Twigg v Pitcher Partners Holdings Pty Ltd

Motion to transfer these proceedings to the Supreme Court of Victoria

1. By Notice of Motion filed on 7 June 2022, within weeks of the commencement of these proceedings, Pitcher Partners seek an order pursuant to s 5(2) of the Jurisdiction of Courts (Cross-vesting) Act 1987 (NSW) (the "Cross Vesting Act") that these proceedings be transferred to the Supreme Court of Victoria.
2. Pitcher Partners' application is opposed by Diane and the Corporate Plaintiffs; as well as by Max and Twigg Co.

Principles

1. The questions posed by s 5(2)(b)(iii) of the Cross Vesting Act is whether it is in the "interests of justice" that the proceedings be determined by the Supreme Court of another state or territory.
2. This is an evaluative, rather than discretionary question as to which is the "more appropriate" forum. [7]
3. An applicant for a transfer bears no burden of persuasion or onus of proof. [8] No significance attends to the plaintiff's original choice of forum. [9]
4. The "more appropriate" forum would ordinarily be the jurisdiction "with which the action has the most real and substantial connection" based on objective factors. [10]
5. It is both necessary and sufficient that, in the interests of justice, the second court be more appropriate. [11]
6. What is called for is 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". [12]
7. The question is not merely where the balance of the parties' competing convenience lies. [13]

Location of the events, parties, their legal teams, witnesses and documents

Pitcher Partners

1. Pitcher Partners is the eighth largest accounting firm in Australia. It has offices in Sydney, Melbourne, Adelaide, Brisbane, Perth and Newcastle. However, the three Pitcher Partners' corporate entities named as defendants have their registered office and principal place of business in Melbourne and have Victorian residents as their directors.
2. Mr Theodore, the solicitor for Pitcher Partners, deposed: "While investigations are still being undertaken (given the significant period of time covered in the Plaintiffs' Commercial List Statement), I am informed by a director of all three Defendants, Brendan Britten, and believe to be true, that at all material times during the periods alleged in the Commercial List Statement the work undertaken by the partners and employees of the Defendants for the Twigg Group involved partners and employees located and currently residing in Victoria, including those persons named in the Commercial List Statement namely, Adrian Fitzpatrick, Mark Northeast, Michael Fiteni and Michael Eefting."
3. Mr Elliott SC, who appeared for Diane and the Corporate Plaintiffs, submitted that it was unlikely that Pitcher Partners would, in fact, call some of these witnesses. I am not in a position to make any assessment about that matter.
4. There was no dispute before me that it would be desirable that the evidence of the Pitchers Partners' witnesses be given in person, rather than by Audio Visual Link. Thus, some inconvenience and expense would be involved in having those witnesses give their evidence in this Court.
5. Pitchers Partners has a legal team in Sydney, retained to argue this application and also an application, made by Notice of Motion filed on 15 July 2022, to have these proceedings permanently stayed, dismissed or struck out as an abuse of process. That application is yet to be heard and I will return to it below. The point for present purposes is that Pitcher Partners has been obliged to engage a legal team in Sydney that, based on the quality of the argument before me, has clearly already gained a close familiarity with the details of the Earlier Proceedings and the nature of the allegations made in these proceedings.
6. Mr Theodore is a partner of the national law firm Gadens. He is corresponding from Gadens' Sydney office, but lives in Melbourne.

Max and Twigg Co

1. Max in based in and operates out of Queensland. He has retained solicitors and counsel in Sydney. Twigg Co has its registered address in Victoria (at Pitcher Partners' offices). Its principal place of business is, however, Max's residence in Queensland.

Diane

1. Diane lives in Melbourne but wishes to litigate these proceedings in Sydney, no doubt because of her connection with her current legal team, being Mr Elliott, his junior Mr Smith and their instructors, Messrs Christiaan Roberts and Anton Roberts.
2. In his written submissions, Mr Elliott said: "The plaintiffs have retained identical legal representatives - essentially comprising four persons - as conducted the [Earlier Proceedings]. As Mr Roberts explains in his affidavit, in the event the proceedings are transferred to Victoria, it will be necessary to brief local counsel and to retain local solicitors. The loss in this regard is not confined to the usual loss arising where a plaintiff has elected to commence proceedings in an appropriate forum. It will involve the loss of an accumulation of thousands of hours of factual and legal analysis of the very documents and issues that will be before the Court in [these proceedings]. It will also involve the loss of an understanding of the forensic decisions about the way [the Earlier Proceedings were] conducted and which have informed the way the present proceedings are framed. This time and money represent a sunken cost that will be wasted if the proceedings are transferred, a matter aggravated by the need for a new legal team to acquaint themselves with the facts and issues."
3. In oral submissions, Mr Elliott presented a more nuanced submission and accepted that there would be no reason why, were the matter to be transferred to the Supreme Court of Victoria, Diane's four trusted legal representatives could not continue to have the primary conduct of the proceedings and travel to Melbourne for any necessary interlocutory applications and, ultimately, for the hearing. It is likely, as Mr Elliott submitted, that this would involve considerable expense, in terms of airfares and hotel accommodation and the like, which expenses would likely outweigh the expense Pitcher Partners would incur bringing witnesses to Sydney for a hearing.

The Corporate Plaintiffs

1. The Corporate Plaintiffs, until recently, had their registered office in Melbourne. Mr Williams SC, who appeared with Ms Jaffray for Pitcher Partners, emphasised the fact that the registered office of the Corporate Plaintiffs was changed to a Sydney address on the same day that these proceedings were commenced. I do not see that fact as having any particular significance. The Corporate Plaintiffs are, as I understand it, trustees, and they had no assets or business at the time that the Earlier Proceedings were commenced.
2. The current activities of the Corporate Plaintiffs involve selling assets in respect of which constructive trusts were declared in the Earlier Proceedings. These activities are run out of Sydney, in accordance with orders of this Court, and concern assets in Queensland. I see the role of Corporate Plaintiffs as being a neutral factor.

Documents

1. It appears that Pitcher Partners' documents created prior to 2006 are located offsite in storage in Melbourne. Pitcher Partners has informed Mr Theodore that it does not know how many boxes of documents are so stored but anticipates they are quite likely to be "a significant number".
2. Since 2006, Pitcher Partners has managed documents using document management software.
3. However, in the Earlier Proceedings, Pitchers Partners were subpoenaed to produce, and did produce, their files and records in relation to the transactions the subject of the Earlier Proceedings and thus, these proceedings. Mr Roberts has deposed that those documents are held in the subpoena registry of this Court.

Conclusion

1. Although many of the relevant documents are already in the possession of this Court, overall, it would appear that, as Mr Williams submitted, so far as concerns the location of the parties, the likely witnesses and the events that occurred, these proceedings have a strong connection with Victoria.
2. Nonetheless, as Mr Elliott submitted, I am persuaded that the inconvenience and expense for Pitcher Partners to litigate here would be less than that incurred by Diane and the Corporate Plaintiffs were the proceedings to be transferred; especially if Pitcher Partners were to retain its current legal team, a matter that is not yet certain.
3. However, as I have said, the question is not simply where the balance of the parties' convenience lies. It is a question of whether it is in the interests of justice that the proceedings be transferred.
4. There are other matters to consider.

Commonality of issues in these proceedings to those in the Earlier Proceedings

1. Mr Elliott submitted: "[These proceedings are] concerned with various matters arising directly out of the same transactions [as were the subject of the Earlier Proceedings]. They raise for this Court's determination whether the first to third defendants (Pitcher Partners) are liable for the losses sustained by the plaintiffs which cannot be recovered from Max Twigg, having regard to, inter alia, the nature and extent of their fiduciary obligations owed to the plaintiffs, and whether they knowingly assisted Max Twigg in his fraudulent misappropriation of the sale proceeds. The other allegations in [these proceedings] are also connected with the events in [the Earlier Proceedings]. They are that Pitcher Partners breached their fiduciary duties to the plaintiffs by providing false and misleading evidence to this Court in support of Max Twigg's claims in [the Earlier Proceedings] … and that the second defendant (Pitchers Investments) knowingly assisted Max Twigg and Twigg Co in a scheme to dispose of certain bonds so as to defeat the constructive trust declared in respect of those bonds."
2. In oral submissions, Mr Elliott accepted that the mere fact that these proceedings arise out of the same transactions as were the subject of the Earlier Proceedings is not, itself, a reason to resist transfer of these proceedings to the Supreme Court of Victoria.
3. That must be so.
4. Pitcher Partners were not parties to the Earlier Proceedings and are not bound by the findings made in those proceedings. Indeed, Mr Williams informed me that, in these proceedings, Pitcher Partners will seek to persuade the Court to come to differing conclusions than those to which Ball J came in the Earlier Proceedings; notably, as to whether Max engaged in the dishonest and fraudulent design that Ball J found and the Court of Appeal accepted. Mr Williams informed me that it will be Pitcher Partners' case in these proceedings that Max did not engage in any such dishonest or fraudulent design. The question of whether Max and Twigg Co could adopt the same position in these proceedings was not explored in submissions before me.

Pitcher Partners' conduct in the Earlier Proceedings

1. As I have said, in these proceedings Diane and the Corporate Plaintiffs make allegations about alleged misconduct by Pitcher Partners and Max in the Earlier Proceedings "and how those parties did behave and ought to have behaved in this Court".
2. In his written submissions, Mr Elliott put the matter this way: "The adequacy of compliance with subpoenas issued by the Supreme Court of NSW in [the Earlier Proceedings] arises in [these proceedings] (Part XVI: [14] 'Conduct Prior To and During Earlier Proceeding'). It is not in the interests of justice that matters of compliance with NSW court processes be adjudicated by Victorian courts. Questions of Pitcher Partners' obligations when complying with subpoenas issued by this Court, the nature and extent of non-compliance and the consequences which follow are matters upon which NSW courts are uniquely well-positioned to adjudicate. Equally, questions of the obligations of witnesses appearing before NSW courts, such as the obligations of non-parties to give evidence and the significance of professionals' obligations of confidentiality fall to be determined in [these proceedings]. Such matters should be determined by NSW Courts. Similar considerations inform the case in respect of the bonds (Part XVIII: [15] 'Mistreatment of Unlisted Australian Bonds'). This issue requires consideration of the effect of freezing orders made by Ball J on 3, 18 and 30 June 2020, of findings and declarations made by Ball J on 11 and 18 December 2020 and 8 July 2021 and of orders made by the NSW Court of Appeal on 2 February and 12 April 2020. It involves review of the transcripts of the hearings before Ball J on 20 November 2022 and 7 July 2021. It is in the interests of justice that NSW courts and legal practitioners address and determine the significance and effect of what appears in these documents. Most fundamentally, it involves consideration of whether documents produced by Pitcher Partners and put into evidence in the Supreme Court of NSW were deployed by Max Twigg to give a false understanding of Twigg Co's assets to this Court when final orders were made in [the Earlier Proceedings]."
3. Mr Williams submitted that there was no substance in any of the claims made in these proceedings about Pitcher Partners' alleged misconduct in the Earlier Proceedings and that, in any event, Diane and the Corporate Plaintiffs have no prospect of showing that they have suffered any damage as a result of the conduct alleged.
4. I am not able to make any assessment of that submission on this application.
5. Serious allegations are made in the Amended Commercial List Statement as to Pitcher Partners' conduct in the Earlier Proceedings and the substance of those contentions will have to be determined in due course.
6. No doubt the Supreme Court of Victoria is as capable as this Court is in making an assessment as to the merit or otherwise of these contentions.
7. However, I see substance in Mr Elliott's submissions that this Court is the one best placed to consider and determine these claims, in that it would be more appropriate for this Court to determine whether Pitcher Partners have misbehaved in the manner alleged in proceedings before it.
8. I see this as a factor pointing to the appropriateness of this Court determining these proceedings and against the proposition that it is in the interests of justice that the proceedings be determined by the Supreme Court of Victoria.

The Earlier Proceedings remain on foot

1. Mr Elliott has also pointed to the fact that the Earlier Proceedings are not yet concluded in that the Court has made an order for reference to the Honourable Robert McDougall QC to make a determination of the rents and profits earned in respect of certain properties that Ball J found to be held on constructive trust for Diane and the Corporate Plaintiffs.
2. The reference is listed for hearing on 7 to 11 November 2022. Diane and Max and their corporate associates are parties to that reference. A subpoena has been issued to Pitcher Partners in respect of it.
3. Mr Elliott submitted that if these proceedings were transferred, "there will be two concurrent and related proceedings being conducted by differently constituted legal teams in different jurisdictions" and that "it is inefficient and undesirable to have one proceeding involving the parties being conducted here, and another in Victoria".
4. I see that factor as also pointing, although not strongly, to the conclusion that the interests of justice do not require transfer of the proceedings.

Exclusive jurisdiction clause

1. Pitcher Partners referred to an exclusive jurisdiction clause contained within a document called "Terms of Engagement" said to have been attached to a letter sent by Pitcher Partners to the "Twigg Group" on 30 July 2007. The 30 July 2007 letter was signed by Max on 31 August 2007 and includes, under the heading "Terms of Engagement": "We also refer you to the attached 'Terms of Engagement' (dated 1 May 2007) which should be read in conjunction with this letter."
2. In a copy of that letter, annexed to Mr Theodore's affidavit of 2 June 2007, the "Terms of Engagement" document is shown as an attachment, although the footer to that document refers to "Terms of Engagement dated 23 May 2007" rather than 1 May 2007 as stated in the body of the 30 July 2007 letter.
3. Within the "Terms of Engagement" is this provision, under the heading "Applicable Law": "This Contract shall be governed by and interpreted in accordance with the laws of the State of Victoria and the Courts of that State have exclusive jurisdiction in relation to any claim, dispute or difference concerning the Contract and any matter arising from it. The parties irrevocably waive any right they may have to object to any action being brought in those Courts, to claim that the action has been brought to an inconvenient forum or to claim that those Courts do not have jurisdiction." (Emphasis added.)
4. Mr Roberts has deposed that Diane, and her daughters, have informed him that they are not aware of any prior engagement letter. Mr Roberts said that no such prior engagement letter was produced during discovery or on subpoena in the Earlier Proceedings.
5. There is a controversy, which I cannot resolve on this application, as to whether the "Terms of Engagement" document was in fact attached to the 30 July 2007 letter.
6. Assuming that it was, there is a real question as to whether it is engaged. As Mr Elliott submitted: "… the substantive and primary conduct complained of in this proceeding (i.e. Pitcher Partners' conduct in relation to the misappropriation of the sale proceeds of the Twigg Group) had already occurred prior to 30 June 2007. For the most part, the money was taken well prior to 30 June 2007. As such, the alleged contract and the exclusive jurisdiction clause (even if it existed), is irrelevant to what is, by far and away, the largest and most central dispute in the present case. That dispute does not fall within the scope of the clause. [Further] the alleged exclusive jurisdiction clause only concerns claims, disputes or differences 'concerning the Contract or any matter arising from it [i.e. the Contract]'. The present disputes do not fall within this clause. They are disputes that concern and arise from Pitcher Partners' equitable obligations as fiduciaries, and their participation and assistance to Max Twigg and his corporate alter egos in the perpetration of a fraudulent or dishonest design."
7. In any event, although an exclusive jurisdiction clause carries great weight on a transfer application, [16] it does not oust the jurisdiction of the Court. [17]

The forthcoming strike-out application

1. Finally, I see Pitcher Partners' forthcoming strike out application as a factor pointing strongly to the appropriateness of this Court determining these proceedings.
2. By their Notice of Motion filed on 15 July 2022, Pitcher Partners seeks an order that pars 12D and 16B to 150 of the List Statement be stayed or struck out. In those paragraphs Diane and the Corporate Plaintiffs seek relief against Pitcher Partners arising out of the transactions that were the subject of the Earlier Proceedings. They include the allegations made concerning Pitcher Partners' alleged misconduct in the Earlier Proceedings.
3. In substance, Pitcher Partners contend that these proceedings are an abuse of this Court's process.
4. Thus, in a letter sent by Mr Theodore to Mr Roberts on 6 July 2022 foreshadowing that application, Mr Theodore outlined the basis upon which Pitcher Partners will argue that application: "9. Resolution of many of the issues raised by the plaintiffs in the [Amended Commercial List Statement] in the Current Proceedings will involve consideration and determination of the same essential issues determined by this Court in the [Earlier Proceedings]. The [Amended Commercial List Statement] alleges that Pitcher Partners knowingly assisted Max Twigg in his breaches of fiduciary duty. That subsidiary claim depends on, amongst other things, the plaintiffs' establishing issues similar or identical to those apparently raised in the Primary Breach of Fiduciary Duty Claim and the Heatherton Breach of Fiduciary Duty Claim. 10. The determination of this subsidiary claim will involve the parties traversing the same or similar factual and legal issues as those before the Court in the [Earlier Proceedings]. 11. Other parts of the [Amended Commercial List Statement] concern factual and legal matters that were known to the plaintiffs at the time of the [Earlier Proceedings], including the allegation that Pitcher Partners purportedly owed and breached their fiduciary duties to one or more of the plaintiffs. 12. In the circumstance, it appears to us that the Current Proceedings involves an abuse of process and are liable to be dismissed or permanently stayed or alternatively the [Amended Commercial List Statement] struck out, as the determination of the Current Proceedings will, or will likely, involve the (without limitation): (a) duplication of legal issues and findings; (b) cross-examination of the same or similar witnesses on the same or similar topics on which they were examined in 2020; (c) risk of inconsistent factual findings; (d) risk of inconsistent legal findings; (e) risk of significant prejudice to Pitcher Partners, including in respect of: (i) poor witness recollections and evidentiary records due to the effluxion of time. As stated above, this was a live issue in the [Earlier Proceedings] - it will be even more prominent when the Current Proceedings are set down for hearing (which could be as late as 2023, some 16 years after the sale of the Twigg Group); (ii) difficulties due to the effluxion of time (again, in respect of poor recollections and evidentiary records) in effectively investigating and pursuing viable cross-claims, including for example, in respect of solicitors involved in any of the relevant transactions; (iii) oppression to Pitcher Partners in respect of its involvement in the [Earlier Proceedings], including with regard to: (A) transcripts and affidavits (over 5 affidavits were prepared by officers or employees of Pitcher Partners) from the [Earlier Proceedings] being used against it in the Current Proceedings; (B) duplication of work in preparing affidavits on identical or similar factual issues; and (C) wasted time and costs in preparing for and attending a further hearing; (f) the importance if the Court and the parties conducting themselves in a manner that facilitates the just, quick and cheap resolution of the real issues in the proceedings; (g) the risk of that the Current Proceeding will give rise to the perception that the administration of justice is inefficient, careless of costs and profligate in its application of public moneys; and (h) the absence of any cogent reason why one or more of the above issues could not have been litigated in the [Earlier Proceedings], including in circumstances where: (i) knowing assistance claims and breaches of fiduciary duty claims were brought in the [Earlier Proceedings]; and (ii) the sole (or dominant) purpose of the Current Proceeding is to recover losses no longer recoverable from the defendants in the [Earlier Proceedings] (see [Amended Commercial List Statement] at Part A [par 6])."
5. It is clearly appropriate that this Court, and not the Supreme Court of Victoria, determines whether its own process has been abused. I do not mean to suggest that the Supreme Court of Victoria could not adequately attend to the task. Of course, it could. But it would not, in my opinion, be appropriate for this Court, by transferring these proceedings to the Supreme Court of Victoria, in effect to impose on that Court the task of determining whether this Court's process has been abused.
6. I see that as a powerful, indeed, determinative, factor on this application. In my opinion, the proceedings must stay here for the determination of the strike out application. If the application is successful, these proceedings will be permanently stayed, dismissed or struck out. That will be that. But if the application is not successful, I cannot see how it would then be in the interests of justice to transfer them elsewhere for ultimate determination.

Conclusion

1. Overall, I am not persuaded that it is in the interests of justice for the proceedings to be transferred to the Supreme Court of Victoria. On the contrary, I am persuaded that, primarily because of the impending strike out application, it would not be in the interests of justice to do so.
2. The first to third defendants' Notice of Motion filed 7 June 2022 is dismissed with costs.

Endnotes

1. Diane and her daughters commenced earlier proceedings in July 2018 that were ultimately heard together with the March 2019 proceedings. Nothing turns on the distinction between the two.
2. Twigg v Twigg (No 4); Lambert v Twigg Investments Pty Ltd (No 3) [2020] NSWSC 1159.
3. Twigg v Twigg (No 5); Lambert v Twigg Investments Pty Ltd (No 4) [2020] NSWSC 1782.
4. Twigg v Twigg [2022] NSWCA 68 (Brereton JA; Bell CJ and Payne JA agreeing).
5. Amended Commercial List Statement par A7.
6. Amended Commercial List Statement par A6.
7. BHP Billiton Ltd v Schultz (2004) 221 CLR 400; [2004] HCA 61 at [14] (Gleeson CJ, McHugh and Heydon JJ).
8. BHP Billiton Ltd v Schultz at [71] (Gummow J).
9. BHP Billiton Ltd v Schultz at [25]-[27] (Gleeson CJ, McHugh and Heydon JJ) and [77] (Gummow J).
10. BHP Billiton Ltd v Schultz at [170] (Kirby J) and [19] (Gleeson CJ, McHugh and Heydon JJ).
11. BHP Billiton Ltd v Schultz at [14] (Gleeson CJ, McHugh and Heydon JJ).
12. Bankinvest AG v Seabrook (1988) 14 NSWLR 711 at 714 (Street CJ); cited with approval in BHP Billiton Ltd v Schultz at [13] Gleeson CJ, McHugh and Heydon JJ).
13. For example, Freshii Developments LLC v Damjanovic [2021] NSWSC 1530 at [16] (Williams J).
14. Amended Commercial List Statement pars C146A-C146LL.
15. Amended Commercial List Statement pars C151-C179.
16. For example, Joshan v Pizza Pan Group Pty Ltd (2021) 106 NSWLR 104; [2021] NSWCA 219 at [81]-[84] (Bell P (as the Chief Justice then was); Gleeson and McCallum JJA agreeing).
17. Australian Health & Nutrition Association Ltd v Hive Marketing Group Pty Ltd (2019) 99 NSWLR 419; [2019] NSWCA 61 at [76] (Bell P; Bathurst CJ and Leeming JA agreeing).

Amendments 08 August 2022 - Amendment made to correct minor typographical error 12 September 2022 - Amendment made to correct minor typographical error DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 12 September 2022