Leda Holdings Pty Ltd v Securcorp Limited

Relevant legislation and principles 23 Section 48 of the Federal Court of Australia Act 1976 (Cth) (the Federal Court Act) relevantly provides: (1) The Court or a Judge may, at any stage of a proceeding in the Court, direct that the proceeding or a part of the proceeding be conducted or continued at a place specified in the order, subject to such conditions (if any) as the Court or Judge imposes. (2) ... 24 Rule 2.02 of the Federal Court Rules 2011 (Cth) (the Rules) provides: A party may apply at the proper place for an order that the proceeding be transferred to another place. 25 The term "proper place" is defined in the Rules as: proper place, for a proceeding, means: (a) the place where the proceeding is started; or (b) if the proceeding is transferred to another place - the other place, from the date of transfer. 26 In National Mutual Holdings Pty Ltd and Others v The Sentry Corporation and Another (1988) 19 FCR 155, the Full Court discussed the application of s 48 of the Federal Court Act and O 10 r 1(2)(f) of the Federal Court Rules 1979 (Cth), which provides for the transfer of proceedings in similar terms to r 2.02 of the Rules. The Full Court said (at 162): … There is no onus of proof in the strict sense to be discharged by the party seeking to conduct or continue the proceedings elsewhere. It should be noted that the Court may exercise its powers under O 30, r 6 either on the application of a party or of its own motion. The Court must, however, be satisfied, after considering all relevant matters, that there is sound reason to direct that the proceeding be conducted or continued elsewhere. Its starting point is that the proceeding has been commenced at a particular place. Why should it be changed? On the one hand, if the party who commenced the proceeding chose that place capriciously the Court would be justified in giving no weight to the choice of place. At the other end of the scale, a proceeding may have continued for some time at the place of commencement with many steps having been taken there, for example, filing of pleadings and affidavits, discovery and inspection. Due weight would be given by the Court to such matters before directing that the proceeding should continue at a different place. The balance of convenience is important, but its weight must vary from case to case. 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 precisely. 27 More recently, in Mulhern v Pearce [2013] FCA 1138, Robertson J, after referring to National Mutual and Mortimer v Opes Prime Stockbroking Pty Limited (ACN 086 294 028) (Administrators Appointed) (in Liquidation) [2009] FCA 227, summarised (at [14]) the relevant considerations as follows: • There must be sound reason to direct that the proceeding be conducted or continued elsewhere. If the party commencing the proceeding chose the place capriciously the Court would be justified in giving no weight to the choice of place. The balance of convenience is important but its weight must vary from case to case. What needs to be ascertained is where the case can be conducted or continued most suitably bearing in mind the interests of the parties, the ends of justice and determination of the issues between them, and the most efficient administration of the Court (National Mutual Holdings Pty Ltd v The Sentry Corporation (1988) 19 FCR 155 at 162). • The location of parties and witnesses, the place where the cause of action arose and the convenience of the Court are all factors (National Mutual 19 FCR 155 at 162, Wang v Australian China Marketing Co Pty Ltd [2001] FCA 13 at [21], Aquila Resources Ltd v Pasminco Ltd [2004] FCA 39 at [27]-[34] and [42]-[43]. • Typically there is no factor that is determinative but rather it is necessary to weigh all the relevant factors that might connect the proceedings to one jurisdiction or the other (Australian Competition and Consumer Commission v Fila Sport Oceania Pty Ltd [2003] FCA 430 at [19]). • The national character of the Court including its capacity to make flexible arrangements for the taking of evidence and the receipt of submissions is relevant (Australian Competition and Consumer Commission v Virgin Mobile Australia Pty Ltd [2002] FCA 1239). • The question of which District Registry should conduct the proceedings does not raise matters of high principle. Essentially it is a matter of case management and proper recognition of the legitimate interests of each of the parties reflected in the balance of convenience as between them and the convenience of the Court and any economies and efficiencies which may attach to one choice or the other (Lamb v Hog's Breath Company Pty Ltd (No 1) [2007] FCA 49). • There may be flexibility - one Registry could conduct pre-trial management while allocating the trial to a judge in another Registry (Hog's Breath at [10]). • There is no burden of proof governing the exercise of the discretion in s 48 of the Act (National Mutual 19 FCR 155 at 162).

The submissions 28 The first and second respondents, and the applicant, have provided written submissions in support of their opposing positions. I do not propose to set out the details of those submissions. It is sufficient for me to note that, in oral argument, counsel for the first and second respondents placed primary significance on the location of likely witnesses. She also relied on the fact that the proceeding has "an intensely strong Queensland flavour", adopting language used by O'Loughlin J in Wang v Australia China Marketing Company Pty Ltd [2001] FCA 13 at [20], when considering a similar application. In doing so, she pointed to the fact that underlying the applicant's claim were acts and transactions, particularly those involving the valuation of property, which centred on the property market on the Gold Coast in Queensland. 29 On the other hand, counsel for the applicant argued that the first and second respondents' focus on the location of likely witnesses was, at the present time, more hypothetical than real. He submitted that the only persons whom the Court could confidently conclude would give evidence would be the applicant's "two directors". By this I take him to mean Bob Ell and Mr Allerdice whom Ms Banton identified as likely to be the applicant's principal witnesses. While the applicant did not deny the possibility that, ultimately, a number of witnesses from Queensland might be called, counsel submitted that the present application was somewhat premature and that the better course would be to wait until more was known about the identity and location of all persons likely to give evidence in the proceeding. Indeed, he argued that any consideration of transfer should await the time when it is known who will be giving evidence. While accepting that it may be true that the genesis of the matters underlying the proceeding have a "Queensland flavour to them", he submitted that the Court should not be satisfied at the present time that the considerations raised by the first and second respondents were sufficient to justify transferring the proceeding to the Queensland District Registry of the Court.

Consideration 30 I have considered whether the present application for transfer is premature and whether, as the applicant has urged, the Court should wait to see who the witnesses in the proceeding will be. I have come to the conclusion, however, that that course should not be adopted. This is because important decisions will need to be made about how the proceeding is to be conducted and, in particular, how evidence, including expert evidence, is to be adduced. There may also be important decisions to be made concerning the need for, and extent and timing of, discovery. These decisions are best made by the relevant docket judge who, in all likelihood, will hear the proceeding. In light of the matters placed before the Court in relation to the present application, I do not think that the application is premature, although I accept that some information about the proceeding is uncertain. 31 This is not a case where the choice of where to commence the proceeding has been taken capriciously. Indeed, the first and second respondents stressed that no such case is advanced. Nevertheless, I am satisfied that there is a real likelihood that a significant number of witnesses located in Queensland will give evidence about transactions and events occurring in Queensland involving the valuation of Queensland properties. The case is really about the viability of the Kirra development, and what the first respondent, in Queensland, should have done or, indeed, would have done in relation to making a loan to Backpackers for the purpose of the Kirra development, had it been in possession of certain information. I can proceed on the comfortable assumption that valuation evidence will be given by those with expertise in the Gold Coast real estate market. Although counsel for the applicant submitted to the contrary, I believe that I can safely assume that it is likely that evidence will be adduced by both sides of the record from witnesses resident on the Gold Coast or in Brisbane. 32 I accept the applicant's submission that there will be some inconvenience caused to the applicant by the transfer of the proceeding. I take into account that the applicant will be denied its choice of the place in which to bring the proceeding. I do note, however, that the applicant has an office on the Gold Coast from which it conducts business. The applicant's indication that staff or former staff of that office are likely to be called as witnesses signifies an involvement of the applicant's Gold Coast office and its business activities in the events or transactions relevant to the proceeding. 33 I do not think that this is a case where the considerations are evenly balanced, thereby favouring the retention of the proceeding in the New South Wales District Registry: see ESCO Corporation and Another v Wundowie Foundry Pty Ltd (2003) 58 IPR 443 at [6]. In my view, the presently known circumstances positively favour the transfer that is sought. The case presents as one that is substantially reliant on Queensland-based evidence from a number of Queensland-based witnesses.

Conclusion and disposition 34 I am satisfied that the economical and efficient conduct of the proceeding will be best promoted by transferring the proceeding to the Queensland District Registry. An order will be made accordingly. The first and second respondents have sought their costs of this application. In my view, the appropriate order is that the costs of the application be the first and second respondents' costs in the cause. I certify that the preceding thirty-four (34) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Yates.