Comello Pty Ltd v Feeney

introduction 1 This proceeding was commenced in the Fast Track list by Comello Pty Ltd (ACN 073 856 023) (Comello) on 26 May 2011. Comello seeks declarations and damages for alleged breaches of the Corporations Act 2001 (Cth) (the Corporations Act) and the Fair Trading Act 1999 by William Feeney and Kylie Feeney (collectively the Respondents). In general terms, the proceeding involves alleged wrongful transfers of monies by the First Respondent from Comello into a bank account held by the Second Respondent. On 21 July 2011, the proceeding was listed for a scheduling conference. Orders were made (the 21 July Orders), relevantly, that: … 3. Pursuant to Order 72 of the Federal Court Rules, the proceeding be referred to mediation by a Registrar of the Court. The mediation shall be conducted on Tuesday 6 September 2011 in the Brisbane Registry. In the event that the matter does not settle at the conclusion of the initial mediation, the Registrar conduct a case management conference immediately following the mediation to consider the most economic and efficient means of bringing the proceedings to trial and of conducting the trial, at which conference the Registrar may give further directions. The mediator is to report the result of the mediation / case management conference to the Court by 12 September 2011. 4. By 4:00pm on 19 September 2011, the parties file and serve any affidavits or other documents upon which they intend to rely at the trial of this proceeding. 5. By 4:00pm on 26 September 2011, the parties file and serve any objections to the admissibility of any affidavit material. 6. By 4:00pm on 30 September 2011, the parties file and serve any response to the objections to the admissibility of any affidavit material. 7. By 4:00pm on 11 October 2011, the parties file and serve an outline of contentions of fact and law. 8. The notice of motion filed 18 July 2011 be adjourned sine die. 9. The proceeding be set down for trial at 9:30am on a date between 18 October 2011 and 30 November 2011 with an estimated duration of 2-3 days. … 2 Two matters about those directions should be noted. First, the parties consented to the proceeding being referred to mediation in Brisbane on 6 September 2011. The mediation was conducted by a Registrar of the Court on 6 September 2011. The proceeding did not settle. Secondly, the notice of motion referred to in paragraph 8 of the 21 July Orders was a notice of motion filed by the Respondents seeking to transfer the management and hearing of the proceeding to the Queensland Registry of the Federal Court. It is that notice of motion which is now the subject of these reasons for decision. 3 Before turning to the parties' respective submissions, it is necessary to refer to some further aspects of the procedural history. Put simply, contrary to the 21 July Orders, no party filed and served the affidavit material on which they intended to rely by 4:00pm on 19 September 2011. In addition, the dates referred to in paragraphs 5, 6 and 7 of the 21 July Orders passed without any further step being taken by Comello. 4 On 14 October 2011, the Respondents' solicitor filed a Notice of Intention to Cease to Act. A Notice of Ceasing to Act was filed on 24 October 2011. 5 On 20 October and again on 28 October, Comello filed affidavits which, on their face, they will seek to rely upon at trial. The affidavits were late. 6 On 4 November 2011, the Court convened a telephone conference to discuss the future management of the proceeding. For the purposes of that conference, Comello's solicitors filed an affidavit seeking to explain why the 21 July Orders had not been complied with and seeking to support its contention that the trial date of 28 November 2011 should not be adjourned. In general terms, Comello's solicitor stated that the delay in filing and serving the three affidavits upon which it intends to rely at the trial was "in part, caused by [his] reasonable apprehension that the Respondents would file an application seeking orders that they be granted leave to: (a) file and serve a cross claim; and (b) enjoin (sic) a number of parties to this proceeding". The second respondent, Mrs Feeney, also filed an affidavit. Her affidavit sought to explain why the Respondents had not complied with the Court Orders, why the trial should be rescheduled and, finally, proposing what Mrs Feeney described as a "realistic" timeframe to prepare the matter for trial. 7 For present purposes, it is sufficient to note that at the conclusion of the telephone conference, the following Orders were made: 1. The trial set down to commence on 28 November 2011 be vacated. 2. The proceeding be removed from the Fast Track List. 3. By 4:00pm on 11 November 2011, the Respondents file and serve any further evidence and written submissions in support of their application to transfer the proceedings to the Brisbane Registry of the Court. 4. By 4:00pm on 18 November 2011, [Comello] file and serve any further evidence and written submissions in opposition to the application to transfer the proceedings to Brisbane Registry of the Court. 5. The directions hearing be adjourned to a date after 21 November 2011. 8 These Orders must be considered in light of the following facts. Comello filed its affidavit material upon which it intends to rely at trial up to and including 28 October 2011 which was late and just one month before the scheduled trial date. That conduct was not only in breach of the 21 July Orders but contrary to Practice Note CM8 for matters filed in Fast Track. Moreover, the Respondents are now unrepresented. 9 At the hearing on 4 November 2011, the Respondents revived their application to transfer the proceeding to the Queensland Registry of the Federal Court. In support of that application, the Respondents each filed an affidavit and an outline of submissions. The facts and matters relied upon by the Respondents were described by them as follows: (a) As the Respondents are in person, with a young family, the costs of participating in the matter when it is located in the Victorian registry are prohibitively high. Costs include: (i) Actual dollar travel costs and accommodation costs for family (ii) Costs associated with child care both before and during proceedings (iii) Costs associated with having facilities available to the Respondents to participate in and prepare for the Court Process (iv) Time away from earning normal income for living costs because of the extended travel distance Having the matter at the Brisbane Registry, while still incurring costs, allows the Respondents in person to more fully participate in the proceedings both from a practical perspective and a cost perspective. … (b) The Second Respondent in person has well documented medical conditions that make participating in the matter when it is located in the Victorian registry very challenging. … Note the Second Respondents medical conditions pre-existed the Proceedings and will exist during the first half of 2012, when it is likely the matter may go to Trial. Having the matter at the Brisbane Registry allows the Second Respondent in person more equal participation in the proceedings. Additionally, it reduces the health risks imposed on the Second Respondent and puts the Second Respondent closer to her treating doctors. (c) The Respondents have small children and an infant which will require care during the Court process. The Respondents ability to provide that care, particularly for the infant, and participate in the Court Process when it is located in the Victorian registry is prohibitive and, moreover, requires the children and infant to [be] left in the care of unknown third parties. Having the matter at the Brisbane Registry would completely remove this risk due to the Respondents available family support and allow the Respondents in person to more fully participate in the proceedings. … 10 Comello opposes the transfer. It opposes the transfer on the bases that: 1. Comello chose to commence the proceeding in Victoria, a choice which was not capricious; 2. The cause of action arose in Victoria; 3. The proceeding has continued in Melbourne since proceedings were commenced. Pleadings and Affidavits have been filed in Melbourne and applications have been filed and heard in Melbourne; 4. Comello is registered in Victoria, and its sole director and legal representatives reside in Victoria; and 5. The four witnesses Comello intends to call to give evidence at the trial reside in Victoria. 11 Section 48 of the Federal Court of Australia Act 1976 (Cth) provides that the Court or a Judge may, at any stage of a proceeding in the Court, direct that the proceeding or part of it be conducted or continued at a place specified in the order, subject to conditions (if any) as the Court or Judge imposes. There is no precise formula to be applied governing transfers of venue: National Mutual Holdings Ltd v Sentry Corp (1988) 19 FCR 155 at 162. The question is not resolved by identifying the most convenient place for the hearing. The balance of convenience is relevant, but not determinative. The factors or considerations relevant to determining whether one city is more appropriate than another are varied. The Court must be satisfied that there is a "sound reason" for a positive order to change the venue selected by an applicant. As the Court explained in National Mutual Holdings Ltd v Sentry Corp (1988) 19 FCR 155 at 162: The power conferred on the Court or a judge by s 48 is in terms wholly unfettered. It should be exercised flexibly having regard to the circumstances of the particular case. It would be regrettable and unwise if the Court were to circumscribe the general power conferred by s 48 with inflexible rules or impose inelastic constraints upon its exercise. As the power may be exercised subject to conditions, the Court or a judge is in a position to mould orders under the section to take account of the many and varied circumstances that arise in particular cases. 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 of 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. A party commences a proceeding by filing an application in a particular registry of the Court. If that party or another party wishes to have the proceeding conducted or continued in another place he may apply to the Court for an order under s 48 or O 10, r 1(2)(f) or O 30, r 6 as the case may be. There is no onus of proof in the strict sense to be discharged by the party seeking to conduct or continue the proceedings elsewhere. It should be noted that the Court may exercise its powers under O 30, r 6 either on the application of a party or of its own motion. 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 some time 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 proceeding 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 most suitably bearing in mind the interests of all the parties, the ends of justice in 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 precisely. (Emphasis added.) See also CMA Corporation Ltd v McSorley [2011] FCA 747 at [4]-[10]; National Australia Bank Ltd v Commissioner of Taxation [2011] FCA 44; Mortimer v Opes Prime Stockbroking Limited (ACN 086 294 028) (Administrators Appointed) (In Liquidation) [2009] FCA 227 at [15]-[17] and Australian Competition & Consumer Commission v Pauls Ltd [2002] FCA 71 at [17]-[19]. 12 In the present case, there are "sound reasons" which warrant a positive order to change the venue to the Queensland Registry of the Federal Court. The Respondents are now unrepresented. The second respondent is pregnant and that pregnancy is not easy. Third, the Respondents have small children and, contrary to the position if the trial was in Victoria, it is possible for them to secure child care of those children in Brisbane by people known to them. Next, the Respondents' financial position appears to be limited and their ability to defend what are serious allegations pleaded against them would be further limited if the future management and conduct of the trial was conducted in Victoria. 13 For those reasons, I would transfer this proceeding to the Queensland Registry of the Federal Court and direct that the next directions hearing be held before the new docket judge on a date convenient to that judge. There will be no order as to costs. I certify that the preceding thirteen (13) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gordon.