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Practice and procedure - Cross­vesting - Transfer of proceedings to Victoria - Related proceedings in Victoria - Where the balance of convenience lies at a case management stage

Jurisdiction of Courts (Cross­Vesting) Act 1987 (NSW), s 5(2)(b)(iii)

Jurisdiction of Courts (Cross­Vesting) Act 1987 (WA), s 5(2)

(This judgment was delivered extemporaneously on 12 August 2008 and has been edited from the transcript.)

1 The defendants in these proceedings apply for an order transferring these proceedings to the Supreme Court of Victoria pursuant to s 5 of the Jurisdiction of Courts (Cross-Vesting) Act 1987 (WA) (the Act). In particular the application is brought under s 5(2) which provides:

Where -

(a) a proceeding (in this subsection referred to as the 'relevant proceeding') is pending in the Supreme 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 another State or of a Territory and it is more appropriate that the relevant proceedings be determined by that other Supreme Court;

(ii) ...

...

the first court shall transfer the relevant proceeding to that other Supreme Court.

2 In this case it is not in dispute that the proceeding in this court is related to another proceeding pending in the Supreme Court of Victoria, being the proceedings: AED Oil Ltd & Ors v Elizabeth Back & Ors (No 2001 of 2008).

3 Accordingly, it is not necessary to go to the provisions of s 5(2)(b)(ii)(C) which refer, among other things, to the 'interests of justice' rendering it more appropriate that the relevant proceeding be determined by another Supreme Court, in this case the Supreme Court of Victoria. Rather, the question that is posed for my determination is whether, having regard to the two proceedings pending in each of the Supreme Courts, it is more appropriate that these proceedings be determined by the Supreme Court of Victoria.

4 Because of the view which I take of s 5(2) of the Act, some caution must be applied before adopting entirely the observations made by the High Court in BHP Billiton Ltd v Schultz [2004] HCA 61; (2004) 221 CLR 400. That was a case arising under s 5(2)(b)(iii) of the Jurisdiction of Courts (Cross-Vesting) Act 1987 (NSW) (which is identical to that of the Western Australian legislation) where the application was made on the basis that it was in the interests of justice that the proceeding be transferred.

5 Nevertheless, there are a number of principles enunciated in the decision in BHP Billiton v Schultz which I think are of general application to transfer proceedings. Those principles include the fact that there is no question of judicial discretion under the section. Once it has been determined, relevantly in this case, that it would be more appropriate for these proceedings to be heard and determined in the Supreme Court of Victoria, then under the Act, transfer of the proceeding is not discretionary but compulsory.

6 The High Court in BHP Billiton made other observations which are applicable to this case. Firstly, there is no relevant onus in an application under s 5(2) (at [71] per Gummow J). Secondly, the court is to pay no regard to the plaintiffs' choice of forum. Lastly, there is no longer any presumption as to where the balance of convenience or, more correctly, the balance of appropriateness might lie. The principles to be applied are those conveniently enunciated in the judgment of Gleeson CJ, McHugh and Heydon JJ in BHP Billiton at [19]:

In many cases, there will be such a preponderance of connecting factors with one forum that can be readily identified as the most appropriate, or natural, forum. In other cases, there might be significant connecting factors with each of the two different forums. Some of the factors might cancel each other out. If the action is between two individuals, and the plaintiff resides in one law area and the defendant in another, there may be no reason to treat the residence of either party as determinative, although, as already noted, it will ordinarily be the residence of the defendant that is important to establish jurisdiction. Weighing considerations of cost, expense, and convenience, even when they conflict, is a familiar aspect of the kind of case management involved in many cross-vesting applications.

7 Applying these observations, the process that is required to be undertaken when an application of this kind is made is to first consider the connecting factors that relate to one or other of the fora and then to weigh considerations of cost, expense and convenience in the manner in which those considerations are customarily weighed in case management determinations.

8 Looking firstly at the relevant connecting factors, the claim in this case advances a number of causes of actions but at its centre is a claim in contract. The place of the contract is Singapore because that appears to be where the contract was made. However, the law of the contract by its express terms is the law of Western Australia and the contract includes a provision whereby the parties submit to the 'non-exclusive jurisdiction of the courts of the State of Western Australia'.

9 The place of performance of the contract is offshore Australia to the north of Australia, I am told offshore Western Australia, although there is also some connection apparently with the Northern Territory where there was a management base for the performance of the works.

10 It can be seen from these observations that such connecting factors of the traditional kind as there are do not show any relevant connection to Victoria but do show some connection to Western Australia.

11 I turn now to what I think is probably the most significant aspect of this application and that is the relationship between the two sets of proceedings. During argument, I explored with counsel a way of characterising the issues that arise in the two proceedings that neither have disagreed with. At the heart of the Western Australian proceedings is what I might call a conventional construction contract claim between the two Singaporean entities. The second plaintiff claims that there is a debt due and owing under the construction contract with the first defendant which is to be paid. There are counterclaims which go to the balance of account as between the contracting parties. Although neither the claims nor the counterclaims are strictly enunciated only in terms of contract, in that reference is made to statutory causes of action such as misleading and deceptive conduct, at the heart of the Western Australian proceedings is the ascertainment of the balance of account due as between the contracting parties as a result of the works that were performed pursuant to the construction contract.

12 At the next level out is an issue raised in the Western Australian proceedings as to the alleged liability of the second defendant (which is the parent company of the first defendant) for the obligations of the first defendant under the construction contract.

13 The claim made against the second defendant is based on causes of action that are said to arise from representations made in the course of the contractual negotiations between the parties, misleading and deceptive conduct, and also by way of estoppel.

14 The essential character of those claims in these proceedings is to argue that by reason of one or other of those causes of action, the second defendant is as liable as the first defendant in relation to the balance of account as between the contracting parties. In other words, the purpose of those additional causes of action in these proceedings is to seek a determination to the effect that the second defendant is liable for what would otherwise be regarded as the debts of the first defendant. That claim is brought, no doubt, because of an apprehension that the first defendant may not be in a position to satisfy a substantial judgment entered against it.

15 At the next level out are the issues raised in the Victorian proceedings which are complex and which are not easy to simplify or generally describe. However, it is perhaps sufficient for present purposes if I characterise them as a conspiracy action with related and associated features, between a significant number of parties - 14 in fact. All the parties to the Western Australian proceedings are also parties to the Victorian proceedings but there are 10 other parties to those Victorian proceedings including two firms of solicitors.

16 Pursuing this characterisation of the issues, at the level of the core claim as to the balance of account between the contracting parties in relation to the construction contract, there would not seem to be a significant degree of overlap between the Western Australian proceedings and the Victorian proceedings. Rather, the Victorian proceedings presume that a balance of account will be established some way or another and build upon the establishment of that balance of account.

17 At the next level out there is a potential for overlap between the Western Australian proceedings and the Victorian proceedings in that some of the witnesses who will be called in relation to the causes of action for misrepresentation, misleading and deceptive conduct and estoppel are also either parties to or likely to be witnesses in the Victorian proceedings. In particular it seems that the witnesses most likely to fall within that category are the witnesses Johnson, Back and Dix.

18 There are other witnesses who are likely to be called in the Western Australian proceedings who will also have a role to play in the Victorian proceedings but the extent of the overlap in relation to those witnesses appears to be much less significant than the extent of the overlap in relation to the three witnesses to whom I have referred.

19 The defendants submit that if the Western Australian proceedings are to continue in Western Australia they will seek to lead evidence overlapping substantially with the allegations of conspiracy that are made in the Victorian proceedings for the purpose of, firstly, setting the context in which the evidence to be given in the Western Australian proceedings is to be evaluated and, secondly, because the allegations made in the Victorian proceedings, if made good, would be relevant to the assessment of the credit of those witnesses in the Western Australian proceedings.

20 It seems to me that it is too early for me to determine the extent to which evidence of that kind would or could be led in the Western Australian proceedings. I would expect that there would be substantial issues as to the admissibility of the allegations made in the Victorian proceedings in the Western Australian proceedings and those issues may fall to be determined at a trial. It would be difficult for me to try and predict the outcome of those issues at this stage in the context of an application of this kind.

21 At the next level out, that is to say the conspiracy allegations, subject to the argument to which I have just referred, that is the proposition that evidence might be sought to be led of those conspiracy allegations in the Western Australian proceedings, there would not appear to be any significant overlap between the Western Australian proceedings and the Victorian proceedings. Essentially the conspiracy allegations will fall to be determined in Victoria along with the other issues that are raised in the Victorian proceedings relating to the breaches of duty that are said to have been committed by the two firms of solicitors to which I have referred.

22 Another matter that is relevant to the assessment of the appropriateness of the transfer is the progress of the two proceedings. It is difficult to predict with any confidence which of the two sets of proceedings is likely to proceed at a greater rate. The Western Australian proceedings started a little earlier, and appear on one view to be a little more advanced. In the Western Australian proceedings there is an issue as to the timing with which the Scott schedule will be completed. That schedule is at the heart of the contractual claim to which I have referred. On the other hand the complexity of the Victorian proceedings and the nature of the allegations raised gives room to doubt the extent to which those proceedings can be moved forward quickly.

23 I turn now to the case management issues relating to the location of parties and witnesses. In relation to the parties in the Western Australian proceedings there is no clear preponderance of convenience. The first plaintiff is Western Australia based, the second defendant is Victoria based, the second plaintiff and the first defendant are each Singapore based. If one expands the field and looks at the parties to the Victorian proceedings as well, then again there is no clear preponderance of convenience as between the three locations - Perth, Melbourne or Singapore.

24 In relation to witnesses, as I have observed, there is likely to be some overlap of the witnesses to be called in the two proceeding, particularly in relation to the evidence to be given by Messrs Johnson, Back and Dix. There are a number of other witnesses who could be expected to give evidence in both proceedings, although the extent of overlap in the evidence to be given by them is not so great. Mr Johnson, on behalf of the plaintiffs in these proceedings, has sworn an affidavit identifying the witnesses that he thinks are likely to be called in support of the plaintiffs' case. It is clear from the schedule of witnesses and their places of residence that, on the plaintiffs' case at least, the preponderance of witnesses to be called by them would come from Perth.

25 So on the evidence that is presently available, it seems likely that there will be a preponderance of convenience to witnesses if the proceedings are held in Perth rather than Melbourne. I note also that in the case of the Singapore witnesses, it may be marginally easier for those witnesses to attend Perth rather than Melbourne. Perth is closer to Singapore than Melbourne and is in the same time zone. So on the information presently available there may well be a preponderance of convenience to witnesses if the proceedings are held in Perth.

26 That is an observation that applies primarily to what I have described as the first core element of the claim; that is, the issue with respect to the balance of account due under the construction contract. However, we have not yet got to the part of these proceedings where witness statements are to be exchanged. So it may be that some of the witnesses who Mr Johnson now expects will be called may not in fact need to be called because of some greater definition of the issues between now and the trial.

27 In relation to the likely time of trial, it does not seem to me that I can arrive at any definite conclusion as to whether it is more likely than not that a trial would take place in Perth earlier than it would at Victoria. It is simply unknown at this stage. One can not predict with any confidence the relative rates at which the two cases will proceed.

28 There is I think also a question as to the significance of the timing of any trial because there will be a question as to the enforceability of any judgment obtained by the plaintiffs in these proceedings, having regard to the nature of the Victorian proceedings. There is at least a risk that even if judgment were entered in favour of the plaintiff in the Western Australian proceedings, some step might be taken either here or in Victoria to defer enforceability of that judgment until such time as the Victorian proceedings are resolved. Again, it is difficult on the state of the information presently available to assess the likelihood of that occurring.

29 There are a number of possibilities in relation to future case management of these issues that might arise for consideration. One is the separate determination of some of the issues that arise in the Western Australian proceedings. For example, although it is too early to make any meaningful assessment of this possibility, one option that might present itself would be to first determine in the Western Australian proceedings the issues that I have described as the balance of account issues arising under the construction contract. If that course were taken then there would be no need to immediately resolve and determine the causes of action based in misrepresentation, misleading and deceptive conduct, and estoppel, and the risk of overlap between the Victorian proceedings and the first portion of the Western Australian proceedings would be significantly diminished, although probably not entirely eliminated. The difficulty that I have at the moment is that it is simply too early to assess whether such a course would be appropriate.

30 There have been a number of matters raised in submissions that I think are irrelevant to the issue that I am required to determine. It is appropriate for me to enunciate them. The first is the allegation of past delay by the defendants. I say nothing about the merits of that allegation because I do not think I need to. That is because it does not seem to me to matter whether or not the defendants have been responsible for delay in the past. In making a determination as to the future course of these proceedings I must look to the future and I do not think the place in which these cases are managed to trial is likely to affect the rate at which they will progress. It is not possible for me to find - and I would not find unless compelled to by the evidence - that there would be some less expeditious management of the issues that arise in these proceedings in the Supreme Court of Victoria than if they remained in Western Australia to be managed in this Court.

31 Another issue that is raised which seems to me to be, if not irrelevant, at least of very marginal significance, is the difficulties that arise from the fact that the firm of solicitors representing the plaintiffs in the Western Australian proceedings is the eleventh defendant in the Victorian proceedings. It is suggested in submissions that if these proceedings were transferred to Victoria it would mean that those solicitors could no longer act. It seems to me that the only difference that would arise in relation to the capacity of the solicitors to continue to act would be if there was consolidation of the two sets of proceedings. That is not an issue before me. I am only asked to consider the transfer of these proceedings, so that issue does not arise at this stage.

32 Another matter that has been raised is the alleged delay on the part of the defendants in bringing this application. In principle, of course, there are cases in which delay in bringing an application will tell against an applicant for transfer because another party may expend funds in reliance upon the continuation of the case in the current jurisdiction, which funds might be thrown away in the event of transfer.

33 I do not think this is such a case because that factor in this case is balanced out against the difficulty of assessing at what point in time, within the context of the case management process, it will become clear whether or not there is one jurisdiction that is more appropriate than another.

34 Another point that neither party has pressed as being relevant but which I will mention anyway is the time at which the respective proceedings were commenced. The Western Australian proceedings were commenced before the Victorian proceedings were commenced. It does not seem to me that anything turns upon that. It has been used to support a submission by the plaintiffs in these proceedings to the effect that I should conclude that there has been some strategic desire on the part of the defendants to delay the prosecution of these proceedings by having them transferred to Victoria.

35 I do not need to evaluate the strength of otherwise of that proposition because it presupposes that the transfer to Victoria would somehow delay the further prosecution of these proceedings. That is not a proposition that is made out on the evidence or which I should assume.

36 Another issue that is raised relates to discovery. It is said that there will be issues of overlap in relation to discovery. That is not a factor of any significance. To the extent that discovery is required in both proceedings, I would expect the documents discovered in these proceedings to be a subset of the discovery required in the Victorian proceedings. The work of providing discovery of those documents will not be duplicated, and the benefit of that work could easily be transferred to the Victorian proceedings.

37 Another matter that has been raised in submissions is the relative resources of the parties. It is said the second defendant is better resourced than the plaintiffs and therefore it should be the defendants that, in colloquial terms, play 'the away game' at greater expense than the plaintiffs. This proposition is not made out on the evidence. There is no evidence that the plaintiffs lack the resources to efficiently and properly conduct these proceedings in Victoria and, of course, the plaintiffs are parties to proceedings in Victoria whether they like it or not.

38 Summarising my conclusions, there are connecting factors that more strongly link these proceedings to Western Australia than to Victoria. There is a danger of overlap in relation to the Western Australian proceedings and the Victorian proceedings but it is too early to predict the extent to which that danger will materialise. There are some clear advantages in these proceedings remaining in Western Australia in terms of the preponderance of convenience to witnesses and possibly in relation to the timing of at least the core contractual claim, although I emphasise that it is very difficult to predict with confidence what the relative timing of the two sets of proceedings will be.

39 In those circumstances, I conclude that it is more appropriate that these proceedings remain in Western Australia, for the time being at least. That is not to say that there might not come a point in time at which the view might be taken that it will be more appropriate that these proceedings be transferred to Victoria.

40 That point of time is most likely to be after the exchange of witness statements when it will be easier to assess the significance of the overlap between the two sets of proceedings and therefore the likelihood of duplication of effort and inconsistent findings with respect to issues that arise in both sets of proceedings.

41 There are also case management options that might be available in the future that could mitigate the effect of the overlap between the two sets of proceedings. If those case management options are pursued, it may be clear that Western Australia would be the more appropriate forum for the determination of what I have described as the core contractual or construction-related issues.

42 For these reasons I have come to the conclusion that this application for transfer must be dismissed, but without prejudice to the defendants' capacity to reapply at some time in the future should they consider that the circumstances have changed sufficiently to lead to the conclusion that the Supreme Court of Victoria is the more appropriate forum.