Wang v Australia China Marketing Company Pty Ltd

Federal Court of Australia|2001-01-19|Before: O'Loughlin J

REASONS FOR JUDGMENT 1 The respondents' application for a change of the proper place. 2 The applicant in these proceedings, Mr Hong Sun Wang ("Mr Wang") is a citizen of the Peoples' Republic of China ("China"). In pars 2 and 3 of his statement of claim he has alleged that the first respondent, Australia China Marketing Company Pty Ltd ("the company"), is an Australian company that has been established for the purpose of "conducting business concerned with export of emu and deer exports to China from Australia"; it is said that the second respondent, Desmond Lionel Williams ("Dr Williams"), is a director of the first named respondent. It is alleged that prior to the incorporation of the respondent company Dr Williams made various representations to Mr Wang in both South Australia and Western Australia to the effect that he (Dr Williams) had substantial business and political contacts in Australia, that he lacked working capital, that he was engaged in the business of the production and export of emu and deer products, that he wished to expand his production facilities and that the business offered Mr Wang the opportunity to invest and to participate in substantial profits. 3 It is then alleged that Mr Wang relied upon the representations of Dr Williams and subject to certain conditions agreed that he, Mr Wang, would invest the sum of $150,000 by way of acquiring shares in a company to be incorporated. Mr Wang has also pleaded that, once more acting in reliance upon the representations of Dr Williams, he further agreed that, subject to him obtaining an appropriate visa which would enable him to conduct business in Australia, he would invest a further $100,000 in the company by way of the acquisition of additional shares. Mr Wang duly advanced $150,000 and the company issued to him in his own name 150,000 shares. In addition Mr Wang was appointed a director of the company. 4 He then alleged in par 12 of the statement of claim that the representations that had been made by Dr Williams prior to the incorporation of the company were false in material particulars. There is, in a later plea in the statement of claim, an allegation that the company also engaged in misleading and deceptive conduct. This particular allegation is said to be based upon statements attributed to Dr Williams subsequent to the incorporation of the company but presumably upon the premise that they were representations made on behalf of the company. It is alleged that the representations were made "during the course of various discussions by telephone and at personal meetings" but the location of the relevant parties at the time of those telephone discussions and those personal meetings has not been pleaded. 5 Further claims that have been made by Mr Wang include allegations that Dr Williams owed a fiduciary duty to Mr Wang and that he breached that fiduciary duty. However, so far as I can ascertain, no additional factual material has been advanced over and above that already disclosed - with the exception that it has been pleaded that Mr Wang had limited skills in the use of the English language and was therefore a person "reasonably able to be foreseen as likely to suffer injury in consequence of any act or omission on the part of Williams". 6 By a notice of motion dated 24 November 2000, the respondents seek an order pursuant to O 10, r 1(2)(f) of the Federal Court Rules and s 48 of the Federal Court of Australia Act 1976 (Cth) that these proceedings be transferred from the South Australian Registry to the Western Australian Registry of the Federal Court. That particular provision in the rules gives to the Court the discretionary power to: "Direct that the proceedings be transferred to a place at which there is a Registry other than the proper place."

Order 1, r 4 provides that in the Federal Court Rules, unless the contrary intention appears, "proper place" in relation to any proceeding, means the place at which the proceeding was commenced. At this stage, Adelaide is the proper place: and, unless there is an order to the contrary, the trial of these proceedings will be held in Adelaide and Adelaide will remain the "proper place".

7 Neither of the respondents has sought to invoke the provisions of O 30, r 6 which states: "6(1) Subject to sub-rules (2) and (3), unless the place of trial has been fixed by the Court, the trial of a proceeding shall be at the proper place. (2) The Court on the application of a party or of its own motion may direct that the trial of a proceeding be fixed at a place other than the proper place. (3) In this rule a reference to the trial of a proceeding shall include a reference to any interlocutory hearing in the proceeding." 8 The heading that precedes r 6 or O 30 is "Change of Venue"; in my opinion, that heading is significant to the outcome of these proceedings, for it emphasises that there is a difference in purpose and objective between O 10, r 1(2)(f) and O 30, r 6. The meaning and effect of "proper place" was explained by the Full Court in National Mutual v Sentry Corporation (1988) 83 ALR 434 at 441 in these terms: "The purpose of the provision in the rules of a 'proper place' is to ensure the orderly and efficient conduct of the Court's business by requiring all documents filed in a proceeding to be in the custody and charge of the registry where the matter is then proceeding." 9 Immediately following this passage, the Full Court went on to consider the provisions of s 48 of the Federal Court Act: it 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." 10 The Full Court explained at p 441 that: "The power conferred on the Court or a Judge by s 48 is in terms wholly unfettered. It should be exercised flexibly having regard to the circumstances of the particular case. It would be regrettable and unwise if the Court were to circumscribe the general power conferred by s 48 with inflexible rules or impose inelastic constraints upon its exercise. As the power may be exercised subject to conditions, the Court or a Judge is in a position to mould orders under the section to take account of the many and varied circumstances that arise in particular cases. The power conferred by s 48 recognises the national character of this Court. The factors which the Court is entitled to take into account in considering whether one city is more appropriate than another for interlocutory hearings or for the trial itself are numerous. The Court must weigh those factors in each case. Residence of parties and of witnesses, expense to parties, the place where the cause of action arose and the convenience of the Court itself are some of the factors that may be relevant in particular circumstances." 11 Hence it is necessary to emphasise that the matter presently before the Court is not the determination of the ultimate venue or venues for the trial of this action but rather, the identification of that "place" which, consistent with the Rules of Court, is the "proper place" for the orderly and efficient conduct of the Court's business. There is presently a need, as a consequence of the respondents having invoked the provisions of O 10, r 1(2)(f) to determine, whether the South Australia Registry of the Court (being the Registry in which the applicant commenced his proceedings) or the Western Australia Registry (being the Registry to which the respondents seek to have the proceedings transferred) is the appropriate Registry for the filing of proceedings and other documents, for the control of interlocutory processes, for the conduct of future directions hearings and generally for the preparation for trial. 12 The Full Court in National Mutual v Sentry Corporation (supra) has now authoritatively laid down the test to be applied in evaluating the competing claims of parties to an action at p 442: "Ultimately the test is: 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." 13 In that case (where proceedings had originally been commenced in Melbourne) the respondent had sought not only an order that the trial be fixed at Sydney (which effectively would have meant a change of venue) but also an order that Sydney be the "proper place" of the proceedings. Nevertheless, as Gummow J pointed out in Cycles & Wheelman Pty Ltd v Beltech Corp Ltd (1988) 80 ALR 279, (on a motion to direct the transfer of a proceeding from the New South Wales Registry to the Western Australia Registry) the consequence of an order that the further conduct of the proceedings be at the Western Australia Registry would be that Perth would be the "proper place" within par (b) of the definition of that term in O 1, r 4. In turn, that would mean that under O 30, r 6 the trial of the proceedings would be at Perth unless fixed elsewhere. Thereafter, Gummow J proceeded to express his views on the test to be applied; those views, which were quoted without criticism by the Full Court in National Mutual v Sentry Corporation at 440, were as follows: "It is not, in my view, simply a question of the Court locating the balance of convenience, because the Court must be satisfied by the applicant that there be a change in the status quo and in the identity of the 'proper place' and that transfer be ordered. Nor, contrary to some of the submissions made this morning, is much guidance to be derived from cases in other jurisdictions, particularly those jurisdictions lacking the national character of this Court, and those providing for trial by jury of civil claims." 14 The respondents' application for an order that the proceedings be transferred was supported by the affidavit of Dr Williams sworn on 23 November 2000. The solicitor for Mr Wang filed an affidavit that was sworn on 11 December 2000, annexing to it a photocopy of a facsimile transmission representing an affidavit that was said to have been sworn by Mr Wang in China on 8 December 2000. In the absence of any objection from the respondents I have determined to receive Mr Wang's affidavit for the purposes of resolving the present issue. In par 4 of his affidavit Dr Williams states that the Western Australia Registry of the Court is the Court nearest to the place where: "(a) The relationship between the applicant and the respondents was formed; (b) The respondents carry on business; (c) The respondents' cause of action arose."

That particular assertion has not been the subject of mention by Mr Wang in his affidavit. After stating that he opposes the order sought in the notice of motion Mr Wang deposes that his opposition is based upon the grounds that the South Australia Registry is the venue which is the most appropriate and the most convenient because:

"5.1 The preponderance of witnesses reside in South Australia or reside in a place closer to Adelaide than to Perth in the State of Western Australia; 5.2 The evidence relating to the issues to be tried will primarily be oral, rather than documentary; 5.3 Where the evidence is of a documentary nature, that evidence is readily available from; 5.3.1 Records held by the Australian Securities and Investment Commission; 5.3.2 Records held by the accountants for the first and second respondents; 5.3.3 The parties or their agents wheresoever located." 15 The parties are in agreement that Mr Wang is presently residing in South Australia, that Dr Williams is presently residing and practising as a medical practitioner in Western Australia and that the company was duly incorporated and registered in Western Australia and has its registered office in that State. 16 In par 10 of his affidavit Dr Williams asserts that the company is carrying on the business of "farming" emu and deer and producing emu and deer products. He also asserts that the company is engaged in "developing telemedicine within Western Australia and overseas including China". Mr Wang addressed the contents of par 10 saying that he had reservations with respect to the description of the company's business. He said: "It was my understanding upon the formation of the company that it would be engaged in the manufacture of products for export to China and other places…" 17 It is not of course necessary at this stage to make findings of fact, nor would it be appropriate to do so. It is sufficient to note that there is agreement between the parties that the company is engaging in business activities and that those activities are being conducted in Western Australia. 18 In par 11 of his affidavit Dr Williams states that the company has leased 100 acres of land at Bindoon, approximately 100 kilometres north of Perth where its emus and deers are kept. He exhibited copies of the relevant lease and relevant Certificate of Title to his affidavit. As to this allegation, Mr Wang has said that he has no knowledge of any of those matters although he volunteered that directors' meetings of the company were conducted solely within the State of Western Australia. Mr Wang accepted the following assertions of fact as made by Dr Williams in his affidavit: · That the company has never traded in South Australia; · That the company's records and books of account are held in Western Australia; · That the company's accountants who are responsible for the preparation of the company's annual accounts and tax returns are based in Western Australia; · That the company's bank accounts are maintained in Western Australia; · Dr Williams and Mr Wang met through a mutual friend and discussed the opportunity "of business migration investment" in Dr Williams' emu and deer farming project; · Mr Wang's migration agent was a Mr John Swift who is a resident of Western Australia and whose principal place of business is in West Perth in that State. 19 An area of dispute between the parties relates to the location of many of their discussions and negotiations. Dr Williams has asserted that all major discussions and negotiations between the parties occurred between May 1998 and September 1998 at various places in Western Australia. On the other hand Mr Wang has asserted that there were telephone calls between Adelaide and Perth; there were meetings at hotels and at the airport in Adelaide and at the home of a mutual friend, Dr Du in Adelaide. 20 Without engaging in a fact finding exercise it would seem to me that the issues to be resolved in these proceedings have an intensely strong Western Australian flavour. That is not to say that there are no factors relating to South Australia. In Mr Wang's application for a visa which was exhibited as an annexure to Dr Williams' affidavit there is a reference to the development of the export of emu oil which was to be sourced from South Australia as well as Western Australia. There was also a reference to Mr Wang's business contacts in South Australia. Nevertheless, in addition to the residence and incorporation of the respondents in Western Australia, the primary business of the venture is based in Western Australia. The company's accountants who are also Dr Williams' accountants are potential witnesses and they are Western Australian based. Mr Swift the migration agent is Western Australian based and the circumstances under which Mr Wang is presently a resident of South Australia have not been explained. 21 There are many factors to be taken into account when making a decision of this nature. Not the least of them is the fact that an applicant is entitled primarily to nominate the place where an action is to be instituted. Such an assertion of course favours the retention of the proceedings in the South Australia Registry. However the residence of the parties and the residence of potential witnesses together with the identification of the place where the cause of action arose as well as the general balance of convenience are all matters to be taken into account. I find in this particular case that the exercise is finely balanced but having reflected on the matter it would seem to me that the totality of the circumstances justify the order being made as sought by the respondents. There will be an order that the proceedings in this matter be transferred from the South Australia Registry to the Western Australia Registry. The applicant, Mr Wang, is to pay the costs of and incidental to the making of this order. I certify that the preceding twenty-one (21) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice O'Loughlin.

Solicitor for the Applicant: Messrs Winters

Solicitor for the Respondent: Messrs Johnson Winter and Slattery as agents for Shea Nelson and Hagen

Written submissions were received from the parties on 24 November and 11 December 2000

Date of Judgment: 19 January 2001

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