Todber Pty Ltd v Glendale RV Syndication Pty Ltd [2004] FCA 1328 | Case summary

8 Nevertheless, the Court does not approach the question as if it were determining for itself where it is most convenient for the proceedings to be litigated. A court, having jurisdiction to determine a dispute that is properly before it, has a duty to exercise that jurisdiction according to law: see Lamb v Moss (1983) 49 ALR 533 at 549. It can only transfer the proceeding to some other court pursuant to these statutory powers if satisfied that it is in the "interests of justice" to do so. As the Lewski respondents accepted, the consequence is that they bear an "onus of persuasion": see Higgins J in Dawson v Baker (1994) 120 ACTR 11 at 18. 9 In this case both parties accepted that both the Federal Court and the Victorian Supreme Court could deal with all of the claims and could grant whatever remedies were being sought. There was no argument put that there was any difference in the substantive law that would be applied by either court in determining the dispute. 10 Much of the argument by the Lewski respondents and by the applicants was directed to the question whether it was more convenient to the parties for a trial to be held in Adelaide or in Melbourne. Much affidavit material was put before the Court relating to this question, with assertions and counter assertions as to how many witnesses would need to be called, on what issues and so on. 11 There are a number of difficulties with the approach taken by the parties to this issue. The first is that it is not an issue that can sensibly be resolved at this stage in the proceedings. A Statement of Claim and a Defence have been filed. There has not yet been any discovery. As matters stand, it would seem to be clear that some witnesses who live in each State will need to be called. It would also seem to be clear that some parties reside in each State and it would be convenient to those parties for the proceedings to be heard in the State of their residence. It is also clear that some parties have legal advisers who live in one State or another. Beyond that, it does not seem to me at this stage that it can be said that the balance of convenience favours the case being heard either in South Australia or Victoria. This may become clearer as the litigation progresses. 12 The second difficulty is that this question of convenience is not as important today as it once was. In this regard I refer to the comments of Gillard J in Global Technology Australasia Ltd v Bank of Queensland Ltd [2001] VSC 230 at [40]-[42] that the creation of a national legal profession and the availability of technology such as audio-visual links have greatly reduced whatever inconveniences there may once have been in a case being heard in some State other than that in which the witnesses or parties or lawyers reside. 13 However, the fundamental difficulty with this argument in this case is that this Court is a national court. If, as the Lewski respondents claim, it is in the interests of justice that the case be heard in Victoria then this Court can do so. Obviously the proceedings could be transferred to the Victorian Registry of this Court pursuant to Order 10 R 1(2)(f) of the Federal Court Rules if it is more convenient, efficient and appropriate for the proceedings to be managed and heard in that Registry: see National Mutual Holdings Pty Ltd v Sentry Corporation & Anor (1988) 19 FCR 155 at 162-163 and see Cycles & Wheelman Pty Ltd v Beltech Corporation Ltd (1988) 80 ALR 279 at 281. Indeed, because it is a national court a Judge of this Court can hear evidence in any part of Australia, no matter what Registry the proceedings are filed in: see CMC (Aust) Pty Ltd v Austral Asia Line B.V. [2004] FCA 765 at [4] and see s 48 of the Federal Court of Australia Act, 1976 (Cth) and O 30 r 6 of the Federal Court Rules. 14 So considered the issue on this Notice of Motion is not whether it would be more convenient for the trial to be held in Adelaide or in Melbourne, but whether it is in the interests of justice for the proceedings to be litigated in the Supreme Court of Victoria, rather than the Federal Court of Australia. So far as the convenience of the parties, witnesses and lawyers are concerned all that can be said at this stage is that because this Court is a national court which can sit anywhere in Australia, including both Victoria and South Australia, it may be more convenient for any trial to be conducted in this Court. However, given that the Victorian Supreme Court undoubtedly has the power to hear evidence by video link and (if necessary) in Adelaide and given the factors referred to in par [12] above I do not place much weight upon this consideration. 15 The thrust of the submissions put by the Lewski respondents depend upon cl 18 of the contract. That cl provides: 'The law of this Agreement is the law of Victoria and the parties irrevocably and unconditionally submit themselves to the exclusive jurisdiction of the courts of Victoria and all courts competent to hear appeals from those courts.' 16 The Lewski respondents rely upon a number of decisions which have held that weight should be given to such exclusive jurisdiction clauses in determining whether it is in the interests of justice for proceedings to be transferred to a court upon which 'exclusive jurisdiction' has been conferred. It is unnecessary to set out all of those decisions. The reasoning of Philippides J of the Queensland Supreme Court in World Firefighters Games Brisbane v World Firefighters Games Western Australia Inc & Ors (2001) 161 FLR 355; [2001] QSC 164 (the Firefighters Case) was relied upon by both parties. It seems to me to explain the relevant principles as applied in other cases. 17 In the Firefighters Case proceedings were instituted in the Supreme Court of Queensland seeking declaratory and other relief in relation to obligations pursuant to a Deed. Clause 38 of the Deed provided that the parties submitted to the exclusive jurisdiction of the courts of Western Australia. An application was made to transfer the proceedings to the Western Australia Supreme Court pursuant to the relevant cross-vesting legislation. Her Honour held that the exclusive jurisdiction clause did not exclude the jurisdiction of the Queensland Supreme Court, but that that Court had a discretion to stay the proceedings. In the exercise of that discretion 'the starting point is that the parties should be held to their bargain and while the forum court retains its jurisdiction and a discretion to decline to grant a stay of proceedings, substantial grounds for doing so are required.' (at [11]). 18 Her Honour then considered the effect of the exclusive jurisdiction clause in the context of the cross vesting legislation and concluded that the interests of justice required that due acknowledgement be given to the bargain made between the parties. Consequently, her Honour found that the exclusive jurisdiction clause was a factor to be considered in determining the interests of justice. It would not appear that her Honour took into account the fact that, if the case was not transferred, it may have been stayed. Indeed, her Honour would seem to have excluded this as a relevant issue: see at [76]. 19 In any event, her Honour held that 'the weight to be given to such [exclusive jurisdiction] clauses will vary depending on the surrounding and countervailing circumstances' (at [38]). In that case her Honour found that the inconvenience of litigating in Western Australia must have been known to the parties at the time that they entered into the contract with the consequence that the parties should be kept to their bargain (at [74]). The case was transferred to the Western Australian Supreme Court. 20 It can be seen that the basis of the decision in the Firefighters Case was that it was in the interests of justice for the parties to be kept to their contractual bargain to litigate in a particular State. That analysis assumes that the bargain is lawful and effective (as, indeed, it was in that case). However, the contractual bargain will not be lawful and effective where the relevant jurisdiction is conferred by a Commonwealth law and the purported exclusive jurisdiction clause purports to oust that statutory jurisdiction. This is the point I sought to make in Alstom Power Ltd v Eraring Energy [2004] FCA 706 at [6]-[8] in relation to an argument that this Court could not exercise its jurisdiction under the TPA because of an exclusive arbitration clause: '…the primary submission put by the first respondent was…directed … to an argument that the applicant was required to pursue any TPA claim it might have in the arbitration and could not do so in this Court. In my view it is clear that this Court's jurisdiction to hear a claim pursuant to s 86(1) of the TPA cannot be excluded by an arbitration agreement or by a State statute such as the Commercial Arbitration Act, 1984 (NSW): see Hi-Fert Pty Ltd v Kiukiang Maritime Carriers Inc (No 5) & Anor (1998) 90 FCR 1 at 23-24, 29. The parties have not identified any law of the Commonwealth which purports to limit the jurisdiction of this Court in these circumstances. The result is that the applicant has a statutory entitlement to pursue its claim in this Court if it chooses to do so. The first respondent cannot require the applicant to pursue its claim in the arbitration. Nor is there any reason of principle why an arbitration should be given an invariable priority over the pursuit of proceedings in this Court. This is not meant to suggest that the parties to a contract cannot agree that an arbitrator can determine a dispute between them which includes rights or obligations conferred or imposed by the TPA, providing, of course, that the arbitrator is not exercising the 'judicial power of the Commonwealth': see IBM Australia Ltd v National Distribution Services Ltd (1991) 22 NSWLR 466 at 480-481. However, that agreement cannot have the effect that the parties can agree to waive the jurisdiction of this Court under the TPA. Of course, in an appropriate case this Court can stay proceedings in this Court pending the finalisation of arbitration proceedings involving the same subject matter: see Bond Corporation Pty Ltd v Thiess Contractors Pty Ltd (1987) 14 FCR 193; Recyclers of Australia Pty Ltd & Anor v Hettinga Equipment Inc & Anor (2000) 100 FCR 420; Timic v Hammock [2001] FCA 74. That power arises from the inherent jurisdiction of the Court in the management of the business of the Court so as best to achieve a sensible resolution of the dispute between the parties. It does not involve any denial of the Court's jurisdiction.' 21 In this case the Lewski respondents do not argue that the exclusive jurisdiction clause can limit this Court's jurisdiction under the TPA. They are right to do so. However, having made that concession, it is then plain that the exclusive jurisdiction clause is of no effect at all in so far as it seeks to require the parties to institute proceedings under the TPA only in the courts of Victoria. 22 There are, however, a number of cases where courts would seem to have taken account of an exclusive jurisdiction clauses for the purpose of transferring proceedings where the proceedings were instituted under the TPA. Most of them are cases involving Supreme Courts. I refer, for example, to Air Attention WA Pty Ltd v Seeley International Pty Ltd (unreported, SC(WA), Walsh J, 3 September 1996); Anderson Formrite Pty Ltd v Baulderstone Hornibrook Pty Ltd [2004] WASC 115; Jovista Pty Ltd & Ors v Bateman Project Engineering Pty Ltd [1998] WASC 148; Patrick Badges Pty Ltd v Cth [2002] NSWSC 221 and West's Process Engineering Pty Ltd (Administrator Appointed) v Westralian Sands Ltd & Anor (unreported, NSWCA, Rolfe J, 6 August 1997). In each of these cases the courts did not consider whether the "exclusive jurisdiction" clause was valid or effective in terms of the statutory conferral of jurisdiction made under the TPA. 23 As between State courts, jurisdiction is (more or less) territorial. As between State courts the issue of jurisdiction and the issue of the place where litigation should be conducted are broadly the same issue. Consequently, it may be that the above cases are best understood on the basis that the exclusive jurisdiction clause, at the very least, involved an agreement by the parties as to the place where, in the interests of justice, the litigation should be conducted. The discussion in the cases as to the effect of the exclusive jurisdiction clause would seem to proceed on that basis. Given that the conferral of jurisdiction by the TPA is subject to the powers of the relevant courts to transfer the proceedings if it is in the 'interests of justice' to do so, an agreement containing such a provision would seem to be valid. Its effectiveness would be no greater than as identified in the Firefighters Case but it would still have some operable effect. So understood, the above cases would seem to me to be consistent with the statutory conferral of jurisdiction on the Supreme Courts by the TPA. 24 Of course, the same approach is not available in relation to this Court. As already pointed out, this Court is a national court. If the exclusive jurisdiction clause is to be read as meaning that the parties are agreed that it is in the interests of justice that the case be heard in Victoria then this does not serve to distinguish the Supreme Court of Victoria from this Court. If the clause is to be understood that way its only effect may be in relation to the question whether the proceedings should be transferred to the Victorian registry of this Court. 25 On the other hand, if the clause is read in accordance with its terms such that proceedings can only be taken in the Victorian Supreme Court and not in the Federal Court sitting in Victoria, then the clause is plainly inconsistent with s 86(1) of the TPA and to that extent must be invalid. 26 The approach I take appears to differ from that of Tamberlin J in National Dairies WA Ltd & Ors v Wesfarmers Ltd [1996] FCA 603. In relation to the question whether the proceedings in that case should be heard in Western Australia or in New South Wales, his Honour referred to the exclusive jurisdiction clause as recording the intention of the parties that the litigation should be heard in Western Australia. Weighing this with other factors, his Honour concluded that the most appropriate place for the litigation to be conducted was Western Australia. His Honour then proceeded to consider whether it should be heard in the Supreme Court of Western Australia or the Federal Court sitting in Western Australia. His Honour concluded that the proceedings should be transferred to the Supreme Court of Western Australia. Given the various issues to which his Honour referred in his reasons, that conclusion was undoubtedly correct. However, even in relation to the question of whether the proceedings should be transferred to the Western Australian Supreme Court his Honour again referred to the exclusive jurisdiction clause at [31]: 'In deciding which Court is the appropriate forum the agreement of the parties as to the governing law is very significant. While the provision as to the governing law does not refer to the Federal Court, on a broad construction, this Court could possibly come within the description of 'Courts of Western Australia'. However, the clause conveys to me a preference for determination of the contractual issues exclusively by the Courts of the State of Western Australia. This is understandable given the extensive references in the agreement to Western Australian regulatory laws.' 27 In this part of his reasoning his Honour would seem to distinguish the TPA claims from the contract claims in the case before him. However, the jurisdiction conferred on this Court by s 86 of the TPA is a jurisdiction in relation to a 'matter' which will include an 'attached non-severable' claim: see Re Wakim, Ex parte McNally (1999) 198 CLR 511 at 583-586. It may be that in the case before his Honour the claims were relevantly severable. Apart from that possibility, I regret that I am unable to agree with that particular part of his Honour's reasoning. In this case it has not been argued that the relevant claims, whether based on the TPA or otherwise, are severable. 28 Finally, I note that none of the claims made in these proceedings are claims in contract. They are either claims made in relation to pre contract representations or they are equitable claims based on the relationships and obligations under the contract. The Lewski respondents submit that the equitable claims fall within the exclusive jurisdiction clause. However, that clause does not specify the extent of any exclusivity. Given the problems of validity and jurisdiction already referred to I cannot see any basis for construing the clause broadly. I am not currently satisfied that any of the claims made in the Statement of Claim fall within the terms of the exclusive jurisdiction clause. 29 The result of the above considerations is that the exclusive jurisdiction clause does not and cannot have the effect contended for by the Lewski respondents. I am not satisfied that the exclusive jurisdiction clause has any application. Even if it did, the parties cannot reach any agreement that this Court does not have jurisdiction to determine the 'matter' in the current proceedings. If they cannot reach such an agreement then it cannot be 'in the interests of justice' to give effect to it. It may be that the clause can be understood as an agreement that it is in the interests of justice that the proceedings be heard in Victoria. If so the clause has no application to the question whether the case should be transferred to the Supreme Court of Victoria or should be heard in this Court. It may have some effect on the question whether the proceedings should be transferred to the Victorian Registry of this Court, but that is a different question. 30 I note that proceedings have recently been instituted in the Victorian Registry of this Court brought by ASIC against at least some of the respondents in these proceedings (Action No V 1187 of 2004). It would appear that some of the relief sought by ASIC in those proceedings would have some consequential effects upon the relationships under the contract of the parties to these proceedings. It would also appear that some of the interlocutory orders apparently being sought in those proceedings (including in relation to access to books and accounts) might affect the proper management of these proceedings. Given the limited information currently available in relation to those proceedings, including what effect they might have on the proceedings currently before me, I have not taken those effects into account in reaching my decision in this case. Plainly enough, my decision on this Notice of Motion is an interlocutory decision. If circumstances change the parties are at liberty to re-agitate the issues. It may be appropriate to do so if the ASIC proceedings do affect any of the conclusions I have reached. 31 As the exclusive jurisdiction clause does not have the effect contended for and as no other factors have been identified suggesting that it is in the interests of justice that these proceedings be transferred to the Supreme Court of Victoria I am not satisfied that it is in the interests of justice for them to be transferred. The application is dismissed. 32 The Notice of Motion does not seek the transfer of these proceedings to the Victorian registry of this Court. This question was discussed in the course of submissions. However, there being no application before me it is not appropriate that I express any formal view or give any reasons in relation to it. 33 I will hear the parties as to costs. I certify that the preceding thirty-three (33) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Selway.

Todber Pty Ltd v Glendale RV Syndication Pty Ltd

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