Duncan v AAI Limited, in the matter of Quinnco Pty Ltd

Relevant Principles 5 Section 48(1) of the Act is in the following terms: The Court or a Judge may, at any stage of a proceeding in the Court, direct that the proceeding or a part of the proceeding be conducted or continued at a place specified in the order, subject to such conditions (if any) as the Court or Judge imposes. 6 Rule 2.02 of the Rules allows a party to apply at the proper place for an order that the proceedings be transferred to another place. The term "proper place" is defined in Schedule 1 to the Rules as the place where the proceeding is started (which in this case is South Australia) or, if the proceeding is transferred to another place, the other place from the date of transfer. 7 The relevant principles concerning the transfer of a proceeding are well known. The seminal case is National Mutual Holdings Pty Ltd and Others v The Sentry Corporation and Another (1988) 19 FCR 155 in which the Full Court said (at 162): 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. 8 With respect, Justice McKerracher provided a convenient summary of the relevant principles in Mortimer v Opes Prime Stockbroking Ltd (ACN 086 294 028) (Administrators Appointed) (In Liq) [2009] FCA 227. His Honour said (at [15]-[16]): [15] The appropriate principles arising in this motion are not controversial. The relevant principles presently arising, in my view are these: • 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). • The existence of related proceedings which may be case managed jointly may be important (Wyllie Group Pty Ltd [2000] FCA 1382 at [14]-[19]). [16] Factors which may be relevant for consideration include: • the residence of the parties, the residence of the witnesses, the expense and prejudice likely to the respective parties, the likelihood of delay being a significant consideration, whether there is, in respect of the competing suggestions as to venue, any possibility of an interference with a fair trial of the hearing, the balance of convenience in regard to all considerations (Jacobs v Claudius Enterprises Pty Ltd [1985] ATPR 40-511). 9 One further proposition relevant in the circumstances of this case is that ordinarily an application to transfer a proceeding should be made at an early stage in the proceeding. In Harcourts WA Pty Ltd v Roy Weston Nominees Pty Ltd [2012] FCA 1383 I addressed a submission that it was too early to determine if the proceedings should be transferred because discovery and possibly witness statements might reveal that there were only limited disputes of fact. At [24] I said: … no doubt there are cases where it is too early in the proceeding to determine whether it should be transferred (see, for example, Lamb v Hog's Breath Company Pty Ltd (No 1) [2007] FCA 49). However, ordinarily an application for transfer should be made at an early stage in order to obtain the advantages of an early decision as to the Registry where the proceeding is to be heard and determined. Those advantages include one Judge dealing with the matter as far as possible and the parties being able to make arrangements (financial, personal and other) connected with the place of the proceeding…

The stage of the proceeding 10 The respondent submits that it is relevant that this application has been made in a timely fashion. The applicants filed an amended statement of claim on 18 April 2016 and the respondent filed an amended defence on 11 May 2016. This interlocutory application was issued on 23 May 2016. By contrast, the applicants submit that it would be premature to determine this application and that it should not be addressed until after witness statements have been filed. The applicants submit that there is a "manifest uncertainty" as to the precise evidence to be called at trial and that the place of trial should be reconsidered at a later date. It was submitted that there would be no prejudice to the respondent if that is how the matter proceeded. In making such a submission, counsel for the applicants highlighted the fact that this Court is a national court which permits flexibility and could allow for the transfer to another registry at or around the time of trial or allow for part of the trial to be heard in Queensland and part in South Australia. 11 I do not think that this is a case in which the application should be postponed. To do so would be to forgo some of the advantages of an early assessment of the proper place of the proceeding. The issues are relatively clear and a reasonable assessment of likely witnesses can be made.

Location of witnesses 12 Counsel for the respondent identified the witnesses it intends to call at trial based on the issues in dispute. The respondent's solicitor also deposed that these persons (and others) were likely to be required to give evidence. The potential witnesses identified by the respondent included: (1) Mr Michael Ballinger of Crawford & Company (Australia) Pty Ltd who was involved in the preparation of Crawford & Co's report referred to in the applicants' amended statement of claim; (2) Mr David Cook, a former employee of the respondent; (3) Mr Joseph Clune of Taylor Byrne Pty Ltd, who provided a valuation report of the property dated 27 September 2011; (4) Mr Craig Mason of Mason's Assessment Services Pty Ltd, who was appointed by the respondent to investigate the circumstances surrounding the applicants' claim; (5) Two members of the Queensland Police Service whom it is said will give evidence as to instances of trespass and vandalism at the property during the period when damage to the property was allegedly sustained; (6) Mr Stephan Juhasz of Safeline Security Service, who performed security services at the property. It is said by the respondent that he will give evidence as to instances of trespass and vandalism at the property as well as the level of security at the property; (7) Mr Brett Ahern, formerly of Angas Securities Pty Ltd, the entity which appointed receivers and managers to Quinnco; (8) Mr Peter Geyer of Park Avenue Asset Management, who it is intended will give evidence on the extent of the damage at the property; and (9) Mr John Quinn, the former sole director and secretary of Quinnco. 13 All of the witnesses listed above currently reside in Queensland (with the exception of Mr Cook who resides in New South Wales). 14 The respondent also submits that expert evidence from a quantity surveyor is likely to be required. It is submitted that it is imperative that the expert is from Queensland because local knowledge of the costs of rectification and the value of the property is required. 15 A solicitor for the applicants also deposed to a number of potential witnesses that they presently intend to call to give evidence. Those witnesses reside in South Australia and include: (1) Mr Stephen Duncan, one of the applicants and receiver and manager of Quinnco; (2) Mr Dominic Cantone, a former employee of the applicants; (3) Mr Andrew Luckhurst-Smith, a director of Angas Securities Pty Ltd; (4) Mr Mathew Thomson, a former employee of Willis, the applicants' insurance broker; and (5) Mr Tom Hancock, an employee of Willis. 16 The respondent says it is also likely that the applicants will call two other witnesses. Mr Mark Mammarella of Donald Cant Watts Corke Pty Ltd and Mr Russ Nicholas of LMI Group Pty Ltd. Both Mr Mammarella and Mr Nicholas provided reports referred to in the applicants' amended statement of claim and both reside in Queensland.

The location of the property 17 The property is in Queensland. The respondent submits that given its defence (that the property was not properly secured and reasonable precautions were not taken to prevent damage and loss) the Court may benefit from a view of the property. It submitted that a view may be helpful in circumstances where the property is very large and where the alleged theft was somewhat elaborate (apparently a crane was used to access the property). These circumstances might be relevant in determining what reasonable steps were or should have been taken to secure the property. The applicants submit that a view would have limited utility and is unlikely to be required because the dispute relates to the historic state of the property, which has since been sold to an unrelated party. All I can say at this stage is that this is one of those relatively rare civil cases where the Court may benefit from a view of the property.

The location of the parties 18 The applicants reside in South Australia. 19 The respondent has its registered office in Queensland and the claim is being conducted out of one of its offices in Queensland. 20 The respondent submits that Quinnco is a company registered in Queensland and that the "natural connection between this proceeding and the dispute is Queensland". That is but one aspect of the matter. The applicants submit that certain books and records of Quinnco are located in South Australia. Again, I do not think that this is a particularly weighty matter (Wepar Nominees Pty Ltd v Schofield [2013] FCA 920 at [42]).

Where the proceeding was commenced 21 The applicants submit that there is no suggestion that their decision to commence this proceeding in the South Australia District Registry was made capriciously. 22 The applicants also referred to clause 18 of the Policies which is as follows: 18. PROPER LAW This Insurance shall be governed by Australian Law. Each party to the Contract agrees to submit to the jurisdiction of any court or competent jurisdiction within Australia and to comply with the requirements necessary to give such court jurisdiction. All matters arising hereunder shall be determined in accordance with the law and the practices of such court. 23 Counsel for the applicants acknowledged that this Court is a court of national jurisdiction and questions of cross-vesting are not relevant, but submit the clause is an example of the insurer recognising that its insured may take proceedings in the locale of the insured. I do not think that the clause is of any particular significance.

Conclusion 24 The applicants' choice of venue was not capricious. However, having regard to the circumstances of this case, I think that the proceeding should be transferred. The majority of the relevant events took place in Queensland. Furthermore, this is a case where the location of the property is of some significance, having regard to the possible need for the experts to inspect the property and the possibility of the Court taking a view of the property. Finally, the location of witnesses is an important matter. I am satisfied that, as to those factual matters most likely to be the subject of serious dispute, the bulk of the witnesses relevant to those matters are in Queensland. 25 I will make an order pursuant to s 48 of the Federal Court of Australia Act 1976 (Cth) transferring this proceeding to the Queensland District Registry of this Court. I will hear the parties as to any other orders. I certify that the preceding twenty-five (25) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Besanko.