Amos v Tarrants Financial Consultants Pty Ltd

IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 1189 of 2011

PS AMOS PTY LTD (ATF) PS AMOS SUPERFUND ABN 79 693 954 132

AND: TARRANTS FINANCIAL CONSULTANTS PTY LTD ABN 63 086 674 179 (IN LIQUIDATION)

JUDGE: GRIFFITHS J DATE: 10 DECEMBER 2013 PLACE: SYDNEY

REASONS FOR JUDGMENT 1 The plaintiffs move on an interlocutory application dated 4 December 2013 in which they seek to have the proceeding transferred to the equity list of the Supreme Court of New South Wales. It is not in dispute that the Court has the power to transfer the proceeding. Such power is conferred by either s 5(4)(b)(iii) of the Jurisdiction of Courts (Cross-vesting) Act 1987 (Cth) (the Cross-vesting Act) or s 12GK of the Australian Securities and Investments Commission Act 2001 (Cth) (the ASIC Act). The question is whether this is an appropriate case in which to make such an order having regard to the terms of those provisions and case law identifying relevant principles guiding the exercise of the discretion, as to which see, for example, Bankinvest AG v Seabrook (1988) 14 NSWLR 711; Bourke v State Bank of New South Wales (1988) 22 FCR 378 and, more recently, Khoury v Commonwealth Bank of Australia trading as BankWest [2013] FCA 304. The ultimate question is whether it is in the interests of justice that the proceeding be determined in the Supreme Court of New South Wales notwithstanding that the proceeding was commenced in this Court and has been on foot since mid-2011. 2 The proceeding involves claims of breach of contract, tort and breach of duty under the Trade Practices Act 1974 (Cth); the ASIC Act and the Corporations Act 2001 (Cth). The proceeding relates to financial and investment advice provided to the plaintiffs by the first and second defendants. The plaintiffs seek declaratory relief and damages against the first and second defendants. By an amended application filed on 23 May 2012, the plaintiffs also seek relief against the third defendant under s 6 of the Law Reform (Miscellaneous Provisions) Act 1946 (NSW) (the Reform Act). The third defendant is the first defendant's professional indemnity insurer. Justice Emmett gave leave to join the third defendant in May 2012. 3 The third defendant does not oppose the transfer but it is opposed by the second defendant. The second defendant was unable to attend today's hearing but he set out his position in an email dated 6 December 2013. His opposition is based on matters such as that the proceeding was commenced over two and a half years ago; there have been 13 directions hearings since the matter was commenced; the plaintiffs' application is belated and he claims that jurisdictional issues concerning the substantive proceeding were pointed out to the plaintiffs' solicitors over two years ago; the plaintiffs have failed to abide by the Court's directions and orders on several occasions and have not paid the second defendant's costs as ordered by the Court on 17 September 2013 and 31 October 2013. 4 There is some force in these matters which are raised by the second defendant. The conduct of the proceeding to date by the plaintiffs has been erratic and, at times, delinquent. Several adjournments have been required in respect of the hearing of interlocutory applications filed by the plaintiffs. The pleadings have also been amended several times. The plaintiffs have also failed to comply with various directions for the filing of lay and expert evidence. On 19 July 2011, the plaintiffs sought leave to proceed against the first defendant which is in voluntary liquidation. That application was listed for hearing on 20 August 2012 before me but it never proceeded at that time and the application was only recently revived by the plaintiffs. Orders were made for the application to be heard on 17 September 2013, but that did not occur through no fault of the defendants. The hearing of that interlocutory application was then adjourned to today and, in the meantime, the plaintiffs have now sought to have the proceeding transferred. On at least four occasions (i.e. 4 June 2013, 9 July 2013, 17 September 2013 and 31 October 2013), the plaintiffs were ordered to pay the costs of the second and third defendants thrown away by adjournments or other difficulties occasioned by the plaintiffs' conduct. 5 It appears that the decision to seek to have the proceeding transferred has been inspired by the decision of the Court of Appeal of New South Wales in Chubb Insurance Company of Australia Ltd v Moore (2013) 302 ALR 101. In that decision, which was handed down on 11 July 2013, the Court of Appeal held that, on its proper construction, s 6 of the Reform Act applies only to claims brought in a court of New South Wales and does not apply to a claim brought in a court that is not a court of New South Wales. It was not suggested before me that that decision is clearly wrong and I propose to follow it. This means that the plaintiffs cannot rely on that provision in this Court and can only do so in a court of New South Wales. 6 In my view, this is a powerful consideration weighing in favour of transferring the proceedings to such a court. The matter ought properly to have been raised by the plaintiffs well before this having regard to the date of the decision in Chubb. I note that the plaintiffs have recently changed solicitors and that Mr Lever SC has only come into the matter relatively recently representing the plaintiffs. 7 I have taken into account the various matters raised in opposition by the second defendant but consider that they are outweighed by the significance of the decision in Chubb. I am satisfied that the New South Wales Supreme Court is better placed to hear and determine the entirety of the proceeding than is this Court having regard to Chubb. I am further satisfied that the requirements of both s 5(4)(b)(iii) of the Cross-vesting Act and s 12GK of the ASIC Act are satisfied in this case and I propose to make orders accordingly. I certify that the preceding seven (7) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Griffiths.