Transglobal Marketing Pty Limited v Ferrero Australia Pty Limited

Teece Hodgson and Ward, Sydney - Defendants CATCHWORDS : Cross-vesting - District Court action, set-off and cross-claim - Test on cross-vesting application - Onus of proof on cross-vesting application - Considerations for exercise of power LEGISLATION CITED : Jurisdiction of Courts (Cross Vesting) Act 1987 ss 5(2), 8(1) District Court Act s145 Bankinvest v Seabrook and ors (1988) 14 NSWLR 711 James Hardie & Co Pty Limited v Barry (2000) NSWLR 357 CASES CITED : Dawson v Baker (?) 120 ACTR 11 O'Hare v DPP [2000] NSWSC 430 Spiliada Maritime Corporation v Cansulux td (1987) AC 460 Oceananic Sunline Special Shipping Co Inc v Fay (1988) 165 CLR 195 DECISION : Relief refused; Summons dismissed; Plaintiff to pay the defendant's costs

• 10 - IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

10956/02 - TRANSGLOBAL MARKETING PTY LTD v FERRERO AUSTRALIA PTY LTD

JUDGMENT HIS HONOUR: 1 This is an application pursuant to s 8(1) of the Jurisdiction of Courts (Cross-Vesting) Act 1987 to remove a District Court action (No 1177 of 2002) ("the New South Wales action") into the Supreme Court for the purposes of transferring it to the Supreme Court of the Northern Territory pursuant to s 5(2) of the Courts (Cross-Vesting) Act 1987 for hearing in Darwin. Alternatively, the application seeks to remove the action into the Supreme Court pursuant to s 145 of the District Courts Act. 2 There would be no utility in bringing the New South Wales action into this Court, except for the purpose of transferring it to the Supreme Court of the Northern Territory. If such a transfer were to be refused, then it would follow as a matter of logic that the New South Wales action should remain where it is. Thus, as a matter of logic, the Court should first determine whether (on the assumption that the New South Wales action is already in this Court) it would be transferred to the Northern Territory pursuant to the cross-vesting legislation. I therefore propose to proceed on the assumption that the matter is already in this Court, although that is clearly contrary to the fact. 3 The New South Wales action was commenced in the District Court by Ferrero Australia Pty Ltd ("Ferrero") on 4 March 2002. It is a claim for $76,861.32 and is for goods sold and delivered pursuant to contracts which involved a number of separate deliveries. The contracts were entered into between Ferrero and Transglobal Marketing Pty Ltd ("Transglobal") for the supply of chocolates by Ferrero to Transglobal, with delivery to take place at Lurnea, New South Wales, as well as for other deliveries by direction, to which I will advert later. 4 The deliveries arose out of telephone conversations between Mr Saquib Abbas Awan ("Mr Awan") and Jose Consentina ("Mr Consentina"). At the material times, Mr Anwan was in Darwin; Mr Consentina in Sydney. The Statement of Claim filed in the New South Wales action shows that the registered office of Ferrero is at North Sydney, New South Wales, and the registered office of Transglobal is at Berrimah, Northern Territory. Ferrero carries on business in New South Wales as a marketer of confectionery. 5 Transglobal filed a Notice of Grounds of Defence and of Cross-Claim in the New South Wales action. It put in issue the date on which payment of the amount claimed by Ferrero was due, denied the date of the invoice which set out details of the amounts for which recovery was sought, and denied certain of the terms of the contract sued upon. It also denied delivery but admitted its liability for goods in the sum of $71,930.64. However, it then pleaded a set-off in respect of damages said to have been sustained by Transglobal in consequence of the breach of contract by Ferrero arising out of non-delivery of chocolates. 6 The New South Wales action is presently standing awaiting hearing. A Notice of Motion for Judgment has been filed by Ferrero which is to be heard on 21 June 2002. 7 The disputes between Ferrero and Transglobal arose out of serial dealings between the two parties which led to Ferrero threatening legal action against Transglobal in November 2001. Transglobal commenced an action in the Supreme Court of the Northern Territory by a writ which was filed on 26 February 2002 and was served thereafter. In that action, Transglobal seeks damages for breach of contract being non-delivery of what should have been deliveries 5 and 6 in a series of deliveries. 8 In the cross-claim filed in the New South Wales action, Transglobal alleges, inter alia, that deliveries would be made by Ferrero on behalf of Transglobal to the Port of Sydney and, as I understand para 3(c) of the cross-claim, that Transglobal had a warehouse premises in Sydney. Certainly from para 3 of the cross-claim filed in the New South Wales action, it is clear that in the New South Wales action there will be a need for evidence as to the course of conduct of both the parties over the course of each of the contracts. There is thus a clear nexus between the matters raised for determination in the New South Wales action and those raised in the Northern Territory action, to which I will refer. 9 The amount claimed in Transglobal's cross-claim is $176,739, together with unspecified additional losses. 10 Transglobal commenced an action in the Supreme Court of the Northern Territory, as I have said, by a writ which was filed on 26 February 2002. Ferrero has not pleaded to the Northern Territory action but has filed a conditional appearance. It has also made an application to the Supreme Court of the Northern Territory for the cross-vesting of the action by Transglobal to New South Wales for determination, together with the existing action between the two parties. That application is to be heard on Thursday, 9 May 2002 and as a consequence both parties have submitted that the decision of this Court should be arrived at and published prior to that date. 11 The application which has been made to lift up the District Court action depends upon the power given to this Court by s 8 of the Jurisdiction of Courts (Cross-Vesting) Act 1987 ("the cross-vesting legislation"). That section provides as follows: "(1) Where -

(a) proceeding (in this subsection referred to as the relevant proceeding) is pending in - (i) a court, other than the Supreme Court, of the State; and …

... (ii) an order should be made under this subsection in relation to the relevant proceedings so that consideration can be given to whether the relevant proceedings should be transferred to another court, the Supreme Court may on an application of a party to a relevant proceeding ... make an order removing the relevant proceedings to the Supreme Court." 12 The power to cross-vest to the Supreme Court of the Northern Territory is conferred by s 5 of the cross-vesting legislation. That section relevantly provides as follows: "Section 5(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 - the relevant proceeding arises out of for is related to another proceeding pending in the Supreme Court of another State ... and it is more appropriate that the relevant proceeding be determined by that other Supreme Court; ... (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." 13 The test to be applied in the exercise of jurisdiction under the above provisions is set out in Bankinvest v Seabrook & Ors (1988) 14 NSWLR 711. In that case Street CJ examined the effect and purpose of s 5 and said as follows: "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. Consideration of textured principle and deep learning - in particular principles of international law such as forum non conveniens - have no place in a cross-vesting adjudication. There is, in substance, no principle to be enunciated other than the necessity of applying the specific considerations stated in the cross-vesting legislation, primary amongst which is the pursuit of the interests of justice." (at 714) 14 Rogers AJA expressed the principles in somewhat more graphic terms but nonetheless they were terms which, in effect, reiterated what had already been said by Street CJ, namely: " The only lode star that a judge may steer by is what did the interests of justice dictate should be done? It is inapt to speak in terms of onus. Bearing in mind that the court may make an order on its own motion, the language of onus being discharged is not applicable." (at 727)

I shall advert to the last part of this quotation shortly. 15 In the course of his analysis of the section Rogers AJA made reference to the speech of Lord Goff of Chieveley in Spiliada Maritime Corporation v Cansulex Limited (1987) AC 460, who referred, inter alia, to the court - "... in which the case may be tried more suitably for the interests of all the parties and the ends of justice." (supra at 728) 16 Rogers AJA also said: " In my opinion, initially, the search under the Act as in the English Courts is for the 'natural forum'. As Deane J pointed out in Oceanic (at 412; 48), the term 'natural' in the context simply means 'more appropriate'. The expression 'natural forum' is given content by Lord Goff (at 478) as: being that with which the action had the most real and substantial connection. So it is for connecting factors in this sense that the Court must first look; and these will include not only factors affecting convenience or expense (such as 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. ' In Spiliada (at 465) Lord Templeman said: 'The factors which the Court is entitled to take into account in considering whether one forum is more appropriate are legion. The authorities do not, perhaps cannot, give any clear guidance as to how these factors are to be weighed in any particular case.'" (supra at 728) 17 The approach adopted in Bankinvest, and in particular by Rogers AJA, was endorsed with one reservation in James Hardie and Co Pty Ltd v Barry (2000) 50 NSWLR 357. Mason P, with whom Spigelman CJ and Priestley JA relevantly agreed, said that the Court "should adhere to this (relevant) aspect of Bankinvest" and rejected as no longer representing the law an approach based on the principles of forum non conveniens set out in Oceanic Sunline Special Shipping Co Inc v Fay (1988) 165 CLR 197. The one reservation which Mason P expressed in respect of Bankinvest was the statement by Rogers AJA adverted to above, namely, that it is inapt to speak of any onus resting upon the applicant for the transfer. Mason P said as follows: " Such a sentiment may be understandable where transfer is ordered on the Court's own motion. However, like others I find it elusive in the context of a contested proceeding inter partes. If one views the exercise as one of judicial discretion according to proper principle, then it is natural to regard the applicant for particular relief as carrying at least the persuasive onus." (at 380) 18 The agreement by Priestley JA with the reasons of Mason P contained no reservation in respect of this statement. However, the agreement by Spigelman CJ, whilst containing no express reservation in relation to the above reservation expressed by Mason P, included an analysis, the effect of which was to dispute that s 5(2) conferred a discretion in the sense that the Court exercises a power of choice. He said as follows: " The Court makes a judgment as to what the interests of justice require and, having made the judgment that the proceedings should be determined in another court, the court is obliged to transfer the proceedings: see F Bennion 'Distinguishing Judgment and Discretion' (2000 Public Law) 368". See also O'Hare v DPP [2000] NSW SC 430. 19 The principles referred to in Bankinvest were considered by Higgins J in Dawson v Baker 120 ACTR 11. That decision was referred to favourably in James Hardie and Co Pty Ltd v Barry (supra). In that decision Higgins J set out a convenient check list. It should not be treated as exclusive, but nonetheless it is helpful when determining matters such as the present. 20 Returning to the matter in question. The two actions arise out of the course of dealings between the parties. The New South Wales action by Ferrero is based on contracts that form part of a series of dealings between the parties. The defence and cross-claim by Transglobal involves all contracts and raises the same matters as are raised by it in the Northern Territory action. 21 The contract or contracts were made in New South Wales. The telephone offer or offers by Mr Awan from Darwin on behalf of Transglobal was or were accepted in Sydney by Mr Consentina on behalf of Ferrero. The law of the contract is the law of New South Wales and whilst it may not differ as to the common law provisions of the Northern Territory, it is not necessarily on all fours in both places when not only the common law but the statute law and procedural law are had regard to. 22 The place of delivery of the goods was New South Wales. Furthermore, there was a delivery of containers for packing by Ferrero, the packing of such containers with confectionery by Ferrero and the delivery of those containers to Transglobal for shipment on behalf of Transglobal out of Sydney. All of these acts took place in Sydney. 23 All of Ferrero's witnesses, both as to the making of the contracts and the deliveries, are in New South Wales. There are, according to the evidence, three such witnesses, one of whom is no longer in the employ of Ferrero. He now conducts his own business and it is said that procuring his attendance in the Northern Territory would be "very difficult and would be extremely inconvenient and disruptive to the running of his business." On the other hand, the only witness on behalf of Transglobal said to be material to the making of the contracts is Mr Awan, who resides in the Northern Territory. 24 There will be a credit issue in the case, namely, a dispute as to the terms of the contract or contracts arising out of the telephone discussions between Mr Awan and Mr Consentina. The resolution of a credit issue is best effected by seeing the witnesses in the witness box, not in the artificial setting of a video link. There are difficulties for any witness when confronted by court proceedings. They are, in my opinion, compounded when evidence is given by video link and the ability of the Court to make a judgment in relation to the responses of a witness is diminished by such a link and circumstances. 25 All issues between the parties are raised in the New South Wales action. The New South Wales action is one which, naturally, has been commenced within a New South Wales forum. Such a forum is, in my opinion, the natural forum for such an action. 26 Although all the issues between the parties have been raised in the New South Wales action by the claim, defence and cross-claim, the same cannot be said at the present time in relation to the Northern Territory action, and it does not necessarily follow from the form of the action that they would be, should a defence ultimately have to be filed. 27 There is no evidence as to any witness or witnesses for Transglobal other than Mr Awan. Indeed, in his affidavit he says: "I am the only material Australian witness on the issue of liability. If other witnesses should be required to quantify damages these will be from outside Australia." 28 Where such overseas witnesses may reside is not stated in the evidence; however, Sydney is usually better serviced by overseas airlines than Darwin, there is greater competition amongst airlines flying into Sydney, packaged fares are commonplace for Sydney, and the range and cost of accommodation available in Sydney is very wide. On the whole, Sydney would generally be regarded as a more convenient destination than Darwin for people coming from overseas. 29 The cost of bringing one witness to New South Wales can be expected to be approximately one third of the cost that will be involved in taking three witnesses to the Northern Territory. 30 Although Mr Awan states in his affidavit that: "I believe Ferrero would not suffer any injustice by having the NSW action transferred to the NT Supreme Court"

he does not state any reasons for his belief. It is a belief which, in my opinion, is not soundly based. 31 There is no evidence to suggest that the matter will be heard more expeditiously in the Northern Territory than it would be if it remained in New South Wales. 32 From the foregoing, it emerges that the only factor in the New South Wales action that involves a relevant connection with the Northern Territory is that Mr Awan carries on his business in the Northern Territory, and that he made Transglobal's offer from his Darwin office. Furthermore, it is the undisputed evidence that Mr Awan travels to Sydney in the ordinary course of his business, and that he regularly travels abroad to meet with his export customers. In the course of negotiations after the dispute arose, he offered to return from overseas through Sydney so that the parties could meet face to face. Thus it appears that travel to Sydney is not disruptive of his business, nor is it unduly onerous. 33 Having regard to the circumstances and competing interests to which I have referred, I am satisfied that the District Court in New South Wales is the natural forum for the determination of the New South Wales action and that, furthermore, it would not be more appropriate to have the New South Wales action determined by the Supreme Court of the Northern Territory. Nor would it be in the interests of justice for this Court to transfer such proceeding to the Supreme Court of the Northern Territory. 34 For the foregoing reasons, I am of the opinion that it would not be appropriate to transfer the New South Wales action to the Northern Territory. 35 Since there would be no utility in lifting the New South Wales action up from the District Court into this Court, except for the purpose of transferring it, there is no appropriate basis for an order under the cross-vesting legislation, nor under s 145 of the District Courts Act. 36 In these circumstances the proper order is to refuse the relief claimed. 37 The orders of the Court will be:

2. The plaintiff is to pay the defendant's costs. **********

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