Plantagenet Wines Pty Limited v Lion Nathan Wine Group Australia Limited

The application under s 20 of the SEP Act 46 I will now give consideration to Lion Nathan's application brought by reference to the SEP Act. Section 20 of the SEP Act reads as follows: '(1) This section does not apply in relation to a proceeding in which the Supreme Court of a State is the court of issue. (2) The person served may apply to the court of issue for an order staying the proceeding. (3) The court may order that the proceeding be stayed if it is satisfied that a court of another State that has jurisdiction to determine all the matters in issue between the parties is the appropriate court to determine those matters. (4) The matters that the court is to take into account in determining whether that court of another State is the appropriate court for the proceeding include: (a) the places of residence of the parties and of the witnesses likely to be called in the proceeding; and (b) the place where the subject matter of the proceeding is situated; and (c) the financial circumstances of the parties, so far as the court is aware of them; and (d) any agreement between the parties about the court or place in which the proceeding should be instituted; and (e) the law that would be most appropriate to apply in the proceeding; and (f) whether a related or similar proceeding has been commenced against the person served or another person; but do not include the fact that the proceeding was commenced in the place of issue. …' 47 Counsel for Plantagenet argued that s 20 of the SEP Act had no application to proceedings issued by the Federal Court, and that, therefore, s 20 of the SEP Act could not found a basis for this Court to stay the Federal Court proceedings. 48 In my view, counsel for Plantagenet's argument is to be accepted. 'Court' is defined in s 3 of the SEP Act as follows: 'Court, except in Part 7, means a court of a State and includes an authority exercising the powers of such a court'. 49 Section 20 of the SEP Act does not appear in Pt 7 of the SEP Act, and therefore the reference to the word 'Court' in s 20 of the SEP Act is to be construed as a reference to a court of a State. It follows that the reference to 'court' in s 20 of the SEP Act is not a reference to the Federal Court, whose proceedings are not, in any event, served pursuant to the SEP Act. Further, in Schmidt, Ormiston JA at 454 observed that s 20(1) of the SEP Act is to be construed as referring to an inferior court of a State. 50 I, accordingly, decline to stay the Federal Court proceedings under s 20 of the SEP Act as there is no jurisdiction to do so. The application for transfer under the cross‑vesting legislation 51 In BHP Billiton, Gleeson CJ, McHugh and Heydon JJ said at 527, at [14]: 'In the context of the Cross‑Vesting Act, one 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. An application for transfer under s 5 of the Cross‑Vesting Act is brought upon the hypothesis that the jurisdiction of the court to which the application is made has been regularly invoked. If it appears to that court that it is in the interests of justice that the proceedings be determined by another designated court, then the first court "shall transfer" the proceedings to that other court. 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. It is not necessary that it should appear that the first court is a "clearly inappropriate" forum. It is both necessary and sufficient that, in the interests of justice, the second court is more appropriate.' 52 Gleeson CJ, McHugh and Heydon JJ in BHP Billiton at 527, at [13] quoted with approval the following observations by Street CJ in Bankinvest: 'The cross‑vesting legislation passed by the Commonwealth, the States and the Territories both conferred on each of the ten courts Australia‑wide jurisdiction and set up the mechanism regulating the transferring of proceedings from one of these ten courts to another. In relation to transfer, the common policy reflected in each of the individual enactments is that there must be a judicial determination by the court in which proceedings are commenced either to transfer or not to transfer the proceedings to one of the other nine based, broadly speaking, upon consideration of the interests of justice…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.' 53 Lion Nathan relied upon the following factors in support of its submission that the Federal Court proceedings should be transferred to the New South Wales Supreme Court: (i) the distribution agreement contains a clause whereby the parties have submitted to the non exclusive jurisdiction of the courts of New South Wales; (ii) the distribution agreement contains a clause stating that the 'agreement and the transactions contemplated' by the agreement are governed by the laws of New South Wales, Australia; (iii) the New South Wales proceedings are likely to be determined in a shorter period of time than the Western Australia proceedings; (iv) the New South Wales proceedings are more advanced than the Western Australia proceedings and a considerable body of affidavit material has already been served and absorbed by the legal representatives in New South Wales, including the solicitors and counsel retained by Plantagenet in that State; (v) Lion Nathan's potential witnesses reside predominantly in New South Wales. 54 Plantagenet, on the other hand, relies upon the following factors in opposing the transfer of the Federal Court proceedings to the New South Wales Supreme Court: (i) the claims made by Plantagenet are within the original jurisdiction of the Federal Court and there is a substantial connection between Western Australia and the claims made in the Federal Court proceedings; (ii) there is a great disparity in the financial resources of Plantagenet and Lion Nathan and the burden of interstate litigation will, relative to the parties' resources, be far greater for Plantagenet. 55 I deal with each of the factors relied upon by Lion Nathan. 56 Counsel for Lion Nathan submits that considerable weight must be given to the fact that the distribution agreement contains a clause whereby the parties have submitted to the non exclusive jurisdiction of the courts of New South Wales. Counsel relies upon observations by Simmonds J in Anderson Formrite Pty Ltd v Baulderstone Hornibrook Pty Ltd (2004) 206 ALR 614 at 618 where his Honour observed that weight should be given to a clause where parties have agreed to submit to the jurisdiction of a particular court even if the submission was to the non exclusive jurisdiction of that court, but that greater weight should be given if the parties have submitted to the exclusive jurisdiction of the court. 57 Counsel for Plantagenet submitted that on the proper construction of the clause Plantagenet has not submitted its TP Act claims to the non exclusive jurisdiction of the courts of New South Wales. The submission to the non exclusive jurisdiction of the New South Wales Court was limited to claims relating to the construction and performance of the distribution agreement, and did not extend to claims of misrepresentation leading to the entry into the agreement. 58 Secondly, counsel argued that the words 'courts of [New South Wales]' in the clause were apt to include the Federal Court which is a court which, inter alia, sits in New South Wales. 59 A non exclusive jurisdiction clause does not preclude a party bound by that clause from commencing proceedings in a jurisdiction other than the jurisdiction specified in the clause. The effect of the clause is that the contracting parties agree to submit to the non exclusive jurisdiction of the court specified in the clause, the claims that are within the scope of the clause. I accept the argument of counsel for Plantagenet that there is a relationship between the scope of the choice of law clause and the scope of the submission to the non exclusive jurisdiction in cl 24.7 of the distribution agreement. I also accept Plantagenet's argument that the words 'The Agreement and the transactions contemplated by this [agreement]' in that clause, refer to claims relating to the construction and performance of the distribution agreement and do not refer to claims of misrepresentation inducing the entry into the distribution agreement (see Green v Australian Industrial Investment Ltd (1989) 25 FCR 532 at 543 ('Green')). However, a significant part of Plantagenet's claim in the Federal Court proceedings relates to allegations of breach of contract by Lion Nathan and, therefore, the fact that Plantagenet is party to a non exclusive jurisdiction clause in favour of the courts of New South Wales must be taken into account. In my view, the effect of the clause is that the parties have agreed that New South Wales is an appropriate forum to consider claims falling within the ambit of the choice of law clause, and have, thereby, agreed to accept the jurisdiction of that Court for the determination of those claims, but that does not mean that they have agreed that there is no other court, particularly within Australia, which may also be an appropriate forum. I am of the view, therefore, that, given the limited scope of the claims that the parties have agreed to submit to the non exclusive jurisdiction of the New South Wales courts, some, but not much, weight is to be accorded to the non exclusive jurisdiction clause, as a factor in favour of the Federal Court proceedings being transferred to the New South Wales Supreme Court. 60 I do not regard it as helpful to address, in this context, the question of whether the Federal Court sitting in Sydney is within the ambit of the expression 'courts of [New South Wales]'. This is because the inquiry at hand requires an assessment of whether, by reference to its connecting factors to the Western Australia District Registry of this Court, as opposed to any other district registry, the Federal Court proceedings should be transferred to the New South Wales Supreme Court. 61 I place no weight, additional to that already referred to, on the fact that the distribution agreement provides that the governing law of the distribution agreement is the law of New South Wales. This is because the Federal Court is a national court which applies the common and statutory law of each of the States when it is appropriate to do so. Further, Lion Nathan has not pointed to any distinguishing features in the law of New South Wales which it is anticipated, will assume any importance in the resolution of the controversy (see Green at 544). 62 I place no weight on the claim that the New South Wales proceedings are likely to be determined within a shorter period than the Federal Court proceedings. The evidence of Ms Ward is that the New South Wales proceedings could be heard within approximately six to seven months. The evidence of Ms Allison is that in her recent experience, it is possible for an application to get to trial in the Western Australia District Registry of this Court within a year of the date of issue, even in cases where there have been defaults in the timetable. In her view, if the parties were to comply with the timetable it would be possible to get a matter to trial in this Registry in a substantially lesser period of time. Ms Allison also deposes that she has been informed by Mr O'Connor, a partner of the Sydney law firm, Addisons, that in his experience a trial may be had in the Federal Court in Sydney within four to six weeks of the issue of the application if the disposition of the matter is regarded as urgent. In my view, evidence at this level of generality is of very limited value. What is more significant is that each court has the facilities available to the parties whereby each court is able to make directions, at the instance of the parties, for bringing the matter to trial within a short period of time. 63 I also place no weight on the claim that the proceedings are further advanced in the New South Wales Supreme Court. In this Court, Plantagenet has filed an application and a statement of claim. In the New South Wales proceedings, Lion Nathan has filed a statement of claim and a commercial list statement. In neither of the proceedings has a defence been filed. Further, in neither of the proceedings have directions been made for the progress of the proceedings to trial. Further, I place no weight on the submission that solicitors and counsel retained in New South Wales will have acquired such a familiarity with the case that it would be inefficient to waste that expertise. There has not been any contested application heard in the New South Wales proceedings. 64 As to the question of the number and location of witnesses, Ms Ward has deposed that she anticipates that there would be about 10 witnesses called in support of Lion Nathan's case and that they are largely resident in New South Wales. Among the witnesses referred to are employees from Tucker Seabrook and Fine Wine Partners Australia Pty Ltd as trustee of the Fine Wine Partners Unit Trust ('Fine Wine Partners'). Ms Allison has not specified a number of witnesses whom she anticipates would be called to give evidence for Plantagenet, but she says she has identified several possible witnesses, who, save for one, are resident in Western Australia. 65 Counsel for Lion Nathan submits that the number of potential witnesses resident in New South Wales is a strong factor in favour of the Federal Court proceedings being transferred to the New South Wales Supreme Court. Counsel for Plantagenet submits that it is too early to anticipate how many witnesses will be required to give evidence at trial and that should it transpire that most of the witnesses required to give evidence at trial are resident in New South Wales, it will be open to this Court to make orders to accommodate that eventuality by taking evidence by video link, or even, by directing that the trial be conducted in New South Wales. 66 I accept that it is too early to make any reliable estimate as to the number of witnesses that will be required to give evidence at trial. The pleadings are not yet closed and Ms Ward has made no attempt to identify the issues likely to be in dispute and the matters in respect of which each of the 10 anticipated witnesses will be required to give evidence. I, accordingly, regard the evidence of Ms Ward as to the number of witnesses likely to be called to give evidence for Lion Nathan at trial as being of limited value. 67 Further, I accept that the inconvenience of witnesses having to travel can be often be mitigated by taking evidence by video link; and that the Court does have the power to order that the trial be conducted in New South Wales. However, notwithstanding, these comments, in my view, some weight must be accorded to the prospect that there will be witnesses called by Lion Nathan who are resident outside of Western Australia, who will be required to travel to Perth (if that is the trial venue) to give evidence at the trial of the Federal Court proceedings. However, balanced against that factor must also be weighed the prospect of witnesses from Plantagenet having to travel to New South Wales to give evidence at the trial, if the Federal Court proceedings are transferred to New South Wales. In my view, because it is so early in the life of proceedings, any projection about the relative number of witnesses entails a considerable amount of speculation. I consider, therefore, that this factor must be regarded as neutral because the prospect of some of Lion Nathan's witnesses having to give evidence in Perth if the Federal Court proceedings are not transferred to New South Wales, must be weighed against the prospect of some of the Plantagenet witnesses having to give evidence in New South Wales if the Federal Court proceedings are transferred to the New South Wales Supreme Court. I do not accept the submission by counsel for Lion Nathan that it would be equally inconvenient for the Western Australia based witnesses called for Plantagenet to have to give evidence in Perth, as it would be if they had to give evidence in Sydney. 68 I now deal with the factors relied upon by Plantagenet. 69 Firstly, Plantagenet claims that the Federal Court is the appropriate forum because the Federal Court proceedings were brought in the original jurisdiction of the Court. Plantagenet also claims that there are substantial connections between Federal Court proceedings and Western Australia. These are that the principal place of business of Plantagenet is in Western Australia, the misrepresentations founding the TP Act claims were made in Western Australia and the damage has been suffered in Western Australia. 70 Counsel for Lion Nathan does not dispute that the Federal Court proceedings were brought in the original jurisdiction of the Federal Court. Nor does counsel for Lion Nathan dispute that the Federal Court proceedings have some substantial connections with Western Australia. However, counsel for Lion Nathan submits that those proceedings also have substantial connections with jurisdictions outside of Western Australia, namely, that the principal place of business of each of Lion Nathan, Tucker Seabrook and Fine Wine Partners, is in New South Wales, that the breaches of the distribution agreement are alleged to have occurred in States and Territories outside of Western Australia, and, also, that the entry of Lion Nathan into the joint venture is alleged to have occurred outside of Western Australia. It is also said that the principal place of business of Casama is outside of Western Australia. 71 In my view, there is substance in each party's submission and this factor is a neutral factor. 72 Counsel for Plantagenet submitted that there was a significant disparity in the financial resources available to each of the parties for the conduct of these legal proceedings and this has the potential to lead to unfairness. He submitted that the relative imbalance in financial resources meant that it would be more onerous for Plantagenet to engage in long distance litigation in New South Wales, than it would be for Lion Nathan to engage in long distance litigation in the Federal Court in Western Australia. Counsel for Plantagenet also submitted that, based upon the manner in which Lion Nathan had conducted the litigation to date, it was likely that the litigation would be hard fought, time consuming and expensive; and this had the potential to exacerbate the disparity in financial resources between the parties. Counsel relied upon the following circumstances in support of this submission: (a) Lion Nathan had applied for an interlocutory injunction in New South Wales when it was unnecessary to do so, because the matter of an interim wine supply could have been resolved commercially. (b) Lion Nathan had refused to consent to an adjournment of the first directions hearing in the New South Wales proceedings which was listed on 10 February 2006 pending on the outcome of this motion and had sought to have directions made which provided for a timetable until the trial. Lion Nathan had accelerated its own proposed directions so as to serve a statement of claim before this motion was heard. 73 Counsel for Lion Nathan submitted that each corporation operates a substantial business and that this factor should be regarded as neutral. Counsel also disputed that it was unnecessary for Lion Nathan to have applied for the interlocutory injunction in the New South Wales Supreme Court. 74 Plantagenet is a private company which employs 20 people. Its net profit for 2005 was $269 000. Mr Mayo also deposed that Plantagenet is a small business, and that it is important that its management team including himself be available in Western Australia to attend to that business. He also said that Plantagenet does not have the staff resources to accommodate periods of absence interstate for the purposes of litigation. 75 Lion Nathan is part of a publicly listed group of companies which operates a major multinational business. The parent company of Lion Nathan issued a press release on 9 November 2005 stating that its net profit after tax was $230.4 million for the 2005 year. 76 In the case of Cultivaust Pty Ltd v Grain Pool of WA [2000] FCA 974, Heerey J at [12] observed: 'Financial aspects loom large in this matter. Cultivaust is a small company with an annual income of less than $200 000. Grain Pool is a substantial statutory corporation with revenues in excess of $600 million. The objective of access to justice is just as applicable in the area of commercial litigation between corporations as it is when individuals are involved. The extra expense involved in a transfer would be a substantial burden on Cultivaust and would exacerbate the existing imbalance of financial resources between these two litigants.' 77 Although those observations were made in the context of an application to transfer proceedings in the South Australia District Registry of this Court, to the Western Australia District Registry, Heerey J's observations are, in my view, equally applicable to an application for the transfer of proceedings under the cross‑vesting legislation. 78 I accept the submissions by counsel for Plantagenet that there is a large disparity in financial resources between Plantagenet and Lion Nathan, and that the effect of having to conduct interstate litigation would be substantially more onerous on the financial resources of Plantagenet than it would be on the financial resources of Lion Nathan. 79 It has been necessary for Plantagenet to engage an additional firm of solicitors to act as its solicitors in New South Wales on instructions from Plantagenet's firm of solicitors in Perth, and that Plantagenet has also been required to engage counsel in New South Wales as well. By contrast, Lion Nathan has used its Sydney based firm of solicitors and counsel both in the New South Wales proceedings and the Federal Court proceedings. Lion Nathan can continue to do so in the event that the Federal Court proceedings are not transferred to the New South Wales Supreme Court. No doubt if the Federal Court proceedings were to be tried in Perth, Lion Nathan may well have to incur the additional costs of transporting and accommodating its legal representatives in Perth for the trial, but those costs would be relatively minor, in comparison to the costs that Plantagenet would have to incur in having to retain for the duration of the proceedings a second firm of solicitors and a counsel in Sydney. 80 The parties produced a considerable amount of evidence in relation to the issue of whether it was necessary for Lion Nathan to have sought the interlocutory injunction in the New South Wales proceedings. By reason of the contentious nature of this evidence, the Court is simply not in a position to make any findings on this issue. Accordingly, I make no finding that it was unnecessary for Lion Nathan to invoke the jurisdiction of the New South Wales Supreme Court in order to obtain the interlocutory injunction when it did, and I do not accept Plantagenet's submission to that effect. 81 However, I accept that in giving its solicitors instructions, whilst this motion was pending, to produce and serve an accelerated statement of claim, and to apply to the New South Wales Supreme Court for an accelerated programme of directions which had potential to require Plantagenet to undertake work which might ultimately prove unnecessary, Lion Nathan did indicate that it is prepared to conduct the litigation with a degree of indifference as to whether costs are wasted by the undertaking of potentially unnecessary work. 82 In my view, the disparity in the financial resources of Plantagenet and Lion Nathan and the potential for the conduct of hard fought interstate commercial proceedings to 'exacerbate the existing imbalance of financial resources between these two litigants', is a factor to which I accord considerable weight. This factor weighs in favour of not transferring the Federal Court proceedings to the New South Wales Supreme Court. 83 In balancing all of the factors referred to above, I am of the view that in the interests of justice the more appropriate forum for the conduct of the Federal Court proceedings is the Western Australia District Registry of the Federal Court. I, therefore, decline to order that the Federal Court proceedings be transferred to the New South Wales Supreme Court. 84 It follows that I dismiss Lion Nathan's motion with costs. I certify that the preceding eighty‑four (84) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Siopis.

Associate: Dated: 17 March 2006 Counsel for the Applicant: Mr D Stone

Solicitor for the Applicant: Williams & Hughes

Solicitor for the Respondent: Mallesons Stephen Jaques

Date of Hearing: 17 February 2006

Date of Final Written Submissions: 24 February 2006