Jurisdiction Ping Pong: The Queensland Supreme Court or the Federal Court

Litigation: 22 June 2026

Author: Erin Prout , Joel Parsons - Our People

Commencing a legal proceeding is not as straightforward as simply ‘going to Court’. Determining what jurisdiction can involve complex legal analysis and in some cases become a contested issue.

This was demonstrated in Thompson v Lane [2025] QSC 128, where the Supreme Court of Queensland considered whether it had jurisdiction to determine a bankruptcy dispute, or whether the matter should be transferred to the Federal Court of Australia.

Background

Ms Thompson commenced proceedings against Mr Lane, her appointed trustee in bankruptcy, in the Supreme Court of Queensland (Supreme Court).

Following her discharge from bankruptcy, Ms Thompson sought an order that Mr Lane facilitate the transfer of title of a property into Ms Thompson’s name.

Shortly after the proceeding commenced, the following questions became apparent as to the Supreme Court’s authority to hear the matter:

• Do certain Federal Courts have exclusive jurisdiction over the proceeding pursuant to the Bankruptcy Act 1966 (Cth) (Bankruptcy Act);
• If so, does bankruptcy jurisdiction revest back to the Supreme Court pursuant to the Jurisdiction of Courts (Cross-vesting) Act 1987 (Cth) (Cross-vesting Act), and does the proceeding involve a “special federal matter” that, in any event, may be required to be transferred to the Federal Court of Australia (Federal Court); and
• Should an order be made pursuant to section 6(3) of the Cross-vesting Act?

1. Do certain Federal Courts have exclusive jurisdiction over the proceeding to the Bankruptcy Act?

Under the Judiciary Act 1903 (Cth), federal jurisdiction is conferred on individual state Supreme Courts. However, section 27 of the Bankruptcy Act modifies this position, providing both the Federal Court and Division 2 of the Federal Circuit and Family Court of Australia (Federal Circuit Court) with concurrent jurisdiction in bankruptcy, exclusive over the jurisdiction of all courts other than the High Court of Australia and Division 1 of the Federal Circuit Court.

The relief sought itself revealed that the proceeding would ultimately involve a final decision either for or against Mr Lane’s title to the property. Ms Thompson’s claim was that her discharge from bankruptcy brought an end to the ability of Mr Lane to retain any property that he had held as her trustee in bankruptcy. Accordingly, the proceeding was deemed to have fallen within the operation of the Bankruptcy Act, resulting in the Federal Court having exclusive jurisdiction.

2. Does bankruptcy jurisdiction revest back into the Supreme Court pursuant to the Cross-vesting Act, and does the proceeding involve a “special federal matter” that, in any event, may be required to be transferred to the Federal Court?

Despite section 27 of the Bankruptcy Act granting exclusive jurisdiction over the proceeding to the Federal Court, the second question posed considered whether there was a further, separate referral of jurisdiction pursuant to the Cross-vesting Act.

Section 4(1) of the Cross-vesting Act operates so that the exclusive Commonwealth jurisdiction provided for under the Bankruptcy Act is revested back into the state Supreme Court. This exists because a state Supreme Court would otherwise not have jurisdiction to deal with bankruptcy matters.

Despite this, section 6(1) of the Cross-vesting Act, provides that to the extent the revested jurisdiction involves a “special federal matter”, such matter is mandatorily required to be transferred to the Federal Court, unless an order under section 6(3) of the Cross-vesting Act is made.

Ultimately, the Court was satisfied that the Supreme Court was revested with bankruptcy jurisdiction, however, the entirety of the proceeding was one that involved a “special federal matter”, requiring the Supreme Court to transfer the proceeding to the Federal Court, unless an order is made pursuant to section 6(3) of the Jurisdiction Act.

3. Should an order be made pursuant to section 6(3) of the Cross-vesting Act?

Section 6(3) of the Cross-vesting Act allows for a state Supreme Court to order that a proceeding be determined within that state Supreme Court if it is satisfied that there are special reasons for doing so.

In this proceeding, it was held that all of the facts pointed to there being no special reasons as to why this proceeding should be determined in the Supreme Court. In support of there being no special reasons, regard was had to the general rule that special federal matters should in fact be heard by the Federal Court.

At the same time as this proceeding, another proceeding was on foot in the Federal Court which has been initiated by Ms Thompson, where she sought orders that Mr Lane cease to act as her trustee in bankruptcy for certain property. The very matters raised in this proceeding mirrored those raised in the already existing proceeding, strongly pointing to the fact that no special reasons existed. It was viewed that the efficient and cost-effective conduct of this common issue would be achieved if the proceeding was transferred to the Federal Court.

Consequently, the proceeding was ordered to be transferred to the Federal Court.

Key Takeaways

For those wishing to commence proceedings, it is crucial to determine what Court has the appropriate jurisdiction. This requires considered legal advice as to the underlying Court rules and legislation, which may mandate which Court has jurisdiction. Applying in a jurisdiction without proper authority can result in major adverse cost and time consequences.

If you wish to commence proceedings or are simply looking for legal advice, contact one of our experienced litigation lawyers on (03) 8600 6000 or (07) 3544 5659.

Please note: The information in this article is provided for general information purposes only and does not constitute legal advice. It is not intended to be comprehensive or to apply to any specific circumstances. You should seek independent legal advice before acting on any information contained in this article.