JLV Industries Pty Ltd v MacDonald - [2006] FCA 721

FEDERAL COURT OF AUSTRALIA
JLV Industries Pty Ltd v MacDonald [2006] FCA 721
PROCEDURE – change of venue – allegations of breach of duties by employee – claims for compensation and account of profits – engagement in Western Australia – performance in Queensland – witnesses in both places – preponderance of documents in Queensland – submission to non-exclusive jurisdiction in Western Australia – relevance of video-link – disparity of resources – possibility of trial being located in Queensland and/or Perth when witnesses finally identified
Held: Notice of motion for transfer dismissed
Corporations Act 2001 (Cth) s 182, 1317H
Federal Court of Australia Act 1976 (Cth) s 48
Federal Court Rules O 10 r 1(2)(f)
Aquila Resources Limited v Pasminco Limited [2004] FCA 39
Australian Competition and Consumer Commission v Virgin Mobile Australia Pty Ltd [2002] FCA 1239
Australia Country Cinemas Pty Ltd v BYA Pty Ltd [1998] FCA 714
Burdekin Pacific Limited v Communitee Pty Limited [2003] FCA 777
KC Park Safe(SA) Pty Ltd v Adelaide Terrace Investments Pty Ltd [1998] FCA 601
National Mutual Holdings Pty Ltd v Sentry Corporation (1988) 83 ALR 434
Plantagenet Wines Pty Limited v Lion Nathan Wine Group Australia Limited [2006] FCA 247
JLV INDUSTRIES PTY LTD v GRANT STUART MACDONALD, MICHELLE MACDONALD, C-MAK SERVICES PTY LTD and EDM AUSTRALIA PTY LTD
WAD 84 of 2006
NICHOLSON J
9 JUNE 2006
PERTH

IN THE FEDERAL COURT OF AUSTRALIA

WESTERN AUSTRALIA DISTRICT REGISTRY

WAD 84 OF 2006

BETWEEN:

JLV INDUSTRIES PTY LTD
ACN 009 385 880
Applicant

AND:

GRANT STUART MACDONALD
First Respondent

MICHELLE MACDONALD
Second Respondent

C-MAK SERVICES PTY LTD
ACN 108 314 245
Third Respondent

EDM AUSTRALIA PTY LTD
ACN 111 413 917
Fourth Respondent

JUDGE:

NICHOLSON J

DATE OF ORDER:

9 JUNE 2006

WHERE MADE:

PERTH

THE COURT ORDERS THAT:
1.The respondents’ notice of motion for transfer of the proceeding to the Queensland District Registry be dismissed.
2.The respondents pay the applicant’s costs of 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

WESTERN AUSTRALIA DISTRICT REGISTRY

WAD 84 OF 2006

BETWEEN:

JLV INDUSTRIES PTY LTD
ACN 009 385 880
Applicant

AND:

GRANT STUART MACDONALD
First Respondent

MICHELLE MACDONALD
Second Respondent

C-MAK SERVICES PTY LTD
ACN 108 314 245
Third Respondent

EDM AUSTRALIA PTY LTD
ACN 111 413 917
Fourth Respondent

JUDGE:

NICHOLSON J

DATE:

9 JUNE 2006

PLACE:

PERTH

REASONS FOR JUDGMENT

The respondents bring a notice of motion seeking the transfer of the proceeding to the Queensland District Registry of the Court. This seeks the exercise by the Court of the power to transfer provided for in s 48 of the Federal Court of Australia Act 1976 (Cth) and O 10 r 1(2)(f) of the Federal Court Rules.
It is not in dispute that the approach which the Court should take to the issue of transfer is set out in the reasoning of the Full Court (Bowen CJ, Woodward and Lockhart JJ) in

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: [2006] FCA 721
Decision Date: 9 JUNE 2006

CaseChat Overview and Summary

In the case of JLV Industries Pty Ltd v MacDonald, the dispute arose between JLV Industries, a company based in Western Australia, and Mr. MacDonald, who had previously been employed by JLV and was now a party to the proceedings. The respondents sought a transfer of the case from Western Australia to Queensland, arguing that the nature of the claims against them centred around Mr. MacDonald's use of JLV’s resources to supply services to another entity, C-Mak, which was located in Queensland. The central legal issue was whether the case should be transferred to Queensland based on the convenience of the parties, the location of witnesses and documents, and the jurisdictional agreement in Mr. MacDonald's employment contract.

The court examined the arguments for and against the transfer, weighing factors such as the likelihood of locating more witnesses and documents in Mackay than Perth, the disparity in resources between the parties, and the convenience of video links between the proposed locations. The court found that while some factors favoured a transfer, others did not, resulting in fairly balanced considerations. Ultimately, the court applied the principle that the case should be conducted or continued where it can be most suitably managed, and found no compelling reason to order a change of venue at that stage. The court also noted that any issues regarding witness travel could be addressed through future applications concerning the trial location.

The court dismissed the motion for transfer but left open the possibility for future applications regarding the trial locations. The decision underscored the importance of the non-exclusive jurisdiction clause in Mr. MacDonald's employment contract, which stipulated that disputes arising from the deed of confidentiality would be submitted to the courts of Western Australia. The court held that this clause should be given weight, especially as the breach of confidentiality formed a central part of the claims against Mr. MacDonald and the other respondents.

The final orders of the court included dismissing the respondents’ notice of motion for transfer of the proceeding to Queensland and directing that the respondents pay the applicant’s costs of the motion. This decision ensures that the case remains in Western Australia unless further applications are made that provide a compelling reason for a change in venue.

Orders

Orders of the court

1. The respondents’ notice of motion for transfer of the proceeding to the Queensland District Registry be dismissed.

2. The respondents pay the applicant’s costs of the motion.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

NICHOLSON J

A further issue is raised by JLV that should the application for the transfer be refused, the option remains for the Court to order a trial in Townsville or partly in Perth and partly in Townsville because of the significant number of witnesses residing at, or about, those two centres. Such an approach was foreshadowed in Burdekin Pacific Limited v Communitee Pty Limited [2003] FCA 777.CONCLUSION When the respondents brought their motion for change of venue to Queensland they were, as their written submissions disclosed, of the view that the heart of the claims against them was that Mr MacDonald had used his position to gratuitously supply the services of JLV’s employees to C-Mak. At the hearing of it became apparent that the first claim, being the greatest in monetary value, was the principal allegation. Further, as the amended statement of claim alleges, each of the claims is based on a breach of Mr MacDonald’s obligations arising from the nature of his employment in Western Australia. It is against that perspective that the application to change venue must be viewed. The factors arguably supporting transfer are the present likelihood of more witnesses and documents being located in Mackay than Perth; and the disparity in resources of the parties. The factors arguably against transfer are that nevertheless a significant number of witnesses and documents will be located in Perth; Mr MacDonald has submitted to jurisdiction in Western Australia; and video links from Mackay to Perth may be as convenient to the respondents as video links from Townsville to Perth. The factors are fairly evenly balanced. The test which I must apply was stated at the outset, that is, where can the case be conducted or continued most suitably. I must look for a sound reason to direct that the proceeding be conducted or continued elsewhere. Save for one issue, I consider the proceeding can be most suitably conducted or continued as at present. That one issue is if the evidence of the labourers is required for trial, it would be necessary for them to travel to Perth. That issue, however, can be addressed by directions made concerning the locations at which witnesses are to be heard and the trial conducted. Accordingly I have reached the view that the respondents’ motion should be dismissed but without prejudice to the right of the respondents to bring an application in the future concerning the location or locations of the trial.

Ratio Decidendi

Legal Principle Established

Established by: NICHOLSON J

It is apparent that the nature of Mr MacDonald’s obligations will require evidence to be brought from records in Western Australia. Evidence of Mr MacDonald’s conduct will require documents to be put into evidence from sources most likely in Queensland. I accept the preponderance of documentation at issue in the trial will be found to be located in Queensland rather than Western Australia. CONTRACTUAL CONSIDERATIONS Mr Forgie’s affidavit brings into evidence the letter of offer of employment made by JLV to Mr MacDonald on 28 December 1999. He was offered the position of mechanical engineer, although the contract reserved the right to assign him to other duties. The offer contained a confidentiality provision to the effect that he would not breach the confidence of JLV. Additionally, it stated that in the event of his acceptance of the offer of employment he would be required to sign a deed of confidentiality and restrictive covenant. He did so on 8 February 2000. By cl 3 of that deed, he covenanted not to ‘cause, procure, suffer or permit the unauthorised use by any third party of any of the Information and will take all steps as may be necessary from time to time to prevent any such use’. Further, it was provided in cl 12.7 that the deed was governed by the law in force in Western Australia and that each party irrevocably and unconditionally submitted to the non-exclusive jurisdiction of the courts of Western Australia. JLV therefore relies on the fact that there was agreement between it and Mr MacDonald to submit disputes arising from the deed of confidentiality to the courts sitting within Western Australia and that such courts include this Court. In support they rely on Aquila Resources Limited v Pasminco Limited [2004] FCA 39 at [37]-[41]; Australia Country Cinemas Pty Ltd v BYA Pty Ltd [1998] FCA 714 at 2; see also KC Park Safe(SA) Pty Ltd v Adelaide Terrace Investments Pty Ltd [1998] FCA 601. In the light of those authorities I do not consider it can be contended here as the respondents submit that because the proceeding has been instituted within the Federal Court of Australia, it has not been instituted within the jurisdiction of ‘the courts of Western Australia’, as provided for in the submission to jurisdiction clause. JLV relies on the fact that the contract of employment was formed within Western Australia at a time when Mr MacDonald was resident there and that the initial years of the employment contract were performed in Western Australia. The respondents assert that this is of no weight because it is not alleged that any breach occurred in Western Australia. The respondents contend that there is limited scope of the claims that parties have agreed to submit to the non-exclusive jurisdiction of the courts of Western Australia and that therefore the Court should not attach much weight to the non-exclusive jurisdiction clause: cf Plantagenet Wines Pty Limited v Lion Nathan Wine Group Australia Limited [2006] FCA 247. They contend that the three express particular breaches pleaded in [10] and [11] of the amended statement of claim relate to the actions of Mr MacDonald. However, they say all other respondents are parties to each breach so that the scope of the claim is well outside the scope of the non-exclusive jurisdiction claim. Here, however, it cannot be said that the breach of the confidentiality requirement constitutes a limited part of the claims that the parties have agreed to submit to the non-exclusive jurisdiction. As has been explained in delineating the nature of the proceeding, it goes to the heart of the allegations under s 182 of the Corporations Act and the alleged breach of fiduciary duties: RP Meagher, JD Heydon, MJ Leeming, Meagher, Gummow and Lehane’s Equity: Doctrines and Remedies, 4th edn, Butterworths Australia 2002, 206, at [5-255]. The liability of Mr MacDonald is at the foundation of the liability of the other respondents. Therefore I consider that weight is to be accorded here to the non-exclusive jurisdiction clause. VIDEO CONFERENCING FACILITIES

IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY	WAD 84 OF 2006

BETWEEN:	JLV INDUSTRIES PTY LTD ACN 009 385 880 Applicant
AND:	GRANT STUART MACDONALD First Respondent MICHELLE MACDONALD Second Respondent C-MAK SERVICES PTY LTD ACN 108 314 245 Third Respondent EDM AUSTRALIA PTY LTD ACN 111 413 917 Fourth Respondent
JUDGE:	NICHOLSON J
DATE OF ORDER:	9 JUNE 2006
WHERE MADE:	PERTH

JUDGE:	NICHOLSON J
DATE:	9 JUNE 2006
PLACE:	PERTH