Plaintiff v Defendant

2 Smartscaff has prepared a statement of claim, which has been provided to the third company but has neither been formally filed or served. The statement of claim claims damages for detention and/or conversion, alternatively an account of profits for unjust enrichment.

3 Smartscaff is a Victorian company in the business of hiring scaffolding, and it alleges that it leased some 900 tonnes of scaffolding to a company, controlled by Mr Denny Aleksic, called Capital Scaffolding NSW (the first company). The scaffolding, as I understand it, was provided from Smartscaff's site in Ingleby, New South Wales, which I am informed is a suburb in the west of Sydney, to the first company's site in Ingleby.

4 Capital Scaffold NSW, which I will call the second company, also operated out of the site at Ingleby from which it then made available to builders, for a fee, the scaffolding that it had hired from Smartscaff.

5 Capital Scaffolding NSW (the first company) became insolvent, and went into liquidation. The stock Capital Scaffolding NSW had hired from Smartscaff scaffolding was taken over by another company controlled by Denny Aleksic called Capital Scaffold NSW, the second company, and Smartscaff entered into a hiring agreement with the second company.

6 The second company became insolvent and went into liquidation. The Smartscaff stock of scaffolding was allegedly taken over by the third company, now the defendant, Capital Scaffolding Pty Ltd, purportedly under the control of Mr Denny Aleksic's son.

7 Denny Aleksic has gone into bankruptcy and his son, Mr Nebojsa Aleksic, is the sole director of the third company. However, the affidavit material shows that the son knows little about the relevant transaction as he obtained the information about the transaction from his father, Denny.

8 I can only infer that the father may still control the business now conducted by the third company.

9 Smartscaff alleges that according to its accounting records, it delivered 973 tonnes of scaffolding to either the first or second company, and, in my view, it does not greatly matter which, they were all under the control of Mr Denny Aleksic, and only 320 tonnes have been returned. The third company did not have an agreement in place with Smartscaff.

10 Smartsaff has demanded that the third company return the scaffolding, and the allegation is that Capital Scaffolding, the third company, has failed to return the 320 tonnes.

11 The cause of action is conversion and detinue, that is, Capital Scaffolding, the third company, has converted the goods for its own purpose or has improperly detained them.

12 As to the summons before me, s 5(2)(b)(iii) of the Jurisdiction of Courts (Cross-vesting) Act 1987 (Cth) relevantly provides:

(2) where:

... (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 or of a Territory the first court shall transfer the relevant proceeding to that other Supreme Court.

13 The third company, the defendant in the proceeding and the applicant in the application before me, says that I should be satisfied that it appears to this court that it is in the interests of justice that the relevant proceeding be determined in the Supreme Court of New South Wales. If it so appears to me, I accept that I am bound to transfer the proceedings to the Supreme Court of New South Wales.

14 The relevant principles have been canvassed by me in the case of Irwin v The State of Queensland as follows:[1]

(a) The Act requires that the [first] court should exercise the power of transfer whenever "it appears" that it is in the interests of justice that it should be exercised.[2]

(b) It is not necessary that it should appear that the first court is a "clearly inappropriate" forum.[3] It is both necessary and sufficient that it appears that, in the interests of justice, the second court is more appropriate than the first court.[4]

(c) The court is not concerned with the problem of a court, with a prima facie duty to exercise a jurisdiction that has been regularly invoked, asking whether it is justified in refusing to perform that duty. Rather, the court is required by statute to ensure that cases are heard in the forum dictated by the interests of justice.[5]

(d) The interests of justice are not the same as the interests of one party, and there may be interests wider than those of either party to be considered. Even so the interests of the respective parties, which might in some respects be common (as for example cost and efficiency) and in other respects conflicting, arise for consideration.[6]

(e) The power to exercise the jurisdiction is not a discretionary power but a mandatory obligation. No question of discretion arises.[7]

(f) It is inapt to speak of an applicant for an order for transfer as bearing a burden of persuasion analogous to an onus of proof.[8] Rather the jurisdiction must be exercised when "it appears" to the court that "it is in the interests of justice" that the proceeding be determined in the Supreme Court of another State or Territory rather than the court of where the proceeding has been issued.[9] Unless it so appears, the court does not have power under the Act to transfer the proceedings. To that extent it may be said that an applicant assumes some onus of persuasion.

(g) The court should adopt what has been described as a "nuts and bolts" management decision as to which court, in the pursuit of the interests of justice, is more appropriate to hear and determine the substantive dispute.[10]

(h) The appropriate court is the natural forum as determined by connecting factors to that forum.[11]

(i) Relevant connecting factors include matters of convenience and expense[12] such as availability of witnesses, the places where the parties respectively reside or carry on business, and the law covering the relevant transaction.[13]

(j) In many cases there will be a preponderance of connecting factors with one forum so that it can readily be identified as the most appropriate of natural forum. In other cases, there might be significant connecting factors with each of the two different forums. Some of the factors might cancel each other out.[14]

(k) If the action is between two individuals, and the plaintiff resides in one area and the defendant in another, there may be no reason to treat the residence of either party as determinative, although it would ordinarily be the residence of the defendant that is important to establish jurisdiction.[15]

(l) Factors which may be relevant to a tortious action are:[16]

(i) The place where the wrong occurred.

(ii) Residence of the parties and where it is an individual, the place where he or she resides, and in the case of a corporation where it carries on business. The latter is not necessarily its place of registration, although of course the latter is important to ensure jurisdiction.

(iii) The convenience of the parties and witnesses. However in this day and age this factor may not carry substantial weight because of the ability to move witnesses around Australia at small expense and little inconvenience, and also because the provision of evidence by audio visual link.

(iv) The law governing the proceeding.

(v) The experience of a particular court and its ability to provide an efficient and speedy trial, for example a court with a particular evidentiary and procedural rules hearing particular types of cases.

(vi) The condition of a party, for example, in a personal injury case where life expectancy of the plaintiff is limited requiring a speedy outcome.[17]

(m) As a general rule significant weight is to be attached to the place of the tortious wrong and the residence of the parties in a personal injury claim arising out of a claim in tort.[18] Where the place of the tort and the residence of the parties coincides, this will generally be determinative of the issue of the appropriate court although other factors may need to be assessed in the process of determining where the interests of justice lie.[19]

(n) A relevant factor is whether the coincidence of the lex fori[20] and the lex loci delicti[21] will avoid debates concerning substantive and procedural law.[22]

(o) The plaintiff's choice of forum by itself is not a relevant connecting factor.[23]

(p) Each case depends on its own particular facts.[24]

(q) The list of connecting factors is impossible to state exhaustively. Equally the weight to be given to each factor must vary from case to case.[25]

15 The third company says that I ought to find that it appears to the court that it is in the interests of justice that the proceeding be determined in the Supreme Court of New South Wales as:

(a) all the relevant witnesses that the defendant would seek to call reside in New South Wales;

(i) Mr Denny Aleksic, who seems to be the source of information about what the third company has done or not done with respect to the scaffolding, is proximate to Sydney - notwithstanding that Smartscaff contends his address is in the Australian Capital Territory.

(ii) Other witnesses who may be able to give evidence as to what happened to the stock that was in the possession of the third company at its site in Ingleby also, I infer, will be residents of New South Wales.

(b) The transactions in issue, that Smartscaff providing scaffolding to the first and second companies, that has now been taken possession of by the third company, have taken place in New South Wales.

16 I agree with counsel that there is no difference in the law between the two states, that there is only one common law of Australia and the claims are in tort. I therefore do not consider the fact that the applicable law will be that of New South Wales, as that is where the alleged conversion and detinue occurred, to be determinative.

17 Smartscaff says that essentially the case is going to be an accounting exercise - going through Smartscaff's records of what it delivered to Mr Aleksic's companies and records of what it has received back. Nonetheless, it is likely that there will also be evidence of witnesses siting Smartscaff's scaffolding at other building sites in New South Wales, and as the third company says, of witnesses who will speak to the documentary records.

18 I think the distinctive factor about this case, which probably separates it from many of the other cases where an application of this kind is made, is that this is a commercial dispute between corporations, concerning significant sums of money. It is not a case of personal injuries where certain doctors need to be called and people who are not involved in commerce, or who may otherwise find it difficult to travel, may be called as witnesses.

19 In my opinion, it has to be accepted that Australia is a single market. The market is not usually seen in terms of state boundaries, rather it is business conducted in Australia, although there are often regional offices and state operations.

20 In a commercial dispute, I do not think much turns on whether a witness, party or legal representatives are from Melbourne or Sydney. In either case, it is likely to involve some travel for the parties and witnesses. I do not consider that in a commercial dispute to be determined in the Supreme Court that issues of travelling either to Sydney or Melbourne are a significant factor. From a practical level I can see very little, if any, inconvenience to one party or another of holding the hearing in one place or the other.

21 As I said, the case has none of the criteria in an application of this kind involving medical witnesses and such like, where travelling may be inconvenient, and staying in the other state may be inconvenient.

22 The statutory test requires that it must appear to me that it is in the interests of justice that the matter be determined in the Supreme Court of New South Wales. On the basis that this is a commercial dispute between corporations, where there are no factors preventing or inhibiting the parties, witnesses and lawyers attending in Melbourne, rather than Sydney, I find that it does not appear to me that it is in the interests of justice that the matter be heard in Sydney.

23 For the above reasons, I dismiss the application. I order that the defendant pay the plaintiff's costs of the application.

[1] [2011] VSC 291, [14].

[2] BHP Billiton Ltd v Schultz [2004] HCA 61; (2004) 221 CLR 400 [14] ('Schultz') (Gleeson CJ, McHugh and Heydon JJ) and at [17] (Gummow J (with whom Hayne J agreed)); and Ewins; Hall v Australian Finance Direct Ltd [2005] VSC 306 [16] ('Ewins').

[3] The reference to a "clearly inappropriate" forum is the test adopted by the High Court of Australia in Voth v Manildra Flour Mills Pty Ltd [1990] HCA 55; (1990) 171 CLR 538 that should be applied in an application to stay a proceeding on the grounds of forum non conveniens. In Schultz at [7]-[11] Gleeson CJ, McHugh and Heydon JJ distinguish between the test to be applied in such an application and the test that should be applied in an application under the Jurisdiction of Courts (Cross-vesting) Act 1987.

[5] Schultz, [14] (Gleeson CJ, McHugh and Heydon JJ) when distinguishing between an application for a stay on the ground of forum non conveniens and an application under the Act.

[6] Schultz, [15] (Gleeson CJ, McHugh and Heydon JJ).

[7] Schultz, [62]-[63] (Gummow J (with whom Hayne J agreed)); Ewins, [17].

[8] Schultz, [71] (Gummow J (with whom Hayne J agreed)).

[9] Schultz, [71] (Gummow J (with whom Hayne J agreed)); Bankinvest AG v Seabrook (1988) 14 NSWLR 711 (Rogers AJA), 727 ('Bankinvest'). In Ewins at [23] Gillard J held that although persuasive it was not adopted by the majority of the High Court. He said he was not prepared to accept that it represents the law.

[10] Bankinvest, 714 (Street CJ); approved in Schultz, [13] (Gleeson CJ, McHugh and Heydon JJ).

[11] Schultz, [10] (Gleeson CJ, McHugh and Heydon JJ); Spiliada Maritime Corp v Cansulex Ltd [1987] AC 460 the House of Lords (Spiliada); Ewins, [31].

[12] Preamble to the Act "Whereas inconvenience and expense have."

[13] Schultz, [18]-[19] (Gleeson CJ, McHugh and Heydon JJ).

[14] Schultz, [19] (Gleeson CJ, McHugh and Heydon JJ).

[15] Schultz, [19] (Gleeson CJ, McHugh and Heydon JJ).

[19] James Hardie & Co Pty Ltd v Barry (2000) 50 NSWLR 557 ('James Hardie'), 361 (Spigelman CJ).

[22] Schultz, 262 (Gummow J (with whom Hayne J agreed)).

[23] Schultz; Ewins, [12]. Gummow J said at [77] in Schultz "The phrase 'otherwise in the interests of justice' in sub para (iii) of s 5(2)(b) of the Cross-vesting Act requires the Supreme Court to determine a transfer application by identifying the more appropriate forum without any specific emphasis in favour of the choice of forum made by the plaintiff."

[24] Eden v Amaca Pty Ltd [2007] VSC 374 [10].