Fastlane Australia Pty Ltd v Nolmont Pty Ltd
[2005] VSC 389
•16 August 2005
| Do Not Send for Reporting | ||
| IN THE SUPREME COURT OF VICTORIA | Not Restricted | |
AT MELBOURNE
COMMERCIAL AND EQUITY DIVISION
No. 6695 of 2005
| FASTLANE AUSTRALIA PTY LTD | Plaintiff |
| v | |
| NOLMONT PTY LTD & ORS | Defendants |
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JUDGE: | WHELAN J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 16 August 2005 | |
DATE OF RULING: | 16 August 2005 | |
CASE MAY BE CITED AS: | Fastlane v Nolmont | |
MEDIUM NEUTRAL CITATION: | [2005] VSC 389 | |
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PRACTICE AND PROCEDURE – Transfer of proceeding – Jurisdiction of Courts (Cross-Vesting) Act 1987 (Vic) s 5(2)(b)(iii) – Terms and conditions of purported agreement requiring conduct of litigation in Victoria – Application for transfer to the Supreme Court of Queensland dismissed.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr M G McNamara | White Cleland |
| For the Defendants | Mr M S Osborne | Wood Fussell |
HIS HONOUR:
This is an application by summons filed 29 July 2005 in which the defendants seek an order that the proceeding be transferred to the Supreme Court of Queensland pursuant to s 5(2)(b)(iii) of the Jurisdiction of Courts (Cross-Vesting) Act 1987 (“the Act”).
The plaintiff is a wholesaler of fashion clothing. The first defendant is a clothing retailer. On 31 March 2005, the first defendant was placed in administration and the second and third defendants were appointed administrators.
On 31 May 2005, the first defendant executed a deed of company arrangement and the second and third defendants became deed administrators.
In the statement of claim, the plaintiff alleges that in October 2002 the plaintiff and the first defendant entered into an agreement for the supply of goods by the plaintiff to the first defendant. The plaintiff alleges breach of the agreement by failure to pay the purchase price and by disposal of the goods in breach of a retention of title clause.
The plaintiff also alleges that there have been further breaches by a failure to return the goods, by unpacking the goods, by altering the goods and attaching labels and price tickets to them, by displaying the goods, and by other conduct.
A claim is made for breach of contract and claims are also made in detinue and conversion. It is alleged that the administrators are personally liable for the disposal of some of the goods since 31 March 2005, and that they are personally liable for the purchase price of some of the goods. No defences have yet been filed.
In the hearing before me, there was no substantial dispute as to the principles to be applied.
Section 5(2) of the Act relevantly provides:
“(2) Where –
(a) a proceeding (in this sub-section referred to as the “relevant proceeding”) is pending in the Supreme Court (in this sub-section referred to as the “first court”); and
(b) it appears to the first court that – …
(iii) it is otherwise in the interests of justice that the relevant proceeding be determined by the Supreme Court of another State …
the first court shall transfer the relevant proceeding to that other Supreme Court.”
The principles applicable on these applications are as follows. First, one starts with the statement of Street CJ in Bankinvest AG v Seabrook,[1] recently applied by the High Court in BHP Billiton Ltd v Schultz,[2] and by Gillard J in this Court in Ewins v BHP Billiton Ltd:[3]
“It calls for what I might describe as a “nuts and bolts” management decision as to which court, in the pursuit of the interests of justice, is the more appropriate to hear and determine the substantive dispute.”
[1](1988) 14 NSWLR 711, 713-714.
[2][2004] HCA 61, [13] per Gleeson CJ, McHugh and Heydon JJ.
[3][2005] VSC 4, [24].
Whilst described as a “nuts and bolts” decision, this does not mean that it is an administrative decision, as opposed to an inter-partes exercise of judicial power.[4]
[4]BHP Billiton Ltd v Schultz [2004] HCA 61, [71] per Gummow J.
Second, there is a statutory requirement to exercise the power of transfer whenever it appears that it is in the interests of justice that it should be exercised.[5]
[5]Ibid [14] per Gleeson CJ, McHugh and Heydon JJ, [62] per Gummow J and [222] per Callinan J.
Third, the issue arising under the legislation is not the same as the issue which arises in the context of forum non-convenience, but factors identified in cases in that context, in particular, the House of Lords decision in Spiliada Maritime Corporation v Cansulex Ltd,[6] remain relevant.[7]
[6][1987] AC 460.
[7]BHP Billiton Ltd v Schultz [2004] HCA 61, [18]-[20] per Gleeson CJ, McHugh and Heydon JJ and [42] per Gummow J.
Amongst the factors which are so relevant are questions of convenience and expense, issues of the availability of witnesses, the places of residence or business of the parties and the witnesses, and the law which governs the relevant transactions.[8]
[8]Ibid [18]-[19] per Gleeson CJ, McHugh and Heydon JJ and [163] per Kirby J.
In any particular case, the law governing the relevant transactions may be of greater importance or lesser importance.[9] Similarly, the existence of an agreement between the parties regulating the jurisdiction in which their disputes are to be heard may also be a factor.[10]
[9]Ibid [20] per Gleeson CJ, McHugh and Heydon JJ.
[10]World Firefighters Games Brisbane, 2002 v World Firefighters Games Western Australia Inc (2001) 161 FLR 355, [38]; Patrick Badges Pty Ltd v Commonwealth of Australia [2002] NSWSC 221; Motor Trade Finances Prestige Leasing Pty Ltd v Elderslie Finance Corporation Ltd [2005] VSC 360.
Finally, the High Court has made it clear that a disinclination to override the plaintiff’s choice of forum is not a relevant factor to be taken into account.[11]
[11]BHP Billiton Ltd v Schultz [2004] HCA 61, [25] per Gleeson CJ, McHugh and Heydon JJ, [72] per Gummow J and [167] per Kirby J.
The defendants submitted that an order ought to be made transferring the proceeding to Queensland for the following reasons:
1. The proceeding concerns goods which are located in Queensland and concerns alleged dealings with those goods, all of which occurred in Queensland.
2. The first defendant is subject to a deed of company arrangement and the second and third defendants are deed administrators. The administration is being conducted in Queensland and the impact of the additional cost of litigating in Victoria will detrimentally affect innocent third party creditors.
3.The defendants’ witnesses are all in Queensland. The first defendant’s business was, and continues to be, conducted in Queensland.
4.The plaintiff’s claim is, in substance, a claim in conversion. The place of the alleged conversion is Queensland. Reliance was placed upon the decision in Ewins v BHP Billiton Ltd.[12]
[12][2005] VSC 4.
The plaintiff opposes the application. In substance the plaintiff submitted that just as the defendants reside and conduct business in Queensland and are likely to call witnesses resident in Queensland, the plaintiff resides and conducts business in Victoria, and its likely witnesses are in Victoria.
The plaintiff submits there will be little or no inconvenience associated with the fact that the goods are in Queensland and submits that there is no credible suggestion that any substantial number of the goods would need to be tendered.
The plaintiff particularly relies upon an alleged term of the agreement which it alleges between it and the first defendant.
It is necessary to set out the material before me concerning this alleged term.
The initial affidavit in support of this application was sworn by one of the administrators, Mr Gerald Thomas Collins, on 28 July 2005. In paragraph 31 of that affidavit, Mr Collins commented upon the allegation in the statement of claim of an agreement between the plaintiff and the first defendant and swore as follows:
“Exhibited hereto and marked “GTC6” is a true copy of the only Application for Credit and terms and conditions the Company has executed, as far as I am aware. If the Agreement the Plaintiff relies upon is binding (which is not admitted), the agreement does not contain any express provision regarding the law applicable to the agreement, or any clause to the effect that the dispute be litigated in Melbourne or in any other place.”
Notwithstanding Mr Collins’ assertion to the contrary, “GTC6” does contain a provision dealing with those matters.
The exhibit “GTC6” is comprised of an application for credit which has been purportedly completed on behalf of the first defendant and to which has been affixed the first defendant’s company seal. Attached to this application is a document headed “Terms and Conditions”. One of the terms and conditions reads as follows:
“Any agreement and any sale or supply of goods and services, shall be deemed to have been made in Melbourne and the purchaser acknowledges that any dispute arising between the parties shall be heard in and be governed by the laws of the State of Victoria.”
In an affidavit in opposition to this application sworn by a director of the plaintiff, Mr Paul David Neate, on 11 August 2005, Mr Neate referred to and quoted this term.
In a further affidavit sworn on 12 August 2005, Mr Collins swore that in his earlier affidavit he was referring only to the application for credit section of “GTC6” and not to the annexed terms and conditions. He also swore that he could not make sense of the document and did not know whether the terms and conditions had been attached to the credit application or not.
The sole director and secretary of the first defendant, Mr Austin John Watson, swore an affidavit on the same day. He deposed that the application for credit had been executed without his authority and without his knowledge.
On the morning of the hearing before me, an affidavit was sworn by the solicitor for the plaintiff. This affidavit produced the application for credit with the attached terms and conditions held by the plaintiff, as well as a facsimile coversheet. This material indicates that the completed application for credit, including the attached terms and conditions, was faxed to the plaintiff on 15 October 2002.
As indicated previously, the application itself bears the first defendant’s seal. The seal is attested to by a Ms Masters.
Mr Watson, in his affidavit, acknowledged that Ms Masters was an employee, but he swore that she had no authority to enter into the agreement.
The covering fax sheet is signed by another employee of the first defendant, or rather by another person purporting to be an employee of the first defendant, named Val Crawford.
The defendants intend to contend that the application for credit was executed without authority.
There is very little between the competing forums on the issue of convenience and expense. The defendants and their witnesses are in Queensland. The plaintiff and its witnesses are in Victoria. Perhaps matters might weigh a little in favour of Queensland as the goods are there and as the first defendant is under a deed of company administration, which might impose greater burdens than would otherwise be the case.
It is also true that the conduct relied upon as constituting a breach of the agreement and conversion of the goods occurred in Queensland. This is not as significant a factor in a case of this kind as it might be in other cases, such as personal injury litigation.
It was suggested that the matter might be heard more quickly in Queensland, but I do not believe I can make any realistic assessment of whether there is any comparative advantage in that respect.
Generally, on issues of convenience and expense, the differences between Victoria and Queensland are marginal. The inconvenience to the plaintiff of litigating in Queensland is likely to be similar to the inconvenience to the defendants of litigating in Victoria.
In my view, the matter which is significant here is the provision in the terms and conditions of the credit application to which I have referred.
On this application, I cannot decide whether the plaintiff and the first defendant are bound by those terms and conditions. One issue which is to be raised in that connection is a question of authority. On the material before me, however, it does appear that at the outset of the relationship the plaintiff proffered terms to the first defendant which included a term requiring that any litigation be conducted in Victoria, that two of the first defendant’s employees purported to accept those terms, and that the plaintiff thereafter supplied goods to and extended credit to the first defendant. The plaintiff and the two employees of the first defendant dealing with the matter when the relationship was established did so on the basis that litigation arising out of their dealings would be conducted in Victoria.
It seems to me that that circumstance tips the balance in favour of Victoria and accordingly the application to have the matter transferred to Queensland fails.
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