Iasbet Limited v Worldgroup Consulting Pty Ltd [2002] VSC 587

5. The defendant relied on two affidavits of Richard Andrew Davis sworn 29 October and 7 November 2002 respectively in support of its application. Mr Davis is a member of the firm of Acuiti Legal and is the solicitor for the defendant.

8. The application was opposed by the plaintiff, Iasbet Limited ("IAS"). It relied on two affidavits of Donna Olivia Pelka sworn 6 and 10 November 2002 respectively in opposition to the application. Ms Pelka is a member of the firm of Baker & McKenzie, the solicitors for the plaintiff. After the hearing concluded, Ms Pelka filed a further affidavit correcting a statement in an earlier affidavit which had resulted from mistaken instructions.

12. The plaintiff is a publicly listed company carrying on business in Australia as a bookmaker, taking bets by telephone and via the Internet on horse races and other sporting events principally in Australia, New Zealand and Asia. The location where the bets are physically taken is in Darwin in the Northern Territory.

15. The defendant is a company which specialises in the production of complex computer software. In 2000 and 2001, WGC agreed to provide a succession of specified computing services to IAS. A dispute arose between the plaintiff and the defendant in relation to the quality of the computer services provided by WGC. IAS alleges that in April 2001, an attempted demonstration of the betting engine computer system ("the System") was abandoned because it lacked basic functionality and that despite WGC performing further work on it, the System failed the user acceptance testing conducted on it by IAS in August and September 2001 and in February 2002. By its Statement of Claim, the plaintiff alleges a number of false representations and seeks damages for negligence, breach of contract and under s.82 of the Trade Practices Act 1974 (Cth) and orders for restitution of about $2.3 million paid by the plaintiff to the defendant for work performed by the defendant.

18. On 28 October 2002, WGC commenced a proceeding against IAS in the Supreme Court of New South Wales claiming payment of the sum of $1,355,095.28 in respect of unpaid invoices. Part of that claim was in respect of an invoice dated 16 October 2002 in the sum of $705,650. IAS queried the validity of this late delivered invoice and pointed out that, without its inclusion, the sum claimed by WGC would have been within the jurisdiction of the District Court of New South Wales. In his second affidavit, Mr Davis said that when IAS commenced its proceeding, there were ongoing commercial discussions between the parties in an endeavour to reach a commercial resolution and that, but for those negotiations, WGC would have sent the final invoice and commenced its own proceeding in early 2002.

22. The Notice filed pursuant to r.13.06(1)(a) of Chapter II of the Supreme Court Rules stated that the defendant would rely in the application on s.5(2)(b) of the Jurisdiction of Courts (Cross-Vesting) Act 1987. That section provides as follows:

"5. Transfer of Proceedings ... (2) Where (a) a proceeding (in this sub-section referred to as '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 - (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 a 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) the interests of justice - it is more appropriate 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."

26. In Ross Mollison Group Pty Ltd v The Really Useful Company (Aust) Pty Ltd[1], Warren J stated as follows:

"In determining whether to order a transfer under s.5(2) of the Jurisdiction of Courts (Cross-Vesting) Act the court must be satisfied as to which is the 'more appropriate forum' for the hearing and determination of the dispute: Bankinvest AG v Seabrook (1988) 14 NSWLR 711, 714, 730; Schmidt v Won (1988) 3 VR 435, 450. The courts have held that the 'more appropriate forum' is the forum with the 'most real and substantial connection' with the subject matter of the proceeding: Bankinvest, supra, 728; Spiliada Maritime Corporation v Cansulex Limited (1987) AC 460, 478. Relevant factors to be taken into account in determining the more appropriate forum have included three factors. Firstly, the governing law of any agreement in dispute. Secondly, the connection between the alleged conduct and the jurisdiction. Thirdly, the cost and inconvenience for the parties as to the forum selected: Bankinvest, supra, 729."

Similar views were expressed by her Honour in the subsequent cases of Toll (FHL) Limited v Finemore[2] and Rogan v Rushton (Qld) Pty Ltd[3].

31. Warren J also considered, in Ross Mollison[4], the role that the plaintiff's choice of venue should play in determining the more appropriate forum. Her Honour referred to a number of conflicting observations in earlier cases[5] as to whether or not the original choice of forum should be brought into the balancing exercise under s.5(2) of cross-vesting legislation. In particular, she quoted the statement by Wilcox J in Bourke v State Bank of New South Wales[6] that:

"... for an applicant's choice of forum to be overridden, there must be some objective factor which makes it possible to say that the interests of justice will be better served by transfer than by non-transfer."

"In my view, the fact of original choice of forum ought not to stand alone as a determinative factor. It is a factor that ought to be considered in the context of the reasons underlying the original choice of forum and on that basis forms part of the balancing process."[7]

37. In Global Technology Australasia Ltd v Bank of Queensland Ltd[8], Gillard J said:

"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'."

41. In James Hardie & Coy Pty Ltd v Barry[9], Mason P, with whom Spigelman CJ and Priestley JA relevantly agreed, approved the "useful checklist of factors relevant to the decision to order a transfer of category (iii) cases"[10] contained in the judgment of Higgins J in Dawson v Baker[11]. The factors are:

(i) application of substantive law;

(ii) forensic advantage or detriment conferred by procedural law;

(iii) the choice made by a plaintiff of a forum and the reasons for that choice;

(iv) substantive connections with the forum;

(v) balance of convenience to parties and witnesses; and

(vi) convenience to the court system.

47. In McKee v Van Haften[12], Gillard J agreed that the listed matters were relevant, but emphasised that "the list is not exhaustive and the weight to be attached to each relevant matter depends upon the circumstances."

50. The Barry[13] case also resolved another matter of debate which was whether there was an onus of proof on an applicant of establishing that, in the exercise of the discretion, an order should be made. After referring to the contrary statement by Rogers AJA in Bankinvest AG v Seabrook[14], Mason P said:

"... 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 the persuasive onus. ... Fortunately, 'onus' will seldom if ever be determinative at the end of the day."[15]

55. The defendant relies on s.5(2)(b)(i) and (iii) of the Jurisdiction of Courts (Cross-Vesting) Act 1987. It submits that if the Court is of the view that it is more appropriate for this proceeding to be determined by the Supreme Court of New South Wales, taking into account the existing proceeding commenced on 28 October 2002 by WGC or otherwise in the interests of justice, then this Court must transfer this proceeding to the Supreme Court of New South Wales. However, Mr Myers QC, who appeared with Mr Dicker for the defendant, conceded that the commencement by the defendant of its own proceeding in the Supreme Court of New South Wales some six weeks after this proceeding commenced and one day before it issued its summons seeking the transfer to the Supreme Court of New South Wales in this Court, did little to advance its case under s.5(2)(b)(i). His submission therefore concentrated on the reasons why he submitted that, in accordance with s.5(2)(b)(iii), it was othewise in the interests of justice that the matter should be transferred to the Supreme Court of New South Wales.

58. WGC submitted that there were three jurisdictions which appeared to have a connection to the facts in this proceeding - New South Wales, Northern Territory and Victoria. However, neither party contended that the Northern Territory was the appropriate forum, despite the apparent strength of its claim. The contest was, therefore, one between New South Wales and Victoria. I turn, then, to applying to the facts the various factors referred to in the above authorities.

62. The governing law under the relevant contractual documents, the Master Services Agreement dated 1 July 2000 and each of the relevant Work Orders, was the law of New South Wales. An earlier Master Services Agreement was executed by a related company of WGC, SPL World Group (Australia) Pty Ltd ("SPL"). The governing law under that document was also the law of New South Wales. However, I agree with the plaintiff's submission that the defendant did not identify any legislation peculiar to New South Wales which could affect the interpretation or performance of the agreement. Therefore, the common law of Australia governs the relationship between the parties.

65. Further, Dr Pannam, who appeared with Mr Pearce for the plaintiff, submitted that the plaintiff's claims based on alleged misrepresentations would be governed either by the law of Victoria or the law of the Northern Territory, as those were said to be the places where the representations should be taken to have been made. But as there were no relevant differences between the law of Victoria, the Northern Territory or New South Wales in this area, there was no reason to favour one jurisdiction over the other.

68. Therefore, it seems to me that the question of the governing law is, as Dr Pannam put it, a neutral factor.

The Connection between the Alleged Conduct and the Jurisdiction

72. On behalf of the defendant, Mr Myers placed great reliance on the connections between his client and the work it performed and New South Wales. He listed a number of factors which, he submitted, demonstrated that New South Wales was the more appropriate forum for this proceeding:

(a) WGC was a company which had its head office in New South Wales.

(b) In the relevant contractual documents, the address of WGC is stated to be in New South Wales. Notices could be served at this address.

(c) All of the Work Orders were executed on behalf of SPL or WGC in New South Wales.

(d) With minor exceptions, the work performed by WGC pursuant to the Work Orders was carried out in Sydney in the State of New South Wales and Darwin in the Northern Territory. It was said that the quality and competence of the work that was done to design and create the System was the primary issue in the case.

(e) All of the proposal and design documents referred to in the Statement of Claim were sent to IAS from WGC's Sydney office.

(f) Invoices issued by WGC to IAS were raised and sent from WGC's Sydney office.

(g) The vast majority of the steering committee meetings and the daily heads up meetings between the parties were held by teleconference with participants only in Sydney and Darwin.

(h) WGC had issued in the Supreme Court of New South Wales its claim for outstanding fees in excess of $1.35 million.

(i) The vast majority of WGC's potential witnesses were currently located in Sydney. Four of the five persons employed by WGC who are referred to in the Statement of Claim were located in Sydney and the fifth resided in Sydney but currently worked during the week in Canberra.

78. Mr Myers submitted that there were very few factors which connected the proceeding to Victoria. He listed the following:

(a) A small amount of the work performed by WGC was carried out in Victoria.

(b) The Statement of Claim referred to one presentation given by WGC to IAS in Melbourne. This presentation was the only reference in the Statement of Claim to Melbourne or Victoria.

(c) A few of the meetings by teleconference had people participating from Melbourne.

(d) Three of WGC's potential witnesses were located in Melbourne but two were in Melbourne on short term work assignments.

(e) A number of the directors of IAS had residential addresses in Victoria, but others had residential addresses in New South Wales.

(f) A number of IAS' potential witnesses resided in Victoria.

(g) Some of the testing in relation to computer work performed by WGC was undertaken on behalf of IAS in Victoria.

(h) The proceeding was commenced in this Court.

84. By way of contrast with Victoria, Mr Myers listed the more substantial factors connecting the proceeding to the Northern Territory. They were:

(a) The registered office of IAS was in Darwin and its annual general meetings were held in Darwin.

(b) The address of IAS in the relevant contractual documents was in the Northern Territory. This was the same address given for the plaintiff in the Writ.

(c) Some of the work performed by WGC was carried out in the Northern Territory.

(d) All of the proposal and design documents referred to in the Statement of Claim were sent by WGC generally to two officers of IAS who at all material times resided and worked in Darwin.

(e) All of the invoices sent by WGC to IAS were sent to Darwin.

(f) Most meetings by teleconference were held with participants only in Darwin and Sydney.

(g) The Statement of Claim referred to two presentations given by WGC to IAS in Darwin.

(h) The attempted demonstration of the System in April 2001 took place at the plaintiff's office in Darwin.

(i) One director of IAS had a residential address in the Northern Territory.

90. Dr Pannam referred me to the evidence establishing that the corporate headquarters of the plaintiff was in Melbourne. A number of senior executives, including the Chief Executive Officer, the Chief Financial Officer, the director of Information Technology, the Member Services manager, the Marketing director and one of the two company secretaries, were now based in Melbourne. The executive chairman, Mr Mark Read, had residences in both the Northern Territory and Victoria, and it was said that he spent the majority of his time in Victoria.

93. Dr Pannam disputed the relevance of many of the connecting factors relied on by the defendant in support of its submission that New South Wales was the more appropriate forum. Dr Pannam accepted that most of the work performed by WGC was carried out in Sydney and Darwin, with only a small amount performed in Victoria. However, he submitted that it had not been established that location of the work was important. What was of significance, he submitted, was where the defects were established by the testing of the System. Part of this was done in Melbourne and part in Darwin. None of it was done in New South Wales. Dr Pannam further submitted that unlike a building case there would be no occasion for a site inspection and the computer system could be demonstrated anywhere.[16] The important issue was that testing of the System, in the Northern Territory and Victoria, had shown that it had certain deficiencies. It was irrelevant to that question that the work had been performed in New South Wales.

96. The plaintiff emphasised that the case itself was about alleged misrepresentations contained in documents sent to its employees in either the Northern Territory or Victoria. Also, it was alleged that critical oral representations were made at the plaintiff's board meeting, which was held in Melbourne, on 19 October 2000.

99. I have found assessing the competing arguments on this point the most difficult part of reaching my decision. The defendant's list of connecting factors with New South Wales certainly outnumbers the connecting factors in respect of Victoria. However, after careful consideration, I have concluded that Dr Pannam's submission, that the more important factors, such as where the alleged misrepresentations were made and where the testing of the System has occurred, have a greater connection with Victoria than New South Wales, has merit. This means, in my opinion, that although it is finely balanced, the factor involving the connection between the alleged conduct and the jurisdiction tends to favour Victoria rather than New South Wales.

103. Not surprisingly, both parties argued that they would be put to considerable extra costs and inconvenience if required to litigate the dispute in a jurisdiction other than the one they favoured. Regrettably, one party has to suffer. There is no way of avoiding this result.

106. On behalf of the defendant, Mr Myers listed a number of factors which, he submitted, showed that the cost and inconvenience to his client would be greater if the matter remained in this Court than it would be for the plaintiff if the matter were transferred to the Supreme Court of New South Wales. These factors were:

(a) Thirty out of thirty eight potential witnesses for WGC were currently located in Sydney and one resided in Sydney but currently worked in Canberra. Of the remaining seven potential witnesses, one was now located permanently in Melbourne, two were temporarily in Melbourne, one was in Queanbeyan, two were overseas and the address of one was unknown. Therefore, the travel and accommodation costs would be less if the matter were transferred to New South Wales.

(b) By the nature of their work as part of a close knit team, it would be more disruptive for WGC to have its witnesses spending the extra time required to travel to Victoria. The plaintiff's business of taking bets over the telephone or by internet would not be similarly disrupted.

(c) A number of WGC's potential witnesses had particular personal factors, such as child minding, which would make it very difficult if those witnesses had to travel to Victoria give evidence.

(d) All of the documents to be discovered by WGC were located in Sydney. There were many more documents to be discovered by WGC than IAS.

(e) The solicitors for WGC were only located in Sydney.

(f) The solicitors for IAS, Baker & McKenzie, were a national partnership with a very substantial office in Sydney.

112. On behalf of the plaintiff, Dr Pannam responded with his list of factors in favour of retaining the matter in Victoria.

(a) Sixteen out of twenty three likely witnesses for IAS were based permanently in Melbourne and another three resided in Darwin but travelled regularly to Melbourne. None resided in Sydney. By reducing the number of witnesses to be called by WGC, Ms Pelka was able to come up with calculations which purportedly showed that the travel and accommodation costs would be less if the matter remained in Victoria.

(b) The defendant has a Melbourne office which should minimise the disruption to its staff having to travel to Melbourne. The plaintiff had no office in Sydney.

(c) Whatever the current position with respect to personal factors of witnesses, there was no reason to conclude that they would be operative when the matter came on for hearing at some stage in the future. In any event, video links could substantially mitigate any inconvenience.

(d) All of the documents to be discovered by IAS were now in Melbourne and they totalled approximately 11,500 pages. The defendant's own material disclosed that many of its documents were in electronic form only.

118. Counsel for both parties acknowledged that it was far too early to state with any certainty which witnesses would be called. The issues have yet to be refined by the pleadings. It seems to me that both parties may have overstated the number of likely witnesses, but one cannot be certain. Nevertheless, it is clear that the majority of WGC's witnesses will be from Sydney and the majority of IAS' witnesses will be from Melbourne. At this stage, therefore, I cannot conclude one way or the other which course is likely to lead to more travel and accommodation costs being incurred.

121. Similarly, it is difficult to decide at this stage to which party more disruption will be caused by having to litigate in the other party's jurisdiction. Further, whilst the personal factors are important, it seems to me that it would be wrong to decide this application on the basis of these current personal factors when they will probably have changed and others may have become more important by the time of the hearing. Consideration can be given at the appropriate time to measures to overcome any particular personal problems of witnesses.

124. I do not consider that the question of the whereabouts of discoverable documents should play any part in the resolution of this application.

127. This leaves the suggestion that consideration should be given to the fact that the defendant's solicitors are only located in Sydney, whereas the plaintiff's solicitors are a large national partnership. In Global Technology[17], Gillard J pointed out that it is no longer difficult for interstate practitioners to practise in this State. His Honour continued:

"... 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. ... 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?"[18]

I endorse his Honour's observations and, in addition, mention that there is also the ability to use the offices of a local agent from which to run the litigation. Whilst it presumably would be more convenient for the defendant's solicitors not to have to use facilities such as these, interstate, I do not consider that the size or location of a party's solicitors should play a significant part in deciding a cross-vesting application.

132. After taking into account all of the above submissions, I am not persuaded that the defendant has made out a case that the cost and inconvenience to it of the matter remaining in this Court would be greater than the cost and inconvenience to the plaintiff of having to litigate in New South Wales. But neither has the plaintiff persuaded me that the cost and inconvenience factor is one in its favour. At this stage, it is evenly balanced.

Forensic Advantage or Detriment in Procedural Law

136. Mr Myers referred to the fact that the proceeding could be case managed in an appropriate list in the Supreme Court of New South Wales leading to a likely early hearing. However, in only one of the two alternative lists, would there be case management by a judge.

139. The plaintiff acknowledged that there was currently no specialist list in this Court offering case management by a judge for a proceeding such as this, but this is not to say that there will be no case management of the proceeding. For example, Dr Pannam referred to the fact that the plaintiff would be seeking directions from me if the cross-vesting application were dismissed.

142. There has been no suggestion by either party that the interlocutory steps or the time before a hearing the matter will be shorter in either the Supreme Court of New South Wales or this Court. In the circumstances, I do not consider that this aspect assists me in deciding which is the most appropriate forum.

146. Neither party advanced any argument under this heading.

150. The plaintiff submitted that its invocation of the jurisdiction of this Court was regular and for proper motives. They included the location of the plaintiff's management, most of its likely witnesses, the testing of the defects, the location of the documents and the cost to the plaintiff of litigating in Sydney. This point did not appear to be challenged by the defendant. What Mr Myers did submit was that it was of no significance which proceeding was commenced first. He submitted that the cross-vesting legislation did not reward the party who sued first. Particularly was this the case, he argued, where the parties had been attempting to negotiate a settlement, and yet, without any notice or letter of demand, IAS had commenced this proceeding with its elaborately worded statement of claim..

153. In his written submissions, Dr Pannam made much of the argument that WGC's claim in the Supreme Court of New South Wales had been manufactured or falsely inflated by reason of the October 2002 invoice for $705,650. It was pointed out that the invoice was delivered almost a year after the last of the previous invoices and related to work of which the plaintiff claimed it had no knowledge.

156. The only relevance of this, from my point of view, is that it would seem that the preparation of the invoice may have been the cause of the delay in WGC issuing its own proceedings. Whatever the reason, it may not be appropriate to talk of IAS beating WGC to "the draw", when IAS' claim was issued on 12 September 2002 and WGC's simple debt claim was not issued until 28 October 2002. In the circumstances, I see no reason why the plaintiff's choice of forum should not be given the appropriate weight.

160. For the reasons set out above, I have concluded that the more appropriate forum for the hearing of this dispute is this Court. Accordingly, the defendant's application to transfer this proceeding to the Supreme Court of New South Wales will be dismissed.

[1] [2000] VSC 256 at [12]

[2] [2001] VSC 467 at [9]

[3] [2002] VSC 375 at [16]

[4] [2000] VSC 256 at [20] to [22]

[5] See Triumph International v ACP Publishing Pty Ltd (1997) 37 IPR 661 at 665 per Ashley J; Seymour Smith v Electricity Trust of South Australia (1989) 97 FLR 160 at 174 per Rogers J; and Overall v Permanent Trustee Co Limited (1999) FCA 1385 at [14] per Ryan J.

[6] (1988) 22 FCR 378 at 396

[7] [2000] VSC 256 at [22]

[8] [2001] VSC 230 at [31]

[9] [2000] NSWCA 353; (2000) 50 NSWLR 357

[10] [2000] NSWCA 353; (2000) 50 NSWLR 357 at 379

[12] [2001] VSC 251 at [26]

[13] [2000] NSWCA 353; (2000) 50 NSWLR 357

[14] (1988) 14 NSWLR 711 at 726-727

[15] [2000] NSWCA 353; (2000) 50 NSWLR 357 at 380

[16] See Global Technology Australasia Ltd v Bank of Queensland Ltd [2001] VSC 230 at [54] per Gillard J

[17] [2001] VSC 230

[18] [2001] VSC 230 at [41] and [42]