118 The University ofQueensland Law Journal Vol. 14, No.2

Cross-Vesting of jurisdiction betweenstate and federal courts

Clifton Baker*

Scope of Article

This article deals with the question of cross-vesting of jurisdictionbetween Federal and State Courts. l A number of issues were raisedmost recently by the Constitutional Commission as to the extent towhich cross-vesting should be permitted, and the machinery bywhich such a proposal should be implemented. 2 Matters whichwere highlighted as being of particular concern were the courts towhich appeals should lie when cross-vested jurisdiction had beenexercised, and the courts between which there ought to be cross­vesting. 3

Legislation was introduced into the Commonwealth Parliamenton 20th October 1986 to provide for cross-vesting of jurisdiction aspart of a joint scheme involving both Commonwealth and Stateslegislating for cross-vesting of jurisdiction, together with an in­cidental transfer of some jurisdiction under federal jurisdiction tothe Federal Court, and investment of substantial Trade Practicesjurisdiction in State Courts.4 This article examines the backgroundagainst which the cross-vesting proposal was developed and is nowto be enacted. It looks at the legislation currently before the Com­monwealth Parliament, and conside:s its impact having regard tothe issues raised by the Constitutional Commission.

It also considers the extent to which this legislation, in the lightof the provisions of Chapter III, Constitution, and the JudiciaryAct, 1903, (which is not amended by the present legislation)achieves its stated objective of ensuring that "no action will fail in acourt through lack of jurisdiction, and that as far as possible, nocourt will have to determine the boundaries between federal, state,and territory jurisdictions."s

Background to the Cross-vesting Proposal

Until the creation of the Federal Court, which commenced work in1977, and the Family Court in 1976, the question of whether state

*B.A., L.L.B. (Syd.)Of the New South Wales and Victorian Bars.Lecturer in Law, Footscray Institute of Technology.

1. Constitutional Commission, Summary of Issues Paper, (1986) Section C, Part3, p.8.

2. Ibid.3. Constitutional Commission, Issues Paper, (1986) Section C, Part 3, p.19.4. Jurisdiction of Courts (Cross- Vesting) Bill 1986; Jurisdiction of Courts

(Miscellaneous Amendments) Bill 1986.5. Commonwealth Parliament, House of Representatives, Jurisdiction of Courts

(Cross- Vesting) Bill 1986: Explanatory Memorandum, para 5, p.3.

Cross- Vesting ofJurisdiction between State and Federal Courts 119

or federal jurisdiction was being exercised had only arisen in twocases, Booth v. Shelmerdine Bros. Pty. Ltd. [1924] V.L.R. 276,and Felton v. Mulligan (1971) 121 C.L.R. 367. Both ProfessorSawer and Professor Howard find the infrequency with which thisissue arose surprising. As Howard points out, there are potentialproblems with the composition of the court (as in Booth v.Shelmerdine Bros. Pty. Ltd.) and with the court to which an appeallies (as in Felton v. Mulligan) if it is federal jurisdiction that is beingexercised, because of the provisions of s.39(2) Judiciary Act, 1903.6

Howard makes the additional point that the problem of determin­ing whether state or federal jurisdiction is involved could also arisein other contexts, although the significance of such matters hasdiminished with the abolition of all appeals to the Privy Council. 7

The High Court had also considered the extent to which it coulddeal with proceedings associated with a matter of federal jurisdic­tion: Carter v. Egg and Egg Pulp Marketing Board (Vic.) (1942) 66C.L.R. 557, Parton v. Milk Board (Vic.) (1949) 80 C.L.R. 229, andAirlines ofNew South Wales Pty. Ltd. v. New South Wales (No.1)(1964) 113 C.L.R. 1. The distinction drawn in those cases restsupon whether there is a "single claim", or whether there are anumber of claims, one of which is "entirely severable".8 The diffi­culties involved in this test have been referred to as inconvenientand uncertain. 9 When the position in the Federal Court is examined,it becomes even more so, with problems of divided jurisdiction andlack of unanimity upon the degree of association required betweena non federal claim and a federal claim to be a "matter".10

The proposed legislation for the establishment of a SuperiorCourt during the period 1968-1974, set out details of the jurisdic­tion with which the court was to be invested, while s.19 of theFederal Court Act, 1976, required jurisdiction to be conferred byParliament. 11 It was claimed in the Attorney-General's SecondReading Speech that the result of this approach would be that "thecourt now proposed will not, as would previous bills to establish aSuperior Court that have been introduced into Parliament, per­form judicial functions that can better be performed by StateCourts or create jurisdictional problems of a kind that mightdelight constitutional lawyers but only add to the hazards of litiga­tion for the parties concerned."12

In discussion on the previous Superior Court proposal, the pro­blems of divided jurisdiction had been raised, and in fact had beenadverted to by the then Attorney-General, Mr. N.H. Bowen, whosaid that ". . . a complete separation (of federal and state jurisdic­tion) would mean that many matters litigated in one court in one

6. G. Sawer, "Judicial Power under the Constitution" in R. Else-Mitchell (ed.),Essays on the Australian Constitution, 2nd ed. (1961), at p.85, C. Howard,Australian Federal Constitutional Law, 2nd ed. (1972) at p.237.

7. Howard, loco cit.8. Carter v. Egg and Egg Pulp Marketing Board (Vic.) (1942) 56 C.L.R. 557 at

p.580 per Latham C.J.9. Z. Cowen & L. Zines, Federal Jurisdiction in Australia, 2nd ed. (1978) p. 75.

10. See text at fn.16 below.11. Hansard, House ofRepresentatives, 21st October 1976, p. 2112.12. Hansard, op.cit., p. 2111.

120 c. Baker

action would need to be litigated in two courts in two separate ac­tions," and recognised the particular problems that might arise if,for example, proceedings involved a claim both under the TradeMarks Act, 1905, and a claim for passing-off at common law}3 Asimilar point was made by Professor Lane, who referred to the pro­spect of split proceedings as "a spectre (which) will haunt its (Le.the Superior Court's) halls."14

Despite these warnings, it was not explained when the FederalCourt was established why the approach then taken to conferral ofits jurisdiction could alleviate the problems referred to in relationto the Superior Court, as the problems themselves were fixed inplace by the provisions of ss.75-77 Constitution. Notwithstandingthe confident assertion of the then Attorney-General to the con­trary, problems of divided jurisdiction related to the Federal CourtAct soon emerged. 1S In addition, the problems of divided jurisdic­tion were felt also in the Family Court in relation to the FamilyCourt Act.

As this paper is concerned primarily with the response to dividedjurisdiction, it is not proposed to review the case law in detail, butto proceed by considering the calls for reform and proposalsmooted to end problems of divided jurisdiction. 16 As has beennoted, the divided jurisdiction issue had been raised in the debateover establishment of the Superior Court. 17

Shortly after the inception of the Family Court and FederalCourt, discussion began on the topic of overlapping and dividedjurisdiction. Thi~ discussion was, to a substantial extent, initiatedby State Supreme Court judges. 1s The problems which were raised

13. N.H. Bowen, "Some Aspects of the Commonwealth Superior Court Proposal",91967) 41 A.L.J. 336, at pp. 337, 338.

14. P.H. Lane, "The Commonwealth Superior Court". (1969) 43 A.L.J. 148, atp. 150. See also R. Else-Mitchell, "Burying the Autochthonous Expedient)(1969) 3 Fed. L. R. 187, at p. 196.

15. Fn. 9, above. (Attorney-General's statement).16. Principal case references are ­

1. Commercial Law:Moorgate Tobacco Ltd. v. Philip Morris Ltd. (1980) 145 C.L.R. 457, PhilipMorris Inc. v. Adam P. Brown Male Fashions Pty. Ltd. (1981) 148 C.L.R. 457,Fencott v. Muller (1983) 152 C.L.R. 570, Stack v. Coast Securities (No.9) Ply.Ltd. (1983) 154 C.L.R. 261. (All major High Court decisions).2. Administrative Law:Woss v. Jacobsen (1985) 60 A.L.R. 313, Rosenthal v. Phillips [1985] V.R. 409,Delmore,Pty. Ltd. v. Commonwt!alth (1985) 2 N.S.W.L.R. 179, Clamback &Hennessy Pty. Ltd. v. Commonwealth (1985) 3 N.S.W.L.R. 91. (No majorappellate authorities).3. Family Law:Dowal v. Murray (1978) 143 C.L.R. 410, Vitzdamm Jones v. Vitzdamm Jones(1981) 148 C.L.R. 383, Fountain v. Alexander (1982) 150 C.L.R. 613, In theMarriage of Cormick, re Salmon (1984) 59 A.L.J.R. 151, V v. V (1985) 59A.L.J .R. 60. (All major High Court decisions).

17. See fns. 13 and 14, above.18. L.W. Street, "Consequences of a Dual System of State and Federal Courts",

(1978) 52 A.L.J. 434; W.B. Campbell, "The Relationship between the FederalCourt and the Supreme Courts of the States", (1979) 11 U.Q. L.J. 3; A.J.Rogers, "State/Federal Court Relations" (1981) 55 A.L.J. 630; F.T. Burt, "AnAustralian Judicature" (1982) 56 A.L.J. 509; L.W. Street, "Towards anAustralian Judicial System" (1982) 56A.L.J. 515.

Cross- Vesting ofJurisdiction between State and Federal Courts 121

in the articles referred to, and in public debate, were summarisedby the Judicature Sub-Committee of the Australian ConstitutionalConvention. 19 A number of matters of concern were expressed.The first related to the direct consequences of a broad jurisdictionbeing conferred on the Federal Court, which jurisdiction was en­croaching on that of State Supreme Courts. Problems of dividedand conflicting jurisdiction were emerging in the areas of tradepractices and family law in particular, which resulted in a tendencytowards forum-shopping, and lack of uniformity in the law. Asecond matter of concern related to indirect consequences of theFederal Court jurisdiction, which affected the status and power ofState Supreme Courts, (thus diminishing the role of the judicialbranch of State Governments) and that this was detrimental to thestanding of the court system as a whole. 20

The fundamental point, was that "even if there were no jurisdic­tional problems serving as a catalyst for change, a single nationalcourt system would simply serve the nation better and provide amore efficient system of justice."21 This point was ultimately derivedfrom the views of Sir Owen Dixon that the notion of federal juris­diction itself was unsound, and that the total content of the lawshould be administered by the courts. 22 In the debate on theFederal Court, these views of Sir Owen Dixon have been frequentlyinvoked. 23

However, the concept of a single unified court system standingoutside both Commonwealth and State responsibilities has notbeen seriously pursued as a practical solution to jurisdictionalproblems. 24 The solutions considered by the Judicature Sub­Committee of the Australian Constitutional Convention were(1) Abolition of the Federal Court, (2) Concurrent original federaljurisdiction, (3) Cross-vesting of jurisdiction, (4) National courtsystem (Street proposal), (5) State trial courts and an AustralianCourt of Appeal. 25

It was proposed during debate at the 1973 session of theAustralian Constitutional Convention that there should be onesystem of courts to enforce the total content of the law, and thisand a number of other matters were taken up as an appropriaterecommendation at the 1975 session of the Convention along with anumber of other matters. 26 The issues involved, however, required

19. Australian Constitutional Convention, Judicature Sub-Committee, Report toStanding Committee on an Integrated System ojCourts, (1984), para 3.3, p.7.

20. Ibid.21. Ibid.22. O. Dixon, "The Law and the Constitution", (1935) 51 L.Q.R. 590 at pp. 607-8.23. W. Campbell, art. cit. , p. 11, A.J. Rogers, art. cit. , p. 645, F.T. Burt, art. cit. ,

p. 513, R.J. Ellicott, "The Need for a Single All-Australia Court System",(1978) 52 A.L.J. 431, p. 431, Australian Constitutional Convention, StandingCommittee D, Fourth Report to Executive Committee (1982), p. 14 (para 13,Jurisdiction of Australian Courts).

24. I consider that the Judicature Sub-Committee (fn. 19 above) has wrongly inter­preted the Street proposal as a proposal for a National Court System. (Report,paras 4.7-4.8, pp. 10-11).

25. Australian Constitutional Convention, Judicature Sub-Committee, Report,paras 4.1-4.15, pp. 9-13.

26. Australian Constitutional Convention, Standing Committee D Report to Ex­ecutive Committee (1974).

122 C. Baker

further consideration, which took place in the Australian Constitu­tional Convention in 1977, when the Judicature Sub-Committeerecommended, in relation to the problems of dividedjurisdiction: -(a) that the Constitution be amended to make express provision

empowering State Parliaments to vest in Federal Courts (otherthan the High Court) jurisdiction, both original and appellate,in matters arising under State law;

(b) that Standing Committee D consider recommending to theConvention that the Constitution be amended to provide foragreements between the Commonwealth and the States for thecreation, jurisdiction, financing and administration ofAustralian courts and providing that such agreements shouldhave effect notwithstanding anything contained in Chapter 3,but without prejudice to the position of the High Court asultimate arbiter of constitutional questions. "27

These recommendations were endorsed by the plenary Session ofthe Australian Constitutional Commission at Perth in 1978, butwere not acted upon. 28 In 1981, a further sub-committee was estab­lished to report on the question of clarifying constitutional powersenabling the Federal and State Parliaments to vest jurisdiction inFederal and State Courts.29 It was this sub-committee that reportedin 1982 to the 1983 session of the Constitutional Convention inAdelaide. 30

The Constitutional Convention at that session referred thefollowing resolution for report:-"That this Convention recommends that the Constitution to pro­vide for Federal Courts and State Courts of Supreme Court leveland above to be integrated into a single system of Australian courtswith three distinct levels:(a) a trial level;(b) an appellate level; and(c) the High Court as the final court of appeal.That this proposal be referred to the Standing Committee of theConvention.

That the committee be asked to recommend a model for an in­tegrated system of Australian courts taking into account views ex­pressed by the Convention in its committee reports and in plenarysession, and views expressed to the Australian Institute of JudicialAdministration.

That the committee should be asked further to recommend inwhat manner the proposal should be implemented."31

In carrying out this project the Judicature Sub-Committee, asdiscussed previously, gave consideration to five proposals, discussedbelow.

27. Australian Constitutional Convention, Judicature Committee, Report to Stan­ding Committee D, (1977), p. 31.

28. Australian Constitutional Convention, Standing Committee 0, Reports,(1983), p. 12, paras 1.3-1.5, "Jurisdiction of Australian Courts."

29. Ibid. (para 1.5).30. Ibid. (paras 1.6-1.7).31. Australian Constitutional Convention, Judicature Sub-Committee, Report

(1984), para 1.1, p. 3 (hereafter "Judicature Sub-Committee, Report").

Cross- Vesting ofJurisdiction between State and Federal Courts 123

It was accepted that while the proposal to abolish the FederalCourt would overcome existing jurisdictional problems, it couldnot be regarded as a practical solution.32

The Judicature Sub-Committee adverted to four considerationsas to why such a solution would not be desirable: (1) the practicaldifficulty of dismantling the Federal Court, which had achieved ahigh reputation; (2) the legitimate interest of the Commonwealth inhaving its own court of Supreme Court status to operate in special­ized areas; (3) it provided the advantage through its original andappellate jurisdiction, or uniformity of interpretation of federallaw; (4) the political reality was that no Federal Government wouldabolish the Federal Court. 33

Although the proposal to retain the Federal Court ·and investState courts with concurrent original federal jurisdiction in allmatters to State Supreme Courts was favoured in the detailed andcarefully reasoned paper by Rogers, J. of the New South WalesSupreme Court, it did not meet with the approval of the JudicatureSub-Committee. 34

It was pointed out that the problem of lack of uniformity couldbe resolved by providing that appeals involving the substantial in­terpretation of Federal law should be taken to the Full FederalCourt, rather than a State Supreme Court. It was felt that such atest as "substantiality" would create problems, and that again thestatus of State Supreme Courts would be detrimentally affected. 35

However, the most serious problem identified was the potentialsuch an approach left for forum-shopping, with the prospect ofconflicting proceedings. 36

The proposal by Sir Laurence Street, Chief Justice of New SouthWales, was considered under the heading "A Fundamental Change- A National Court System." As was mentioned previously, theStreet proposal, although in form the closest to a national systemof courts, fell short of being a complete re-ordering of the Courtsystem as envisaged by Sir Owen Dixon. 37 The proposed SupremeCourt of Australia was to be constituted in Divisions correspondingto the existing State and Territory Supreme Courts, and the FederalCourt (with the possible addition of the Family Court), with asuperimposed Appeal Division. Each of the governments presentlyresponsible for judicial appointments would continue to make suchappointments, with the exception of the Appeal Division, to be ap­pointed by a joint decision of the Commonwealth, States and Ter­ritories. 38 While this scheme would eliminate jurisdictionaldisputes, it would, as the Judicature Sub-Committee pointed out,

32. Judicature Sub-Committee, Report, para 4.2, p. 9.33. Ibid.34. A.J. Rogers, art. cit. , p. 648, Judicature Sub-Committee, Report, paras 4.3-4.4,

pp.9-10.35. Judicature Sub-Committee, Report, para 4.3, p. 10.36. Judicature Sub-Committee, Report, para 4.4, p. 10.37. L.W. Street, "Towards an Australian Judicial System", (1982) 56 A.L.J. 515,

Judicature Sub-Committee, Report, paras 4.7-4.8, pp. 10-11. O. Dixon,art.cit. , pp. 607-8.

38. L.W. Street, "Towards an Australian Judicial System", (1982) 56 A.L.J. 515,pp.516-517.

124 C. Baker

involve a significant change in the traditional relationship betweenthe legislature and the executive on one hand, and the judiciary onthe other - ". . . there would be no one government answerable toa legislature and ultimately to the people in relation to the court."39It has also pointed out that the court would be difficult to ad­minister, and, particularly in regard to the smaller States, would in­volve erosion of the independence of their present judicial systemsas an arm of State Government.40

A proposal that attracted the Judicature Sub-Committee wasthat for State trial courts and an Australian Court of Appeal, beingthe model proposed by Sir Francis Burt, Chief Justice of WesternAustralia.41 Under this scheme, State and Federal trial courtswould be retained, with the Australian Court of Appeal proposedin Sir Lawrence Street's paper as a common appellate court.42 Ameasure of investment of jurisdiction between courts was also seenas desirable.43 This proposal was claimed as "a truly federal solu­tion to jurisdictional problems", which "pays due regard to thenature of the Australian federal system and to the principle ofministerial responsibility. "44 The objections which told against theacceptance of this proposal were (1) the fact that it would fetterboth State and Federal powers to create courts and to confer ex­clusive jurisdiction upon them, and (2) that it was not acceptablethat State Supreme Courts should give up their entire appellatejurisdiction.45 The other proposal considered by the JudicatureSub-Committee was the cross-vesting proposal.46 The solution pro­posed involved a combination of the cross-vesting proposal and theAustralian Court of Appeal which had been a feature of both theStreet and Burt models of the judicial system.47 This alternativeproposal was described as "an alternative solution involving lessfundamental change to the present judicial system."48 That recom­mendation will now be discussed as it has been substantiallyenacted as far as original jurisdiction is concerned in the 1986 legis­lation, and has been modified at the appellate level, by the exten­sion of cross-vesting to that level, rather than proceeding with theAustralian Court of Appeal.

The Cross-Vesting Legislation

(a) Cross- Vesting: Basic Principles

The Judicature Sub-Committee took the view that the cross-vestingproposal was an extension of the concurrent jurisdiction proposal,

39. Judicature Sub-Committee, Report, para 4.8, p. 11.40. Ibid.41. Judicature Sub-Committee, Report, paras 4.9-4.14, pp. 11-13., F.T. Burt,

art. cit.42. Judicature Sub-Committee, Report, para 4.9, pp. 11-12.43. Judicature Sub-Committee, Report, para4.11, p. 12.44. Judicature Sub-Committee, Report, paras 4.9,4.12, p. 12.45. Judicature Sub-Committee, Report, para 4.13, p. 13.46. Judicature Sub-Committee, Report, para 4.5-4.6, p. 10.47. Judicature Sub-Committee, Report, paras 5.1-5.40, pp. 13-24.48. Judicature Sub-Committee, Report, para 4.15, p. 12.

Cross- Vesting ofJurisdiction between State and Federal Courts 125

in that as well as State courts being invested with the whole offederal jurisdiction pursuant to s.77(iii) Constitution, the Federalcourts were to have state jurisdiction conferred upon them.49 TheFamily Court was to be brought within the cross-vesting scheme. 50There was recognition of the jurisdictional advantages provided bythe Federal Court. 51 A scheme was proposed to control forum­shopping, which was seen as the major difficulty that would ariseunder the cross-vesting scheme. 52

It was envisaged that constitutional problems might arise out ofthe conferral of state jurisdiction upon Federal courts and theJudicature Sub-Committee obtained an opinion from ProfessorZines on that subject. 53 Zines was of the view that the StateParliaments could validly invest Federal courts with state juris­diction, althoughit was recognised that there was no direct authorityon this issue. 54 The principal consideration which was put forwardagainst that view was the statement in Re Judiciary and NavigationActs (Advisory Opinions Case) (1921) 29 C.L.R. 257, that ss.75and 76 Constitution were an "express statement of the matters inrespect of which and the courts by which the judicial power of theCommonwealth may be exercised is, we think, clearly intended as adelimitation of the whole of the original jurisdiction which may beexercised under the judicial power of the Commonwealth, and as anecessary exclusion of any other exercise of original jurisdiction."55Zines pointed out that this pronouncement related to the power ofthe Commonwealth to resort to provisions outside ss.75-77 Con­stitution in relation to the conferral of jurisdiction. A similar ap­proach was taken to the Boilermakers' Case (Attorney-General(Commonwealth) v. The Queen) (1956) 95 CL.R. 529, in that itonly related to Commonwealth power to invest Federal courts withnon-judicial power. Reference was made to Spratt v. Hermes(1965) 114 C.L.R. 226 where it was held that a Federal Court couldexercise jurisdiction on appeal from a Territory Court, and to thatextent Chapter III was not exclusive or exhaustive of the jurisdic­tion of Federal courts. 56 In forming his view, Zines relied on ReDuncan, ex parte Australian Iron and Steel Pty. Ltd. (1983) 57A.L.J.R. 649 where the validity of a scheme under which the CoalIndustry Tribunal had powers relating to industrial disputes confer­red upon it by both Commonwealth and New South Wales legisla­tion. 57 He quoted from the judgment of Gibbs, C.J. who stated:"There is no express provision in the Constitution, and no principleof constitutional law, that would prevent the Commonwealth andthe States from acting in co-operation, so that each, acting in itsown field, supplies the deficiencies in the power of the other, and so

49. Judicature Sub-Committee, Report, paras 4.5-4.6, p. 10.50. Judicature Sub-Committee, Report, paras 6.1-6.6, pp. 25-26.51. Judicature Sub-Committee, Report, para 5.2, pp. 13-14.52. Judicature Sub-Committee, Report, paras 5.6-5.8, pp. 14-16.53. Judicature Sub-Committee, Report, Appendix, pp. 27-36.54. Judicature Sub-Committee, Report, Appendix, pp. 27, 31-22.55. Judicature Sub-Committee, Report, Appendix, p. 29.56. Judicature Sub-Committee, Report, Appendix A, p. 30.57. Judicature Sub-Committee, Report, Appendix A, p. 28.

126 c. Baker

that together they may achieve ... a uniform and complete legisla­tive scheme."58 Gibbs, C.J. also stated" ... no reason is providedby constitutional enactment or constitutional principle why theCommonwealth and a State or States should not simultaneouslycOl1fer powers on one person and empower that person to exerciseany or all of those powers alone or in conjunction." (at p.655)

It should also be noted that in Philip Morris Inc. v. Adam P.Brown Male Fashions Pty. Ltd. (1981) 148 C.L.R. 457, while othermembers of the High Court were prepared to hold s.32 of theFederal Court of Australia Act, 1976, related to associated juris­diction as having a severable valid field of operation, Aickin, J.was of the view that it was invalid, as the valid operation of the pro­vision could not be severed from the invalid. (at pp.534-5, 541) Herelied on the exclusive and exhaustive limitations imposed uponFederal jurisdiction by the Advisory Opinions Case (1921) 29C.L.R. 257, at p.265. Although a minority view, it does weaken theZines opinion, as it could be argued that Spratt v. Hermes (1965)114 C.L.R. 226 dealt with the specific question of Territory juris­diction, and Chapter III remains exclusive and exhaustive in othercontexts.

The Jurisdiction of Courts (Cross- Vesting) Bill 1986 containsrecitals in a Preamble which state the purpose of the legislation andthe difficulties sought to be overcome; as follows: - "Whereas in­convenience and expense have occasionally been caused to litigantsby jurisdictional limitations in federal, state, and territory courts,and whereas it is desirable -(a) to establish a system of cross-vesting of jurisdiction between

those courts, without detracting from the existing jurisdictionof any court;

(b) to structure the system in such a way as to ensure that as far aspracticable that proceedings concerning matters which, apartfrom this Act and any law of a State relating to cross-vesting ofjurisdiction, would be entirely or substantially within the juris­diction (other than the accrued jurisdiction) of the FederalCourt or the Family Court or the jurisdiction of the SupremeCourt of a State or Territory are instituted and determined inthat court, whilst providing for the determination by one courtof federal and state matters in appropriate cases; and

(c) if a proceeding is instituted in a court that is not the appro­priate court, to provide a system under which the proceedingwill be transferred to the appropriate court.

The use of a preamble is uncommon at present, and its use here isapparently intended as an aid to construction of the legislation.59

The Explanatory Memorandum accompanying the Bill in itsgeneral outline reiterates the objectives contained in thepreamble.60 It states "The successful operation of the cross-vestingscheme will depend very much on courts approaching the legisla-

58. Ibid.59. D.C. Pearce, Statutory Interpretation in Australia, 2nd ed. (1981), pp. 10-11,

51-52.60. Commonwealth Parliament, House of Representatives, Jurisdiction of Courts

(Cross- Vesting) Bill 1986, Explanatory Memorandum, paras 3-7, pp. 2-3(henceforth "Explanatory Memorandum").

Cross- Vesting ofJurisdiction between State and Federal Courts 127

tion in accordance with its general purpose and intention as in­dicated in the preamble to the Commonwealth and State legisla­tion."61

It will be noted that in earlier proposals for rationalising federaljurisdiction, the prospect of a need for constitutional amendment(which may have involved a co-operative scheme) was raised.62 TheJudicature Sub-Committee, while mindful of the previous discus­sion and taking the possible difficulties into account, was of theview that the proposal ought to be dealt with ordinary legislationrather than Constitutional amendment, and this approach has beenfollowed in the cross-vesting legislation.63 The legislation will becomplemented by reciprocal State and Territory legislation, butthere is no co-operative scheme.64 In fact, cl.16 of the Bill allowsthe cross-vesting legislation to be suspended, if it is ineffective as awhole or in relation to a particular State. It is therefore not depen­dent upon complete agreement for its operation, although lack ofunanimity may be grounds for the legislation ceasing to operate.

The implications of the cross-vesting legislation will now be con­sidered in more detail by examining the provisions made fororiginal and appellate jurisdiction respectively.

(b) Cross- Vesting: Original Jurisdiction

The principal provision by which cross-vesting is implemented iscl.4 of the Jurisdiction of Courts (Cross- Vesting) Bill 1986 (here­afterthe "Cross- Vesting BUr'). Clause 4(1) confers that federal civiljurisdiction possessed by the Federal Court or Family Court uponthe Supreme Court of the respective States and Territories. Civiljurisdiction of the Supreme Court of a Territory is conferred on theFederal Court, Family Court or the Supreme Court of a State oranother Territory (cI.4(2) ). Jurisdiction is also conferred in respectof proceedings transferred to the Federal Court, the Family Courtor a State Family Court (cI.4(3) ). Proceedings under the Concilia­tion and Arbitration Act, 1904 and ss.45D and 45E (the secondaryboycott provisions) of the Trade Practices Act, 1974 are excludedfrom the operation of cross-vesting (cl.4(4) ). Sub-clause (1) wouldappear to involve the investiture of federal jurisdiction pursuant toConstitution s.77(iii), supplemented by the Territories power ins.122, upon which sub-clause (2) is dependent. However, sub­clause (3) would appear to present difficulties of a like kind to thosearising out of the associated jurisdiction in s.32 of the FederalCourt of Australia Act, 1976. Although that provision has beenheld valid, it has to be read down in relation to matters withinss.75-77 Constitution, or, in accordance with the judicial formula­tions, it is required that there be proceedings which involve a matternecessary for the decision, or inseverable from such a matter, ornot separate from that matter: Philip Morris Inc. v. Adam P.

61. Explanatory Memorandum, para 6, p. 3.62. See discussion above at fos. 24-29 above.63. Judicature Sub-Committee, Report, para 5.5, p. 14.64. Explanatory Memorandum, para 2, p. 2.

128 C. Baker

Brown Male Fashions Pty. Ltd. (1981) 148 C.L.R. 457. The legis­lative provision here seeks to take all other jurisdiction and conferit as well. It must be a matter of considerable doubt whether theCommonwealth legislative power can achieve this result of its owneffect.

The exclusion of c1.4(4) of matters related to industrial law is notexplained further, but appears to be a policy decision relating to theretention of industrial law matters within Federal courts. Such anapproach may lead to the retention of divided jurisdiction prob­lems where, for example, claims involving the secondary boycottprovisions and common law industrial torts are made in pro­ceedings. Complex discretionary problems could arise as to whichaction should proceed where conduct which would attract secon­dary boycott provisions were relied upon as a defence and thirdparty claim in state proceedings for breach of contract, while an in­dependent claim based on the secondary boycott provisions wasbrought in the Federal Court, raising similar issues to Stack v.Coast Securities (No.9) Pty. Ltd. (1983) 154 C.L.R. 261. Suchproblems may be capable of solution however, by transfer of theentire proceedings to the Federal Court under state cross-vestinglegislation.

Clause 5 is the key provision relating to transfer of proceedingsand thus the avoidance of forum-shopping. It provides for thetransfer of proceedings between various courts, as discussed below,where such a transfer would be appropriate if there are related pen­ding proceedings in another court, and having regard to the in­capacity of otherwise commencing part of those proceedings in thetransferee court, the extent to which matters involve the applicationof, interpretation or validity of a Commonwealth law, and the in­terests of justice so require, or it is otherwise in the interests ofjustice that the proceedings be transferred, then the proceedingsshall be transferred. This is the formula contained in cI.5(1) in rela­tion to transfer from State Supreme Courts to the Federal Court orFamily Court, and it is substantially repeated, with appropriatemodification in cI.5(2) (transfer between Supreme Courts), c1.5(3)(transfer between Supreme Courts and State Family Courts),c1.5(4) (transfer from Federal Court or Family Court and SupremeCourts), and cI.5(5) (transfer between Federal Court and FamilyCourt).

Clause 5(6) confers a power in similar terms for a court to trans­fer proceedings related to those in respect of which an order fortransfer has been made. An order for transfer may be made on theapplication of a party, an Attorney-General or the court of its ownmotion (cl.5(7) ). The right of a legal practitioner to be entitled topractice in transferred proceedings is preserved (cI.5(8) ).

Clause 6 deals with special federal matters, which are defined incI.3(1) as a matter within Part IV of the Trade Practices Act, 1974,a matter involving determination of questions of law on appealfrom a Tribunal or other statutory body (such as an appeal or casestated to the Federal Court from the Administrative AppealsTribunal), a matter arising under the Administrative Decisions(Judicial Review) Act, 1977, a matter arising under s.32 of the

Cross- Vesting oj-Jurisdiction between State and Federal Courts 129

National Crime Authority Act, 1984, or a matter within theoriginal jurisdiction of the Federal Court pursuant to s.39B of theJudiciary Act, 1903. When a matter in a proceeding in a SupremeCourt is a special federal matter, then the Supreme Court shalltransfer that matter to the Federal Court, unless the Supreme Courtmakes an order that the proceedings continue and be determined inthe Supreme Court (cl.6(l) ). A Supreme Court shall not make anorder that proceedings continue unless it is not appropriate that theproceedings be transferred, and it is appropriate that the SupremeCourt decide the proceedings. (cl.6(2) ). If an order is made underc1.6(2), it is the duty of the court not to proceed until notice of theorder has been given to the Attorney-General, so that he maydecide to exercise his power of requesting a transfer under c1.6(7),and a reasonable time has elapsed since the giving of that notice.(c1.6(3) ). The Supreme Court may give directions as to notice andadjourn proceedings (c1.6(4». The Attorney-General mayauthorise the payment of costs occasioned by such an adjourn­ment. (c1.6(5». There are savings in cl.6(6) of the power ofSupreme Courts in respect of urgent relief of an interlocutorynature, and in cl.6(8) there is a saving where a Supreme Court exer­cises jurisdiction in a special federal matter through inadvertence.Clause 6(9) excludes the operation of this section in relation toappeals.

There are a number of matters in cIs. 5 and 6 which require com­ment. The general formula for transfer of proceedings in bothclauses rests on the broad discretionary ground of "appro­priateness", with some specific matters to be taken into account inrelation to c1.5 but none in relation to cl.6. There appears to belittle authority on the word "appropriate" in this context, and itwould appear that the courts will have to develop their own guide­lines in relation to this direction, which may be productive of liti­gation. 6s It should be noted, however, that where an order fortransfer or removal is made, no appeal lies (cl.13).

The question of validity where the Commonwealth legislationpurport to effect transfer of proceedings between State courtswould also appear to be a problem. It would be valid insofar as itrelated to "matters" within federal jurisdiction, includingassociated matters. But difficulties could arise in situations such aswhere there was an issue in the proceedings which did not form partof such a matter, as for example occurred in United States SurgicalCorporation v. Hospital Products International Limited (1981) 148C.L.R. 457. The practical solution may be, however, that the com­plementary state legislation may supply any deficiencies in Com­monwealth power, but a litigant determined to frustrate pro­ceedings may well be able to take jurisdictional points through pre­rogative writ or injunction proceedings in the absence of an appeal.It may well be that the provision in the Act requiring the legislation

65. The nearest approach to consideration of this point involved a statutory defini­tion of "appropriate court" as the court to which an accused person was com­mitted for trial; the proceedings then being transferred to a superior court, thequestion arose as to whether that was an "appropriate court" R. v. Holmen[1918] 2 K.B. 861. (Answered in the affirmative).

130 c. Baker

to be read down, and that the provision be construed as validwithin the ambit of Commonwealth powers (cl.15), may be invokedin relation to cl.5, in particular sub-cls.(2), (3) and (6). In cl.6, awide area of jurisdiction, particularly in relation to Federal admin­istrative law, is subject to exclusion from the cross-vesting provi­sions and, in practical terms, is reserved as a head of federal juris­diction. 66 This reservation of jurisdiction, together with the exclu­sion of some industrial law matters by c1.4(4), referred to above,constitutes a potentially significant weakening of the overall cross­vesting scheme.

(c) The Cross- Vesting Scheme: Appellate Jurisdiction

As discussed previously, the Judicature Sub-Committee gave con­sideration to cross-vesting at appellate level but preferred theAustralian Court of Appeal proposal.67 It was argued that theAustralian Court of Appeal would lead to greater uniformity in thelaw, although the practice of State Full Courts adopting the deci­sions of other Full Courts was noted (R. v. Parsons [1983] 2 V.R.499). It was pointed out that if there was a divergence between StateFull Courts, this may lead to an increase in the workload of theHigh Court. 68 It was emphasised that this was only a preferredposition and that the cross-vesting scheme could include appellatejurisdiction.69 In addition, there may be problems in defining suchappellate jurisdiction so as to fall within Commonwealth power.70

In Collins v. Charles Marshall Pty. Ltd. (1955) 92 C.L.R. 529, thisquestion was discussed and it was held that any appeal had to con­tain the necessary element of federal jurisdiction by reference to theheads of jurisdiction in ss.75 and 76 Constitution. This propositionwas adverted to by Professor Zines in the Opinion he prepared forthe Judicature Sub-Committee, but was not referred to by the Sub­Committee itself. 71

The scheme of cl.7 of the Cross- Vesting Bill is to ensure that anappeal lies to the most appropriate court, although that term is notused. A specific structure of appeals is laid down. Clause 7(1) pro­vides that an appeal shall not lie from the Federal Court or theFamily Court to a Full Court of a State or Territory. An appeal isnot to be instituted from the Federal Court or the Family Court tothe other of those Courts. (cl.7(2) ). Unless a matter determined bya single Supreme Court judge involves scheduled Commonwealthlegislation, then an appeal only lies to the Full·Court of the State orTerritory of first instance jurisdiction (cl.7(3) ). Clause 7(4) relatesto appeals to a State Family Court. If a matter arises on appeal inrelation to a scheduled Commonwealth law, then it is to be taken tothe Full Court of the Federal Court or the Family Court, or, byspecial leave, to the High Court. (c1.7(5) ). If a Full Court of a

66. See fn.16(2) above, on administrative law cases.67. Judicature Sub-Committee, Report, para 5.13, p. 17.68. Judicature Sub-Committee, Report, para 5.14, p. 17.69. Judicature Sub-Committee, Report, para 5.15, p. 17.70. Z. Cowen and L. Zines, Ope cit., p. 133.71. Judicature Sub-Committee, Report, Appendix A, p. 29.

Cross- Vesting ofJurisdiction between State and Federal Courts 131

Supreme Court embarks on an appeal to which c1.7(5) applies, thenit is to transfer it to the appropriate court, being the Federal Courtor Family Court, unless the interests of justice require otherwise(c1.7(7) ), but if a Full Court of a Supreme Court determines a pro­ceeding to which cl.7(5) applies, then there is a saving provision,c1.7(8), in similar terms to c1.6(8). Again, it may be noted that bythe use of the scheduled federal legislation, the cover of the cross­vesting proposal is reduced, with the prospect of further litigationrelated to jurisdictional issues only.

(d) Cross- Vesting Legislation: Additional Provisions

Clause 8 deals with the removal of proceedings from inferior Ter­ritory courts to the Territory Supreme Court so that a transferorder can be made in such proceedings, where there are relatedmatters pending in another court.

Clause 9(1) provides that this legislation is not intended to over­ride or limit the operation of state cross-vesting legislation. Thisprovision is in similar terms to s.6A(1) of the Racial DiscriminationAct, 1975, which sought to preserve the operation of State or Ter­ritory anti-discrimination laws, notwithstanding s.109 Constitu­tion. The latter provision was considered in University ofWollongong v. Metwally (1985) 59 A.L.J.R. 49. In the course oftheir respective reasons for judgment, Gibbs C.J. (at p.51), MasonJ. (at p.52), and Murphy J. (at p.56), pointed out that a Com­monwealth statute cannot prevail over s.109 Constitution, and thatthe Commonwealth Parliament could not enact a law inconsistentwith s.109. However, Mason and Murphy JJ. pointed out ways inwhich legislation may avoid this result, by declaring that there wasnot an inconsistency. It would appear that similar considerationswould favour the valid operations of c1.9(1). Clause 9(2) confersjurisdiction on Federal and Territory courts where a State cross­vesting law is operative.

Clause 10 will be dealt with below in relation to the Jurisdictionof Courts (Miscellaneous Amendments) Bill 1986 below. Clause 11provides for the law to be applied in proceedings, and the ap­plicable rules of evidence and procedure. The Explanatory Memo­randum points out that, in applying the law in force in the state orterritory in which the Court is sitting, it is intended that this includethat state or territory's conflict of law rules. 72 The transferee courtmay make orders as to costs before transfer (cl.12), and c1.3 pro­vides that an appeal does not lie from an order for transfer. Clause14(1) and (2) makes provision for enforcement of judgments in aterritory where cross-vesting jurisdiction is exercised. Clause 14(3)extends references in legislation to courts with cross-vested legisla­tion. As has been mentioned, cl.15 provides for the reading downof the provisions of this legislation to the limits of Commonwealthconstitutional power, and for severance of the invalid portion,along similar lines to s.15A Acts Interpretation Act 1901. Clause 16provides for the suspension or cessation of the legislation if the

72. Explanatory Memorandum, p. 13.

132 C. Baker

scheme is ineffective, or if a state does not co-operate in the cross­vesting scheme, then this legislation can be suspended in relation tothat state (cl.I6(4) ), although there is provision for reinstatement(cl.I6(5) ) if a state reviews its participation in the scheme.

(e) Jurisdictional Changes: The Jurisdiction ofCourts(Miscellaneous Amendments) Bill 1986

This legislation is complementary to the Jurisdiction of Courts(Cross- Vesting) Bill, 1986. It confers civil jurisdiction in intellectualproperty matters on the Federal Court. It also confers jurisdictionupon that court to determine references and appeals under Com­monwealth taxation legislation, the most important of such mattersbeing under the Income Tax Assessment Act, 1936.73 Such jurisdic­tion had in the past been dealt with by the High Court, but as aresult of jurisdictional changes in the 1970's, had devolved to StateSupreme Courts, in 1973 in the case of taxation jurisdiction and in1976 in the case of intellectual property matters. 74 In these fields,the present jurisdictional shift represents the fulfilment of theoriginal view of Sir Garfield Barwick that these matters should bewithin the jurisdiction of a federal court. 75

Although the provisions with respect to intellectual property andtaxation matters involved transferring jurisdiction presently in­vested in State Supreme Courts to the Federal Court, there is amost important conferral of jurisdiction upon State courts inrespect of civil proceedings arising under Part V, Divisions 1 andlA of the Trade Practices Act, 1974. (Consumer Protection - Un­fair Practices, and Product Safety and Product Information). Theexisting provision of the Trade Practices Act, 1974 relating to ex­clusive jurisdiction (s.86) is replaced by provisions which conferconcurrent jurisdiction upon State courts and facilitate transfersbetween courts (new sections 86, 86A) and provide in general, forappeals to lie within the appropriate State or Territory hierarchy(new s.86B).76 Such provisions will enable State courts to deal withthe entirety such proceedings as arose in Stack v. Coast Securities(No.9) Pty. Ltd. (1983) 154 C.L.R. 261, by entertaining the pur­chaser's claim under the Trade Practices Act, 1974 as a defence tothe vendor's action for specific performance. It could be said thatthese amendments give effect in an important area of law to theconcurrent investment of jurisdiction proposal considered by theJudicature Sub-Committee alongside the general scheme of cross­vesting. 77

73. Commonwealth Parliament, House of Representatives, Jurisdiction of Courts(Miscellaneous Amendments) Bill 1986: Explanatory Memorandum, paras 2-3,p.2.

74. R.J. Ellicott, "The Exercise of Federal Jurisdiction - A Revision of the FederalJudicial Structure" (1977), 1 Crim L.J. 2 at p. 13.

75. G.E. Barwick, "The Australian Judicial System: The Proposed New FederalSuperior Court", (1964) 1 Federal Law Review 1, at p. 17.

76. Commonwealth Parliament, House of Representatives, Jurisdiction of Courts(Miscellaneous Amendments) Bill 1986: Explanatory Memorandum, paras42-45, p. 11.

77. Judicature Sub-Committee, Report, para 4.3, pp. 9-10.

Cross- Vesting ofJurisdiction between State and Federal Courts 133

Clause 10 of the Cross- Vesting Bill provides that where a pro­ceedings in relation to Part V~ Division 1 or lA is pending in theFederal Court, Family Court, or Supreme Court of a state or Ter­ritory, and no special federal matter or appellate proceedings areinvolved, and another Supreme Court has jurisdiction in respect ofall matters in relation to those proceedings, then the proceedingsmay be transferred to the latter court. This provision enables trans­fers to be made where the area of concurrent jurisdiction underPart V, Division 1or lA of the Trade Practices Act, 1974 is involved.

Conclusion and Evaluation

In reviewing the cross-vesting scheme, it ought to be pointed outthat there is by no means complete cross-vesting. It falls short in­sofar as exceptional provision is made for industrial law matters,and reservations are made in respect of original jurisdiction inspecial federal matters, and scheduled legislation in appellate juris­diction. On the other hand, in relation to Part V Trade Practicesmatters, there is now effectively concurrent jurisdiction betweenState and federal courts.

The preceding discussion of the legislation and its backgroundindicates that in a number of areas, particularly insofar as federallegislation purports to affect proceedings unrelated to federal juris­diction, the cross-vesting scheme may encounter constitutionalproblems. It may be, however, that these difficulties can be solvedin a pragmatic fashion by the enactment of complementary Statelegislation. As the Attorney-General claimed in the ExplanatoryMemorandum, "no court will need to decide whether any particularmatter is truly within federal or state jurisdiction since in eitherevent the court will have the same powers and duties."78

A critical analogy could be drawn by relation to the all white can­vas entitled "Polar Bear in a Blizzard": the subject matter is un­doubtedly there but it cannot be identified with precision. Again,there may be some residual cases where divided proceedings mayarise, such as those involving both the secondary boycott legislationand either the industrial torts or breach of contract. The HighCourt may again have to consider the scope of "matters" underss.75 and 76 Constitution, and decide where the boundaries offederal jurisdiction are to be drawn.

The Explanatory Memorandum· pointed out that "Courts willneed to be ruthless in the exercise of their transferral powers to en­sure that litigants do not engage in forum-shopping by commencingproceedings in inappropriate courts."79 The concept of appropri­ateness leaves a broad discretion to the courts which, because of theprovisions of cl.13 of the Bill, is substantially unreviewable. It maywell be that courts ultimately come to rely on a variant of the doc­trine of forum non conveniens based on balance of jurisdictionalconvenience. 8o The courts may also draw on the experience of the

78. Explanatory Memorandum, paras 5, 7, p. 3.79. Explanatory Memorandum, para 6, p. 3.80. Cf. B. O'Brien, "Arid Jurisdictional Disputes: The Federal Court versus the

State Supreme Courts" (1985) 13 A.B.L.R. 77, at pp. 89-93.

134 c. Baker

High Court in remitting actions pursuant to s.44 of the JudiciaryAct, 1903.

It should be noted that this legislation does not amend theJudiciary Act, 1903, and that the jurisdiction conferred on Statecourts by the cross-vesting scheme is supplementary to that confer­red by the Judiciary Act, 1903. Problems relating to the ultimatedestination of appeals, in particular the scheme of the JudiciaryAct, 1903, that no appeal in a matter of federal jurisdiction would

. lie to the Privy Council, have been solved, by the abolition ofappeals in State jurisdiction to the Privy Council by the AustraliaAct, 1986.

The cross-vesting legislation represents a delicate balancing of in­terests between federal interests and state interests, which havebeen recognised in the exclusions and reservations referred toabove, while extending an important field of jurisdiction to thestates. However, the legislation appears to work by blurring ofjurisdictional lines rather than abolishing them (it is tempting tomake a cheap joke about the "transvestite" scheme). However, theJudicature Sub-Committee of the Australian Constitutional Con­vention considered alternative proposals and came down in favourof cross-vesting based on a legislative footing, rather than requiringconstitutional amendment. It would be interesting to considerwhether the reference power in s.51(xxxvii) Constitution, could beemployed to eliminate jurisdictional boundaries, or whether the in­terchange of .powers amendment (proposed s.51(xxxviia) ) wouldbe required to achieve such a result.

It is apparent that the cross-vesting scheme has a practical found­ation, and that it has sought to avoid the theoretical problems in­volved in the concept of federal jurisdiction. To a substantial ex­tent, it will rely on complementary state legislation, and the currentexpansive High Court view of "matters" in ss.75 and 76 Constitu­tion. Although that High Court approach may command assent asa practical solution to problems of divided jurisdiction, the reason­ing relied upon involves a degree of refinement of propositions thatmay not be found acceptable upon subsequent analysis.

One can only share the hope that the cross-vesting scheme willsucceed, but it should be recalled that on the establishment of theFederal Court the view was expressed that jurisdictional problemswould not be thereby created. 81

It has always been recognized that there are practical difficultiesin implementing a unified system of courts, and thus eliminatingjurisdictional problems. Sir Owen Dixon said, however, that"... it would not have been beyond the wit of man to devisemachinery which would have placed the courts ... upon neutralterritory where they administered the whole law irrespective of itssource. "82 The present scheme does not go that far, for both prag­matic reasons and for the theoretical reason of the shadow thatChapter III Constitution (in particular ss.75-77) casts over anyattempt at reform. It would appear that a complete solution can

81. See fn. 9 above.82. O. Dixon, art. cit., p. 607.

Cross- Vesting ofJurisdiction between State and Federal Courts 135

only be found in a total overhaul of the Australian judicial systemconsequent upon revision of Chapter III Constitution. That moredrastic solution may have to be adopted if the cross-vesting legisla­tion falls short of the remedial properties claimed for it.