CMA Corporation Limited v McSorley

Legislation and principles 4 The relevant principles were established in National Mutual Holdings Pty Ltd v The Sentry Corporation (1988) 19 FCR 155. There, the Full Court, having noted that the power conferred on the Court or a judge by s 48 of the Federal Court of Australia Act 1976 (Cth) is in terms wholly unfettered and that it should be exercised flexibly having regard to the circumstances of the particular case said at 162: The power conferred by s 48 recognises the national character of this Court. The factors which the Court is entitled to take into account in considering whether one city is more appropriate than another for interlocutory hearings or for the trial itself are numerous. The Court must weigh those factors in each case. Residence of parties and the witnesses, expense to parties, the place where the cause of action arose and the convenience of the Court itself are some of the factors that may be relevant in particular circumstances. The balance of convenience will generally be a relevant consideration, but not necessarily determinative of each case. … The Court must, however, be satisfied, after considering all relevant matters, that there is sound reason to direct that the proceeding be conducted or continued elsewhere. Its starting point is that the proceeding has been commenced at a particular place. Why should it be changed? On the one hand, if the party who commenced the proceeding chose that place capriciously the Court would be justified in giving no weight to the choice of place. At the other end of the scale, a proceeding may have continued for sometime at the place of commencement with many steps having been taken there, for example, filing of pleadings and affidavits, discovery and inspection. Due weight would be given by the Court to such matters before directing that the proceedings should continue at a different place. The balance of convenience is important, but its weight must vary from case to case. Ultimately the test is: where can the case be conducted or continued more 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, in our opinion, be defined more closely or capriciously. 5 More recently, in Mortimer v Opes Prime Stockbroking Limited (ACN 086 294 028) (Administrators Appointed) (In Liquidation) [2009] FCA 227 McKerracher J made a number of points, partly in reliance on National Mutual, partly with reference to the decision of French J in Lamb v Hog's Breath Co [2007] FCA 49. 6 McKerracher J said that the relevant principles arising in the case before him were, in part: • There must be sound reason to direct that the proceeding be conducted or continued elsewhere. If the party commencing the proceeding chose the place capriciously the Court would be justified in giving no weight to the choice of place. The balance of convenience is important but its weight must vary from case to case. What needs to be ascertained is where the case can be conducted or continued most suitably bearing in mind the interests of the parties, the ends of justice and determination of the issues between them, and the most efficient administration of the Court (National Mutual Holdings Pty Ltd v The Sentry Corporation (1988) 19 FCR 155 at 162). • The location of parties and witnesses, the place where the cause of action arose and the convenience of the Court are all factors (National Mutual 19 FCR 155 at 162, Wang v Australian China Marketing Co Pty Ltd [2001] FCA 13 at [21], Aquila Resources Ltd v Pasminco Ltd [2004] FCA 39 at [27]-[34] and [42]-[43]. • Typically there is no factor that is determinative but rather it is necessary to weigh all the relevant factors that might connect the proceedings to one jurisdiction or the other (Australian Competition and Consumer Commission v Fila Sport Oceania Pty Ltd [2003] FCA 430 at [19]). • The national character of the Court including its capacity to make flexible arrangements for the taking of evidence and the receipt of submissions is relevant (Australian Competition and Consumer Commission v Virgin Mobile Australia Pty Ltd [2002] FCA 1239). • The question of which District Registry should conduct the proceedings does not raise matters of high principle. Essentially it is a matter of case management and proper recognition of the legitimate interests of each of the parties reflected in the balance of convenience as between them and the convenience of the Court and any economies and efficiencies which may attach to one choice or the other (Lamb v Hog's Breath Company Pty Ltd (No 1) [2007] FCA 49). • There may be flexibility - one Registry could conduct pre-trial management while allocating the trial to a judge in another Registry (Hog's Breath at [10]). • There is no burden of proof governing the exercise of the discretion in s 48 of the Act (National Mutual 19 FCR 155 at 162). 7 I particularly emphasise the national character of the Court; its capacity to make flexible arrangements for the taking of evidence and the receipt of submissions; and that these applications do not raise matters of high principle and essentially are matters of case management and proper recognition of the legitimate interests of each of the parties. 8 I note that neither side seeks to rely on any specific advantage or disadvantage in the law which would depend on the place of the trial. 9 I also note that in Hog's Breath (above) French J referred at [10] to the geographical distribution of the witnesses and to whether part of the trial would be conducted in one centre and part in another, but that in the case before him it was too early to make a determination about that issue. 10 I also observe that communications across Australia are easier and quicker than they were in 1988 when National Mutual was decided. Parties and the Court are no longer dependent on the post or on fax machines and documents are often and quickly sent by email. Videolink is now available where appropriate. Further, documents may be filed electronically. The early cases need to be read in that context.

The pleadings 11 It is important to attempt to establish from the pleadings what issues are likely to arise. From that perspective it should be possible to judge from whom, and thus from where geographically, the bulk of the evidence might come. It is necessary to speak provisionally because the detailed shape of the case has not yet been established. 12 It seems from the pleadings that Mr McSorley was an employee of CMA Corp for approximately 3 years between 2007 and 2010 and was CMA Corp's State Manager Western Australia. Whilst employed by CMA Corp Mr McSorley performed services on behalf of and as agent of CMA Recycling. 13 The statement of defence is less than detailed as to the real issues. 14 Nevertheless, in relation to the plaintiffs sending silver recovered from waste materials in Victoria ("Victorian Silver") to its Perth site and selling it to the Perth Mint, Mr McSorley admits that he retained 3% of the sale price received for that silver, but denies that he had any obligation to account for the portion of the sale price retained to the plaintiffs. He pleads an oral agreement between himself and Mr Dale Robbins, a former manager, I understand, of part of the business of the plaintiffs. From the reply it seems that, amongst other issues, there will be an issue as to Mr Robbins' authority. The evidence of Mr Doug Rowe, a former CEO and managing director, as I understand, may also be relevant, according to particulars separately given on 16 June 2011. 15 The statement of claim also refers to material containing silver which CMA Corp or CMA Recycling bought in Western Australia and refined "WA silver". Mr McSorley admits that during the period of his employment by CMA Corp he was responsible for dealing with the Perth Mint and that he sold the WA silver to the Perth Mint and caused the Perth Mint to pay the sale price for the WA silver to himself. Importantly, he denies, paragraph 18(f) ie that he "did not remit the proceeds of the WA silver to [the plaintiffs]". Thus he denies that he converted the WA silver or held the money received by him on trust for the plaintiffs, that he has not accounted for the money so received, or that he breached the duties pleaded or that by reason of those matters the plaintiffs have suffered loss and damage. 16 For present purposes, I accept the summary at [8] of Ms Hamilton-Jewell's affidavit sworn 21 June 2011 that the real issues in dispute between the parties are: 1. in relation to the Victorian Silver, whether there was an agreement that permitted Mr McSorley to keep 3% of the proceeds of the sale as a commission; and 2. in relation to the WA Silver, whether Mr McSorley has remitted the proceeds of the WA Silver to the plaintiffs and whether Mr McSorley sold silver belonging to him or to the plaintiffs to the Perth Mint.

Submissions and consideration 17 In his written submissions the defendant relies on 23 matters in support of the application. They may be grouped by broad subject-matter as follows, taking into account, as submitted today, that one looks at these matters both individually and as to their totality: where the events occurred; the 'proper' law; the location of possible or probable witnesses, including the defendant; and that the resources of the plaintiffs, including financial resources, are greater than the defendant's. 18 In my opinion many of the 23 matters are directed to issues which, while relevant to an application such as the present, would be of greater force or weight on an issue of forum non conveniens as between competing forums, generally with different legal systems. I note that the letter of 17 May 2011 which broached the question of transfer referred to "the appropriate and convenient forum" being in Western Australia. Here, of course, a different evaluation is necessary because the Federal Court is a national court: see National Mutual at 165 where the Full Court said that in an application such as the present there is no question of this Court declining jurisdiction in ordering that the further conduct of proceedings be at one registry rather than another. 19 Further, it seems to me, at present, that in relation to many of the matters referred to it is not at all clear that they will be issues at the trial. I emphasise that this is my view on the information presently available. For example, neither side has so far established either who will be called as a witness or the nature or length of the evidence of any such person or whether it will be contentious. 20 As to the choice of law provisions on which the defendant relies, it is not clear to me that within the meaning of the relevant clause of the employment agreement the Federal Court of Australia is intended to be excluded. I doubt that the draftsman was distinguishing between State Courts and the Federal Court in Western Australia. In any event that clause, clause 22.2, refers to the parties submitting to the "non-exclusive jurisdiction" of the courts of that State. 21 It is relevant, and I give it weight, that the defendant is an individual who resides in Western Australia. 22 I also accept that it may be that most of the witnesses who may be called on behalf of the defendant are situated in Western Australia. It is not clear which side will call Mr Robbins or Mr Rowe. It may be the defendant. Both of those people are apparently resident in Victoria. However I am not convinced that the eight named, and the several unnamed, persons will be called as witnesses or that, if they are, they will need to give oral evidence or that that evidence could not be given by videolink. 23 I reject the submission on behalf of the defendant that the issue of the proceedings from the New South Wales District Registry was capricious or "borders on capriciousness": as to the meaning of "capricious" in this context see Green v Atlantic International Entertainment Australia Pty Ltd [1998] FCA 1278 at [10] per Weinberg J. Further, in my view, there is no basis for the defendant's bare allegation that the proceedings were "issued to maximise financial harm and make matters as difficult as possible for the defendant" or that there was an unfair advantage sought to be taken over an individual litigant. No particular harm or difficulty is identified. I reject that allegation. 24 The submission is made that the defendant's legal representative is a sole practitioner employing two paralegals. However, at this stage of the proceedings, no practical difficulty in terms of discovery or filing documents is alleged or made out stemming from their location in Western Australia. At present I place no weight on the location of either the plaintiffs' legal representatives, in Sydney, nor on the location of the present or intended legal representatives of the defendant, in Western Australia. 25 As to the matters referred to by the plaintiffs in Ms Hamilton-Jewell's affidavit, first, it is said that CMA Corp's registered office and principal place of business is in Sydney. It is said that CMA Corp's Chief Financial Officer since May 2008 is based in Sydney. As to CMA Recycling, it is a wholly owned subsidiary of CMA Corp and has its registered office in Sydney. Its principal place of business is Queensland. The directors of CMA Recycling are based in Sydney. 26 Ms Hamilton-Jewell deposes that CMA's centralised accounting software and system records may be accessible only on a restricted basis to those personnel who are not based in Greenwood, Victoria. CMA Corp's centralised accounting software and system records are accessible by the finance team which is based in Sydney. The implication is that some of the plaintiff's electronic records are not unconditionally or directly available to the plaintiffs' personnel in Western Australia. In my view, very little turns on where the plaintiff's electronic records are, or from where they can be accessed. 27 As I have indicated, no evidence beyond formal material has yet been filed in the substantive proceedings. The plaintiffs indicate that as presently advised, they expect that witnesses for the plaintiff will be required from either New South Wales or Victoria and to some extent from Perth. In terms of numbers, it seems likely that the majority of the plaintiffs' potential witnesses may be from places other than Perth or Western Australia. 28 I place no weight on the circumstance that paragraphs 11-17 of the statement of claim refer to transactions which had their origin in waste materials in Victoria. Likewise I place no weight on the submission on behalf of Mr McSorley that the WA Silver was bought from companies in Western Australia and the facilities extracting the WA Silver were situated in Perth. As indicated above, from Ms Hamilton-Jewell's affidavit Mr Robbins and Mr Rowe appear to reside in Victoria. 29 I do take into account that the defendant has from an early point agitated for a transfer of the proceedings to the Western Australia District Registry.

Conclusion 30 The matter of greatest moment in the present application in the exercise of the unfettered power to which the Full Court in National Mutual referred is the geographical distribution of the witnesses and the expense to the parties. However, in my view, it is too early to say, in light of the limited issues raised on the pleadings, where the number or bulk of the witnesses who will be called to give oral evidence are located, more particularly to what extent that evidence will be controversial, and even more particularly whether and to what extent the credit of any of the witnesses will be involved. I say this because in terms of formal or non-contentious evidence, hearing that evidence by videolink, may well be practicable if desired. 31 It is premature to go further at present into the advantages and disadvantages of taking important evidence by videolink. Perram J recently referred to these matters in Blackrock Asset Management Australia Services Limited v Waked (No 2) [2011] FCA 479 at [41]. 32 The Court has the power and capacity to sit in different places and in the course of hearing the matter. I do not rule out the possibility that some part of the evidence may more efficiently be heard in Perth or perhaps in Melbourne. The comparative resources of the parties will then be a relevant factor in considering any such application.

Orders 33 For these reasons I dismiss the application. I am not satisfied, after considering all relevant matters, that there is sound reason to direct that the proceeding be conducted or continued elsewhere. I order that the defendant pay the plaintiffs' costs of the motion. I certify that the preceding thirty-three (33) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Robertson.