Finstro Securities Pty Ltd v Gosatti

Conclusion

1. For reasons which follow, I have concluded that the transfer order must be refused and the motion dismissed.

The parties' cases

1. Mr and Mrs Gosatti relied on an affidavit made by their solicitor Mr Ling, who deposed to his belief that it was more appropriate and in the interests of justice for the matter to be determined by the Supreme Court of Western Australia Court, given that Western Australia is where: 1. Mr and Mrs Gosatti reside and Miluc had its principal place of business; and 2. the subject matter of the dispute lies, it being where: 1. the contract was entered; 2. the guarantees were executed; 3. the funds were dispersed to Miluc Civil; 4. the alleged breach of contract occurred; and 5. where proceedings between Finstro and Miluc are on foot.
2. Mr and Mrs Gosatti's case was that there were no relevant transactions in this State; that a statutory demand for payment had been issued to Miluc in Western Australia, which had been opposed in the Supreme Court of Western Australia; that was where they live and where Miluc had its place of business and the subject matter of the dispute is. It was thus in the interests of justice to order the transfer sought, a persuasive consideration being the ongoing proceedings in that State and that the choice of law and jurisdiction clause on which Finstro relies, not precluding the conclusion that it was in the interests of justice to make the order sought.
3. Finstro relied on the December 2020 affidavit made by Mr Shaw, a process server about service of the pleadings and on the March 2021 affidavit made by Mr Swinton, its head of credit. He deposed to: 1. how the agreements came to be entered in NSW; 2. how the funds were provided from that State; 3. the default and the eventual liquidation of Miluc Civil; 4. the assignment of the debt; 5. Finstro and FC Securities' registered office and principal place of business being in Sydney, where the recovery of the debt which Mr and Mrs Gosatti owe is being managed by Mr Swinton, Ms Crowhurst, the general counsel and Mr Anderson, the national broker manager; 6. the Sydney based witnesses likely to be called at the hearing; and 7. that in January 2021 Mr Gosatti was known to be located in Queensland.
4. To resist the transfer application Finstro contended that the matters which Mr and Mrs Gosatti relied on were essentially neutral and did not establish a basis on which the transfer power could be exercised. Further, it was relevant that the parties' agreement specifies that the facility is governed by the laws of New South Wales and that the defendants submit to the non-exclusive jurisdiction of its courts. In the result it cannot be concluded that it would be in the interests of justice to order the transfer sought, or that it was appropriate for the West Australian Supreme Court to determine the proceedings.

Applicable legal principles

1. There is no issue as to this Court's jurisdiction in the proceedings which have been brought, or about the applicable law, the Court having power to make the transfer orders sought under s 5(2) of the Jurisdiction of Courts (Cross-vesting) Act 1987 (NSW): BHP Billiton Ltd v Schultz (2004) 221 CLR 400; [2004] HCA 61 and James Hardie & Coy Pty Ltd v Barry & Anor; Seltsam Pty Ltd v Barry & Anor (2000) 50 NSWLR 257; [2000] NSWCA 353.
2. Such a transfer may be ordered if it is considered on the evidence to be "more appropriate" that the proceedings be determined by the West Australian Supreme Court: s 5(2)(a). That is to be determined by: (ii) having regard to: (A) whether, in the opinion of the first court, apart from this Act and any law of the Commonwealth or another State relating to cross-vesting of jurisdiction, the relevant proceeding or a substantial part of the relevant proceeding would have been incapable of being instituted in the first court and capable of being instituted in the Supreme Court of another State or Territory, (B) 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 (A) and not within the jurisdiction of the first court apart from this Act and any law of the Commonwealth or another State relating to cross-vesting of jurisdiction, and (C) the interests of justice, it is more appropriate that the relevant proceeding be determined by that other Supreme Court, or (iii) it is otherwise in the interests of justice that the relevant proceeding be determined by the Supreme Court of another State or of a Territory.
3. Residence of a defendant is important to establish a Court's jurisdiction, in this case that the Supreme Court of Western Australia has jurisdiction in the matters the subject of the parties' dispute, which is not in issue. But that will not of itself satisfy s 5(2). The interests of justice require that consideration be given to factors such as those identified in James Hardie at [95]: "• application of substantive law; • forensic advantage or detriment conferred by procedural law; • the choice made by a plaintiff or a forum and the reasons for that choice; • substantive connections with the forum; • balance of convenience to parties and witnesses; and • convenience to the court system."
4. It follows that Mr and Mrs Gosatti's submission that the location of Finstro's witnesses is immaterial to the interests of justice, may not be accepted. But as I will explain, the location of the parties, other witnesses and the legal representatives is in this case not a critical factor.
5. Choice of forum is, since BHP Billiton Ltd v Schultz was decided, not a matter of particular significance: Taurus Funds Management Pty Ltd v Aurox Resources Ltd [2010] NSWSC 1223 at [8].
6. There may be a preponderance of connecting factors with one forum, so that it can readily be identified as the most appropriate forum to hear and determine a dispute. Or there might be significant connecting factors with two different forums, some of which might cancel each other out: BHP Billiton Ltd v Schultz at [19].

Why the orders sought must be refused

1. What arises for determination is a dispute over a transaction entered by parties located in two different States.
2. Where a hearing before another court affords an advantage to the defendant, which is matched by an advantage to the plaintiff if there is a hearing in this Court, those considerations will not make it possible to say one court is more appropriate than the other. Where other factors are also neutral, they will also not establish that one court is more appropriate than the other: BHP Billiton Ltd v Schultz at [16].
3. Finstro has its head office in this State, where it executed the contractual documents and provided the funds it advanced. It appears there was finally no issue that Mr and Mrs Gosatti live in Western Australia, where they executed their guarantees, the funds were received and the undisputed default occurred.
4. Relevant events thus occurred in both States.
5. The defence submission that there were no transactions in this State, thus cannot be accepted. Nor can the submission that the location of the witnesses who would be called by Finstro to establish its case is immaterial to what must be decided on the motion, when balanced against the fact that Mr and Mrs Gosatti reside in Western Australia.
6. Given their defence, Mr and Mrs Gosatti will have to give evidence. On Finstro's case it will call up to five witnesses' resident here. It is likely that credit will be an issue.
7. Mr and Mrs Gosatti relied on the possibility of Finstro participating remotely in a hearing in West Australia. But Mr and Mrs Gosatti and their legal representatives could also undoubtedly appear remotely in this court.
8. There was no issue that witnesses may nowadays give their evidence remotely and that parties and their legal representatives may also not have to be physically present in court, during a hearing, with resulting cost savings. If either party has to incur travel costs, eventually they will have to be borne by the losing party.
9. It follows that in this case location of the parties and their representatives is a neutral consideration.
10. There is but one common law in Australia. The Supreme Court of Western Australia is in no better position than this Court to apply that law. There is no suggestion that what lies in issue will involve the application of any law unique or peculiar to Western Australia.
11. To the contrary, an agreed governing law and jurisdiction clause binds the parties. It provides that the facility was governed and to be construed under the laws of this State and Mr and Mrs Gosatti, as guarantors, each agreed to submit to the non-exclusive jurisdiction of its courts: cl 13.12.
12. This aspect of the parties' agreement is also a relevant consideration, reflecting as it does that they not only contemplated proceedings such as these being brought in this Court, but that Mr and Mrs Gosatti irrevocably submitted to its jurisdiction, regardless of the inconvenience which might result to them: Taurus Funds Management at [26]-[29].
13. In this case, given how balanced the other relevant considerations are, it must also be accepted that this aspect of the parties' agreement is a significant factor, as it was in Taurus Funds Management at [38]-[39], Patrick Badges Pty Ltd v Commonwealth of Australia [2002] NSWSC 221; Asciano Services Pty Ltd v Australian Rail Track Corp Ltd [2008] NSWSC 652 at [18]-[19] and Primero Group Ltd v Wartsila Australia Pty Ltd [2021] WASC 44 at [86].
14. Mr and Mrs Gosatti also relied on proceedings brought in the West Australian Supreme Court by Miluc, which is now in administration, to set aside a statutory demand which Finstro Security issued on its guarantee. On their case they will seek to rely on matters which Miluc advanced in that case, in defending Finstro Securities' claims.
15. That application may not have adhered to what was agreed by the governing law and jurisdiction clause, having been brought in October 2020, after these proceedings were commenced. Be that as it may, it was common ground that they were heard in April 2021, when judgment was reserved and thus if transferred, these proceedings will not be heard together with those Miluc brought. An administrator now having been appointed, Mr and Mrs Gosatti will also not be involved in the further conduct of those proceedings.
16. In those circumstances, I am satisfied that those proceedings are not significant to what here arises to be resolved.
17. In all of the circumstances which I have discussed, it seems to me that it must be accepted that the parties' agreement to the governing law and jurisdiction clause is what sways the conclusion that Mr and Mrs Gosatti have not established, as they must, that the interests of justice require the order they seek be made or that it is "more appropriate" that the proceedings be determined by the Supreme Court of Western Australia.

Costs

1. The usual order under the Uniform Civil Procedure Rules 2005 (NSW) is that costs follow the event, which in this case is that Mr and Mrs Gosatti must bear the costs of the motion, as agreed or assessed.

Orders

1. For the reasons given I order that: 1. The motion is dismissed; 2. Mr and Mrs Gosatti must bear the costs of the motion, as agreed or assessed.

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