Du Plessis Auction Gallery Pty Ltd & Ors (trading as Du Plessis Galleries) v Bacchil Nominees Pty Ltd (trading as Saffars Genuine Persian Carpets & Anor)
[1989] FCA 262
•31 MAY 1989
Re: DU PLESSIS AUCTION GALLERY PTY, LTD.; PETER E. DU PLESSIS and
ROBIN A. DU PLESSIS Trading as DU PLESSIS GALLERIES
And: BACCHIL NOMINEES PTY LTD Trading as SAFFARS GENUINE PERSIAN CARPETS
and HOOSHIYAR SAFFAR
No. G76 of 1988
FED No. 262
Practice and Procedure
COURT
IN THE FEDERAL COURT OF AUSTRALIA
SOUTH AUSTRALIA DISTRICT REGISTRY
GENERAL DIVISION
Fisher J.(1)
CATCHWORDS
Practice and Procedure - cross-vesting legislation - common law claims in contract - forum shopping - competing applications to transfer proceedings to State Supreme Courts - interests of justice.
Jurisdiction of Courts (Cross-Vesting) Act 1987 (Cwlth) sub.s 5(4)
HEARING
ADELAIDE
#DATE 31:5:1989
Counsel for Applicants : Mr. R.J. Whitington
Solicitors Thomson Simmons & Co.
Counsel for Respondents : Mr. D.P. Rydon
Solicitors Mollison Litchfield
ORDER
The proceeding pending in this Court in which Du Plessis Auction Gallery Pty. Ltd., Peter E. Du Plessis and Robin A. Du Plessis Trading as Du Plessis Galleries are the applicants and Bacchil Nominees Pty. Ltd. trading as Saffars Genuine Persian Carpets and Hoochiyar Saffar are the respondents and which is numbered G76 of 1988 be transferred pursuant to the provisions of sub.s 5(4) of the Jurisdiction of Courts (Cross-Vesting) Act 1987 (Cwlth) to the Supreme Court of Victoria.
The costs other than the costs of the respondents' notice of motion be costs in the cause.
The costs of the respondents' notice of motion be paid to the respondents by the applicants, the same to be taxed if not agreed.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
JUDGE1
On 25 August 1988 the applicants filed an application in the South Australia District Registry of this Court accompanied by a statement of claim. The application stated the applicants' claim to be as follows:
"1. The sum of $6,000.00 together with interest from 12 November 1982 at 12% per annum.
2. The sum of $2,100.90.
3. Interest.
4. A declaration that the Applicants and each of them do not owe the First Respondent and/or the Second Respondent the sum of $17,000.00 or any other monetary sum.
5. Costs."
These claims were said to be made "on the grounds appearing in the accompanying statement of claim", which statement of claim was amended on 2 May 1989 to plead the claim 4 in some more detail.
The address of both of the respondents was 262A Glenferrie Road, Malvern, Victoria and the application bore an endorsement to the effect that it was to be served out of the State of South Australia and in the State of Victoria.
The statement of claim pleaded that the first applicant was an auctioneer and the second and third applicants carried on business as dealers in art and as management consultants to the antique trade. The business of the first respondent was stated to be that of a trader of Persian carpets. During the course of business dealings between the parties a number of transactions took place which led to the claims made by the applicants. The first claim was that on 12 November 1982 the applicants paid to the respondents by telegraphic transfer the sum of $6,000 for payment to Iraj Master for goods sold by the applicants on his behalf. This amount, it was said, was neither paid by the respondents to Master nor returned to the applicants and the applicants claimed its repayment together with interest to 11 July 1988 of $5,400. The second claim was for $449 being travelling expenses incurred in conducting at the request of the respondents an auction at Camberwell, Victoria on 2 October 1983. The third claim was for $297 being travelling expenses incurred in conducting a second auction on 24 June 1984 and the fourth $1,354 being expenses incurred at the request of the respondents on 18 May 1984 in conducting a parade of posters in High Street, Armadale. In respect of the declaration sought in paragraph 4 of the application the applicants pleaded that the respondent Saffar in May 1988 made allegations to the effect that the applicants were indebted to one or other of the respondents in the sum of $17,000, which allegations were untrue.
The statement of claim ended with the following endorsement:
"The Applicants rely upon Section 4 of the Jurisdiction of Courts (Cross-Vesting) Act 1987 (Commonwealth) and Section 4 of the Jurisdiction of Courts (Cross-Vesting) Act 1987 (South Australia) in respect of the whole of the claim specified in the Application on the grounds that the matter is a matter in which the Supreme Court of South Australia has jurisdiction because the contracts between the Applicants and the Respondents referred to in this statement of claim were made in the State of South Australia. In the alternative the Applicants rely on the Jurisdiction of Courts
(Cross-Vesting) Act 1987 (Victoria) on the grounds that the Respondents reside and the First Respondent is incorporated and trades in the State of Victoria."
The respondents filed an appearance on 9 September 1988. At the first directions hearing on that day the applicants' attention was drawn to the fact that there appeared to be no federal element in their claims. They were State matters as defined in the South Australian and Victorian cross-vesting legislation. It was doubtful therefore, they were told, whether this Court should exercise jurisdiction other than to transfer the matter to a more appropriate Court. The attitude of the solicitors for the respondents in this regard was that they wished to consider and take instructions whether to make an application for such a transfer. On 16 November 1988 the respondents filed a notice of motion seeking orders:
"1. That pursuant to section 5(4) of the Jurisdiction of Courts (Cross-Vesting) Act 1987 (Commonwealth), the within action be transferred to the Supreme Court of Victoria;
2. That the within action, upon transfer to the Supreme Court of Victoria, be joined with proceedings initiated in that Court under action number 8 of 1983 between the first named respondent herein as plaintiff and the applicant herein as defendant.
3. That the application in the within action be dismissed and that the applicant do pay the respondents costs associated with such application;
4. ...
5. ..."
The following affidavit material which was not challenged was put before the Court in support of the application to transfer. The solicitor for the respondents deposed, in reliance upon information received from their Melbourne solicitors, that the proceeding in the Supreme Court of Victoria had been initiated on 3 March 1983 and that the applicant in this matter as defendant had appeared thereto without objection being taken to jurisdiction of the Supreme Court of Victoria. The application in the action in the Federal Court, it was said, raised issues substantially similar to issues in the Victorian action, all of which issues arose out of previous dealings between the parties. The affidavit went on to set out the fact that the Iraj Master referred to in the applicants' statement of claim had commenced proceeding in the County Court of Melbourne against the first two applicants. The applicants again did not object to the jurisdiction of the County Court and after a number of days of hearing the proceeding were settled on 31 May 1988. The terms of settlement included the following paragraph:
"5. Mr. Hooshiyar Saffar of 307 Barkers Road, Kew hereby acknowledges receiving the sum of $6,000.00 by telegraphic transfer on 12th November as part payment of sums outstanding by him at that date by the firstnamed defendant therein."
The "firstnamed defendant" was the second applicant in this proceeding and he as well as the second respondent in this proceeding signed and initialled the terms of settlement. An affidavit in support of the application to transfer this matter was also sworn by the respondent Saffar who in addition to confirming the above matters deposed to the fact that he had instructed his solicitors to serve a notice of intention to proceed in the Supreme Court proceeding. He said that he had delayed doing so pending the outcome of the Master proceeding in the County Court and with the hope that the matter could be resolved. The notice of intention to proceed was forwarded to the solicitors on the record of the applicants on 14 November 1988. The special endorsement of claim in the Supreme Court proceeding in which the applicant company was the defendant and the respondent company was the plaintiff was in the following terms:
"The Plaintiff's claim is
1. The Plaintiff is a company duly incorporated in accordance with the provisions of the Victorian Companies Act
2. The Defendant is a company duly incorporated in accordance with the provisions of the South Australian Companies Act.
3. The Defendant is indebted to the Plaintiff in the sum of $48,373.38 for goods placed on consignment with the Defendant for sale between July 1980 and November 1982, such goods having been sold by the Defendant and the Defendant having failed to account to the Plaintiff for the proceeds of sale of such goods.
AND THE PLAINTIFF CLAIMS........ ........ ...$48,373.38"
The plaintiff in that proceeding took out a Summons for Final Judgment which summons was with the consent of both parties and in their absence on 17 June 1983 adjourned sine die. Mr. Du Plessis contended that as a result of negotiations between the parties the proceeding were compromised and that the plaintiff had agreed to discontinue the proceedings, each party bearing its own costs. However on 28 April 1989 a statement of claim was filed in the Supreme Court of Victoria wherein the plaintiff's claim was amended to $30,557.00 and, in the alternative, an account.
On 2 May 1989, the day fixed for the hearing in this Court of the respondents' notice of motion for a transfer to Victoria, the applicants filed a notice of motion seeking a transfer of the proceeding to the Supreme Court of South Australia. In the affidavit in support of this notice of motion the solicitor for the applicants deposed to the fact that on 17 April 1989 an Inter-Partes summons had been issued out of the Supreme Court of South Australia. The statement of claim annexed to the summons made claims identical to those in the proceeding in this Court with the exception of the claim relating to the amount of $6,000 and interest which claim was excluded on the ground that it was said to be "out of time".
The two notices of motion seeking transfer to the Supreme Court of Victoria and the Supreme Court of South Australia respectively were heard together and little argument was presented in support of the earlier claim that the proceeding should remain with this Court. There is no doubt in my opinion that the initiation of proceeding in this Court was an extreme instance of "forum shopping". It was common ground that the case which the applicants seek to make would not come within the jurisdiction of this Court but for the provisions of s.4 of the Jurisdiction of Courts (Cross-vesting) Act 1987 of the State of South Australia and sub.s9(2) of the Jurisdiction of Courts (Cross-vesting) Act 1987 of the Commonwealth.
Neither the application nor the statement of claim contained any element of federal jurisdiction. Furthermore the amount of the claim was more appropriate to be litigated in a District or County Court. If reliance had been placed upon the provisions of the Trade Practices Act 1974, s.86A thereof could well have enabled an immediate transfer to the District Court of this State, In the absence of any such reliance, it is necessary for this Court to act under the Jurisdiction of Courts (Cross-vesting) Act 1987 of the Commonwealth.
In their notices of motion each party asks for an order pursuant to sub.s5(4) of that Act. The terms of that sub-section are as follows:
"(4) Where -
(a) a proceeding (in this sub-section referred to as the 'relevant proceeding') is pending in the Federal Court or the Family Court (in this sub-section referred to as the 'first court'); and
(b) it appears to the first court that -
(i) the relevant proceeding arises out of, or is related to, another proceeding pending in the Supreme Court of a State or Territory and it is more appropriate that the relevant proceeding be determined by that Supreme Court; or
(ii)having regard to -
(A) whether, in the opinion of the first court, apart from this Act and any law of a State relating to cross-vesting of jurisdiction, the relevant proceeding would have been incapable of being instituted in the first Court and capable of being instituted in the Supreme Court of a State or Territory;
(B) the extent to which, in the opinion of the first court, the matters for determination in the relevant proceeding are matters arising under or involving questions as to the application, interpretation or validity of a law of the State or Territory referred to in sub-sub-paragraph (A) and not within the jurisdiction of the first court apart from this Act and any law of a State relating to cross-vesting of jurisdiction; and
(C) the interests of justice, it is more appropriate that the relevant proceeding be determined by that Supreme Court; or
(iii)it is otherwise in the interests of justice that the relevant proceeding be determined by the Supreme Court of a State or Territory, the first court shall transfer the relevant proceeding to that Supreme Court."
If there is no proceeding pending in a Supreme Court which pursuant to sub.para.5(4)(b)(i) arises out of or is related to the Federal Court proceeding, sub.paras.(ii) and (iii) of para.5(4)(b) provide alternative grounds upon which a transfer can be made. The Federal Court is obliged to transfer a proceeding to the Supreme Court if it comes within either of those sub-paragraphs. It is very apparent that the interests of justice require that matters which have traditionally been determined by State Courts should in the ordinary course continue to be so determined. This intent is confirmed by para.(b) of the preamble. It is pertinent also to note that whereas sub.paras.(ii) and (iii) are true alternatives, the three criteria in sub.para.(ii) are cumulative.
Each party, having initiated proceeding in a Supreme Court, sought to rely on sub.para.5(4)(b)(i) as well as sub.paras (ii) and (iii). In the case of the respondents to this proceeding they had a proceeding "pending" in the Supreme Court of Victoria since early 1983 but this proceeding has been moribund since that date. They have now revived this proceeding and have indicated their intention to proceed. The applicants did not have any proceeding "pending" in the Supreme Court of South Australia at the time of the respondents' motion to transfer but commenced such proceeding some 9 months after the issue of their application in this Court. This Supreme Court proceeding was initiated approximately 14 days prior to the date fixed for hearing in this Court of the respondents' notice of motion to transfer to Victoria. Its existence prima facie enables the applicants to rely upon sub.para.5(4)(b)(i).
I am disinclined to attach much weight to the applicants' claim based on the sub-paragraph. It may well be said that the claims in the South Australian Supreme Court were "colourable", in the sense that they were initiated for an improper purpose, namely in an attempt to attract a decision in their favour under sub.para.5(4)(b)(i).
Notwithstanding the reliance by both sides upon the provisions of sub.para.5(4)(b)(i) I propose to give consideration to the criteria set out in sub-sub.paras.(A),(B) and (C) of para.5(4)(b)(ii) of the Act. They are the criteria in accordance with which I should, in my opinion, determine which is the most appropriate Court to which I should transfer the proceeding in this Court.
The provisions of para.5(4)(a) of the Commonwealth Act having been satisfied, the question then in this matter is whether it appears to this Court that, having regard to the cumulative requirements of sub-sub.paras.(A),(B) and (C) it is more appropriate that the proceeding be determined by the Supreme Court of Victoria or the Supreme Court of South Australia.
As to sub-sub.paras.(A) and (B) it is clear, as previously stated, that apart from the cross-vesting legislation, the proceeding would have been incapable of being instituted in this Court and capable of being instituted in either of the Supreme Courts. The basis for this conclusion is that on the evidence at this stage before the Court, which although in many instances somewhat inconsistent, was not challenged by cross-examination, the negotiations, business dealings and performance of the contracts relied upon were to a greater or lesser extent conducted in part in each State. The claims of the applicants are claims primarily arising in contract and no reliance was placed on any State statute. In whichever Supreme Court a proceeding might be commenced, leave to serve outside the jurisdiction would doubtless be necessary in that the respondent or defendant resided in another State.
As to sub-sub-para (C) it is apparent that this is the determining provision. Counsel for the applicants relied on the fact that his clients reside and carry on business in South Australia and had chosen to invoke the jurisdiction of a Court in that State. For that reason, if this Court was an inappropriate Court to determine the matters in the proceeding, the proper exercise of discretion was to transfer it to the Supreme Court of the State of their choice, particularly as there was a proceeding pending in the Supreme Court of that State.
On the other hand counsel for the respondents pointed to the two sets of proceedings, one of which is pending in Victoria, in neither of which had the applicants objected to the jurisdiction of the particular Court or applied for a change of venue. Particularly significant matters, it was said, were the settlement of the County Court proceeding and the allegation of a compromise of the Victorian Supreme Court proceedings. Each of these matters could well have to be investigated and, having occurred exclusively in Victoria, any investigation would necessitate examination of primarily Victorian witnesses. Certainly there would be a preponderance of parties located in Victoria to testify in relation to matters concerning the settlement or otherwise of the two proceedings in that State.
I would however not contemplate making the order for consolidation sought in para.2 of the respondents' notice of motion. Such an order would amount to an improper interference in the internal management of the Supreme Court of Victoria.
It seems to me that the decision in this matter as to the more appropriate Court must be determined by reference to the "lodestar" of the interests of justice. In this regard I refer to and adopt the approach of Wilcox J. in Bourke v State Bank of NSW (1989) ATPR 49,985 when he spoke at p 49,999 of the necessity to identify objective factors which would determine whether one forum is more appropriate than another:
"Finally, in connection with this subparagraph the Court must consider 'the interests of justice'. In my opinion this phrase ought to be read widely. 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 the litigation. In the present case there is no submission that it is in ' the interests of justice' for the matter to be transferred to the Supreme Court. Notwithstanding that fact, I have given this question careful consideration. But I find difficulty in identifying any objective factor by reference to which it can be said that, as between the Supreme Court and this Court, it is in 'the interests of justice' for the matter to be heard in one court rather than in the other."
I consider the following objective factors favour the transfer of the proceeding in this Court to the Supreme Court of Victoria. There was an existing proceeding pending in that Supreme Court at the time the application was taken out in this Court. The applicants' contention that that proceeding had been the subject of a compromise which required it to be discontinued receives no support from the evidence and the revival thereof has not to date been challenged in the Supreme Court by the applicants. The three small claims in this Court relate to matters arising out of business dealings between the parties which primarily required performance by the applicants in Victoria. The claim for $6,000 and interest was a subject of the terms of settlement of the Victorian County Court proceedings. The declaration sought in relation to the sum of $17,000 allegedly claimed by the respondents as owing by the applicants arises out of the business dealings between the parties. The statement of claim of the respondents in the Supreme Court proceedings requires an account to be taken of these business dealings. If that proceeding continues it appears it will encompass the totality of the issues between the parties whereas the applicants' Supreme Court proceeding in this State refers only to limited issues. The applicants' claim in respect of the sum of $6,000 can not be litigated in the Supreme Court of this State but can be determined if the proceeding in this Court is transferred to the Supreme Court of Victoria. This factor will be a substantial deterrent to the litigation by the applicants of similar issues in two Courts.
In addition to placing reliance upon the proceeding which has been belatedly commenced in the Supreme Court of this State the applicants contended that they were entitled to invoke the jurisdiction of a Court in this State. This choice on their part should, they said, be taken into account in determining the more appropriate of the two Supreme Courts. This submission might well require consideration if the principles of forum non conveniens are required to be taken into account. However such principles have little relevance when the exercise of cross-vesting jurisdiction is under consideration (See per Rogers A.J. in Bankinvest A.P. v Seabrook an unreported decision of the Court of Appeal of New South Wales delivered on 29 September 1988 but shortly to be reported in (1989) 14 NSWLR 711). The applicants also pointed to the expense and inconvenience to them of having to litigate in Victoria. They particularly had in mind the moving of their business records to Victoria and also the medical condition of the applicant Peter Du Plessis. Notwithstanding these inevitable difficulties, that applicant attended a six days hearing of the County Court proceeding in Victoria in the middle of 1988. Like inconvenience, except in respect of the medical matters, will be occasioned to the respondents and the solicitors involved in the Master proceeding and the Victoria Supreme Court proceeding particularly if the terms of settlement in the former and the allegation of compromise in the latter proceeding became relevant issues in a hearing in this State.
In my opinion an order should be made transferring the proceeding to the Supreme Court of Victoria. The matter of the medical condition of Peter Du Plessis can be raised before and dealt with by that Court. The costs of the proceeding in this Court, excluding the cost of the respondents' notice of motion, to be costs in the proceeding in the Supreme Court of Victoria. The applicants are to pay the costs of the respondents' notice of motion before me because in my opinion there was no justification other than forum shopping for the filing by the applicants of the proceeding in this Court.
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