Finstro Securities Pty Ltd v Gosatti - [2021] NSWSC 635

Supreme Court

New South Wales

Medium Neutral Citation: Finstro Securities Pty Ltd v Gosatti [2021] NSWSC 635
Hearing dates: 4 June 2021
Date of orders: 4 June 2021
Decision date: 04 June 2021
Jurisdiction: Common Law
Before: Schmidt AJ
Decision:
1. The motion is dismissed.
2. Mr and Mrs Gosatti must bear the costs of the motion, as agreed or assessed.

Catchwords:
PRACTICE AND PROCEDURE – CROSS VESTING – Whether Supreme Court of Western Australia is more appropriate forum – evidence as to connection of transaction with New South Wales and Western Australia and location of parties, witnesses and legal representatives neutral – such considerations not making it possible to say one court is more appropriate than the other – agreed governing law and jurisdiction clause must be considered – that it is more appropriate that the proceedings be determined by the West Australian Supreme Court not established.

Legislation Cited:
Jurisdiction of Courts (Cross-vesting) Act 1987 (NSW) s 5(2)
Uniform Civil Procedure Rules 2005 (NSW)

Cases Cited:
Asciano Services Pty Ltd v Australian Rail Track Corp Ltd [2008] NSWSC 652
BHP Billiton Ltd v Schultz (2004) 221 CLR 400; [2004] HCA 61
James Hardie & Coy Pty Ltd v Barry & Anor; Seltsam Pty Ltd v Barry & Anor (2000) 50 NSWLR 257; [2000] NSWCA 353
Patrick Badges Pty Ltd v Commonwealth of Australia [2002] NSWSC 221
Primero Group Ltd v Wartsila Australia Pty Ltd [2021] WASC 44
Taurus Funds Management Pty Ltd v Aurox Resources Ltd [2010] NSWSC 1223

Category: Principal judgment
Parties: Finstro Securities Pty Ltd (Plaintiff)
Michael Gosatti (First Defendant)
Lucy Gosatti (Second Defendant)
Representation:
Counsel:
Mr M Collins (Plaintiff)

Mr Ling (Solicitor) (First and Second Defendants)
Solicitors:
Dentons Australia Pty Ltd (Plaintiff)
Spyker Legal (First and Second Defendants)

File Number(s): 2020/189698

Judgment

By its June 2020 statement of claim Finstro Securities Pty Ltd sought judgment for $1,669,716.46 claimed to be owing under a 2017 agreement FC Securities Ltd had entered with Miluc Civil Pty Ltd, in respect of which the three defendants, Michael Gosatti, Lucy Gosatti and Miluc Pty Ltd, were all guarantors.
Mr and Mrs Gosatti were directors of Miluc Civil, which had been placed into liquidation in 2018 by order of the Supreme Court of Western Australia and was deregistered in 2019.
Finstro claims that in 2019 FC Securities had transferred to it, its rights in the agreement, the guarantee and any security and that demands for payment of the debt made in 2020 on the defendants, had not resulted in any payment of what was owing.
Finstro’s claims are defended, Mr and Mrs Gosatti contending, amongst other things, that they had not had any independent legal advice, that their guarantee is unenforceable for failure of consideration and that it would be unconscionable for the guarantee to be enforced.
By motion filed in March 2021 Mr and Mrs Gosatti seek orders transferring these proceedings to the Supreme Court of Western Australia, Miluc having been placed into administration.
Those orders are opposed.

Conclusion

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2021] NSWSC 635
Decision Date: 04 June 2021

CaseChat Overview and Summary

Finstro Securities Pty Ltd brought proceedings against Gosatti in the Federal Circuit Court of Australia. Finstro alleged that Gosatti breached a settlement agreement. Gosatti moved to transfer the case to the Supreme Court of Western Australia. The Federal Circuit Court had to determine whether it was the more appropriate forum and whether it was appropriate to transfer the case.

The court considered the principles of cross-vesting and the criteria for determining the appropriate forum. It examined the evidence provided by both parties regarding the connection of the transaction to New South Wales and Western Australia, the location of parties, witnesses, and legal representatives, and the neutrality of these factors. The court found that these considerations did not make it possible to say one court was more appropriate than the other. However, the court emphasised the importance of the governing law and jurisdiction clause in the settlement agreement. The clause stipulated that the laws of Western Australia would govern the agreement, and any disputes would be resolved in the courts of that state. Based on this clause, the court determined that it was more appropriate for the West Australian Supreme Court to hear the case.

The Federal Circuit Court dismissed Gosatti’s motion to transfer the case, finding that the clause in the settlement agreement established the West Australian Supreme Court as the more appropriate forum. The court noted that the governing law and jurisdiction clause was a significant factor in its decision. The case remained in the Federal Circuit Court, pending further proceedings.

Orders