Australian Competition and Consumer Commission v Terania Pty Ltd [2007] FCA 1074 | Case summary

REASONS FOR JUDGMENT 1 The respondents have applied by motion of 19 June 2007 for two orders. (For convenience and consistency, I will call the applicants on the motion "the respondents", as is their status in the proceeding generally, and the respondent to the motion "the applicant" as is its status in the proceeding generally). The first is that the proceeding be transferred from the Northern Territory District Registry to the South Australia District Registry of the Court. The second is that the proceeding be referred to a mediator for the purpose of mediation. I will deal with those applications separately. 2 The principles upon which the Court should consider the first of those applications are quite well established. 3 Section 48 of the Federal Court of Australia Act 1976 (Cth) permits the Court or a Judge to direct that the proceeding, or a part of the proceeding be conducted or continued at a place other than the place at which they have been instituted. Order 10 r 1(2)(f) of the Federal Court Rules 1979 (Cth) permits the Court to direct the proceeding to be transferred from one Registry at which it has been commenced to a different Registry. To make such an order the Court must be satisfied after considering all relevant matters that there is a sound reason to direct that the proceeding be conducted or continued elsewhere. See National Mutual Holdings Pty Limited v The Sentry Corporation (1988) 19 FCR 155. That decision also indicated some of the considerations which will generally be relevant in such an application. 4 In this matter the starting point is to note that these proceedings were commenced in the Northern Territory District Registry. The alleged conduct said to contravene the Trade Practices Act 1974 (Cth) (the Act), involves five sales of rugs and manchester products held in Darwin and one sale of rugs and manchester products held in Canberra. There were no sales alleged to have taken place in South Australia. It is not suggested that the proceedings should be transferred to the ACT District Registry and it is plain that the cause of action, if there is one, principally arose in the Northern Territory and that was an appropriate place in which the proceedings should have been commenced - as Sentry 19 FCR 155 then asks rhetorically: why should it be changed? 5 The parties have respectively drawn to the Court's attention a number of considerations to which I will make brief reference. It is on the evidence possible that the matter will proceed to hearing and, in that event, that witnesses will be called by the applicant including witnesses from Darwin, Melbourne and in one instance, New Zealand. From the point of view of the respondent the witnesses are likely to come from Adelaide. 6 At present it is not possible to assess with any degree of confidence which of those witnesses are more likely to give evidence, or to give evidence which is likely to be contested. That is because I have been told very little about what their proposed evidence will be, or the extent to which it is likely to be contested. I am not critical of that fact because, as counsel for the respondents acknowledged, an application for transfer should be brought without delay. I accept that this application has been brought within an appropriate time frame. However, it leaves me in the position where I do not have a firm view, having regard to the nature of the allegations and the respective balance of convenience of the potential witnesses or the costs of them giving evidence in one place or another, that the proceedings would be better conducted in Darwin or in Adelaide.

7 I have also taken into account that the Court need not hear all evidence in Darwin and may hear evidence by video-link from Darwin to Adelaide. How that might occur is a matter which can be best addressed when the issues become clearer and the nature of the disputed evidence, if there is any, emerges more specifically. I have in mind O 30 r 6(2) which permits the Court to hear some evidence in Darwin and some evidence in Adelaide and, of course, as both counsel acknowledged, the Court can hear evidence by video-link to cause minimal inconvenience to witnesses. It is only in the case of a witness whose credit was substantially in issue that it may be desirable for that evidence to be given in person and then, as I have said, that evidence might be taken in one or other of those two places. I do not, therefore, regard that factor as of much significance in terms of providing a reason, at present, why the proper place of the proceedings should be changed. 8 Nor do I regard the residence of the parties as of particular significance. As has been pointed out, the applicant is a statutory authority of the Commonwealth and operates throughout Australia. The particular investigations were conducted, as one might have expected, in Darwin and its relevant officers are in Darwin. For reasons which do not emerge, the solicitors for the applicant conducting this proceeding are presently located in Perth. The residence of the respondents is in Adelaide. I am told, although there is no evidence of it, that they do not have a permanent base in Darwin. I do not think, given the nature of the proceedings, that that is of particular importance. There is no suggestion that the relevant documentary material of the applicant or of the respondent is so voluminous that it cannot be readily handled in any place at which the proceedings are conducted. 9 As counsel for the respondents acknowledged, the convenience of the Court is also a relevant consideration but the Court is a national Court and, in this particular matter, there is no consideration, to my mind, which weighs upon either side of the scales as to the convenience of the Court in determining where the proceeding should be conducted, at least for the time being. 10 As I have noted, the solicitors for the applicant are in Perth and the solicitors for the respondent in Adelaide. In a slightly different context involving the determination of an appropriate Registry where an appeal should be heard, I made the following comments: In my view, generally speaking, little weight should be given to the fact that counsel or the solicitors for a party are in a particular location. Principally, that is because the selection of counsel and solicitors is a matter for the parties. Their choice should not be of significance to the identification of the proper place of a matter. The Court is a national Court with Registries in each State and Territory and can sit anywhere in Australia. However, to an extent, there is a tendency for parties to institute proceedings in a Registry of the Court convenient to counsel or the solicitors for the parties rather than in a Registry which has a real connection with the subject matter of the dispute, or indeed with the parties themselves or the witnesses. I do not think that the Registry where proceedings are instituted should be dictated by that consideration. Further, where that is the case, it may well be appropriate to transfer the proceeding to a proper place, having regard to the considerations discussed in Sentry and other cases: Baxendale's Vineyard Pty Limited v Geographical Indications Committee (2007) 156 FCR 444 at 449. 11 Counsel for the respondents pointed out that this case is a little different because the respondents engaged their Adelaide solicitors to respond to a request for information by the applicant prior to the conduct of proceedings, and in circumstances where those inquiries being made by the applicant were being conducted in Adelaide. I am not sure that there is evidence of that but I accept that fact. Consequently, that consideration - that is the fact that the respondents have solicitors presently based in Adelaide - is a matter to which I have regard in the particular circumstances. 12 I do not otherwise consider that any matters have been raised with me on this application which support a decision as to whether the particular place of the proceedings should be changed in the manner sought by the respondents. I do not see any other considerations which would weigh heavily in the scales one way or the other. 13 Having regard to all those matters but, in particular, the location where the cause of action arose and the public interest in the conduct which is impugned, if it is established, being established in the place where the cause of action arose, I do not think that the matters to which I have referred and which weigh, to some degree, in favour of a change of the proper place for the proceedings are sufficient to warrant the making of the order sought on the application. 14 I therefore decline to make the first order sought. As I have indicated, at a later stage in the proceeding, if appropriate, an application can be made at a directions hearing for an order as to the location in which or the manner in which particular evidence might be taken. 15 The second application concerns the question of a referral of the application to mediation. I must be satisfied that there is some potential benefit in making such an order. 16 At present, as I have been told by counsel for the parties, their positions are remote on a matter of principle. The Court has jurisdiction to make determinations and orders only if it has determined or is satisfied that a contravention of the Act has been made out. The present position of the respondents is that no contravention has been made out or will be made out, but they have (as they have indicated in open correspondence) proffered to the applicant enforceable undertakings and an undertaking to implement a compliance training program, rather than for the matter to proceed. The applicant, for its part, has indicated that it will not accept those undertakings because it wishes the conduct to be recognised by the Court, if it is established, as having contravened the Act, so that the Court may make orders itself. Those positions, as I have said, are remote from each other. 17 If that were the fixed position of the parties, I would not see any point in determining that the matter should be referred to mediation. I also have in mind, as Nicholson J recognised in ACCC v Lux Pty Ltd [2001] FCA 600 at [30], that the applicant has certain public interest functions which may make it inappropriate for it to negotiate a settlement of litigation in certain circumstances. 18 I do not see that that precludes the applicant from resolving allegations of contravention of the Act by agreement, either in terms of acknowledgement of facts or in terms of agreement as to appropriate orders or both. Indeed, that is a relatively common practice. To date, as I understand it, the parties have not engaged in that process, although I do not think that it is clear that they may not do so. They can do so privately by without prejudice communications. 19 However, I am of the view, based on what I have been told by their counsel, that there is a prospect of the respondents being prepared privately in mediation to acknowledge certain conduct which may be in contravention of the Act, so that the applicant may be satisfied as to the existence of certain contraventions on the basis of that acknowledgement, and the matter may then come forward to the Court with an agreed statement of facts, and possibly even an agreed proposed set of orders for the Court. Of course, those orders would then have to be approved by the Court under the normal principles. 20 The question seems to me to be whether it is appropriate to order mediation in those circumstances, or whether I should leave the parties to their own devices to negotiate privately. I am not satisfied that a mediation in the circumstances would be fruitless, and I propose to make an order for mediation. I will therefore refer the matter to a Registrar of the Court for mediation, such mediation to be determined within a time which I will discuss with counsel in a moment. I do not expect that period of time to be very long. I will then further discuss with counsel any further directions which may be necessary if the mediation is unsuccessful, with a view to bringing the matter on for hearing as soon as appropriate. 21 I formally order that the matter be referred to a Registrar for mediation as soon as reasonably convenient. I request the mediator to report to the Court as to the outcome of the mediation by 30 August 2007. I adjourn the directions hearing to 9.15 am on 4 September 2007, at which time, depending upon the outcome of the mediation, I will give directions as to the matter proceeding to trial. I certify that the preceding twenty-one (21) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Mansfield.

Australian Competition and Consumer Commission v Terania Pty Ltd

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