Gun Capital Management Pty Ltd v Solamind Pty Ltd

REASONS FOR JUDGMENT 1 The applicant commenced this proceeding in the Western Australia District Registry. The applicant alleges that the first and second respondents engaged in conduct in contravention of s 1041E and s 1041H of the Corporations Act 2001 (Cth), alternatively, s 52 of the Trade Practices Act 1974 (Cth), and claims damages against these respondents. The third respondent, Mr Soultanov is, and was, at the material times, a director of each of the first and second respondents. The applicant alleges that Mr Soultanov was involved in the impugned conduct of the other two respondents, and seeks consequential relief against him. The applicant also claims monies, referred to as the "Gun fee", allegedly owed by the first respondent to the applicant under a share acquisition agreement between those parties. 2 The respondents have applied to transfer this proceeding to the Victoria District Registry of this Court so that that registry would then become the "proper place" in relation to this proceeding. The respondents rely on s 48 of the Federal Court of Australia Act 1976 (Cth) and O 10 r 1(2) of the Federal Court Rules (the Rules). 3 The Court has a wide discretion in determining whether to order the transfer of the proceeding. However, there are a number of authorities which provide some guidance in relation to the exercise of that discretion. In the case of National Mutual Holdings Pty Ltd v The Sentry Corporation (1988) 19 FCR 155, the Full Court observed at [162]: Ultimately the test is: where can the case be conducted or continued most suitably bearing in mind the interests of all the parties, the ends of justice in the determination of the issues between them, and the most efficient administration of the court? It cannot and should not, in our opinion, be defined more closely or more precisely. 4 In Lamb v Hog's Breath Company Pty Ltd (No 1) [2007] FCA 49 at [7], French J (as his Honour then was) observed: The question of the Registry from which proceedings should be conducted does not raise matters of high principle. It is essentially a matter of case management and proper recognition of the legitimate interests of each of the parties reflected, in part, in the balance of convenience as between them and, of course, the convenience of the Court and any economies and efficiencies that may attach to one choice or the another. 5 I set out below the relevant factors in considering whether the proceeding should be transferred to the Victoria District Registry of this Court. 6 All the parties are located in Melbourne. The applicant's principal place of business and registered address is in Melbourne. The first respondent and the second respondent are, and have been, located in Melbourne since 1998 and 1993 respectively, and conduct their respective businesses from Melbourne. The third respondent, Mr Soultanov, resides in Melbourne. There are other directors of each of the first respondent and second respondent who are also resident in Melbourne. Mr Khouri, who is a director and sole shareholder of the applicant, resides in The Republic of Lebanon, but has a residence in Melbourne, which is listed as his residential address on the company search of the applicant. 7 The conversations comprising the impugned conduct of the respondents took place in Melbourne. One such conversation is pleaded at para 12 of the applicant's statement of claim. There, the applicant pleads that a crucial representation was made on 20 August 2007, in the course of a meeting at the offices of the first and second respondents which was attended by Mr Khouri, Mr Soultanov, Mr Kilroy (then a director of both the first respondent and second respondent), and Mr Stedwell (then a director of the second respondent), and Mr Pellegrino (then a director of the second respondent). 8 The damages claimed by the applicant are related to the fact of the appointment of external administrators to Opes Prime. Those external administrators are located in Melbourne. 9 The firm of solicitors and counsel representing the respondents are based in Melbourne. 10 The proceeding was commenced in the Western Australia District Registry by Lavan Legal, a law firm which is based in Perth, acting on behalf of the applicant. Mr Martin Bennett is an in-house counsel with Lavan Legal. The fact that Lavan Legal and Mr Bennett are based in Perth, is the only connection that the proceeding has to Western Australia. 11 The proceeding is at a very early stage. The respondents have not yet filed defences, but have very recently filed a notice of motion to strike out the applicant's statement of claim. 12 For the following reasons, I am of the view that the proceeding should be transferred to the Victoria District Registry. 13 First, I place considerable weight on the fact that Mr Soultanov and other principals of the respondents are located in Melbourne, and that Mr Khouri has a closer connection with Melbourne than Perth. These facts are significant in determining the place where the proceeding can be most efficiently and effectively case managed. Mediation is now a component of case management in this Court. Not infrequently, more than one mediation conference may occur before the mediation process is completed. The personal attendance of the parties at mediation conferences is a very important element of the mediation process. The fact that Mr Soultanov and other directors of the first and second respondents are resident in Melbourne, means that it is much more likely that one or more of the principals of the respondents will be able to attend any mediation personally, at substantially lesser cost, if mediation was conducted in Melbourne, under the direction of the Victoria District Registry, than if it was conducted in Perth, under the direction of the Western Australia District Registry. For Mr Khouri to attend a mediation personally, he would, of course, have to fly from The Republic of Lebanon to Melbourne rather than to Perth. However, in view of Mr Khouri's connection with Melbourne, it would, on the face of it, appear to be less burdensome for him to attend a mediation in Melbourne than in Perth. 14 Whilst it is possible for persons, in exceptional circumstances, to obtain the leave of the Court to attend a mediation by telephone, the premise underlying mediations under the Rules of the Court, is that parties will attend personally. 15 Secondly, I take into consideration that the applicant has retained the services of Lavan Legal, a law firm based in Perth. In my view, this consideration carries only limited weight in the circumstances of this case. First, there is no evidence that the applicant will terminate the retainer of Lavan Legal and Mr Bennett, if the proceeding is transferred to the Victoria District Registry. Accordingly, there is no evidence that a transfer of the proceeding will intrude upon the liberty of the applicant to be represented by the lawyers of its choice. Secondly, the Court is a national court and it is a common occurrence for the Court to use video link communications, particularly, in interlocutory proceedings, to accommodate the fact that the parties are represented by legal practitioners located in different States. Indeed, on the hearing of this motion, the respondents were represented by Mr Tomlinson, who appeared by video link from the Victoria District Registry. Mr Bennett contended, however, that the three hour time difference between Western Australia and some of the Eastern States of Australia constituted an obstacle to Western Australian practitioners participating in directions hearings and interlocutory hearings in respect of proceedings whose proper place was either the Victoria District Registry or New South Wales District Registry. I place little weight on this contention. Whilst there may have been occasions in the past when Western Australian practitioners have been required to appear by video link at such hearings at inconveniently early times in the morning, I am confident that, as a general practice, a judge in another district registry who is managing a case, in which a Western Australian practitioner is involved, would take into account the time difference between the States, in setting times for directions and other hearings. 16 Thirdly, I have regard to the stage at which the application to transfer this proceeding has been made. One of the factors referred to in the cases as militating against the transfer of a proceeding to another district registry of the Court, is that a new docket judge in the receiving registry would have to "retread" the ground already covered by the docket judge in the current district registry (Labelmakers Pty Ltd v LL Force Pty Ltd [2009] FCA 956 at [14]). The respondents' transfer application has been brought before the respondents have filed defences and, also, before the hearing of the respondents' notice of motion to strike out the applicant's statement of claim. Accordingly, the timing of the respondent's transfer application is not a factor militating in favour of declining to transfer the proceeding to the Victoria District Registry. 17 Fourthly, the respondents, also, contended that the fact that the likely witnesses were resident in Melbourne, was another consideration which favoured the transfer of the proceeding to the Victoria District Registry. Mr Bennett contended, however, that until defences were filed, it would not be possible to know what was in issue between the parties and, therefore, which persons would be required to give evidence. Mr Bennett went on to contend that, therefore, the respondents' transfer application should be adjourned until after the respondents have filed their respective defences. 18 Whilst I accept that the filing of defences might assist in identifying the number of likely witnesses, I am of the view that adjourning the transfer application until after that stage has been reached, would be of no practical utility for the purposes of determining this transfer application. This is because it was not contended by the applicant, that there is even one potential witness who is resident in Perth. On the other hand, there is evidence that all of the other potential witnesses (with the exception of Mr Khouri), including, in particular, one of the parties, Mr Soultanov, are resident in Melbourne. As to Mr Khouri, he has a closer connection with Melbourne than Perth. It follows that the "potential witness" consideration also militates in favour of transferring the proceeding to the Victoria District Registry. 19 It follows, therefore, that I will order the proceeding should be transferred to the Victoria District Registry. I certify that the preceding nineteen (19) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Siopis.