Bateman Project EngineneringPty Ltd and Ors and Pegasus Gold Australia Pty Ltd
[2000] NTSC 3
•31 January 2000
Bateman Project EngineneringPty Ltd & Ors and Pegasus Gold Australia Pty Ltd [2000] NTSC 3
PARTIES:BATEMAN PROJECT ENGINEERING PTY LTD, KINHILL PACIFIC PTY LTD AND KILBORN ENGINEERING PACIFIC PTY LTD
AND
PEGASUS GOLD AUSTRALIA PTY LTD
TITLE OF COURT: SUPREME COURT OF THE NORTHERN TERRITORY
JURISDICTION: SUPREME COURT OF THE NORTHERN TERRITORY EXERCISING TERRITORY JURISDICTION
FILE NO:306 of 1997 (9728220)
21 of 1998 (9801771)
81 of 1998 (9809080)
DELIVERED: 31 January 2000
HEARING DATES: 20 December 1999
JUDGMENT OF: MILDREN J
CATCHWORDS:
REPRESENTATION:
Counsel:
Defendant/Applicant: C G Gee QC
Plaintiffs/Respondents: J Reeves QC, and D Alderman
Solicitors:
Defendant/Applicant: Ward Keller
Plaintiffs/Respondents: Hunt & Hunt
Judgment category classification: C
Judgment ID Number:
Number of pages: 11
IN THE SUPREME COURT
OF THE NORTHERN TERRITORY
OF AUSTRALIA
AT DARWINBateman Project Engineering Pty Ltd & Ors and Pegasus Gold Australia Pty Ltd [2000] NTSC 3
No. 306 of 1997 (9728220)
No. 21 of 1998 (9801771)
No. 81 of 1998 (9809080)
BETWEEN:
BATEMAN PROJECT ENIGNEERING PTY LTD, KINHILL PACIFIC PTY LTD AND KILBORN ENGINEERING PACIFIC PTY LTD
Plaintiffs/Respondents
AND:
PEGASUS GOLD AUSTRALIA PTY LTD
Defendant/Applicant
CORAM: MILDREN J
REASONS FOR DECISION
(Delivered 31 January 2000)
Mildren J
This is a summons by the defendant seeking an order that these three actions be transferred to the Federal Court, New South Wales District Registry.
Following the decision of the High Court in Re Wakim; ex parte McNally and Others (1999) 163 ALR 270, there is doubt as to whether s4(1) and s5 of the Jurisdiction of Courts (Cross-Vesting) Act 1987 is constitutionally valid. Notices have been served on the Commonwealth and the Northern Territory in accordance with Order 19 of the Supreme Court Rules. Both the Commonwealth and Northern Territory Solicitors-General have indicated that they wish to be heard on that issue. However, by agreement between the parties, my ruling has been sought as a preliminary matter on whether, assuming the relevant sections of the Act are valid, an order should be made to transfer the actions on the basis that, if no order would be made, it will become unnecessary to decide the constitutional point in these proceedings. I proceed accordingly.
The plaintiffs claim, as the operators of a joint venture known as "BKK", to have supplied services and materials in respect of the engineering, procurement, construction, pre-commissioning and wet commissioning of a project at the Mt Todd Gold Mine in the Northern Territory, pursuant to a written agreement dated 5 October 1995 (the EPCM contract). BKK claims that certain monies fell due under the contract from time to time. The Mt Todd Gold Mine was situated on a mining lease in the Northern Territory, in respect of which the defendant was the registered lessee and occupier. In December 1997, January 1998 and April 1998, BKK registered workmen's liens over the defendant's interest in the mining lease pursuant to the Workmen's Liens Act as security for amounts claimed to have fallen due under the contract totalling $3,092,349.68. The actions in these proceedings were brought in order to obtain orders for the enforcement of these liens. By order made by Bailey J on 4 June 1998, these actions were consolidated and an amended consolidated statement of claim (which was subsequently further amended) was later filed by the plaintiffs.
On 23 December 1997 (the same day as the first of the three lien actions was filed) the defendant filed action number 305 of 1997 against BKK. On 4 June 1998, the plaintiffs invited the defendant to consolidate action 305 of 1997 with the three lien actions, but that offer was declined. The defendant's action claims damages for breach of a contract between the parties dated 24 January 1995 relating to the performance by the plaintiffs of a feasibility study for the development of Phase II of the Development Project. Alternatively, the defendant seeks damages for negligence in the preparation of the feasibility study, for negligent advice given in relation thereto, or for misleading and deceptive conduct in connection with that advice pursuant to s52 of the Trade Practices Act and the provisions of Fair Trading Acts of WA and the NT. Further, the defendant seeks damages for breach of a contract dated 5 October 1995 pursuant to which the plaintiffs agreed to provide work and services (the EPCM contract) and for negligence in the performance thereof. The total damages claimed, although unspecified in the pleadings, allegedly amount to some $340 million.
On 17 December 1998, action number 305 of 1997 was ordered by Thomas J to be cross-vested to the Federal Court's NSW Registry by consent of the parties.
So far as the lien actions are concerned, the defendant sought to have similar liens lodged by other contractors or sub-contractors struck out on a number of technical grounds. That application was dismissed by the Full Court: Jovista Pty Limited v Pegasus Gold Australia Pty Ltd & Ors (1999) 8 NTLR 171. That decision affects some of the defences which the defendant has raised in respect of the plaintiffs' liens in the consolidated action.
The liens have since been "modified" by a number of orders known as the "Power Station Sale Orders", the effect of which was to substitute other security for the liens to enable the defendant's interest in the mineral lease to be sold. Under the terms of these orders, $3,092,349.68 was paid into the trust accounts of Messrs Ward Keller in respect of the plaintiffs' claims upon certain trusts (which sum was later reduced by a consent order made on 20 December 1999 by an amount of $271,786.75). The defendant has agreed to pay into Court a further sum of $13,884,567.65 in respect of other liens over the mineral lease pursuant to an order made by Bailey J on 16 February 1999, but this does not appear to have any bearing on the present application.
Section 5(1) of the Jurisdiction of Courts (Cross-Vesting) Act relevantly provides:
(1) Where –
(a) a proceeding (in this subsection referred to as the "relevant proceeding") is pending in the Supreme Court; and
(b) it appears to the Supreme Court that –
(i) the relevant proceeding arises out of, or is related to, another proceeding pending in the Federal Court...and it is more appropriate that the relevant proceeding be determined by the Federal Court...;
(ii) ...; or
(iii) it is otherwise in the interests of justice that the relevant proceeding be determined by the Federal Court... ;
the Supreme Court shall transfer the relevant proceeding to the Federal Court...
The defendant relies upon both s5(1)(b)(i) and s5(1)(b)(iii). These are clearly alternatives. The Court may order the actions to be transferred under either provision.
Section 13 of the Act provides that an appeal does not lie from a decision of this Court in relation to the transfer or removal of a proceeding under this Act. It appears that there is no uniformity of opinion on some matters of interpretation in the various jurisdictions: see the comments of Martin CJ in Swanson v Harley (1995) 103 NTR 25 at 31-32. Indeed, there appears to be some difference of opinion even between different judges of this Court on some issues: see Pikos v Australian Boat Sales Pty Ltd & Ors (Thomas J, 26 July 1995, unreported) where her Honour gave weight to the plaintiff's choice of forum; c.f. Swanson v Harley (supra, at 32); Toren Fishing and Trading Ltd v McKenzie Family Nominees Pty Ltd & Ors (1995) 4 NTLR 195 at 211, per Kearney J. I propose, like Kearney J in Toren Fishing and Trading Ltd v McKenzie Family Nominees Pty Ltd (supra) to follow the approach of the Chief Justice in Swanson v Harley (supra).
Section 5(1)(b)(i)
This head of power gives rise to two questions:
(a) are the present proceedings "related to" action 305 of 1997 which has already been transferred to the Federal Court and is therefore pending in that Court? If yes –
(b) is it more appropriate that the present proceedings be determined by the Federal Court?
Mr Gee QC, for the defendant applicant, submitted that the two proceedings were indeed related. He submitted that the matters relied upon by the defendant in its claim in action 305 of 1997 gave rise to an equitable set-off which has been pleaded by way of defence to these proceedings: see paragraph 52 of the Defence. Further, Mr Gee QC relied upon paragraphs 45 and 46 of the Defence which assert that no monies had accrued due under the EPCM contract at the time the liens were registered and the EPCM contract was terminated on or about 31 December 1997, at which time there were no monies payable and unpaid by the defendant.
Mr Reeves QC, counsel for the plaintiffs, submitted that, in order for the two sets of proceedings to be related, there needed to be an interdependency or substantive link or association between the two sets of proceedings: Mattock v Mattock (1989) 97 FLR 112 at 114; Leithead v Leithead (1991) 109 FLR 177 at 182-3; Woodard v H & J Nominees Pty Ltd (1993) 17 Fam LR 327 at 335. In Mattock v Mattock (supra) McLelland J held that two proceedings were related if there was a substantial and common question which arose in both. In Leithead v Leithead (supra), Murray J held that the proceedings were not related as there was no interdependency or substantial link or association, one with the other.
It is by no means clear from the pleadings that the issues raised by paragraphs 45 and 46 of the defendant's defence has any connection with (substantial or otherwise) action 305 of 1997 (other than as part of the plea of equitable set-off). However, the plea of equitable set-off is another matter as that directly connects the two actions together with substantial and common questions, assuming the plea is a valid one. No application was made to have it struck out, but Mr Reeves QC submitted that the plea would be unlikely to succeed. I do not consider that it is open to me to decide this question at this time; and in any event, I do not believe that the plea is likely to fail for the reasons relied upon by Mr Reeves QC. I therefore conclude that the two proceedings are related.
As to the second question, it was submitted by Mr Gee QC that it was appropriate that the present proceedings be determined by the Federal Court rather than by this Court. A number of matters were relied upon. Suffice it to say that there would be considerable inconvenience and cost to the parties for the defendant to fully replead by way of set-off and counterclaim the whole of the damages action brought in relation to the EPCM contract in the present proceedings and delete that part of the action from the Federal Court proceedings. Alternatively, the action might proceed without the equitable set-off plea and if successful, judgment could be stayed pending the outcome of the Federal Court proceedings, but there is no guarantee that a stay would be granted.
Mr Gee QC, submitted that there would be considerable inconvenience in having the equitable set-off plea heard in this Court. There is evidence that Pegasus has some five boxes of documents located in Sydney for the purposes of discovery in the liens proceedings and 250 boxes of documents located in Sydney for the damages proceedings and that the plaintiffs have 420 archive boxes of documents relevant to the damages action. These and other matters relied upon by both parties, such as the location of witnesses, counsel and solicitors, do not persuade me one way or the other. I consider that there would be no particular need to relocate all of the documents to Darwin and the Court could, if asked, either take evidence by video-conferencing facility or even sit in Sydney if appropriate arrangements could be made. Similar considerations apply if the action were to be heard by the Federal Court in Sydney so far as the plaintiffs' witnesses are concerned, many of whom I note are not located in the Northern Territory in any event. I note that the Federal Court also has video-conferencing facilities as well as the capacity to sit in Darwin if that be necessary.
Mr Reeves QC relied upon a number of matters. First, it was submitted that the onus lay upon the defendant to establish that the case should be transferred and the onus had not been discharged. I reject that submission. There is no onus: see Swanson v Harley (supra) at 33.
Next, it was submitted that the EPCM contract contained an exclusive jurisdiction clause. Clause 29 of the contract provides:
This contract should be governed by and construed in accordance with the laws of the Northern Territory, and the parties hereto agree to submit to the jurisdiction of the courts of that territory.
I would not regard this clause as establishing exclusive jurisdiction in this Court; it does not say that – merely that this Court has jurisdiction. In any event, such a clause would not prevent this Court from making an order transferring the actions. Mr Reeves QC accepted that proposition, but submitted that it was a factor relevant to the question of which is the appropriate court. I accept that it is relevant, it being the parties' choice. However, in this case, the parties have already consented to transfer action 305 of 1997 to the Federal Court. There is more substance to the argument based upon the other limbs of clause 29 of the contract. So far as the lien actions are concerned, the law of the Northern Territory must apply and no one would pretend that it is easy for a judge of another court to come to grips with the Workmen's Liens Act. However, most of the difficulties likely to arise under that Act have been decided by recent decisions of this Court – most notably Jovista v Pegasus Gold Australia Pty Ltd & Ors (supra) (which follows two South Australian Full Court decisions and over-rules some previously inconsistent local decisions) and by the decision of Martin CJ in these proceedings which has not been appealed (see (1998) 8 NTLR 132) both of which would provide considerable assistance to the Federal Court. Even if Mr Reeves QC's submission that these decisions may not be binding on a single judge of the Federal Court is correct, I think it would be most unlikely that they would not be followed.
Mr Reeves QC pointed to the delay likely to be caused if this action were to be transferred. I note that at one stage the plaintiffs offered to consolidate this action with action 305 of 1997. Presumably the question of delay did not concern the plaintiffs then. Nothing has been put to show that there has been any significant change in the respective parties' positions, although it is true that the proceedings in the Federal Court have become cluttered with other actions which have been consolidated with action 305 of 1997, which may cause further delay than was originally envisaged. But the reality is that it is unlikely that the plaintiffs will recover any monies – even if they are ultimately successful – from the monies held in trust whilst action 305 of 1997 is unresolved. If indeed the defendant has an equitable set-off which exceeds the amount of the plaintiffs' claims, it is arguable that there would be no monies due under the contract and therefore no valid liens.
Mr Reeves QC points out that the plaintiffs will not recover interest upon the monies held in trust, but as Mr Gee QC correctly submits, liens under the Workmen's Liens Act do not secure interest on the amount owing. As the defendant has been placed under the control of administrators pursuant to a Deed of Company Arrangement, it would seem that the plaintiffs' prospects of recovering interest are limited. It was submitted that these matters suggest that it would be more appropriate for the lien actions to proceed in this Court as it is likely that this Court has the capacity to hear the lien actions more promptly than the Federal Court – but this assumes that this Court would resolve this action without considering the defendants equitable set-off – a matter I very much doubt. In the end, Mr Reeves QC was forced to submit that if this Court refused the defendant's application, the set-off plea would be abandoned or struck out. I am not able to say whether this would occur or not.
Mr Reeves QC submitted that if I were to grant this application, the plaintiffs would be unable to argue that the defendant is not entitled to any equitable set-off. I am unable to accept this submission. There is no reason why the Federal Court could not decide that question and, in my opinion, that Court is better placed than this Court to determine that issue as it has the control of action 305 of 1997 and is more familiar with the issues involved in the management of that action than this Court. If, as the plaintiffs contend, it is appropriate for these actions to be heard prior to action 305 of 1997, the Federal Court is better placed to decide that question.
In conclusion, I consider that it is more appropriate for these proceedings to be transferred to the Federal Court of Australia, New South Wales Registry.
I will hear the parties as to the course now to be followed to determine the question of whether or not there is jurisdiction to make the order sought.
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