PRD Realty Pty Ltd v King & Ors [2007] NSWSC 734 | Case summary

6476/06 PRD REALTY PTY LTD v ANDREW KING & ORS JUDGMENT 1 Andrew King, Mark Evans and Anthony Ott, the first, second and third defendants, seek an order that these proceedings to be transferred to the Supreme Court of Queensland. DTZ Australia (Queensland) Pty Ltd, the fourth defendant, has no objection to that order being made. It is opposed by PRD Realty Pty Ltd, the plaintiff. 2 The application is brought under the Jurisdiction of Courts (Cross-vesting) Act 1987, s 5(2). It is in the following terms: "(2) Where: (a) a proceeding (in this subsection referred to as the "relevant proceeding") is pending in the Supreme Court (in this subsection referred to as the "first court"); and (b) it appears to the first court that: (i) the relevant proceeding arises out of, or is related to, another proceeding pending in the Supreme Court of another State or of a Territory and it is more appropriate that the relevant proceeding be determined by that other Supreme Court; (ii) having regard to: (A) whether, in the opinion of the first court, apart from this Act and any law of the Commonwealth or another State relating to cross-vesting of jurisdiction, the relevant proceeding or a substantial part of the relevant proceeding would have been incapable of being instituted in the first court and capable of being instituted in the Supreme Court of another State or Territory, (B) the extent to which, in the opinion of the first court, the matters for determination in the relevant proceeding are matters arising under or involving questions as to the application, interpretation or validity of a law of the State or Territory referred to in sub-subparagraph (A) and not within the jurisdiction of the first court apart from this Act and any law of the Commonwealth or another State relating to cross-vesting of jurisdiction, and (C) the interests of justice, it is more appropriate that the relevant proceeding be determined by that other Supreme Court, or (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." 3 PRD and DTZ conduct real estate agency businesses in several States, including Queensland and New South Wales. Mr King, Mr Evans and Mr Ott were employed by PRD as real estate agents until shortly after the takeover of PRD by Colliers International Holdings (Australia) Ltd. Since then they have been employed by DTZ. 4 PRD alleges that Mr King, Mr Evans and Mr Ott breached their contractual and fiduciary duties to it and breached its confidence. It is alleged that while they were employees of PRD they provided confidential information to DTZ; that since being employed by DTZ, they have used that information for its benefit; that while employed by PRD they misled it into believing that after it was taken over by Colliers, they would continue to work for PRD or would agree to work for Colliers: and that DTZ induced Mr King, Mr Evans and Mr Ott to breach their contracts with PRD. 5 Mr King and Mr Evans have commenced proceedings in the Supreme Court of Queensland against PRD claiming commissions and superannuation said to be due to them. It was submitted that some of the witnesses in the New South Wales proceedings will be called in the Queensland proceedings. 6 In my view, the proceedings in this court do not arise out of, or are related to, the Queensland proceedings such that the Jurisdiction of Courts (Cross-vesting) Act 1987, s 5(2)(b)(i) is enlivened. The claim to commission and superannuation benefits are not affected by the alleged breaches of contract and fiduciary duty. Nor was the application pressed on that basis. The application was founded on the interests of justice under s 5(2)(b)(iii). 7 In determining whether or not to transfer proceedings under that provision, the court is not concerned with a justification for refusing to exercise a jurisdiction that has been regularly invoked. Thus the fact that PRD commenced the proceedings in New South Wales is irrelevant. If it be more appropriate that the proceedings be determined in the Supreme Court of Queensland, there is a mandatory requirement to order a transfer to that court (BHP Billiton Ltd v Schultz (2004) 221 CLR 400 at 426 [27], 439 [77], 463-464 [161], 465-466 [168], 492 [258]) 8 In BHP Co Ltd v Zunic (2001) 22 NSWCCR 92 at 103, Sully J described the ultimate question under that provision as: which is the more appropriate forum, upon a fair balancing of all the factors defining the relevant interests of justice. Gleeson CJ, McHugh and Heydon JJ approved of that formulation in Shultz at 424 [22]. 9 The formulation harks back to the adoption of the approach taken by Lord Goff of Chieveley in Spiliada Maritime Corporation v Cansulex Ltd [1987] AC 460 by Rogers AJA in Bankinvest AG v Seabrook (1988) 14 NSWLR 711 at 730 and by Mason P in James Hardie & Coy Pty Ltd v Barry (2000) 50 NSWLR 357 at 377 [87]. 10 In the The Abidin Daver [1984] AC 398 at 415, Lord Keith of Kinkel drew a distinction between the case in which England was the natural forum for the plaintiff to bring action and the case where it was not. He said that by "the natural forum" he meant that with which the action had the most real and substantial connection. In Spiliada at 478 Lord Goff endorsed that observation and went on to say that it is for connecting factors in that sense that the court must first look and they include, not only factors affecting convenience or expense, such as the availability of witnesses, but also other factors, such as the law governing the relevant transaction and the places where the parties respectively reside or carry on business. 11 Spiliada concerned a stay of proceedings founded on the ground of forum non conveniens. Notwithstanding that Australia has adopted a more stringent test than that in Spiliada in this regard (Voth v Manildra Flour Mills Pty Ltd (1990) 171 CLR 538), Lord Goff's approach to connecting factors in determining the natural forum has been adopted in applications under the Jurisdiction of Courts (Cross-vesting) Act 1987, s 5(2)(b)(iii) (Schultz at 422-423 [18]-[19], 464 [163], 493 [259]). 12 In James Hardie at 361 [7], Spigelman CJ laid emphasis on the place where the alleged contravention took place. He said: "To determine which court is, in the interests of justice, the appropriate court, it is necessary to inquire, in the case of a tort, as to what is the place of the tort. Indeed, in the context of administering the co-operative national scheme in the Jurisdiction of Courts (Cross-vesting) Act, where the place of the tort and the residence of the parties coincide, this will generally be determinative of the issue of "appropriate court", although other factors may need to be assessed in the process of determining where the interests of justice lie." 13 There is no reason why similar considerations should not apply to the allegations of breach of contract and breach of fiduciary duty in this case (Schultz at 465 [166], 493 [259]). 14 A number of connecting factors are more or less equally balanced. PRD intends to call seven witnesses, four of whom reside in Sydney, the others being resident in Melbourne, New Zealand and Brisbane. There is a possibility that PRD will call an eighth witness who resides in Queensland. 15 On the other hand, Mr King, Mr Evans and Mr Ott reside in Queensland and the officers of PRD with whom they dealt, and who are potential witnesses, live in Queensland. They include Archie Douglas, Gordon Douglas and Angus Douglas, directors of PRD, Gary Vugler, an alternate director, and the then secretary of PRD, Alan Smith. The other director, John Benton, lives in New Zealand. It is PRD's intention of call him as a witness. A further potential witness, Keryn Barfoot, who signed Mr Evans' employment agreement on behalf of PRD lives in Queensland. 16 Likewise, the solicitors for Mr King, Mr Evans and Mr Ott are in Brisbane whereas the solicitors for PRD are in Sydney. 17 The records of PRD were kept in Queensland. They have since been moved to Sydney. But I do not regard the provision of records at a trial in Brisbane, if the Supreme Court of Queensland be the more appropriate forum, as a matter of great weight in balancing the connecting factors. Nor was it submitted to the contrary. 18 The head offices of PRD and DTZ are in Sydney. But the activities of Mr King, Mr Evans and Mr Ott, on behalf of DTZ, were centred in Queensland where, presumably, any further use of confidential information of PRD will take place. 19 It was submitted that the application was premature because until a defence is filed the issues are not established. But an order was made by a Registrar that defences not be filed until the conclusion of this application. 20 It was submitted that while the statement of claim refers to communications between Mr King, Mr Evans and Mr Ott with DTZ there is no evidence identifying where the communications took place. This is partly due to non-particularised allegations in the statement of claim. But in my view the reasonable inference from the geographical location of the services performed by Mr King, Mr Evans and Mr Ott for PRD and, subsequently, for DTZ, is that the communications took place in Queensland. The alleged misuse of confidential information concerned land in Queensland and former Queensland clients of PRD. When employed by PRD, Mr King, Mr Evans and Mr Ott, with few exceptions, worked in Queensland with respect to Queensland properties. Their alleged misuse of confidential information is said to have occurred not only after they were employed by PRD, but also during their period of employment with that company. 21 The exceptions to Queensland activities were a sale of a commercial property in Melbourne by Mr King, a property located in Tweed Heads, being part of a portfolio of properties for a Queensland client with respect to Mr Evans and two properties in Tweed Heads with respect to Mr Ott. 22 While PRD's registered office is now in New South Wales it was, until May 2006, in Queensland where PRD's principal place of business was situated. Each of the contracts of employment of Mr King, Mr Evans and Mr Ott were made in Queensland and are governed by Queensland law. 23 In my view the balance comes down in favour of the Supreme Court of Queensland as the more appropriate forum for the determination of the proceedings. On the inference I have drawn, the alleged misuse of confidential information took place in Queensland where the activities of Mr King, Mr Evans and Mr Ott were centred. And, while there is unlikely to be any difference in the relevant laws of Queensland and New South Wales, the fact that the contracts of employment are governed by Queensland law that is to be applied to Queensland activities adds to the factors connected to Queensland and supports the conclusion that the Supreme Court of Queensland is the natural forum. 24 Having arrived at that conclusion I am compelled by the statute to transfer the proceedings to the Supreme Court of Queensland. I therefore make the order in paragraph 1 of the Notice of Motion and order PRD to pay the costs of the motion of Mr King, Mr Evans, Mr Ott and DTZ.

PRD Realty Pty Ltd v King & Ors

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