Anderton v Enterprising Global Group Pty Ltd
[2003] WASC 67
ANDERTON & ANOR -v- ENTERPRISING GLOBAL GROUP PTY LTD & ORS [2003] WASC 67
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2003] WASC 67 | |
| Case No: | CIV:2152/2002 | 17 MARCH 2003 | |
| Coram: | HASLUCK J | 4/04/03 | |
| 11 | Judgment Part: | 1 of 1 | |
| Result: | Defendants' application dismissed | ||
| B | |||
| PDF Version |
| Parties: | COLIN JAMES ANDERTON ANDERTON ENVIRONMENTAL CORPORATION PTY LTD (ACN 083 044 973) ENTERPRISING GLOBAL GROUP PTY LTD BIOCENTRAL LABORATORIES LTD (ACN 097 539 592) GEOFFREY JOHN TURLEY FRANCIS VINCENT McNAMARA GENARGI KRASNOV |
Catchwords: | Cross-vesting jurisdiction Proceedings commenced in Western Australia pursuant to choice of law provision in subject contract Application by defendant to transfer proceedings to South Australia Criteria for transfer having regard to "interests of justice" precept in relevant provision Whether approach adopted in Western Australia is consistent with approach adopted in other jurisdictions Onus of proof Turns on own facts |
Legislation: | Jurisdiction of Courts (Cross Vesting) Act 1987, s 5(2) |
Case References: | Australian Securities Commission v Marlborough Gold Mines Ltd (1993) 177 CLR 485 Bankinvest AG v Seabrook (1998) 14 NSWLR 711 Douglas v Philip Parbury & Associates (a firm) [1999] WASC 15 James Hardie & Coy Pty Ltd v Barry (2000) 50 NSWLR 357 Mullins Investments Pty Ltd v Elliot Exploration Co Pty Ltd (1990) 1 WAR 531 Patrick Badges Pty Ltd v Commonwealth of Australia [2002] NSWSC 221 Rossi Gearmotors Australia Pty Ltd v Continental Conveyor and Equipment Pty Ltd [2003] WASC 42 Whyalla Refiners Pty Ltd v Grant Thornton (a firm) (2001) 182 ALR 274 Baffsky v John Fairfax & Sons Ltd (1990) 97 ACTR 1 Bailey (by his next friend the Public Trustee) v Climaze Holdings Pty Ltd, unreported; SCt of WA; Library No 980455; 12 August 1998 Bond v Larobi Pty Ltd, unreported; SCt of WA; Library No 920057; 31 December 1991 Platz v Lambert (1994) 12 WAR 319 Rogan v Rushton (Qld) Pty Ltd [2002] VSC 375 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- First Plaintiff
ANDERTON ENVIRONMENTAL CORPORATION PTY LTD (ACN 083 044 973)
Second Plaintiff
AND
ENTERPRISING GLOBAL GROUP PTY LTD
First Defendant
BIOCENTRAL LABORATORIES LTD (ACN 097 539 592)
Second Defendant
GEOFFREY JOHN TURLEY
Third Defendant
FRANCIS VINCENT McNAMARA
Fourth Defendant
GENARGI KRASNOV
Fifth Defendant
(Page 2)
- <Party Name1="COLIN JAMES ANDERTON", Type1="First Plaintiff", Name2="ANDERTON ENVIRONMENTAL CORPORATION PTY LTD (ACN 083 044 973)", Type2="Second Plaintiff", Name3="ENTERPRISING GLOBAL GROUP PTY LTD", Type3="First Defendant", Name4="BIOCENTRAL LABORATORIES LTD (ACN 097 539 592)", Type4="Second Defendant", Name5="GEOFFREY JOHN TURLEY", Type5="Third Defendant", Name6="FRANCIS VINCENT McNAMARA", Type6="Fourth Defendant", Name7="GENARGI KRASNOV", Type7="Fifth Defendant",>
Catchwords:
Cross-vesting jurisdiction - Proceedings commenced in Western Australia pursuant to choice of law provision in subject contract - Application by defendant to transfer proceedings to South Australia - Criteria for transfer having regard to "interests of justice" precept in relevant provision - Whether approach adopted in Western Australia is consistent with approach adopted in other jurisdictions - Onus of proof - Turns on own facts
Legislation:
Jurisdiction of Courts (Cross Vesting) Act 1987, s 5(2)
Result:
Defendants' application dismissed
Category: B
Representation:
Counsel:
First Plaintiff : Mr M E Paterson
Second Plaintiff : No appearance
First Defendant : Mr G R Donaldson
Second Defendant : Mr G R Donaldson
Third Defendant : Mr G R Donaldson
Fourth Defendant : Mr G R Donaldson
Fifth Defendant : Mr G R Donaldson
Solicitors:
First Plaintiff : Michael Paterson & Associates
Second Plaintiff : No appearance
First Defendant : Jackson McDonald
Second Defendant : Jackson McDonald
Third Defendant : Jackson McDonald
Fourth Defendant : Jackson McDonald
Fifth Defendant : Jackson McDonald
(Page 3)
Case(s) referred to in judgment(s):
Australian Securities Commission v Marlborough Gold Mines Ltd (1993) 177 CLR 485
Bankinvest AG v Seabrook (1998) 14 NSWLR 711
Douglas v Philip Parbury & Associates (a firm) [1999] WASC 15
James Hardie & Coy Pty Ltd v Barry (2000) 50 NSWLR 357
Mullins Investments Pty Ltd v Elliot Exploration Co Pty Ltd (1990) 1 WAR 531
Patrick Badges Pty Ltd v Commonwealth of Australia [2002] NSWSC 221
Rossi Gearmotors Australia Pty Ltd v Continental Conveyor and Equipment Pty Ltd [2003] WASC 42
Whyalla Refiners Pty Ltd v Grant Thornton (a firm) (2001) 182 ALR 274
Case(s) also cited:
Baffsky v John Fairfax & Sons Ltd (1990) 97 ACTR 1
Bailey (by his next friend the Public Trustee) v Climaze Holdings Pty Ltd, unreported; SCt of WA; Library No 980455; 12 August 1998
Bond v Larobi Pty Ltd, unreported; SCt of WA; Library No 920057; 31 December 1991
Platz v Lambert (1994) 12 WAR 319
Rogan v Rushton (Qld) Pty Ltd [2002] VSC 375
(Page 4)
1 HASLUCK J: The second, third and fifth defendants have applied for an order that these proceedings be transferred to the Supreme Court of South Australia on the grounds that the Supreme Court of South Australia is the more appropriate forum to determine the matters in issue.
2 The defendants have filed various affidavits in support of the application including principally the affidavit of the third defendant, Geoffrey John Turley, sworn 3 December 2002. The first plaintiff, Colin James Anderton, relies upon his own affidavit sworn 20 January 2003 in opposition to the application.
Background
3 It appears from the Turley affidavit that on or about 10 May 2001 Enterprising Global Group Pty Ltd, or EGG, acquired the exclusive Australian and worldwide rights to manufacture, market and promote various products produced or under the control of the plaintiffs. The products in question are used in fire safety, erosion prevention and deodorising.
4 I note in passing that the document principally relied upon by the plaintiff is a document called "Heads of Agreement" to which the first plaintiff is a party in his own right. The recital indicates that Mr Anderton had developed the products and held intellectual property rights in respect of the same. The vendor is described as such entity as he incorporates to hold the master licences relating to the products.
5 Clause 3.5.4 of the subject agreement allowed for the purchaser to assign its rights. Paragraph 17 of the Turley affidavit establishes that on or about 6 September 2001 EGG nominated the second defendant, Biocentral, as its assignee under the agreement.
6 Clause 5.1 of the subject agreement provides that the agreement is governed by the law in force in South Australia and Western Australia. By cl 5.2 the parties submit to the non-exclusive jurisdiction of the Courts of South Australia and Western Australia and any Courts which may hear appeals from those Courts in respect of any proceedings in connection with the agreement.
7 The plaintiffs allege in the statement of claim that by letter dated 1 May 2002 the corporate defendants were advised that they were in default under the agreement in that they had failed to account for royalties in the prescribed manner and had failed to promote the sale of the
(Page 5)
- products. Further, it is said that by letter dated 8 August 2002 the plaintiffs gave formal notice to the corporate defendants that the contract had been terminated due to their default.
8 The plaintiffs are advancing claims in respect of alleged breaches of contract and infringement of intellectual property rights. The plaintiffs say also that certain representations allegedly made by the corporate defendants that they had the expertise to manufacture and promote the products amounted to misleading and deceptive conduct.
9 The plaintiffs claim a declaration that the agreement has been validly terminated and that the plaintiffs have no further obligations pursuant to the same. Further, they seek an injunction restraining the corporate defendants from manufacturing the products or holding out that they have any rights other than as a non-exclusive distributor of the products. The plaintiffs also seek damages.
10 A statement of defence has not been filed but the evidentiary materials before me establish that the claims being advanced by the plaintiffs will be defended. However, a question has arisen as to where the trial of the action should take place. This requires me to give some consideration to the legal and evidentiary issues arising between the parties.
11 I was informed at the hearing of this application that on 21 January 2003 an order was made by the Supreme Court of Queensland for the winding up of the second plaintiff. Counsel for the first plaintiff made it clear that he was opposing the application on behalf of Mr Anderton only. However, he emphasised that Mr Anderton was a party to the subject agreement and was in a position to advance the claims reflected in the statement of claim in his own right. Counsel on both sides accepted that the winding up order did not preclude an order being made in response to the application before me. However, counsel for the defendants submitted that in reviewing the factors bearing upon the application I ought not to take into account any alleged inconvenience to the plaintiff company as its future was uncertain.
Issues
12 It appears from the affidavit of Emma Christie sworn 3 December 2002 in support of the application to have the proceedings transferred to the Supreme Court of South Australia that she has been instructed to file a defence on behalf of the second, third and fifth defendants denying that
(Page 6)
- they have breached the agreement and denying that the purported termination of the agreement by the plaintiffs is valid. The allegations concerning misleading and deceptive conduct, conspiracy and infringement of intellectual property rights will be defended also.
13 The deponent goes on to say that having regard to the statement of claim and the instructions she has received the central issues in these proceedings are likely to be, first, whether EGG and/or Biocentral have breached material terms of the agreement and, accordingly, whether the purported termination of the agreement is valid; second, whether the products acquired by EGG were sufficiently developed and tested to enable Biocentral to commence the commercialisation and marketing of the products and, third, the proper construction of the terms of the agreement.
14 Emma Christie says further that the defendants intend to call around 15 witnesses in support of their defence all of which witnesses reside in South Australia. Of the witnesses, only five are employees, officers or shareholders of the second defendant. Further details concerning the identity of these witnesses and the nature of the evidence to be given by them is set out in the affidavit of Emma Christie and in the Turley affidavit.
15 It is said in par 29 of the Turley affidavit that as part of its obligations under the agreement Biocentral has expended considerable sums of money on the construction of a manufacturing facility in Thebarton in Adelaide to manufacture the products. Biocentral and Mr Turley will provide evidence in due course of the money spent by Biocentral to enable the company to manufacture, commercialise, market and sell the products.
16 Mr Turley says in par 35 of his affidavit that if he and his principal witnesses are required to spend between 8 to 10 days in Perth for the hearing of the proceedings, Biocentral will be without its key management and staff for that period and the business of the company is likely to be significantly disrupted. It may be necessary to view the Biocentral premises in South Australia.
17 The first plaintiff, Mr Anderton, says in his affidavit that he has read the affidavits of the defendants. He takes issue with the suggestion that it is more appropriate or in the interests of justice for the proceedings to be transferred to South Australia. He says that he decided to commence the action in Western Australia for good and valid reasons, namely, the
(Page 7)
- agreement allowed for an action to be commenced in either Western Australia or South Australia, he and his legal advisers reside in Western Australia, the agreement was negotiated in Western Australia, the factory and manufacturing plant for producing the products the subject of the agreement are in Western Australia and the conduct of a trial outside the State would have an adverse effect upon his business.
18 Mr Anderton goes on to say that although many of the witnesses to be called in the matter reside outside Western Australia the evidence of such witnesses can be taken by video link. He says that, as the sole proprietor of a business, his absence in South Australia for any time referrable to a trial of the action would have a commensurately much greater significance on the affairs of he and his company than on the affairs of Biocentral. The convenience of holding the trial in Western Australia outweighs the inconvenience of holding it in South Australia. In this context, as appears from par 7 of his affidavit, he was referring to a business being run in his own name. He acknowledged that the plaintiff company was not trading at the time he swore the affidavit.
19 I pause to note that by an affidavit sworn 29 January 2003 Ms Christie challenged various of the assertions made by Mr Anderton concerning his proposed witnesses. It was said in this affidavit and by counsel at the hearing that there was a lack of specificity as to the witnesses supposedly to be called by the first plaintiff.
20 It will be useful to look at the statutory provisions and legal principles bearing upon an application of this kind.
Statutory provisions and principles
21 The source of the Court's power to transfer proceedings to another Court is derived from s 5(2) of the Jurisdiction of Courts (Cross-Vesting) Act 1987 which provides (omitting the inessential parts):
"Where:
(a) …
(b) it appears to the first court that:-
(i) …;
(ii) …;
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- (iii) 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."
22 Counsel for the first plaintiff referred to the explanatory memorandum concerning the Act and submitted that the primary objective of the cross-vesting scheme is to ensure that no action will fail in a court through lack of jurisdiction. The intention is that as far as possible no court will have to determine the boundaries between Federal, State and Territory jurisdiction. The memorandum suggests that the provisions relating to cross-vesting will need to be applied only in those exceptional cases where there are jurisdictional uncertainties and where there is a real need to have matters tried together in the one court.
23 In Mullins Investments Pty Ltd v Elliot Exploration Co Pty Ltd (1990) 1 WAR 531 Ipp J indicated that the expression "interests of justice" under s 5(2)(b)(iii) is not meant to be interpreted without limitation. Common law rules continue to apply. It follows that the mere balance of convenience or inconvenience, even if it be marginally in the defendant's favour, is insufficient to displace the plaintiff's prima facie right to require the court to exercise the jurisdiction which it has.
24 The reasoning of Ipp J in Mullins (supra) has been cited with approval in a number of subsequent cases including Whyalla Refiners Pty Ltd v Grant Thornton (a firm) (2001) 182 ALR 274. Miller J noted in that case that a plaintiff invoking the jurisdiction of a court as of right is entitled to have that choice given due weight. A party seeking to upset the plaintiff's choice of a venue which was lawfully open, bears the onus showing that that party will suffer real injustice unless the transfer is made and that the plaintiff will not suffer injustice as a result of the transfer.
25 A similar approach was adopted by McKechnie J in Douglas v Philip Parbury & Associates (a firm) [1999] WASC 15. In that case a company director commenced proceedings against a solicitor in New South Wales in respect of a transaction concerning land in New South Wales. His Honour considered that the claims of the plaintiff company director to have the action heard in Western Australia where the plaintiff resided stood "in equipoise" with the claims of the defendant to have the action heard in New South Wales. However, because of His Honour's acceptance of the principle that prima facie the plaintiff has a right to have
(Page 9)
- the matter determined in the forum he has chosen, the defendant's application to have the matter transferred to New South Wales was dismissed.
26 More recently, in Rossi Gearmotors Australia Pty Ltd v Continental Conveyor and Equipment Pty Ltd [2003] WASC 42 Roberts-Smith J dismissed the application of a defendant based in Sydney to have proceedings brought by a Perth-based supplier of equipment transferred to New South Wales. His Honour reviewed the decided cases and concluded that he should approach the application on the basis that where a plaintiff has chosen a venue which is lawfully open to it, there is an onus on a party seeking an order for transfer to demonstrate some cogent reason why such an order should be made. Due weight must be given to the plaintiff's choice of venue.
27 These cases suggest that factors thought to be relevant will include the governing law of any agreement in dispute, the connection between the alleged conduct which is the subject of the dispute and the jurisdiction, the location of the parties, the location of the witnesses and the location of the documents that are relevant to the action.
28 Counsel for the defendants in the present case submitted that s 5(2)(b)(iii) of the Act requires the Court to decide which is the more appropriate Court to determine the proceedings brought by the plaintiffs. Bankinvest AG v Seabrook (1998) 14 NSWLR 711 at 727; James Hardie & Coy Pty Ltd v Barry (2000) 50 NSWLR 357 at 379; Patrick Badges Pty Ltd v Commonwealth of Australia [2002] NSWSC 221.
29 Counsel for the defendants recognised that such a proposition was not entirely consistent with the approach applied in Mullins (supra) and other cases in Western Australia. However, he referred to the recent and forceful dicta of Spigelman CJ and Mason P in James Hardie (supra) at 361 and 377 respectively which suggested that the "more appropriate" test enunciated in Bankinvest (supra) has received widespread acceptance with the exception of Western Australia and possibly South Australia. Such an approach was said to be consistent with the requirements of a co-operative national scheme. Counsel for the defendants therefore submitted that the time had come for the Supreme Court in this State to put aside the Mullins (supra) approach and determine the transfer issue by reference to what was more appropriate in the interests of justice having regard to the circumstances of the present case.
(Page 10)
30 In seeking to reinforce this line of argument, counsel referred to Australian Securities Commission v Marlborough Gold Mines Ltd (1993) 177 CLR 485 in which the High Court indicated at 492 that a single Judge should not depart from an interpretation placed on uniform legislation by an intermediate Australian appellate court unless convinced that the interpretation in question is plainly wrong. This suggested that a single Judge of the Supreme Court of this State should follow the approach approved by the Court of Appeal in New South Wales in Bankinvest (supra) and James Hardie (supra).
31 As to this aspect of the matter, I am not persuaded to the defendants' point of view. I am not convinced that the observations of the High Court were intended to apply to a situation of the present kind where there is a long line of previously decided cases, in a particular State, albeit decided by single Judges, affirming a particular approach to the legislation in question which endeavours to give effect to the criteria enunciated by the statute, which is consistent with common law principles concerning choice of forum and which reflects a considered view that appears to be compatible with the objects of the legislation. Further, and in any event, it is difficult to discern with confidence the extent of the difference between the two approaches.
32 Counsel for the defendants went on to submit, in the alternative, that irrespective of which approach was followed, the interests of justice in the present case favoured transfer to the Supreme Court of South Australia. The governing law of the agreement allowed for such a course. The connection between the conduct the subject of the proceedings and the presence of a substantial number of witnesses in South Australia justified the proposed transfer.
Conclusion
33 As to the legal issue concerning the interpretation of s 5(2)(b)(iii) of the Act, I see considerable force in the arguments advanced by counsel for the defendants. It is undoubtedly desirable that courts throughout Australia follow a consistent approach in dealing with issues arising under the provision in question. However, the fact remains that to date the Supreme Court in this State has applied the Mullins (supra) approach. It seems to me that I am obliged to follow suit unless and until there is a ruling to the contrary by the Full Court in a suitable case. Accordingly, in dealing with the application before me, I will proceed in accordance with the Mullins (supra) approach.
(Page 11)
34 I accept that the plaintiff was entitled to commence the proceedings in Western Australia. I noted earlier that cl 5 of the agreement allows for such a course to be followed. It follows from the principles emerging from Mullins (supra) and related cases that due weight must be given to the plaintiffs' permissible decision to commence proceedings in this State. It emerges from the decided cases also that the burden lies upon the defendants of persuading the Court that an injustice will result if the application for transfer is not allowed.
35 When one turns to the particular circumstances of the case it becomes apparent that there will be a significant degree of inconvenience and disruption on both sides if the forum preferred by the opposing parties is not selected. One side is bound to be inconvenienced. However, inconvenience does not necessarily equate to injustice. The weight of numbers in regard to the parties and witnesses should not be regarded as determinative of the outcome of an application of this kind. The place where the events occurred giving rise to the various causes of action must also be considered. Further and better particulars of claim filed recently indicate that the initial representations were allegedly made by the director defendants to the first plaintiff at various meetings during a visit to Perth in January 2001. I note that the subject agreement in cl 3.4.4 provided for an initial period of production in this State.
36 In the final analysis, I am not persuaded that the proceedings should be transferred to South Australia. The first plaintiff carries on business in this State. There is evidence before me that he will call upon witnesses resident in this State concerning the product and related events that originated here. In a case where pleadings have not yet closed I am not persuaded that a lack of specificity as to some of the first plaintiff's proposed witnesses weighs heavily against his position. I consider that the nature of the proposed case to be advanced at trial is sufficiently clear.
37 I also give weight to the fact that the contractual arrangements expressly allowed for the proceedings to be commenced in this State. I am of the view that to some extent the inconvenience to the defendants can be ameliorated by the use of video link facilities.
38 In summary, then, the defendants' application will be dismissed. I will hear from the parties as to whether any further orders or directions are required.
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