Dwyer v Hindal Corporate Pty Ltd - [2005] SASC 24

SUPREME COURT OF SOUTH AUSTRALIA
(Civil: Application)
In the Matter of DSTORE LTD (RECEIVERS & MANAGERS APPOINTED) (IN LIQUIDATION)
DWYER & ANOR v HINDAL CORPORATE P/L; MAXSTED & ANOR v ARNOLD BLOCH LIEBLER
Judgment of The Honourable Justice Debelle
21 January 2005
PROCEDURE - COURTS AND JUDGES GENERALLY - COURTS - CONCURRENT JURISDICTION OF DIFFERENT COURTS
Cross-vesting - company in liquidation - liquidators' actions in South Australian courts to recover preferential payments - application by defendants to transfer proceedings to Supreme Court of Victoria - interests of justice - relevant factors - application dismissed.
Jurisdiction of Courts (Cross-vesting) Act 1997 s 5 (2) (b) (iii); Corporations Act 2001 (Cth) s 1337H; Corporations Act 1990 (SA) s 44, referred to.
Bourke v State of New South Wales (1988) 22 FCR 378; Rosenboon v Qantas Airways Ltd (2002) 56 NSWLR 164; Re McKean (unreported, Federal Court, NSW, No 499 of 1996); Rick Cobby Pty Ltd v Podesta Transport Pty Ltd (1977) 139 FLR 54; St George Bank Ltd v McTaggart (2003) 2 Qd R 568, applied.
Bankinvest AG v Seabrook (1988) 14 NSWLR 711; BHP Billiton Ltd v Schultz [2004] HCA 61; Acton Engineering Pty Ltd v Campbell (1991) 103 ALR 437; Spiliada Maritime Corporation v Cansulex Ltd [1987] AC 460; James Hardie & Co Pty Ltd v Barry (2000) 50 NSWLR 357; Dawson v Baker (1994) 120 ACTR 11; Pegasus Leasing Ltd v Tieco International (Australia) Pty Ltd (1993) 61 SASR 195; Sihota v Pacific Sands Motel Pty Ltd (In Liq) (2000) 56 NSWLR 721; Continental Venture Capital Ltd v Amman Aviation Pty Ltd (In Liq) (2001) 53 NSWLR 687; Pegasus Leasing Ltd v Tieco International (Australia) Pty Ltd (1993) 61 SASR 195, considered.

DWYER & ANOR v HINDAL CORPORATE P/L; MAXSTED & ANOR v ARNOLD BLOCH LIEBLER
[2005] SASC 24
Civil:

DEBELLE J An application has been made by the defendants in each of two actions in this Court to transfer the action to the Supreme Court of Victoria. Both actions arise out of the liquidation of Dstore Ltd (Receivers and Managers Appointed) (in liquidation). Both applications were made pursuant to s 5 (2) (b) (iii) of the Jurisdiction of Courts (Cross-vesting) Act 1997. They were heard together. On the hearing of the applications, both defendants applied to amend their respective applications to rely on s 1337H of the Corporations Act 2001 (Cth). Leave to amend was granted.
Both actions have the same factual background. Dstore Ltd is a company in the Harris Scarfe Group of companies. On 3 April 2001 the plaintiffs were appointed joint and several voluntary administrators of 11 companies within the Harris Scarfe Group. Dstore Ltd is one of the companies in the Group and the plaintiffs were also appointed as joint and several voluntary administrators of Dstore Ltd.
On 6 April 2001, that is to say, three days after the plaintiffs had been appointed administrators of Dstore, receivers and managers were appointed to Dstore and most of the other members of the Harris Scarfe Group. Subsequently, on 3 January 2002, the plaintiffs were appointed joint liquidators of the Harris Scarfe Group including Dstore.
Dstore was registered in Victoria. Since 2001, its registered office and principal place of business has been at 551 Toorak Road, Toorak, Victoria. From July 2000 to February 2001 the registered office and principal place of business of Dstore was at 280 City Road, South Melbourne. In 2002 Harris Scarfe Holdings Ltd entered into negotiations with Dstore to acquire its business and ultimately did acquire it. Arnold Bloch Liebler (“ABL”) acted as solicitors for Dstore in those negotiations. ABL has its office in Melbourne. Clayton Utz acted for Harris Scarfe Holdings Ltd. Clayton Utz has offices in a number of the capital cities of the States. This matter was handled in its office in Melbourne. Hindal Corporate Pty Ltd (“Hindal”) is a company which provides corporate advisory services. Hindal is registered in Victoria. Its registered office and principal place of business is at 350 Collins Street, Melbourne. It was engaged to advise Dstore in its negotiations with Harris Scarfe Holdings Ltd. Most of the meetings in respect of the sale of Dstore to Harris Scarfe Holdings Ltd took place in the City of Melbourne or in the metropolitan area of Melbourne.
In these two actions the plaintiffs seek to recover what they allege were preferential payments made to each of the defendants, ABL and Hindal, in the period from October 2000 to March 2001, that is to say, within the period of six months from the relation-back day. The substance of the allegations against each of the defendants is the same. It is alleged that Dstore was insolvent when the payments were made so that the payments were insolvent payments within the meaning of s 588FC of the Corporations Act, undue preferences within the meaning of s 588FA of the Act, uncommercial transactions in the meaning of s 588FB of the Act, or avoidable transactions within the meaning of s 588FE of the Act.
The plaintiffs’ claim against ABL is that, between October 2000 and March 2001, Dstore paid the firm an amount totalling $146,247.01 as fees for services rendered. ABL admits that the payments were made within the six month relation-back period but denies that the payments are preferences or otherwise recoverable by the plaintiffs. ABL also denies that Dstore was insolvent at the time when the payments were made. ABL asserts that, after the alleged insolvency of Dstore, ABL supplied Dstore with services of an economic value at least equivalent to the payments; that the payments were an integral part of the continuing business relationship between Dstore and ABL; that ABL provided services to Dstore and received payments from it in good faith; and that ABL did not have reasonable grounds for suspecting that Dstore was insolvent or likely to become insolvent at the time it received the payments.
The plaintiffs’ claim against Hindal is that, between October 2000 and March 2001, Dstore paid Hindal an amount totalling $281,500 for services rendered. Hindal does not admit the payments nor that they are preferences or are otherwise recoverable by the plaintiffs. Hindal does not admit that Dstore was insolvent when the payments were made. To the extent that it did receive payments from Dstore, Hindal asserts that it received each payment in good faith; that at the time when it received each payment it had no grounds for suspecting that Dstore was insolvent or would become insolvent and that no reasonable person in its position would have had any grounds for suspecting those facts; that Hindal provided valuable consideration for the payments; and that the payments did not constitute a preference within the meaning of s 588FA of the Corporations Act. Hindal does not admit that Dstore was insolvent at the material times.
Shortly stated, there are common issues in each action both as to the solvency of Dstore and whether the payments constitute a preference or are otherwise recoverable by the plaintiffs.
The defendants contended that the insolvency of Dstore may no longer be an issue in these actions. It is not proper to require the Court to speculate on the question whether the insolvency will be an issue. The Court must determine the questions on this application on the basis of the existing pleadings. I therefore proceed on the footing that it will be necessary for the plaintiff liquidators to prove the insolvency of Dstore in each action.
ABL and Hindal both contend that the Supreme Court of Victoria is the more appropriate forum for reasons which are very similar. That is a consequence of the fact that the plaintiffs’ claims in these two actions arise out of the same factual background. Before examining them, I note the relevant statutory provisions.
Transfer of Proceedings – Relevant Factors
Section 1337H of the Corporations Act authorises a court to transfer a civil matter arising under the Corporations legislation to another court. Each of these actions is a civil matter arising under the Corporations legislation: s 9 of the Corporations Act.
Section 1337H (2) prescribes when a matter may be transferred. It reads:
“Subject to subsections (3), (4) and (5), if it appears to the transferor court that, having regard to the interests of justice, it is more appropriate for:
(a) the relevant proceeding; or
(b) an application in the relevant proceeding;
to be determined by another court that has jurisdiction in the matters for determination in the relevant proceeding or application, the transferor court may transfer the relevant proceeding or application to that other court.”
The question for the court to determine is whether the court to which it is sought to transfer the proceeding is more appropriate than the transferor court for the determination of the relevant proceeding or an application in the relevant proceeding. The question is to be determined by having regard to the interests of justice.
Notwithstanding that they are expressed in different terms, the issues for consideration on an application under s 1337H are, broadly speaking, the same as those which must be considered on an application to transfer proceedings made pursuant to s 5 (2) (b) (iii) of the Jurisdiction of Courts (Cross-vesting) Acts 1987 of the States and Territories. Although para (iii) of s 5 (2) (b) differs from paras (i) and (ii) of that subsection in that it does not expressly require the transferor court to consider the more appropriate forum, that is what para (iii) requires. The reasons are explained by Rogers A-JA in Bankinvest AG v Seabrook (1988) 14 NSWLR 711 at 730. It is now well established that the terms of para (iii) of s 5 (2) (b) of the Cross-vesting legislation of the States and Territories require the transferor court to determine what is the more appropriate forum and that it is not necessary that the transferor court be a “clearly inappropriate” forum: BHP Billiton v Schultz [2004] HCA 61 per Gleeson CJ, McHugh and Heydon JJ at [14], per Gummow J with whom Hayne J agreed at [42] and [69]. In Bankinvest, 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].
However, there is one important difference between para (iii) of s 5 (2) (b) and s 1337H. In the case of s 5 (2) (b) (iii), if the transferor court is satisfied that it is in the interests of justice that 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 arises. However, under s 1337H (2), even if another court is the more appropriate forum, the transferor court retains a discretion whether to transfer the proceedings. That is apparent from the use of the word “may” in the concluding words of s 1337H (2).
Section 1337L lists other matters to be taken into account by the court when deciding whether to transfer a proceeding. They are
(a)the principal place of business of any body corporate concerned in the proceeding or application;
(b)the place or places where the events that are the subject of the proceedings or application took place; and
(c)the other courts that have jurisdiction to deal with the proceeding or application.
The expression “the interests of justice” is to be interpreted broadly. That is apparent from the very terms of the expression and that interpretation of the expression has been repeatedly re-affirmed. In Acton Engineering Pty Ltd v Campbell (1991) 103 ALR 437 the Full Court of the Federal Court was considering s 44 of the Corporations Act 1990 of the States and Territories which was then in very similar terms to s 1337H. Section 44 (3) was in similar terms to s 1337L. In that decision, Black CJ said (at 440) that the expression “the interests of justice” will allow a wide range of considerations to be taken into account in deciding whether it is more appropriate for a proceeding to be determined in another court. He said,
“The expression ‘the interests of justice’ is a broad one. Section 44(3) requires a court to have regard to the matters it specifies but it does not thereby limit the range of matters that fall for consideration under s 44(2). Rather, s 44(3) recognises that, Australia being a large country with widely dispersed main centres of population, it is necessary to have regard to practical connections between a proceeding, or an application in a proceeding, and a particular part or parts of Australia to see where the interests of justice lie when deciding whether another court is a more appropriate court to determine the matter. Section 44 certainly does not deny the relevance of existing proceedings in other courts in the same or a related matter. These may, depending upon the circumstances, be of great importance in determining whether or not to transfer, but the section does not single out such considerations for special treatment.”
Although the court was then dealing with s 44 of the Corporation Acts of each of the States and Territories, the comments apply with equal force to s 1337H. In the same case, Davies J said (at 441 - 442) that the expression enables all relevant factors to be taken into account. They included
·matters relating to the efficiency of litigation which in turn include its economy and expedition;
·matters of convenience having regard to the location of witnesses and records; and
·matters of policy relating to the administration of justice by the Federal Court and the State and Territory Supreme Courts.
Plainly, the matters listed in s 1337L are also relevant to a determination of what the interests of justice require.
Before leaving the question of what is meant by the expression “the interests of justice”, it is appropriate to refer to 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.”
Those remarks have since been consistently applied and affirmed. They are to the same force and effect as the remarks of Black CJ and Davies J in Acton Engineering.
In Dawson v Baker (1994) 120 ACTR 11 at 22 Higgins J (with whom Gallop J agreed) identified a helpful checklist of factors which bear upon the interests of justice. They are
·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 parties and witnesses; and
·convenience to the court system.
That list is consistent with the reasoning in Acton Engineering, Spiliada, and BHP Billiton Ltd v Schultz. The list is clearly not intended to be an exclusive list.
The fact that the plaintiffs have chosen to litigate these issues in the Supreme Court of South Australia is not in itself a relevant factor: BHP Billiton v Schultz. Instead, the enquiry is to determine by reference to the interests of justice what is the more appropriate forum. However, that principle does not prevent regard being had to any advantages in litigating in that court which might be identified.
When considering the question of inconvenience to parties and witnesses, there are other factors which, I think, are proper to bear in mind. 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 contact while a person is interstate. The ready availability of air transport reduces the inconvenience of interstate travel. As I said in Pegasus Leasing Ltd v Tieco International (Australia) Pty Ltd (1993) 61 SASR 195 at 199, arguments as to convenience have even less force when the two courts are as approximate as Melbourne and Adelaide, as they are in this case.
There is the question whether the applicant has an onus of proof to discharge. In this context, it is necessary to amend what I said in Pegasus Leasing Ltd v Tieco International (Australia) Pty Ltd at 200, when commenting on the following extract from the reasons of Wilcox J at 396, which follows shortly after the passage already quoted:
“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.”
I said that I did not understand the paragraph to suggest that the party moving for a change of venue should bear any onus of proof. The concept of onus of proof in this context is difficult. In Bankinvest at 726 –727 Rogers JA (with whom Street CJ and perhaps Kirby P agreed) said that it is inept to speak of any onus upon the applicant for transfer. I respectfully agree with Mason P in James Hardie & Co Pty Ltd v Barry that such a sentiment may be understandable when the transfer is ordered on the court’s own motion, pursuant to s 5 (7) of the Cross-vesting Act, but it is elusive in the context of a contested application between parties. An applicant has the task, not only of identifying the factors affecting the interests of justice which establish that the transferee court is the more appropriate forum, but also of establishing that those factors should outweigh those which might be identified by the plaintiff. The court must then decide whether, having regard to the interest of justice, the transferee court is the more appropriate forum. These considerations apply with equal force to an application made under s 1337H. These considerations suggest that the applicant carries the persuasive onus that the transferee court is the more appropriate forum.
Other Relevant Factors

In the particular circumstances of the proceedings the subject of the present applications, other factors are relevant to the interests of justice. They stem from the fact that the actions are associated with the administration of the liquidation of a company. The Corporations Act 2001 (Cth) establishes a national scheme and Pt 9.6A establishes jurisdictional arrangements for the Federal Court and the Supreme Courts of the States and Territories in which, generally speaking, the jurisdiction is concurrent and no court is given primacy: Acton Engineering (supra). These principles have been recently reaffirmed by Austin J in Sihota v Pacific Sands Motel Pty Ltd (In Liq) (2000) 56 NSWLR 721. One consequence is that a liquidator appointed by a Supreme Court is not solely under the jurisdiction and control of that court but may be amenable to the jurisdiction of the Federal Court and the other Supreme Courts of the States and Territories: Acton Engineering (supra); Continental Venture Capital Ltd v Amman Aviation Pty Ltd (In Liq) (2001) 53 NSWLR 687 at [59] – [62]. Sihota v Pacific Sands Motel Pty Ltd (In Liq) is an example of a court other than the court which made the winding up order granting leave to bring proceedings against a company in liquidation.
Notwithstanding these considerations, where, as here, a liquidator commences a series of related actions out of one court and the issues in those actions are common, it is desirable, as a general rule, that the same court should hear and determine all of those actions. The reasons for that conclusion are not hard to find. First, it is more likely to result in consistent decision-making on the common issues. Secondly, the fact that all actions are in one court, it will be more conducive to the expeditious management of the litigation. Thirdly, it will thereby assist in reducing the costs of the litigation. A liquidator is plainly under a duty to keep the costs of the winding up as low as is reasonably possible in order to increase the return to creditors. There are additional costs if the liquidator has to litigate common issues in a number of different courts. As Sperling J noted in Rosenboom v Qantas Airways Ltd (2002) 56 NSWLR 164 at [44],
“The cost of conducting similar litigation in more than one court, when the totality of the litigation can be jointly managed in one court, with potential saving in costs is capable of being regarded as an “unnecessary burden”. Holding back the bulk of the cases pending determination of a lead case or cases with a view to saving costs, is not an ‘unnecessary delay’.”
This passage follows as the extract from the reasons of Wilcox J in Bourke v State of NSW which has been quoted above. The references to “unnecessary burden” and “unnecessary delay” are to those expressions as used by Wilcox J in that extract. A fourth reason will exist in those cases where the liquidator is litigating common issues in other courts in the same State. Where, as is the position in this case, actions are commenced in the Supreme Court, District Court and Magistrates Court in this State, a determination on the common issue in the Supreme Court will be binding in the other courts.
The issue in this case requires consideration of the weight to be attached to the existence of related proceedings in the Supreme Court from which it is sought to transfer proceedings and in other courts in the same State.
The Respective Contentions
The plaintiff liquidators rely on the fact that the administration of the liquidation of Dstore and of other companies in the Harris Scarfe Group has been carried out in Adelaide. The liquidator’s legal advisers are also in Adelaide. It is a large and complex liquidation. As with any liquidation, the liquidator does not have extensive funds available. Although Dstore has assets, the accounts and statements presented by the liquidator pursuant to s 539 (1) of the Corporations Act and dated 21 July 2004 state that Dstore has $321.56 cash at bank.
The fact that the administration and liquidation has been conducted in Adelaide points to the conclusion that the plaintiffs are not forum shopping and there was no submission that they were.
The defendants suggested that there might be a change of liquidators. There is no clear evidence of such a fact. I must determine the issues in this case on the facts as they presently exist. Even if there were to be a change of liquidators, it is likely that the liquidation would continue to be administered from Adelaide, and thus, any change is unlikely to have any material consequence for the determination of the issues in this action.
The liquidator has commenced 62 actions in this Court, the District Court of South Australia and in the Magistrates Court of South Australia seeking to recover what are alleged to be preferential payments to creditors of Dstore, Harris Scarfe Ltd and Harris Scarfe Wholesale Ltd. Thirteen of those actions concern preferential payments by Dstore and, of those 13 actions, five are being litigated in this Court. Those five actions include the two actions the subject of these applications.
There are two issues which are common to each of the 13 actions. They are whether Dstore was insolvent when the payment alleged to be a preferential payment was made and the preferential effect of that payment. The liquidators have instructed an expert to report on the issue of insolvency in the Dstore actions and in the other actions. One report is being prepared for all of the companies. The documents and records and other source materials to be examined for the purposes of preparing the insolvency report are located in Adelaide. The documents and records are voluminous. They include 250 boxes of documents handed to the liquidators by the receivers and managers of Dstore and Harris Scarfe Ltd. The liquidators hold other additional documents.
The plaintiffs point to the fact that the insolvency of Dstore at the time when the payments were made is an issue in both of these actions. The plaintiffs submit that there will be significant consequences for the cost of prosecuting these actions if these actions are transferred to the Supreme Court of Victoria. If the actions are not transferred, only one set of these documents need be kept at a convenient office in Adelaide, where they will be available for inspection by the defendants’ legal advisers or their agents in Adelaide. However, if the action is transferred to the Supreme Court of Victoria, it will be necessary to prepare a set of documents for inspection in Melbourne in addition to the set which must be kept in Adelaide. This will involve a substantial cost in copying what is a substantial volume of documents and will be an unnecessary duplication. This will be but one of a number of additional costs which the liquidator would incur in transferring this action to the Supreme Court of Victoria.
I am satisfied that the volume of documents on the issues raised by the defendants as to whether the payments were preferential will be minimal compared with those which are relevant to the question of insolvency.
The question whether Dstore was insolvent must, of course, be examined separately from the solvency of the other companies in the Harris Scarfe Group. However, it must be noted that Dstore was a wholly owned subsidiary. There may, therefore, be aspects of the management of other companies in the Harris Scarfe Group which affected the solvency of Dstore. The true position will only be known when the expert’s report on the question of insolvency has been prepared.
There is a further and, I think, a more important factor. These and the other actions in this Court are being managed by the Court as a group. It is likely that there will be a test case on the two common issues of insolvency and the preferential effect of the payment, leaving the question of whether the payment was a preference to be determined in each action. If the action is transferred to the Supreme Court of Victoria there is a risk of inconsistent findings on these common issues. In my view, as a general rule, once a court is seized of an issue relating to the administration of a company in liquidation, it is desirable that that court should hear and determine all actions involving that issue. That principle is dictated not only by considerations of comity and courtesy between courts but also, and more importantly, to ensure that inconsistent orders are not made. This is but one aspect of the principles examined by Burchett J in Re McKean (unreported, Federal Court, NSW, No 499 of 1996, 16 April 1996).
The defendants contend that the Supreme Court of Victoria is the natural, and therefore, the more appropriate forum for the following reasons.
They point to the fact that Dstore was registered and carried on business in Melbourne or in the metropolitan area of Melbourne. They point out that the directors of Dstore reside in suburbs of Melbourne. Similarly, each of the defendants carries on business in Melbourne and the persons in each organisation who were involved in the transactions which gave rise to the payments also reside in suburbs of Melbourne. Similarly, the relevant witnesses in Clayton Utz reside in suburbs of Melbourne. All of the professional services which gave rise to the payments were provided in Melbourne. Thus, the relevant witnesses will have to come from Melbourne to Adelaide. Each defendant lists a number of witnesses who might have to be called. In my view, the number of potential witnesses listed by each defendant includes many who will not have to be called. There is no issue as to the events which give rise to the payments. The only issue is whether the payments constituted a preference. Very few witnesses from each of the defendants will be required to give evidence on those issues. It is unlikely that any of the directors or officers of Dstore will have to give evidence. Nevertheless, it will be necessary for some witnesses to have to come to Adelaide and that will result in cost and inconvenience. Equally, there will be a cost and inconvenience to the witnesses for the plaintiff liquidators having to travel to Melbourne to give evidence.
The defendants point out that their legal advisers both carry on business in Melbourne and not in Adelaide. Hindal has retained Deacons. ABL will be acting for itself. Neither Deacons nor ABL have an office in Adelaide. The plaintiffs have retained Phillips Fox, a firm with offices in both Adelaide and Melbourne. It is contended that the defendants will thereby incur extra legal costs in having to retain agents in Adelaide. There might be some additional costs incurred by the defendants in this way. That is to be a factor to which much weight should be given but I do not think it will be so substantially more than will be incurred by Phillips Fox in instructing someone in its Melbourne office. In addition, I note that both Deacons and ABL have retained the same firm, Thomson Playford, as their Adelaide agent. There is no reason why that engagement of Thomson Playford should not continue. I do not perceive the likelihood of any conflict of interest. It is a useful arrangement which will assist in reducing whatever additional cost will be incurred.
Hindal also relies on the fact that the draft Heads of Agreement between Harris Scarfe and Dstore and a draft Governing Agreement between Harris Scarfe and Dstore both provide that each party irrevocably submits to the non-exclusive jurisdiction of the courts of Victoria. I do not think any weight should be attached to this fact particularly as each clause also states that each party irrevocably waives any objection it may have to the venue of any proceedings. Similarly, no force is to be attached to the fact that each agreement provided that it was governed by the laws of Victoria. The question whether the payments are preferential will not depend on the terms of either agreement nor on the law of Victoria but on the terms of the relevant provisions of the Corporations Act, legislation of the Commonwealth, and the common law principles relating to those issues. This is not therefore a relevant factor.
Thus, the defendants’ contentions boil down to the fact that all of the events leading to and surrounding the payment occurred in Melbourne and that a number of witnesses reside in Melbourne. These are important and relevant factors. They will often be decisive factors. However, it is necessary to have regard to all relevant factors. It is necessary to consider with the cost and inconvenience to the defendants’ witnesses, the fact that, if the action is transferred to the Supreme Court of Victoria, there will be a like cost and inconvenience to the plaintiffs’ witnesses. It is not possible to compare them accurately. However, broadly speaking, it is a case of one party’s advantage being another party’s disadvantage. In my view, the respective costs and inconvenience cancel one another out or, if they do not, there is not a sufficient difference to lead to the conclusion that the Supreme Court of Victoria is the more appropriate forum.
Conclusion
After weighing the relevant factors I believe that the balance favours an order dismissing each of these applications. The cost and inconvenience to witnesses to be called by each party tend to cancel each other out. Although the relevant conduct occurred in Melbourne with the consequence that there is a close connection with the Supreme Court of Victoria, that factor is outweighed by the desirability of one court hearing and determining the common issues in these and the other actions claiming the recovery of preferential payments. Although there are only 13 other such actions, five of which are in this Court, it is desirable that all of the actions remain in this State so that there will be one decision on the common issues in this Court which will bind both the District Court and the Magistrates Court. If these two actions are transferred, the advantage of a binding decision will be lost. These factors will be conducive to an efficient and expeditious administration of the liquidation. The fact that the liquidators should not be required to incur the cost of copying a very substantial volume of documents is not a weighty factor but, nevertheless, assists in tipping the scales in favour of the actions remaining in this Court. In short, the interests of justice point to the desirability of litigating these issues in this Court. For all of these reasons, I do not believe that the Supreme Court of Victoria is the more appropriate forum.
For these reasons I dismiss both applications.
For like reasons, I dismiss the applications for a stay. An applicant for a stay must demonstrate a clear and compelling basis for that order: Rick Cobby Pty Ltd v Podesta Transport Pty Ltd (1997) 139 FLR 54 at 58; St George Bank Ltd v McTaggart (2003) 2 Qd R 568 at [17]. The applicants have not demonstrated why such a stay should be ordered