Optics Online Pty Ltd v Sunland Group Ltd

REASONS FOR JUDGMENT 1 Before the Court, though not with any formal notice of motion, is an application made by the second, third, fourth and fifth respondents for the transfer of this proceeding to the Queensland Registry of this Court under Order 10 Rule 1(2)(f) and s 48 of the Federal Court Rules. By way of introduction, the same application, together with another application, was made at the last directions hearing, being the first directions hearing in the matter, by the first respondent. That directions hearing took place on 26 September 2006. 2 By email sent to my chambers and forwarded to the other parties at about that time, the first respondent abandoned the applications it was making. Those applications were, first, the application that is made by the second to fifth respondents today, together with and preceded by an application for removal of this matter to the Commercial List of the Supreme Court of Queensland. On the last occasion, that is on 26 September, I ordered that half the costs of the directions hearing be costs in the application for transfer. I will deal with those questions of costs in due course. 3 The burden of the application was carried by the fourth and fifth respondents. However, the second and third respondents joined in the application. The application was supported by two affidavits of the solicitor for the fourth and fifth respondents, Mr Michael David Gapes, of Carter Newell lawyers in Brisbane. The evidence in the resistance of the motion was an affidavit of Mr Imlay who is a solicitor in the firm of solicitors instructed by the application. There were no objections to those affidavits. They were taken as read. 4 It is unnecessary to go through the affidavits in detail. There have been helpfully agreed facts between the various parties in two documents which I marked Exhibits A and B, setting out agreed facts between the parties and which are annexed to these reasons. 5 In short, it can be accepted that there is a significant relationship with the State of Queensland, in particular the south-eastern portion of it. The case is about the asserted misleading and deceptive conduct of various respondents in relation to the sale and purchase of a unit or condominium at a complex known as Palazzo Versace. It is unnecessary to go through the various places that each of the respondents takes in the asserted facts, nor is it necessary to descend to the detail of the alleged misrepresentations. 6 Various statements were asserted to have been made in writing and sent to New South Wales, and to have been made in conversation with the applicant in New South Wales about the quality and attractiveness, amongst other things, of the condominium. The applicant takes the view that those representations are less than completely accurate. Though some of the participants have connection with New South Wales, there is a significant relationship and connection with Queensland. 7 However, if the allegations are true, what has in effect happened is that respondents, assuming the case is made out, have sought out an investor in New South Wales and used, on this hypothesis, misleading and deceptive conduct to attract the applicant to the investment. I have used the expression "applicant" here to cover both the corporate and human manifestation of the applicant. That is, the company as well as people representing it. I am not persuaded that applying the test in National Mutual Holdings Pty Ltd& Ors v The Sentry Corporation & Anor (1988) 19 FCR 155, in particular at page 162, that anyone has shown that the case can be conducted more suitably in Queensland, bearing in mind the interests of all parties and the efficient administration of the Court. 8 That said, depending upon issues falling out in the due preparation of the case, it is not inconceivable that, when precision is brought to bear on what will be litigated, that I may not take a view that the matter should be heard wholly or partly in Queensland. I have taken into account the content of the affidavits and the submissions placed in front of me. I am not persuaded, however, bearing in mind the broad test set down in National Mutual Holdings that the proceedings should be transferred to the Queensland District Registry. In particular, I have had regard to the seeking out of the applicant in New South Wales, the evidence as to the use by the applicant of New South Wales solicitors who are not a national firm in contradistinction to the geographic scope of practice of most, if not all, of the respondents' firms, the availability of video link technology in relation to conduct of directions hearings, with appropriate orders dealing with the sharing of the costs of those video link directions, and the ability for the parties to renew any application, either to transfer or to hear evidence in Queensland. 9 I do not see any need to cause what will probably be expense and inconvenience to the applicant by requiring the transfer of the proceedings to Queensland at this stage. Thus, in all the circumstances of the written and oral submissions put before me and the evidence put before me, I dismiss the application to transfer the proceedings to the Queensland District Registry at the present time. 10 The parties should understand that if, by reason of the development of issues in the case, they are of a view that, in the state of maturity the matter is at the time, the application should be renewed, my dismissal of this application is not a bar on the matter being raised again. However, I would indicate that, as it was on this occasion, the matter should be raised informally first, so that a minimum amount of costs are expended in ascertaining the changes that have been brought by the development of the case up to that point. In those circumstances I would order that the second, third, fourth and fifth respondents pay the costs of the applicant of the application to transfer, including half the costs of the directions hearing on 26 September 2006. 11 A question arises as to whether the first respondent should pay the costs of the application that it identified up to 5 October 2006. I have dispensed with the formality of a notice of motion. If a notice of motion had been filed and moved on and then abandoned up to that point I do not see that there would be any doubt about the liability of the first respondent for those costs. I do not think there should be any difference having dealt with the matter informally. Therefore, I would also order that the first respondent pay costs of the applicant of the motion made orally to transfer the proceedings to Queensland, up to but not past 5 October, and including half the costs of 26 September. Security for costs 12 I propose to deal with the security for costs applications in this way. First, by dispensing for the need for the filing of any formal notice of motion or affidavit material, subject to the parties in the future, or at the end of these reasons, indicating that they wish to proceed by way of a formal notice of motion with formal evidence, which I will admit if they wish to do it that way. What I propose to do is deal with the matter in a summary fashion in an attempt to minimise the costs. As is apparent from my earlier reasons in relation to transfer, this case is likely to be a factual dispute about what was or was not said or communicated about the quality of otherwise of the condominium question. 13 There are a number of respondents which the applicant has chosen to join. There is no suggestion, at least as yet, that any of the parties not be separately represented. There may indeed be cross-claims between the respondents in the fullness of time. I propose to attempt to minimise the steps that need to be taken by the respondents until they have a full appreciation of the nature of the case of the applicant, so that their expenditure and costs can be minimised until the latest possible stage in the orderly preparation of the proceeding. This is not only to their advantage, but to the applicant, given that the applicant is a company which will be giving security for costs. 14 If I required the respondents to file defences and then wait some weeks before obtaining the evidence of the applicant there may well be a degree of double handling in the preparation of the case, in particular in taking statements and dealing with factual matters. In a case such as this experience tells one that one is unlikely to get a dramatic narrowing of issues on the defence prior to the illumination of the real issues in the case from the evidence. 15 Therefore, though it is not a perfect way of doing things, what I propose to do is suspend any obligation that may be taken from the rules to file defences until otherwise ordered, to stand the matter over to a convenient time later in the year, perhaps in late November or early December, and to require the applicant to serve full statements of intended evidence of any witness. Such documents are not intended to be other than documents for which privilege is waived. 16 However, the orders will make clear that there will be no cross-examination on those documents without the leave of the Court. They are not to be filed. They are to stand as intended disclosure of evidence and the full nature of the case insofar as it will be disclosed by evidence, either orally or by affidavit. 17 I take this step to ensure that if it is thought appropriate to have all the evidence orally, that can be done without the distraction of earlier sworn evidence in affidavits. The orders which will be drafted will also cater for the applicant to provide an indexed paginated bundle of documents it proposes to tender, together with a document setting out in short form what each document is intended to prove. Further, the applicant will provide to the respondents the respects in which, if it is not otherwise clear from the pleading that it relies upon section 51A, of the Trade Practices Act 1974 (Cth). It is also to identify, within and only within the framework of discovery in the rules, what documents it would want discovery of. 18 Further, if it is so advised, it should serve, but not file, draft interrogatories which the applicant says are necessary or convenient for the disposition of the case. I need hardly add that the task of drafting those interrogatories should always bear in mind the necessity for fewer rather than more interrogatories. All that material is to be served at least 14 days before the directions hearing. But it may be necessary, or it will be necessary to amend the amended statement of claim. Such amendment should take place within 14 days. 19 In those circumstances, recognising that various clients are in Queensland and the need for proper and adequate instructions to be taken as to the respondent's attitude to the case as thrown up, I think security should be given for something in the order of two full days work. It is put to me that this may take more than two days. That is not an unreasonable submission. But I think what I would prefer to do is deal with the matter on two full days work with security that recognises the possibility that some of that time may involve senior counsel. I put to the parties that I thought $15,000 for all would be adequate. On hearing the respondents, I think fairness might dictate a little more. 20 It was put to me by one party that I should award a sum which would give $100,000 to all four parties. I think that is well outside what is reasonable for security for costs, bearing in mind the well known purpose of security, not to be a complete indemnity and to be largely based on tax costs. I am not aware of any financial impecuniosity; there is no suggestion of that thus far. 21 This is a potentially fact-rich case brought against four respondents in respect of which it could be understood there would be significant disputes. In those circumstances, I think $20,000 not unreasonable and unless Mr Lee wishes to say anything to the contrary that is the figure that I would come to, unless the respondents wish to have this matter, in effect, run on a formal evidence basis that I referred to earlier. I certify that the preceding twenty-one (21) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Allsop.