Burdekin Pacific Limited v Communitee Pty Limited

REASONS FOR JUDGMENT 1 A notice of motion is brought on behalf of the respondents moving the Court for an order that pursuant to s 48 of the Federal Court of Australia Act 1976 (Cth) the conduct of the matter be transferred from the Western Australia District Registry to the New South Wales District Registry. That power resides in s 48 and may be exercised subject to such conditions, if any, as the Court or Judge imposes. 2 The application is one brought under ss 52, 80, 82 and 87 of the Trade Practices Act 1974 (Cth). The claim by the applicant is for an order pursuant to s 82, or alternatively, s 86 of the Fair Trading Act 1987 (NSW), that the respondents pay the applicant damages in the amount of the loss or damage suffered by the applicant as a result of the respondents' conduct referred to in certain paragraphs in the statement of claim. Alternatively, an order is sought pursuant to s 87(1A) of the Trade Practices Act, and other sections, seeking various declarations in relation to a deed executed on or about 21 December 2001 and entered into by the applicant, the first respondent and the second respondent and others and seeking a declaration that the deed is void as between the applicant and the respondents. Other matters are sought in the application, including injunctive relief pursuant to s 80 of the Trade Practices Act. 3 The statement of claim maintains in par 6 that in the course of negotiations in which the applicant engaged between June 2001 and December 2001 with the respondents to purchase all the shares of a company known as Emax, the respondents represented to the applicant that the books of account and other trading and financial records of Emax which the respondents provided to the applicant disclosed a true and fair view of the state of affairs, financial position, assets and liabilities, income expenses and results of Emax. 4 It is further pleaded in par 18 of the statement of claim that it was an express term of the deed that the respondents jointly and severally represented and warranted to the applicant that the financial records of Emax, including without limitation what are described as the September accounts, disclosed the true and fair view and, as par 19 states, were consistent with generally accepted accounting principles under Australian accounting standards. 5 Further, in par 20 it is alleged that it was an express term of the deed that the respondents jointly and severally represented and warranted to the applicant there had been no occurrence adversely affecting the value of the Emax shares and the financial position of it. It is claimed in the statement of claim that the representations in relation to these matters were false in that the financial records were not consistent with generally accepted accounting principles and so on. The claim therefore is one for misleading and deceptive conduct arising in those circumstances. 6 The statement of claim also pleads, and it is not in dispute, that on 10 September 2002 Emax was placed into voluntary administration in accordance with the provisions of the Corporations Act 2001 (Cth) and on 29 October 2002 became subject to a deed of company arrangement in accordance with the provisions of the Corporations Act. 7 It is common ground that in considering an application pursuant to s 48 this Court is bound to apply that test which was enunciated by the Full Court in National Mutual Holdings Pty Ltd v The Sentry Corporation (1988) 19 FCR 155 at 162, namely: '… where can a case be conducted or continued most suitably bearing in mind the interests of all the parties, the ends of justice and the determination of the issues between them, and the most efficient administration of the Court. It cannot and should not … be defined more closely or precisely than that.' 8 For the respondents the following factors are put forward as favouring the balance being in favour of the transfer. Firstly, there is the fact that the deed to which I have referred is subject, as cl 16.1 discloses, to the governing law of New South Wales. Secondly, the company Emax was incorporated in New South Wales and conducted its business there. Thirdly, as a consequence it is said that in order to answer the allegations to which I have referred, there will necessarily be a number of witnesses who are residents of New South Wales who will be required to give evidence. The number of witnesses is not yet quantified but that statement is made in terms of the need for the respondents to defend and answer the range of allegations made. Next, reference is made to the fact that, as correspondence relating to prior negotiations discloses, the New South Wales solicitors for the respondents have had prior contact with this matter and it is asked that the Court therefore infer familiarity and capacity to carry further the matter which is enhanced by that prior contact and which is a factor favouring the location of the matter being in New South Wales. Finally, the case for the respondents is that the second respondent, as evidence discloses, is unemployed and of limited means. 9 In the course of submissions it was said for the respondents that there were factors in the case for the applicants which appeared from advance written submissions which should not be taken into account by the Court because they were factors which had been created by the applicant in knowledge of this present notice of motion. The first of those factors was the appointment of an expert witness with Perth-based credentials and, secondly, the appointment of administrators and the choice of them as Perth‑based persons. 10 In my view that submission is ill founded because I consider, on the face of it, it runs counter to the test that the Full Court has imposed and laid down. That test requires this Court to look at where the case can be conducted or continued most suitably bearing in mind the interests of all parties and the ends of justice. The Court therefore must make that assessment in the light of all the facts which presently exist. The question is that if the case is going to be conducted, it is a reality for the conduct of that case that there is an expert witness with Perth locations and administrators with Perth locations. Therefore, I do not accept the submission that those two factors in the applicant's case should not receive weight in the balance. 11 Significantly, there is evidence before the Court in par 14 of the affidavit of Susan Jane Field that she has arranged for most of the Emax records to be delivered to the applicant's principal place of business in Perth. She also states that the balance of the Emax records or copies thereof remains in the possession of the administrators in Perth. There is, therefore, to be weighed importantly, that the location of the documents likely to bear significance in relation to the pleadings is in Perth. That does not blind me to the fact that witnesses to the course of the business dealings of Emax may still have to be drawn from New South Wales but it is a significant factor nevertheless. 12 I accept the submission made for the applicant that there is indeed a difference between a pre-trial aspect and a trial aspect. I consider that on the factors that have been produced, the pre-trial aspects could be conducted or continued in Perth without any difficulty. This is so given in particular the availability of a video‑link system widely used in this Court, which would, without cost to the respondents, enable them to be regularly connected to the Court and the Judge and to address whatever issues arise at the pre‑trial stage. 13 As to the trial stage, it may be that when witnesses are identified, many witnesses needed to attest in relation to the business conduct of Emax will be seen as likely to come from New South Wales than is perhaps presently the case. That would not then preclude the Court from either conducting a sitting in New South Wales for the purpose of taking that evidence or doing so by video-link or reconsidering whether a transfer was necessary in the light of the facts as they had then fallen out. 14 However, as matters stand at the moment, I am not satisfied that the case cannot be conducted or continued most suitably in Perth, utilising all the mechanisms of the Court to ensure that all the interests of all the parties are met and the ends of justice served. There is a considerable number of factors in terms of the number of witnesses located in Perth, the documentary evidence being located in Perth, and the location of the administrators in Perth, which weigh in favour of not disturbing the invoked location. 15 Therefore, being satisfied that there would be no unjustified difficulties to the respondent to continue the proceedings in Perth, I do not consider that a case has been made out for the invocation of s 48. I therefore refuse the motion. I add that the Court is open to the adoption of any techniques which ease the difficulties of communication between the respondents and this registry. 16 Counsel for the respondents suggested that the motion, rather than being refused, should be held over so that the respondents can seek an order for transfer of proceedings if the circumstances which may necessitate such course of action arise at a later date. I do not regard it as consistent with my reasons to hold the motion over. So far as the reasons may have signalled the possibility of future actions, it was not on the basis of any present expectation but only as a range of choices if the facts change in the future and it is thought desirable to bring them back to the court. I therefore accept that the motion should be dismissed and that the order should be the respondents pay the applicant's costs of the motion. I certify that the preceding sixteen (16) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice RD Nicholson.