[2000] NSWCA 353
Joshan v Pizza Pan Group Pty Ltd (2021) 393 ALR 522
Source
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Catchwords
[2000] NSWCA 353
Joshan v Pizza Pan Group Pty Ltd (2021) 393 ALR 522
Judgment (2 paragraphs)
[1]
Judgment
The plaintiff operates a global franchising business involving the establishment and operation of a chain of restaurants under the "Freshii" brand.
These proceedings arise out of a master franchise agreement that the plaintiff entered into with Freshii and Fresh Franchising Australia Pty Ltd (FFA) in June 2016. Under that agreement, the plaintiff granted FFA the exclusive right to act as franchisee and sub-franchisor of Freshii restaurants in Australia. The plaintiff claims that FFA is liable to pay outstanding franchise fees, royalties and liquidated damages under the agreement, and that the defendant is liable to the plaintiff for those amounts pursuant to a deed poll signed in June 2016 by which the defendant guaranteed FFA's performance of its obligations under the agreement. FFA is now in liquidation and is not a party to the proceedings.
The alleged outstanding franchise and royalty fees relate to ten restaurants in Western Australia, one restaurant in Victoria and one restaurant in the Australian Capital Territory. Some of those restaurants are operated by FFA and some by sub-franchisees of FFA. The franchisee fees are fixed sums specified in the agreement, whereas the royalty fees are calculated based on the revenue of each restaurant operated by FFA or a sub-franchisee.
The plaintiff commenced these proceedings on 16 August 2021.
The defendant guarantor has not yet filed a response to the plaintiff's Commercial List Statement.
The defendant has applied to transfer the proceedings to the Supreme Court of Western Australia pursuant to s 5(2)(b)(iii) of the Jurisdiction of Courts (Cross-Vesting) Act 1987 (NSW). That section provides that, where a proceeding is pending in this Court and it appears to this Court that is in the interests of justice that the proceedings be determined by the Supreme Court of another State or Territory, this Court shall transfer the proceedings to that other Supreme Court.
That application was heard earlier today. At the conclusion of the hearing, I dismissed the application with costs on the basis that my reasons would be published later. These are my reasons.
The issue raised by the application is whether the Supreme Court of Western Australia is the more appropriate forum for the determination of these proceedings, in the sense discussed in Spiliada Maritime Corp v Cansulex Ltd [1987] AC 460 (Spiliada): Joshan v Pizza Pan Group Pty Ltd (2021) 393 ALR 522; [2021] NSWCA 219 (Joshan) at [47] (Bell P, Gleeson and McCallum JJA agreeing); see also Bankinvest AG v Seabrook (1988) 14 NSWLR 711 at 727-730; James Hardie & Coy Pty Ltd v Barry (2000) 50 NSWLR 357; [2000] NSWCA 353 at [4]-[5], [87]-[94]; .
That is an evaluative judgment that requires a fair balancing of all of the factors that bear upon the question whether the proceedings may be tried and determined in the Supreme Court of Western Australia more suitably for the interests of all parties and the ends of justice: Spiliada at 476 (Lord Goff). The evaluative exercise is undertaken without any specific emphasis in favour of the plaintiff's choice of this Court as the forum: BHP Billiton Ltd v Schultz (2004) 221 CLR 400 (Schultz) at [25] (Gleeson CJ, McHugh and Heydon JJ), at [77] (Gummow J, Hayne J agreeing at [177]) and [258] (Callinan J). Factors relevant to the evaluation, and the weight to be given to them, will depend on the particular circumstances of the case: Schultz at [18]-[19].
If the outcome of the evaluative judgment is that the Supreme Court of Western Australia is the more appropriate forum so that it is in the interests of justice that the proceedings be determined by that Court, then this Court must transfer the proceedings to the Supreme Court of Western Australia: Schultz at [62]-[63] (Gummow J, Hayne J agreeing at [177]) and at [222] (Callinan J).
The reasons why the defendant contends that it is in the interests of justice to transfer the proceedings to the Supreme Court of Western Australia are set out in the defendant's affidavit sworn on 5 November 2021 and in his oral submissions made during the hearing of the application today. Those reasons may be summarised as follows:
1. the plaintiff is a foreign company that conducts its business from North America, whereas the defendant resides in Western Australia and the registered office and principal place of business of FFA (now in liquidation) were in Western Australia;
2. under the present Western Australian regulations or public health orders, if the defendant were to travel to New South Wales for the purpose of these proceedings, he would not be able to return to Western Australia without undertaking quarantine at suitable premises for 14 days after his arrival;
3. the negotiations for the agreement were conducted by telephone and email, together with some meetings in person which were held in Canada, and the defendant sought advice from accountants in Western Australia during the negotiations;
4. FFA signed the agreement, and the defendant signed the guarantee, in Western Australia;
5. clause 22.1 of the agreement provides that it shall be interpreted and construed "exclusively under the laws of Australia and the State of Victoria, Australia";
6. the plaintiff was aware when entering into the agreement that the defendant and FFA were based in Western Australia and the defendant informed the plaintiffs' representatives that his initial focus would be on opening Freshii restaurants in Western Australia;
7. all of the restaurants were in fact opened in Western Australia, with the exception of one in Melbourne and one in Canberra, as I have referred to above;
8. "nearly all of the pleadings contained in the Commercial List Statement pertain to alleged causes of action and alleged events that occurred in Western Australia";
9. any witnesses to be called in the proceedings are likely to reside in Western Australia or overseas;
10. the defendant "cannot financially sustain" travelling to and from New South Wales for the purpose of these proceedings;
11. if the proceedings are not transferred to Western Australia, the defendant "would suffer significant prejudice"; and
12. if the proceedings remain in New South Wales with the defendant participating by audio-visual link (AVL), the time difference between New South Wales and Western Australia will become problematic in that the proceedings will not be able to be conducted within normal business hours in both jurisdictions.
The plaintiff opposes the transfer of the proceedings and relied on an affidavit of its solicitor, Ms Hutchison, sworn on 18 November 2021. As Ms Hutchison's affidavit was principally a submission, I will refer to its contents and the substance of the plaintiff's written and oral submissions in addressing the twelve matters raised by the defendant and summarised above.
The third to eighth matters raised by the defendant were the main focus of his oral submissions during the hearing of the application and I will therefore address those matters first. I accept that the restaurants referred to in the Commercial List Statement are predominantly located in Western Australia. However, as the plaintiff submitted, this case is about the enforcement of contractual obligations arising under an agreement and guarantee of which the governing law is "the laws of Australia and the State of Victoria". The issues raised by the Commercial List Statement will fall to be determined in accordance with the common law of Australia. Unlike cases involving causes of action in tort to which the defendant referred in his oral submissions, the geographical location of relevant events has no bearing on the law to be applied to the determination of the issues in dispute. For the same reasons, the place where the negotiations were conducted, the location of the defendant's advisers during those negotiations, and the place where the agreement and guarantee were signed, are not relevant to the present application.
As I have already mentioned, the defendant has not yet filed any response to the Commercial List Statement. According to Ms Hutchison's affidavit, the defendant has not articulated the substance or basis of his defence in any correspondence with the plaintiff. This was emphasised in the oral submissions made by counsel for the plaintiff at the hearing of the application. The defendant, who appeared representing himself, did not identify the grounds of his defence during the hearing of the application. Rather, he submitted that the grounds of his defence were irrelevant to the question whether the Supreme Court of Western Australia was the more appropriate forum because all relevant business had been conducted and all relevant events had occurred in Western Australia. He did not foreshadow any cross-claim.
I reject the defendant's submission for the reasons already explained above. It is regrettable that the substance of the defence (and any cross-claim) was not disclosed to the Court for the purpose of determining the defendant's application. That has precluded the Court from assessing the matters likely to be dispute: see Joshan at [56]. The possibility cannot be excluded that the defendant's grounds of defence may raise issues that favour a conclusion that the Supreme Court of Western Australia is the more appropriate forum (for example, if the defence or any cross-claim were to rely on Western Australian legislation). However, the Court must determine the application on the basis of the available evidence and not speculation about possibilities.
I now turn to the first, second and tenth matters raised by the defendant. I acknowledge that the defendant's place of residence renders the Supreme Court of Western Australia a more convenient forum for the defendant. However, as the plaintiff submitted, the Court is required to determine what is in the interests of justice and not merely where the balance of the parties' competing convenience lies. As the plaintiff submitted, the uncertainty surrounding the defendant's ability to travel to New South Wales for the purpose of the proceedings if they remain in this Court, and the inconvenience and cost of doing so (including inconvenience and additional cost arising from any applicable COVID-19 quarantine requirements at the time) can be overcome by permitting the defendant to appear by AVL; see Joshan at [58]. On the basis of the evidence presently before the Court (and assuming the financial constraints that the defendant referred to, which were not the subject of any evidence) the availability of AVL is sufficient to overcome the inconvenience and expense of travel that would otherwise be required for the defendant who intends to represent himself at the final hearing.
The ninth matter raised by the defendant is related to the matters referred to above. AVL facilities are also available for witnesses to give evidence. However, as I indicated during the hearing of the application, the combination of a litigant representing himself appearing by AVL and co-ordinating his witnesses giving evidence by AVL would impose logistical burdens on the self-represented defendant that may adversely affect his ability to present his defence to the best of his ability. Whether that burden would exist at all and, if so, the extent of it and the available means of mitigating it, can be meaningfully considered only once it is known what issues will be raised by the defence, what is the nature and subject matter of any evidence to be relied on by the defendant, who are the witnesses to be called by the defendant and what is the capacity of those witnesses to give their evidence by AVL having regard to the technology available to them and their proficiency in using that technology. All of those matters are presently unknown, as the defendant has not disclosed the substance of his defence or the nature of the evidence that he intends to rely on or the identity of any witnesses whom he intends to call. One consequence of this is that the Court cannot assess the likely relevance and significance of the testimony of witnesses (as opposed to documentary evidence) in the proceedings: see Joshan at [57]. Ms Hutchison has deposed that she anticipates that the plaintiff will call only one witness (who is expected to give evidence from an overseas location by AVL) and that many of the allegations will fall to be determined on the basis of documentary evidence. The defendant has simply asserted in his affidavit that "any witnesses to be called … are likely to reside in Western Australia or overseas". The mere possibility that witnesses who reside in Western Australia may be called to give evidence does not support the conclusion that the Supreme Court of Western Australia is a more appropriate forum, in the absence of information about the substance of the disputed issues in the proceedings and the nature of the evidence that will bear on those issues.
As to the eleventh matter raised by the defendant, his affidavit asserted that he would suffer significant prejudice if the proceedings were determined in this Court but did not identify any particular prejudice. I infer that the defendant is referring to the inconvenience and cost involved if he were required to travel from Western Australia to New South Wales for the purpose of these proceedings. As I have already indicated, the evidence presently before the Court does not establish that this cost and inconvenience cannot be overcome by the use of AVL. Depending on the issues raised by the defence and the location and circumstances of any witnesses to be called by the defendant, it may turn out to be the case that AVL does not overcome these problems and this may affect the assessment of where the interests of justice lie for the purpose of s 5(2)(b)(iii) of the Jurisdiction of Courts (Cross-Vesting) Act 1987 (NSW. However, the present application must be determined on the basis of the evidence before the Court and not on the basis of speculation about the defence or the defendant's evidence.
The twelfth matter raised by the defendant can be disposed of briefly. This Court is accustomed to varying its sitting hours where appropriate to accommodate parties and witnesses participating in proceedings from interstate or overseas. There is no reason why a slight variation to the Court's normal sitting hours could not be made to accommodate the defendant and any witnesses appearing by AVL from Western Australia. That said, there is no iron-clad rule that parties are not required to participate in court hearings outside of "normal business hours" in their own geographical locations. Flexibility and common sense is required and, in my experience, is invariably displayed by all parties.
Those are my reasons for dismissing the defendant's application, without prejudice to his ability to make a fresh application at a later stage of these proceedings after (at least) the filing of his Commercial List Response.
[2]
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Decision last updated: 26 November 2021