ABL Nominees Pty Ltd v McRobert; McRobert v ABL Nominees Pty Ltd - [2014] SASC 49

SUPREME COURT OF SOUTH AUSTRALIA
(Civil: Application)
ABL NOMINEES PTY LTD & ANOR v MCROBERT; MCROBERT v ABL NOMINEES PTY LTD & ANOR
[2014] SASC 49
Reasons for Decision of The Honourable Justice Nicholson
11 April 2014
PROCEDURE - COURTS AND JUDGES GENERALLY - COURTS - CONCURRENT JURISDICTION OF DIFFERENT COURTS - TRANSFER OF PROCEEDINGS UNDER CROSS-VESTING LEGISLATION - WHERE APPROPRIATE AND IN INTERESTS OF JUSTICE
The defendant to loan recovery proceedings sought an order for the transfer of those proceedings to the Supreme Court of Western Australia pursuant to s5(2) of the Jurisdiction of Courts (Cross-Vesting) Act 1987 (SA).
Whether it is in the interests of justice for the proceedings to be heard and determined by the Supreme Court of Western Australia.
Held (dismissing the application): it is not in the interests of justice for the proceedings to be heard in Western Australia as opposed to South Australia.
Jurisdiction of Courts (Cross-Vesting) Act 1987 (SA) s5, referred to.
Cini v Pets Paradise Franchising (SA) Pty Ltd & Ors (2008) 102 SASR 177; Garra Water Investments Pty Ltd (in liq) v Ourback Yard Nursery & Garra [2010] SASC 326; Kranenberg v AFT Pharmaceuticals Pty Ltd [2012] SASC 98; Clarke & Ors v ABL Nominees Pty Ltd & Anor [2014] SASC 15; BHP Billiton Ltd v Schultz (2004) 221 CLR 400, considered.

ABL NOMINEES PTY LTD & ANOR v MCROBERT; MCROBERT v ABL NOMINEES PTY LTD & ANOR
[2014] SASC 49
CIVIL
NICHOLSON J.
Introduction

Shaun McRobert (“the applicant”) is the defendant to loan recovery proceedings originally instituted in the District Court and recently transferred into this Court. He has brought an application for an order that the loan recovery proceedings be transferred to the Supreme Court of Western Australia, pursuant to s5(2) of the Jurisdiction of Courts (Cross-Vesting) Act 1987 (SA) (“the Act”). The first and second plaintiffs in the loan recovery proceedings are ABL Nominees Pty Ltd (“ABL”) and Bendigo and Adelaide Bank Ltd (“BABL”). They are the respondents to Mr McRobert’s cross-vesting application.
The applicant invested in the Great Southern Beef Cattle Project which was one of a number of managed investment schemes within the Great Southern Plantation Project. The Great Southern Beef Cattle Project involved leasing droves of cattle on stations across Australia. Apart from any direct commercial benefits hoped for, the investment was seen as offering investors certain tax advantages. The scheme failed, causing investment losses for the various participants including the applicant.
The applicant entered into a loan agreement with ABL in March 2007 pursuant to which ABL provided finance to enable the applicant to participate in the Great Southern Beef Cattle Project. ABL’s rights under the loan agreement were later assigned to BABL and subsequently assigned back to ABL. ABL is the party who claims an entitlement to recover the loan. BABL is also a party, in essence, to ensure that any difficulties that might arise with respect to the assignments might be resolved as part of this litigation.
On 7 June 2013, the respondents filed in the District Court their summons and statement of claim seeking recovery of the loan monies from the applicant. After some interlocutory skirmishing in the District Court the matter was transferred, by consent, to this Court in order for the applicant to file in this Court, and for this Court to determine, an application for the transfer of the substantive proceedings to the Supreme Court of Western Australia. The action was transferred to this Court by order of another Judge of this Court on 8 November 2013. Orders for the filing of any further affidavit evidence sought to be relied on by the parties were also made and the cross-vesting application was adjourned to the chamber list where it came before me on 13 December 2013. On that day, I made further orders dealing with pleading matters and at the request of the parties adjourned the matter to 28 February 2014 for argument.
The materials before me on the hearing of the cross-vesting application included the following:
(i)a summons and statement of claim filed in the District Court by the respondents on 7 June 2013;
(ii)a second summons filed in this Court by Mr McRobert on 8 October 2013 seeking a transfer of the proceedings from the District Court of South Australia to the Supreme Court of South Australia and thereafter an order for the transfer of the proceedings to the Supreme Court of Western Australia;
(iii)a defence and counter-claim filed in this Court by the applicant on 20 December 2013;
(iv)a reply and defence to counter-claim filed in this Court by the respondents on 16 January 2014;
(v)an affidavit with exhibits sworn by Stephen Flamer-Smith on 16 October 2013 read and relied on by the respondents;[1]
(vi)an affidavit with exhibits affirmed by the applicant on 30 July 2013 read and relied on by the applicant;
(vii)an email dated Wednesday 31 July 2013 from Karen Guazzelli (solicitor acting for ABL and BABL) to the solicitors acting for Mr McRobert;[2]
(viii)written submissions described as “Defendants’ consolidated submissions” filed on behalf of the respondents on 20 February 2014; and
(ix)written submissions filed on behalf of the applicant on 7 November 2013.
[1] Mr Flamer-Smith is the Manager, Legal and Resolutions, employed by BABL. He has deposed to the facts, inter alia, that ABL is a wholly owned subsidiary of BABL and that he is authorised to make the affidavit on behalf of both ABL and BABL.
[2] This email is page 22 of an affidavit (and exhibits) sworn by Evelyn Anne Johns (an employee of the solicitors for ABL and BABL) which was filed in this Court on 6 November 2013 with reference to other matters. The affidavit itself is not relied on by either party in connection with the present application apart from the email referred to in the text which the applicant does seek to rely on and to which the respondents do not object.
Legal principles
The application is brought pursuant to s5(2)(b)(iii) of the Act. Section 5 provides for a number of circumstances in which the Supreme Court has power to transfer proceedings to the Supreme Court of another jurisdiction, a Federal Court or the Family Court. Sub-section 5(2) is in the following terms.
(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)     —
(i)it appears to the first court that the relevant proceeding arises out of, or is related to, another proceeding pending in the Supreme Court of another State or of a Territory and it is more appropriate that the relevant proceeding be determined by that other Supreme Court; or
(ii)it appears to the first court that having regard to—
(A)whether, in the opinion of the first court, apart from this Act and any law of the Commonwealth or another State relating to cross-vesting of jurisdiction, the relevant proceeding or a substantial part of the relevant proceeding would have been incapable of being instituted in the first court and capable of being instituted in the Supreme Court of another State or Territory; and
(B)the extent to which, in the opinion of the first court, the matters for determination in the relevant proceeding are matters arising under or involving questions as to the application, interpretation or validity of a law of the State or Territory referred to in subsubparagraph (A) and not within the jurisdiction of the first court apart from this Act and any law of the Commonwealth or another State relating to cross-vesting of jurisdiction; and
(C)the interests of justice,
it is more appropriate that the relevant proceeding be determined by that other Supreme Court; or
(iii)it appears to the first court that it is otherwise in the interests of justice that the relevant proceeding be determined by the Supreme Court of another State or of a Territory,
the first court shall transfer the relevant proceeding to that other Supreme Court.
The applicant places no reliance on the jurisdiction conferred by placitum (b)(i) or (b)(ii). He relies only on placitum (b)(iii) and submits that it is “otherwise in the interests of justice that [these proceedings for loan recovery] be determined by the Supreme Court of [Western Australia]”.
The principles governing applications of the present kind are well established.[3] I, as other members of this Court have done, gratefully adopt the summary of the principles provided by Bleby J in Cini v Pets Paradise Franchising (SA) Pty Ltd & Ors:[4]
•It is not relevant to ask whether this Court is justified in refusing to exercise the jurisdiction conferred on it. Rather, it must ensure that the case is heard in the forum dictated by the interests of justice.
•The question is not whether this Court is an inappropriate forum. It is both necessary and sufficient that, in the interests of justice, the other Court is more appropriate.
•The Court is required to ensure that cases are heard in the forum dictated by the interests of justice. It is not a question of the exercise of a discretion.
•The interests of justice are not necessarily the same as the interests of any one party.
•Because it is necessary to identify the more appropriate forum, no specific emphasis can be given in favour of the choice of forum made by the plaintiff.
•It is inapt to speak of the applicant for an order for transfer as bearing a burden of persuasion analogous to an onus of proof
[3] See for example, Cini v Pets Paradise Franchising (SA) Pty Ltd & Ors (2008) 102 SASR 177 at 183-184; Garra Water Investments Pty Ltd (in liq) v Ourback Yard Nursery & Garra [2010] SASC 326 at [10]; Kranenberg v AFT Pharmaceuticals Pty Ltd [2012] SASC 98 at [4]; Clarke & Ors v ABL Nominees Pty Ltd & Anor [2014] SASC 15 and see generally, BHP Billiton Ltd v Schultz (2004) 221 CLR 400.
[4] (2008) 102 SASR 177 at [8] (citations omitted).
The pleadings
The statement of claim is relatively straightforward. It asserts an agreement to lend money to the applicant, and a loan made in the amount of $121,325. Particulars of the loan agreement documents are pleaded. A breach of the loan agreement arising by virtue of an alleged failure to pay principal and interest, on demand, is pleaded. Also pleaded are the various arrangements or transactions pursuant to which: ABL’s rights in respect of the loan agreement were purportedly assigned to Adelaide Bank Ltd; Adelaide Bank Ltd and Bendigo Bank Ltd merged to become BABL; BABL assumed, by operation of law, the benefit of the rights under the loan agreement; and BABL assigned those rights back to ABL.
By his defence, the applicant has put a number of matters pleaded in the statement of claim formally in issue. However, he admits that no loan repayments have been made but goes on to plead that, in the circumstances, he has no legal obligation to make repayments. The essence of the applicant’s defence and counter-claim is that, in connection with his investment in the scheme, Great Southern Managers Australia Ltd (“GSMAL”) provided him with a written product disclosure statement which was misleading in both what it contained and what it did not contain. The applicant pleads that, in reliance on the misleading product disclosure statement, he was induced to make his investment and to enter into the loan agreement and borrow the monies the subject of the substantive proceedings. The applicant further pleads that either or both respondents are liable for the alleged misleading and deceptive conduct by GSMAL on the basis, inter alia, of certain conduct by a Mr Romeo, the finance manager at the relevant time for one of the scheme entities, Great Southern Ltd, and who also, as the attorney of ABL, was authorised to execute the loan documentation on behalf of ABL. The pleading by which it is asserted that ABL and/or BABL are liable to the applicant with respect to the inadequacies of the product disclosure statement and the manner in which that liability should be found to arise as a matter of law, is somewhat opaque.
The applicant’s submissions
The applicant relies on the following matters in support of the submission that the substantive proceedings should be cross-vested to the Supreme Court of Western Australia.
(i)Western Australia is where the loan deed was entered into, where Mr McRobert resides and where the lender conducted business.
(ii)According to the terms of the loan deed it is to be governed by Western Australia law.
(iii)The cost and inconvenience of conducting proceedings in South Australia will be proportionately higher for the applicant than for the respondents.
In essence, the applicant submitted that the proceedings were being conducted in South Australia only for the administrative convenience of the respondents and that there was an obvious disparity in the resources respectively available to the parties such that the interests of justice favoured the proceedings being conducted in Western Australia.
During oral submissions, counsel for the applicant conceded that, on the pleadings as they presently stand, whether or not the applicant will be found liable to repay the loan, as claimed, will be determined essentially on the basis of the documentary record. Whilst the applicant may need to give evidence in order to establish matters such as reliance and any consequential loss, there was no suggestion on behalf of the applicant that he would be put to the expense of having to call any other witness located in Western Australia should the matter remain in South Australia.
There is the possibility that Mr Romeo might be required to give evidence. However, it is not apparent, from the pleadings and the submissions put on behalf of the applicant, how Mr Romeo might be of any assistance. The role he played (if material) is likely to be apparent on the documents. In any event, there is no evidence as to where Mr Romeo presently resides. Furthermore, on the pleadings as they now stand, it would seem that the applicant would need to make out his case on the documents and the question would then arise for the respondents as to whether or not they might call Mr Romeo.
Whilst I am satisfied that the applicant will be put to greater inconvenience and expense should the matter remain in South Australia than were it to be conducted in Western Australia, I am not satisfied that this is particularly significant to the application. The applicant might either retain solicitors in Western Australia and engage an Adelaide agent (the present position) or directly engage Adelaide solicitors. He ought not need to spend time or significant time in Adelaide in order to provide instructions. It is true that, if and when the matter were to proceed to trial, the applicant would need to attend which would put him to greater expense than if the trial were to be conducted in Western Australia. However, to reverse the positions and compel the respondents to conduct the litigation in Western Australia might simply transfer financial disadvantages of this nature from one party to the other.
According to the affidavit of Mr Flamer-Smith, he is responsible for debt recovery proceedings on behalf of BABL and its related entities with respect to loans associated with the Great Southern Group Investment Schemes. He and his team of 18 people work from offices in Adelaide and engage BABL’s Adelaide solicitors to conduct the debt recovery proceedings throughout the country. Mr Flamer-Smith has provided further detail in his affidavit concerning his Adelaide team’s involvement and the Adelaide solicitors’ involvement in such debt recovery type matters throughout the country. I am satisfied that sound administrative and financial reasons inform the respondents’ decisions concerning which Court and in which jurisdiction it will pursue a particular loan recovery proceeding. The only point I make is that I do not accept that which is implicit in the applicant’s submissions, that the administrative decision made by the respondents to conduct this particular litigation in the Courts of South Australia should be given no weight. I return to my earlier point that if the position were to be reversed, as the applicant would have it, it is more than likely that administrative inconvenience and increased costs would fall upon the respondents.
The applicant’s counsel also relied on the fact, as he described it, “that everything that mattered happened in Western Australia” including, for example, that the applicant was then a resident in that state, the project responsible entity had a registered office in that state and the loan agreement was entered into in that state. However, in a case which will be decided essentially in accordance with the documentary record, once ascertained and properly construed, such a consideration carries little weight on the question of whether one forum is more appropriate than another, let alone where the interests of justice might lie. The fact that the loan documentation contains a choice of law clause also carries little weight, as counsel conceded. There is nothing about this matter to suggest that the relevant law of Western Australia will be materially different from the cognate law routinely applied in the courts of this State. There is no reason to think that the courts of this State are not quite capable of identifying and applying the relevant law of Western Australia.
The respondents, both in their written submissions and through counsel, raised a number of matters in support of their opposition to the application. I do not need to set these out in any detail. I have drawn on these submissions, to some extent, in the discussion to this point.
Consideration and resolution of the application
Ultimately, this litigation as presently constituted and the evidence relied on by the applicant in support of his application for transfer, do not give rise to any considerations that, alone or in combination, plainly dictate that one forum should be preferable to the other. I start with the proposition that, subject to the obligation under s5 of the Act to order otherwise where it is in the interests of justice,[5] a plaintiff is ordinarily entitled to choose its forum. I am satisfied that the respondents in this case have chosen South Australia for proper reasons to do with administrative convenience and costs. The question arises as to whether the applicant has pointed to anything to suggest that it is in the interests of justice that the proceedings be transferred to and determined by the Supreme Court of Western Australia.
[5] See the fifth dot point taken from the judgment of Bleby J in Cini v Pets Paradise quoted earlier.
On my review of the parties’ affidavit evidence and their submissions it seems to me that they have locked horns not on the question of what is in the interests of justice, but on a comparison of the respective disparities in inconvenience and expense for the parties depending on the choice of forum. Whilst this is a consideration relevant to the interests of justice question, I have no information, by affidavit or otherwise, as to the likely extent to which one party might be put to more inconvenience and expense than the other.
In Garra Water Investments Pty Ltd (in liq) v Ourback Yard Nursery Pty Ltd & Garra[6] White J observed as follows:
The sixth principle summarised by Bleby J in Cini v Pets Paradise Franchising (SA) Pty Ltd is that it is inappropriate to speak of an applicant for an order for transfer having a burden of persuasion analogous to onus of proof. Different views on this topic have been expressed in the Supreme Court of New South Wales: compare Bankinvest Letters A-G v Seabrook & Others and James Hardie & Co Pty Ltd v Barry. However, in BHP Billiton v Schultz Gummow J, with whom Hayne J agreed, considered that:
Section 5(7) indicates that it is inapt to speak of the applicant for an order for transfer as bearing a burden of persuasion analogous to an onus of proof. However, it would be inaccurate to describe the decision upon a transfer application as administrative, by some analogy to the orders made with no lis inter partes in the administration of assets or of trust by courts of equity.
The approach outlined by Gummow J has been adopted in this Court by Bleby J, as noted above, and subsequently by Gray J. I consider it appropriate to take the same view. However, I do not understand this to mean that an applicant for an order does not carry an evidential onus and, in particular, to establish the basis upon which a court may make an assessment of where the interests of justice lie. That is a matter of some significance on the present application bearing in mind both its timing and the limited evidence adduced by the defendants to support it.
[6] [2010] SASC 326 at [12] (citations omitted).

I am satisfied that each of the Supreme Court of Western Australia and the Supreme Court of South Australia (or indeed the District Court of South Australia should the matter be returned there) is an appropriate forum for the hearing of this apparently fairly routine matter. The question is whether the interests of justice dictate that the matter should be heard in Western Australia. As Bleby J observed in Cini v Pets Paradise, the interests of justice are not necessarily the same as the interests of any one party. As I have indicated, to the extent that it is in the interests of the applicant that the matter be conducted in Western Australia, it is likely to be just as much in the interests of the respondents that the matter be conducted in South Australia. Aside from this competition of interests, I can see no prejudice to the applicant’s capacity to conduct his defence and counter-claim should the matter remain in South Australia.
On the basis of the affidavit evidence and the written and oral submissions relied on by the applicant, I am not satisfied that litigating this matter in South Australia rather than Western Australia will result in anything other than some additional expense and inconvenience to him. This is a factor, and in an appropriate case can be a significant factor, relevant to the question of whether there should be a transfer of proceedings. However, in this case, it is not sufficient to demonstrate that it is in the interests of justice that these proceedings be transferred to the Supreme Court of Western Australia. Mr McRobert’s application is refused.
I will hear the parties on the question of the costs of the application and also as to whether or not the matter should be remitted to the District Court of South Australia.