Donaldson v Worrells

1. The whole of the proceedings be transferred to the Supreme Court of Western Australia pursuant to s 5(4)(b)(iii) of the Jurisdiction of Courts (Cross-vesting) Act 1987 (Cth).
2. The applicant pay the costs of Suffolk Investments Pty Ltd (in liquidation) of and incidental to the interlocutory application filed on 20 December 2018, such costs to be taxed in default of agreement.
3. There be no order as to costs against the first respondent. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

DAVIES J: 1 On 26 November 2018 Mr Donaldson filed two originating processes in the Victorian Registry of this Court in which he seeks orders pursuant to r 7.22 and r 7.23 of the Federal Court Rules 2011 (Cth) for discovery by the respondents of various categories of documents concerned with the estate of John Wayne Donaldson, Mr Donaldson's late father, and Suffolk Investments Pty Ltd (in liquidation) (Suffolk Investments). The first respondent has applied pursuant to s 5(4)(b)(iii) of the Jurisdiction of Courts (Cross-vesting) Act 1987 (Cth) (Cross-vesting Act) for an order that both proceedings be transferred to the Supreme Court of Western Australia. Section 5(4) of the Cross-vesting Act provides that: (4) Where: (a) a proceeding (in this subsection referred to as the relevant proceeding) is pending in the Federal Court or the Family Court (in this subsection referred to as the first court); and (b) it appears to the first court that: (i) the relevant proceeding arises out of, or is related to, another proceeding pending in the Supreme Court of a State or Territory and it is more appropriate that the relevant proceeding be determined by that Supreme Court; (ii) having regard to: (A) whether, in the opinion of the first court, the relevant proceeding or a substantial part of it would have been incapable of being instituted in that court, apart from this Act and any law of the Australian Capital Territory or the Northern Territory relating to cross-vesting of jurisdiction; and (B) whether, in the opinion of the first court, the relevant proceeding or a substantial part of it would have been capable of being instituted in the Supreme Court of a State or Territory, apart from this Act and any law of a State or Territory relating to cross-vesting of jurisdiction; and (C) the extent to which, in the opinion of the first court, the matters for determination in the relevant proceeding are matters arising under or involving questions as to the application, interpretation or validity of a law of the State or Territory referred to in sub-subparagraph (B) and not within the jurisdiction of the first court apart from this Act and any law of the Australian Capital Territory or the Northern Territory relating to cross-vesting of jurisdiction; and (D) the interests of justice; it is more appropriate that the relevant proceeding be determined by that Supreme Court; or (iii) it is otherwise in the interests of justice that the relevant proceeding be determined by the Supreme Court of a State or Territory; the first court shall transfer the relevant proceeding to that Supreme Court. 2 The relevant principles to apply in an application under s 5(4)(b)(iii) were considered by the High Court in BHP Billiton Ltd v Schultz (2004) 221 CLR 400; [2004] HCA 61 (Schultz). That case is authority that there is a statutory requirement to exercise the power of transfer whenever it appears that it is in the interests of justice that it should be exercised and that the test of "the interests of justice" is met once it is determined that one court is more appropriate than another, taking all relevant considerations into account. If one court is shown to be more appropriate than the other then the proceeding must be transferred to the more appropriate court. The Court has no discretion over whether the proceeding should be transferred: see Schultz at [63], [222]. 3 Mr Donaldson submitted that the Court should not transfer the proceedings because it is within the jurisdiction of this Court to determine the issues raised by these proceedings. It is a relevant consideration that this Court does have jurisdiction to determine the issues raised by these proceedings, but the fact that these proceedings are within the jurisdiction of the Court to determine is not determinative against an order for transfer under s 5(4)(b)(iii) of the Cross-vesting Act being made. As the plurality explained in Schultz at [14]: In the context of the Cross-vesting Act, one is not concerned with the problem of a court, with a prima facie duty to exercise a jurisdiction that has been regularly invoked, asking whether it is justified in refusing to perform that duty. Rather, the court is required by statute to ensure that cases are heard in the forum dictated by the interests of justice. An application for transfer under s 5 of the Cross-vesting Act is brought upon the hypothesis that the jurisdiction of the court to which the application is made has been regularly invoked. If it appears to that court that it is in the interests of justice that the proceedings be determined by another designated court, then the first court "shall transfer" the proceedings to that other court. There is a statutory requirement to exercise the power of transfer whenever it appears that it is in the interests of justice that it should be exercised. It is not necessary that it should appear that the first court is a "clearly inappropriate" forum. It is both necessary and sufficient that, in the interests of justice, the second court is more appropriate. Thus, a proceeding must be transferred to another court if it appears that it is the more appropriate court, notwithstanding that the jurisdiction of the transferor court has been regularly invoked. 4 I have concluded that the Supreme Court of Western Australia is the more appropriate court to determine these proceedings. 5 First, these proceedings have no connection at all with Victoria. All of the parties to the proceedings, including the applicant, are resident in Western Australia. Suffolk Investments, whose books and records are sought by the applicant by way of pre-action discovery, was registered in Western Australia and had its registered office and principal place of business in Western Australia. All of its directors are listed as having addresses in Western Australia and its only real property is land located in Western Australia. Further, the company is now in liquidation and the liquidator is also based in Western Australia. Nor does it appear that Mr Donaldson's late father had any connection with Victoria. Mr Donaldson did not point to any factor connecting the proceedings to Victoria, nor dispute that there were no factors connecting these proceedings to Victoria. Indeed, Mr Donaldson deposed that he may seek to have the proceedings transferred to Western Australia himself once the discovery orders are made. 6 Secondly, it is relevant that Mr Donaldson has previously made applications for pre-action discovery in the Supreme Court of Western Australia which are materially similar to these proceedings. The Court was referred to published decisions of the Supreme Court of Western Australia in Donaldson v Suffolk Investments Pty Ltd (No 2) [2015] WASC 262 and Donaldson v Suffolk Investments Pty Ltd [2015] WASC 481. In the first case, Beech J heard an application by Mr Donaldson for pre-action discovery. The defendant to that proceeding was Suffolk Investments. It appears from the judgment that the proceeding was materially identical to these proceedings in respect of the categories of documents sought, save as to the year. That application was dismissed by Beech J. A fresh proceeding was then commenced by Mr Donaldson which was also dismissed, this time by Chaney J, on the basis that it was not open to Mr Donaldson to bring what was, in substance, the same application and therefore the proceeding should be dismissed on the basis that it constituted an abuse of process. 7 In a case management proceeding in December 2018, Mr Donaldson informed this Court that he had "deliberately taken [his] matters out of the wild west because it operates outside of the rules of law". At the hearing of the transfer application Mr Donaldson used similarly colourful language to explain why he filed these new proceedings in this Court. The first respondent's counsel relied on what Mr Donaldson told this Court to put the submission that Mr Donaldson was engaging in "blatant forum shopping" by commencing the new proceedings in this Court, a claim that Mr Donaldson vehemently denied. However, it was not submitted that this Court lacked jurisdiction to determine these proceedings and merely describing the filing of these proceedings as "blatant forum shopping" does not particularly advance the question for determination under s 5(4)(b)(iii) of the Cross-vesting Act, having regard to the concurrent federal jurisdictions of this Court and the Supreme Court of Western Australia in respect of the matters that Mr Donaldson seeks to litigate. There should be some allowance given to Mr Donaldson, who is self-represented, for the way in which he expressed himself but his explanation for commencing proceedings in the Victorian Registry of this Court, nonetheless, did underscore that his choice of forum had nothing to do with the proceedings having any connection with Victoria. The question is whether, having regard to the interests of justice, it is more appropriate for the proceedings to be determined by the Supreme Court of Western Australia. 8 Given the complete lack of connection with Victoria, and that there have been earlier related proceedings in the Supreme Court of Western Australia dealing with materially similar applications by Mr Donaldson, the Supreme Court of Western Australia appears to me to be the more appropriate forum in which to bring these proceedings. The fact that he has been unsuccessful in his previous applications before the Supreme Court of Western Australia is not a reason to conclude that this Court is the more appropriate forum. In the circumstances, the interests of justice require the transfer of these proceedings to the Supreme Court of Western Australia. 9 If successful on the transfer application, the first respondent sought the following orders in each proceeding in relation to costs: 1. The applicant pay the costs of Suffolk Investments (in liquidation) of this proceeding. 2. The costs of Suffolk Investments (in liquidation) be paid on an indemnity basis. 3. There be no order as to the costs of the first respondent. 10 The general rule is that the successful party is entitled to an award of costs in its favour and there should be a costs order against Mr Donaldson. I also accept that the costs order should be in favour of Suffolk Investments, not the first respondent, albeit the application for transfer was filed by the first respondent. As the pre-action discovery sought by Mr Donaldson is of the books and records of Suffolk Investments, it is the company which is the proper respondent to the proceedings, not Worrells being the firm in which Mr Kitay, the liquidator of Suffolk Investments, practices. There is some uncertainty as to whether Suffolk Investments has been made a respondent to the proceedings but the Court does have the power under s 43 of the Federal Court of Australia Act 1976 (Cth) to order costs in favour of a non-party: O'Keefe v Hayes Knight GTO Pty Ltd [2005] FCA 1559. In the circumstances, it is appropriate that the order for costs be made in favour of the company, rather than the first respondent. 11 The question is whether those costs should be paid on an indemnity basis. Three reasons were advanced in support of that submission. 12 First, it was submitted, Mr Donaldson's choice of forum was entirely without merit and has resulted in considerable additional expense. It was submitted that because the proceeding was commenced in a jurisdiction that has no connection with the subject matter of the dispute, the first respondent was forced to engage Victorian lawyers to defend the proceedings and bring the transfer application, thus resulting in unnecessary costs being incurred, above and beyond those that would ordinarily be incurred, had these proceedings been instituted, as it was submitted they should have been, in Western Australia. 13 Secondly, it was submitted, Mr Donaldson brought these proceedings in Victoria for the improper purpose of subverting the courts of Western Australia. It was submitted that this was not the ordinary case of forum shopping where a plaintiff chooses the less appropriate of two forums because doing so increases the prospects of success, but that here Mr Donaldson has "egregiously attempted to game the system to the detriment not only of the first respondent but also of the integrity of the Australian legal system". 14 Thirdly, the Court was provided with an email in which, it was said, Mr Donaldson made a number of accusations and threats that were not only unjustified but appeared to be intended to intimidate the first respondent and/or its lawyers. It was submitted that his conduct in sending that email justified an award of indemnity costs. 15 The principles for awarding indemnity costs are well settled. They were recently summarised in Melbourne City Investments Pty Ltd v Treasury Wine Estates Ltd (No 2) [2017] FCAFC 116 at [5]: In broad terms an order for indemnity costs requires that some special or unusual feature arises: Cirillo v Consolidated Press Property Ltd (formerly known as Citicorp Australia Ltd) (No 2) [2007] FCA 179 at [3] (Finn J). Indemnity costs are not punitive but are designed for "compensating a party fully for costs incurred, as a normal costs order could not be expected to do, when the Court takes the view that it was unreasonable for the party against whom the order is made to have subjected the innocent party to the expenditure of costs": Hamod v New South Wales (2002) 188 ALR 659 at 665 (Gray J, with whom Carr and Goldberg JJ agreed). Such circumstances may include where allegations are made "which ought never to have been made", where the case is "unduly prolonged by groundless contentions" (Ragata Developments Pty Ltd v Westpac Banking Corporation [1993] FCA 115 at [15], [17] (Davies J)), and where "the applicant, properly advised, should have known that he had no chance of success" (Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397 at 401 (Woodward J)) or "persists in what should on proper consideration be seen to be a hopeless case" (J-Corp Pty Ltd v Australian Builders Labourers Federated Union of Workers (WA Branch) (No 2) (1993) 46 IR 301 at 303 (French J)). The cases illustrate the appropriateness of awarding costs on an indemnity basis where there has been some misconduct by a litigant in the conduct of proceedings but indemnity costs are not designed to punish a party. Rather an award of indemnity costs serves the purpose of compensating a party fully for costs incurred, as a normal costs order could not be expected to do, where the court takes the view that it was unreasonable for the party against whom the order is made to have subjected the innocent party to the expenditure for costs: Hamod v New South Wales (2002) 188 ALR 659; [2002] FCA 424 at [20]. 16 In considering whether to award indemnity costs it is relevant to take into account that Mr Donaldson is self-represented. In Shaw v MAB Corporation Pty Ltd (No 2) [2014] FCA 227 Mortimer J observed at [10]: Both the pursuit of a claim without any reasonable justification, and the pursuit of a claim in a manner that cannot reasonably be justified, are common themes in the authorities. The confidence with which Courts may reach these conclusions is likely to be affected by consideration of what can be expected from the legal representatives of an unsuccessful party. The matters to which the authorities refer contain norms of behaviour in litigation which can be expected from parties who are legally advised and represented. They may also proceed on unstated assumptions about norms which operate in terms of advice passing between lawyers and clients concerning the prospects of success of particular litigation, or the manner in which litigation should be conducted. This may, in part, explain the general reluctance of courts to make orders for indemnity costs against litigants in person, although, in an appropriate case, they will make such an order: see the observations of Kenny J in Wu v Avin Operations Pty Ltd (No 2) [2006] FCA 792 at [45]. Her Honour also observed at [11] that it cannot be said that self-represented litigants are immune from indemnity costs orders. However, it should be recognised that the considerations affecting the exercise of the costs discretion may be different, or differently weighted, where a litigant is self-represented. 17 I take into account that costs may have been unnecessarily incurred by Suffolk Investments (as the proper respondent) because of the institution of the proceedings in this Court. However I am not persuaded to make an indemnity costs order in the present case. Whilst it appears that Mr Donaldson commenced his new proceedings in Victoria because of a perceived lack of justice in the Supreme Court of Western Australia, it cannot necessarily be expected that Mr Donaldson, as a self-represented litigant, ought to have known that the lack of connection with Victoria was a consideration to be taken into account in choosing the forum in which to file. I also accept that he genuinely considers that he had a legitimate basis for instituting proceedings in Victoria, albeit he used infelicitous and disrespectful language in submitting why the proceedings should not be transferred. In the circumstances, I am not persuaded that indemnity costs should be awarded. 18 I should say something separately about the email shown to the Court which was, in my view, threatening and designed to intimidate. Even making allowances for the position of Mr Donaldson as a litigant in person, the circumstance that he is a litigant in person does not entitle him to threaten, or be abusive to, or to engage in conduct designed to intimidate or harass the other parties or their lawyers to the litigation. Whilst I am not disposed to make an award of indemnity costs against him on the transfer application, it is important for Mr Donaldson to understand that such conduct, if continued, may be a consideration attracting the sanction of an indemnity costs order in the future. I certify that the preceding eighteen (18) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Davies.