Darryl Georg & Denise Liversidge t/as Simul-8R Xtreem v Stephen Andrew Walsh

[2005] NSWSC 308

CITATION:	Darryl Georg & Denise Liversidge t/as Simul-8R Xtreem v Stephen Andrew Walsh & Ors [2005] NSWSC 308
HEARING DATE(S):	29/03/05
JUDGMENT DATE :	29 March 2005
JURISDICTION:	Equity Division
JUDGMENT OF:	Einstein J
DECISION:	Cross vesting application dismissed.

CATCHWORDS:	Cross vesting
LEGISLATION CITED:	Fair Trading Act Jurisdiction of Courts (Cross-Vesting) Act 1987 Trade Practices Act
CASES CITED:	BankInvest AG v Seabrook (1988) 14 NSWLR 711 Bourke v State Bank of New South Wales (1988) 22 FCR 378 Chapman v Jansen (1990) 100 FLR 66 Dawson v Baker (1994) 120 ACTR 11 James Hardie & Company v Barry (2000) 50 NSWLR 357 Hoddell v Hoddell Pty Ltd [1999] WASC 156 Spiliada Maritime Corporation v Cansulex Limited (1987) AC 460
PARTIES:	Darryl Georg & Denise Liversidge t/as Simul-8R Xtreem (Plaintiff) Stephen Andrew Walsh (First Defendant) Beerpig Pty Limited (Second Defendant) Hyper Simulator International Pty Limited (Third Defendant)
FILE NUMBER(S):	SC 5551/04
COUNSEL:	Mr J Young (Plaintiff) Mr K Morrissey (Defendants)
SOLICITORS:	Baldock Stacy & Niven (Plaintiff) Mc Dermott & Associates (Defendants)

LOWER COURT JURISDICTION:

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

Einstein J

Tuesday 29 March 2005 ex tempore
Revised 8 April 2005

5551/04 Darryl Georg & Denise Liversidge t/as Simul-8R Xtreem v Stephen Andrew Walsh & Ors

JUDGMENT

1 There is before the court a notice of motion pursuant to which the defendants seek an order removing the proceedings to the Supreme Court of Victoria pursuant s 5(2)(b) of the Jurisdiction of Courts (Cross-Vesting) Act 1987.

The Proceedings

2 It is unnecessary to repeat the record in any exhaustive detail. In substance the parties are alleged to have entered into three contracts, the Simulator Contract and the Ford Ute Contract in about March 2004 and the Remaining Works Contract in the following month.

3 It appears to be common ground, as I understood both counsel, that the essential terms of the Simulator Contract were for the manufacture, supply and licensing by the plaintiff to the first and second defendants or, alternatively, to one of them of a racing car simulator. The terms are said to have been that the plaintiff would manufacture the simulator and deliver the same to the first and second defendants on receipt of a final payment and a completed licence agreement and that thereafter the first and second defendants would be granted a perpetual licence to display the simulator in Victoria, in consideration for which the first and second defendants would pay royalties in accordance with the terms of the licence agreement. It is said to have been an implied term of the simulator contract that the intellectual property in the simulator would at all times remain the property of the plaintiff.

4 The Simulator Contract is said to have been varied so as to delete from the scope of the works for the manufacture of the simulator, the full-body rolling chassis, which was now to be supplied by the first and second defendants. Also to be deleted was the requirement to manufacture the wheels.

5 The Ford Ute agreement was for the plaintiff, pending completion of the manufacture of the simulator, to modify the Ford and to make it available, for a fee, to the first and second defendants for display by them.

6 The Remaining Works agreement of April 2004 is said to have obliged the plaintiff to deliver the simulator, together with the Ford, to the premises of the third defendant in Victoria for reward, the third defendant to carry out the remaining works on the simulator. The plaintiff claims that it was a term of the Remaining Works agreement that the third defendant would not release the simulator to the first or second defendant until the plaintiff had received payment in full, pursuant to the contract, from the first and second defendants. Other terms alleged as part of the Remaining Works agreement were that the third defendant would store and handle the simulator and Ford ute with due care and diligence.

7 Breaches of contract and breaches of duty of care are carefully pleaded. The plaintiff also relies on a cause of action in conversion. There is also a case put in terms of breaches of the Trade Practices Act and/or the Fair Trading Act and inter alia a claim for what is said to have been passing off.

The Principles

8 It is common ground that the defendant bears a relevant onus to satisfy the court that it is otherwise in the interests of justice that the relevant proceedings be remitted by the Supreme Court of New South Wales here to the Supreme Court of Victoria. There has been no serious issue at the Bar table as to the general approach proper to be taken by the court in hearing applications such as the present. Clearly enough the relevant subsection requires the court to decide which is the more appropriate court to determine the proceedings brought by the plaintiffs: BankInvest AG v Seabrook (1988) 14 NSWLR 711 at 714(e), 727(b). Clearly also one court will be more appropriate they another if, in that court, the case may be, “tried more suitably for the interests of all the parties and the ends of justice”: Spiliada Maritime Corporation v Cansulex Limited (1987) AC 460 at 476 applied in James Hardie & Company v Barry (2000) 50 NSWLR 357 at 378.

9 In my view one can take from James Hardie at 379 what is described as a “useful checklist of factors” relevant to the decision to order a transfer of category (3) cases, namely:

· application of substantive law

· forensic advantage or detriment conferred by procedural law

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

· substantive connections with the forum

· balance of convenience to the parties and witnesses

· convenience to the court system.

10 This case raises the question of whether or not it is apt to conceive of an onus resting upon the applicant for transfer. Most recently in James Hardie Mason P referred to comments by Rogers AJA, with which Street CJ agreed [and Kirby P probably agreed] in BankInvest that it was inapt to speak of any onus resting upon the applicant for transfer. Mason P put the matter as follows:

“ Such a sentiment may be understandable where transfer is ordered on the Court's own motion. However, like others I find it illusive in the context of contested proceedings inter partes. If one views the exercise as one of judicial discretion according to proper principle then it is natural to regard the applicant for particular relief as carrying at least a persuasive onus: see Bourke (at 395–396); Chapman v Jansen (1990) 100 FLR 66 at 74; Dawson (at 18); Hoddell v Hoddell Pty Ltd [1999] WASC 156 at [18]; Nygh (op cit at 92). Fortunately, “onus” will seldom if ever be determinative at the end of the day.”

11 The reason for the motion is that the plaintiffs are resident in New South Wales, whereas the defendants are resident in Victoria. The New South Wales focus is on Blayney and the Victorian focus is on Lilydale.

12 It is tolerably clear from the affidavits before the court and from the submissions put by both parties that there will be quite a number of areas of close factual contest. Insofar as the factual issues will arise, the communications which led to the entry into of the subject agreements, it seems tolerably clear that in the main the material witnesses will be the first plaintiff and the first defendant who would likely be required to be present, as I understand it, through most, if not all, of the actual hearing of the proceedings.

13 In relation to the calling of evidence by both parties concerning the extent to which the contractual agreements were properly performed and the extent to which breaches of those agreements are alleged to have occurred, it is clear that evidence will require to be called from witnesses resident in New South Wales inter alia as to the making of the contract, the making of the representations and the extent to which work was carried out in New South Wales before the simulator and Ford were transferred to Victoria. It is also clear that evidence will require to be called from witnesses resident in Victoria as to the making of the contract, the making of the representations and the extent to which work was carried out in Victoria after transfer of the simulator and Ford to that State.

14 To the extent that any strength in the defendants’ case for the cross-vesting order lies in the fact that a deal of evidence will clearly require to be given as to the circumstances in which work was carried out at the premises of the third defendant in Victoria and as to the extent to which the first and second defendants are alleging the imprimatur of the third defendant to have been permitted to remove the simulator and to pass possession of it to the first and second defendants, clearly again evidence will require to be adduced on those topics.

15 It is important, however, to also note that the plaintiffs have claims in passing off and claims to breaches by the first and second defendants of the contractual arrangements [where it is said that the first and second defendants continued to licence out use of the simulators to others without paying royalties and in breach of the agreement], clearly enough Australia-wide considerations will arise. Importantly also the question of damages suffered by the plaintiffs by reason of the breaches of contract and by reason of the Trade Practices Act, Fair Trading Act and/or passing off causes of action, evidence relevant to those damages claims may be anticipated to require examination of not only the situation in New South Wales and Victoria but also the situation in other states. The plaintiffs claim that the subject passing off was an Australia-wide exercise.

16 At the end of the day then the balance of convenience to the parties and witnesses and convenience to the court system considerations seem to be the main considerations to be taken into account. It is unlikely that there will be a material difference in the substantive law to be applied, whether by Victoria or New South Wales, and it is unlikely that there will be any particularly significant forensic advantages or detriments conferred by the procedural law.

17 It is important to note that the choice made by a plaintiff of a forum should not lightly be interfered with, but as against that the cross-vesting legislation plainly gives the court the discretion to order a transfer in appropriate cases, such orders to be made upon a principled approach to cross-vesting.

18 I have come to the very clear view that in this case the defendants have not made good the proposition that the interests of justice are in the making of the cross-vesting order. As Street CJ (as his Honour then was) made clear in BankInvest, in many of these cases the proper approach to the interests of justice is no more and no less than a nuts and bolts decision and whilst with the benefit of hindsight after the hearing of the proceedings it is conceivable that the defendants will be shown to have been correct in terms of the amount of evidence being required to be called from witnesses who live in Lilydale, it seems to me that there is certainly sufficient of evidence to be called from witnesses in New South Wales as to negate the proposition that there is an overwhelming preponderance of time and effort which will be based in Victoria such as to require the making of the cross-vesting order.

19 Whilst it may be a rare case where this occurs, it has happened in the past (and may arguably in this case happen) that special arrangements require to be made for the taking of some of the evidence, possibly on a commission basis, by the trial judge as commissioner in Victoria and arguably the trial judge will be persuaded to move outside the normal sphere of comfort to permit contracting evidence to actually be called in the Supreme Court of Victoria premises. That is an unusual course but it is certainly a possible course and, of course, it is a course which the Federal Court of Australia commonly adopts to meet the convenience of the parties.

20 For those reasons the notice of motion is dismissed.

21 It seems to me the proper order as to costs is simply to order the applicant/defendants pay the plaintiff’s costs of the motion on the usual basis and I so order.

22 The proceedings are stood into the Registrar’s list at 9 am on 5 April 2005.

I certify that paragraphs 1 - 22
are a true copy of the reasons
for judgment herein of
the Hon. Justice Einstein
given on 29 March 2005
and revised 8 April 2005

___________________
Susan Piggott
Associate

8 April 2005