AN INTRODUCTION TO THE JURISDICTION OF THE FEDERAL COURT OF AUSTRALIA

Introduction

The Federal Court of Australia (the “Federal Court”) was created by the Federal Court of Australia Act 1976 (Cth) under the authority granted to Parliament by s 71 of Ch III of the Australian Constitution (the “Constitution”) to create federal courts other than the High Court of Australia.

The Federal Court was once a court of limited specific jurisdiction.  This is no longer so.  This change was a result of the exercise of will of the Commonwealth Parliament.  The Federal Court is, and has been since 1997, a court of general federal civil jurisdiction, having jurisdiction whenever a law of the Commonwealth Parliament is part of a dispute.

Any explanation of the Federal Court’s jurisdiction must commence with the provision which, in 1997, conferred that general jurisdiction:  the Judiciary Act 1903 (Cth), s 39B(1A)(c).  Parliament has, by this provision, conferred jurisdiction on the Federal Court in all (non-criminal) matters arising under any Commonwealth statute.  Thus, if a Commonwealth statute is involved in a dispute (in the application, statement of claim, defence, cross-claim, defence to cross-claim or otherwise) the Federal Court will have jurisdiction to resolve the whole dispute or controversy.  Section 39B(1A)(c) is in the following terms:
The original jurisdiction of the Federal Court of Australia also includes jurisdiction in any matter: 
…
(c)  	arising under any laws made by the Parliament, other than a matter in respect of which a criminal prosecution is instituted or any other criminal matter.
[emphasis added]

There is no need to find any other provision in any other Act saying that the Court has jurisdiction.  This provision has conferred jurisdiction already. It is a general conferral of (non-criminal) federal jurisdiction.  To appreciate fully its reach and importance (as to which, see below) a little explanation of the nature of federal jurisdiction and conferral of it on the Federal Court is necessary.

Federal jurisdiction: background 

Jurisdiction exercised by Australian courts is either federal jurisdiction or state or territory jurisdiction.  Federal jurisdiction is the authority to exercise the judicial power of the Commonwealth.  State or territory jurisdiction is the authority to exercise the judicial power of a State or Territory.  The courts in each polity (Commonwealth, State or Territory) comprise the judicial branch of government in that polity.

The Constitution authorises State and Territory courts to be invested with federal jurisdiction, as well as their own State and territory jurisdiction.  Since Re Wakim; Ex parte McNally (1999) 198 CLR 511, it is clear that the Constitution does not authorise the conferral of State jurisdiction on federal courts, including the Federal Court.  Apart from the High Court, which occupies a unique position at the apex of the Australian court system, federal courts, including the Federal Court, have no jurisdiction to exercise State judicial power.  Federal courts can only exercise federal jurisdiction, that is, they can only exercise the judicial power of the Commonwealth.  It is important, however, in whichever court a case is being heard, to understand whether the jurisdiction being exercised is federal or state.  Important consequences may flow from the character of the jurisdiction, including choice and application of law.

Jurisdiction in the sense being discussed here, is the authority of the court to adjudicate:  Australian Securities Investment Commission v Edensor Nominees Pty Limited (2001) 204 CLR 559 at 570 [2].

The Federal Court’s jurisdiction derives from Commonwealth laws which have been made pursuant to the authority given to Parliament in s 77(i) and (ii) of the Constitution:

s 77  Power to define jurisdiction 
With respect to any of the matters mentioned in the last two sections [that is, ss 75 and 76 below] the Parliament may make laws: 
(i)	defining the jurisdiction of any federal court other than the High Court; 
(ii)	defining the extent to which the jurisdiction of any federal court shall be exclusive of that which belongs to or is invested in the courts of the States; 
…

The boundaries of the field of such laws, that is the boundaries of federal jurisdiction, are found in ss 75 and 76 of the Constitution:
s 75  Original jurisdiction of High Court 
In all matters: 
(i)	arising under any treaty; 
(ii)	affecting consuls or other representatives of other countries; 
(iii)	in which the Commonwealth, or a person suing or being sued on behalf of the Commonwealth, is a party; 
(iv)	between States, or between residents of different States, or between a State and a resident of another State; 
(v)	in which a writ of Mandamus or prohibition or an injunction is sought against an officer of the Commonwealth; 
the High Court shall have original jurisdiction. 

s 76 Additional original jurisdiction 
The Parliament may make laws conferring original jurisdiction on the High Court in any matter: 
(i)	arising under this Constitution, or involving its interpretation; 
(ii)	arising under any laws made by the Parliament; 
(iii)	of Admiralty and maritime jurisdiction; 
(iv)	relating to the same subject‑matter claimed under the laws of different States. 

Thus, the Parliament may confer jurisdiction on any federal court with respect to any of the matters which the Constitution itself confers jurisdiction on the High Court (s 75), or which the Constitution authorises Parliament to confer jurisdiction on the High Court (s 76).  As can be seen from its wording, s 39B(1A)(c) is based on s 76(ii) of the Constitution.  The subject matters on which the Commonwealth Parliament has authority to legislate are derived from these and other provisions of the Constitution, especially s 51 of the Constitution (which sets out the subject matters in respect of which the Commonwealth Parliament has authority upon which to legislate).

Parliament has not conferred the totality of federal jurisdiction in ss 75 and 76 on the Federal Court, though the conferral that has been made is wide and is not limited to the use of s 76(ii).

The process of ascertaining the jurisdiction of the Federal Court

How does one go about ascertaining what the Federal Court’s jurisdiction is?

The answer to this question is not complex:  One finds the Federal Court’s jurisdiction in provisions of Commonwealth statutes.  Before describing these provisions, and in particular the Judiciary Act, s 39B(1A)(c) in a little more detail, a fundamental underpinning concept must be explained: that contained in the word “matter”.

The meaning of “matter”

The content and width of the concept of “matter” lies at the heart of the notions of federal jurisdiction and the judicial power of the Commonwealth.  It is a word central to the operation of ss 75, 76 and 77 of the Constitution.  It is used repeatedly in Commonwealth laws concerning federal jurisdiction.  The “matter” is the justiciable controversy between the actors to it comprised of the substratum of facts and claims representing or amounting to the dispute or controversy between or amongst them.  It is not the cause or causes of action brought by the plaintiff.  A justiciable controversy is identifiable independently of proceedings brought for its determination.  It is the whole controversy in respect of which it is the function of the court or courts (the one controversy may be fought in different places) exercising the judicial power of the Commonwealth to quell.  It is the “subject matter for determination in a legal proceeding”’. 

The need for a controversy means that whilst federal courts can make declarations, they do not, and cannot, give advisory opinions.  Accepting this well-understood limitation, it is important to appreciate the width of the concept of “matter”.  As was said in South Australia v Victoria (1911) 12 CLR 667 at 675 by Griffith CJ, “the word ‘matters’ was… the widest term to connote controversies which might come before a Court of Justice.”  There are a number of important cases that deal with the concept.  Probably the most helpful self-contained guide is the following passage from the joint reasons for judgment of Gummow and Hayne JJ in Re Wakim 198 CLR at 585-86 [139]-[142]:
The central task is to identify the justiciable controversy.  In civil proceedings that will ordinarily require close attention to the pleadings (if any) and to the factual basis of each claim.

In Fencott [(1983) 152 CLR 570 at 608 per Mason, Murphy, Brennan and Deane JJ] it was said that ‘in the end, it is a matter of impression and of practical judgment whether a non-federal claim and a federal claim joined in a proceeding are within the scope of one controversy and thus within the ambit of a matter.’  The references to ‘impression’ and ‘practical judgment’ cannot be understood, however, as stating a test that is to be applied.  Considerations of impression and practical judgment are relevant because the question of jurisdiction usually arises before evidence is adduced and often before the pleadings are complete.  Necessarily, then, the question will have to be decided on limited information.  But the question is not at large.  What is a single controversy ‘depends on what the parties have done, the relationships between or among them and the laws which attach rights or liabilities to their conduct and relationships [Fencott  (1983) 152 CLR 570 at 608 per Mason, Murphy, Brennan and Deane JJ].  There is but a single matter if different claims arise out of “common transactions and facts” or “a common substratum of facts” [Philip Morris (1981) 148 CLR 457 at 512 per Mason J], notwithstanding that the facts upon which the claims depend “do not wholly coincide” [Fencott (1983) 152 CLR 570 at 607 per Mason J, Murphy, Brennan and Deane JJ].  So, too, there is but one matter where different claims are so related that the determination of one is essential to the determination of the other [Philip Morris (1981) 148 CLR 457 at 512 per Mason J], as, for example, in the case of third party proceedings or where there are alternative claims for the same damage and the determination of one will either render the other otiose or necessitate its determination.  Conversely, claims which are “completely disparate” [Felton v Mulligan (1971) 124 CLR 367 at 373 per Barwick CJ], “completely separate and distinct” [Philip Morris (1981) 148 CLR 457 at 521 per Murphy J] or “distinct and unrelated” [Moorgate Tobacco Co Ltd v Philip Morris Ltd (1980) 145 CLR 457 at 482 per Stephen, Mason, Aickin and Wilson JJ] are not part of the same matter.

Often, the conclusion that, if proceedings were tried in different courts, there could be conflicting findings made on one or more issues common to the two proceedings will indicate that there is a single matter.  By contrast, if the several proceedings could not have been joined in one proceeding, it is difficult to see that they could be said to constitute a single matter.

Here, the three proceedings could have been joined in one.  The fact that those advising Mr Wakim chose to issue separate proceedings at different times does not mean that the scope of the controversy is limited to the matters raised in the first proceeding.  Had the Official Trustee brought a cross-claim against both the solicitors and Mr Darvall immediately after Mr Wakim commenced his proceeding against it and if Mr Wakim had then joined the cross-respondents as respondents to his principal claim, the existence of a single controversy involving several parties would be more apparent than it may be in the present circumstances.  But neither the differences in the present procedural history nor the absence of any claim by the Official Trustee against the solicitors and Mr Darvall determines the question whether there is a single controversy.

There are some what might be termed “non-controversial matters” accepted to be within the notion of federal jurisdiction appropriate for the exercise of the judicial power of the Commonwealth.  For example, in Hedge, as Administrator of Goldfields Medical Fund Inc (2002) 196 ALR 557, orders were sought giving effect to a proposed course of action by an administrator .  There was no contradictor (as there often is not in uncontested company matters).  French J discussed (see [41] to [46]) the relationship of “matter” with the notion of judicial power.  The character of the statutory function was closely analogous with matters historically accepted as judicial in character and so was a legitimate subject of federal jurisdiction. 

Also, for a discussion of whether non-justiciability denies the existence of a matter, see Petrotimor Companhia de Petroleos S.A.R.L. v Commonwealth of Australia (2003) 126 FCR 354 and (2003) 128 FCR 507.

For further reading on the meaning of the word “matter” see In re Judiciary and Navigation Acts (1921) 29 CLR 257 at 264-67 (concerning advisory opinions); Moorgate Tobacco Co Ltd v Philip Morris Ltd (1980) 145 CLR 457 at 480; Philip Morris Inc v Adam P Brown Male Fashions Pty Limited (1981) 148 CLR 457 at 473-76, 491-92, 507-515, 519-20, 531-33; Fencott v Muller (1983) 152 CLR 570 at 603-610; Stack v Coast Securities (No 9) Pty Limited (1983) 154 CLR 261 at 290-91; Crouch v Commission for Railways (Qld) (1985) 159 CLR 22 at 37; Edensor 204 CLR at 586 [54]-[55]; Re McBain; Ex parte Australian Catholic Bishops Conference (2002) 209 CLR 372 at 388-89 [3]-[5], 404-406 [59]-[62], 412-414 [86]-[91], 458-462 [242]-[252] and 476 [296]; Hooper v Kirella (1999) 96 FCR 1 at 13-16 [41]-[55]; Zines L, Cowen and Zines’s Federal Jurisdiction in Australia (3rd Ed Federation Press) at 15-21 and passim; Opeskin B and Wheeler F (Eds) The Australian Federal Judicial System (Melb. Uni Press 20002) at 230-35; and Allsop J “Federal jurisdiction and the jurisdiction of the Federal Court of Australia” (2002) 23 Australian Bar Review 29.  

The need to find a Commonwealth statute

Once this wide concept of matter is appreciated to be central to the notion of federal jurisdiction and to be an indispensable tool of analysis in relation to federal jurisdiction, the next question is:  What federal jurisdiction has been conferred on the Federal Court by Acts of the Commonwealth Parliament?  

Intuitively, one would have thought that the answer to this might be found in the Federal Court of Australia Act.  With one important exception (s 32, to which I will come), it is not.  The Federal Court of Australia Act deals with the nature, structure, operation and powers of the Federal Court, but not its jurisdiction (with the above exception of s 32).  As to the powers of the Federal Court (once a matter is within its jurisdiction), see in particular ss 5(2), 21, 22, 23 and 28 of the Federal Court of Australia Act.  One needs to look to other laws of the Parliament for the identification of the Federal Court’s jurisdiction.  In this respect, see in particular s 19(1) of the Federal Court of Australia Act which states:
The Court has such original jurisdiction as is vested in it by laws made by the Parliament. 

The early approach from 1977:  specific conferrals using s 76(ii)

The approach taken by the Parliament in the early years of the life of the Federal Court was to define the jurisdiction of the Federal Court, Act by Act, by reference to individual named subject matters using the authority given to it by s 76(ii) of the Constitution.  From its earliest days, the Federal Court’s jurisdiction was conferred by Parliament in provisions in legislation dealing with trade practices, administrative law, intellectual property, industrial relations, bankruptcy and taxation.

In 1977, shortly after its creation, Parliament defined the Federal Court’s jurisdiction by 13 Commonwealth statutes, in 1992, by about 100.  The annual report of the Court, in any given year, lists the individual legislation which gives the Court jurisdiction.

The widening of the jurisdictional base: the use of ss 75(v) and 76(iii)

Over time, the Parliament began to use other foundations of power within ss 75 and 76 of the Constitution besides s 76(ii) to define the jurisdiction of the Federal Court.  In 1983, an important change was made to the Judiciary Act which affected the practice of Commonwealth administrative law.  Parliament enacted s 39B(1) of the Judiciary Act which provided as follows:
…[T]he original jurisdiction of the Federal Court of Australia includes jurisdiction with respect to any matter in which a writ of mandamus or prohibition or an injunction is sought against an officer or officers of the Commonwealth. 

The enactment of s 39B(1) of the Judiciary Act  employed ss 75(v) and 77(i) of the Constitution.  Section 39B(1) mirrors in terms the Constitutional relief available in the High Court under s 75(v) of the Constitution.  Section 39B(1) significantly complements the Commonwealth administrative law regime in the Administrative Decisions (Judicial Review) Act 1977 (Cth) and the Administrative Appeals Tribunal Act 1975 (Cth).  As to the relationship between s 39B(1) and these Acts, see Robertson A “The administrative law jurisdiction of the Federal Court – Is the AD(JR) Act still important?” (2003) 24 Australian Bar Review 87.

In 1988, acting on the recommendation of the Australian Law Reform Commission, the Parliament enacted the Admiralty Act 1988 (Cth) which conferred on the Federal Court comprehensive Admiralty and maritime jurisdiction using ss 76(iii) and 77(i) of the Constitution.  See generally in this regard, Owners of the Ship ‘Shin Kobe Maru’ v Empire Shipping Co Inc (1994) 181 CLR 404 and at first instance (1991) 32 FCR 78 where Gummow J explained s 76(iii) in its historical context; and see also Elbe Shipping SA v The Ship ‘Global Peace’ (2006) 154 FCR 439 at 451-460 [53]-[76].

The conferral of general federal (civil) and other jurisdiction:  s 39B(1A)

Most importantly, in 1997, the Parliament took a significant step towards transforming the Federal Court from being a court of specific federal jurisdiction into a court of more general federal jurisdiction.  The step in question was the passing of s 39B(1A), especially s 39B(1A)(c), of the Judiciary Act.  Using ss 75(iii) (in part), 76(i) and (ii) and 77(i) of the Constitution, the Parliament provided as follows in s 39B(1A):
The original jurisdiction of the Federal Court of Australia also includes jurisdiction in any matter: 
(a) 	in which the Commonwealth is seeking an injunction or a declaration; or 
(b) 	arising under the Constitution, or involving its interpretation; or 
(c) 	arising under any laws made by the Parliament, other than a matter in respect of which a criminal prosecution is instituted or any other criminal matter.

Section 39B(1A)(a) draws on s 75(iii) only to the extent that the Commonwealth seeks relief.   “Commonwealth” includes Commonwealth instrumentalities such as ASIC and the Civil Aviation Authority:  Edensor (2001) 204 CLR 559 at 580-581 [39] and Austral Pacific Group Ltd (in liq) v Airservices Australia (2000) 203 CLR 136 at 141-142 [10] and 152-153 [48].  The test of what is the Commonwealth for s 39B(1A)(a) and s 75 (iii) is not the same enquiry as involved in the determination of the question as to whether an entity is entitled to so-called “Crown immunity”.  See generally Zines L in Opeskin B and Wheeler F (Eds), The Australian Federal Judicial System (Melbourne Uni Press, 2000) at 272-75;  State Bank of New South Wales v Commonwealth Savings Bank (1986) 161 CLR 639; Edensor 204 CLR 559 and Austral Pacific 203 CLR 136.  Also, the term “injunction” should be viewed as not limited to traditional equitable relief; it incorporates the developing remedy of injunctive relief in public law: Edensor 204 CLR 559 at 582-583 [45]. 

Section 39B(1A)(b) makes clear, by specific conferral, that the Federal Court was conferred with jurisdiction to determine Constitutional questions and controversies.

The importance and effect of s 39B(1A)(c) is difficult to overstate.  Leaving aside criminal matters, the Federal Court is vested with jurisdiction:
•	in any matter
•	arising under any laws made by Parliament.

Section 39B(1A)(c) operates according to its terms as a general conferral of jurisdiction:  Transport Workers’ Union of Australia v Lee (1998) 84 FCR 60 at 67 and National Union of Workers v Davids Distribution Pty Ltd (1999) 91 FCR 513 at 519.  The effect of s 39B(1A)(c) on pre-existing provisions conferring jurisdiction will be worked out on a case by case basis, but one starts from the proposition that s 39B(1A)(c) is a general conferral of jurisdiction.  In Hooper v Kirella Pty Ltd 96 FCR 1 the Full Court considered the relationship between s 39B(1A)(c) and s 86 of the Trade Practices Act 1974 (Cth).  Section 86 was a positive conferral not a proscription and thus s 39B(1A)(c) extended to matters beyond “proceedings” dealt with by s 86.  Section 86 thus became otiose.  Questions of statutory construction may arise between an earlier (or later) Acts and s 39B(1A)(c).  There may be difficult questions where there is already some conferral which can be seen as deliberately circumscribed.  For example see TWU v Lee 84 FCR 60, Rohner v Scanlan (1997) 77 FCR 433 and ACTEW Corporation v Pangallo [2002] FCAFC 325 (SL Refused).

“arising under laws made by the Parliament”

The wide notion of matter has been discussed.  What does “arising under any laws made by the Parliament” mean?  The prepositional phrase “arising under” has been interpreted authoritatively very widely.  

First, a matter indubitably “arises under” a law of the Parliament if a provision such as s 82 of the Trade Practices Act creates a cause of action under a federal law.  

Secondly, it is, however, not necessary for the form of relief or the cause of action to owe its nature or existence to a law of the Parliament for a matter to arise under such a law.  Even if the cause of action or form of relief is not created or provided for by a law of the Parliament, if a law of the Parliament is relied upon as giving a right sought to be vindicated or as the source of a defence asserted then the matter (that is, the controversy) in which that right or defence arises is a matter arising under the law:  R v Commonwealth Court of Conciliation and Arbitration; Ex parte Barrett (1945) 70 CLR 141 at 154; Felton v Mulligan (1971) 124 CLR 367 at 374, 375, 388, 403 and 408; Fejo v Northern Territory (1998) 195 CLR 96 at 120; Re McJannet; Ex parte Australian Workers’ Union of Employees, Queensland (1997) 189 CLR 654 at 656-57; and Australian Solar Mesh Sales Pty Ltd v Anderson (2000) 101 FCR 1 at 7-8 [13]-[14].

Thirdly, the law of the Parliament need not create a right that is the whole subject matter of vindication or the whole subject matter of the defence. If a question under a Commonwealth law is to be determined as a step along the way in one way of vindicating the position of someone involved in the controversy, that will create a matter arising under a law of the Parliament: Felton v Mulligan 124 CLR at 374 and 375; Moorgate Tobacco v Philip Morris  145 CLR 457 at 476 and Australian Solar Mesh Sales 101 FCR at 5-6 [11].  In this context what was said by Stephen, Mason, Aickin and Wilson JJ in Moorgate v Philip Morris 145 CLR at 476 is important:
…The cases establish that federal jurisdiction is attracted if the right or duty based in a federal statute is directly asserted by the plaintiff or defendant, but not if the federal question arises only in some incidental fashion.  So too federal jurisdiction is attracted if the court finds it necessary to decide whether or not a right or duty based in federal law exists, even if that matter has not been pleaded by the parties.  But the converse is not true.  If a federal matter is raised on the pleadings federal jurisdiction is exercised, notwithstanding that the court finds it unnecessary to decide the federal question because the case can be disposed of on other grounds.

Fourthly, there need not even be a dispute or issue about a right or duty based on a Commonwealth statute in these ways.  The phrase “arising under” is wide enough to encompass a claim for common law or equitable relief in respect of, or over, a right which simply owes its existence to federal law.  This is a matter arising under a law of the Parliament.  In LNC Industries Ltd v BMW (Aust) Ltd (1983) 151 CLR 575, the property over which the parties were fighting comprised import quotas created by the Commonwealth Customs legislation.  The fight was about contractual and equitable rights and obligations of the parties in respect of that property.  There was no issue or debate about the nature of any Commonwealth statutory right or duty.  The subject matter was a bundle of rights owing their existence to a law of the Parliament.  That was sufficient for the matter to arise under a law (the Customs legislation) of the Parliament.

The width of “arising under” in LNC Industries v BMW 151 CLR 575 is also illustrated by the approval in the reasons of the Court in that case of what Dixon J had said in Federal Capital Commission v Laristan Building and Investment Co Pty Ltd (1929) 42 CLR 582 at 585-86.  There, Dixon J was dealing with Territory jurisdiction, but part of what he said related directly to the notion of “arising under” a law of the Parliament.  Dixon J said:
…It may well be that all claims of right arising under the law in force in the Territory come within this description, because they arise indirectly as the result of the Seat of Government Acceptance Act 1909 (see sec 6), and the Seat of Government (Administration) Act 1910 (see secs 4 to 7 and 12).  But it is at least clear that a claim to a right conferred by or under ordinances made by the Governor-General in Council under sec 12 of the Seat of Government (Administration) Act is a matter arising under an enactment of the Parliament.

So, there, Territory ordinances and claims to rights under Territory ordinances arose under the Commonwealth Act providing for those ordinances.  

practical examples

It is of assistance to give some practical examples of how a matter arises under a law of the Parliament.
•	Actions for debts based on Commonwealth law, for example under taxation, or corporations or bankruptcy legislation clearly arise under the legislation.  The debt owes its existence to the operation of Commonwealth law:  Federal Airports Corporation v Aerolineas Argentinas (1997) 76 FCR 582 and Coffey v Department of Social Security (1999) 86 FCR 434.  
•	An action for negligence against a patent attorney for his or her failure to draft a patent with due skill arises under the Patents Act 1990 (Cth) , because the subject matter in dispute owes or would have owed its existence to the Patents Act. Even more so if the defence raises an issue that the claimed invention was obvious or not novel:  Australian Solar Mesh Sales 101 FCR 1.
•	A claim under an insurance policy for which interest under the Insurance Contracts Act 1984 (Cth) is claimed, or in defence of which the insurer relies on misrepresentation or non-disclosure and invokes the Insurance Contracts Act, arises under that Act.
•	A claim for damages for a breach of a term of a contract implied by Commonwealth law (such as the Trade Practices Act 1974 (Cth)) is a matter arising under a law of the Parliament.  Previously, it was accepted (as was the case) that this was not a claim for damages caused by breach of the Act for the purposes of ss 82 and 86:  Brennan J in Arturi v Zupps Motors Pty Ltd (1980) 33 ALR 243 following the decision of Rogers J in Zalai v Col Crawford (Retail) Pty Ltd (1980) 2 NSWLR 438.  It now is a matter arising under the Trade Practices Act.
•	Where a liquidator was appointed by the Federal Court under the Corporations Act 2001 (Cth) at the suit of ASIC, the claim instituted by the liquidator seeking to get in the assets of the trust to which he was appointed by the Court was within federal jurisdiction, notwithstanding that the third party raised only common law rights to justify its possession:  ASIC v Landy DFK Securities Ltd [2002] FCA 1056 cf Avamure Pty Ltd (in liq) v Fletcher Jones & Staff Pty Ltd [1997] 2 VR 56 which dealt with an action by a voluntary liquidator.
•	In von Arnim v Group 4 Correctional Services Pty Ltd [2002] FCA 310 Kenny J discussed the effect of s 53 of the Extradition Act 1988 (Cth) which was in the following terms:
The laws of a State or Territory with respect to:
a.	the conditions of imprisonment of persons imprisoned in that State or Territory to await trial for offences against the law of that State or Territory;
b.	the treatment of such persons during imprisonment; and
c.	the transfer of such persons prison to prison;
apply, so far as they are capable of application, in relation to persons who have been committed to prison in that State or Territory under this Act.

This made a State law, s 47 of the Corrections Act 1986 (Vic), applicable to persons committed to prison under the Extradition Act.  Thus, though the right sought to be vindicated arose from the Corrections Act it was picked up by s 53 of the Extradition Act and so the right was one arising under the federal law.  The operation was similar to that of the Judiciary Act s 79 (exercising federal jurisdiction below) in transforming the State law into a surrogate federal law.  

There are countless other examples.  

The relationship between the “matter” and “arising under”

It is important to appreciate the relationship between a “matter” or controversy (which it is the court’s job to quell) and the question of “arising under” a Commonwealth law.  A controversy may be evident between parties before either party decides to go to court.  An assessment may well be able to be made at that point about whether there is or will be a federal matter, if it goes to court for resolution.  For example, an insured might make a claim upon its insurer, seeking vindication of its contractual rights.  The insurer may deny liability and say nothing, or it may explain its position.  It may say that there was a non-disclosure or misrepresentation, thereby raising in the controversy ss 21 and 28 of the Insurance Contracts Act.  It may say that the claim is fraudulent, making s 56 of the Insurance Contracts Act relevant.  It may say that a breach of condition occurred so as to make s 54 relevant.  In these circumstances, the matter (the controversy) arises under a law of the Parliament because of the existence of the federal issue embedded within the matter.  The federal nature of the controversy does not depend upon whether the federal issue is in the first or second pleading.  It does not depend upon whether the insurer strikes first by seeking a declaration of right based on the Insurance Contracts Act or the applicant strikes first with a claim under the policy.  It is plain that a “matter” or controversy may exist prior to the institution of proceedings and that it may, at that point, bear a federal character:  Hooper v Kirella 96 FCR at 12-16 [41]-[55].  This was the foundation for the conclusion in Hooper v Kirella 96 FCR 1 that the procedure for preliminary discovery in the Federal Court was valid and could be supported by an existing matter under s 39B(1A)(c) before the suit was commenced. 

The difference between “arising under” and “involving the interpretation of”

It should be noted that there is a distinction drawn between merely interpreting a federal law, which is insufficient alone to attract federal jurisdiction, and arising under a federal law.  The difference is not reliably placed into a universally valid test.  In Felton v Mulligan 124 CLR 367 the following was said:
(a)	Barwick CJ at 374: 
…Further the matter arising under a law of the Parliament will have arisen if the suit could have been disposed of by deciding the matter, whether or not the suit was so disposed of:  cf Nelungaloo Pty Ltd v The Commonwealth [(1952) 85 CLR 545]; The Commonwealth v Bank of New South Wales [(1949) 79 CLR 497].  It is of course not enough that a law made by the Parliament must be construed in the course of the decision of the case.  There must be a matter arising under a law of the Parliament.   The contrast between the language of s 76(i) and 76(ii) is relevant in this connexion.  The point at which interpretation of the federal statute, prima facie an apparently incidental consideration, may give rise to a matter arising under the statute is not readily expressed in universally valid terms.  But the distinction between the two situations must be maintained.

(b)	Walsh J at 408-409: 
A comparison between the terms of s 76(i) and those of s 76(ii) of the Constitution indicates that a distinction is to be drawn between a matter “arising under” a law of the Parliament and a matter which involves the interpretation of such a law.  The fact that the interpretation of a law is involved does not necessarily mean that there is a matter arising under the law.  But, in my opinion, there is a matter arising under the law if the source of the right claimed by the plaintiff or applicant or the source of a defence which asserts that the defendant or respondent is immune from the liability or obligation alleged against him is a law of the Parliament.  I think that that view of what constitutes a matter arising under a law of the Parliament is in conformity with the statements made in R v Commonwealth Court of Conciliation and Arbitration; Ex parte Barrett [(1945) 70 CLR 141] by Latham CJ and McTiernan J [(1945) 70 CLR at p 173].  There Latham CJ said:  “If a right claimed is conferred by or under a federal statute, the claim arises under the statute” [(1945) 70 CLR at p 154].  Likewise, in my opinion, if the answer made to a claim is that the defendant is free from the obligation asserted against him and that this freedom is conferred by an Act of the Parliament, the defence arises under that Act and the result is that there is before the Court a “matter” which arises under that Act.

(c)	Gibbs J at 416: 
…I regard it as now settled that a matter cannot be said to arise under a law made by the Parliament within s 76(ii) simply because to decide the matter it is necessary to consider or construe the law.  To adapt some of the language used in James v South Australia [(1927) 40 CLR 1 at p 40] in relation to s 30 of the Judiciary Act, it may be said that a matter arises under a law made by the Parliament when a right, title, privilege or immunity is claimed under that law.  A right, title privilege or immunity may be claimed under a law, either because the law is the source of the right, title, privilege or immunity or because the right, title, privilege or immunity can only be enforced by virtue of the law.

The occasional elusiveness of the distinction between “arising under” and “involving the interpretation of” can be seen in Felton v Mulligan 124 CLR 367 itself.  The plaintiff sought a declaration as to her rights under a covenant in a maintenance agreement against her former husband’s executor.  The defendant argued that the covenant was void as an attempt to oust the jurisdiction of the Court under the Matrimonial Causes Act 1959 (Cth) to make a maintenance order.  All seven justices agreed that in determining the matter and dealing with the defence the federal Act was relevant.  The majority (Barwick CJ, McTiernan, Windeyer and Walsh JJ) were of the view that it arose under the Act.  Menzies, Owen and Gibbs JJ disagreed.

Often the distinction will be clear.  For example a State statute under which the rights of the parties are to be judged may have words similar to, or the same as, those appearing in a federal statute in respect of which there is a body of case law.   The disposition of the case may turn on the interpretation of the relevant words (and so, in one sense, on the interpretation of the federal statute), but the case clearly would not arise under a law of the Commonwealth.

However, it should be noted that Gummow and Hayne JJ in Abebe v Commonwealth (1999) 197 CLR 510 cited LNC v BMW 151 CLR 575 as authority for the proposition that a controversy will be a matter arising under a federal law:
…because the determination of the controversy involves the interpretation of the Act and the rights or duties in question in the matter owe their existence to that statute. 

Basic approach required

To assess with some reliability whether the Federal Court has jurisdiction, the following steps should be taken:
(a)	First, identify the controversy and its limits.  
(b)	Secondly, identify the federal element or connection therein. 
(c)	Thirdly, having identified the federal element or connection and the matter or controversy, assess whether there is a question arising under a federal law in the sense discussed earlier or whether for some other reason the Court has jurisdiction.
According to Gummow and Hayne JJ (with whom Gleeson CJ agreed) in Re Wakim 198 CLR at [139], the “central task” is the identification of the controversy.

Of course, the task in (a) is not necessarily able to be confidently concluded prior to suit.  If, prior to filing originating process, no federal element can be seen as part of the controversy, federal jurisdiction may not be present, in which case the Federal Court may not have jurisdiction.

If, later, the defendant asserts a claim in the defence or cross-claim raising a question under federal law, the matter arises under federal law.  See, for example, Bell Group Ltd v Westpac (2000) 104 FCR 305 where the issue arose in a  pre-Wakim context with a statement of claim and defence not disclosing a federal issue, but the cross-claim sought relief under s 52 of the Trade Practices Act.

Accrued and Associated Jurisdiction

These terms denote different concepts, which it is important not to confuse.  “Accrued jurisdiction” is that part of the matter which is not specifically federal.  It is probably a term best avoided.  The whole “matter” is federal if it arises under a federal law.  It is apt to mislead if one thinks of State or common law jurisdiction clamping on to federal jurisdiction.  It is all federal jurisdiction, if it is one controversy.  The old notion of there perhaps being some “discretion” as to whether the Federal Court will accept this “accrued” jurisdiction may well be wrong (or at the very least, unreliable) in the light of recent statements in the High Court in Re Wakim 198 CLR 511, Edensor 204 CLR 559 and Austral Pacific 203 CLR 136.

The separateness of the notion of accrued jurisdiction arose because of the context of some of the early debates.  In its early form, s 86 of the Trade Practices Act conferred exclusive jurisdiction on the Federal Court to hear and determine “actions, prosecutions and other proceedings” under Part VI of the Trade Practices Act.  If common law questions were part of the matter, the problem arose that these common law questions may also have been conferred exclusively on the Federal Court.  This led to the two elements being viewed separately and also to the notion (latterly the subject of adverse comment in the High Court) that the assumption of this accrued jurisdiction was discretionary.

“Associated” jurisdiction is dealt with in s 32 of the Federal Court of Australia in the following terms:
(1) 	To the extent that the Constitution permits, jurisdiction is conferred on the Court in respect of matters not otherwise within its jurisdiction that are associated with matters in which the jurisdiction of the Court is invoked. 
(2) 	The jurisdiction conferred by subsection (1) extends to jurisdiction to hear and determine an appeal from a judgment of a court so far as it relates to a matter that is associated with a matter in respect of which an appeal from that judgment, or another judgment of that court, is brought. 

Though related, in a sense, to the question of the extent of the controversy or “accrued” jurisdiction, s 32 provides for a conferral of jurisdiction in other federal matters not otherwise conferred, but available to be conferred, if there is conferral of some jurisdiction.  Thus, if there is conferral by Commonwealth statute X of some federal jurisdiction, and jurisdiction under topic Y could be conferred on the Federal Court (by reference to ss 75 and 76 of the Constitution) but has not been so conferred and it is associated with the matter conferred by statute X, s 32 confers jurisdiction on the Court in respect of topic Y for the disposition this controversy.  

Thus, if there is a federal element in a controversy arising under a law of the Parliament (s 39B(1A)(c), from s 76(ii) of the Constitution) and the Commonwealth is being sued, s 32 would confer jurisdiction on the Court, by, and in respect of, the fact that the Commonwealth is being sued, since it is a ground in s 75(iii) which could be, but otherwise has not been, conferred on the Federal Court (s 39B(1A)(a) only deals with the Commonwealth seeking certain relief).  With the growth of jurisdiction by s 39B(1A)(c) the scope for the operation of s 32 has lessened, but it could be useful in clarifying the existence of express federal jurisdiction, for example if the dispute involves the diversity jurisdiction under s 75(iv), or the Commonwealth is sued, making s 75(iii) relevant.  There is a lack of authoritative exposition of the extent of “associated”.  In Philip Morris Inc v Adam P Brown Male Fashions  148 CLR 457, Barwick CJ at 476 indicated that “associated” embraced matters which may be disparate from each other, that is not within the “accrued” jurisdiction within the conferred federal matter.  Gaudron J in PCS Operations Pty Ltd v Maritime Union of Australia (1998) 153 ALR 520 at 521 was of the view that Barwick CJ’s views were implicit in the other judgments in that case:  see Philip Morris v Adam P Brown Male Fashions 148 CLR at 494-95, 518, 521-22.  The High Court, apart from Gaudron J sitting at first instance in PCS v MUA 153 ALR 520, has not recently discussed “associated” and s 32.  Philip Morris v Adam P Brown Male Fashions 148 CLR 457 remains the main High Court source of discussion on s 32.  See also the article by Gummow J in 1979 in 10 Fed LR 211 which outlines the history behind s 32 and which remains a fertile source of ideas as to the scope and extent of s 32.  As to the operation of “associated jurisdiction” in the context of Admiralty jurisdiction under s 76(iii) of the Constitution, see The ‘Global Peace’ 154 FCR 439 at 454-455 [60].

Another example of the impact of associated jurisdiction is provided by Allied Mills Industries Pty Ltd v Trade Practices Commission (No 1) (1981) 34 ALR 105.  There, a cross-claim was brought by a company to the litigation against the Trade Practices Commission.  Leaving aside the question of whether this fell within the whole controversy anyway, s 32 gave the Federal Court jurisdiction which it otherwise may not have had (the cross-claim being founded on common law and equitable causes of action), because the Trade Practices Commission was the Commonwealth for the purposes of s 75(iii).

Another example of the use of s 32 can be seen in the Patrick’s dispute in PCS v MUA 153 ALR 520.  There, the applicants claimed breach of an award and an enterprise agreement, contravention of the Workplace Relations Act 1996 (Cth) and of the Corporations Law against certain companies in the Patrick Group.  The applicants also alleged two common law causes of action for conspiracy against the “Patrick parties”, the National Farmers Federation and the Commonwealth.  The claim against the Commonwealth fell within s 75(iii) and jurisdiction to hear it was not otherwise conferred on the Federal Court.  Section 32 brought it within the Federal Court’s jurisdiction.  Gaudron J rejected the proposition that s 32 was limited to “matters which arise under other laws made by Parliament”.  This was how Gibbs J put it in Philip Morris v Adam P Brown Male Fashions 148 CLR 457.  Her Honour said that it was at odds with the words of s 32 and the views expressed by Aickin J and Wilson J in Philip Morris v Adam P Brown Male Fashions 148 CLR at 535 and 547 that s 32 extends jurisdiction to  associated matters falling within ss 75 and 76, and was contrary to Turner v Owen (1990) 26 FCR 366 and Businessworld Computers Pty Ltd v Australian Telecommunications Commission (1988) 82 ALR 499.  

There is room for some further exposition of the scope of s 32, and, in particular, the meaning of “associated”.

The importance of assertion in founding jurisdiction: once federal, only and ever federal

Once a party involved in a controversy asserts its position and that amounts to the assertion of a matter arising under a federal law in the sense discussed above, the whole matter or controversy is federal: Edensor 204 CLR 559 at 571 [7].

Once federal jurisdiction is attracted to a court, the jurisdiction which is exercised by that court throughout the case will be federal, save as to a completely disparate claim constituting in substance a separate matter: NEC Information Systems Australia Pty Ltd v Iveson (1992) 36 FCR 258 at 264; Fencott v Muller 152 CLR at 606-8; Re Wakim 198 CLR at [135]; Felton v Mulligan 124 CLR at 393; and Moorgate Tobacco v Philip Morris 145 CLR at 477.

Once federal jurisdiction is attracted, the court is not exercising State jurisdiction.  There is no notion of concurrent exercise of federal and State jurisdiction over the matter.  It is federal.  The notion that there could be two concurrent streams of federal and state jurisdiction (cf Lorenzo v Carey (1921) 29 CLR 243 at 251) was doubted in Ffrost v Stevenson (1937) 58 CLR 528 and rejected in Felton v Mulligan 124 CLR at 412-3 and Moorgate Tobacco 145 CLR at 471 and 479. 

When a right, as part of a claim or defence, which is said to arise under a law of the Parliament, is put forward by the party, the assertion of the federal issue, not its disposition, and not its merit, attracts the jurisdiction of the court to the relevant matter of which the federal issue forms part: Miller v Haweis (1907) 5 CLR 89 at 93; Troy v Wrigglesworth (1919) 26 CLR 305 at 311; National Union of Workers v Davids Distribution 91 FCR at [22]; Felton v Mulligan 124 CLR at 374; Australian Solar Mesh 101 FCR at 8-9; Westpac Banking Corporation v Paterson (1999) 167 ALR 377; and Hooper v Kirella 96 FCR 1 at [55], unless the claim or defence is made colourably, that is not genuinely or as a ‘mere subterfuge’ in order to fabricate jurisdiction:  Burgundy Royale v Westpac (1987) 18 FCR 212 at 219.  Note that (especially in the context of the cross-vesting legislation) it is not colourable to bring proceedings in the Federal Court as a step in having the case moved to the Supreme Court so that all issues may be dealt with: Burgundy Royale v Westpac 18 FCR at 219.

Hence, even if the federal issue is decided against the party raising it, or, it was, or became, unnecessary to deal with it, the matter of which it forms part does not cease to be federal jurisdiction: see Moorgate Tobacco v Philip Morris 145 CLR at 472, 476; Hooper v Kirella 96 FCR 1 at [55]; Burgundy Royale v Westpac 18 FCR at 219; McIntosh v National Australia Bank Ltd (1988) 17 FCR 482 at 484; Hopper v Egg and Egg Pulp Marketing Board (Vict) (1939) 61 CLR 665 at 673-74 and 680-81; Carter v Egg and Egg Pulp Marketing Board (1942) 66 CLR 557 at 580, 585-87 and 602; Parton v Milk Board (Vict) (1949) 80 CLR 229 at 249 and 257-58.  This is so even if the federal claim is struck out: Unilan Holdings Pty Ltd v Kerin (1993) 44 FCR 481 at 481-82 and Hooper v Kirella 96 FCR 1 at [55].  In Unilan Holdings 44 FCR 481, claims made under the Trade Practices Act were struck out as not disclosing a cause of action.  A Minister had given a speech at a public conference.  It was held that it was not arguable that it was in trade or commerce.  Nevertheless, the Full Court made it clear that the Court had jurisdiction to hear the negligent misrepresentation claims left on the pleadings.  In Moorgate Tobacco v Philip Morris 145 CLR 457, a trade mark count was pleaded but, though lying on the pleading, was not pressed.  To all intents and purposes, it was abandoned.  All other aspects of the controversy were non-federal.  The matter was federal jurisdiction.

The failure of the federal issue generally does not deny the consequences of its assertion.  If non-colourable, the assertion clothes the court with jurisdiction to hear the federal and non-federal parts of the matter – the whole matter.  It is the request to the court by a litigant to deal with a matter in which the litigant seeks the aid of the court to decide whether it has a valid right or defence arising under Commonwealth law in the sense described above which is crucial.  Jurisdiction is attracted by non-colourable claim or assertion within the matter by one of the parties to it.  The Full Court in Westpac v Paterson 167 ALR at 381 put the matter squarely:
As a matter of principle, there is no reason why the court cannot acquire jurisdiction in a matter arising under a law of the Commonwealth by the filing of a cross-claim which asserts a claim founded on the Commonwealth legislation.  The filing of the cross-claim asserts the right and makes the claim to enforce the right part of the justiciable controversy between the parties.   Provided the cross-claim is not “colourable”, it attracts federal jurisdiction.  This was the view of French J in Cambridge Gulf Investments Pty Ltd (in liq) v Dandoe Pty Ltd (1999) 32 ACSR 422 at [16], although his Honour considered that the cross-claim actually filed in that case did not properly raise such an issue.
[emphasis added]

The statute in question may, however, make something more than an assertion necessary for jurisdiction.  For instance, there is a dispute in the authorities as to whether the absence of an “administrative” act under the Administrative Decisions (Judicial Review) Act leads to the conclusion of an absence of jurisdiction (and thus denying the possibility of accrued or associated jurisdiction), or to the conclusion that the action failed, but within jurisdiction.  See generally, Vietnam Veterans’ Affairs Association of Australia New South Wales Branch Inc v Cohen (1996) 70 FCR 419 (the former view) and Post Office Agents Assoc. Ltd v Australian Postal Commission (1958) 84 ALR 563 at 565 (the latter view); and see also Johnson Tiles v Esso Aust (2000) 104 FCR 564 at 598 [87].  The High Court has stated that unless there is federal jurisdiction properly invoked there can be no accrued jurisdiction:  Carlton & United Breweries Ltd v Castlemaine Tooheys Ltd (1986) 161 CLR 543 at 553.  But that proposition does not answer the question, which is one of statutory construction whether the limitations on the exercise of power (relevantly here whether the act in question was “administrative”) will be regarded as going to the existence of jurisdiction or its exercise.

In Parisienne Basket Shoes Pty Ltd v Whyte (1938) 59 CLR 369 at 391, Dixon J made clear that, ordinarily, limitations relevant to the jurisdiction of a superior court will be regarded as going to the exercise of jurisdiction, rather than its existence, unless a contrary intention is clearly expressed.  Thus, generally, the non-colourable assertion of the elements of a cause of action, in respect of the resolution of which a Court has been given authority to hear, is sufficient for the existence of jurisdiction.  For instance, if it is alleged that the respondent has engaged in misleading or deceptive conduct under s 52 of the Trade Practices Act and the case fails because the court finds there was no such conduct, that does not mean the court lacked jurisdiction to hear the case; rather, the issue of misleading or deceptive conduct went to the exercise of jurisdiction, not its existence.  See also Sir Anthony Mason in the Hong Kong Final Court of Appeal in The ‘Tian Sheng No 8’ [2002] 2 Lloyd’s Rep 430 at 443.

An example of the legislature intending the limitation to be jurisdictional can be found in the factual preconditions in ss 17, 18 and 19 of the Admiralty Act (1988) (Cth):  The ‘Shin Kobe Maru’ 181 CLR at 426.

The matter can perhaps best be left by referring to what French J said in Johnson Tiles v Esso 104 FCR at [87]:
If there be no federal jurisdiction properly invoked then there can be no accrued jurisdiction – Carlton & United Breweries Ltd v Castlemaine Tooheys Ltd (1986) 161 CLR 543 at 553 and see the discussion by Professor Zines, “Federal Associated and Accrued Jurisdiction”, in B Opeskin and F Wheeler (eds) – The Australian Federal Judicial System (2000), pp 294-295 and the apparent tension between Vietnam Veterans’ Affairs Association of Australia New South Wales Branch Inc v Cohen (1996) 70 FCR 419 on the one hand and Post Office Agents Association Ltd v Australian Postal Commission (1988) 84 ALR 563 at 565 (Davies J) and Buck v Comcare (1996) 66 FCR 359 at 370 (Finn J).  The Court in such a case of course does have a limited jurisdiction to determine whether its jurisdiction is properly invoked – Mercator Property Consultants Pty Ltd v Christmas Island Resort Pty Ltd (1999) 94 FCR 384; Khatri v Price (1999) 95 FCR 287.

To the extent that there is, or may be, debate about the Administrative Decisions (Judicial Review) Act, that is one of statutory construction and not principle.  Further, as Alan Robertson has shown in his article referred to earlier, this particular point concerning the Administrative Decisions (Judicial Review) Act is now largely moot in the light of s 39B(1A)(c).

The legitimacy of the court disposing of the non-federal issues even after the failure of the federal issue arises from the clothing of the court with an authority essential for the complete adjudication of the matter.  The jurisdiction, the authority to decide, arises once the claim is made, once it is asserted.  As Latham CJ said in Hopper v Egg and Egg Pulp Marketing Board 61 CLR at 673:  
The fact that the constitutional objection has failed does not deprive the court of jurisdiction if “the facts relied on were bona fide raised, and were such as to raise” the question (Troy v Wrigglesworth... at 311).

In Burgundy Royale Investments Pty Ltd v Westpac 18 FCR 212 the Full Court dealt with a claim under the Trade Practices Act.  Two respondents successfully argued, in an early separate hearing, that the Act had no application to them (they being governmental in character).  However, they were unsuccessful in their contention that this meant that there was no accrued jurisdiction over them.  The Full Court said the following at 219:
The Court’s jurisdiction is to determine each of the claims which together constitute a federal “matter”.  That jurisdiction cannot be limited, as the argument of the second and third respondents would suggest, to the determination of only those claims, federal or attached, which are successfully maintained.  On the contrary, the jurisdiction is to entertain, and determine, all claims constituting a “matter”, whatever their ultimate fate.  Any other approach would involve the extremely inconvenient result that the existence or absence of jurisdiction to deal with a particular claim would depend upon the substantive result of that claim:  cf Parisienne Basket Shoes Pty Ltd v Whyte (1938) 59 CLR 369 per Dixon J at 391.

…

It is true that in answering questions 1 and 2 in the negative, we have determined preliminary points of law in the claims under the Act brought against the second and third respondents; and that, in consequence, there will be no further trial of those issues.  But it does not follow that the Court ever lacked jurisdiction to deal with such claims.  Nor does it follow that the Court now loses its jurisdiction to deal with the attached common law claims:  see Moorgate Tobacco Co Ltd v Philip Morris Ltd (1980) 145 CLR 457 at 469, 472, 477;  Elna Australia Pty Ltd v International Computers (Australia) Pty Ltd (1987) ATPR 40-795; 75 ALR 271, and Dorotea Pty Ltd v  Vancleve Pty Ltd (1987) ATPR 40-807; 75 ALR 629.  In principle, the position is no different than it would have been if the claims under the Act had proceeded to trial and had been dismissed on the merits.  In that situation, it could not seriously be suggested that the dismissal of the claims under the Act had the effect of depriving the Court of jurisdiction to deal with any attached non-federal claim.

The position may have been different if the claims under the Act had been “colourable” in the sense that they were made for the improper purpose of “fabricating” jurisdiction:  see P H Lane, Lane’s Commentary on the Australian Constitution (1986), pp 367-368 and the cases there cited.  There is no room for such a suggestion here.  The applicants’ case that the second and third respondents were bound by the Act cannot be said to be unarguable; and we think it was pursued bona fide:  cf R v Cook; Ex parte Twigg (1980) 147 CLR 15 per Gibbs J at 26.

Once a non-colourable assertion is made, that clothes the court with federal jurisdiction, which, once gained, is never lost.  Owen Dixon KC’s testimony to the Royal Commission on the Constitution in 1927 put the matter in pungent practical terms:
So, if a tramp about to cross the bridge at Swan Hill is arrested for vagrancy and is intelligent enough to object that he is engaged in interstate commerce and cannot be obstructed, a matter arises under the Constitution.  His objection may be constitutional nonsense, but his case is at once one of Federal jurisdiction. 

“Colourable” imports improper purpose: Burgundy Royale 18 FCR at 219, or a lack of bona fides: Hopper v Egg & Egg Pulp Marketing Board 61 CLR at 673.  It is not judged by reference to the strength and weakness of the case alone.  Improper purpose or lack of bona fides carries with it the notion of an abuse of process.

The Full Court decision of Elders Ltd v Swinbank (2000) 96 FCR 303 that, there being no federal matter in an original pleading, the Full Court on appeal had no power to amend the application to include a federal matter (a claim for interest under the Insurance Contracts Act), was wrong and was reversed on appeal to the High Court, without argument at the hearing of the appeal.  The Chief Justice made it plain that the Full Court had jurisdiction to hear the application to amend and if it granted the application it would then have jurisdiction to hear the whole matter.  The Chief Justice said (see High Court transcript 13 August 2001):
The Court is of the opinion that the Federal Court of Australia had jurisdiction to hear and determine the application for leave to amend made by notice of motion dated 17 November 1999 and that if the amendment was granted, the Federal Court would have jurisdiction to hear and determine the whole matter, including the application for leave to appeal against the decision of Justice Mansfield.  Because the respondent insurers do not now oppose the making of the amendment sought and will consent to its making, it is unnecessary to consider whether, as is contended in this Court, the Federal Court otherwise had jurisdiction.

As to the final fate of Swinbank v Elders Ltd 96 FCR 303, see the Full Court judgment on the application for leave to discontinue: [2002] FCAFC 270.  

Federal jurisdiction is often invoked by the pleading in the statement of claim of a matter arising under a law of the Commonwealth Parliament.  It may be invoked by the pleading of such a matter in a defence: Felton v Mulligan 124 CLR at 382-83; Moorgate Tobacco v Philip Morris 145 CLR at 476;  NEC Information v Iveson 36 FCR at 264;  Westpac v Paterson 167 ALR at [12].  It may also be invoked by the pleading of such a matter in a cross-claim, where, for the first time in the pleadings a federal issue is raised: Westpac v Paterson 167 ALR at [9]–[13]; Cambridge Gulf Investments Pty Ltd (in liq) v Dandoe Pty Ltd (1999) 32 ACSR 422 at [16]; and Bell Group Ltd v Westpac Banking Corporation 104 FCR 305.  If the issues raised by those pleadings have already been ventilated by the parties in their discussion of the controversy, the matter will already be federal: Hooper v Kirella 96 FCR at [41] to [55].

At first sight, it may seem odd that the characterisation of the “matter” as federal can arise from the defence or cross-claim.  If the initiating process has no reference to any provision of a Commonwealth statute, how can the matter be federal?  At least at that point?  It may not be.  But it may be.  What is essential is to think in terms of a “matter”, a “controversy”, which is there to be “quelled”.  Parties sometimes engage in debate about their rights before going to court.  A letter is sent. A response is received. Further delineation of the issues takes place.  If within that exchange a party asserts in the sense described above (see Owen Dixon KC’s evidence referred to above) a right or claim under a federal law, (whether by way of claim to be asserted or defence to be vindicated) there is a controversy in which one party is asserting a question arising under a federal law.  If, thereafter, one party wishes to seek the aid of the Court to quell the controversy, it will be bringing a matter forward which has within it a question under a federal statute, even if the enunciation of the claim in the originating process contains no explicit foundation upon a federal statute.  The justiciable controversy will be federal.

A few examples of reasonably commonplace circumstances illustrate the above.  
•	Westpac v Paterson 167 ALR 377 is a good example.  Westpac sought possession of the mortgaged premises.  The debt was owed and in default.  Mrs Paterson sought to set aside the mortgage, by a cross-claim, relying on Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447, the Contracts Review Act 1980 (NSW) and a claim under s 52 of the Trade Practices Act.  The s 52 claim was to set aside or vary the mortgage.  The controversy was federal because of her claims under a federal law.  
•	An insurance claim may contain a claim for interest under s 57 of the Insurance Contracts Act in the originating process; or in the pre-existing correspondence a controversy may be seen to exist as to defences or claims under the Insurance Contracts Act, cf ss 21, 28, 54, 56.  
•	In a cheque claim alleging the wrongful debit of a bank account, say in respect of a fraudulently altered cheque, the bank’s defence may involve reliance on a provision of Cheques and Payment Orders Act 1986 (Cth).  Any case raising banker’s protections will be a matter arising under that Act.  
•	The Corporations Act is now Commonwealth legislation pursuant to the referral of power by the States.  
•	Claims by Commonwealth authorities such as ASIC or APRA for injunctions or declarations are claims contemplated by s 39B(1A)(a).

The  law applicable in federal jurisdiction

So far, attention has been given to the exercise by the Federal Court of federal jurisdiction.  State courts, of course, exercise federal jurisdiction also, unless a federal statute confers jurisdiction exclusively in the Federal Court.  The reason why attention is required to be addressed to the jurisdiction of the Federal Court is that, as a statutory Court, its jurisdiction is defined and bounded by federal statutes.  But no court in Australia has unlimited jurisdiction.  It is always necessary to understand what jurisdiction any court is exercising.

Sections 79 and 80 of the Judiciary Act deal with the application of laws, not just when a federal court or the Federal Court is exercising jurisdiction, but when any court is exercising federal jurisdiction.  They are in the following terms:
s 79  State or Territory laws to govern where applicable
The laws of each State or Territory, including the laws relating to procedure, evidence, and the competency of witnesses, shall, except as otherwise provided by the Constitution or the laws of the Commonwealth, be binding on all Courts exercising federal jurisdiction in that State or Territory in all cases to which they are applicable. 
[emphasis added]

s 80  Common law to govern
So far as the laws of the Commonwealth are not applicable or so far as their provisions are insufficient to carry them into effect, or to provide adequate remedies or punishment, the common law in Australia as modified by the Constitution and by the statute law in force in the State or Territory in which the Court in which the jurisdiction is exercised is held shall, so far as it is applicable and not inconsistent with the Constitution and the laws of the Commonwealth, govern all Courts exercising federal jurisdiction in the exercise of their jurisdiction in civil and criminal matters. 
[emphasis added]

These are important provisions, especially the words “except as otherwise provided by… the laws of the Commonwealth” in s 79, and “not inconsistent with… the laws of the Commonwealth” in s 80.  If the court in question is exercising federal jurisdiction (federal or State court) it is necessary to ascertain whether any law (State statute or common law) is inapplicable to the resolution of the controversy because there is an otherwise applicable law of the Commonwealth.  This task is always present when the court is exercising federal jurisdiction, whether the court is a State court or a federal court.  A recent decision explaining the operation of s 79 is Northern Territory v GPAO (1999) 196 CLR 553 especially [79] and [81] (per Gleeson CJ and Gummow J, with whom Gaudron J at [135] and Hayne J at [254] agreed); and see also Macleod v ASIC (2002) 211 CLR 287 at [10].

Sections 79 and 80 of the Judiciary Act and their proper scope of operation are subjects not entirely free from doubt, though some things can be said with confidence.  The question of their operation, arises whenever a court, any court, is exercising federal jurisdiction.  The fundamentals of the task referred to earlier underpin this part of the subject.  State judges exercising federal jurisdiction, whilst not officers of the Commonwealth, are exercising the judicial power of the Commonwealth.  Thus, it is Commonwealth law to which one looks to see what they are doing and how they must do it.  But, ss 79 and 80 make State law integral to that task; though, as will be seen, transmogrified in an important respect.

What follows is an attempt to explicate the essential elements of, and in some respects the issues still open about, the operation of ss 79 and 80 and to give you some of the analytical tools to deal with issues that may arise.

Once one recognises that a court, federal or State, is hearing a case under the authority of the Commonwealth, one needs to ask:  what laws apply?  The “authorising polity” is the Commonwealth.  The executing arm is the State (through its judicial officers) or the Commonwealth (through a federal court).  The law to be applicable in either case, generally, must be the same, unless a conscious choice to the contrary is made by the Commonwealth Parliament (cf the Evidence Act 1985 (Cth)).

Sections 79 and 80 help achieve this.

By way of introduction, it is appropriate to recognise that the complexities that can arise in this area do so because of the multiplicity of polities and legal systems  involved in the federal compact.  The application of rules of conflict of laws derived from the common law and the relationship between sovereign states must be accommodated to the nature of the federal compact.  In this regard, with the development of truly independent national status and consciousness since the Second World War, it should not surprise that the law in this area is not fully mature.

The limited nature of the Commonwealth’s power to legislate means that in any given controversy within federal jurisdiction the laws that attend its resolution going to substantive law, choice of law, procedure, evidence and remedies will not be comprehensively covered by Commonwealth legislation.

Sections 79 and 80 of the Judiciary Act perform the function of filling that inevitable gap.  The law applied by the operation of s 79 is not State or Territory law, as such, but “surrogate federal law”, picked up and applied, where appropriate, by s 79.  State laws do not apply of their own force in the exercise of federal jurisdiction:  Pederson v Young (1964) 110 CLR 162 at 165; Edensor 204 CLR 559; and Solomons v District Court (NSW) (2002) 211 CLR 119 at [21].  Section 79 does not alter the meaning of State or Territory law.  The State law, with its meaning unchanged, is picked up.  That is what the terms of s 79 provide for.  One must, however, be careful not to apply this proposition too literally to the text of the State Act.  What has to be remembered in this context is that s 79 is federal law picking up and applying State law, but as federal law, in order to quell controversies that are within the authority of the Commonwealth to deal with.  The meaning of “State” statutes should be recognised in that context, and not merely within the paradigm of statutory construction of a State statute.

For example, of some importance is the question of the degree to which the wording of the State Act (through the choice of words by the State Parliament) can make the State Act inapplicable to the exercise of federal jurisdiction.  To read the State statute too literally might permit control over the Constitutional conception of a “matter” that is within the authority of the Commonwealth to quell to be exercised by State Parliaments.  In John Robertson & Co Ltd (in liq) v Ferguson Transformers Pty Ltd (1973) 129 CLR 65 at 95 Mason J said:
To ensure that State laws dealing with the particular topics mentioned in the section are applied in the exercise of federal jurisdiction by courts other than State courts, it is necessary that State laws be applied according to the hypothesis that federal courts do not necessarily lie outside their field of application.  Section 79 requires the assumption to be made that federal courts lie within the field of application of State laws on the topics to which it refers, at least in those cases in which the State laws are expressed to apply to courts generally.  

See also Gibbs J in John Robertson 129 CLR at 88.

When a State statute is expressed to apply to courts generally, it will pick up a federal court:  GPAO 196 CLR at 575 [34]; and Solomons 211 CLR at [37].  Also, even when the State statute refers to State courts by name, it may be read as encompassing a federal court:  John Robertson 129 CLR 65; GPAO 196 CLR at 575 [34]; Austral Pacific 203 CLR at 143 [13]; Edensor 204 CLR  at 588-89, 591, 593-4 [59]-[60], [68], [72]-[75]; and Macleod v ASIC 211 CLR 287 at [10].

This is not some fictitious piece of statutory construction of a State statute.  It is not changing the substance of the law picked up.  The State law has been “federalised” by s 79 and must be made to operate for courts exercising federal jurisdiction and so as not to undermine s 77(ii).  In Edensor 204 CLR 559, McHugh J emphasised the way s 79, for a federal purpose and as a federal law, picked up the substance of the State law insofar as it can be applied.  At [137] and [141] his Honour said the following:
[137]	The fact that a State statute either expressly or as a matter of construction provides only for State courts to enforce its provisions does not mean that it cannot be "picked up" and applied by s 79 of the Judiciary Act in the exercise of federal jurisdiction. The hypothesis to which Mason J referred in John Robertson , which must apply to substantive as well as procedural laws, will ensure its applicability in federal jurisdiction unless the statute is not applicable for some reason other than that State courts were intended by the State as the instruments for enforcing it. …
…
[141]	[C]ourts exercising federal jurisdiction should operate on the hypothesis that s 79 will apply the substance of any relevant State law in so far as it can be applied. The efficacy of federal jurisdiction would be seriously impaired if State statutes were held to be inapplicable in federal jurisdiction by reason of their literal terms or verbal distinctions and without reference to their substance. 

There are a number of other issues concerning ss 79 and 80.  First, s 79 has been applied to pick up procedural and substantive matters.  There is a view that s 79 should be limited to procedure with the words “procedure, evidence and competency of witnesses” controlling the interpretation of the previous words:  see Brennan CJ in Commonwealth of Australia v Mewett (1997) 191 CLR 471 at 492-3.  The former position would appear to be the prevailing view:  Austral Pacific 203 CLR 136; Edensor 204 CLR 559; and British American Tobacco v Western Australia  (2003) 200 ALR 403 at 420 [65].

To the extent that the Full Court of the Federal Court in Woodlands v Permanent Trustee Company (1996) 68 FCR 213 at 245 (see in the High Court Bass v Permanent Trustee (1999) 198 CLR 334) said that s 79 did not pick up State law which was other than procedural, that is contrary to the above High Court decisions.  The Court said the following:
…[A]lthough s 79 speaks of “laws … including the laws relating to procedure, evidence, and the competency of witnesses”, the section has not been held to apply State laws other than those relating to the three stipulated topics.  If it were construed more widely, so as to enable State Parliaments to modify the substantive federal law applied within their bounds, this would have serious ramifications for the Australian federal system.  It would undermine the principle that federal substantive law operates uniformly throughout the nation.

With respect, this is contrary to the fundamental operation of s 79:  see Wilson v Alexander (2003) 135 FCR 273.

Secondly, whether s 79 picks up both statute and common law is unclear.  The High Court in Commissioner of Stamp Duties (NSW) v Owens (1953) 88 CLR 168 at 170 suggested that it does.  In recent years, however, the High Court has made clear that Australia has a single common law:  Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 at 523; John Pfeiffer Pty Ltd v Rogerson (2000) 203 CLR 503, GPAO 196 CLR 553; and Lipohar v R (1999) 200 CLR 485 at [51]-[53].  In that light, the phrase “the laws of each State” would seem inappropriate to refer to the common law.  In this regard, see especially Gaudron J in Mewett 191 CLR at 522.

Thirdly, which State laws are picked up can lead to controversy.  The words “in all cases to which they are applicable” appear in s 79. The law must be relevant to the resolution of the matter.  An illustration of the problem can be given by consideration of Solomons v District Court (NSW) 211 CLR 119 .  There, s 2 of the Costs in Criminal Cases Act 1967 (NSW) empowered a Court or a Judge to grant a certificate to an acquitted accused.  Section 4(2) allowed the holder of a certificate to apply to the Under Secretary for payment from (State) Consolidated Revenue of the costs of the trial.  Section 4(5) gave the Treasurer a discretion to pay.  Mr Solomons was charged with offences under the Customs Act 1901 (Cth).  He was tried in the District Court of New South Wales exercising federal jurisdiction under s 68(2) of the Judiciary Act, and acquitted by direction.  He applied for a certificate under s 2.

What was the problem?  The District Court was a State court.  The Act was a State Act.  But, the jurisdiction being exercised was federal.  One polity’s laws were being enforced by the officers of another.  A trial for alleged breach of Commonwealth law had taken place, and now what was sought was State taxpayers’ funds to be paid in relation to that trial run (unsuccessfully) at the behest of the other polity.  Looked at in that way, there is every reason to pause for thought as to why a State statute should apply to that State court.

The Act did not apply.  The reasoning of Gleeson CJ, Gaudron, Gummow, Hayne and Callinan JJ was broadly as follows.  Section 2 was not an isolated provision, but part of a (State) legislative scheme involving the payment out of State funds.  To pick it up by s 79 would be to pick up and federalise a scheme for accessing State funds.  Assuming that the application under s 2 was “with respect to… the trial and conviction on indictment” for the purposes of s 68(2), there was an unexhausted federal criminal matter.  This proposition was open to debate, but was not decided.  If the State law was to apply under s 79, it did so as federal law.  Even if it could be assumed that the federal criminal controversy was still being quelled, s 79 could not pick up and give a different meaning to the law.  Section 79 could not “federalise” the Treasurer’s discretion under s 4, which was not a law governing the rights of the parties or the procedure of the Court.  It created a power in the (State) executive to make a decision regarding the dealing with State funds.  The grant of a certificate under s 2 had no utility divorced from s 4 in its role as the precondition for executive discretion.  Also, the grant of a certificate (in this disconnected way) would involve the court in the exercise of a power not provided for by Ch III.

In Solomons 211 CLR 119, the majority cited what Gleeson CJ, Gaudron and Gummow JJ had said in Edensor 204 CLR 559 at [72] to [74]:
[72]	Section 79 of the Judiciary Act renders State and Territory law binding only in cases to which they are applicable.  As to State law, this may be taken to reflect what otherwise would be the operation of Ch III.  In Kruger v The Commonwealth, Gaudron J said:
“There may be statutory provisions couched in terms which make it impossible for them to be ‘picked up’ by s 79 of the Judiciary Act.  Similarly, there may be provisions which impose functions which are beyond the reach of s79.  Even so, I see no reason why s 79 cannot ‘pick up’ limitation laws or other statutory provisions merely because they are expressed in terms applying specifically to State or Territory courts.”

[73]	An example in the second category of provisions imposing functions beyond the reach of s 79 would be those insusceptible of exercise as part of the judicial power of the Commonwealth.  In Mellifont v Attorney-General (Q), Mason CJ, Deane, Dawson, Gaudron and McHugh JJ observed that:
“[I]n the absence of a constitutional separation of powers, there has existed the possibility that the Supreme Courts of the States might be entrusted with a jurisdiction that did not involve the exercise of judicial power.”

[74]	As to the first category identified by Gaudron J, the provisions of the Suitors Fund Act 1951 (NSW) considered in Commissioner of Stamp Duties (NSW) v Owens [No 2] may be an example of provisions expressed in terms making it impossible for them to be "picked up" by s 79 of the Judiciary Act. The grant of a certificate under s 6 of the State Act formed a step in machinery which had been established for the indemnification out of a fund set up and administered by New South Wales of an unsuccessful litigant in respect of costs. This Court held that s 79 could not operate to convert the function imposed on State courts into a provision imposing a function on federal courts.

Fourthly, when does a Commonwealth law “otherwise provide”?  From Northern Territory v GPAO 196 CLR 553, Austral Pacific (2000) 203 CLR 136 and Bass v Permanent Trustee 198 CLR 334, it would appear that this is a narrower test than s 109 “cover the field” inconsistency.  Both laws (s79 and the law to be picked up) are federal.  A notion of irreconcilability or virtually direct inconsistency appears from these cases (contrary to a wider concept of a closer analogy with s 109:  De Vos v Daly (1947) 73 CLR 509 at 514-5, 517-8; and Anderson v Eric Anderson (1965) 114 CLR 20 at 39).

Fifthly, what is the place for s 80?  Traditionally s 80 was eclipsed by the wide construction of s 79.  Also, until 1988, s 80 referred to the “common law of England”.  The change to its current form and the entrenching of the notion of a common law of Australia will affect the reach of s 80.  How these views play out in cases will depend in part on the roles ascribed to ss 79 and 80.

The traditional view emphasised s 79. The Court in Commissioner of Stamp Duties (NSW) v Owens 88 CLR at 170 said (in dealing with a State Suitor’s Fund Act):
…The function which s 6 imposes upon State courts forms a step in the machinery provided for indemnifying an unsuccessful litigant in respect of costs out of a fund set up and administered by the State.  That is outside the scope of s 79.  The purpose of that section is to adopt the law of the State where federal jurisdiction is exercised as the law by which, except as the Constitution or federal law may otherwise provide, the rights of the parties to the lis are to be ascertained [substantive] and matters of procedure are to be regulated.  [procedure]
[emphasis and interlineation added]

This involves both substance and procedure.  The place where the exercise of jurisdiction takes place is the forum whose body of law applies.  This body of State law includes its conflict of laws rules.  Looked at in this way, there is little for s 80 to do.

One way of giving work to both ss 79 and 80 is to limit s 79 to procedure:  see Brennan CJ in Mewett 191 CLR at 492:
…Section 79 picks up the State’s laws relating to procedure, evidence and the competency of witnesses, whether those laws be statutory or common law.  So the common law relating to procedure, evidence and the competency of witnesses is picked up by s 79 as modified by local statutory laws relating to those subjects.  Section 80, on the other hand, picks up the general common law in the circumstances which it states.

This does not have general support.

The existence of one common law in Australia: Lange v ABC 189 CLR 520; Northern Territory v GPAO 196 CLR 553; and John Pfeiffer v Rogerson 203 CLR 503 challenges the traditional approach of ss 79 and 80.  In GPAO 196 CLR 553, Gleeson CJ, Gummow J and Hayne J identified the starting point as “the common law in Australia” as referred to in s 80.  See also Mewett 191 CLR at 526 (Gaudron J) and 554 (Gummow and Kirby JJ).  Gummow and Kirby JJ said in Mewett 191 CLR at 554:
…[T]here is much to be said for the view that regard is to be had to s 80, and to the common law in Australia, before turning to s 79 to ascertain whether a State or Territory law is to be picked up in the case at hand.  In particular, that common law may be developed so as to provide choice of law rules applicable in federal jurisdiction. …

On this approach, one looks to the common law of Australia (including any relevant conflict of laws rules) and then one sees whether the common law of Australia is amended by a statute of the State or Territory in which the court is sitting.  One would then turn to s 79 to pick up any other State or Territory statute.  Quaere, whether this takes one back round to the view of Brennan CJ in Mewett 191 CLR 471, though the distinction between substance and procedure is not a helpful taxonomy:  Bass v Permanent Trustee 198 CLR 334.

In any given case, the result of application of the traditional approach of looking to s 79 first, or using the common law of Australia referred to in s 80 as the starting point, may not be very different.  But the development of federal choice of law rules as part of the common law of Australia may begin to make it a matter of some importance.