Australian Rail Track Corp Ltd v Mineral Commodities Ltd

[2006] SASC 27

SUPREME COURT OF SOUTH AUSTRALIA

(Civil: Application)

AUSTRALIAN RAIL TRACK CORP LTD v MINERAL COMMODITIES LTD & ANOR

Judgment of The Honourable Justice Debelle

2 February 2006

PROCEDURE - COURTS AND JUDGES GENERALLY - COURTS - CONCURRENT JURISDICTION OF DIFFERENT COURTS - TRANSFER OF PROCEEDINGS UNDER CROSS-VESTING LEGISLATION

Application to transfer proceedings to Supreme Court of Western Australia - whether more appropriate court - relevant principles - appropriate costs order - held, balance of factors favours transfer - application allowed, costs to be costs in the cause.

Trade Practices Act 1974 (Cth) s 52; Jurisdiction of Courts (Cross-vesting) Act 1987 (SA) s 5; Fair Trading Act 1987 (SA) s 10; Fair Trading Act 1987 (WA) s 56, referred to.
Dawson v Baker (1994) 120 ACTR 11, applied.
Bankinvest AG v Seabrook (1988) 14 NSWLR 711; BHP Billiton v Schultz (2004) 211 ALR 523; Bourke v State Bank of New South Wales (1988) 22 FCR 378; James Hardie & Co Pty Ltd v Barry (2000) 50 NSWLR 357; Spiliada Maritime Corporation v Cansulex Ltd [1987] AC 460, considered.

AUSTRALIAN RAIL TRACK CORP LTD v MINERAL COMMODITIES LTD & ANOR
[2006] SASC 27

Civil

1. DEBELLE J. This is an application by the first defendant to transfer this action to the Supreme Court of Western Australia pursuant to s 5(2)(b)(iii) of the Jurisdiction of Courts (Cross-vesting) Act1987 (“the Cross‑vesting Act”). The second defendant neither opposes nor consents to the application. In the course of several hearings of this application and a related application, the defendants instituted third party proceedings against three other parties. Those three parties all stated that they would abide the order of the court. In short, the protagonists are the first defendant and the plaintiff.

2. The plaintiff owns the rail track and the corridor of land on either side of surrounding the rail track between Zanthus in Western Australia and Adelaide.  The rail track is part of the trans‑Australian railway between Perth and Adelaide and Sydney.  At what is called the 1,550.594 kilometre mark on the rail track is a crossing which has been constructed to enable maintenance of the rail track.  For convenience I will call it “the maintenance crossing”.  It is near Goddard’s Creek in the State of Western Australia.  It is not a crossing which is suitable for ordinary vehicular traffic and the plaintiff does not make it available to the public for use as a crossing.  The maintenance crossing is some 1,434 kilometres from Adelaide and 790 kilometres from Perth. 

3. By an authority dated 9 October 2002 the plaintiff granted a licence to the first defendant Mineral Commodities Limited (“Mineral Commodities”), its employees, agents, contractors, invitees and licensees permission to use the maintenance crossing.  For convenience, I will call the document granting permission “the Authority”.  The period of the licence was from 21 October 2002 to 30 November 2002.  The Authority was in writing and had been executed by the plaintiff and Mineral Commodities.  It contained clauses intending to protect the plaintiff from any liability for loss caused as a result of the use of the crossing by Mineral Commodities or any of its servants, agents, contractors, invitees or licensees.

4. The terms of the Authority required Mineral Commodities to establish a safe system for the purpose of providing access across the railway line, to supervise and control any person authorised to cross the railway line and, if a vehicle was to be within three metres of the railway line, to have present a qualified railway safe worker.  The Authority also required Mineral Commodities to make good any damage caused by it or by any person authorised by Mineral Commodities to use the crossing.  The Authority also contains a general indemnity provision which requires Mineral Commodities to indemnify the plaintiff against all loss, cost, expense, liability and damage suffered by the plaintiff as a consequence, direct or indirect, of the plaintiff agreeing to enter into the Authority, including any work executed by the plaintiff on behalf of Mineral Commodities, regardless of any reckless or negligent act or omission on the part of the plaintiff or any other person.

5. The principal activities of Mineral Commodities include exploration for mineral sands and other mineral resources.  In 2002 it was conducting exploration on tenements known as the Yandallah Project in an area approximately 240 kilometres east of Kalgoorlie and approximately 10 kilometres north of the rail track.  Mineral Commodities wished to use the maintenance crossing to provide access across the rail track for vehicles for its exploration work.  It therefore obtained the Authority from the plaintiff to use the maintenance crossing.

6. Mineral Commodities had engaged HMS Plant Hire Pty Ltd (“HMS Plant Hire”) as an independent contractor to provide field assistance in respect of the Yandallah Project.  Mineral Commodities had also engaged Orion (WA) Pty Ltd (“Orion”) an earthmoving contractor to provide a front‑end loader and operator to carry out line clearing operations on the tenements.  The front‑end loader gained access to the Yandallah Project via the maintenance crossing on 2 November 2002.  On 4 November Orion’s front‑end loader burst a tyre.  Orion then arranged for the second defendant Marathon Tyres (WA) Pty Ltd (“Marathon Tyres”) to send a repair truck from Kalgoorlie.  It was arranged that the repair truck would cross the maintenance crossing on 5 November.

7. On the afternoon of 5 November 2002, while attempting to cross the rail track at the maintenance crossing, a repair truck owned by the second defendant Marathon Tyres became stuck on the rail track.  The truck became stuck on the maintenance crossing at some time between 1.00 pm and 1.43 pm.  At about 1.43 pm, while the truck was still on the crossing, a train operated by Pacific National Ltd (“Pacific National”) collided with the truck.  The train travelled almost 600 metres after the point of impact before it came to rest.  As a result of the collision, the plaintiff’s rail track and the infrastructure of the rail track were extensively damaged.  The truck was destroyed in the collision.  The leading locomotive of the train was also extensively damaged and the second locomotive was damaged.

8. In this action the plaintiff seeks to recover some $160,000 as damages from the defendants for the cost of repairing the rail track and its infrastructure.  As against Mineral Commodities, the plaintiff alleges that it has acted in breach of the terms of the Authority and is liable pursuant to the indemnity in the Authority to make good to the plaintiff all loss, cost, expense and damage incurred by the plaintiff as a consequence of the collision.  The plaintiff also claims that Mineral Commodities was negligent in that it failed to ensure that those authorised by it to use the maintenance crossing failed to retain a qualified railway safe worker to prevent the truck becoming stuck on the crossing and who could also notify train control of the fact that the truck was stuck on the crossing, that it failed to ensure that there was a method of notifying train control of the fact that a truck was stuck on the crossing, and that it failed to ensure that those authorised to use the crossing could issue a warning to trains if an obstruction on the track should occur.  The plaintiff’s cause of action as against Marathon Tyres is also in negligence.  It alleges that Marathon Tyres was negligent in escorting the truck safely across the track in that it failed to notify train control when the truck became stuck and failed to employ a qualified railway safe worker to supervise the piloting of the truck across the track and who could also notify train control.

9. The plaintiff seeks to recover damages only in respect of the cost of the replacement and repair of some 600 metres of railway track.  There is no question of the recovery of damages in respect of the damage to the two locomotives.  That is a matter to be resolved between Pacific National Limited, which owned and operated the locomotives on the one hand and Mineral Commodities and Marathon Tyres on the other.

10. When this application was first heard the parties to the action were the plaintiff, Mineral Commodities, and Marathon Tyres.  At that stage the issues were

    1.the proper construction of the indemnity relied upon by the plaintiff;

    2.the content of the alleged duty on the part of Mineral Commodities to establish a safe system for use of the maintenance crossing by its employees, independent contractors and invitees; and

    3.whether the defendants had acted in breach of the alleged duties.

    There was every likelihood that there would also be an issue as to whether the plaintiff had been guilty of any contributory negligence.

11. At the second hearing of this application, I asked whether the interests of justice might best be served if the plaintiff’s claim for indemnity was tried as a preliminary issue in this Court and, if the plaintiff succeeded on that issue, the Court could then transfer to the Supreme Court of Western Australia the remaining issues as between Mineral Commodities and Marathon.  It was common ground that the plaintiff and Mineral Commodities had executed the Authority and that the repair truck owned by Marathon was crossing at the request of Mineral Commodities and pursuant to the Authority.  The attraction of the proposal to try the question of the plaintiff’s entitlement to be indemnified under the terms of the Authority and its entitlement to damages pursuant to that indemnity as a preliminary question lay in the fact that it appeared that those issues could be determined on the construction of the Authority, an issue involving only the plaintiff and Mineral Commodities.  It appeared to be a discrete issue which would not involve any other parties or a determination of the issues of negligence.  Once that issue had been determined in this Court, the proceedings could be transferred to the Supreme Court of Western Australia for determination of the remaining issues.  The application was therefore adjourned to enable consideration of that issue.

12. A further reason for adjourning the application was that Mineral Commodities had foreshadowed that it might institute third party proceedings against its insurers, its insurance broker and HMS Plant Hire.  It is undesirable that an application of this kind should proceed until the parties to the action are known and the issues more clearly identified than they were at that stage.

13. Thereafter both Mineral Commodities and Marathon Tyres filed defences and, in addition, filed a counterclaim against the plaintiff alleging negligence on its part.  At a later stage both Mineral Commodities and Marathon Tyres also instituted third party proceedings.  Marathon Tyres has instituted third party proceedings against HMS Plant Hire, Orion and Pacific National.  Marathon has also served a contribution notice on Mineral Commodities.  For its part, Mineral Commodities has issued third party proceedings against HMS Plant Hire.

14. The situation has now been reached where there are six parties to this action.  They are the plaintiff, two defendants and three third parties.  The plaintiff conducts its operations from its offices in Adelaide.  Its witnesses all reside and work in Adelaide.  If the action is transferred to Western Australia, the plaintiff’s witnesses will incur the inconvenience of travelling to Perth and the plaintiff will have to incur the costs associated with that.  Each of the two defendants is a company which conducts its operations in Western Australia.  Mineral Commodities is a small company with a staff of only five employees.  It asserts and I find that it will suffer a heavier burden than the plaintiff if the action is heard in Adelaide.  That burden will not only involve the cost and inconvenience of travelling from Perth to Adelaide.  It has a real potential to affect its capacity to conduct its business.  However, that difficulty cannot be over‑stated given the ability to use modern methods of communication and, in particular, email.  Both HMS Plant Hire and Orion are relatively small companies which carry on business in Western Australia.  The third third party, Pacific National, is a substantial company carrying on business throughout Australia.

15. After the application of Mineral Commodities had been adjourned, the plaintiff filed an application seeking to have its claim under the indemnity heard as a preliminary question.  Mineral Commodities opposed the application.  Although Marathon Tyres had no attitude on the defendant’s application to transfer this action, it was opposed to the hearing of any preliminary question by this Court.  On further examination over a number of adjourned hearings, it became apparent that it was not appropriate to identify a preliminary question for determination.  Not only was it difficult to identify the terms of the question but the issues had become more complex as a consequence of the third party proceedings against HMS Plant Hire, Orion and Pacific National.

16. After several hearings of the plaintiff’s application for determination of a preliminary question, Mineral Commodities filed an amended defence set‑off and counterclaim. Whereas in its initial defence it had admitted that it executed the Authority, Mineral Commodities now pleads in its defence allegations that the plaintiff made misrepresentations in respect of the suitability of the maintenance crossing for use by light and heavy vehicles and that it did not require a railway safe worker to be present while vehicles were crossing the railway track at the maintenance crossing. It alleges that it relied on those representations when it entered into the Authority. While it admits the Authority includes the indemnity on which the plaintiff relies, it says that if it is found to be liable to the plaintiff then that loss was occasioned by the conduct of the plaintiff in making the misrepresentations. It relies on s 52 of the Trade Practices Act 1974 (Cth) and s 10 of the Fair Trading Act 1987 (WA), or alternatively, s 56 of the Fair Trading Act 1987 (SA). It pleads it is entitled to set‑off so much of the loss which it suffered against the plaintiff’s claim. In the alternative it makes a counterclaim for damages for those misrepresentations in an amount equal to the loss suffered by the plaintiff. This late amendment made on 29 July 2005 substantially changed the issues before the Court. It presented a real obstacle to the identification of a preliminary question as to the meaning and effect of the indemnity provided in the Authority. It caused the plaintiff to abandon its application for determination of a preliminary question.

    The Grounds of the Application

17. The application is grounded on several factors which, it is said, demonstrate that the Supreme Court of Western Australia is the natural forum to hear this action.  The first is that the alleged breach of contract and the alleged negligence occurred in Western Australia.  Mineral Commodities places substantial reliance on that ground.  The second is that all of the parties other than the plaintiff carry on business in Western Australia.  The third factor is a consequence of the second, namely, that the greater number of witnesses reside in or are employed in Western Australia.  Those witnesses include employees of each of the defendants and third parties.  The plaintiff’s accident investigation report suggests that the train drivers employed by Pacific National as well as its depot manager reside in Kalgoorlie.  Mineral Commodities, therefore, contends that the convenience of witnesses and the parties clearly favours the hearing of the action in the Supreme Court of Western Australia.  In addition, Mineral Commodities submits that as it has five employees only, it will suffer a greater hardship in having the action heard in Adelaide than the plaintiff would suffer if the action were heard in Perth.

18. In opposing the application, the plaintiff points to the fact that its offices are in Adelaide.  All of its five witnesses reside in Adelaide, so that it would have to incur the cost of bringing its witnesses from Adelaide to Perth.  In addition it relies on the fact that its solicitors are in Adelaide and it will have to instruct other solicitors in Perth.

    The Relevant Principles

19. The principles governing applications to transfer proceedings pursuant to s 5(2)(b)(iii) of the Cross‑vesting Act are well established.  The transferor court must determine what is the more appropriate forum.  It is not necessary that the transferor court be a clearly inappropriate forum:  BHP Billiton v Schultz (2004) 211 ALR 523 per Gleeson CJ, McHugh and Heydon JJ at [14], per Gummow J with whom Hayne J agreed at [42] and [69]. In Bankinvest AG v Seabrook (1988) 14 NSWLR 711 at 728 – 729 Rogers A‑JA applied the reasoning of Lord Goff in Spiliada Maritime Corporation v Cansulex Ltd [1987] AC 460 at 478 and identified the task as being to determine the more natural forum, that is to say, the forum with which the action had the most real and substantial connection. Lord Goff continued:

    “So it is for the connecting factors in this sense that the court must look; and these will include not only factors affecting convenience or expense (such as availability of witnesses), but also other factors such as the law governing the relevant transaction (as to which see Crédit Chimique v James Scott Engineering Group Ltd [1982] SLT 131), and the places where the parties respectively reside or carry on business.”

    In Spiliada at 464 Lord Templeman identified the factors which the court is entitled to take into account as “legion”. The principles in Bankinvest have been consistently applied:  see Mason P in James Hardie & Co Pty Ltd v Barry (2000) 50 NSWLR 357 at 377 – 378 and the cases and other references there cited. As I understand them, the reasons of the High Court in BHP Billiton v Schultz affirmed this approach: see Gleeson CJ, McHugh and Heydon JJ at [14] – [17], Gummow J with whom Hayne J agreed at [76] – [77], Kirby J at [163] – [165] and Callinan J at [258] - [259]. If the transferor court is satisfied that it is in the interests of justice that the proceedings be transferred to another court as the more appropriate court, the court has no alternative but to transfer the proceedings: BHP Billiton Ltd v Schultz at [14], [63] and [169].  No question of discretion then arises.

20. In addition, s 5(2)(b)(iii) expressly requires regard to be had to the interests of justice. The factors identified in the previous paragraph are all relevant to the question of the interests of justice. However, the interests of justice is a wide expression capable of including other factors relevant to the question whether proceedings should be transferred from one court to another. I respectfully agree with and adopt the remarks of Wilcox J in Bourke v State of New South Wales (1988) 22 FCR 378 at 394:

    “Under that rubric, as it seems to me, the court is entitled to consider not only the ability of a particular court to deal with all aspects of a matter, and to make and to enforce all the orders to which a party may be entitled, but also adjectival matters such as the availability of particular evidence, the procedures to be adopted, the desirable venue for trial and the likely hearing date.  It is not in ‘the interests of justice’ to adopt a course, in relation to those matters, which places unnecessary burdens and delays upon the parties to litigation …

    I take this to be a charter for the court to take the course which appears to it to be more just, interpreting that word widely.  However, for an applicant’s choice of forum to be overridden, there must be some objective factor which makes it possible to say that the interests of justice will be better served by transfer than by non-transfer.  Where, as here, it is impossible to identify any such factor, the subparagraph has no application.”

    As Mason P noted in James Hardie & Co Pty Ltd v Barry at [96] the decisions of other courts support this broad approach to the enquiry as to the interests of justice.

1. In Dawson v Baker (1994) 120 ACTR 11 the Full Court of the Supreme Court of the Australian Capital Territory examined existing decisions relating to “the interests of justice” and extracted the following checklist of factors relevant to a decision to order a transfer pursuant to s 5 (2)(b) (iii). They were

   ·application of substantive law;

   ·forensic advantage or detriment conferred by procedural law;

   ·a choice made by a plaintiff of a forum and the reasons for that choice;

   ·substantive connections with the forum;

   ·balance of convenience to parties and witnesses; and

   ·convenience to the court system

   Those factors substantially reflect the connecting factors identified by Lord Goff in Spiliada.  They had been identified in the cases cited in Dawson v Baker.  Plainly, the weight to be given to the plaintiff’s choice of forum must be qualified by what has been said in BHP Billiton v Schultz.  However, as was pointed out by Gleeson CJ, McHugh and Heydon JJ in BHP Billiton v Schultz at [15], there may be reasons for the choice of forum which are relevant when considering the interests of justice. One example is the capacity of a court or tribunal to deal expeditiously with a claim where, say, the death of a plaintiff may be imminent.

2. An examination of issues such as balance of convenience to the parties and the witnesses might demonstrate conflicting advantages and disadvantages to each party.  In other words, as was noted by Gleeson CJ, McHugh and Heydon JJ in BHP Billiton v Schultz at [16]:

   On the other hand, there may be conflicting interests of such a kind that justice would not attribute greater weight to one rather than the other.  The advantage which a plaintiff might obtain from proceeding in one court might be matched by a corresponding and commensurate disadvantage to a defendant.  The reason why a plaintiff commenced proceedings in one court might be the same reason as the reason why the defendant seeks to have them transferred to another court.  In such a case, justice may not dictate a preference for the interests of either party.

   As Callinan J said, one person’s legitimate advantage is another person’s disadvantage.

   Weighing the Relevant Factors

3. The fact that the collision occurred in Western Australia is not conclusive.  In the course of their reasons, Kirby and Callinan JJ expressed the view that, when considering what is the more appropriate forum in an action stemming from the commission of a tort, the place where the tort was committed would be a substantial factor.  Kirby J (at [165]) agreed with the remarks of Spigelman CJ in James Hardie & Co Pty Ltd v Barry (2000) 50 NSWLR 357 at 361 [7]:

   To determine which court is, in the interests of justice, the appropriate court, it is necessary to inquire, in the case of a tort, as to what is the place of the tort.  Indeed, in the context of administering the co-operative national scheme in the Jurisdiction of Courts (Cross-vesting) Act, where the place of the tort and the residence of the parties coincide, this will generally be determinative of the issue of ‘appropriate court’, although other factors may need to be assessed in the process of determining where the interests of justice lie.

   It will have been noticed that the remarks of Spigelman CJ require a coincidence of the place where the tort was committed and the residence of the parties.  His Honour then goes on to note that other factors will have to be assessed to determine where the interests of justice lie.  In James Hardie & Co Pty Ltd v Barry, His Honour was persuaded that there other factors which operated to outweigh the coincidence of the place where the tort was committed and the residence of the parties. Callinan J said (at [259]) that the place where the tort was committed would always be an important factor and would often be the natural forum. In his view, it will always be “an important matter”. However, it is apparent from a consideration of the whole of His Honour’s reasons that regard must be had to other factors. None of the other members of the High Court expressly gave the same degree of weight as did Callinan J to the place where the tort was committed. Gleeson CJ, McHugh and Heydon JJ believed (at [18] to [20]) that it was but one of the relevant factors, and Gummow J with whom Hayne J agreed, adopted a like approach (at [99]).

4. In this case, the place where the collision occurred does not point to one forum being more appropriate than another.  The collision occurred at a point some 790 kilometres east from Perth and 1,434 kilometres west of Adelaide.  No party has suggested at this stage that a view will be necessary.  If it were, it is equally inconvenient to all parties to have to travel to the maintenance crossing.

5. On one view, the fact that this Court is hearing twelve other actions each involving an indemnity clause in similar terms to the indemnity clause in this action makes it desirable that the same court should interpret the meaning of these indemnity clauses upon which the plaintiff relies.  However, the terms of the indemnity in this action sufficiently differ from that in the other actions to mean that it is not essential that this Court should interpret the clauses.

6. The decisive factor in this case is that, of the six parties to this action, four carry on business in Western Australia and do not carry on business in South Australia.  By contrast, the operations of both the plaintiff and of Pacific National are conducted in most parts of Australia, including Western Australia.  In many cases, the conflicting advantages and disadvantages to each party cancel one another out in the sense explained by Callinan J in BHP Billiton v Schultz, that is to say, one person’s legitimate advantage is another’s disadvantage.  In those cases the court might not be satisfied that the interests of justice require the action to be transferred to another court.  In these days of quick and efficient transport and communication, questions of convenience have less force than hitherto.  The speed and facility of both electronic and telephonic communication enables ready and immediate contact with a person interstate.  The ready availability of air transport reduces the inconvenience of interstate travel.  However, in this case, it will be plainly inconvenient for four of the six parties if the action is heard in Adelaide and not in Perth.  Although applications to transfer proceedings from one court to another are not to be decided by comparing the number of witnesses in each jurisdiction, it is clear in this case that a substantially greater number of witnesses reside in Perth than in Adelaide.  On the other side of the ledger is the fact that it will be inconvenient for the plaintiff if it has to instruct solicitors in Perth and has to bring its witnesses from Adelaide as well as to incur the additional expenses of flying them to and accommodating them in Perth.  However, after all of these factors are weighed, the balance tips in favour of transferring this action to the Supreme Court of Western Australia.  There will be orders to that effect.

   Costs

7. I turn to the question of costs which has already been argued.  This application was made prematurely before the issues had been identified and the parties ascertained.  It was made quite prematurely.  When first made, neither the issues between the plaintiff and Mineral Commodities nor the relevant parties had been identified.  Mineral Commodities stated that it was likely to institute third party proceedings against its insurer, its insurance broker and HMS Plant Hire.  In the result, it did not institute third party proceedings against either its insurer or insurance broker but only against HMS Plant Hire.  Later, Marathon issued third party proceedings against HMS Plant Hire, Orion and Pacific National.  Until those three parties became involved in this action, the question whether the Supreme Court of Western Australia was the more appropriate forum was finely balanced.  Because the application was made prematurely, the application has been the subject of a number of hearings in which the parties and the issues were identified.

8. It is undesirable for applications to transfer an action to another court to be made prematurely before the issues and all of the parties have been identified.  One consequence is that it will not necessarily be clear whether one court is a more appropriate forum than another.  As a general rule, the elucidation of the issues and the identification of the parties, especially the latter, will often have a critical bearing upon the outcome of the application.  In some proceedings it will, therefore, be preferable for an application to transfer the proceedings to be brought after the issues have been identified and the parties ascertained.  As a general rule, it is not an unduly onerous burden for pleadings and other pre‑trial issues to be conducted in a court other than the court in which a party resides or carries on business.  The real burden occurs immediately before to prepare for the trial or during the trial when parties and witnesses might be required to travel interstate.

9. The identification of the parties will often have a real bearing on the outcome of the application.  In this case, the question whether to transfer the proceedings was at first finely balanced.  It was essentially a case of the plaintiff’s legitimate advantage being the disadvantage of Mineral Commodities.  The amended pleadings which re‑defined the issues and the identification of the third parties enhanced the application.  The amended defence, set‑off and counterclaim filed on 29 July 2005 alleging misrepresentations in Western Australia further strengthened the application.

10. In the result, the hearing of this application has enabled a better identification of the issues and parties.  At one stage it appeared that it might be appropriate to try the question of the entitlement of the plaintiff to recover under its indemnity as a preliminary question.  However, it ultimately became apparent that that course would not be appropriate, especially after Mineral Commodities had in July 2005 amended its defence to plead the alleged misrepresentations by the plaintiff in the negotiations leading to the execution of the Authority.  The gradual steps by which the issues and the parties have been identified has had the consequence that the hearing of this application has so closely resembled directions hearings in the course of preparing an action for trial that it is appropriate to order that the costs of all hearings before me should be costs in the cause.  That will be the order as to costs.