Keys v Royal & Sun Alliance Insurance

THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

IRC10509/00 - H V KEYS v ROYAL & SUN ALLIANCE INSURANCE (AUSTRALIA) LIMITED. JUDGMENT

1 HIS HONOUR: By summons and notice of motion filed on 6 March 2000, Hazel Violet Keys (Mrs Keys) and Wendy Hazel Pope (Mrs Pope) seek to transfer two actions from the District Court, and having had them transferred to this Court, to have those proceedings cross vested to the Queensland Supreme Court. 2 The circumstances giving rise to the application are that there are two actions in the District Court in New South Wales commenced by Royal and Sun Alliance Insurance Australia Limited (Royal and Sun Alliance). One of those actions is against Nautic Blue Pty Limited (Nautic Blue), Mrs Keys, William John Edward Cusack (Cusack) and the partners of Coopers and Lybrand (Coopers and Lybrand). It is a claim for $217,500 arising out of a contract of 17 September 1997 under which Royal and Sun Alliance agreed to issue what was described as a deposit power insurance bond in respect of the purchase of a property known as Lot 5, Sir Leslie Theiss Drive, Townsville. That property was owned by a company, Leda Developments Pty Limited (Leda). 3 It agreed to sell the property for $2,175,000. The deposit power insurance bond was provided and used in that transaction in lieu of a cash payment as the deposit required under the contract. The purchasers under that contract defaulted and as a consequence the contract was terminated. Leda has sued in the Supreme Court of Queensland in respect of losses it claims to have incurred as a consequence of the default of the proposed purchasers of the property, Lot 5 Sir Leslie Theiss Drive, Townsville. The loss was occasioned because on resale the property has been said to have realised only $1,300,000. 4 One of the sequelae of the default under the contract was that Royal and Sun Alliance was required to make the payment of $217,500 under the deposit power insurance bond which it had issued. It has sued in the District Court in proceedings which were instituted on 25 August 1998. That action has proceeded to a stage where the fixing of a hearing date is imminent and a hearing during the course of the third quarter of the current year is possible and is virtually certain during the final quarter of the current year at the latest. 5 In those proceedings, defences have been raised by Mrs Keys that the bond was not authorised by her and that any signatures purporting to be hers are forgeries. I shall return to the issues in that case later in the course of this judgment. 6 By an agreement made in February 1998, Royal and Sun Alliance agreed to issue a further deposit power insurance bond for $200,000. It was issued in respect of the purchase of the property known as Zurich House, 67 - 73 Denham Street Townsville. As in the previous instance the bond was used in lieu of cash for the deposit payable under the contract. Again there was default and again Royal and Sun Alliance was called upon by the vendor to pay the amount of the bond $200,000, consequent upon the default. 7 As a consequence of that payment having been made, Royal and Sun Alliance has sued Wydark Pty Limited (Wydark), Mrs Keys and Mrs Pope, to recover the amount paid. 8 In the action concerning the bond for $217,500, default judgment has been obtained against Nautic Blue and Cusack. The action will therefore proceed against only Mrs Keys and Coopers and Lybrand. 9 In the action concerning the bond for $200,000 default judgment has been obtained against one of the defendants, Mr Geoffrey Keys, a son of Mrs Keys. That action will now proceed, against Wydark, Mrs Keys and Mrs Pope. 10 On 8 November 1999 Leda commenced proceedings in the Supreme Court of Queensland seeking to recover the damages to which I have already referred. A defence to this action was filed on 8 December 1999. No cross claim against Coopers and Lybrand was included with that defence. 11 However, the evidence reveals that as at 21 January 2000, instructions had been given to counsel to draw the appropriate process to join Coopers and Lybrand as parties to these proceedings. As at the date of hearing of the present application that joinder has not been effected. However, according to the evidence, it is still "proposed". The delay in effecting the joinder of Coopers and Lybrand is sought to be explained by the fact that for a period of some seven weeks, terminating on 10 April 2000, there had been without prejudice discussions which endeavoured to bring about a settlement of the matter. But as has been pointed out by counsel for the defendants in this application, those discussions involved Royal and Sun Alliance but did not involve Coopers and Lybrand Moreover, the period between the date on which the defence was filed in the Queensland action and the date on which the negotiations with Royal and Sun Alliance began is not insignificant. Furthermore, it is not explained. If one goes back seven weeks from 10 April,2000, mid February 2000 is fixed as the approximate date of commencement of the negotiations. That leaves unexplained a period of some two months, perhaps more, between the date of filing of the defence and the institution of the negotiations. It also leaves unexplained why Coopers and Lybrand, if they are to be joined, were not joined at the time the defence was filed. 12 In addition, although it is probably not of any great significance, it is relevant to note that the defendants in the Queensland proceedings filed their defence on the last date fixed for that purpose. 13 The application which has been made to lift up the two District Court actions depends upon the power given to this Court by S.8 of the Jurisdiction of Courts (Cross Vesting) Act 1987. That section provides as follows: "(1) Where -

(a) a proceeding (in this subsection referred to as the relevant proceeding) is pending in -

(i) a court other than the Supreme Court of the State; and

(ii) an order should be made under this subsection in relation to the relevant proceedings so that consideration can be given to whether the relevant proceedings should be transferred to another court.

The Supreme Court may on an application of a party to a relevant proceeding ... make an order removing the relevant proceeding to the Supreme Court." 14 The power to cross vest to the Queensland Supreme Court is conferred by s.5 of the Jurisdiction of Courts (Cross Vesting) Act 1987. Relevantly that section provides as follows: "Section 5(ii) where -

a proceeding (in this subsection referred to as 'the relevant proceeding') is pending in the Supreme Court; (in this subsection referred to as the first court);

(i) the relevant proceeding arises out of or is related to another proceeding pending in the Supreme Court of another State ... and it is more appropriate that the relevant proceeding be determined by that other Supreme Court;

(iii) it is otherwise in the interests of justice that the relevant proceeding be determined by the Supreme Court of another State ... the first court shall transfer the relevant proceeding to that other Supreme Court." 15 It is common ground between the parties that in the application of the cross vesting legislation to which I have referred, the statements made by the Court of Appeal of New South Wales is Bankinvest, v Seabrook & Ors (1988) 14 NSWLR 711 should be applied. In that case Street CJ in examining the effect and purpose of section 5 said: "It calls for what I might describe as a 'nuts and bolts' management decision as to which court, in the pursuit of the interests of justice, is the more appropriate to hear and determine the substantive dispute. Consideration of ... principle and deep learning - in particular principles of international law such as forum non conveniens - have no place in a cross vesting adjudication. There is, in substance, no principle to be enunciated other than the necessity of applying the specific considerations stated in the cross vesting legislation, primary amongst which is the pursuit of the interests of justice." at 714) 16 Rogers AJA expressed the principles to be applied in somewhat more literary style, using the analogy of navigation He said: "The only lode star that a judge may steer by is what did the interests of justice dictate should be done? It is inapt to speak in terms of onus. Bearing in mind that the court may make an order on its own motion, the language of onus being discharged is not applicable." (at 727) 17 Furthermore, in his exegesis of the section, Rogers AJA made reference to the speech of Lord Goff in Spiliada Maritime Corporation v Cansulex Limited (1987) AC 460. He referred in particular to the court "... in which the case may be tried more suitably for the interests of all the parties and the ends of justice." (at 728) 18 Furthermore, he pointed out that whilst the provisions of S.5(2)(b)(ii) make reference to jurisdictional limits or inability to institute proceedings in a particular court and that such references appear to be restricted to that subsection, such considerations, "... must have a role to play under the provisions of the earlier subsection" i.e. section 5(2)(b)(i). 19 It is in the light of these principles that this matter has to be determined and in determining it I will apply those principles. 20 The first thing that should be said is that there would be no utility in lifting up the two matters that are presently on the threshold of hearing in the District Court, if those matters were not then to be transferred to the Queensland Supreme Court. My reasons for this conclusion are: first, if those actions were brought into this Court but not transferred they would lose their imminent hearing dates, be put into a holding list and have to take their turn on the basis that they were newly instituted or, at least, freshly within the court. Thus any time advantage which they had as a consequence of having been instituted in 1998 would be lost. 21 Second, there is no point in bringing the matters into this Court except for the purpose of transferring them. Thus, as a matter of logic, one should first determine whether on the assumption that the matters were already in the Court they would be transferred to Queensland. I propose to proceed on the assumption that the matters are in the court even though that is contrary to the fact. 22 An examination of the issues raised in the District Court proceedings and the issues raised in the action in the Supreme Court of Queensland reveals a marked divergence. First, Coopers and Lybrand are not at this time parties to the proceedings that are pending in Queensland. It is proposed that they be joined but there is no compulsion that they be so joined and there is nothing to ensure or assure that they will be joined. In terms of the statute which is the source of the power to cross vest, it cannot be said that there is any pending proceeding in the Supreme Court of Queensland at the instance of Leda, which involves Mrs Keys, Mrs Pope and Coopers and Lybrand. In one sense, that technical fact would be sufficient to dispose of the matter in so far as the application of section 5(2)(a)(i) is concerned. 23 However, in the interests of the parties knowing my full reasons, I think it appropriate that I should go beyond that technical point. It may, for instance, be overcome by the joinder but I think there are substantial non technical reasons going to the issues and the justice of the matter, which militate against the cross vesting of the matters to Queensland. 24 The issue posed by section 5(2)(b)(i) is whether it is more appropriate that the relevant proceedings, that is the District Court proceedings assumed to have been lifted into this Court, be determined in Queensland. 25 A number of matters were advanced by the plaintiff in support of this. First, the health respectively of Mrs Keys and Mrs Pope. As I read the affidavits, there is no reason why either of them should not travel. One, Mrs. Keys, is taking a series of drugs which are common in Australian society. They are, as I understand them, normal hypotensive and anti cholesterol drugs, combined with a mild sedative, Serepax. 26 As far as Mrs Pope is concerned, her kidney disorder and surgery consequent upon it are now some time in the past and her apprehension of what might happen if she were to travel does not seem to be supported by the medical evidence. Furthermore, both ladies live in Townsville. The actions, if transferred, would be heard in Brisbane. Because of the enormous distance between major centres of population in Queensland, that will involve a considerable journey. The journey on to Sydney from Brisbane is about an hour's flight; not a significant imposition when one considers that even if the cross vesting occurs, they will still have to travel to Brisbane. So I do not think that the ground of ill health has any real force in this matter, at least not such force as would be persuasive in relation to the determination of the matter. 27 Second, each says that she is apprehensive about being cross examined three times. However, neither of them has made any application to consolidate the District Court actions so as to have them heard together. Furthermore, there is no assurance that even if those matters are transferred to Queensland they will be heard together or that they will be heard with the Leda matter. So the suggestion that to leave the matters New South Wales will certainly involve three lots of cross examination, whereas there would only be one lot of cross examination in Queensland, is not really substantiated by the evidence. 28 If Mrs. Keys and Mrs. Pope were really so concerned about the number of cross examinations to which they may be subjected, the court would be entitled to expect them long since to have made application to consolidate the hearing of the two actions in the District Court. So that factor, to my mind, is not a significant or real factor in favour of transferring the actions. 29 Third, it is said with force and sincerity by counsel for the plaintiffs, that if the matters were transferred to Queensland, perhaps an issue relating to forgery could be isolated. Perhaps it could, but experience teaches - that is judicial experience teaches - that the isolation of issues is rarely successful in minimising delay, cost, or even duration of hearing and tends to lead, because of fragmentation, to even greater delay and greater cost. Furthermore, there is no undertaking by the plaintiffs to seek to have the matters consolidated or to seek to have any question isolated should the matters be transferred to Queensland. 30 Fourth, such procedural matters would be within the discretion and determination of the Queensland Court. This Court does not know what the practise of that Court is and there is no evidence in relation to such matters. So this element advanced on behalf of the applicant does not seem to me to be a matter of significance or weight in the determination of whether or not the matter should be transferred. 31 Finally, it is said that if the matters assumed to have been lifted from the District Court into this Court for the purpose of being transferred were left in the District Court and determined in that Court, it is possible that there might be different determinations of fact in the District Court, on the one hand, and in the Supreme Court of Queensland, on the other. That may be so but it may not be so. It is pure speculation and where the issue is one of forgery, again experience teaches that forgeries, like alibis, are very dangerous as defences. If they collapse, there is little left for the defendant that has raised them. Ultimately where forgery is asserted, it is either plain or it is not. If plain it is unlikely that two different tribunals of fact will come to two different decisions; if it is not there is a possibility of two different decisions, but with modern techniques of analysis and computer examination, this is must less frequent than in the past. 32 So I think that the question that is posed in that regard - whilst having some weight as a possibility is not one which significantly influences the appropriateness of the forum, or the justice of where these matters should be determined. 33 Turning to the other side of the coin of fairness or appropriateness, or justice and appropriateness, some of the matters to which I have already adverted have relevance. For example, the consideration that there is no assurance that both the cross vested proceedings and the Leda proceedings would be heard together in Queensland. 34 Second, as I have already indicated, there is no basis for assuming that a separate question would be isolated from each of the three proceedings and such question from each proceeding heard at the same time. 35 Third, as was submitted by counsel for the defendant, and as I have already adverted to, there is no evidence that either Mrs Keys or Mrs Pope are unavailable or unable for medical or other reasons to attend in Sydney for trial.

36 It was submitted on behalf of the defendants that were the matters to be transferred to Queensland there would be substantial delay in the hearing of those matters, compared with the situation that would pertain were they to remain where they are. There is great force in that. It is made abundantly clear by the evidence that is before me. 37 In the District Court the fixing of hearing dates is imminent and the time of hearing is, as I have already indicated in the earlier part of this judgment, proximate. 38 The evidence in relation to the Queensland Supreme Court is that it would take approximately 12 months to get to a stage at which a hearing date would be allocated. That, of course, makes the assumption that the proposed joinder is effected timeously, and that there is no further joinder by any of the parties. Furthermore, the evidence indicates that Leda itself may apply to join additional parties but who they are is unexpressed and when any such joinder will be effected is unstated. All of this betokens the prospect of delays beyond that 12 month period to which I have just referred. 39 Then, even when one gets the case to a state where a hearing date can be assigned, there is a two to four month further delay. One can say, therefore, that there will be an additional delay of at least a year in the hearing of these matters, should they be transferred to Queensland. It is a cliche that justice delayed is justice denied. Cliche it may be, but like all cliches it answers to that description only because it is so super abundantly correct; so obvious as not to need stating. It has clear application to the present case. 40 The next matter that was raised on behalf of the defendant was that even if the actions were transferred and heard together, the actions would be protracted and the plaintiff in the District Court would be required to be party to a proceeding in which a range of issues with which it was not concerned would be examined at length and hence at great cost to that party. For instance, Royal and Sun Alliance has no interest in whether the signatures on the relevant contracts were forgeries. That will take time in the action in the Supreme Court in Queensland. 41 Royal and Sun Alliance is not concerned whether Mrs Keys is or is not estopped from asserting forgery. But, as those who have seen cases that involve estoppel know, it is one of those areas of the law where the issues often involve much material and frequently take considerable time to analyse. Furthermore, Leda itself has no interest in whether the signatures on the deposit bonds were forgeries or not. It has its money. Nor is it interested in whether representations were made by Coopers and Lybrand.

42 When one looks at the nature of the representations, their vagueness may itself betoken considerable searching around for evidence, again indicating time and cost. It is significant to note that if Coopers and Lybrand are not joined in the Queensland proceedings then there is no basis whatsoever for asserting that one has a related proceeding. 43 The final matter raised on behalf of the defence was a matter to which I have already adverted, namely, that despite a defence having been filed on 8 December, 2000, there was no allegation made against Coopers and Lybrand. In addition, when looking at the question of delay, there is no evidence of any negotiation with Coopers and Lybrand, thus leaving unexplained the four and a half month delay qua them and qua their joinder. One would have thought that caution, prudence and experience would all dictate that the joinder is effected first and the discussions take place then. 44 The aphorism of the late Mao Tse Tung is relevant in this regard, "Power grows out of the barrel of a gun," said the deceased Chairman. The litigious equivalent of that is process filed and served. Then negotiations can proceed from strength. That did not happen in this case. 45 I must say that I cannot help but feel that if these matters were transferred to Queensland they would be bogged down in procedural and other delays perhaps even in excess of those to which I have already referred. But since that is only a feeling and a possibility, it is not a matter to which I can give any weight or on which I base my judgment. Nonetheless, it would be less than fair not to express it. 46 These considerations, in my opinion, lead to the conclusion that it is not more appropriate that the relevant proceedings, that is the District Court actions, be determined in the Supreme Court of Queensland. That disposes of the application in so far as it rests on section 5(2)(b)(i). However, counsel for the plaintiffs has what he describes as a fall back position, and properly so, and that relies upon the application of section 5(2)(b)(iii) of the Jurisdiction of Courts (Cross Vesting) Act 1987. 47 The question posed by that section is in explicit terms: whether it is otherwise in the interests of justice that the relevant proceedings should be transferred. Many of the considerations that apply to the determination of whether it is more appropriate or not to transfer the proceedings, in this case are relevant to whether or not it is otherwise in the interests of justice. 48 However, the determination that the Supreme Court of Queensland is not the more appropriate court, itself mandates that for s.5(2)(b)(iii) to apply there be some circumstance which has great significance but does not fit within the rubric of appropriateness. No such factor has been pointed to in this case and nor do I believe it exists, since if it had existed counsel for the plaintiff, who has been assiduous in pressing his client's claim and in his researches in this matter, would undoubtedly have brought it to attention. I am comforted by the fact that he has not done so. It makes me the more confident that it does not exist. 49 If it is inappropriate to transfer the matters to the Queensland Supreme Court for the reasons that I have indicated, what are the other interests of justice that would suggest that they should be transferred? As I have indicated, I am not able to find any. In my opinion, the plaintiff's fall back position, unlike the redoubt to which the troops fell back at the battle of Rorke's Drift, fails to secure victory for the plaintiffs. 50 For the foregoing reasons, I am of the opinion that if the proceedings which are pending in the District Court were lifted up into this Court they should not and would not be transferred to the Supreme Court of Queensland. For that reason the application to lift them up into this Court, which as I read the summons and notice of motion is really a procedural motion and application, also fails. 51 The summons and notice of motion in this matter are dismissed with costs.

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