Amcor v Barnes
[2007] VSC 515
•11 December 2007
From
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
No. 8181 of 2007
| AMCOR AND ANOTHER | Plaintiffs |
| v | |
| BARNES AND OTHERS | Defendants |
JUDGE: | OSBORN J | |
WHERE HELD: | MELBOURNE | |
DATE OF HEARING: | 22 and 23 OCTOBER 2007 | |
DATE OF JUDGMENT: | 11 DECEMBER 2007 | |
CASE MAY BE CITED AS: | AMCOR v BARNES & ORS | |
MEDIUM NEUTRAL CITATION: | [2007] VSC 515 | |
---
Application by defendants to transfer proceedings to the Supreme Court of NSW – pre-existing proceedings in this court in which the first plaintiff is a defendant – both proceedings concerned with common transactions in part – allegations made in this proceeding of involvement by the defendants in wrongful actions of the plaintiff in the pre-existing proceeding – real relationship between the issues and facts in both proceedings – consequences thereof – substantial connection between NSW and the subject matter of this proceeding – real prospect of consequential loss to defendant if this proceeding not transferred to NSW – requirement of usual undertaking as to damages by plaintiffs if proceeding not transferred – s.5(2) Jurisdiction of Courts (Cross Vesting) Act 1987
---
APPEARANCES: | Counsel | Solicitors |
| For the Plaintiffs | Mr J. Elliot SC with Ms R. Enbom | Corrs Chambers Westgarth Lawyers |
| For the First Defendant | Mr A. Rodbard-Bean | Kirby & Co Solicitors |
| For the Second, Third and Fourth Defendants | Mr P. Riordan SC | Mills Oakley Lawyers |
| For the defendant and plaintiffs by counterclaim in proceeding 9420 of 2004 | Mr P. Solomon | Allens Arthur Robinson Lawyers |
| For the plaintiffs and defendant by counterclaim in proceeding 9420 of 2004 | Mr C. Gunst QC | A.J. Macken & Co. Lawyers |
HIS HONOUR:
This proceeding (the ”Amcor proceeding”) arises out of a dispute between the first plaintiff (“Amcor”) and persons previously employed by it in a managerial capacity (together with corporate entities involved in relevant dealings).
When the matter came before me in the Practice Court on 22 and 23 October 2007, I referred to mediation both this proceeding and what were asserted to be related proceedings. In the event, mediation has proved unsuccessful and it is necessary to determine a series of procedural questions.
By summons dated 3 September 2007, the plaintiffs seek an order that the Amcor proceeding and proceeding 9420 of 2004 (the “Hodgson proceeding”) be heard together and that the evidence and discovery in each proceeding be evidence and discovery in the other proceeding.
By summons dated 26 October 2007, the second, third and fourth defendants in this proceeding seek an order pursuant to s.5(2) of the Jurisdiction of Courts (Cross-Vesting) Act 1987 (“the Cross-Vesting Act”) that the Amcor proceeding be transferred to New South Wales.
By summons dated 8 October 2007, the first defendant seeks a like order that the Amcor proceeding be transferred to New South Wales.
The Cross-Vesting Legislation
Section 5 sub-section (2) of the Cross-Vesting Act provides:
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) it appears to the first court that –
(i)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;
(ii) 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;
(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 sub‑paragraph (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 jurisdictions; and
(C) the interests of justice –
it is more appropriate that the relevant proceeding be determined by that other Supreme Court; or
(iii)it is otherwise in the interests of justice that the relevant proceeding be determined by the Supreme Court another State or of a Territory –
the first court shall transfer the relevant proceeding to that other Supreme Court.
The defendant’s application is made under s.5(2)(b)(iii).
In BHP Billiton Ltd v Schultz[1] the High Court confirmed that in determining such an application, a court must be satisfied as to which is the “more appropriate forum”, in the sense that it has the most real and substantial connection with the subject matter of the proceeding.
[1](2004) 221 CLR 400.
As Hollingworth J has observed:[2]
Factors which may be relevant include the connection between the alleged conduct and the jurisdiction, the governing law, any choice of jurisdiction clause, as well as issues of cost and convenience to the parties, including where the parties and witnesses live and carry on business. The High Court has also affirmed that it is inappropriate to start from a presumption that a plaintiff's initial choice of forum carries independent weight.
[2]Internet Business Systems Australia Pty Ltd v Webb & Ors [2007] VSC 347 [9].
In the present case, it may also be observed that s.5(2)(b)(i) recognises that if a particular proceeding is related to another proceeding pending in the Supreme Court of a State or Territory, that factor may make it more appropriate that the relevant proceeding be determined by that Supreme Court.
In BHP Billiton Ltd v Schultz Gleeson CJ, McHugh and Heydon JJ noted:[3]
The interests of justice are not the same as the interests of one party, and there may be interests wider than those of either party to be considered. Even so, the interests of the respective parties, which might in some respects be common (as, for example, cost and efficiency), and in other respects conflicting, will arise for consideration. The justice referred to in s 5 is not disembodied, or divorced from practical reality.
[3]At 421 [15].
In the present case, the plaintiffs in the Amcor proceeding contend that the relationship between the Amcor and the Hodgson proceeding is such that both should be heard together in this State. This contention is put in part by reference to considerations wider than the interests of the parties themselves, in part by reference to interests the respective parties have in common relating to cost and efficiency and in part by reference to considerations in respect of which the parties have conflicting interests.
The defendants contend that the connection between the subject matter of the Amcor proceeding and New South Wales is such that it is more appropriate the Amcor proceeding proceeds separately in New South Wales. Their contentions are grounded both in the common interests of the respective parties relating to cost and efficiency, and other matters affecting their position in particular.
The plaintiffs in the Hodgson proceeding, who were also heard on the applications of the plaintiffs in the Amcor proceeding, contend that the hearing of the Hodgson proceeding should not be shackled to the Amcor proceeding and thereby delayed.
Background
It is necessary to say something about previous proceedings in order to understand the context in which the parties have made their submissions in this proceeding. A useful starting point is the decision of Williams J in the Hodgson proceeding made on 5 July 2007, with respect to an application for release from undertakings relating to material produced under a non-party discovery order and an Anton Pillar order in proceedings in the Federal Court. The application was brought to facilitate proposed proceedings in New South Wales in respect of what is now, in general terms, the subject matter of the Amcor proceeding.
The Federal Court proceeding
The Federal Court proceeding was commenced on 10 November 2004 by Amcor, Amcor Packaging (Australia) Pty Ltd, Fibre Containers (Queensland) Pty Ltd, Lynyork Pty Ltd, ACN 089 523 919 CCC Pty Ltd, and, from 15 November 2004, Service Containers and Envirocrates Pty Ltd against Mr Mihelic, Mr Sangster, Christopher Roger Bayley, Mr Barnes, Australasian Manufacturing Consulting Group Pty Ltd and, from 15 November 2004, the plaintiff (“Mr Hodgson”).
The individual respondents to the Federal Court proceeding were, until about September 2004, employees of the applicant companies. The proceeding involved claims for breaches of obligations of confidence, fiduciary duty and the Corporations Act 2001. The relief sought included the delivery up of documents.
On 11 November 2004, under the Anton Pillar order made the previous day, documents were seized from premises associated with the respondents and the computer containing the Barnes’ Letter Information was seized from Mr Barnes’ premises.
The Federal Court proceeding was compromised on 16 December 2004. That day, Merkel J gave leave for the use of documents, the subject of an undertaking to the Federal Court in that proceeding, for the purpose of, amongst other things, making applications in this proceeding (which had already been commenced by Mr Hodgson in this Court).
Under the terms of the Federal Court order, the applicants were permitted to retain documents and information, including the Barnes Letter Information, and required to return other documents to solicitors for Carter Holt Harvey (a commercial competitor of Amcor) and to the solicitors for the respondents in the Federal Court proceeding. Copies of the documents remaining in their possession or that of their legal representatives were to be destroyed, after information had been derived from them for purposes which included that of making applications in this proceeding.
The proceeding in this Court
Mr Hodgson had commenced [the proceeding before Williams J] against Amcor, by a writ issued on 3 December 2004. In this proceeding, Mr Hodgson claims to be entitled to a termination payout from Amcor, his former employer.
Amcor filed a defence on 27 January 2005.
On 10 March 2005, Amcor applied for an order granting leave to its solicitors to disclose to Ms McPherson [an officer of Amcor] a draft amended defence and counterclaim and information relating to that draft derived from the material obtained under the Anton Pillar order. That leave was granted on 4 April 2006 by Harper J. Ms McPherson undertook to the Court, amongst other things, not to use the confidential material disclosed to her for purposes other than those of this proceeding.
On 21 April 2006, Harper J granted Amcor leave to file and serve the amended defence and counterclaim. The transferors of the ACB business, ACB, and the Service Containers business, Service Containers were added as plaintiffs to the counterclaim and a company allegedly controlled by Mr Hodgson, Bankson Pty Ltd (“Bankson”), was added as a second defendant to the counterclaim.
The amended defence and counterclaim incorporates the contents of confidential annexures which refer to information the subject of the undertakings in the Federal Court proceeding.
Confidential annexure “C” to the amended defence and counterclaim contains allegations against Mr Hodgson and Bankson, relating to the sale of the ACB business and the sale of the Service Containers business (described as the “Service Packaging Business”). The sales are each challenged on the basis that they were made on uncommercial terms. Amongst other things, it is alleged in confidential annexure C that Mr Hodgson aided and abetted or was knowingly involved in conduct of the proposed defendants, Mr Barnes and Mr Sangster, as well as conduct of Mr Mihelic and Mr Bayley. It is also alleged that he aided and abetted or was knowingly involved in their respective acquisitions of interests in each business.
On 30 June 2006, Harper J made the non-party discovery orders. Those orders include orders against Mr Mihelic and a company associated with him, Sampson Solo Pty Ltd, Mr Barnes, Astra and Brobel and Mr Vickery. Discovery was made in accordance with the non-party discovery orders.
The application
It is in this context that the applicants apply for release from the undertakings in respect of the subject material, for the purposes of the proposed proceeding.[4]
The correspondence between solicitors in relation to the application is exhibited to the Macken affidavit. By their letter to the applicants’ solicitors dated 19 June 2007, the respondents’ solicitors raised the issue of a potential abuse of process by the commencement of the proposed proceeding. They referred to their previous letter of 21 May 2007, addressing the same issue, to which there had been no response. They said that the applicants would appear to make the same allegations against the proposed defendants in the [proposed] New South Wales proceeding as are made against Mr Hodgson in relation to the transactions sought to be impugned in this proceeding. They also pointed out that, if it were to be the case that the same allegations were not to be made in relation to those transactions, then it was possible that the allegations in the New South Wales proceeding would be inconsistent with those made in this Court.
The respondents’ solicitors pointed out that the subject documents and information were produced in the non-party discovery application to Harper J for the limited purpose of use in this proceeding. They stated that, if the applicants wished to make an application for discovery against a prospective defendant or defendants under Order 32.05, then that is what they should do. In such circumstances, they argued, the usual course would be to include a proposed statement of claim amongst the material supporting the application.[5]
[4]The Court was told Amcor proposed inter alia to sue Barnes in respect of both sales of businesses referred to above and to sue Holihan with respect to the second.
[5][2007] VSC 237R.
In her decision, her Honour referred to the authorities stating that the fundamental principle governing the discretion which she was asked to exercise, was that the Court should not release or modify the implied undertaking as to confidentiality unless there were special circumstances and the release or modification would not occasion injustice to the person who gave discovery of the documents in issue.[6]
[6]Citicorp Life Insurance Ltd v Lubransky [2005] VSC 101 at 63 and the authorities there summarised by Hargrave J.
Her Honour recorded that it was submitted on behalf of Amcor that the appropriate forum for the proposed proceeding was the Supreme Court of New South Wales, because all the proposed defendants except Mr Sangster were resident or incorporated in New South Wales. Further, the businesses they operate are there, the relevant sale agreements were negotiated in that State and are expressly governed by its law, and the parties have waived any claim that New South Wales is an inconvenient forum.
Conversely, it was argued for Hodgson and an associated company that the Court might be lending itself to an abuse of process by acquiescing to Amcor’s request. Amcor had not put a draft statement of claim in the proposed proceeding before the Court. Such information as was provided by Amcor as to the proposed content of the allegations to be made in the proposed proceeding, suggested that the same or conflicting allegations would be made in two different courts. Reference was made to underlying policy considerations articulated by French J in Sea Culture Pty Ltd v Scoles.[7] Her Honour concluded as follows:
[7](1991) 32 FCR 275 at 279.
Release from undertakings
I am not persuaded that the Court should relieve the applicants of their undertakings as to the use to which the materials discovered in this proceeding and the Federal Court proceeding may be put. In my view, the applicants have not established the existence of the requisite “special circumstances”.
They have told the Court that they are in the process of preparing a statement of claim in the proposed proceeding, notwithstanding the effect of the undertakings. Indeed, it is unclear from the applicants’ affidavit material precisely what information, presently unknown to them, would be provided by the disclosure sought. It is only some of the subject information which Ms McPherson thinks may be unknown to the applicants.
It is not clear from the materials presently before the Court whether the making of allegations against the respondents in the New South Wales Supreme Court will amount to an abuse of process. However, it does appear from those materials that the propriety of aspects of the two business sale transactions is highly likely to be in issue in both courts. There would clearly be a risk of inconsistent findings if that were to be the case. The Court should not assist in what might amount to an abuse of process. The interest of justice would not be served by such an outcome.
As the respondents’ solicitors have pointed out, a draft pleading would provide the proper basis for the requisite analysis of the allegations and consideration of any request relating to the disclosure or use of documents presently the subject of undertakings.
In my view, the applicants have failed to establish the existence of “special circumstances” justifying the release sought. The applications for release should be refused.
The parties now come before the Court in circumstances where Amcor has instituted proceedings against the parties who were at the time the matter came before Williams J no more than the subject of proposed proceedings. Further, it has pleaded its claim against the defendants in the Amcor proceeding meeting the complaint previously levelled against it that its proposed allegations had not satisfactorily crystallised.
Having now chosen to institute proceedings in Victoria, it is met by the proposition which it previously put to the Court that the proceedings should properly be constituted in New South Wales.
In turn, Hodgson resists orders for the joint hearing of the Amcor and Hodgson proceedings. Moreover, the defendants to the Amcor proceeding seek the transfer of those proceedings to New South Wales.
The Pleading in the Amcor Proceeding
By its statement of claim, Amcor alleges that it is the holder of all issued share capital in two subsidiary companies. The subsidiaries respectively operated a packaging materials business known as “service containers” and a corrugated packaging business which I will refer to as “the corrugated box business”.
The first defendant Barnes is alleged to have been employed by Amcor as a regional general manager, filling a series of roles within New South Wales in and between 2000 and 2004. He is said to have had general managerial responsibilities with respect to the two businesses I have referred to. It is said he was also charged with the supervision of one Hottes and reported directly to the group general manager Hodgson.
The second defendant, Holihan, is alleged to have been employed by Amcor in and between December 1998 and July 2003 as the general manager of the corrugated box business. He was further the sole director of the third defendant which purchased this business from 2 June 2003. It is alleged both Barnes and Holihan owe statutory and fiduciary duties to Amcor with respect to the conduct of its business.
It is alleged Barnes breached his duties to Amcor during the period between early 2001 and February 2002 when “in consultation with Hodgson” he negotiated and authorised the sale of the service containers business to interests associated with Hottes.
It is specifically alleged that in so doing Barnes:
was involved (as that term is defined in s.79 of the Corporations Act 2001) in the conduct of Hodgson using his position to gain an advantage for himself and someone else and further alternatively to cause detriment to Amcor, in contravention of s.182(2) of the Act, by reason that the first sale agreement was uncommercial and detrimental to the interests of Amcor, and, further alternatively, was uncommercial and substantially for the benefit of the ACB Co purchaser and Holihan.[8]
[8]Statement of Claim [15].
It is further alleged that Barnes breached his duties to Amcor during the period between September 2002 and 2 June 2003 when again “in consultation with Hodgson” he negotiated and authorised the sale of the corrugated box business.
It is specifically alleged that in so doing Barnes:
was involved (as that term is defined in s.79 of the Corporations Act 2001) in the conduct of Hodgson using his position to gain an advantage for himself and someone else and further alternatively to cause detriment to Amcor, in contravention of s.182(2) of the Act, by reason that the second sale agreement was uncommercial and detrimental to the interests of Amcor, and, further alternatively, was uncommercial and substantially for the benefit of the ACB Co purchaser and Holihan.[9]
[9]Statement of Claim [21].
It is further alleged that by reason of his involvement with the purchase of the corrugated box business, Holihan breached his statutory duty to Amcor and:
was involved (as that term is defined in s.79 of the Act) in the conduct of Barnes, and further alternatively Hodgson, using his/their position to gain an advantage for someone else and further alternatively to cause detriment to Amcor, in contravention of s.182(2) of the Act.[10]
[10]Statement of Claim [25].
Further and alternatively, it is alleged Holihan breached fiduciary duties owed to Amcor and that interests obtained by him as a result of the purchase of the corrugated box business are held pursuant to a constructive trust.
Relying upon the above allegations, Amcor seeks declaratory relief, damages, in the alternative equitable compensation, and other consequential relief.
It is apparent from the statement of claim that:
(a)the claim is squarely concerned with businesses formerly operated by Amcor and in respect of which Hodgson is alleged to have been in a superior managerial position respectively to both Barnes and Holihan;
(b)the claim arises out of sale transactions in respect of two subsidiary businesses;
(c)the claims made against Barnes and Holihan are expressly formulated in part by way of allegations that they acted “in consultation” with Hodgson;
(d)the breaches of duty alleged against Barnes and Holihan are expressly pleaded to include participation in breach of statutory and equitable duties by Hodgson towards Amcor in respect of the sale of the service container and cardboard box businesses; and
(e)Amcor seeks declarations and other equitable relief consequent upon such alleged breaches.
I do not accept Mr Gunst’s submission that the references to Hodgson are of “no consequence”. As I read the pleading they are independently significant and may, if made out, give rise to a distinct basis for relief.
The Pleadings in the Hodgson Proceeding
Hodgson’s claim is one for moneys due upon summary dismissal from his employment.
The assessment of the pleadings in the Hodgson proceeding is complicated by the fact that the defence and counterclaim raised by Amcor in that proceeding is in part raised by way of allegations in respect of confidential information, which has not been disclosed to Holihan,[11] and was not disclosed to the Court on the hearing of the applications before me.
[11]Nor to the legal advisers who have drawn the statement of claim and appeared on behalf of the plaintiffs in the Amcor proceeding.
It is apparent, however, that the defence and counterclaim of Amcor specifically put in issue Hodgson’s role with respect to the sale of the service container and corrugated box businesses. The defence also makes allegations with respect to Hodgson’s participation in the Australian Manufacturing Consulting Group (AMCG).
Mr Gunst QC, who appeared for Hodgson, agreed that the Hodgson proceeding involved issues, inter alia, concerned with both the sale of the cardboard box business and the sale of the service containers business. It is alleged by the defence and counterclaim, that Hodgson breached statutory and fiduciary duties to Amcor, and the two subsidiary companies which formerly conducted the corrugated box business and the service containers business of which he was a director.[12]
[12]Para 6B of the amended defence and counterclaim.
It is said, in essence, that Hodgson caused or took part in the selling of the two businesses to entities in which he had a secret financial interest.
By way of reply and defence to Amcor’s defence and counterclaim, Hodgson alleges, inter alia, that the Federal Court proceeding which settled in December 2004, to which he was a party, directly involved the same issues of fact or law as those raised in Amcor’s defence and counterclaim in the Hodgson proceeding. It is further alleged that the counterclaim raises matters which were, or should have been, brought forward in the Federal Court proceeding.
In reply, Amcor asserts that Amcor at no time prior to the settlement of the Federal Court proceeding knew of the facts enabling it to make its counterclaim. Amcor’s further and better particulars of this allegation make clear that it alleges in the Hodgson proceeding that it was not aware at the date of settlement that the corrugated box business had been sold at a price and on terms which were not reasonably commercial and that Hodgson had acquired an interest in the business for himself.
Further, Amcor alleges that it was not relevantly aware that Hodgson had been knowingly involved in the acquisition of interests in the corrugated box business by Barnes and others previously associated with Amcor. Likewise, it is alleged Amcor was not aware at the date of the settlement of the Federal Court proceeding that the service containers business had been sold at a price and on terms which were not reasonably commercial and that Hodgson had acquired an interest in that business. Nor, it is alleged, was it known that Hodgson had been involved in the acquisition of interests in that business by Barnes and others previously associated with Amcor.
It is apparent from the open pleadings in the Hodgson proceeding:
(a)that the defence and counterclaim make allegations with respect to the same sale transactions as those in issue in the Amcor proceeding;
(b)that as in the Amcor proceeding, Hodgson is alleged to have breached statutory and equitable duties to Amcor and subsidiaries in respect of those transactions; and
(c)that as in the Amcor proceeding, the relationship of Hodgson and Barnes is in issue in connection with the two sale transactions.
The Parties’ Submissions
Amcor submits that the Amcor proceeding should be heard together with the Hodgson proceeding because the interrelationship of the matters in issue demands as a matter of justice that this should occur.
In turn, in submissions before me Mr Gunst QC accepted on behalf of Hodgson there was some commonality of fact between the proceedings. He opposed the making of any order that the fresh proceeding be heard together with the Hodgson proceeding principally on the basis that to do so would materially and unfairly delay the hearing of the Hodgson proceeding.
Counsel for Barnes and Holihan and entities associated with them principally submitted that the fresh proceeding should be cross-vested to New South Wales because of the intimate connection between its subject matter and that jurisdiction. They also raised a series of consequential matters going to the relative convenience of New South Wales as a forum.
Related Proceedings
In my view, it is sufficiently plain that the Hodgson proceedings and the current proceeding raise interconnected allegations and issues to such a degree that there is a real likelihood of significant issues of fact and law being common to both proceedings. This likelihood in turn gives rise to a probability that:
(a)there will be a duplication of resources expended in the two proceedings unless they are heard together;
(b)there will be a waste of judicial resources unless they are heard together; and
(c)there is a prospect of different findings in different jurisdictions with respect to common issues. This prospect is contrary to the public interest in maintaining confidence in and respect for the authority of the courts.[13]
[13]Cf Sea Culture v Scoles (above) at 279.
Further, it is doubtful whether Amcor’s claims for equitable relief against Hodgson, Barnes and Holihan can be satisfactorily split between two jurisdictions. Amcor seeks declarations in respect of alleged breaches of s.182 of the Corporations Act on the part of Barnes and Holihan by way of involvement in the conduct of Hodgson. It further alleges breaches of fiduciary duty which are alleged to have occurred in consequence of actions taken in consultation with Hodgson. There is much to be said for the proposition that the observations of Bryson JA in Yeshiva Properties No. 1 v Marshall[14] are pertinent:
To my mind it is doubtful whether an equitable remedy against an alleged accessory should be granted to a plaintiff who has given the alleged defaulting trustee or fiduciary a release, or has decided not to sue the trustee or fiduciary. Doing equity as between the plaintiff and the accessory, who is not the person principally liable, seems to me to be possible only if the plaintiff also pursues his claim against the person principally liable. A plaintiff who seeks an equitable remedy commits himself to a suit in which all equities in the controversy will be resolved together, and the Court should not allow the plaintiff to decide which party to sue and which party to ignore or give a release, perhaps for forensic advantages related to assessed readiness to contest the claim.
[14](2005) 219 ALR 112 at 134 [80].
Other Relevant Considerations
It remains to consider the countervailing matters raised by the defendants.
First, it was submitted on behalf of Hodgson that the finalisation of the Hodgson proceeding would be unfairly delayed if it were to be coupled with the Amcor proceeding.[15] I do not accept this submission. I accept that Hodgson is 64 and has had ongoing health problems, but the interlocutory history of the Hodgson proceeding indicates that its trial has not been expedited or pursued with vigour by Hodgson.[16] In my view, directions can and should be given which would expedite the Amcor proceeding and bring both proceedings to trial relatively expeditiously.
[15]At one point Mr Gunst conceded: “If it had been done three years ago then there couldn’t be much argument.”
[16]There are outstanding issues of discovery, there is no court book and no witness statements or outlines of evidence have been exchanged.
In this context, I accept the view expressed in the affidavit of Julia Frances McPherson that if the Hodgson proceeding is, as she emphasises on behalf of Amcor, a 3 to 4 week proceeding in its own right, it is unlikely to be heard earlier than late next year in any event.
Furthermore, affidavit material filed on behalf of Amcor explains the delay in issuing the current proceeding in terms which if ultimately proven, demonstrate that its delay in issuing the Amcor proceedings is substantially explicable by reason of initial lack of knowledge of relevant matters known to the defendants and Hodgson. A further material change of circumstances occurred at the end of March 2007 when Amcor recovered the service containers business. It follows that the underlying responsibility for much of the delay in the issue of the Amcor proceeding is itself a matter in issue.
Having said this, although I accept there should be joint management of the proceedings if the Amcor proceeding is not cross-vested to New South Wales, the question of the terms of joint management should in my view be left open. It is not appropriate to seek to resolve questions with respect to documentary evidence and other matters today.
Next, it is submitted on behalf of Barnes that Amcor is seeking a tactical advantage by proceeding against Barnes in Melbourne. The short answer to this is that Amcor has, in the first instance, been brought to Court in this jurisdiction by Hodgson. In these circumstances it seems to me that the real question is whether the two proceedings now raise sufficiently interrelated issues to require them to be heard together in the interests of justice.
It is submitted on behalf of both Barnes and Holihan that the subject matter of the Amcor proceeding is concerned with transactions in New South Wales. This, it is emphasised, was what Amcor itself submitted to Williams J when it pointed to the fact that the then proposed defendants were relevantly resident or incorporated in New South Wales, that the businesses they carry on operate there, that relevant sale agreements were negotiated in that State and are expressly governed by its law, and that the parties waived any claim that New South Wales is an inconvenient forum.
I accept that each of these considerations supports the view that New South Wales is the convenient forum for the current proceeding. The most significant factors are the residency of the defendants in New South Wales, the fact that the relevant businesses operate there and the fact that the relevant sale negotiations, including the resolution of collateral arguments, occurred there.
The consequences of these considerations are amplified in the affidavit sworn and filed on behalf of the defendants in the Amcor proceedings. I accept that it would be seriously inconvenient for Holihan personally to be absent from his work for any extended period of time and that if he were required to attend a trial in Melbourne for up to a month this may impact adversely on the third defendant’s business. Like considerations apply to Barnes.
The question of the law governing the agreements is of less weight because there is no element of the claim pleaded which is peculiar to the law of New South Wales.[17]
[17]See Toll (FHL) Limited & Ors v Ronald Stanley Finemore & Ors [2001] VSC 467 at [26].
Another consideration is the question of potential hardship to the defendants in respect of bringing their witnesses to Court. I do not accept that all those who played a part in effecting the sale of the service container and corrugated box businesses will be relevant witnesses. Indeed the overwhelming probability is that they are not. Rather, it seems to me that Amcor’s claim bears principally on the actions of the defendants and Hodgson themselves and it is difficult to easily assess who will or will not be a witness to matters which are not in issue. Accordingly, it is also difficult to weigh up the extent to which it will in fact be necessary for Barnes and Holihan to call witnesses from New South Wales.
Further, the risk pointed to is necessarily counterbalanced by the prospect of contemporaneous commercial proceedings in two jurisdictions involving in part the same issues and factual matrix. That prospect is likely in my view to significantly multiply the inconvenience to both the parties and relevant witnesses. It is also clear that a number of potential witnesses relevant to the Amcor proceeding (including Hodgson) are in Victoria. Further, it is apparent that the litigation is concerned with alleged financial losses which do not render the costs and inconvenience of interstate travel (when necessary) disproportionately burdensome to the parties. Such costs have been accepted as not being unduly onerous in other cases and can be minimised with the use of appropriate technology.[18]
[18]Ibid at 22 and see the observations of Gummow J in the BHP Billiton case above at 445 [99].
It was submitted on behalf of Holihan that the claim made against Holihan in the Amcor proceeding is not connected to the facts in issue in the Hodgson proceeding. I do not accept this is so. The claim made against Holihan is expressly pleaded by way of allegations that Holihan acted jointly with Hodgson and was party to breaches by Hodgson of his duties to Amcor. The counterclaim by Amcor in the Hodgson proceeding is concerned in part with the sale of businesses forming the subject matter of Amcor’s subsequent claim against Holihan. Further, I accept Mr Elliott’s submission, that if it is appropriate to proceed in Melbourne against Barnes (who is sued in respect of both sale transactions) then it follows Mr Holihan should also be the subject of allegations in this Court.
It was also submitted that if the matters proceeded together, Holihan would be drawn into a proceeding which in part involved allegations against Hodgson concerning transactions in which Holihan played no part and in particular the AMCG allegations. This is true but it is a matter which one would expect could be addressed by appropriate case management.
Lastly, it was submitted that if Amcor’s submissions are accepted the allegations made against Holihan could have been made by way of counterclaim in the Hodgson proceeding. In principle this may be correct but I do not find the proposition persuasive of the justice of the situation. The real question concerning the Hodgson proceeding is whether Amcor’s delay renders a joint hearing inequitable. I am not satisfied it does.
When the above matters are weighed together it seems to me that on balance the Amcor proceeding should remain in Victoria and should be managed and heard jointly with the Hodgson proceeding in the interests of justice. The practical considerations to which the other parties have referred do not outweigh the commonality of issues which I have identified and the consequences which flow from that commonality.
Nevertheless, I accept that the potential consequences for the defendants of trial in Melbourne are such that it is in the interests of justice that the price for dismissing the cross-vesting applications and hearing the Amcor proceeding in Melbourne should be the giving of the usual undertaking as to damages. The defendants have satisfied me that the potential for loss to them arising from this venue goes beyond what would ordinarily be payable by way of a costs order in the event they are ultimately successful.
Accordingly, if such an undertaking is given, I propose to order that subject to further order the Amcor proceeding be heard together with the Hodgson proceeding and that both matters be listed together for further directions before a judge nominated by the Listing Master.
Further, upon the giving of an undertaking, I will dismiss both the summonses seeking the transfer of the Amcor proceeding to New South Wales.
---
3
4
0