Andrew & Frewin Pty Ltd v Arrow Ltd
[1990] FCA 247
•06 JUNE 1990
Re: ANDREW AND FREWIN PTY LTD and DT ANDREW AND CO
And: ARROW LIMITED and STUART RUSDEN STONEMAN
No. SG14 of 1990
FED No. 247
Courts
COURT
IN THE FEDERAL COURT OF AUSTRALIA
SOUTH AUSTRALIA DISTRICT REGISTRY
GENERAL DIVISION
Sweeney(1), Davies(1) and Von Doussa(1) JJ.
CATCHWORDS
Courts - practice and procedure - "proper place" of proceedings - application to change refused by primary judge - primary judge intimating trial could be conducted in different places to meet convenience of parties and witnesses - whether primary judge erred in treating location of potential witnesses as matters going only to appropriate venue for trial.
Federal Court of Australia Act 1976 ss.12, 48
Federal Court Rules, O.1, r.4, O.10, r.1(2)(f), O.30, r.6.
National Mutual Holdings Pty Ltd and Ors v. Sentry Corporation and Anor (1988) 83 ALR 434
HEARING
ADELAIDE
#DATE 6:6:1990
Counsel for the appellants : Mr D.W. Smith
Solicitors for the appellants : Randle and Taylor as agents
for Herbert, Creer and Rundle
Counsel for the respondent : Mr N.J.T. Swan
Solicitors for the respondent : Finlaysons
ORDER
1. The appeal be dismissed.
2. The appellant pay the respondent's costs of the appeal.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
JUDGE1
This is an appeal brought by leave from an interlocutory judgment of a single judge of this Court (O'Loughlin J.) dismissing applications for a direction under O.10, r.1(2)(f) of the Federal Court Rules that the "proper place" in relation to the proceedings be changed from Adelaide to Melbourne. The proceedings were commenced in the Adelaide Registry by the respondent to this appeal (Arrow Limited) against Stuart Rusden Stoneman ("Mr Stoneman"), and Andrew and Frewin Pty Ltd, and David Tasman Andrew and Bernard Frewin trading as D.T. Andrew and Co. (together referred to as "the chartered accountants").
Order 1, r.4 provides that in the Federal Court Rules, unless the contrary intention appears :
"'proper place' in relation to any proceeding -
(a) where there has been no transfer means the place at which the proceeding was commenced;
(b) where there has been a transfer means the place to which the proceeding was transferred.
Order 10, r.1(2)(f) provides that the Court may :
"direct that the proceeding be transferred to a place at which there is a Registry other than the then proper place. Where the proceeding is so transferred, the Registrar at the proper place from which the proceeding is transferred shall transmit all documents in his charge relating to the proceeding to the Registrar at the proper place to which the proceeding is transferred."
The proper principles to be applied in deciding the place at which a proceeding, or part of a proceeding, shall be conducted or continued were considered by a Full Court in National Mutual Holdings Pty Ltd and Ors v. Sentry Corporation and Anor (1988) 83 ALR 434 ("Sentry Corporation"). The parties to this appeal do not seek to challenge any aspect of that judgment. The submission of the appellant is that the learned primary judge fell into error in the application of the proper test which the Full Court formulated.
In Sentry Corporation (at p 441) the Court observed that the purpose of the provision in the rules of a proper place is to ensure the orderly and efficient conduct of the business of the Court by requiring all documents filed in a proceeding to be in the custody and charge of the Registry where the matter is then proceeding. However the proper place is also the place of trial unless the Court fixes another place. Order 30, r.6 provides, under the heading "Change of venue" :
"6.(1) Subject to sub-rules (2) and (3), unless the place of trial has been fixed by the Court, the trial of the proceeding shall be at the proper place.
(2) The Court on the application of a party or of its own motion may direct that the trial of a proceeding be fixed at a place other than the proper place.
(3) In this rule a reference to the trial of a proceeding shall include a reference to any interlocutory hearing in the proceeding."
The above Rules are to be read in conjunction with ss.12 and 48 of the Federal Court of Australia Act 1976 which read :
"12. Sittings of the Court shall be held from time to time as required at the places at which the registries of the Court are established, but the Court may sit at any place in Australia or in a Territory.
...
48. The Court or a Judge may, at any stage of a proceeding in the Court, direct that the proceeding or a part of the proceeding be conducted or continued at a place specified in the order, subject to such conditions (if any) as the Court or Judge imposes."
In Sentry Corporation the Court rejected the proposition that there should not be a change of the proper place, of the "venue", unless the Court was satisfied that there is a preponderence of convenience in support of the change. The Court said, at pp 441-442 :
"The power conferred by s 48 recognises the national character of this court. The factors which the court is entitled to take into account in considering whether one city is more appropriate than another for interlocutory hearings or for the trial itself are numerous. The court must weigh those factors in each case. Residence of parties and of witnesses, expense to parties, the place where the cause of action arose and the convenience of the court itself are some of the factors that may be relevant in particular circumstances.
The balance of convenience will generally be a relevant consideration, but not necessarily determinative of each case. A party commences a proceeding by filing an application in a particular registry of the court. If that party or another party wishes to have the proceeding conducted or continued in another place he may apply to the court for an order under s 48 or O 10, r 1(2)(f) or O 30, r 6 as the case may be. There is no onus of proof in the strict sense to be discharged by the party seeking to conduct or continue the proceedings elsewhere. It should be noted that the court may exercise its powers under O 30, r 6 either on the application of a party or of its own motion. The court must, however, be satisfied, after considering all relevant matters, that there is sound reason to direct that the proceeding be conducted or continued elsewhere. Its starting point is that the proceeding has been commenced at a particular place. Why should it be changed? On the one hand, if the party who commenced the proceeding chose that place capriciously the court would be justified in giving no weight to the choice of place. At the other end of the scale, a proceeding may have continued for some time at the place of commencement with many steps having been taken there, for example, filing of pleadings and affidavits, discovery and inspection. Due weight would be given by the court to such matters before directing that the proceeding should continue at a different place.
The balance of convenience is important, but its weight must vary from case to case. Ultimately the test is: where can the case be conducted or continued most suitably, bearing in mind the interests of all the parties, the ends of justice in the determination of the issues between them, and the most efficient administration of the court? It cannot and should not, in our opinion, be defined more closely or precisely."
In the present proceedings, Arrow Limited is a South Australian company which has at all material times carried on its business in South Australia. It has pleaded in the statement of claim, filed with the application, that by an agreement dated 27 June 1988, it agreed to purchase the whole of the issued shares in the capital of Stoneman's (Management) Pty Ltd ("the company") from Mr Stoneman and others. The completion date of the sale and purchase of those shares was 4 July 1988. It is alleged that the principal asset of the company was a chain of supermarkets six of which are at Bendigo, one at Castlemaine and one at Ballarat - all large provincial cities in the State of Victoria. Mr Stoneman resides at Castlemaine. The other respondents named in the application (the chartered accountants) carry on business at Bendigo.
Arrow Limited has sought against Mr Stoneman and the chartered accountants a declaration that they have engaged in conduct constituting a contravention of s.52 of the Trade Practices Act 1974 and damages pursuant to s.82 of that Act. It has also claimed against them damages for breaches of the provisions of the South Australian Misrepresentation Act 1971 and either the South Australian Fair Trading Act 1987 or alternatively the Victorian Fair Trading Act 1985. Finally, there is a claim against the chartered accountants for damages in negligence.
In broad terms, Arrow Limited is claiming that it has been the victim of a series of misrepresentations which were made prior to its entry into the agreement to purchase the shares and that, as a consequence of such misrepresentations, it has suffered losses. In particular Arrow Limited alleges that its inability to meet budgetted forecasts (subsequent to its acquisition of the supermarket chain) was a direct consequence of the misrepresentation.
In affidavits filed in support of the application for a change in the proper place it was said that Mr Stoneman would contend that any losses suffered by Arrow Limited were sustained by it as the result of its poor management of the supermarkets. The particularity of that allegation included propositions that Arrow Limited terminated advantageous lines of supply, that it changed management and appointed inexperienced personnel, and that, as a marketing exercise, it failed to recognise the difference between retailing in South Australia and in Victoria. Two allegations which were said by Mr Stoneman, and by the chartered accountants, to be of particular importance were firstly, the proposition that Arrow Limited alienated its customer support by failing to maintain stocks and by increasing prices, and secondly, the proposition that staff alienation was caused by alleged changes to superannuation arrangements and termination of the employment of juniors. To support these allegations Mr Stoneman and the chartered accountants said it would be necessary for them to call numerous witnesses who reside in one or other of the cities in which the supermarkets are located.
The application for change of the proper place was anticipated by Mr Stoneman at the first directions hearing, and brought on for consideration before the primary judge shortly afterwards. There could be no question of delay in the making of the application. It was not suggested that there could be any juridical difference whether the proceedings were conducted in Adelaide or in Melbourne. In either place the relevant law to be applied in the determination of the claims would be the same. Nor was it suggested that Arrow Limited capriciously chose Adelaide as the place to commence proceedings. Mr Stoneman and the chartered accountants argued that the change of venue should be directed having regard to the facts that the principal assets of the company were situated in Victoria, that the contract between Arrow Limited and Mr Stoneman provided that it was to be governed by the law of Victoria; that the chartered accountants carried on business solely in Victoria; that most of the documents relating to the business of the supermarkets were in Victoria; that numerous witnesses whom Mr Stoneman and the chartered accountants might wish to call about the operation of the supermarkets before and after the relevant change of ownership are resident in Victoria; and that at trial a view of the several supermarkets would be requested. Counsel argued on their behalf :
"The natural forum is Victoria. Everything about this case speaks of Victoria except for the fact that a South Australian company determined that it wished to enter into the supermarket foray in a country town of Victoria. That is the crux of the submission..."
Arrow Limited opposed a change of proper place, pointing out, amongst other things, that it was a South Australian company, that the loss alleged by it was suffered in South Australia, and that it proposed to rely on the oral testimony of at least seven witnesses who reside in Adelaide.
In his reasons for dismissing the application the primary judge noted a distinction between the purpose on the one hand, of O.10, r.1(2)(f) under which the application before him was made, and on the other hand of O.30, r.6. The purpose of the former rule, as already stated, is to ensure the orderly and efficient conduct of the court's business by requiring all documents filed in a proceeding to be in the custody and charge of the Registry where the matter is then proceeding. The purpose of the latter rule is to enable trials to be conducted at a place or places which will best facilitate the ends of justice in the determination of the outstanding issues between the parties having regard to such factors as the convenience of the parties and of the witnesses, the most efficient administration of the court, and the minimisation of cost. The primary judge went on to say :
"Earlier I referred to the allegations that the applicant was to blame for its losses because of customer and staff alienation. Having regard to the facts that the supermarkets are located at Bendigo, Castlemaine and Ballarat, it is not unreasonable to assume that many of the allegedly disgruntled customers and staff come from one of those cities. Perhaps it may transpire that they are so numerous that it may warrant an application that the court sit at one or other or all of those cities or in Melbourne. But they are matters that go to venue; at this stage they have nothing to do with the identification of the 'proper place' - unless they or some of them are required as witnesses in an interlocutory process - and that has not been suggested."
The appellant contends that this passage reflects error. It is contended that his Honour should have taken into account the fact that witnesses to be called to prove the reason for the loss of customer and staff support lived in Victoria, and that he should have given significant weight to that fact.
In our opinion the above passage from the reasons of the primary judge does not reflect error. In Sentry Corporation the Full Court stressed (at p 441) that :
"The power conferred on the court or a judge by s 48 is in terms wholly unfettered. It should be exercised flexibly having regard to the circumstances of the particular case. It would be regrettable and unwise if the court were to circumscribe the general power conferred by s 48 with inflexible rules or impose inelastic constraints upon its exercise. As the power may be exercised subject to conditions, the court or a judge is in a position to mould orders under the section to take account of the many and varied circumstances that arise in particular cases."
It is clear from the transcript of argument before the primary judge , which the appellant has put before this Court, that the primary judge was alive to the desirability of moulding orders to fit the particular circumstances of the parties and the issues between them. In the course of argument his Honour intimated that if Adelaide were to remain the proper place, he would accommodate the convenience of each of the parties by hearing as much of the case as might be required in Adelaide, with the balance of the case being heard in Victoria. He expressed his willingness to sit in regional centres of Victoria close to the supermarkets. He observed : "That is the efficacy of a national court". In his reasons, his Honour expressly reserved to the respondents the right to apply at a later stage for an order by way of change of venue or an order that the trial of the action be conducted in whole or in part at a place or places in lieu of or in addition to Adelaide.
As the primary judge was able to indicate at the time when the application to change the proper place was made that the court would meet the convenience of the parties and witnesses by hearing the trial in several places, the distinction in purpose between O.10, r.1(2)(f) and O.30, r.6 was significant. The affidavit material before the primary judge demonstrated no reason why the pre-trial aspects of the proceedings could not be continued just as suitably in Adelaide as in Melbourne. The thrust of the arguments in favour of changing the proper place was that at the trial stage there would be many factors which in combination would result in the proceedings being most suitably conducted in Victoria. If the court had not been able to give the intimation which it did the prima facie requirement of O.30, r.6(1) that the trial be at the proper place would have assumed importance. But on the course proposed by the primary judge the substantial matters of alleged inconvenience and cost to Mr Stoneman and the chartered accountants would be met. It will frequently be helpful if a judge faced with questions similar to those in the present case gives an intimation such as that here given by the primary judge.
The applicant further contended that the reasoning of the primary judge was inconsistent in principle with a decision of another single judge of this Court, von Doussa J., in A.M.C. Investments Limited v. Willey (unreported: judgment delivered 23 November 1989). In that case, where the facts and issues raised by the pleadings were in many respects similar to the instant case, it was directed that the proper place be changed from Adelaide to Melbourne. In the course of ex tempore reasons his Honour said :
"When it is determined in which Registry the case will proceed, that Registry will ordinarily be the place of trial, unless the Court otherwise orders under O.36, r.6. As I think Mr Mansfield's argument acknowledged, once the trial starts in the proper place there is no guarantee that the Court will sit in other places during the trial. However difficult it is to judge ultimately how many witnesses might be needed on one side or the other, and the like, I think the decision as to the proper Registry has to be made at an early stage in the proceedings so that the parties can arrange counsel and expert witnesses in the knowledge that the 'proper place' under the Rules will not change in midstream."
In our opinion the reasoning in the two decisions is not inconsistent. In A.M.C. Investments v. Willey the decision was reached on the footing that there was no assurance that in due course the court would sit in different States to accommodate the convenience of witnesses. That decision is distinguishable from the one now under appeal by reason of the intimation given by the primary judge that he would if necessary hear evidence in several places. That case also concerned questions about the valuation of land and businesses in Victoria which the judge considered to be important in the exercise of his discretion as expert witnesses with local familiarity would have to be instructed. If those experts were required to travel to another State for the trial considerable cost and inconvenience would be occasioned.
In the result, we are of the opinion that there was no error in his Honour's approach to the matter. Indeed, the fact that the interlocutory processes have proceeded smoothly and that his Honour has been able to set aside tentatively dates for the hearing in October, just over twelve months after the lodgment of the application, shows that his Honour's order led to efficient administration of the proceedings.
In any event we think it is important to stress that a decision whether the proper place should be changed is one made in the exercise of a wide and unfettered discretion which has its genesis in s.48 of the Federal Court of Australia Act. The principles governing the circumstances in which appellate courts interfere in the exercise of the discretion of primary judges in respect of interlocutory orders are well established: Adam P. Brown Male Fashions Pty Ltd v. Philip Morris (Inc.) (1981) 148 CLR 170 at 177 and the Sentry Corporation case at 440-441. The exercise of a discretion by a primary judge in an interlocutory order on a matter of practice and procedure will not lightly be disturbed. Particularly will this be so in the case of an application for a change of the proper place where the decision forms part of a wider programme devised by the judge who is managing the proceedings for their orderly and efficient conduct.
For these reasons the appeal will be dismissed with costs.
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