Freeman and Anor v Kellerberrin Farmers Co-Operative Company Limited and Ors

IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

20430 of 2002 Stuart Maxwell Freeman (First plaintiff)

Kellerberrin Farmers Co-Operative Company Limited (First defendant)

JUDGMENT 1 Shaw J: In this matter, the substantive proceedings before the Court concern various allegations by the plaintiff with respect to the construction of a hotel which was part of a hotel/motel complex at Kellerberrin in Western Australia. It is said that in September in 1999 the plaintiffs were in Western Australia and read an advertisement for the sale of a hotel/motel in a local newspaper, and as a result the plaintiffs were informed that the business was viable and a good investment and so the plaintiffs acquired this Western Australian enterprise. 2 The gist of the plaintiffs' action is based on the torts of deceit and fraud said to have been committed in New South Wales. Two misrepresentations are alleged, one being the profitability claimed in the advertisement in the Western Australian newspaper and the other in figures submitted by facsimile. It is said by the plaintiffs that it was the facsimile information which caused the plaintiffs to make the offer they did. It is said by the plaintiffs that the representation was made in New South Wales and acted upon by sending the offer from New South Wales. 3 The Court is faced with a notice of motion which seeks, pursuant to ss 5(2)(a) and 5(2)(b)(iii) of the Jurisdiction of Courts (Cross Vesting) Act 1987 that these proceedings be transferred to the Supreme Court of Western Australia. 4 Such an application requires an exercise of discretion by the Court which essentially comes down to an assessment of what is in the interests of justice between the parties. The result of such an application is not always clear cut. In Joo v Tyler [2003] NSWSC 498 I declined to cross vest an application, but it seems to me that the facts and circumstances in the present matter are clearly distinguishable. 5 First, I should turn to the applicable principles. In Bankinvest AG v Seabrook and Ors (1988) 14 NSWLR 711 Street CJ said (at 713): In relation to transfer, the common policy reflected in each of the individual enactments is that there must be a judicial determination by the Court in which proceedings are commenced either to transfer or not to transfer the proceedings to one of the other nine based, broadly speaking, upon consideration of the interests of justice. 6 Kirby P said (at 715): Courts will do well in approaching the exercise of the discretion to transfer a case brought within one of the relevant Australian jurisdictions to keep their eyes steadily on certain relevant matters. These include the history of judicial arrangements within Australia which preceded the Act, the policy stated by the several Parliaments in the Preamble to the Act and the plain purpose of the legislation which is to provide a regime for the assignment of litigation to the most appropriate jurisdiction in Australia. 7 The Court rejected the notion put in those proceedings that there was a prima facie presumption that the jurisdiction which was regularly invoked should exercise it and that there was some entitlement on the part of the litigant to proceed in that particular court. The Court also rejected the concept that there was some onus on the litigant seeking transfer to show a positive basis for doing so. 8 The seminal case on cross vesting (which survives, so far as transfer between State courts is concerned, the Constitutional challenge to the transfer from State courts to Federal Court in Re Wakim; Ex parte McNally (1999) 198 CLR 511) is James Hardie & Coy Pty Limited v Barry (2000) 50 NSWLR 357. Mason P (at 377) emphasised that the relevant criterion was which forum was 'more appropriate'. The President went on to emphasise the need for consistency and comity in this area of legal discourse (at [90]) and indeed provided a checklist of criteria that should be borne in mind by judges exercising a discretion to cross vest (at [95]) in these terms: · Application of substantive law; · Forensic advantage or detriment conferred by procedural law; · The choice made by a plaintiff of a forum and the reasons for that choice; · Substantive connections to that forum; · The balance of convenience to parties and witnesses; and · Convenience to the court system. 9 I accept the plaintiffs' submission that deceit is a common law tort and that the law which would be applicable in Western Australia is the same as would be applied by a court in this State, in the absence of any suggestion of applicable legislation affecting the proceedings in one State or the other. Hence, I see the force in the plaintiffs' submission that there is no particular advantage in relation to the matter being dealt with in New South Wales compared to Western Australia. 10 However, what the defendant says to this Court is that, given the misrepresentations alleged, which are said to have been deliberate and wilful, it would be essential for the members of the Board of the first defendant to give evidence as to what they knew about the sale of the hotel and to deal with any such allegation of misrepresentation. It is also said that other Western Australian witnesses would need to give evidence including a bookkeeper, police officer, and hotel broker compared to a smaller number of witnesses necessary for the plaintiffs' case residing in New South Wales. 11 There is the real possibility for a need for expert witnesses but, in my view, they could be engaged either in NSW or Western Australia and therefore that is a neutral factor. There is some force in the defendants' submission that an expert broker and/or valuer would have more familiarity in relation to the transaction or enterprise if they were from Western Australia, and it does seem to be the fact that, on the submissions put by the plaintiffs they have, at the maximum, six witnesses based in NSW, in addition to the plaintiffs' themselves. On the other hand, the defendants have fifteen witnesses and four or five expert witnesses, all but one of whom would come from Western Australia. On balance, it seems to me to be cost effective to have this case heard in Western Australia by a superior court of record in that State. 12 The controversy as to the more appropriate forum is not entirely straight forward and requires a balance of factors and the exercise of discretion, but I think that the question of the location of the witnesses - including the experts - does tilt the balance in favour of the matter being heard in the Supreme Court of Western Australia. 13 One other mater, in my opinion, affects the discretion as to whether there should be a cross vesting to the Supreme Court of Western Australia. This consideration focuses upon the clause in the offer made by the first defendant and accepted as part of the contract between the parties to this effect: The agreement shall be subject to the laws of Western Australia and the Courts of that State shall have jurisdiction in relation thereto. 14 The plaintiff says that the clause is unnecessary, and that the relevant law of tort is indistinguishable between the jurisdictions. Nevertheless, it seems to me that the Court should presume that a deliberate decision was made by the parties to this contract to apply the laws of Western Australia in the courts of that State should any legal controversy arise in relation to the contract. 15 I acknowledge that the question of a clause in the contract specifying the appropriate jurisdiction is not expressly contained in the criteria set out by Mason P in Barry. Nonetheless, Rolfe J in the Commercial Division of this Court in West's Process Engineering Pty Ltd v Western Sands Ltd (Unreported, NSWSC, 6 August 1997), did place emphasis on a clause in an agreement between the parties which agreed to accept the laws of Western Australia as the proper law of the contract and that they should submit to and accept the jurisdiction of the courts of that State. As Rolfe J said, such a provision was 'not determinative' however his Honour did find it to be 'significant'. Rolfe J went on to say: In my opinion, it is appropriate to give substantial weight to the jurisdiction clause for it represents the bargain of the parties. The one with the advantage of it should not be subjected to the inconveniences…unless the other relevant factors are powerfully in favour of another jurisdiction. 16 There is some tension between this judgment and one of Byrne J in Nilsen Electric (WA) Pty Limited v Jovista Pty Limited (Unreported, VSC, 8 March 1995), but I think as a matter of judicial comity I should act in conformity with a judgment of this Court. Furthermore, two other judges of this Court have applied that decision: see Patrick Badges Pty Limited v Commonwealth (Unreported, NSWSC, 27 March 2002) per Howie J and Wholesome Bake Pty Limited v Weetoz Pty Limited (Unreported, NSWSC, 5 April 2001) per Bryson J. West's has also been applied in Western Australia (Jovista Pty Limited v Bateman Project Engineering Pty Limited (Unreported, WASC, Wheeler J, 19 May 1998) and in Queensland (World Firefighters Games Brisbane, 2002 v World Firefighters Games Western Australia Inc (Unreported, QSC, Philippides J, 17 May 2001). In my opinion, it is important to maintain a consistent approach to the application of cross vesting legislation. 17 In all of these circumstances, I propose to make the order sought in the notice of motion cross vesting these proceedings to the Supreme Court of Western Australia. I would also propose that the costs of the proceedings to date be costs in the transferred proceedings. Orders

1. Transfer the proceedings to the Supreme Court of Western Australia; 2) Costs of the proceedings to date be costs in the transferred proceedings.

Last Modified: 12/05/2003 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.