Nazdall Pty Ltd v Herrmann

REASONS FOR JUDGMENT 1 The substantive proceeding in this matter concerns a dispute between two directors of a company about its management. On 20 June 2012, the plaintiffs filed the originating process in this proceeding in the Victoria District Registry. The dispute concerns the competing interests of Mr Craig Davies and Mr Murray Herrmann and their associated interests. Allegations have been made in the proceeding concerning breach of directors' duties and oppression. The central issue to be determined is: what are the true accounts of a trust? 2 The relevant company used as the vehicle for a joint venture in a property development between the Davies and the Herrmann interests is called Yowdall Pty Ltd. It is the trustee for the Yowdall Unit Trust. Units in that trust are held by interests associated with Mr Davies and Mr Herrmann. 3 The subject land is located in Parap, a Darwin suburb. The Yowdall Unit Trust was created in the Northern Territory and is subject to the laws of the Northern Territory. The only connection with Victoria is that Mr Davies resides here. He has done so since late 2008 due to considerations relating to the ill health of his wife. The plaintiffs have engaged Melbourne solicitors who have briefed Melbourne-based counsel. They chose to commence the proceeding in the Victoria District Registry of the Court. 4 On 22 June 2012, the Court granted interlocutory relief to the plaintiffs restraining the Herrmann interests from dealing with certain assets of the Yowdall Unit Trust. On 2 July 2012, the Herrmann interests gave undertakings concerning their dealings with those assets. Remaining aspects of the plaintiffs' application for interlocutory relief, not then precisely identified, were adjourned to today. An order was made for mediation. The mediation occurred in Darwin recently but did not resolve the dispute. 5 On 27 August 2012, the defendants filed an interlocutory application seeking various orders, including an order that the proceeding be transferred to the Northern Territory District Registry. The Court informed the parties that it required to be addressed on that issue in advance of any issue raised by any party's interlocutory application. 6 What follows are the Court's reasons for its decision to transfer the proceeding to the Northern Territory District Registry of the Court. 7 The power to direct that a proceeding or part of it be conducted or continued at a particular place arises from s 48 of the Federal Court of Australia Act 1976 (Cth). As the Full Court of this Court said in National Mutual Holdings Pty Ltd v the Sentry Corporation and Another (1988) 19 FCR 155 at 162, the test to be applied in deciding whether to transfer a proceeding to a different registry from the one in which it has been commenced 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. 8 As Lander J said in Macks v Garrett (2008) 174 FCR 151 at [4]: Residence of parties and of witnesses, expense to parties, the place where the cause of action arose, and the convenience of the Court itself are some of the factors that may be relevant in particular circumstances. 9 In Comello Pty Ltd v Feeney [2011] FCA 1334 Gordon J at [11] referred to the judgment of the Full Court in National Mutual Holdings and observed that: There is no precise formula to be applied governing transfers of venue…The question is not resolved by identifying the most convenient place for the hearing. The balance of convenience is relevant, but not determinative. The factors or considerations relevant to determining whether one city is more appropriate than another are varied. 10 Her Honour held that the Court must be satisfied that there is a "sound reason" for a positive order to change the venue selected by the moving party. A similar observation was made by Besanko J in Quotila Pty Ltd v South Australian Marine Products Industries Pty Ltd (No 2) [2011] FCA 29 at [9]. Although, it has been recognised that "in the strict sense, [there is] no onus of proof on a respondent seeking transfer"; see Alliance Craton Explorer Pty Ltd and Quasar Resources Pty Ltd [2010] FCA 1415 at [19] per Ryan J. 11 Sometimes it will be pertinent to consider the stage at which an application to transfer has been made. If a matter is well advanced, a judge may be reluctant to transfer the proceeding to a new docket judge. However, in cases such as the present, where there have been limited preparatory steps taken by the parties and a failed early mediation, the Court will be less reluctant to order a transfer of a proceeding; see for example, Gunn Capital Management Pty Ltd v Solamind Pty Ltd [2010] FCA 1360 at [16] per Siopis J. 12 As McKerracher J recognised in Mortimer v Opus Prime Stockbroking Ltd (in liq) [2009] FCA 227 at [15], resolution of the issue does not raise a matter of high principle. The critical consideration is that 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 another. See Lamb v Hog's Breath Company Pty Ltd (No 1) [2007] FCA 49 at [7] per French J. 13 This case can be conducted most suitably in Darwin. All potential witnesses aside from Mr Davies are based there. Further, a view of the property may be required. Mr Davies' inconvenience in travelling to Darwin is outweighed by the inconvenience which most if not all other witnesses would suffer if required to travel to Melbourne. It is also within the discretion of the new docket judge to allow Mr Davies' evidence to be given by a video conference facility or by the taking of his evidence in Melbourne with the remaining evidence being heard in Darwin. I make this additional observation because of the ill health of Mr Davies' wife which may make it preferable that Mr Davies limit his interstate travel. 14 Overwhelmingly, this is a matter which concerns Darwin. It is about a property development being undertaken there, concerning parties at the time operating from there and involving a Unit Trust set up under the laws of the Northern Territory. This is a case where the preponderance of convenience suggests that the Northern Territory District Registry is the most efficient forum for the administration of the proceeding. 15 This judgment deals only with one aspect of the defendants' interlocutory application of 27 August 2012. There are also matters which the plaintiffs may wish to ventilate on an interlocutory basis arising out of the orders of 2 July 2012. Accordingly, it is appropriate to adjourn all current interlocutory issues to be heard by the new docket judge with responsibility in the Northern Territory District Registry. The Directions Hearing can be adjourned to a date to be fixed by arrangement with the District Registrar of the Northern Territory District Registry and the extant interlocutory applications adjourned to the same time, subject to the convenience of the new docket judge. I certify that the preceding fifteen (15) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Marshall.