Plaintiff v Defendant

Todber Pty Ltd v Glendale RV Syndication Pty Ltd [2004] FCA 1328, distinguished.

World Firefighters Games Brisbane, 2002 v World Firefighters Games Western Australia Inc [2001] QSC 164; (2001) 161 FLR 355, applied.

1 This is an application by summons filed 16 September 2005 in which the defendant/plaintiff by counterclaim seeks an order that the proceeding be transferred to the Supreme Court of Western Australia pursuant to s 5(2)(b)(iii) of the Jurisdiction of Courts (Cross-Vesting) Act 1987 ("the Act").

2 The plaintiff, Slater & Gordon Pty Ltd, is a company which provides legal services. It conducts the legal practice formerly conducted by the second defendant to counterclaim, the solicitors firm of Slater & Gordon.

3 The defendant, Mrs Porteous, is the widow of the late Mr Lang Hancock. She was for many years a party to a considerable amount of litigation involving assets associated with her late husband. That litigation was principally conducted in Western Australia, although there were also proceedings in New South Wales.

4 Mrs Porteous and Slater & Gordon entered into a series of agreements pursuant to which Slater & Gordon conducted the litigation to which I have referred between 1997 and 2003. There are a number of written agreements between Mrs Porteous and Slater & Gordon which Mrs Porteous signed and which culminate in a deed dated 20 January 2005. It is alleged by Mrs Porteous that there was an oral agreement entered into with a representative of Slater & Gordon named Mr Nicholas Styant-Browne in July 1997, prior to all of the written agreements. This oral agreement is inconsistent with the written agreements and is denied by Slater & Gordon.

5 The January 2005 deed required Mrs Porteous to make payments to Slater & Gordon by specified dates. She made a number of payments and then ceased. Slater & Gordon's solicitors took steps in response, and on 27 June 2005 issued this proceeding seeking to enforce the terms of the January 2005 deed.

6 On the same day and very shortly after being informed that proceedings had been issued in this Court, Mrs Porteous' solicitors issued a writ of summons in the Supreme Court of Western Australia. Mrs Porteous' writ of summons has a general indorsement. It seeks an order setting aside all of the written agreements entered into between the parties and the oral agreement allegedly made in July 1997.

7 A statement of claim filed in the West Australian proceeding on 25 July 2005 alleges that Mrs Porteous is entitled to have all the various agreements set aside pursuant to the Legal Practitioners Act 1893 (WA), and alleges that the agreements were entered into as a result of misleading and deceptive conduct, duress and/or breach of fiduciary duty, amongst other things.

8 An application on behalf of Slater & Gordon to stay that proceeding or transfer it to Victoria is presently pending in the Supreme Court of Western Australia.

9 One of the provisions of the January 2005 deed reads as follows:

"Governing law and jurisdiction

This deed will be governed by and construed in accordance with the laws in force in the State of Victoria and each party submits to the exclusive jurisdiction of the courts of that State."

10 Section 5(2) of the Act relevantly provides:

"(2) Where--

(a) a proceeding (in this sub-section referred to as the '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--

(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."

11 There are two issues upon which the submissions of the parties to this application differ as to the legal principles to be applied. The first is the question of onus, and the second concerns the exclusive jurisdiction clause.

12 The principles which are not controversial are the following.

13 First, one starts with the statement of Street CJ in Bankinvest AG v Seabrook,[1] recently applied by the High Court in BHP Billiton Ltd v Schultz,[2] and by Gillard J in this Court in Ewins v BHP Billiton Ltd:[3]

"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."[4]

14 Whilst described as a "nuts and bolts" decision, this does not mean that it is an administrative decision, as opposed to an inter-partes exercise of judicial power.[5]

15 Second, there is a statutory requirement to exercise the power of transfer whenever it appears that it is in the interests of justice that it should be exercised.[6]

16 Third, the issue arising under the legislation is not the same as the issue which arises in the context of "forum non conveniens", but factors identified in cases in that context, in particular, the House of Lords decision in Spiliada Maritime Corporation v Cansulex Ltd,[7] remain relevant.[8]

17 Amongst the factors which are so relevant are questions of convenience and expense, issues of the availability of witnesses, the places of residence or business of the parties and the witnesses, and the law which governs the relevant transactions.[9]

18 The High Court has made it clear that a disinclination to override the plaintiff's choice of forum is not a relevant factor to be taken into account.[10]

19 A further factor which may be relevant is the question of delay. A party should not be permitted, by conducting a case for a time in one court, to, in effect, approbate and reprobate by then applying to have the matter transferred to another court.[11]

20 The first issue of controversy concerns the question of the existence of an onus of some kind on the applicant for transfer. Mrs Porteous' counsel submitted that there was no such onus, relying upon the statement of Gummow J in BHP v Schultz, with whose reasons Hayne J relevantly agreed, to the effect that it is "inapt" to speak of any burden of persuasion analogous to an onus of proof.[12] Counsel for Slater & Gordon submitted that there was an onus, relying upon Gillard J's statement to that effect in Ewins,[13] and other similar observations.

21 Like Dodds-Streeton J in Mcleod v Munro,[14] I find Gummow J's observations persuasive. Gummow J was particularly influenced by s 5(7) of the Jurisdiction of Courts (Cross-Vesting) Act 1987 (NSW), empowering a court to transfer a proceeding of its own motion. The argument against there being an onus analogous to an onus of proof is also fortified, it seems to me, by the position here, where there are proceedings in two States raising the same issues, and applications to transfer by the opposite parties are pending in each State.

22 As has been repeatedly observed, if there is any onus it has a very limited role. The issue is not of significance in this application.

23 The second matter of controversy concerns the exclusive jurisdiction clause. Counsel for Mrs Porteous submitted that such clauses do not have the force in the cross-vesting context that they have in the "forum non conveniens" context. He submitted that they were simply one potentially relevant factor. In this respect he relied upon World Firefighters Games Brisbane, 2002 v World Firefighters Games Western Australia Inc.[15] He also submitted, relying on Todber Pty Ltd v Glendale RV Syndication Pty Ltd,[16] that where the effectiveness of the agreement is itself under challenge in the proceeding, such clauses have little weight.

24 Counsel for Slater & Gordon submitted that such clauses are relevant and significant, and in this case the clause is the overwhelming factor. He submitted that Todber concerns non-contractual claims, and that I should proceed assuming the efficacy of the January 2005 deed.

25 In my view, it would be wrong to proceed in this application assuming either that the January 2005 deed is invalid or that it is valid.

26 Both counsel relied upon Philippides J's judgment in World Firefighters and, in my view, that judgment sets out the applicable principles to be applied. Whilst exclusive jurisdiction clauses such as the clause in the January 2005 deed do not have the effect that they have in the "forum non conveniens" context, they remain a relevant factor and may be the critical factor in a particular case. Such a clause may indicate that the parties turned their minds to the question of where litigation should occur and agreed upon a single exclusive venue. This factor may be particularly compelling where it can be said that the parties must have been conscious at the time of the agreement of the existence of connecting factors between potential disputes and a State other than the exclusively designated State, and must have been conscious of the existence of potential inconvenience for one of the parties in litigating in the exclusively designated State.[17]

27 I have some difficulty with the decision in Todber, which, in any event, seems to me to be concerned with the problem of potential ouster of Federal Court jurisdiction, rather than with the matters in issue here. In so far as Todber differs from World Firefighters, I prefer the approach in World Firefighters.

28 Relying upon an affidavit of Mr William Porteous sworn 15 September 2005, counsel on behalf of Mrs Porteous submitted that an order for transfer ought to be made for the following reasons, in summary:

1. Mrs Porteous' case is that she entered into all of the relevant agreements in circumstances entitling her to have them set aside under West Australian legislation, or under the Supreme Court of Western Australia's inherent jurisdiction to supervise West Australian legal practitioners, or entitling her to have them set aside because she was misled, or because Slater & Gordon acted in breach of fiduciary duty. In essence, she says she is entitled to have the January 2005 deed set aside because she was not told of her entitlement to have the earlier agreements set aside. Counsel for Mrs Porteous submitted that all, or virtually all, of the relevant legal work was undertaken in relation to West Australian court proceedings. He submitted that the proper law of all relevant contracts, being the contracts prior to the January 2005 deed, is West Australian law, that the West Australian statute will be central to the case, and that the issues raised will be matters upon which the Supreme Court of Western Australia has special expertise. He did not submit that this Court would not have jurisdiction to adjudicate on the matters raised, but rather submitted that the Supreme Court of Western Australia is a much more appropriate forum.

2. Mrs Porteous and her husband reside in Western Australia, and although she does intend to eventually move to Victoria, that will not be for some time, perhaps a year or more. Her witnesses and her documents are in Western Australia.

29 Counsel on behalf of Slater & Gordon submitted that the application ought to be dismissed on the following grounds, in summary:

1. The exclusive jurisdiction clause is the overwhelming factor. He submitted that Mrs Porteous executed the deed and made payments pursuant to it. He relied upon the fact that Mr Porteous' affidavit revealed that Mr and Mrs Porteous had taken independent legal advice on the deed, or an earlier version of it, before it was executed (exhibit "WP-20").

2. Mrs Porteous has purchased properties in Victoria and intends to move here. Slater & Gordon is the natural plaintiff and all its witnesses, save for a witness who is in the United States of America, are in Melbourne.

3. Mrs Porteous has been guilty of delay.

30 It seems to me that the relevant matters to be addressed in this particular case are the following:

1. The connections between the relevant transactions and Western Australia and Victoria respectively.

2. The convenience of the parties and the witnesses.

31 The conduct and transactions likely to be in issue in this proceeding have a close association with Western Australia and, in my view, Mr Giles' submissions in this respect on behalf of Mrs Porteous were well-founded. A case raising significant issues concerning liability for the legal costs of litigation would ordinarily be most appropriately dealt with in the court in which the litigation in which the costs were allegedly incurred was conducted. This is a factor militating in favour of transfer to Western Australia.

32 In relation to the convenience of the parties and the witnesses, my view is that Victoria is more appropriate. A trial in Western Australia would be inconvenient to Slater & Gordon, whose practice is substantially in Victoria. A trial in Victoria may involve some inconvenience to Mrs Porteous, but it is significant that she is herself in the process of moving her residence to Victoria, and she has already made investments in residential property here. I cannot accept that she will be greatly inconvenienced by litigating in the State which she has chosen to make her permanent home in the near future.

33 The exclusive jurisdiction clause is an important factor. Whatever complaints Mrs Porteous may establish about other matters, as to which I can, of course, express no view at this stage, she does not suggest she was specifically misled in any relevant way about the exclusive jurisdiction clause. She had independent legal advice on the January 2005 deed, or at least on an earlier draft of it.

34 In my view, this is a case where on an application of this kind, a person in Mrs Porteous' position must be taken to have been conscious of the connecting factors with Western Australia, namely, that the litigation had been substantially conducted there, and must have been conscious of any potential inconvenience to her of litigating in Victoria, when she signed the deed which contained a provision whereby Victoria was agreed to be the exclusive jurisdiction for the determination of disputes.

35 I appreciate that one of Mrs Porteous' allegations is that the deed was executed under duress. It is, I think, significant in that respect that there is no affidavit sworn by her before me on this application.

36 In approaching the matter in this way, I am not assuming that Mrs Porteous is not entitled to have the January 2005 deed set aside. As her case is pleaded, however, if she does succeed in having the deed set aside, it will not be because she was misled or otherwise wronged in relation to her agreement to litigate in Victoria. Here the existence of the term can properly be the basis for concluding that the parties consciously decided that their disputes would be litigated in Victoria, without making any assumption as to the outcome of those disputes, or as to the effect of that outcome on the legal enforceability of the January 2005 deed itself.

37 I do not think the issue of delay is a relevant factor. It has always been obvious that Mrs Porteous wishes to have the matters litigated in Western Australia. I do not think there has been any relevant approbating and reprobating.

38 The determination of the application comes down to the need to balance the factor that the issues raised by Mrs Porteous are more appropriate for the determination of the Supreme Court of Western Australia, against the factor that the parties have agreed to litigate in Victoria.

39 My conclusion is that the parties' agreement is, as counsel for Slater & Gordon submitted, the overwhelming factor. Mrs Porteous, having taken at least some independent legal advice on the proposed terms, signed a deed, one of the terms of which required her to litigate disputes in Victoria, and she should not be permitted to go back on that agreement in the circumstances existing here.

40 Accordingly, the application will be dismissed.

[1] (1988) 14 NSWLR 711.

[2] [2004] HCA 61, [13] per Gleeson CJ, McHugh and Heydon JJ ("BHP v Schultz").

[3] [2005] VSC 4, [24] ("Ewins").

[4] Bankinvest AG v Seabrook (1988) 14 NSWLR 711, 714.

[5] BHP Billiton Ltd v Schultz [2004] HCA 61, [71] per Gummow J.

[6] Ibid [14] per Gleeson CJ, McHugh and Heydon JJ, [62] per Gummow J and [222] per Callinan J.

[7] [1987] AC 460.

[8] BHP Billiton Ltd v Schultz [2004] HCA 61, [18]-[20] per Gleeson CJ, McHugh and Heydon JJ and [42] per Gummow J.

[9] Ibid [18]-[19] per Gleeson CJ, McHugh and Heydon JJ and [163] per Kirby J.

[10] Ibid [25] per Gleeson CJ, McHugh and Heydon JJ, [72] per Gummow J and [167] per Kirby J.

[11] Ibid [19]-[22] per Gleeson CJ, McHugh and Heydon JJ and [64] per Gummow J; Broken Hill Pty Co Ltd v Zunic [2001] NSWSC 561.

[12] [2004] HCA 61, [71].

[13] [2005] VSC 4, [19]-[23].

[14] [2005] VSC 375, [37].

[15] [2001] QSC 164; (2001) 161 FLR 355 ("World Firefighters").

[16] [2004] FCA 1328 ("Todber").

[17] World Firefighters Games Brisbane, 2002 v World Firefighters Games Western Australia Inc [2001] QSC 164; (2001) 161 FLR 355, [26], [33], [60] and [74].