W G & B Manufacturing Pty Ltd v Telsa Farad Pty Ltd

REASONS FOR JUDGMENT 1 The respondents ask for an order that this proceeding, which has been commenced in the Victorian registry of the Court, be transferred to the South Australian registry. The power to make such an order is to be found in s 48 of the Federal Court of Australia Act 1976 (Cth) which provides: "The Court or a Judge may, at any stage of a proceeding in the Court, direct that the proceeding or a part of the proceeding be conducted or continued at a place specified in the order, subject to such conditions (if any) as the Court or Judge imposes." Reference might also be made to the Federal Court Rules, in particular, Order 10 Rule 1(2)(f), and Order 36 Rule 6. The first of these rules gives the Court power to direct that a proceeding be transferred from one registry to another, and the second rule referred to permits the court to direct at what particular place the trial of a proceeding is to take place. 2 The test to be applied on an application of this type is that stated by the Full Court in National Mutual Holdings Pty Ltd v The Sentry Corporation (1988) 19 FCR 155. In that case the Full Court said that the discretion whether to transfer a proceeding should be exercised flexibly, having regard to the particular circumstances of the case. The Full Court said (at 162) that the test was as follows: "… where can the case be conducted or continued most suitably bearing in mind the interests of all the parties, the ends of justice in the determination of the issues between them, and the most efficient administration of the Court. It cannot and should not, in our opinion, be defined more closely or precisely." 3 My own view of the exercise of the discretion is that if the balance of convenience clearly favours the making of an order, then the order should be made. Generally speaking, I would regard the financial convenience of the parties as one very important consideration: that is at what place can the litigation be most economically conducted, so far as the parties are concerned. Of course, it could not be the only consideration and in some cases it may not be decisive. However, more often than not, in an application such as this financial considerations turn out to be the predominant consideration. 4 It is not necessary for me to detail at length the nature of the allegations made in the now amended statement of claim. In substance, the applicant claims to be the owner of certain confidential information relating to an electric brushless motor. In the amended statement of claim it is defined as the "DP motor". It is alleged that at various times the applicant entered into agreements with the respondents concerning the motor. In relation to the second respondent it is alleged that the applicant employed him to research and develop the motor. In relation to the first, second, fourth and fifth respondents, the applicant alleges that those respondents and the applicant had agreed to establish a company in which they and the applicant would hold shares to develop the motor. That company is the first respondent. In consequence of the various arrangements made between the parties it is alleged that the respondents were under an obligation, either contractual or fiduciary, not to misuse or improperly abuse the applicant's proprietary interest in and information concerning the motor, being information alleged to be of a confidential character. Then it is alleged that the respondents, or certain of them, breached their contractual or fiduciary obligations by misusing the confidential information. There are other contractual claims that it is not necessary to mention. 5 In so far as the jurisdiction of the Federal Court is concerned, there is a general allegation that a number of the respondents have engaged in misleading and deceptive conduct or unconscionable conduct contrary to s 52 of the Trade Practices Act 1974 (Cth). As against the second respondent it is alleged that he aided and abetted or was involved in those contraventions. Precisely how the relevant respondents engaged in conduct in contravention of s 52 is not made clear by the amended statement of claim because no particulars have been given of the alleged misleading or deceptive conduct or the alleged unconscionable conduct. The defence that has been filed on behalf of the respondents does raise the question whether the court has jurisdiction to hear the matter. It also takes issue with what I might describe as other alleged deficiencies in the pleading. These are matters that might be dealt with before the trial. 6 The foundation for the request that the proceeding be transferred to the South Australian registry is contained in the affidavits filed on behalf of the respondents, but is conveniently to be found in the written submissions filed on their behalf. I can briefly summarise the facts relied upon. First, the five respondents are all located in Adelaide and carry on business there. Second, the agreements being the subject of the proceeding were to a large extent negotiated in South Australia. Third, the applicant's DP Motor and the motor developed by the respondents, were manufactured and developed in Adelaide. Further, the respondent's solicitors, who are familiar with the proceeding, no doubt having been involved in the dispute for some time, are Adelaide solicitors. Moreover most, if not all, the respondents' witnesses will come from Adelaide. A few other minor points were relied upon, but the ones that I have mentioned seem to me to be the central points. 7 The applicant's position is set forth in an affidavit sworn by its director, William Aylett. From that affidavit I gather that the applicant is a company that carries on business in Victoria, having its place of operations in Mulgrave. Mr Aylett is a Victorian and it is likely that he will be required to give evidence at the trial. Mr Aylett also says that in the proceeding the applicant will "call up to four witnesses", all of whom reside in Victoria. When I suggested there might be some ambiguity in the expression "call up to" four witnesses, I was told that, based on present instructions, four witnesses will be called on behalf of the applicant in the prosecution of its claim against the respondents. 8 The question that I must decide is whether, on the material presently before me, there is a good reason why I should direct the proceeding to be conducted in South Australia. In other words, is there a good reason why I should vary the location of the conduct of the proceeding from that chosen by the applicant. 9 Having regard to the material filed by the parties the issue whether the proceeding should be transferred to South Australia is finely balanced. During the course of submissions by counsel I did suggest that it may be too early to make an informed decision on whether it is preferable that the case go to South Australia. I remain of that view. 10 I mentioned earlier that one of my main concerns was to determine where the case could be conducted to ensure that the cost to the parties is kept at a minimum. The evidence suggests that if I send the case to South Australia the applicant will incur additional costs, whereas if the case remains here the respondents will suffer additional expense. No other factor really compels a decision one way or the other. 11 In these circumstances, what I propose to do is to defer ruling on the respondent's application until I know more about the case. Mr McLeish, counsel for the respondents, did point out that nowadays the Federal Court organises its lists in such a way that one judge takes charge of a case from its inception, deals with all interlocutory applications wherever possible, and hears the trial. This does seem to be a desirable manner of conducting litigation, because it means that the judge who ultimately hears the case has acquired a detailed understanding of the issues raised and is thus able to dispose of the case more efficiently. 12 I accept that this is a factor that should be taken into account in deciding whether the matter should be decided now or whether it is preferable that my decision should be deferred. Nevertheless I am still of the view that it is appropriate to adjourn the respondent's application, not to a specific day, but to be brought on once all the interlocutory steps have been completed. At that time it will be clear how many witnesses will be called by each party. When it is known where those witnesses reside, and what will be the likely duration of their evidence, a more informed decision can be made as to the proper location of the proceeding. I do not believe that the parties will be disadvantaged if it turns out that the trial should take place in South Australia, but in the meantime all interlocutory steps have taken place in Victoria. 13 I should point out that when the application for transfer is brought on for further hearing, the applicant will not be entitled to raise as an issue for consideration the fact that the interlocutory steps have taken place in Victoria. Nor will it be entitled to argue that a transfer may result in it losing the services of its current legal advisers. They may be relevant considerations to take into account in an ordinary case, but they would not be proper considerations to take into account in this case, because the applicant has itself suggested that I should defer ruling on the transfer application for the time being. It should not obtain an advantage in consequence of that ruling. 14 The order that I propose to make is to adjourn the application to transfer the proceeding to a date to be fixed. I do not propose to make any order for costs. If it ultimately turns out that respondents' application was properly based then they can expect that the costs will be ordered in their favour. I certify that the preceding fourteen (14) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Finkelstein.