DJ Builders & Son Pty Ltd (in liq), in the matter of DJ Builders & Son Pty Ltd (in liq) v Queensland Building and Construction Commission (No 3)

• Jurisdiction: Australia Federal only
• Court: Federal Court (Australia)
• Judgment Date: 31 August 2021
• Neutral Citation: [2021] FCA 1041
• Date: 31 August 2021

Federal Court of Australia

DJ Builders & Son Pty Ltd (in liq), in the matter of DJ Builders & Son Pty Ltd (in liq) v Queensland Building and Construction Commission (No 3) [2021] FCA 1041

File number:	QUD 361 of 2019
Judgment of:	DERRINGTON J
Date of judgment:	31 August 2021
Catchwords:	HIGH COURT AND FEDERAL COURT – jurisdiction – whether negligence action within scope of Federal Court’s jurisdiction – whether part of matter arising from federal law because applicant company is in liquidation – whether federal jurisdiction is attracted because separate “matter” is included in same proceedings – no jurisdiction with respect to negligence action – matter transferred to Supreme Court of Queensland
Legislation:	Corporations Act 2001 (Cth) ss 124, 477 Federal Court of Australia Act 1976 (Cth) ss 19, 31A Judiciary Act 1903 (Cth) s 39B Jurisdiction of Courts (Cross-vesting) Act 1987 (Cth) s 5 Federal Court Rules 2011 (Cth) rr 9.02, 13.01
Cases cited:	Australian Securities and Investments Commission v Edensor Nominees Pty Ltd (2001) 204 CLR 559 Burgundy Royale Investments Pty Ltd v Westpac Banking Corporation (1987) 18 FCR 212 CGU Insurance Limited v Blakeley (2016) 259 CLR 339 Chahwan v Euphoric Pty Ltd (2008) 245 ALR 780 Crouch v Commissioner for Railways (1985) 159 CLR 22 DJ Builders & Son Pty Ltd (in liq), in the matter of DJ Builders & Son Pty Ltd (in liq) v Queensland Building and Construction Commission [2019] FCA 2018 Fencott v Muller (1983) 152 CLR 570 Hafertepen v Network Ten Pty Limited [2020] FCA 1456 Lauro v Minter Ellison Lawyers (No 2) [2018] SASC 70 LNC Industries Ltd v BMW (Australia) Ltd (1983) 151 CLR 575 McCarthy v Federal Commissioner of Taxation (2013) 249 FCR 140 Oliver v Nine Network Australia Pty Ltd [2019] FCA 583 Palmer v Ayres (2017) 259 CLR 478 R v Commonwealth Court of Conciliation and Arbitration; Ex parte Barrett (1945) 70 CLR 141 Rana v Google Inc (2017) 254 FCR 1 Re Judiciary and Navigation Acts (1921) 29 CLR 257 Re Wakim; Ex parte McNally (1999) 198 CLR 511 Rizeq v Western Australia (2017) 262 CLR 1 RNB Equities Pty Ltd v Credit Suisse Investment Services (Australia) Ltd (2019) 370 ALR 88 Scott Russell Constructions Pty Ltd (In Liq) v QBCC [2019] FCA 1378
Division:	General Division
Registry:	Queensland
National Practice Area:	Commercial and Corporations
Sub-area:	Corporations and Corporate Insolvency
Number of paragraphs:	49
Date of hearing:	9 July 2021
Solicitor for the Applicants:	Mr S Ivantsoff of EQ Legal
Counsel for the Respondent:	Mr S Forrest
Solicitor for the Respondent:	QBCC

ORDERS

		QUD 361 of 2019
IN THE MATTER OF DJ BUILDERS & SON PTY LIMITED ACN 119 020 049 (IN LIQUIDATION)
BETWEEN:	DJ BUILDERS & SON PTY LIMITED ACN 119 020 049 (IN LIQUIDATION) First Applicant ; FORWARD PACK PTY LIMITED ACN 120 534 090 Second Applicant
AND:	QUEENSLAND BUILDING AND CONSTRUCTION COMMISSION Respondent

order made by:	DERRINGTON J
DATE OF ORDER:	31 August 2021

THE COURT ORDERS THAT:

1. The respondent’s interlocutory application filed 30 April 2021 is allowed.

2. It is declared that the first applicant’s claim for damages for negligence in the applicants’ Originating Application filed 4 June 2019, as articulated in their Amended Statement of Claim filed 18 March 2021, is not within the jurisdiction of the Federal Court of Australia pursuant to s 39B of the Judiciary Act 1903 (Cth) or otherwise.

3. Pursuant to s 5(4) of the Jurisdiction of Courts (Cross-vesting) Act 1987 (Cth), the proceeding numbered QUD 361 of 2019 and titled “DJ Builders & Son Pty Limited (in liquidation) and Anor v Queensland Building and Construction Commission” be transferred to the Supreme Court of Queensland.

4. The applicants pay the respondent’s costs of the interlocutory application filed 30 April 2021.

5. The parties have liberty to apply to the Registrar for orders with respect to the payment out of the Litigants’ Fund of moneys paid into the Fund in accordance with the orders of Reeves J made in this matter on 7 February 2020.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

DERRINGTON J:

Introduction

1. In this matter, the first applicant, DJ Builders & Son Pty Ltd (in liquidation) (DJ Builders), claims damages for negligence from the respondent, the Queensland Building and Construction Commission (QBCC), in respect of the latter’s exercise of powers under the Queensland Building and Construction Commission Act 1991 (Qld) (QBCC Act). On 4 June 2019, the second applicant, Forward Pack Pty Ltd (Forward Pack), which owns 50% of the shares in DJ Builders, commenced this action purportedly on behalf of DJ Builders. As at that time, no order had been made permitting it to do so and it appears that it had no authority from the company to do so. However, it included in the proceedings a claim for purported interlocutory relief seeking orders, pursuant to the Court’s inherent jurisdiction, permitting it to bring and take responsibility for DJ Builders’ action. Subsequently, on its application, an order was made granting that leave, nunc pro tunc.

2. By the present interlocutory application, the QBCC seeks an order either setting aside the Originating Application or for summary judgment in respect of the negligence claim. The sole ground on which the application is made is that this Court does not have jurisdiction to determine the claim because it is not in respect of a matter arising under a law of the Commonwealth. Forward Pack, on its own behalf and on behalf of DJ Builders, submitted that the action is within the Court’s jurisdiction because it is an action to recover property on behalf of an insolvent company. This, so it said, brought the matter within the jurisdiction of the Court consequent upon its connection with the Corporations Act 2001 (Cth) (Corporations Act). It also submitted that the step which it took in obtaining leave to bring and take responsibility of the proceeding was within the Court’s jurisdiction and this attracted jurisdiction to the matter as a whole.

3. For convenience, and where appropriate in the reasons below, I will refer to both applicants simply as “Forward Pack” and to the application for leave to bring and take responsibility for the proceedings as “the Leave Application”.

The facts

4. The factual matters relevant to the issues in question are not of a wide ambit and it is presently not necessary to consider the allegations underpinning the pleaded negligence claim. It was common ground that DJ Builders’ claim against the QBCC is a...