf the

parties appears to be anticzled in cespect of

a legal or equitable claim preperiy beought

Torward by him in the matter, so that, as far

as possiole, all matters in controversy between the parties may bs rtomoletely and fonally determined and all multiplicity of proceedings concerning any of those matters avoicsd."

+a le

In my opinion it is fallacious toa look at ¢.22 and te

conclude that cases not falling within 1ts terms ace curserde

jJucisadiction. Whe Functien of 5.22 was discussed fy saveral

[NAME] > [NAME[NAME] av pe 489-490 referred to the antcsedents of the tectiar, and aecisicns uvon those antecedents, ard contrasted 3.22 with =.37

of the [ADDRESS] of Sus

8.

secticn deals with power and not with jurisdiction. [NAME] commented

that the section "has nothing to [NAME]

uy for H qa fa fs) oy

Ur

ay as to jur

Jd, with whom [NAME[NAME] agreec,

m 'SG a

ke to Similac effect at rp

505-506; as did [NAME[NAME] at

ny

529, [NAME] must be ¢cucher

elsewhere than in 35.22.

"19(1) [ADDRESS] has such criginal Jurisdiction as is vested in it cy laws rade by the Parliament.

(2) The qriginal jurisdiction cf the Tourt ancludes any jucisdicticn vested in it a re) Ty [3] cer] u I a 1- a B3 c nm ct bn fa) Pp. P hkie mM tu ml fu Hy is) Lay ¥ py i) it rt wu c tym ani el i! tal j Me a

yresvect oF t

Dpfe]

osts incurced on 25 September 1998:, the cate upon which the Notice oF Motion was sriginal

day I granted an adtournment of the motion becauss the [NAME] indicated a desirs to amend the Staterent of Claim; they havinz farled to do 50 within the time oreviously limited by [NAME] submitted that © should not orcer his clients to pay the

es because the smendments in Fact made oursuant to tho leave

granted by me would not have affected the scesulc of the [NAME]

may be the position between the applicants and their s2.icritars

the owner parties are entitled to an order against thse a

I certify that preceding pag Reasons for [NAME] [NAME].