French, Justice Robert --- "Legal retail therapy - is forum shopping a necessary evil?" (FCA) [2001] FedJSchol 8

AUSTRALIAN LEGAL CONVENTION
11-14 October 2001
Canberra

Legal Retail Therapy -
Is Forum Shopping a Necessary Evil

Justice R S French
Federal Court of Australia

Forum Shopping - Origins and Definition
The metaphor "Forum Shopping" comes with a denunciatory overlay which does not convey with any clarity what is being denounced. A like imprecision is found in the more arcane, but equally denunciatory, concept of "colourability" which is an attribute attaching to claims for relief which nominally but illegitimately invoke federal jurisdiction in order that they may proceed in a federal court.

In contemporary discussion of forum shopping it is useful to have regard to the history of that term. It originated in the United States, initially descriptive of the practice of invoking diversity jurisdiction in order to utilise federal courts which, although required to apply relevant State statutes, could create and develop a federal common law. The practice was dealt a blow by the landmark decision of the United States Supreme Court in Erie Railroad Company v Tompkins.[1] That decision required federal courts in diversity cases to apply the substantive laws of the State in which they sat. It was later extended by the requirement that federal courts apply the choice of law rule of the forum.[2] The term "forum shopping" appears to have been coined in an article about the Erie decision in the Southern California Law Review[3]. An early reported judicial use of the term appears in a judgment of the United States Supreme Court concerned with the effect of a federal statute upon a plaintiff's ability to sue an employer in the court of any State of that plaintiff's choosing. Upholding that effect of the Federal Employer's Liability Act, Jackson J nevertheless said:

"The judiciary has never favoured this sort of shopping for a forum." [4]

The precise collocation "forum shopping" appears first to have been judicially coined by the Ninth Circuit of the United States Court of Appeals in 1951, borrowing from its usage in the Southern Californian Law Journal.[5] In that case the parents of an eight-year-old child, killed when hit by a gasoline truck, sued the oil company and its driver in the State District Court of Idaho under a State wrongful death statute. The verdict of $40,000 which they obtained was set aside by the Judge as excessive and a new trial ordered. They discontinued against the company and started fresh proceedings in the United States District Court for the District of Idaho invoking its diversity jurisdiction. This time they received a verdict of $35,407.50, reduced in the Federal Court of Appeal to $20,000. Although their tactic had no explicit impact on the outcome of the appeal, it was described by the Chief Judge as "...a clear case of what is aptly called "forum shopping"".

The United States has some fifty State judicial hierarchies and Federal Courts of general and specialist jurisdiction. It is not surprising that forum shopping in that country has been described as "a national legal pastime".[6]

The term "forum shopping" crossed the Atlantic to the United Kingdom where it was used for the first time in the House of Lords in 1971. The case was a running down action arising out of a road accident in Malta. Both parties were residents of England. The action was brought in England. Speaking of the advantage of the rule in Phillips v Eyre [7] Lord Pearson remarked that it enabled an English court "...to give judgment according to its own ideas of justice". Moreover if one Englishman were wrongfully to injure another in a primitive country or unsettled territory where there was no law of torts, the English courts could give redress. His Lordship conceded, however, that with the rapid spread of civilisation the rule had much less importance. We may observe, perhaps with some relief, that the spread of "civilisation" between the States of Australia since federation means that the recent abolition by the High Court of the rule in Phillips v Eyre is unlikely to disadvantage the residents of any State wherever they may be sued within Australia.[8] Lord Pearson identified the principal disadvantage of the rule in Phillips v Eyre in terms which have been regarded as the first judicial definition of forum shopping. The rule he said:

"...might lead to what has been described in American cases as "forum- shopping", ie, a plaintiff by-passing his natural forum and bringing his action in some alien forum which would give him relief or benefits which would not be available to him in his natural forum." [9]

This definition of forum shopping is pejorative and embodies question-begging references to natural and alien forums. It is not reflective of a uniform attitude in the English courts. Lord Denning, in 1973, judicially invited any friendly foreigner to seek the aid of the English courts if he desired to do so:

"You may call this "forum-shopping"...but if the forum is England, it is a good place to shop in, both for the quality of the goods and the speed of service." [10]

Lord Simon of Glaisdale, in the following year, on appeal in the same case acknowledged that "forum shopping" is a dirty word but characterised it as "...only a pejorative way of saying that, if you offer a plaintiff a choice of jurisdictions, he will naturally choose the one in which he thinks his case can be most favourably presented: this should be a matter neither for surprise nor for indignation."[11]

The criticism of forum shopping has not always applied with the same vigour in the United States against inter State forum shopping as it has been against State/Federal forum shopping. Where a libel action against Hustler Magazine was brought in a State with an unusually long statute of limitations, Justice Rehnquist (as he then was) called the selection strategy:

"...no different from the litigation strategy of countless plaintiffs who seek a forum with favourable substantive or procedural rules or sympathetic local populations." [12]

It has been argued in the American context, that the courts of that country have offered little justification for the differential treatment of State/Federal and interstate forum shopping. It has been suggested that the Supreme Court's aversion to State-Federal forum shopping rests upon a myth of federal/state court parity which contends that the two court systems as co-equals will produce similar substantive outcomes with regard to federal rights. It is suggested that in that country, however, on some issues the results differ systematically. So it is said that the Federal courts are the only judicial forums in the American system capable of enforcing counter majoritorian checks in a sustained effective manner. The dominant policy against state/federal forum shopping ignores the fact that differences in court systems exist and that something is at stake in the choice between them.[13]

Reference to the debate in the United States is not intended to suggest immediate analogies between their court system and the Australia system. There are significant differences. The point to draw from the debates in both the English and the United Kingdom jurisdictions, however, is that it is important to be clear about what it is we discuss when we discuss "forum shopping", to begin, so far as possible, with a value free definition and then to examine its implications for public policy for better or for worse.

The Seventh Edition of Black's Law Dictionary offers a definition which is not overtly condemnatory:

"The practice of choosing the most favourable jurisdiction or court in which a claim may be heard."

This is compared with "judge shopping" which involves filing several law suits asserting the same claims in a court or district with multiple judges in the hope of having one of the law suits assigned to a favourable judge and discontinuing the others.

Butterworths Australian Legal Dictionary also defines the practice of "forum shopping" in neutral terms:

"Selection by a plaintiff of the court of justice best suited to the plaintiff's needs by reason of commercial, legal or personal advantage."

Both definitions are essentially the same. Forum shopping is ultimately about choice, choice of forum by litigants.

Forum shopping in the United States may be seen as an enthusiastic application of Rosco Pound's theories of legal realism. By way of example, a recent study by two Cornell law school professors of corporate bankruptcy filings, concluded that large companies that decide to file for bankruptcy "shop for judges the way most persons shop for groceries: they look for the best deal." The study charted filings by the 273 largest public companies which filed for bankruptcy between 1980 and 1997. The study showed a rapid increase in the rate of forum shopping. In the early 1980's about twenty per cent of the cases were filed in a district other than where the company's headquarters were located. Since 1994, more than half the filings took place in other districts. New York city was the most popular destination in the 1980's. In 1988 it clamped down on judge shopping. The companies moved to Delaware. In 1996, 86% of the largest public companies filing bankruptcy did so in Delaware even though none had headquarters there. When the Chief United States District Judge in Delaware withdrew the large bankruptcy cases from the bankruptcy judges in February 1997, the rate of out-of-state shopping in Delaware fell sharply.

Professor LoPucki observed:

"This study shows that big businesses don't just take the judge or the court that the system offers them...big businesses act strategically to come before the court or judge where they will get the best outcome. This pattern can't be explained by convenience; these companies are deliberately filing away from their own headquarters." [14]

Opportunities for Choice of Forum in Australia
Where there is a controversy amenable to judicial determination in Australia, the following choices of forum may arise:

1. Between an Australian court and the court of another country.
2. Between the High Court and a Federal or State court.
3. Between the Federal Court and a State court.
4. Between a court of a State and a court of another State or Territory.
5. Between the courts of a State or Territory.
6. Between the Federal Court and the Federal Magistracy.
7. Between a Federal or State court and an administrative tribunal established under Federal or State law.
8. Between courts and tribunals on the one hand, and arbitration or alternative dispute resolution processes on the other.
   

The focus of this paper is on choices that arise between Federal and State courts. However the discussion must be viewed in the context of the full range of options that may be open to a prospective litigant. Those choices may include resort to an offshore court seen as offering forensic advantages not available in this country. By way of example, from my own experience, in the late 1970's an environmental organisation in Australia took action against Alcoa in the US District Court in Philadelphia in respect of Alcoa's bauxite mining processes in the south west of Western Australia. The action, however, was struck out, the judge referring to the Australian litigators in florid classical metaphor as akin to the inhabitants of Troy seeking protection from the heavenly palladium. On that basis the judge seems to have viewed himself as representing the Goddess Pallas. In a more recent example, in 1995, CSR brought an action in the US District Court in New Jersey against the Cigna Insurance Group seeking a judgment that insurance policies relevant to its liability for asbestos related claims were in effect for the critical years and covered pending and future claims. CSR contended that a purported release was invalid because it resulted from coercive conduct violating US anti-trust laws which were seen as essential to its claim and only able to be heard in the United States. The insurers, however, brought an anti-suit injunction against the manufacturer in the Supreme Court of New South Wales, which injunction was granted provisionally bringing the American action to a complete stop.[15]

Reference to the High Court is included in the choice of forum opportunities because, in recent times, the original jurisdiction of that Court to issue constitutional writs under s 75(v) of the Constitution has been increasingly used to challenge decisions under the Migration Act 1958 (Cth). This development has occurred due to the limitation of grounds of review in the Federal Court to those set out in s 476 of the Act which exclude, inter alia, review on grounds of breach of the rules of natural justice, wednesbury unreasonableness, failure to have regard to relevant factors and taking into account irrelevant factors. The High Court has been unable to remit applications to the Federal Court except in respect of grounds falling within s 476. Those restrictions may be seen as evidencing a perception of the Federal Court analogous to that of federal courts in the US as "...enforcing counter majoritorian checks" which in this setting may be viewed as any interference with the Executive.

The invocation of the original jurisdiction of the High Court to deal with decisions under the Migration Act, as it stood until recently, was a plain example of forum shopping but hardly to be condemned having regard to the wider grounds of review available in that jurisdiction. Criticism should be reserved for those who devised and enacted a regime calculated to lead to the gross distortion of the allocation of judicial resources that has occurred as a result. Some criticism may also be made of those who have lacked the imagination to consider using the State courts as alternative destinations for migration review cases having regard to their federal jurisdiction under s 39 of the Judiciary Act 1903 (Cth) and s 4(1) of the Jurisdiction of Courts (Cross Vesting) Act 1987 (Cth).[16]

The choice that arises between Federal and State courts will be considered more closely below. Now that statutory cross-vesting of State jurisdiction into Federal courts has been struck down, this class of choice essentially derives from the concurrent federal jurisdiction able to be exercised in both systems. Federal jurisdiction incorporates an accrued jurisdiction which can include claims arising under the common law or under State statute which, if they are part of the controversy before a Federal Court, may be determined by that court.

The choices between State courts arise from common law choice of forum rules recently affected by the decision of the High Court in John Pfeiffer Pty Ltd v Rogerson [17] By that decision the common law of Australia now requires that the lex loci delicti be the governing law with respect to torts committed in Australia but which have an interstate element. The rule applies to courts exercising both federal and non-federal jurisdiction. Its stated rationale is two-fold. One, it gives effect to the predominant territorial concern of the statutes of State and Territory legislatures as required by s 118 of the Constitution. Two, it prevents forum shopping having regard to the reasonable expectation of the parties and provides certainty as to the law relating to liability. In the joint judgment of Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ, it was put thus at 647:

"If the lex loci delicti is applied, subject to the possible difficulty of locating the tort, liability is fixed and certain; if the lex fori is applied, the existence, extent and enforceability of liability varies according to the number of forums to which the plaintiff may resort and according to the differences between the laws of those forums and, in cases in federal jurisdiction, according to where the court sits."

In that case the lex loci delicti was New South Wales where the plaintiff suffered a workplace injury. He sued the employer in the Australian Capital Territory as that was where he was employed. The damages recovery was capped in New South Wales but not in the ACT. Callinan J described the case as "...a clear example of forum shopping".[18] Subject to procedural advantages between one court system and another the case will leave parties with less incentive to chose, at least between States and/or Territory courts according to the law of the particular jurisdiction.

Other avenues for choice between State courts are provided by the cross vesting legislation. Section 4(3) of each State Cross-Vesting Act confers original and appellate jurisdiction with respect to State matters in the Supreme Courts of the other States or Territories. Choices of court are subject to control by the provisions of the Act providing for transfer from the Supreme Court of one State to the Supreme Court of another State.[19] Choice is also enlivened by the provisions of the Service and Execution of Process Act 1992 (Cth) which provides for initiating process issued in one State to be served in another State.

Choices between the courts of a particular State or Territory hierarchy or between the Federal Court and the Federal Magistracy are governed by relevant statutes and will no doubt be driven for the most part by considerations of cost and expedition.

Choices between curial and administrative tribunals are of importance and in the case of the Federal Court under the Administrative Decisions (Judicial Review) Act 1977 the Court has a discretion to refuse to grant an application where adequate provision is made under which an applicant can seek a review by the Court or another court or by another tribunal, authority or person of the decision which is impugned.[20]

The final class of choice which is mentioned is between courts and tribunals on the one hand and arbitral or other alternative dispute resolution processes. Curial and other adjudicative dispositions are merely the tip of the iceberg in the resolution of potentially justiciable disputes. The vast bulk of matters which could be or are commenced as proceedings in courts in Australia are resolved through processes of negotiation or mediation and the growth of the alternative dispute resolution industry and involvement in it by members of the legal profession is striking testament to the vitality of those alternative modes of resolution. They have the immense advantages of economy, expedition and privacy and, of course, the ability to find a resolution that will enable important personal or commercial relationships to continue without the lasting or undue damage that adversarial litigation can produce.

The Constitutional Basis for Choices between Federal and State Courts
Choices may arise for litigants between Federal and State courts ultimately because the Commonwealth Constitution provides for federal jurisdiction to be exercised by both Federal and State courts. By s 71 of the Constitution, the judicial power of the Commonwealth vests in the High Court of Australia, such other federal courts as the Parliament creates and such other courts as it invests with federal jurisdiction. Although the Constitution itself, unlike that of the United States, confers no express power to create federal courts, its implied power to do so flows from the phrase "such other federal courts as the parliament creates" which appears in s 71. As was said in the Boilermakers' case, express power was "...thought unnecessary by the framers of the Australian Constitution who adopted so definitely the general pattern of Art III [of the US Constitution] but in their variations and departures from its detailed provisions evidenced a discriminating appreciation of American experience".[21] The "autochthonous expedient" of investing federal jurisdiction in State courts was not adopted in the United States because of the perceived parochialism and lack of independence of some State courts. Alexander Hamilton observed that it would be impossible to foresee "how far the prevalency of a local spirit [might] be found to disqualify the local tribunals for the jurisdiction of national causes". The constitution of some State courts would render them "improper channels of the judicial authority of the union". In particular those where judges held office at pleasure or from year to year would be "too little independent to be relied upon for an inflexible execution of the national laws".[22] On the other hand the Supreme Courts of the States of Australia were seen by the framers of the Constitution as being of uniformly high standard "in marked contrast with that which obtained in the United States shortly after its establishment". [23]

It might have been observed that the independence of State courts in Australia was, under State Constitutions and their colonial predecessors, subject to legislative erosion. Subject to specific exceptions in New South Wales and Victoria, the State Constitutions do not entrench the independence of the courts or protect the tenure or remuneration of State judges.[24] But the fact of federation, s 106 of the Constitution and the provision of legislative power to invest State courts with federal jurisdiction has itself provided them with a status and protection under the Constitution which they do not derive from the Constitutions of the States. For they are now "...part of an integrated system of State and federal courts and organs for the exercise of federal judicial power as well as State judicial power".[25] They cannot now be invested with jurisdiction incompatible with their integrity, independence and impartiality as courts in which federal jurisdiction may be invested under Chapter III. That principle takes one readily to the proposition that State parliaments cannot erode the independence of the State Supreme Courts in ways that would make them improper channels of the judicial power of the Commonwealth. So they must be "...independent and appear to be independent of their own State's legislature and executive government as well as the federal legislature and government".[26]

A Brief History of Federal Jurisdiction
There was a view early in the history of federation propounded by Henry Bourne Higgins among others, that the establishment of the High Court could be delayed and the supervision of the Constitution left to the State Supreme Courts which were, bound by the Constitution by virtue of covering cl 5. In 1903 however the parliament passed the Judiciary Act 1903 (Cth) providing for a High Court comprising a Chief Justice and two other justices. State Courts were invested with federal jurisdiction under s 39 of the Judiciary Act and as Harrison Moore observed the power so to invest then was exercised "almost to its fullest extent". The scheme of the section was:

"To embrace the whole of the matters of federal jurisdiction which it is not intended to give to the High Court exclusively, and to declare first, that the State courts shall according to their nature and degree have jurisdiction in all of them, whether they are matters of which the court would have jurisdiction under the State law or not; secondly, that no jurisdiction shall be exercised by the State Courts in any of such matters, except as federal jurisdiction." [27]

For the greater part of the history of the Commonwealth, federal jurisdiction has been exercised by State courts. The early development of a federal judicature created by the Commonwealth Parliament was confined to specialist courts. The first was the Commonwealth Court of Conciliation and Arbitration, established in 1904, which was succeeded by the Commonwealth Industrial Court in 1956 after the Boilermakers' case, the relevant non-judicial functions being hived off to the Conciliation and Arbitration Commission. The Commonwealth Industrial Court was renamed the Australian Industrial Court in 1973. A Federal Court of Bankruptcy was created in 1930 and ultimately abolished on 30 September 1995 following the retirement in June 1995 of Justice Sweeney, who was the last judge of the Federal Court of Bankruptcy.

The 1970s saw the creation of two major new Federal Courts. The first was the Family Court of Australia, established under the Family Law Act 1975. [28] In 1963 the Thirteenth Annual Legal Convention of the Law Council of Australia was informed by the then Solicitor-General, Sir Kenneth Bailey, that the Attorney-General, Sir Garfield Barwick QC, had been authorised by Cabinet to "design a new federal court with a view to consideration by Cabinet for approval for legislative action". The purpose of the new court was to ease the burden on the High Court. The Solicitor-General was responding at that Convention to a paper presented by MH Byers QC and BP Toose QC.[29] The Byers and Toose proposal suggested a more substantial change for a wider purpose. It rested on certain assumptions which were contentious. The first of these was that the original understanding of the federal bargain contemplated the eventual creation of a complete structure of federal courts. The second was that there was no longer among members of the public the strong State sentiment which had existed at the time of federation and which supported the use of State courts for the exercise of federal jurisdiction.[30]

There was of course debate about the creation of the Court with FTP Burt QC (as he then was) predicting that the "two channel system" would breed "complexity - and black motor cars", that it would seriously reduce the status of State Supreme Courts and would accentuate an imbalance in the Australian judicial system under which too much inferior work was being done by superior courts. Gough Whitlam QC, then Deputy Leader of the Opposition, argued that as a matter of principle federal judges should interpret and apply federal laws. Garfield Barwick acknowledged that the investiture of State Courts with federal jurisdiction was a potentially permanent and desirable feature of the Australian judicial system. The jurisdiction of the Federal Court would be limited to "special" matters of which bankruptcy and industrial law were obvious examples. Beyond those examples, no coherent policy for selection of Federal Court jurisdiction was disclosed.[31]

After many vicissitudes, which it is not necessary to review here, the Court was established in 1976. The Federal Court of Australia Bill was introduced into the parliament by the then Attorney-General, RJ Ellicott QC. Previous more wide ranging proposals were criticised on the basis that they would have removed from State courts the bulk of the federal jurisdiction which they exercised and greatly weakened the status of those courts and the quality of the work dealt with by them.[32] The rationale for a Federal Court at that time was to put the existing federal court system on a more rational basis and to relieve the High Court of some of the workload it bore in matters of federal and territory law. According to the Second Reading Speech the government believed that only where there were "special policy or perhaps historical reasons for doing so should original federal jurisdiction be vested in a Federal Court". Industrial law, bankruptcy, trade practices and judicial review of administrative decisions answered those criteria. The Court would act as an appellate court from State Courts exercising federal jurisdiction in matters of special federal concern.

The Development of Federal Court Jurisdiction
The initial original jurisdiction of the Court covered bankruptcy, industrial law, trade practices, appeals from the Administrative Appeals Tribunal and compensation for Commonwealth Government employees. By s 39B of the Judiciary Act, enacted in 1983, it was given jurisdiction over the grant of prerogative and injunctive relief against officers of the Commonwealth in the same terms that such jurisdiction was conferred on the High Court by s 75(v) of the Constitution.

It is to be noted that although described as aspects of its specialist jurisdiction, the administrative law and trade practices jurisdictions of the Court in fact were extremely broad. The ADJR Act provided very powerful tools for the review of Commonwealth executive action unaffected by the technicalities of prerogative remedies which were still, in 1976, the main mechanisms of judicial review in the State jurisdictions. The administrative law jurisdiction generally gave the Court a foundation for developing a stature and authority not ordinarily achievable by small specialist courts. The Trade Practices Act also moved the Court away from the conception of a specialist tribunal concerned with a narrow band of federal statutes. Through Part V of the Act and in particular the prohibition against misleading or deceptive conduct by corporations the Court became involved in mainstream commercial litigation.[33]

The accrued jurisdiction of which more mention will be made below, picked up non-federal claims which were part of the same controversy in which the federal claim was embedded. The adoption by the High Court of a "practical judgment" test for the scope of that jurisdiction meant that related non-federal claims in the Federal Court were not often defeated for want of jurisdiction.[34] The trade practices jurisdiction was initially exclusive, a fact which gave rise to possible difficulties between Federal and State courts particularly in relation to the exercise of the accrued jurisdiction in common law claims or claims arising under State laws. This was later overcome by legislation and earlier by a determination by the High Court that the accrued jurisdiction was non-exclusive and discretionary.[35] The Court's exclusive jurisdiction under the anti-trust provisions of Part IV of the Trade Practices Act gave it a central role in the development of competition law in Australia. The volume of cases in that jurisdiction is much smaller than the volume of cases under Part V of the Act. However their significance and the special interface they offer between law and economics has attracted considerable professional and academic interest.

Eleven years after its establishment, the Federal Court acquired exclusive jurisdiction in taxation matters and original jurisdiction under intellectual and industrial property laws. Appellate jurisdiction in these areas is exclusive. In January 1989 it was invested with civil admiralty jurisdiction to be exercised concurrently with State and Territory Supreme Courts.[36] In 1991, its jurisdiction was further extended to cover civil proceedings arising under the Corporations Law, although this was dependent in part upon what was later found to be the invalid vesting of jurisdiction under State laws. In January 1994, the Court acquired a new and demanding jurisdiction under the Native Title Act 1993 (Cth).

The enactment of s 39B(1A) of the Judiciary Act 1903 in April 1997 conferred on the Court jurisdiction in any matter in which the Commonwealth is seeking an injunction or declaration; arising under the Constitution or involving its interpretation; and arising under any laws made by the Parliament. The Court does not have jurisdiction to hear and determine offences against federal laws although it may hear and determine prosecutions for pecuniary penalties under the provisions of the Trade Practices Act. By 1998 the sources of the Court's jurisdiction were to be found in 125 federal statutes.

The growth of Federal Court jurisdiction is said to have adversely affected the status of State Supreme Courts. In its 1987 Report the Constitutional Commissions Advisory Committee on the Australian Judicial System reported a corresponding decline in the role of the courts of the States on each occasion when the Commonwealth vests jurisdiction in a federal court. If the areas of jurisdiction of the federal courts continued to expand the courts of the States would become more and more restricted in the scope of their jurisdiction. It was the view of the Committee that the trend was in favour of expanding the jurisdiction of federal courts and although the pace of that change might alter or be reversed from time to time, the probability was that over all it would continue if nothing further were done. While that may have been a perception at the time, in my opinion it is not correct today. This is a matter discussed further below.

The Court's history indicates an evolution from a specialist body dealing with a narrow band of federal statutes to one which is approaching a court of general jurisdiction. Professor James Crawford predicted in 1993 that if a provision such as section 39B(1A) of the Judiciary Act were to be enacted, that change would complete the conversion of the Court into what he called "a superior court of general jurisdiction in Australia".[37]

It is notable that some interest groups have seen the Court as now insufficiently specialised for specific areas of its jurisdiction. Submissions have been made from time to time for the establishment of a specialist intellectual property court or a specialist division of the Federal Court for that purpose. Other proposals have been put for a specialist division to deal with economic issues under competition law or a specialist human rights court or division and a specialist native title court or division. It is also perhaps an index of the jurisdictional development of the Court that it now operates specialist panels in some aspects of its jurisdiction.

The development of the Court described here in outline has not been without its ebbs and flows. The decision of the High Court in Re Wakim resulted in the loss of Corporations Law jurisdiction, cross-vested in the Federal Court under State law and the transfer under short-term remedial legislation of pending matters to the Supreme Courts of the States.[38] Although the Court has now been revested with jurisdiction under the new referred power of the Commonwealth, it will be sometime before it returns to the volume of corporations work it had prior to the High Court decision. This will vary from State to State.

The Present Position
Speaking anecdotally and without the benefit of statistical evidence, it is fair to say that the Court's initial dominance of Part V litigation under the Trade Practices Act has diminished. In the twenty six years since that Act has been in place a whole new generation of practitioners have arrived who are comfortable with its provisions and regard s 52 as a tool of mainstream litigation. So it is invoked routinely in State courts together with the equivalent provisions of the various Fair Trading Acts which take Part V into areas beyond the reach of the Commonwealth constitutional power. It was perhaps in the two areas of Part V and Corporations Law that the Federal Court's role was perceived as potentially damaging to the State courts. It is noticeable however that while the wholesale cross-vesting in the Federal Court of jurisdiction under State laws was in effect, it did not appear to alter significantly the balance of work between jurisdictions. There seems to have been little evidence of judicial empire building based on the cross-vesting legislation. Even before cross-vesting legislation was enacted in 1987 the doctrinal basis of the accrued jurisdiction was reasonably settled and did not give rise to a significant volume of jurisdictional debate.

The term "accrued jurisdiction" is sometimes used to describe alleged Federal Court empire building is a metaphor used in the analysis of the content of federal jurisdiction. It does not describe any constitutionally inferior species of federal jurisdiction. It comes directly from the Constitution and the terms in which the Constitution provides for investing federal jurisdiction in State courts and defining the jurisdiction of Federal courts. The authority of the Parliament under the Constitution extends to defining the jurisdiction of any federal court, other than the High Court or investing jurisdiction in State courts with respect to "matters" of the kind mentioned in ss 75 and 76 of the Constitution. Those include matters arising under any laws made by the Parliament. The concept of "matter" covers the entire controversy which the parties bring to the Court for determination. If the controversy includes questions which are non-federal because they arise under common law or State statutes, they are nonetheless part of federal jurisdiction. Although there was authority in the 1980s to the affect that the accrued jurisdiction was discretionary that must be read in the light of subsequent authority asserting the obligation on the courts of the country to exercise the jurisdiction which is conferred on them.[39] The existence of that duty does not preclude the existence of exceptions based on the availability of a more appropriate alternative court.[40] The discretionary character was questioned by Gummow and Hayne JJ in Re Wakim where their Honours said:

"It may be that the better view is that the references to "discretion" are not intended to convey more than that difficult questions of fact and degree will arise in such issues - questions about which reasonable minds may well differ." [41]

The Federal Court recently reasserted that the circumstances in which it would decline federal jurisdiction properly invoked were exceptional notwithstanding that the federal question which brought the controversy to the Court had been resolved adversely to the applicant by a decision on the pleadings. There was left a claim for damages in negligence which, notwithstanding the striking out of the federal question, retained its character as a subject of federal jurisdiction.[42]

That case was brought under the representative proceedings of the Federal Court of Australia Act 1976. The High Court having granted special leave to appeal against the jurisdictional decision and having granted special leave to appeal against the decision of the Full Court in Femcare v Bright relating to the constitutional validity of the representative proceedings provisions, the trial judge decided to transfer the matter to the Supreme Court of Victoria. He did so under Commonwealth cross-vesting legislation so that any doubt as to the jurisdiction of the court in which the action proceeded could be avoided.

Federal/State Choices and a Single Australian Judicature
There is no doubt that there are important areas of federal jurisdiction in which litigants can chose to proceed in a State Court or in the Federal Court or, indeed, the Federal Magistrates Court. But the choice, if thought inappropriate, can be controlled having regard to considerations of comity between the courts. Parallel proceedings in State and Federal courts arising out of the same subject matter can be stayed so that the litigants have their dispute determined, so far as possible, in one court. Federal courts can transfer proceedings to State courts under the provisions of s 5 of the Jurisdiction of Courts (Cross-Vesting) Act 1987 (Cth) or, in the case of trade practices litigation, s 86A of the Trade Practices Act 1976. [43]

The exercise of a choice to proceed in the Federal Court or in a State court exercising federal jurisdiction is, according to the definition discussed earlier, "forum shopping". The existence and exercise of that choice is contemplated by the Constitution and sanctioned by laws made under it which confer concurrent federal jurisdiction. It is also entirely consistent with a vision of the Australian system of State and Federal courts as a single judicial system under the Commonwealth Constitution serving a single Australian common law and statute laws for the Commonwealth, the States and the Territories made by their respective parliaments. As Deane J said:

"The creation of national jurisdiction involving the application of the new national law, with its Commonwealth and State components, by non-State courts and the provision for the conferral of federal jurisdiction upon State courts provided the mechanism for the administration of the new national law as a single unit. The conferral of general and final appellate jurisdiction upon [the High Court] imposed an ultimate unity upon the various court systems entrusted with the administration of justice under the new national law. The provisions of s 109 of the Constitution ensured coherence between Commonwealth and State laws operating within the national system by invalidating inconsistent State laws to the extent of the inconsistency." [44]

The reference to the administration of the new national law as "a single unit" is borrowed from Sir Owen Dixon's statement to a United States audience that Australia has a national system of law which is properly to be regarded as "a unit" or "a single legal system".[45] More recently Kirby J has, in similar vein, on the topic of interstate choice of law rules, referred to the operation of institutions within a federal nation which reinforce principles of comity and feelings of common identity and national unity. He said:

"In Australia, such institutions include the integrated courts system, the unified common law, the growth of federal legislation and the predominantly territorial concern of the statutes of the several States and Territories." [46]

The exercise of choice of court must be viewed within this large national framework. The factors affecting such choice will be various and will properly and healthily include considerations of expertise, cost and efficiency. Trends in such choices may cause the courts themselves to reflect upon their rules and processes. Human nature will undoubtedly inject into such reflection a competitive desire to maintain a standing as an institution of the highest quality. Provided that competitive instinct is kept within reasonable bounds and does not lead to long term distortion of priorities, it will serve the interests of the whole community.

There will undoubtedly from time to time be occasions in which litigants perceive State or Federal courts as potentially easier for particular classes of litigation or even sympathetic to particular classes of litigant. A safely distant example is the Delaware District Court in bankruptcy matters. Provided there is adequate communication between jurisdictions and vigilance to address any perceptions of imbalance that may occur, these should be at worst short term problems which will not affect the long term integrity of the Australian judicial system. There is little evidence in the Australian system of choices of jurisdiction based upon the kinds of considerations which would be regarded as illegitimate. I say that having regard to recent debate about the perceived respective approaches of the Federal Court and the State Supreme Court in Victoria to industrial matters. Against the background of the historical context in which the term "forum shopping" arose and in particular its American origins and practice, there is in my opinion little, if any basis, within Australian jurisdictions for concern about Federal/State forum shopping. Choices are made by a constitutional system which contemplates the possibility of choice and legitimate choice is healthy.

It is fair to say also that generally speaking there is, at least among the judges of the Supreme Courts and the Federal Court, a sense of common membership of an Australian judicature. The judges attend a conference in January each year at which their experiences and perceptions are shared and acquaintances and friendships renewed. The Chief Justices meet together regularly as Members of the Council of Chief Justices to consider matters of common concern to the judiciary. There is an increasing number of examples of cases in which a judge of a State Supreme Court will sit as a member of another State Supreme Court to deal with a particular case for a particular period. In the recent appeal to the New South Wales Court of Appeal in which Justice Heydon of that Court was a respondent, Chief Justice Malcolm of the Supreme Court of Western Australia sat with Justice McPherson of the Queensland Court of Appeal and Justice Ormiston of the Victorian Court of Appeal to constitute a special bench of the New South Wales Court of Appeal. Justice Ipp of Western Australia was recently seconded to the New South Wales Court of Appeal for twelve months and judges of that Court visited Western Australia to sit in the appellate jurisdiction of the Supreme Court there. The New South Wales Court of Appeal has recruited a number of retired judges of the Federal Court to act for periods as judges of that Court.

These developments will hopefully continue and strengthen the sense of common membership of a national judiciary. Justice Santow of the Supreme Court of New South Wales and Mark Leeming, a New South Wales barrister, a few years ago proposed a system under which, in certain classes of case particularly where consistency in the law was desirable, composite appellate benches drawing on the Supreme Courts of the States and Territories and the Federal Court might be constituted. The point of the suggestion was to endeavour to reduce or avoid precedential conflict between State courts and the Federal Court particularly in areas like corporations law. This was on the basis that the High Court's increasing workload limits its capacity for appellate intervention in resolving such conflicts and refining the law. It was proposed as a minimalist solution to the overloading of appellate capacity aimed at enhancing the appellate system.[47] While nothing much further has been heard of that proposal some of its objectives may be achieved by the increased use of mixed interstate benches for determining issues of precedential importance, albeit the interstate bench might be formally constituted as a sitting of the appeal court of one or other of the relevant States. There is a constitutional difficulty in constituting State court members as members of the Federal Court without conditions of appointment mandated by Chapter III of the Constitution. However, members of the Federal Court could be commissioned as State judges for the purposes of such sittings. This process could be facilitated by a protocol among the courts about the circumstances in which it would be seen as appropriate to constitute a composite bench. Indeed, in cases of important national significance and, subject to statutory restrictions imposed in the jurisdiction of choice, a bench composed of judges from each of the State and Territory jurisdictions together with a judge of the Federal Court could be constituted as a special sitting of, for example, the New South Wales or Victorian Court of Appeal. There was a suggestion in the Santow, Leeming article that this would be done by nomination of relevant cases by the High Court. It could also be done by a straight exercise of what could be called co-operative judicial federalism.

There is, of course, from time to time talk of institutional unification of the Australian judicature whether at the level of intermediate appellate jurisdiction or at both appellate and trial levels. These debates will ebb and flow and change may come. No institution or institutional arrangement has a right to immortality. The present time however is one in which governments and parliaments are inclined to a degree of hostility to the independent role of courts and a desire to incorporate them as a kind of extension of bureaucracy. There are occasionally dramatic gaffes from ministers or officials which indicate a failure to understand the essentials of the separation of powers. More insidious however are pressures from executives and legislatures to homogenise the courts administratively so that they acquire the texture and appearance of executive bureaucracies. It may be thought that a good defence against that trend is a plurality of small, competent, and collegiate courts which place a high value on the independence of individual judges and the unique nature of the judicial function. Such a plurality as presently exists within Australia is an expression of a single national judicial system best suited to meet, in a co-operative way, the contemporary challenges of serving the community and delivering justice according to law. The fact that choices may exist as an incident of that plurality seems a small price to pay, if it be a price at all.

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[1] [1938] USSC 94; 304 US 64 (1938)
[2] Klaxon Co v Stentor Electric Manufacturing Co [1941] USSC 129; 313 US 487 (1941)
[3] Horowitz, Erie RR Co v Tompkins - A Test to Determine those Rules of State Law to Which Its Doctrine Applies, 23 So. Calif. L.Rev 204 at 215
[4] Miles v Illinois Central Railroad Co [1942] USSC 89; 315 US 698 (1942) at 706
[5] Covey Gas & Oil Co v Checketts [1951] USCA9 48; 187 F.2d 561 (1951) at 563
[6] Wright, The Federal Courts and the Nature and Quality of State Law, 13 Wayne L. Rev 317, 333 (1967) cited in Forum Shopping Reconsidered (1990) 103 Harv L. Rev 1677 and 1679
[7] (1870) LR 6 QB 1
[8] John PfeifferPty Ltd v Rogerson [2000] HCA 36; (2000) 172 ALR 625
[9] Chaplin v Boys [1971] AC 356 at 401
[10] The Atlantic Star [1973] 1 QB 364 at 382
[11] The Atlantic Star [1974] AC 436 at 471
[12] Keeton v Hustler Magazine Inc [1984] USSC 54; 465 US 770 (1984)
[13] Forum Shopping Reconsidered (1990) 103 Harv L Rev 1677 at 1683
[14] Harvard Law School News www.law.harvard.edu/news/lopuckibankruptcy.html. See Eisenberg and LoPucki Shopping for Judges: An Empirical Analysis of Venue Choice in Large Chapter 11 Reorganisations 84 Cornell L Rev (1999). See also Rasmussen and Thomas, Timing Matters: Promoting Forum Shopping by Insolvent Corporations 94 NW U L Rev 1357 (2000); David A Skeet Jnr Bankruptcy Judges and Bankruptcy Venue: Some Thoughts on Delaware 1 Del L Rev 1 (1998); David A Skeet Jnr, What's So Bad About Delaware? 54 Vand L Rev 309 (2001); LoPucki and Kalin, The Failure of Public Company Bankruptcies in Delaware and New York: Empirical Evidence of a "Race to the Bottom" 54 Vand L Rev 231 (2001)
[15] Cigna Insurance Australia v CSR Limited (Supreme Court of NSW, No 50133/95 Rolfe J, 15 August 1995)
[16] See the extensive, albeit obiter, discussion by Lee J in Ayub v Minister for Immigration and Multicultural Affairs [2000] FCA 1844; (2000) 181 ALR 522 at 527-530
[17] [2000] HCA 36; (2000) 172 ALR 625
[18] 172 ALR at 673
[19] Jurisdiction of Courts (Cross-Vesting) Act 1987 (Vic) s 5(2)
[20] Administrative Decisions (Judicial Review) Act 1977 s 10(2)(b)
[21] R v Kirby; Ex parte Boilermakers' Society of Australia [1956] HCA 10; (1956) 94 CLR 254 at 268
[22] Hamilton A, Jay J and Madison J (1787) The Federalist, Reprint EM Earle (ed), Modern Library New York 1937 No 81 p 528
[23] Sawer G, Australian Federalism in the Courts Melbourne University Press (1967) p 20-21, Barwick The State of the Australian Judicature (1977) 51 ALJ 480 at 482
[24] McCawley v The King [1920] AC 691 at 713; Constitution Act 1902 (NSW) s 7B; Constitution Act 1975 (Vic) s 18
[25] Kable v Director of Public Prosecutions (NSW) [1996] HCA 24; (1996) 189 CLR 51, 114-115 (McHugh J), see also 102 (Gaudron J) and 143 (Gummow J)
[26] Ibid, 116 (McHugh J)
[27] Harrison Moore, W (1910) The Constitution of the Commonwealth of Australia 2nd Edition Reprint Legal Books, Sydney 1997 p 217
[28] Under an option available under the Family Law Act 1975, Western Australia established a State Court, the Family Court of Western Australia. Federal jurisdiction was invested in it under the provisions of the Commonwealth Act. Each of the judges of that Court also holds a commission on the Family Court of Australia.
[29] Byers MH and Toose BP (1963) The Necessity for a New Federal Court: A Survey of the Federal Court System in Australia 36 ALJ 308
[30] These assumptions have been contested - see Commonwealth Parliamentary Debates House of Representatives, 24 July 1974 598 (RJ Ellicott QC). See also Rogers, Andrew (1980) Federal/State Courts - The Need to Restructure to Avoid Jurisdictional Conflicts 54 ALJ 285. The rebuttals however go too far in suggesting that the Convention delegates saw the creation of federal courts as unnecessary except in the last resort - Stack v Coast Securities (No 9) Pty Ltd..
[31] Barwick (1964) op cit at p 2
[32] Commonwealth Parliamentary Debates, H of R 21 October 1976 p 2110
[33] French RS, A Lawyer's Guide to Misleading or Deceptive Conduct (1989) 63 ALJ 250; Pingilley W, "Section 52 of the Trade Practices Act - A Plaintiff's New Exocet" (1987) 15 ABLR 247
[34] Fencott v Muller (1983) 152 CLR 570
[35] Stack v Coast Securities (No 9) Pty Ltd [1983] HCA 36; (1983) 154 CLR 261
[36] Admiralty Act 1988 (Cth)
[37] Crawford, James (1993) Australian Courts of Law 3rd Edition, Oxford University Press, Melbourne p 168
[38] Re Wakim; Ex parte McNally (1999) 198 CLR 511
[39] Voth v Manildra Flour Mills Pty Ltd [1990] HCA 55; (1990) 171 CLR 538 at 559
[40] Lindell G, The Justiciability of Political Questions: Recent Developments in Lee and Winterton (eds) Australian Constitutional Perspectives (1992) pp 218-223
[41] Re Wakim at 588; And see generally Johnson Tiles Pty Ltd v Esso Australia Pty Ltd [2000] FCA 1572; (2000) 104 FCR 564 at 600-603
[42] Johnson Tiles Pty Ltd v Esso Australia Pty Ltd [2000] FCA 1572; (2000) 104 FCR 564
[43] See Bell Group Ltd v Westpac Banking Corporation [2000] FCA 439; (2000) 104 FCR 305
[44] Breavington v Godleman [1988] HCA 40; (1988) 169 CLR 41 at 124
[45] Dixon O, "Sources of Legal Authority", Jesting Pilate (1965) pp 198-202
[46] John Pfeiffer Pty Ltd v Rogerson [2000] HCA 36; (2000) 172 ALR 625 at 657
[47] Santow GFK and Leeming M, Refining Australia's Appellate System and Enhancing its Significance in our Region (1995) 69 ALJ 348