Gordon v KD Wood Valuations Pty Ltd

[2001] FCA 737

FEDERAL COURT OF AUSTRALIA

Gordon v KD Wood Valuations Pty Ltd
[2001] FCA 737

PETER GORDON v KD WOOD VALUATIONS PTY LIMITED ACN 065 382 345
N 1336 OF 2000

GYLES J
SYDNEY
12 JUNE 2001

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N 1336 OF 2000

BETWEEN:	PETER GORDON APPLICANT
AND:	KD WOOD VALUATIONS PTY LIMITED ACN 065 382 345 RESPONDENT
JUDGE:	GYLES J
DATE OF ORDER:	12 JUNE 2001
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1.The application to transfer the proceeding to the Supreme Court of New South Wales is dismissed.

2.The applicant on the motion (the respondent to the proceeding) pay the costs of the respondent to the motion.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N 1336 OF 2000

BETWEEN:	PETER GORDON APPLICANT
AND:	KD WOOD VALUATIONS PTY LIMITED ACN 065 382 345 RESPONDENT

JUDGE:	GYLES J
DATE:	12 JUNE 2001
PLACE:	SYDNEY

REASONS FOR JUDGMENT (EX TEMPORE)

1. This is an application for an order transferring this proceeding to the Supreme Court of New South Wales. The claim before this Court is made by a second mortgagee which alleges that it lent monies of $2.9 million on the basis of a valuation by the respondent of a property at Wahroonga in early 1998. The claim is for breach of s 52 of the Trade Practices Act 1974 (Cth) and for negligence. The property in question has been sold and all proceeds have been retained by the first mortgagee which claims a significant shortfall.

2. A proceeding has been on foot for some time in the Supreme Court by the first mortgagee against the mortgagors and another party.  Recently, leave was granted to join the present respondent as a defendant in that proceeding, the first mortgagee claiming against the respondent arising out of what it alleges is a negligent valuation of $2.49 million of the same property at Wahroonga in January 1996.  The other issues in that case relate to aspects of the conveyancing transactions.  There is a second proceeding in the Supreme Court in which the first mortgagee sues the additional party to whom I have referred and a company, also arising out of certain conveyancing proceedings.

3. The first question which arises upon consideration of s 5(4) of the Jurisdiction of Courts (Cross Vesting) Act 1987 (Cth), so far as is relevant, is whether this proceeding “arises out of” or is “related to” another proceeding pending in the Supreme Court.  In my opinion, this proceeding does not arise out of any Supreme Court proceeding.  It is arguable that it is related to the claims for which leave has been granted to the first mortgagee to make against this respondent in the Supreme Court proceeding in the sense that there are two proceedings against the same respondent arising out of valuations of the same property.  However, the valuations are more than eighteen months apart and are for significantly different sums of money.  There is, of course, a degree of overlap in relation to the comparable sales which are considered in each valuation. 

4. Assuming, for the purposes of argument, without deciding, that there is the necessary relation between the proceedings, the question is whether it is more appropriate that this proceeding be determined by the Supreme Court.  The applicant in this proceeding (the respondent to the present motion) submits that it is not more appropriate.  It is submitted that the applicant in this proceeding has invoked the undoubted jurisdiction of the court to hear a proceeding of a fairly ordinary nature, that it need not be complicated by reference to other proceedings, and that the issues in each proceeding are different.

5. The applicant on the motion suggests that it will be put to trouble and expense by dealing with two proceedings in different courts where there is, at least, an evidentiary overlap, if not more, and there is also a risk of inconsistent verdicts.  Further, it submits that this proceeding cannot, in practice, be finalised until it is known what the result of the Supreme Court proceeding is upon the accounts between the various parties.  It is submitted that, for all I know, there could end up out of the proceeding by the first mortgagee a balance which must be held by it in favour of the second mortgagee.

6. At the end of the day I am not persuaded that it is positively more appropriate to transfer this proceeding to the Supreme Court.  If it is transferred, the question would still arise as to how this proceeding is to be dealt with.  It is not, by any means, clear that it would be heard with the other proceedings and, if it were, that would inevitably involve the applicant in this proceeding in the delay and the extra expense consequent upon being caught up in wider proceedings.

7. There is no particular reason why a second mortgagee who advances moneys on the faith of a valuation should be delayed in proceeding with any valid claim it has by reason of complications between unrelated parties.  It seems to me that would amount to a real prejudice which is sufficient to outweigh the prejudice to which the respondent in this proceeding appeals. 

8. I should make clear that in my opinion, the issue as to whether there is recovery due to the second mortgagee arising out of the Supreme Court proceeding is, in a sense, a red herring.  If that circumstance results during the currency of this proceeding then, no doubt, there would be either credit given or a stay granted.  If it arises after judgment then there would be a stay of execution or the amount would be held on trust or a similar arrangement for the respondent if the respondent is successful.  Further, I do not see that truly inconsistent verdicts could arise. 

9. I have attempted to balance matters, bearing in mind that once jurisdiction in this Court is properly invoked, it ought to be exercised unless good reason is shown.  I do not think that s 5(4)(b)(i) is satisfied.  In my view s 5(4)(b)(ii) is less appropriate as it deals with circumstances which do not arise here.  It is true that, as the respondent submits, it is not clear that each of the considerations in ss 5(4)(b)(ii)(A), (B) and (C) has to be satisfied in the technical sense, but I must have regard to each of those matters and I am plainly of the view that it would not be more appropriate under that provision that this proceeding be transferred.  So far as s 5(4)(b)(ii) is concerned, I have already touched on the factors which would be relevant to that subsection in dealing with s 5(4)(b)(i).  I therefore decline to make the order for transfer.  I order that the applicant on the motion (the respondent in the proceeding) pay the costs of the respondent to the motion.

I certify that the preceding nine (9) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gyles.

Associate:

Dated:             19 June 2001

Counsel for the Applicant:	P Whitford
Solicitor for the Applicant:	Clayton Utz
Counsel for the Respondent:	CF Adamson
Solicitor for the Respondent:	Phillips Fox
Date of Hearing:	12 June 2001
Date of Judgment:	12 June 2001