Although the court was then dealing with s 44 of the Corporation Acts of each of the states and territories, the comments apply with equal force to s 1337H. In the same case, Davies J said (at FCR 4; ALR 441-2; ACSR 151) that the expression enables all relevant factors to be taken into account. They included:
· matters relating to the efficiency of litigation which in turn include its economy and expedition;
· matters of convenience having regard to the location of witnesses and records; and
· matters of policy relating to the administration of justice by the Federal Court and the state and territory Supreme Courts.
Plainly, the matters listed in s 1337L are also relevant to a determination of what the interests of justice require.
[17] Before leaving the question of what is meant by the expression 'the interests of justice', it is appropriate to refer to the remarks of Wilcox J in Bourke v State Bank of New South Wales (1988) 22 FCR 378 at 394; 85 ALR 61 at 77:
Under that rubric, as it seems to me, the court is entitled to consider not only the ability of a particular court to deal with all aspects of a matter, and to make and to enforce all the orders to which a party may be entitled, but also adjectival matters such as the availability of particular evidence, the procedures to be adopted, the desirable venue for trial and the likely hearing date. It is not in "the interests of justice" to adopt a course, in relation to those matters, which places unnecessary burdens and delays upon the parties to litigation.
Those remarks have since been consistently applied and affirmed. They are to the same force and effect as the remarks of Black CJ and Davies J in Acton Engineering .
[18] In Dawson v Baker (1994) 120 ACTR 11 at 25 Higgins J (with whom Gallop J agreed) identified a helpful checklist of factors which bear upon the interests of justice. They are:
· 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 with the forum;
· balance of convenience to parties and witnesses; and
· convenience to the court system.
That list is consistent with the reasoning in Acton Engineering , Spiliada and BHP Billiton Ltd v Schultz . The list is clearly not intended to be an exclusive list.
[19] The fact that the plaintiffs have chosen to litigate these issues in the Supreme Court of South Australia is not in itself a relevant factor: BHP Billiton Ltd v Schultz . Instead, the enquiry is to determine by reference to the interests of justice what is the more appropriate forum. However, that principle does not prevent regard being had to any advantages in litigating in that court which might be identified.
[20] When considering the question of inconvenience to parties and witnesses, there are other factors which, I think, are proper to bear in mind. In these days of quick and efficient transport and communication, questions of convenience have less force than hitherto. The speed and facility of both electronic and telephonic communication enables ready contact while a person is interstate. The ready availability of air transport reduces the inconvenience of interstate travel. As I said in Pegasus Leasing Ltd v Tieco International (Aust) Pty Ltd (1993) 61 SASR 195 at 199, arguments as to convenience have even less force when the two courts are as approximate as Melbourne and Adelaide, as they are in this case."
15 Having regard to the factual matters to which I have already referred and assessing them against the specific criteria in s.1337L (referred to at paragraph [16] of Debelle J's judgment) and the requirements of justice as a whole, I am of the opinion that the proceedings would be much more appropriately dealt with by a court of competent jurisdiction sitting in Melbourne. The balance of convenience strongly favours Melbourne from the point of view of ready availability of parties (other than the plaintiff), lawyers (other than the plaintiff's lawyers) and witnesses and potential witnesses. The plaintiff's administrative centre is apparently outside Australia and, from that point of view, Melbourne cannot be said to be less convenient to it than Sydney. It is true that the plaintiff has chosen to instruct lawyers in Sydney, but the fact that it did so only as recently as 9 November and that the proceedings are in one sense at an early stage means, I think, that that circumstance does not outweigh those to which I have referred, which clearly and decisively favour a Melbourne venue.
16 It is therefore appropriate that this court exercise the s.1337H discretion in favour of transfer of the proceedings to a court in Melbourne. As to the choice of court, the only consideration raised before me centred upon enquiries that had been made of the registry of the Supreme Court of Victoria regarding processes following any transfer to that court. Because those matters were raised and counsel for both parties referred to the them in a way that did not suggest any reservation about the results of the enquiries, I propose to make an order transferring the proceedings to the Supreme Court of Victoria.
17 I turn then to the plaintiff's application for interlocutory relief and, in doing so, note that 5 December 2005 appears to be the due date for completion under the sale contract to be mentioned presently. Both parties approached the matter on that basis. This timing factor gives the matter a distinct element of urgency.
18 I begin with some general background. Mr Mentha became administrator of Dominion Wines under Part 5.3A on 20 September 2005. The first meeting of creditors in the administration was duly held and the second meeting commenced on 17 October. Creditors had been informed in an earlier report that a deed of company arrangement proposal had been received and appeared likely to provide better returns for creditors than the possible sale of the business. That report was dated 7 October.
19 When the meeting began on 17 October, however, the administrator's representative reported that possibilities of sale of the business (and one in particular had firmed) had caused the administrator no longer to favour the possibility of a deed of company arrangement proposal. There was reference to one prospective buyer whose ability to finance the purchase had been investigated favourably. It was resolved that the second meeting of creditors "be adjourned for a period of up to 60 days".
20 Four days later, on 21 October, Mr Mentha, as administrator, caused Dominion Wines to enter into a contract for the sale of assets to the third defendant, Plunkett Kileen Pty Ltd. By clause 2.1, it was a condition precedent "to the sale and purchase being fulfilled" that a contract for the sale of land between the same parties should be executed in accordance with another provision and, more significantly for present purposes, that by 4 pm on 2 November 2005 the administrator should have reconvened the second meeting of creditors and there should have been passed, at the adjourned meeting, a resolution that Dominion Wines be wound up.
21 In a circular to creditors dated 24 October, the administrator stated that the sale agreement had been entered into and referred to the condition precedent involving the passing of a resolution for winding up, noting that such a resolution would amount, in effect, to an endorsement of the sale. At the time of writing, the administrator had not received any revised deed proposal. He repeated a statement made earlier that the sale proposal involved 15 cents in the dollar more for creditors than the original deed proposal. He said that the directors had indicated an intention of putting forward a revised deed proposal before the reconvened meeting. He also said that any such proposal could be discussed on that occasion. He then gave notice that the reconvened second meeting of creditors would take place at 10am on 3 November, a Thursday.
22 The night before, 2 November, the administrator received an amended deed proposal from the directors. Speaking at the reconvened meeting, the administrator's representative described that proposal as similar to the first proposal but with a greater equity injection, with support from an unnamed equity provider.
23 The administrator's representative made a number of statements to the reconvened meeting to which the plaintiff takes exception. For example, there was a reference to the need for the proposed deed proponent to spend two or three weeks conducting due diligence, whereas, says the plaintiff, the real message should have been that the period mentioned was merely needed to complete the transaction, not to investigate it. Similarly, the equity party was described as anonymous, whereas it is said that it was an entity known to the administrator and about which he could have given some re-assurance or information. Furthermore, it is complained that the administrator did not tell the meeting that the equity party was already familiar with the business. There was also an objection to the fact that, during a large part of the discussion on the deed possibility, an overhead slide was showing which recorded the administrator's recommendation to vote for a winding up. That recommendation had been contained in the circular reconvening the adjourned meeting. The suggestion of the plaintiff is that the administrator did not reconsider as he should have done.
24 These alleged shortcomings combine with others, in the plaintiff's submission, to undermine the integrity of the resolution for winding up. Upon the poll in relation to that resolution, voting was such as to make a casting vote available to the chairperson, who was the administrator, pursuant to regulation 5.6.21(4) of the Corporations Regulations 2001 (Cth). By value, there was a majority against the resolution for winding up and a minority in favour: the votes, by value, were $320,786.10 in favour to $4,322,919.30 against. By number, there was a majority in favour and a minority against: 22 to 9 with one abstention. The chairperson held five proxy votes. He exercised these and his casting vote in favour of winding up. The purchaser under the sale contract had, it is said, collected 13 proxy votes which it caused to be cast in favour. On that basis, the plaintiff complains that only 4 out of the 22 creditors voting exercised judgment independently of the purchaser and the administrator. The plaintiff contends that three of the supposed creditors for whom proxy votes in favour were cast were not creditors at all. The final matter to which the plaintiff refers is failure of the chairperson to ensure that the meeting had an opportunity to consider the alternative of the revised deed of company arrangement or to consider the possibility of further adjournment while that matter was explored. The revised deed proposal is, in the plaintiff's view, calculated to produce a return for creditors of 68 cents in the dollar compared with 45 cents in the dollar from the sale contract.
25 These perceived irregularities, in the plaintiff's submission, culminated in and were compounded by breach, by the administrator as chairperson, of the duties concerning the exercise of the casting vote. The correct approach to the exercise of the casting vote was considered by the Court of Appeal in both Young v Sherman (2002) 170 FLR 86 and Kirwan v Cresvale Far East Ltd (2002) 42 ACSR 21. Several propositions emerging from those cases may be briefly mentioned. First, there is no general rule that the chairperson should use the casting vote to prefer the majority in value over the majority in number. The suggestion to the contrary in submissions on behalf of the plaintiff should be rejected. Second, the correct approach is for the chairperson to proceed according to what the chairperson believes to be in the best interests of those affected by the vote. Third, the objectives of Part 5.3A must be considered in making the decision. Fourth, a distinction is to be drawn between propriety and wisdom, the latter probably being non-justiciable. Fifth, the court's decision on a challenge under s.600B should be made in the light of all the material the chairperson had.
26 I am satisfied that there is a serious question to be tried under s.600B. There is evidence to suggest that the administrator took particular steps with a view to ensuring that the winding up resolution was passed at the meeting in order to satisfy the condition in the sale agreement. Although the agreement mentioned a deadline of 2 March and the meeting was held on 3 March, it is clear that the parties to the agreement conducted themselves as if 3 March were the deadline. I am also satisfied that the condition in the sale agreement was calculated to shut out other possibilities and that the administrator had subscribed to it with an intention of maximising the chance of the sale's successful completion. Upon full investigation, that may or may not be found to be something that was in the best interests of the creditors in the particular factual context. The suggestion that some voters were not creditors also merits investigation. There is then a question as to due discharge of duties to provide information for the purpose of decision-making in advance of and at a meeting. There is a question to be tried there, but I do not regard it as a particularly strong one. The points about failure to ensure that the meeting was further adjourned is, to my mind, of less cogency, given that under regulation 5.6.18 the chairperson may adjourn only upon the direction or with the consent of the meeting itself, which requires a resolution which is within the power of anyone present to propose.
27 Speaking of adjournment, I am also of the opinion that there is an issue as to the process which saw the meeting supposedly adjourned for "up to 60 days" and then reconvened, within a short time, by unilateral decision of the administrator. Regulation 5.6.18(1) permits adjournment "from time to time" at the direction or with the consent of the meeting itself; but in the case of a s.439E meeting, the "day" to which it is adjourned may not be more than 60 days after the first day on which the meeting was held.
28 These observations about the existence of a serious question to be tried make it necessary to consider the balance of convenience.
29 The first point to note on that matter is that the making of the interlocutory orders would, on the approach the parties have taken, mean that the company did not complete the sale contract on the date it appears to be accepted as the due date for completion, that is, 5 December. This assumes, of course, that there will have been no final determination of the originating process by that time - a safe assumption, whichever court is seised of the matter. As a result, the company may be forced into a breach of contract and thereby exposed to a claim for damages.
30 The material before me does not allow any reliable assessment to be made of the quantum of any such damages, although some general idea of the sums involved comes from the fact that the overall purchase price for the totality of the assets is $4.1 million and that certain of the components included in the sale, being land and buildings and plant and equipment only, are shown in the report as to affairs as having a book value of about $8.5 million and a value estimated by directors at about $7.5 million. These considerations favour the defendants.
31 The plaintiff points out, however, that if the contract is completed, creditors will have lost such opportunity as there is to obtain the benefits of the revised deed of company arrangement, a proposal in respect of which the plaintiff professes itself willing to give to the court an undertaking that it will vote in favour. The plaintiff is also prepared to give another undertaking to the court, namely, an undertaking that if it succeeds in obtaining final relief, but a deed of company arrangement substantially in the terms of the proposal discussed at the reconvened meeting is not executed, it will, at the option of each of the other unsecured creditors, acquire that creditor's debt for an amount representing not less than 45 cents in the dollar.
32 In addition, of course, the plaintiff would have to give the usual undertaking as to damages. But that, together with the other undertaking involving financial commitment to which I have just referred, highlights the fact that the plaintiff is a foreign corporation, which is not registered in Australia as a foreign company and does not have any presence within New South Wales or Victoria or, for that matter, elsewhere in Australia. That brings into play principles referred to by Warren J in Hotline Communications Ltd v Hinkley (1999) 44 IPR 445 at 456-7 and by Habersberger J in Advance Communications Technologies Inc v Advance Communications Technologies (Aust) Pty Ltd [2002] VSC 348. I had occasion to deal with those principles in J Aron & Co v Newmont Yandel Operations Pty Ltd (2003) 47 ACSR 243 at pp.247-8:
"A further aspect of the balance of convenience must also be dealt with. The plaintiff is a foreign company which does not appear to have any presence in the jurisdiction (by which I mean not only New South Wales but Australia as a whole). An affidavit of its solicitor filed on its behalf suggested that it maintained a place of business in Sydney. When Mr Gleeson tendered material showing that there was no foreign company registration as required by s.601CD, Mr Macfarlan was given leave to adduce oral evidence from the solicitor who then testified that what he had said in his affidavit was a misapprehension or misunderstanding. There is thus no evidence that the plaintiff has a presence within the jurisdiction and no evidence as to the place of the plaintiff's incorporation. Nor is there any evidence as to its financial position, although there is hearsay evidence of its solicitor that it is wholly owned by Goldman Sachs Group Inc of the United States. No guarantee by that purported ultimate holding company or by anyone else in respect of any undertaking as to damages the plaintiff would give has been foreshadowed.