Global Technology Australasia Ltd v Bank of Queensland Ltd [2001] VSC 230

Supreme Court of Victoria|2001-07-13|Before: Gillard J

TRANSFER OF PROCEEDING - s.5(2) of Jurisdiction of Courts (Cross-Vesting) Act 1987 - parties agreed to forum in arbitration clause - proceeding not transferred.

This is an application by summons by the defendant in the proceeding, seeking an order that it be transferred to the Supreme Court of Queensland pursuant to of the ("the ").

The plaintiff, Global Technology Australasia Ltd, formerly known as Solace Ltd, was and is engaged in the business of selling and installing software in computer systems.

Solace was a listed company on the Australian Stock Exchange. On 16 November 1999, it executed a deed of company arrangement.

Its present Managing Director, Robert John Edge, was appointed administrator of Solace on 15 July 1999. The company arrangement was completed and Solace's suspension from listing on the Stock Exchange was lifted on 23 December 2000. Solace has since changed its name to Global Technology Australasia Ltd ("Global").

Global Technology Ltd ("the company") is a large publicly listed South African software development company. It was introduced to Global, then known as Solace, by Mr Edge. It invested in Global. Today it holds 60 per cent of the shares in Global.

Global carries on its business in Australia from Melbourne, where it employs 45 persons. It also has a Sydney office, in which it employs ten persons. Mr Edge is now Managing Director, and one of two Australian directors. He is its Chief Executive Officer. He works full-time in the business.

The defendant, the Bank of Queensland ("the defendant"), carries on the business of retail banking in the State of Queensland. Its head office is located in Brisbane.

Sometime in 1997, the defendant engaged Global, then known as Solace, to assist it with developing software to be used in its existing core banking system. The software then marketed by Solace was known as the Retail Banking System or RBS. The defendant proposed to replace its existing system with the RBS system. Thereafter, Solace provided services to the defendant, for which the defendant paid some $700,000. The work was mainly concerned with developing what is known as the gap analysis. This analysis focused on the difference between the bank's old system and the proposed new system.

The engagement continued right up to June 1999. It was on 15 July 1999 that Mr Edge was appointed administrator of Solace

Mr Edge formed the view that it was not economical for Solace to continue the contract with the defendant, and later, introduced the South African company to the defendant. Discussions took place in which the company, through Solace, raised the possibility of supplying the defendant with a system marketed by it, known as the "Globus System". This was a different system to the one recommended by Solace which was not, at that time, widely used in Australia.

Discussions took place during December 1999 and January 2000. On 7 February 2000, the defendant and Global executed a Licence Agreement as well as a Services Agreement.

Under the Licence Agreement, Global was obliged to supply the defendant with a software system. This was defined by the agreement. The Globus System, which was to be supplied, required installation and service to ensure that it integrated with and adapted to the client's computer system. The process of integration and adaptation was provided for in the Services Agreement.

Thereafter, services were rendered by Global pursuant to the Services Agreement.

It is asserted by the defendant that Global has failed to deliver a proper system, and is in breach of both the Licence Agreement and the Services Agreement. It says it has suffered damage. Global claims monies and interest due under the Licence Agreement and the Services Agreement. The total amount claimed is about $4,400,000.

Both agreements contained an arbitration clause. As a first step in the arbitration process, it is necessary for the parties to attempt to resolve their dispute "amiably". The clause goes on to provide that if within a reasonable time, being not less than 60 days from the service of a written notice of dispute, the parties fail to resolve their differences, then they agree to abide the decision of a single arbitrator.

The defendant took steps to activate the "amiable" process.

On 3 May 2001, Global issued a proceeding in this Court. The defendant filed a conditional appearance on 28 May 2001. In the meantime, the defendant issued a proceeding on 25 May 2001 against Global and Robert Edge in the Supreme Court of Queensland. On 4 June 2001, it issued a summons seeking the transfer of the proceeding to the Supreme Court of Queensland.

The claims of Global can be fairly described as debt claims, ie. moneys due under agreements for products supplied and services rendered.

The defendant alleges, in its statement of claim in the Queensland proceeding, that there were a number of misrepresentations made which induced the Bank to enter into the Licence Agreement and the Services Agreement. It is alleged that Global was in breach of s.52 of the Trade Practices Act 1974.

It is alleged against Mr Edge, as second defendant in the Queensland proceeding, that he aided and abetted the contravention of s.52 of the Trade Practices Act. Further, it is alleged that Global breached both the Licence Agreement and the Services Agreement. The Bank, as plaintiff, claims damages.

Both sides have filed a substantial number of affidavits. It is clear that the real areas of dispute are in the Bank's claims.

Application Under Section 5

The defendant's application is made pursuant to s.5(2)(b) of the Act, which relevantly provides -

(a) a proceeding (in this sub-section referred to as the 'relevant proceeding') is pending in the Supreme Court (in this sub-section 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 proceeding be determined by that other Supreme Court;

(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 the law of the State or Territory referred to in sub-sub-paragraph (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) in the interests of justice -

it is more convenient 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 -

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

(Emphases added).

There was no suggestion by either party that the matters referred to in sub-sub-paragraphs (A) and (B) applied. The sub-section provides three alternative cases for a transfer. An applicant could rely upon all three - see Bankinvest AGC v Seabrooke and Ors (1988) 14 NSWLR 711 at p.722. The defendant relied upon the appropriate court and interests of justice tests.

The legislation has been on the statute books since 1987, and many applications have been made pursuant to s.5(2). Whether or not a court should grant the application to transfer a proceeding, is a matter of discretion. One looks in vain in the provisions of the Act to ascertain the relevant criteria to take into account in considering such an application. Nevertheless, a number of courts have considered the provisions of the Act and have identified matters which are relevant and to be considered on an application to transfer.

The application is brought by the defendant in the proceeding before this Court. It carries the onus of proof of establishing that, in the exercise of the discretion, an order should be made, transferring the proceeding to the Supreme Court of Queensland.

There was some doubt as to whether there was a burden by reason of what was said by Rogers A-JA in Bankinvest AGC v Seabrooke and Ors (1988) 14 NSWLR 711. His Honour, with whom Street CJ agreed and Kirby P probably agreed, expressed the view that there was no onus. In Realistech Consulting Pty Ltd v Westpac Banking Corporation Ltd and Ors, an unreported decision delivered 30 September 1998, I disagreed with his Honour's approach and concluded that there was an onus resting upon the applicant. However, the case I was dealing with was not a case of competing proceedings in two different courts.

In James Hardie and Coy Pty Ltd v Thomas Joseph Barry, a recent unreported decision of the New South Wales Court of Appeal, delivered 4 December 2000, Mason P, at paragraph 100, had this to say -

"One aspect of Bankinvest which has puzzled later courts is the statement by Rogers A-JA (with which Street CJ definitely agreed and Kirby P probably agreed) that it is inapt to speak of any onus resting upon the applicant for transfer. Such a sentiment may be understandable where the transfer is ordered on the court's own motion. However, like others I find it elusive in the context of a contested proceeding inter partes. If one views the exercise as one of judicial discretion according to proper principle, then it is natural to regard the applicant for particular relief as carrying at least a persuasive onus. ... Fortunately 'onus' will seldom if ever be determinative at the end of the day."

The other two members of the Court agreed with Mason P.

In my opinion, where the application is made in circumstances where there are two competing courts, then in my view, the applicant does carry the burden of persuading the Court to exercise its discretion in its favour.

Another matter which has caused some controversy in the past is the question whether the person first issuing the proceeding is entitled to have his choice of forum accorded substantial weight, on an application such as the present. In my opinion, the plaintiff's choice of the particular court and the reasons for it are relevant to the application. They must be given due weight in the absence of forum shopping. But in circumstances where the plaintiff, as in this case, managed to issue its proceeding first, in circumstances where both parties were gearing up to go to litigation, the weight that should be attached to those factors is minimised. A party should gain little advantage by beating the other party to "the draw".

Having said that, it is clear that this Court has jurisdiction to hear the plaintiff's case. It is a fairly straightforward and simple case, in effect one of debt collection, and there is no suggestion of forum shopping or abuse of process. The plaintiff's main place of business is in Melbourne. There is without doubt, on the evidence, a substantial connection between the facts of the present proceeding in this Court and this State. There is some connection between the defendant's case and this State, although there is a substantial connection with Queensland and South Africa.

This Court is concerned to consider and determine whether the defendant has established that "it is more appropriate that the proceeding be determined by" the Supreme Court of Queensland.

The cases have established relevant criteria to guide the Court on an application such as the present.

It would be both unwise and impossible to state an exhaustive list of relevant matters. Each case must be decided in accordance with its own particular facts. Further, factors that may have been of some importance ten years ago may not, because of changed circumstances, assume the same degree of importance in this day and age.

The Bankinvest case, supra, was the first decision at appellate level to consider the provisions of the Act, and Rogers A-JA, at p.278, gave some guidance as to the Court's approach. I respectfully agree with what his Honour said, and I adopt it. He emphasised that initially, the search is for what is called the "natural forum". This means "more appropriate". The expression "natural forum" was discussed by Lord Goff in Spiliada Maritime Corporation v Cansulex Ltd (1987) AC 460 and described, on p.478, as -

" ...that with which the action has the most real and substantial connection."

So, it is the connecting factors which the Court must weigh up. "These will include not only factors, affecting convenience or expense (such as availability of witnesses), but also other factors, such as the law governing the relevant transaction ... and the places where parties respectively reside or carry on business." - ibid at p.478.

More recently, the Court of Appeal in New South Wales in James Hardie, supra, has considered the principles that should apply. The Court held that the New South Wales courts should adhere to the approach in Bankinvest, by adopting a liberal approach to the application of the legislation.

In Dawson v Baker (1994) 120 ACTR 11, Higgins J, speaking for the Full Court of the A.C.T., summarised the case law and listed a number of factors which were relevant to the consideration of the appropriate forum. These were: application of substantive law; forensic advantage or detriment conferred by procedural law; the choice made by a plaintiff and the reasons for the choice; substantive connections with the forum; balance of convenience to parties and witnesses; and convenience to the court system. I agree, but emphasise that the list is not exhaustive and the weight to be attached to each factor depends upon the circumstances.

This application is concerned with two jurisdictions of Australia. There is no suggestion that the applicable law in both States will be different. If the proceeding is transferred, the lawyers involved in the proceeding are entitled to practise in the State to which the proceeding is transferred. But even if it is not transferred, it is no longer difficult for interstate practitioners to practise in this State. Admission is speedy and inexpensive, by reason of the Mutual Recognition legislation in each State. In this State, under the provisions of Part 2A of the Legal Practice Act 1996, an interstate practitioner may engage in legal practice in this State without having to be admitted or having to obtain a practising certificate. The procedure is inexpensive and can be easily activated.

In addition, with the ease of transport and communications within Australia, it is no longer difficult to prepare a case, indeed a very large case, in one capital city, and establish an office close to a court in another capital city, shortly prior to trial My experience, both at the Bar and on the Bench, is that an office can be established in a hotel, very close to the court, to provide the legal practitioners with the necessary premises and back up to run a large case in another state. It is not difficult to move witnesses around this country, or to subpoena them to attend from other States. In addition, witnesses can give their evidence in this State by audio-visual link.

Difficulties experienced ten years ago in relation to admission to practise, moving from State to State, and conducting litigation in another State, are far less today than they were then. Parties can have their own legal practitioners preparing and presenting the case. Witnesses can come and go. If there is any inconvenience, it is to the lawyers from another State. In this day and age, is it much of an inconvenience? See observations of Kirby J, made 13 years ago in Bankinvest, supra at p.717.

Each side relied upon similar factors, in most instances, to justify what was the more appropriate forum. However, in considering the issue, it must be borne in mind that the questions are, is it more appropriate that the proceeding in this Court be determined in the Supreme Court of Queensland or, is it otherwise in the interests of justice that the proceeding be determined by the Supreme Court of Queensland?

Of course, there will be inconvenience to one of the parties wherever it takes place. I have no doubt the litigation could be conducted efficiently in either State. The defendant relied upon a number of factors, submitting that the relevant circumstances have an "overwhelming connection with the State of Queensland".

The first two factors relied upon were, that the terms of the two agreements were negotiated in Brisbane and secondly, that the bulk of the obligations of Global, pursuant to the terms of the agreements, were to be performed in Queensland. These assertions cannot be disputed. But those factors are of little consequence in the overall litigation. The question of alleged misrepresentations is more important, and it would appear that one of the important representations relied upon by the defendant is alleged to have occurred in Melbourne.

The third factor is that there were extensive discussions and meetings between the defendant's staff, staff employed by Global (then known as Solace) and the South African company. These discussions took place during the period from September 1999 to late January 2000, and it is asserted that most of the discussions took place in Queensland. Whilst it is accepted that many of the discussions took place in Queensland, many took place in South Africa and to a lesser degree, some in Melbourne.

The fourth factor relied upon was that almost all the pleaded representations were made in Brisbane, but as Mr Whelan QC pointed out, one of the most important of the alleged misrepresentations was alleged to have occurred in Melbourne.

The fifth factor was that the primary component of loss and damage suffered by the defendant occurred in Queensland. No doubt that is correct. On the other hand, the claim made by Global for monies due is in respect of monies payable in Melbourne.

The sixth factor was that the relevant documentation discovered by the defendant is estimated to be between 45,000 and 65,000 pages, and is located in Brisbane. It is also said that many of the documents are in electronic form. No doubt those assertions are correct. But those facts do not present any real difficulties with respect to management of the litigation. No doubt the defendant will utilise its Brisbane lawyers to prepare the case, and will prepare the case in Brisbane. The affidavit of documents will be prepared in Brisbane. In litigation of this size, common sense demands that if the proceeding is kept in this Court, the right to inspection can be exercised by Global's representatives in Brisbane. This step is commonly done this way in large litigation.

The seventh factor concerns the location of witnesses. The defendant's witnesses are residents in Brisbane and the United Kingdom, and witnesses to be called by Global are located in South Africa, the United Kingdom and Melbourne.

The defendant states that there are eight witnesses who will be called by the Bank, six of whom are located in Brisbane and two in the United Kingdom. Evidence has been placed before the Court as to the evidence that each witness would give. As I stated in the decision of Realistech, supra, it is important, on an application for transfer, that some evidence be given to indicate the areas of evidence which a witness is likely to give. It is only if that evidence is available, that the Court can make some assessment of the necessity to call the witness.

As against this, Mr Edge, Managing Director of Global, has sworn two affidavits in which he identifies some fifteen witnesses who are located in Melbourne. Whilst he has given evidence as to the likely areas of their evidence, it is somewhat vague and uncertain. Further, it was submitted on behalf of the defendant that many of the witnesses were persons involved in discussions which took place prior to the entry into the agreements at the beginning of 2000. Mr Edge sought to meet the criticism by pointing out that it was uncertain, based upon the generality of some assertions made in the defendant's statement of claim in the Queensland proceeding, as to which witnesses would be required. He opined the view, that at "this early stage of the proceedings, and particularly in the absence of properly particularised pleadings and discovery, it is impossible for Global and, in my view, the Bank to exclude any of the witnesses referred to in paragraph 54 of my first affidavit as persons who will be required to give evidence in this proceeding or the Queensland proceeding."

It is impossible for me to resolve the question of the likely number of witnesses in the proceeding, and all I observe is that at least six witnesses of the defendant reside in Brisbane, two reside in the UK, fifteen possible Global witnesses reside in Melbourne and eight possible Global witnesses reside in other places, the majority of whom are located in South Africa.

Again, the question of location of witnesses must be viewed in the light of the preparation of the case. Each party will prepare its case in the city where it is located. Each will use its own lawyers in that city. Witnesses will provide statements and be interviewed in that city. There will be no difficulties presented to either party with respect to obtaining witness statements and preparing witnesses for trial. The inconvenience comes down to travelling to another city to give evidence. In my view, that inconvenience is of little substance and the expense involved in a multi-million dollar litigation is insignificant. This application will not be decided upon the location of witnesses.

The eighth factor which was initially relied upon by the defendant was that the Globus System, if to be viewed or tested during the course of the preparation of the litigation or during the hearing, could only take place on the Bank's computer system in Brisbane. However, this was revealed to be incorrect as the System could be viewed other than on the Bank's computer system, and Dr Panam QC effectively abandoned this factor.

The ninth factor relied upon was the fact that the defendant's solicitors were engaged in July 2000, and have performed considerable work in relation to the dispute between the parties and the taking of witness statements. It appears senior counsel in Queensland was briefed in January this year. I do not accept the contention that if the matter is to be resolved in this Court, new practitioners must be engaged. The reality is that the proceeding will be prepared for trial in Brisbane by the defendant's legal team, which will then travel to Melbourne and have no difficulty in carrying out their services in this State.

The parties accepted that the law relating to the issues will be substantially the same, whether the proceeding is heard in this Court or in Queensland. It is noted that the governing law of the Licence Agreement is the law of this State, whereas the governing law of the Services Agreement is the law of the State of Queensland. Neither party relied upon this factor in support of their case.

Global submitted that the factors raised by the defendant did not establish that it was more appropriate that the proceeding be determined by the Supreme Court of Queensland, or that otherwise, in the interests of justice, the proceeding be determined by that Court.

Global emphasised that there are a number of other factors of importance which swung the balance in favour of leaving the proceeding in this Court.

Global relied upon the fact that there were more witnesses of Global located in Melbourne than in Brisbane. However, for reasons that I have already stated, that fact is disputed and is a factor which I place little weight on in this application. In addition, it is said that Global wishes to engage lawyers in this State. Again, for reasons that I have already stated, this will not create any problems for the preparation of the case, whether it be here or in Brisbane that it has to be heard. Global's lawyers are entitled to conduct the case in Queensland if the proceeding is transferred.

The next matter relied upon by Global was the position of Mr Robert Edge, who is the Managing Director of Global. He has been joined as a party to the Queensland proceeding, and no doubt would be joined on a counter claim to the proceeding in this Court. I accept that the hearing of the case will take some time and it would be necessary for Mr Edge to be present during the hearing. It is submitted that he would be put to considerable hardship, as he is the Chief Executive Officer of Global and one of only two Australian resident directors. Whilst I accept that Mr Edge may wish to spend time at the hearing, I would be surprised if he would have to attend every day. If the proceeding is to be heard in Queensland, no doubt he would have to take steps to re-arrange his work schedule, and although there would be a degree of hardship, in my view, the problems are not insurmountable.

The next factor, a factor which in my opinion is of substantial weight, is that the parties agreed that if there was to be an arbitration proceeding between them arising out of any dispute under both the Licence Agreement and the Services Agreement, the arbitration proceeding was to be conducted in Melbourne.

Clause 19.2 of the Licence Agreement provided as follows with respect to the arbitration -

"the place of arbitration or forum shall be Melbourne exclusively and the language English. The proceedings shall be governed by the rules of the Law Institute of Victoria."

Clause 20.2 of the Services Agreement is in the same form.

Both agreements are detailed and represent the culmination of negotiations between the parties. It is clear that both parties were agreed that any arbitration proceedings should take place in Melbourne. In the absence of any explanation as to the reason for the location, one can assume that the question of inconvenience to the parties and in particular the Bank of Queensland, was either of little consequence or something that the Bank accepted. In my opinion, it is a matter of considerable substance, when addressing the question whether it is more appropriate that the proceeding be determined by the Supreme Court of Queensland or, that otherwise, it is in the interests of justice that the proceeding should be determined by that Court, that the parties agreed that any arbitration should take place in Melbourne.

Finally, Global emphasised that it issued the proceeding first in time, on 3 May 2001, whereas the Queensland proceeding was not issued until 25 May 2001, after the proceeding was served on the Bank. There is no doubt that the authorities accept that the plaintiff's choice of forum is a relevant factor to consider, and that if the circumstances were otherwise neutral, the plaintiff's choice may be a decisive factor.

The burden rests upon the defendant to establish to the satisfaction of the Court that it is more appropriate that the proceeding be determined by the Supreme Court of Queensland or, that it is in the interests of justice that it be determined by that Court. In my opinion, the defendant has failed to persuade the Court that the proceedings should be transferred.

In reaching that conclusion, I place substantial weight on the fact that the parties agreed to a form of dispute resolution, namely, by arbitration, and that the arbitration should take place in Melbourne. The parties, by so agreeing, accepted that the location was more appropriate, and any inconvenience was something that was to be accepted by the Bank in having to litigate in Melbourne. I think that the other factors relied upon by both sides tend to cancel each other out, and issues such as inconvenience, employing one's own lawyers and having to travel to another state to present a case are of less significance now than in times past. I also place some weight upon the fact that the plaintiff issued its proceeding first.

Subject to the submission of counsel, I propose to make the following orders -

(i) that the defendant's summons filed 4 June 2001 be dismissed;

(ii) that the defendant pay the plaintiff's costs of the summons.

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CERTIFICATE

I certify that this and the 15 preceding pages are a true copy of the reasons for Judgment of Gillard J of the Supreme Court of Victoria delivered on 13 July 2001.

DATED this thirteenth day of July 2001.

Legal Practice Act 1996

At a glance

Court

Decision date

Before

Source

Judgment (76 paragraphs)

Parties

Legislation Cited (1)

Cases Cited (1)