Advanta P/L v E.A. Dixon Nominees P/L

[1991] FCA 486

Re: ADVANTA PTY LTD; CORPLUS PTY LTD; ANTHONY WILLIAM VAN SLEEUWEN; GREGORY
THOMAS NORMAN FARRAR and TERRENCE NOEL POWER
And: E.A. DIXON NOMINEES PTY LTD and EDWARD ALFRED DIXON
No. Q G86 of 1991
FED No. 486
Courts and Judges

COURT

IN THE FEDERAL COURT OF AUSTRALIA

QUEENSLAND DISTRICT REGISTRY
GENERAL DIVISION
Pincus J.(1)

CATCHWORDS

Courts and Judges - transfer of action from Federal to State Court - factors used in determination of "most appropriate" course under s.5(4)(b)(i) of the Jurisdiction of Courts (Cross-vesting) Act 1987.

Jurisdiction of Courts (Cross-vesting) Act 1987, ss.5(4), 10

HEARING

BRISBANE

#DATE 15:8:1991

Counsel for the applicants: Ms M.M. Batch

Solicitors for the applicants: Radcliff, Lather and Buckland

Counsel for the respondents: Mr P.J. Baston

Solicitors for the respondents: O'Shea Corser and Wadley

ORDER

The proceedings in this Court be transferred to the Supreme Court of Victoria.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

JUDGE1

The respondents have applied for an order transferring this matter to the Supreme Court of Victoria and that is resisted by the applicants. In these reasons, I shall give the parties the designations they have in the title of the proceedings.

1. The respondents say that the order they seek should be made under s.5(4) or s.10 of the Jurisdiction of Courts (Cross-vesting) Act 1987 ("the Cross-vesting Act"). Section 5(4)(a) is satisfied because there is a proceeding pending in this Court. The question is whether para (b) is satisfied. It is unnecessary to set out the terms of that provision; it lays down three conditions, the first two of which are specific and the last general. Para (b)(i) applies where there is a related case pending in a Supreme Court; para (b)(ii) makes relevant the question where, apart from the cross-vesting legislation, the suit would have proceeded.

2. The principal application which was filed on 26 June seeks relief under the Trade Practices Act 1974 concerning certain dealings between the parties. These were a purchase of a carpet underlay factory owned by the second respondent, a purchase from the first respondent of chattels used in making underlay, an agreement to lease the factory back to the first respondent for a period of five years and certain guarantees. The statement of claim sets up that these agreements were procured by misleading conduct on the part of the first respondent.

3. The statement of claim says that before the agreements were made, the first respondent tabled a sample of carpet underlay and represented that it would make and supply underlay of comparable quality to the second applicant. A contractual promise to the same effect is also set up. It is alleged, in effect, that the conduct was misleading because the carpet underlay supplied has not been up to sample.

4. It was suggested during argument, and appears to be correct, that the allegations as to the respects in which the conduct was misleading are not properly based on the Trade Practices Act. It is not enough simply to allege that a promise was made and broken, in order to provide a foundation for a claim under s.52 of the Trade Practices Act. It is necessary to allege that the applicant was misled as to some present fact, even if it be only the representer's state of mind. Counsel for the applicants was inclined to concede the existence of a defect in the respect just mentioned and suggested that leave might be given to amend. It must be assumed in favour of the applicants that their counsel might be able, consistently with her instructions, to frame a case properly falling within s.52 of the Trade Practices Act; nevertheless, the present state of the pleading lends force to the submission by the respondent's counsel that this is simply a sale of goods case, of a kind ordinarily tried in State Courts.

5. A separate aspect of the pleading is that, so the applicants allege, the first respondent received the second applicant's "client list" and, in breach of an obligation of confidence, used it to solicit orders. My impression is, however, that this is a subsidiary matter compared with the complaint about the quality of the underlay; whether or not that be so, it is, again, a claim of a kind ordinarily brought in State or Territory Courts.

6. The related suit on which the respondents rely under s.5(4)(b)(i) is a writ issued out of the Supreme Court of Victoria on 12 June last by the first respondent against the applicants, claiming monies due for goods sold and delivered; these goods are of the kind which, according to the statement of claim in this Court, were defective. It was argued by Ms Batch for the applicants that it would be inconvenient to try the matter in Victoria because the clients to whom the allegedly defective material was delivered and those on the list as to which the respondents are alleged to have breached confidentiality are predominantly located in Queensland and northern New South Wales. Mr Baston for the respondents contended that there would be disadvantages to the respondents, who are located in Victoria, if they were forced to litigate those questions in Queensland. Although it is difficult to be dogmatic at this stage, I am inclined to think that it would be cheaper and more convenient to resolve the dispute by a trial in Brisbane than by one in Melbourne. The only disputed factual issues appear to be connected with the customers just mentioned who are, on the evidence, closer to Brisbane than to Melbourne. This is relevant in determining whether transfer to Victoria is the "more appropriate" course under s.5(4)(b)(i) of the Cross-vesting Act.

7. Mr Baston relied upon a clause in one of the agreements between the parties, being Exhibit "E" to the affidavit of the fifth applicant. Under this document, there was a sale of the first respondent's manufacturing machine to the second applicant for $750,000, together with certain stock. The agreement also provided that during a certain period there would be sales of underlay between the parties and it is those sales which are the subject of the action in the Victorian Supreme Court. Clause 19 of Exhibit "E" says:
   

"This Agreement shall be deemed to be governed by the Laws of the State of Victoria and the parties agree to submit to the

jurisdiction of the Victorian Courts and Appellant (sic) Courts

therein for the purposes of giving effect to this Clause".

1. Clause 19 does not say that the parties are not at liberty to sue other than in Victoria, but merely that the parties agree to submit to the jurisdiction of the Victorian Courts. Nevertheless, it appears to me that the presence of this clause is a factor weighing in favour of the respondents, as supporting the notion that the true intention of the parties was that litigation about the agreement should take place in Victoria and not elsewhere.

2. Other matters were relied upon as bearing upon the exercise of the discretion under the Cross-vesting Act, but it is my opinion that only one, in addition to those already mentioned, requires consideration. On the evidence presented for the applicants, they intended to sue in this Court in Brisbane well before the date upon which the Victorian suit was begun and, further, would have done so but for certain misadventures. It was emphasised by Ms Batch on behalf of the applicants that this evidence showed that the institution of the proceedings in this Court was not merely a reaction to the Victorian suit.

3. In my opinion, the matter just mentioned does not assist the applicants. There is no doubt that the first respondent was entitled to issue a writ out of the Supreme Court of Victoria, as it did; it was not obliged to wait for an action to be instituted by its prospective opponents. Although there is no question of fault being relevant the fact is that the Victorian suit was begun first and, at least in marginal cases, that must, in my opinion, be treated as material in considering the s.5(4)(b)(i) power. I have not overlooked the suggestions made in the authorities that under the cross-vesting legislation one must take into account "the prima facie right of a plaintiff to insist upon the exercise of competent jurisdiction which he has regularly invoked": see Seymour-Smith v Electricity Trust of South Australia (1989) 97 FLR 160 at 174. But even if, which I am respectfully inclined to doubt, the application of such a principle is ever of any practical value in resolving the problems which arise under the cross-vesting legislation, it is plainly of no use when (as here) each party is equally entitled to rely upon the principle.

4. In summary, the main circumstance which favours the applicants is the location of those who, as it seems to me, are likely to constitute the majority of the witnesses in the case. The other circumstances tend against the applicant: their suit was not that which was first begun, the dispute, looked at broadly, is of a kind ordinarily handled by State or Territory Courts and the relevant contract suggests an intention of the parties that disputes concerning it should be resolved in Victorian Courts. I am of the view that a case for transfer has been shown under s.5(4)(b)(i) of the Cross-vesting Act; it is more appropriate that the proceeding instituted here be determined by the Supreme Court of Victoria, where the earlier, related, proceedings are pending.

5. I therefore propose to order, in accordance with the respondents' notice of motion, that the proceedings in this Court be transferred to the Supreme Court of Victoria.