Gray v Hill
[2007] WASC 123
•13 JUNE 2007
GRAY -v- HILL & ORS [2007] WASC 123
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2007] WASC 123 | |
| Case No: | CIV:2022/2006 | 29 MAY 2007 | |
| Coram: | MASTER NEWNES | 13/06/07 | |
| 13 | Judgment Part: | 1 of 1 | |
| Result: | Order that action be transferred to New South Wales | ||
| B | |||
| PDF Version |
| Parties: | BRUCE NATHANIEL GRAY RICHARD JAMES HILL GRANT DESMOND BOYCE JOHN ALAN EADY |
Catchwords: | Practice and procedure Application to transfer action to New South Wales Jurisdiction of Courts (Cross-vesting) Act 1987 (WA) Relevant principles Turns on own facts |
Legislation: | Jurisdiction of Courts (Cross-vesting) Act 1987 (WA), s 5 |
Case References: | Bankinvest AG v Seabrook (1988) 14 NSWLR 711 BHP Billiton Ltd v Schultz (2004) 221 CLR 400 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- Plaintiff
AND
RICHARD JAMES HILL
First Defendant
GRANT DESMOND BOYCE
Second Defendant
JOHN ALAN EADY
Third Defendant
Catchwords:
Practice and procedure - Application to transfer action to New South Wales - Jurisdiction of Courts (Cross-vesting) Act 1987 (WA) - Relevant principles - Turns on own facts
Legislation:
Jurisdiction of Courts (Cross-vesting) Act 1987 (WA), s 5
(Page 2)
Result:
Order that action be transferred to New South Wales
Category: B
Representation:
Counsel:
Plaintiff : Mr S M Davies
First Defendant : Mr R W Richardson
Second Defendant : Mr R W Richardson
Third Defendant : Mr R W Richardson
Solicitors:
Plaintiff : Lavan Legal
First Defendant : Fairweather & Lemonis
Second Defendant : Fairweather & Lemonis
Third Defendant : Fairweather & Lemonis
Case(s) referred to in judgment(s):
Bankinvest AG v Seabrook (1988) 14 NSWLR 711
BHP Billiton Ltd v Schultz (2004) 221 CLR 400
(Page 3)
1 MASTER NEWNES: This is an application by the defendants for an order that the proceedings be transferred to the Supreme Court of New South Wales, pursuant to s 5 of the Jurisdiction of Courts (Cross-vesting) Act 1987 (WA) (the "Act").
The action
2 The action was commenced by the plaintiff on 25 September 2006. In the statement of claim, the plaintiff pleads that he and each of the three defendants is and was at all material times a director of Sirtex Medical Ltd ("Sirtex"). There is currently outstanding an application by the plaintiff to join a Mr Gilman Wong as the fourth defendant. Mr Wong is and was at all material times the chief executive officer of Sirtex.
3 The plaintiff pleads that, on or about 31 December 2004, he provided to the defendants a letter from his solicitors and thereby informed the defendants that Sirtex should immediately notify its solicitors, Freehills, that Sirtex had a potential claim against Freehills arising out of a due diligence conducted by Freehills some years previously, and that in continuing to act for Sirtex, Freehills would gain an unfair forensic advantage in circumstances where there was potential for Sirtex to claim against Freehills.
4 It is pleaded that, by a letter dated 5 January 2005, Freehills recommended that as a matter of urgency Sirtex should seek independent advice regarding the plaintiff's allegations. Freehills offered to cooperate fully in providing their files for an independent review. Shortly afterwards, the defendants caused Sirtex to retain Phillips Fox to act on its behalf in evaluating the plaintiff's allegations.
5 The plaintiff pleads that, between January and August 2005, Phillips Fox investigated the plaintiff's assertion and reported to the litigation committee of Sirtex. The litigation committee consists of the three defendants. The plaintiff pleads that during the investigation he cooperated fully with Phillips Fox and was not asked by anyone to put his allegations in writing.
6 It is alleged that by 19 August 2005 Phillips Fox had concluded the investigation sufficiently to enable Sirtex, by the litigation committee, to put an offer to Freehills that it remain the solicitors for Sirtex in "the proceedings" and that Phillips Fox be appointed to manage and deal with any actual or perceived issues of conflict on the part of Freehills and to monitor the conduct of the proceedings by Freehills to identify in advance any potential conflicts. There were certain other provisions of the offer
(Page 4)
- relating to the conduct of the proceedings by Freehills and the use of information obtained in the course of it. The "proceedings" referred to are not identified, but I assume they are the Federal Court proceedings in Perth to which I will refer below.
7 The plaintiff alleges that, by letter dated 11 September 2006, the plaintiff, together with other shareholders in Sirtex, convened a meeting of the members of Sirtex pursuant to s 249F of the Corporations Act 2001 (Cth). The intended purpose of the meeting is not pleaded.
8 It is pleaded that, on or about 18 September 2006, by a letter authorised and sent in the name of the each of the defendants, the defendants wrote to each of the members of Sirtex. The defendants also caused the letter to be released as an announcement by Sirtex on the Australian Stock Exchange.
9 It is unnecessary for present purposes to set out the text of the letter. Suffice it to say that it is alleged that, by the letter, the defendants engaged in conduct that was misleading or deceptive or likely to mislead or deceive. In particular, the plaintiff pleads that the letter was misleading or deceptive or likely to mislead or deceive in that the defendants represented that they did not understand the basis for certain complaints made by the plaintiff when in fact they knew the basis; that the meeting requisitioned by the plaintiff did not meet the necessary legal requirements and could not take place; and that the plaintiff's actions risked great damage to Sirtex, in circumstances where that was not a belief that any reasonable person could hold.
10 It is also alleged that the letter was misleading or deceptive in representing that the plaintiff had failed to articulate the complaint that Freehills had a conflict of interest; that the plaintiff had chosen not to take action against Freehills in the litigation until informed of Sirtex's intention to cross-claim against him; that Sirtex had lost access to crucial history by the action taken by the plaintiff against Freehills; and that the plaintiff's actions had caused Sirtex to incur additional costs, when in fact the additional costs were a direct consequence of the decision of the litigation committee to continue to retain Freehills.
11 The plaintiff claims that he has suffered loss and damage by reason of the defendants' conduct and claims damages pursuant to s 82 of the Trade Practices Act 1974 (Cth), alternatively s 79 of the Fair Trading Act 1987 (WA). Particulars of the loss and damage are not contained in the statement of claim.
(Page 5)
12 The plaintiff also pleads a claim in defamation, alleging that the publication was defamatory of him in a number of respects. It is unnecessary for present purposes to set out the specific defamatory imputations pleaded.
13 In connection with the defamation claim, the plaintiff pleads that the letter was published to the Australian Stock Exchange in circumstances where the defendants each knew and intended that it would be published to the world at large and not limited to the shareholders of Sirtex. The plaintiff also pleads that the defendants failed or neglected to seek comment from him or allow him any opportunity to respond to the allegations contained in the letter.
14 The plaintiff further alleges that the letter was published in circumstances where the plaintiff and other shareholders were intending to hold a meeting of Sirtex to consider a resolution to remove the first defendant as a director, a resolution which each of the defendants opposed and which they sought to persuade the members of Sirtex to vote against. It is pleaded that in publishing the letter the defendants were actuated by an ulterior motive, namely, to obtain the votes of members against the resolution.
15 It is also pleaded in support of the claim for aggravated damages in respect of the defamation claim that the defendants made a number of statements defamatory of the plaintiff to a representative of The Weekend Financial Review newspaper, in circumstances where it was the natural and probable consequence of the making of those statements that they would be republished in The Weekend Financial Review, which in fact occurred. The plaintiff claims that the defendants, by making those statements, sought to damage the reputation of the plaintiff, to promote their own reputations and to impugn the credibility, capacity and influence of the plaintiff in the affairs of Sirtex.
The relevant principles
16 In Bankinvest AG v Seabrook (1988) 14 NSWLR 711, Street CJ (at 714) described an application of this nature as involving "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".
17 That does not mean, however, that it is an administrative decision as opposed to an inter partes exercise of judicial power: BHP Billiton Ltd v Schultz (2004) 221 CLR 400 per Gummow J at 437.
(Page 6)
18 The effect of s 5 of the Act is that there is a statutory requirement to exercise the power of transfer wherever it appears that it is in the interests of justice that it should be exercised. It is not necessary that it should appear that the first court is a clearly "inappropriate" forum. It is both necessary and sufficient that, in the interests of justice, the second court is more appropriate: BHP Billiton Ltd v Schultz, per Gleeson CJ, McHugh and Heydon JJ at 421.
19 InBHP Billiton Ltd v Schultz, Gleeson CJ, McHugh and Heydon JJ pointed out (at 421-422) that the interests of justice are not the same as the interests of one party and there may be interests wider than those of either party to be considered. But the interests of the respective parties, which might in some respects be common (as, for example, costs and efficiency), and in other respects conflicting, will arise for consideration. In considering what is in the interests of justice, regard must be had to the practical circumstances that exist and any exigencies associated with the litigation; the justice referred to in s 5 of the Act is not disembodied, or divorced from practical reality.
20 While the interests of the parties are a relevant consideration, there may be conflicting interests of such a kind that justice would not attribute greater weight to one rather than the other. The advantage which a plaintiff might obtain from proceeding in one court might be matched by a corresponding and commensurate disadvantage to a defendant. The reason why a plaintiff commenced proceedings in one court might be the same as the reason why the defendant seeks to have them transferred to another court. In such a case, justice may not dictate a preference for the interests of either party.
21 The plaintiff's choice of venue is not the starting-point for the consideration of a transfer application. There is no presumption as to where the balance of the interests of justice might come down. A disinclination to override the plaintiff's choice of forum is not a relevant factor to be taken into account: ibid at 425.
22 In any particular case, what specific factorswill be relevant on an application of this sort will depend on the circumstances of the case. But among the factors which will fall for consideration are matters of cost, convenience and expense, such as the availability of witnesses, the places where the parties respectively reside or carry on business, and the law governing the relevant transaction. In any particular case, the law governing the relevant transaction may be of greater importance or lesser importance.
(Page 7)
23 Delay is a relevant factor and an application for transfer should be made as soon as practicable.
The defendants' submissions
24 The factors which the defendants contended supported the transfer of the proceedings to the Supreme Court of New South Wales were:
(1) the plaintiff, the first defendant and the proposed fourth defendant all reside in New South Wales and the second defendant, while he resides in Western Australia, considers the matter is appropriately dealt with in New South Wales. The third defendant, while he resides in Victoria, considers the matter is appropriately dealt with in New South Wales;
(2) Sirtex has been based in Sydney since at least 2001 and does not have an office in Western Australia. Since 2001, all of its meetings of members have taken place in Sydney and approximately 40 per cent of its shareholders are located in New South Wales, compared to only 5 per cent in Western Australia;
(4) the investigation by Phillips Fox, referred to in the publication and the statement of claim, was conducted by a partner in the Sydney office of Phillips Fox;
(5) the meetings of Sirtex referred to in the action took place in Sydney;
(6) the defendants (other than the second defendant and the proposed fourth defendant) do not have any family or business connections in Western Australia;
(7) most of the likely witnesses at the trial reside outside Western Australia;
(8) the location of the documents of Sirtex and Phillips Fox relevant to the proceedings are in Sydney;
(9) there have been proceedings before the Supreme Court of New South Wales relating to Sirtex in which the plaintiff had solicitors and Senior Counsel acting for him; and
(10) the application for transfer has been brought at an early stage when neither party has incurred significant costs in relation to the proceedings.
(Page 8)
The submissions on behalf of the plaintiff
25 It was argued on behalf of the plaintiff that the defendants' contention that the action related to matters involving Sirtex was misconceived; the proceedings relate predominantly to the plaintiff's publication and the consequent damage to the plaintiff's reputation by reason of the defendants' conduct.
26 The plaintiff's counsel said in his written submissions that it was the plaintiff's personal reputation and reputation as a businessman (as distinct from his reputation as a surgeon or research scientist), that was attacked by the defendants' publication. The plaintiff's reputation in Western Australia is substantial, and he is more widely known in Western Australia than elsewhere.
27 Counsel pointed out that the plaintiff had lived in Western Australia for some 27 of the past 40 years, including for the period 1985 to 2001. He had also held a number of professional and academic appointments in Western Australia including, from 1985 to 1999, Professor of Surgery and Head of the Department of Surgery at the University of Western Australia; from 1990 to 1999, Medical Director of the Lions Cancer Institute Inc and, from 1996 to 1999, Director of the Centre for Applied Cancer Studies at the University of Western Australia. The plaintiff is also a director of a number of companies which were incorporated in Western Australia and either are, or until recently were, based in Western Australia.
28 From April 1997 until January 2007, the plaintiff was a director of Sirtex, the registered office of which was, until March 2001, located in Western Australia. The plaintiff still owns and operates a business, Gray Surgical, that is located in Western Australia and he has several other business interests in Western Australia. He is employed as a director of his own company, Pine Ridge Holdings Pty Ltd, in Western Australia. Apart from owning shares in companies registered in New South Wales, the plaintiff has no business interests in New South Wales.
29 The plaintiff is currently the first respondent in proceedings commenced by the University of Western Australia ("UWA") in the Western Australian Registry of the Federal Court of Australia in which, in substance, UWA claims that the intellectual property which Sirtex now uses to produce the treatments which form its business were developed by the plaintiff in his capacity as an employee of UWA and that UWA is entitled to that intellectual property and the benefits derived from it. Sirtex is also a respondent to that action and is represented in it by counsel
(Page 9)
- and solicitors. The trial of the action commenced on 15 March 2007 and was listed for 40 hearing days. It will exceed that length. The plaintiff has legal representatives in Perth who act for him in the Federal Court proceedings and who have a detailed knowledge of his affairs.
30 The New South Wales proceedings in which the plaintiff was involved are concluded apart from the issue of costs and his legal representatives in those proceedings are not familiar with the matters which are the subject of these proceedings. It was submitted that the plaintiff will suffer considerable prejudice if required to instruct new solicitors and counsel in these proceedings, including extra costs and being denied the opportunity to instruct the solicitors and counsel of his choice, those being the Western Australian solicitors and counsel who are currently acting for him in the Federal Court proceedings.
31 It was argued that the defendants' contentions as to the convenience of the defendants and witnesses have not been made out.
32 It is immaterial that the plaintiff now lives in Sydney, as he has commenced the proceedings in Western Australia and wishes them to be heard in Western Australia.
33 The view of the second and third defendants as to where the proceedings should be conducted is irrelevant. The fact is that only the first defendant and the proposed fourth defendant reside in New South Wales. Of the other affected parties, the plaintiff wishes the proceedings to be heard in Western Australia, the second defendant is resident in Western Australia and the third defendant is resident in Victoria. It is therefore inevitable that a number of witnesses will be inconvenienced, wherever the matter is heard.
34 Counsel argued that the location of the Sirtex shareholders was irrelevant and, in any event, less than half of the shareholders were located in New South Wales. The defendants' contention in that regard also ignored the fact that the publication complained of was made not only to shareholders, but was also released as an announcement on the Australian Stock Exchange. The statements which it is alleged aggravated the damage were published in a national newspaper.
35 The argument that the solicitor from Phillips Fox who conducted the investigation and the journalist from The Weekend Financial Review would both have to come from Sydney for the trial is irrelevant. It is not suggested that there would be any undue inconvenience involved in that.
(Page 10)
36 There is also no evidence that any great difficulty or inconvenience would be occasioned by having to transport whatever documents may be relevant to the proceedings from the offices of Sirtex in Sydney to Perth. It is not suggested that the documents are voluminous or that there would be any difficulty associated with removing them to Perth.
37 It was also submitted that there had been delay by the defendants in bringing this application. The application was filed on 11 January 2007. The first conferral between the solicitors in relation to a proposed application to transfer the action took place on or about 11 and 12 December 2006. By that stage, the defendants had filed an appearance, the plaintiff had filed a statement of claim and the plaintiff's solicitors had conferred with the defendants' former solicitors in relation to a proposed application by the defendants to strike out the statement of claim. The plaintiff had also amended the statement of claim on 29 November 2006. The plaintiff has therefore incurred significant legal costs and will suffer detriment if now required to instruct new solicitors and counsel in New South Wales.
Should the action be transferred?
38 It is clear from the principles to which I have earlier referred that the determination of this application requires an assessment, in a pragmatic way, of whether, in the interests of justice, it is more appropriate that the action be conducted in Western Australia or New South Wales.
39 It is, in my view, significant that in the present case the plaintiff submits that it is his personal reputation and his reputation as a businessman, as distinct from his reputation as a surgeon or research scientist, that are in issue in the proceedings.
40 While the plaintiff lived in Perth from 1985 until 2001, he has lived in Sydney since 2001. And it appears from such evidence as there is on the matter that, at least until about the mid to late 1990s, the major part of the plaintiff's activities while he was living in Perth involved his academic and research work rather than his business interests. The plaintiff was Professor of Surgery at the University of Western Australia from 1985 to 1999. He was also Medical Director of the Lions Cancer Research Institute from 1990 to 1999 and Director of the Centre of Applied Cancer Studies at the University of Western Australia from 1996 to 1999.
41 From 1991 to 1994, the plaintiff was a director of Dewart & Associates Pty Ltd and from 1995 to 1999 he was a director of Australian Surgical Products Ltd, both companies having their registered office in
(Page 11)
- Western Australia. Those directorships, however, came to an end some years ago. Since 1993 the plaintiff has been a director of Pine Ridge Holdings Pty Ltd - which he describes as "my company" - the registered office of which was in Western Australia until 2006, when it was moved to Sydney. The nature and extent of the activities of each of those companies was not revealed, nor was the extent of the plaintiff's involvement in their affairs. The plaintiff was a director of Sirtex from April 1997, but its offices have been in Sydney since 2001.
42 There is very little evidence about the nature of the plaintiff's activities since 1999. There is no reference to any further or continuing academic or research appointments. The plaintiff says he is currently employed as a director of Pine Ridge Holdings Pty Ltd, but gives no indication of what that involves. The plaintiff says that he owns and operates Gray Surgical and has "several other business interests in Western Australia", but there is no evidence as to the nature or extent of the activities of Gray Surgical or those business interests. Whatever the nature and extent of those interests may be, they have not prevented the plaintiff from residing in Sydney since 2001.
43 The plaintiff continued to be a director of Sirtex until January 2007. The plaintiff says that he caused the registered office of Sirtex to be relocated to Sydney in March 2001. In the absence of any other explanation, it is, I think, reasonable to infer that the plaintiff's own move to Sydney in 2001 was connected with the move of the office of Sirtex in that year, and that since that time the interests he has in Perth have played a less significant role in his business activities than the affairs of Sirtex.
44 In the circumstances, it is by no means clear on what basis it was contended that the plaintiff's personal reputation and his reputation as a businessman are substantially greater in Perth than in Sydney. Nor does it appear that the publications complained of received greater circulation or prominence in Western Australia than in New South Wales. In relation to the publication to shareholders, as only some 6 per cent of shareholders (that is, 100 out of a total of approximately 1740 shareholders) reside in Western Australia (compared to some 700, or 40 per cent, in New South Wales), it is evident that the vast majority of the shareholders to whom the material was published were located outside Western Australia and that a substantial proportion of them were in New South Wales. The other publications complained of were made through the Sydney office of the Australian Stock Exchange and in The Weekend Financial Review newspaper, in both cases on a national basis.
(Page 12)
45 At this early stage of the action, it is not possible to identify with any real confidence the particular witnesses who will be called to give evidence at trial. Much will depend upon the matters that the defendants put in issue in their defence. But the location of the parties and those most closely connected with the pleaded issues is a relevant factor.
46 The plaintiff, the first defendant and the proposed fourth defendant, Mr Wong, are all normally resident in New South Wales. The third defendant is resident in Victoria. Although I accept that the third defendant's preference for where the action should be heard is not of itself a factor of any significant weight, it reflects, I think, the unsurprising fact that an action conducted in New South Wales is likely to be less inconvenient to him that one conducted in Western Australia. While the plaintiff would prefer that the action be heard in Perth, beyond his desire for Perth counsel and solicitors to act for him it is not suggested that he would be inconvenienced if the action were heard in Sydney.
47 There are other New South Wales connections with the matters pleaded. The partner of Phillips Fox who was involved in the investigation referred to in the statement of claim is a New South Wales resident and the material relevant to that investigation is located there. The offices and documents of Sirtex are located in Sydney and the affairs of Sirtex to which the matters pleaded in the statement of claim refer relate to events which occurred, or had their origins in events which occurred, in New South Wales.
48 While at this stage it is not possible to say with confidence precisely what issues will arise in the action, from the matters pleaded in the statement of claim it appears that the plaintiff's involvement in the affairs of Sirtex will play an important part in the action.
49 It was not contended by the plaintiff that the matters in issue in the current proceedings in the Federal Court in Perth have any direct relevance to the matters likely to be in issue in this action. The plaintiff's argument went no further than that the solicitors and counsel acting for him in those proceedings have a detailed knowledge of his affairs and he will thus incur extra, otherwise unnecessary, expense if he has to retain new solicitors and counsel in New South Wales. To what extent, however, the detailed knowledge of his affairs extended to the particular matters that are likely to be in issue in this action was not evident.
(Page 13)
50 In relation to legal representation, there will undoubtedly be some inconvenience to one party or the other, wherever the action is conducted. In the end, I do not think that is a factor of substantial weight in this case.
51 It was common ground that the relevant law will be the same in either jurisdiction so that is not a factor of any relevance. Nor do I think that questions of delay weigh in the balance. I do not consider that there has been any unreasonable delay by the defendants in making this application.
52 It is, I think, clear that the determination of an application of this nature is more a matter of art than science and is not susceptible of an exhaustive and finely calculated assessment and weighing of the pros and cons of each of the jurisdictions contended for. As Street CJ observed in Bankinvest AG v Seabrook (supra), often what in the end will be involved will be little more than an impression reached after considering in a pragmatic way the factors bearing upon which jurisdiction is the more appropriate, having regard to the interests of justice generally.
53 On balance, having regard to those factors, I consider that the Supreme Court of New South Wales is the more appropriate forum and I would order that the proceedings be transferred to that Court.
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