Case: WG &amp; B Manufacturing Pty Ltd v Tesla Farad Pty Ltd [1999] FCA 1776
Outcome: cited
It is convenient to deal first with Apache's jurisdictional objection. It is not in dispute that, in the absence of the claims which are founded on the TPA, Newcrest could not pursue a case based on allegations of breach of contract in this Court. Nor is it in dispute that the Court will lack jurisdiction to deal with a controversy in circumstances in which the only federal claims relied are either colourable (in the sense of not being bona fide but rather relied on solely to attract the Court's jurisdiction) or trivial or insubstantial. In WG &amp; B Manufacturing Pty Ltd v Tesla Farad Pty Ltd [1999] FCA 1776 Finkelstein J stated the relevant principles (at [11] to [14]) as follows: "[11] This then requires me to determine whether the non-federal claims are justiciable in the Federal Court. The relevant cases show that if a federal claim which is said to enliven the accrued jurisdiction of the court to dispose of non-federal claims is trivial or unsubstantial, that will not be sufficient to attract that jurisdiction. The cases are collected in the judgment of Merkel J in Johnson Tiles Pty Ltd v Esso Australia Ltd [1999] FCA 165. As Merkel J pointed out, triviality in this context does not require an examination as to whether the federal claim is less likely to succeed than the non-federal claim. Accrued jurisdiction does not depend upon an assessment being made of the strengths of the federal claim; rather the question is whether the federal claim is genuine. If the federal claim is colourable in the sense that it was made for the purpose of fabricating jurisdiction, of course the jurisdiction of the court is not enlivened: see Fitzroy Motors Pty Ltd v Hyundai Automotive Distributors Australia Pty Ltd (1995) 133 ALR 445. How is the genuineness of the claim to be determined? One way is to ask whether the federal claim is bound to fail, that is to say, to ask whether the claim is unarguable. If the federal claim is hopeless then it is difficult to see how an applicant could contend that it was pursuing the claim bona fide. [12] However, it is not only when a federal claim is colourable that the Federal Court would lack jurisdiction to deal with non-federal matters. In Fencott v Muller (at 609-610) in a joint judgment of Mason, Murphy, Brennan and Deane JJ, the following was said: "However, federal judicial power is attracted to the whole of a controversy only if the federal claim is a substantial aspect of that controversy. A federal claim which is a trivial or insubstantial aspect of the controversy must, of course, itself be resolved in federal jurisdiction, but it would be neither appropriate nor convenient in such a case to translate to federal jurisdiction the determination of the substantial aspects of the controversy from the jurisdiction to which they are subject in order to determine the trivial or insubstantial federal aspect. Again, impression and practical judgment must determine whether it is appropriate and convenient that the whole controversy be determined by the exercise of federal judicial power." [13] In the present case, on balance I am not prepared to conclude that the asserted federal claims are not genuine in the sense that they are colourable and only brought for the purpose of fabricating jurisdiction, but what does seem plain to me is that the cause of action under s52 of the Trade Practices Act is "trivial or insubstantial" in the sense explained by the High Court in Fencott v Muller. This is not a claim that would be appropriately and conveniently determined in the exercise of federal jurisdiction. [14] In the result two things follow. First, the court does not have jurisdiction to entertain the non-federal claims. Second, there being no other claims that are relied upon to found jurisdiction in the Federal Court, the proceeding must be dismissed with costs." 19 Newcrest alleges that the respondents expressed opinions and made forecasts without having reasonable grounds to do so. It relies on ss 51A and 52 of the TPA. The particular opinions and forecasts are said to be found in the following documents: &#8226; The late June 2008 press release; &#8226; The 30 July 2008 letter from Apache; and &#8226; The 2 August 2008 letter from Santos. 20 It is said that those documents contain representations that, by mid-August, the respondents would be supplying Newcrest with its full gas entitlement under the contract. Newcrest says that, acting on these representations, it cancelled some temporary arrangements and then was forced to make further alternative arrangements when, in mid-August, full supply had not been restored. This led to Newcrest incurring substantial losses.