Keith Seeds P/L v Citic Australia Food P/L & Ors No. Scgrg-98-674 Judgment No. S6756

[1998] SASC 6756

KEITH SEEDS PTY LTD V CITIC AUSTRALIA FOOD PTY LTD AND ORS

Civil

Lander J

This is an application by a defendant to cross-vest these proceedings to the Supreme Court of Victoria.

On 3 March 1998 the plaintiff issued proceedings against the first defendant in the District Court of South Australia.  The first defendant entered an appearance on 18 March 1998.

On 8 May 1998 the plaintiff sought to join the second to fifth defendants and have the matter transferred from the District Court to this Court.  Orders were made accordingly.

On 18 May 1998 the plaintiff filed an amended summons and a statement of claim.  On 19 May 1998 the defendant applied to have these matters stayed until further order or, alternatively, the proceedings removed or transferred as the case may be from the Supreme Court of South Australia to the Supreme Court of Victoria pursuant to s5(2) of the Jurisdiction of Courts (Cross Vesting) Act 1987. 

The plaintiff is a company incorporated in the State of South Australia having its registered office at Dukes Highway, Keith in the State of South Australia.

Its head office and its operations are carried on from Adelaide.

Between October 1997 and January 1998 the plaintiff and the first and second defendants had a course of dealings in relation to the sale and purchase of various commodities.  A number of contracts were apparently entered into between the plaintiff and the first defendant in relation to the sale and purchase of commodities.  One contract I think was entered into between the plaintiff and the second defendant. 

Arising out of those various transactions the plaintiff has brought proceedings in this State for damages for each of a number of contracts entered into over that period of time. 

It is the plaintiff’s case that most of those contracts were entered into in South Australia although performance of the contracts was to take place in Victoria.

The plaintiff’s claim, apart from being in damages for breach of contract for failing to pay for and in some cases deliver commodities, also claims damages for misleading and deceptive conduct in relation to three representations made by or on behalf of the defendants to the plaintiff.  It is claimed that the plaintiff relied on those misrepresentations as a result of which it suffered damage. 

The claim in relation to those misrepresentations is under the Trade Practices Act, Fair Trading Act and Misrepresentation Act. 

The plaintiff also claims that the first and second defendants have been provided with confidential information.  It is asserted that the third and fifth defendants as officers of the first and second defendants have also become privy to that information.  Eventually, it is claimed, so also did the fourth defendant.

It is said that each of the defendants are under a duty of confidence towards the plaintiff in respect of that confidential information and as such were not entitled to use or disclose the information or any part thereof.

It is claimed that the defendants have been guilty of breaching that duty.

The plaintiff also has a claim in copyright and claims that each of the defendants have infringed that copyright.  Lastly the plaintiff claims against the second defendant in conversion.

All of the defendants have now appeared and the plaintiff has applied to have the proceedings in the Supreme Court dealt with under r50 as expedited proceedings. 

The reason for the expedited proceedings is said to be that the plaintiff fears that the defendants will use the confidential information which has been imparted to them in the lentil harvest which will take place in about December 1998.  It is said to be a matter of urgency that the matter be dealt with before that time.

After these proceedings had been filed and served and the first defendant had entered an appearance, the first defendant, by its solicitors, wrote a letter of demand to the plaintiff claiming the sum of $411,559.14, said to be owed by the plaintiff to the first defendant arising out of a total of nine contracts entered into for the sale and purchase of commodities.

Some of the contracts the subject of the proceedings in South Australia also form the subject matter of that letter of demand.

On 8 April 1998 the first defendant commenced proceedings against the plaintiff in the Supreme Court of Victoria.  Those proceedings raise in part some of the contracts the subject of the proceedings in South Australia.

In any event the proceedings refer to a course of dealings over the same period of time alleged in the proceedings in South Australia.

It seems to me that there can be no doubt that whilst the first defendant elected to bring its proceedings in Victoria it could also have brought those proceedings by way of counterclaim in the proceedings in South Australia.  It is to be remembered that at the time that it brought the proceedings in Victoria it had already entered its defence in South Australia.

On 29 April 1998 the plaintiff entered a conditional appearance in those proceedings in Victoria. 

Both parties have filed lengthy affidavits in support and in opposition to the application made by the defendants for cross-vesting these proceedings to Victoria.

The plaintiff is resident in this State and carries on its business in this State.  It would be convenient for the plaintiff for the matter to be heard in this State.

The first and second defendants are incorporated in the State of Victoria and carry on their business in that State.  The third, fourth and fifth defendants are resident in Victoria.  It would be equally as convenient for the defendants that the matter be heard in Victoria.

It is said on behalf of the defendants that if the matter was to be heard in Adelaide it would increase the cost by some $40,000-50,000.

I am prepared to accept that.

It is also said on behalf of the defendants that there is no particular need for the early disposal of this action.  That is a matter of dispute.  The plaintiff is anxious to have the matter disposed of as soon as possible at least in so far as the claim is for a breach of duty in relation to confidential information.

Whatever the case it is in all parties’ interests that the matter be disposed of as soon as possible. 

A solicitor from Victoria has filed an affidavit at the behest of the plaintiff.  In that affidavit he has indicated that it is his expectation that the Victorian proceedings will not be heard before late 1999 or 2000.

If that is right and there is no reason to think otherwise it is likely that the matter could go to trial significantly earlier in this State.

If the parties can resolve the interlocutory matters in the near future there would be no reason why this matter could not go to trial early in 1999.

There is a particular advantage then to all of the parties if the matter was heard in South Australia.

The application is brought pursuant to s5(2) of the Jurisdiction of Courts (Cross Vesting) Act 1987.

That section provides -

“(2)   Where -

(a).... a proceeding (in this subsection referred to as the “relevant proceeding”) is pending in the Supreme Court (in this subsection referred to as the “first court”);

and

(b)(i)..... it appears to the first court that the relevant proceeding arises out of, or is related to, another proceeding pending in the Supreme Court of another State or of a Territory and it is more appropriate that the relevant proceeding be determined by that other Supreme Court;

.....................................          (ii)    it appears to the first court that having regard to -

(A)... whether, in the opinion of the first court, apart from this Act and any law of the Commonwealth or another State relating to cross-vesting of jurisdiction, the relevant proceeding or a substantial part of the relevant proceeding would have been incapable of being instituted in the first court and capable of being instituted in the Supreme Court of another State or Territory;

(B)the extent to which, in the opinion of the first court, the matters for determination in the relevant proceeding are matters arising under or involving questions as to the application, interpretation or validity of a law of the State or Territory referred to in subsubparagraph(a) and not within the jurisdiction of the first court apart from this Act and any law of the Commonwealth or another State relating to cross-vesting of jurisdiction;

.................. and

.................. (C)    the interests of justice,

.................. it is more appropriate that the relevant proceeding be determined by that other Supreme Court;

or

(iii).. it appears to the first court that it is otherwise in the interests of justice that the relevant proceeding be determined by the Supreme Court of another State or of a Territory.

the first court shall transfer the relevant proceeding to that other Supreme Court.”

..................

Section 5(2)(a) is satisfied in as much as this is a proceeding in the Supreme Court.  The question is whether or not the defendants are entitled to the order under any of the limbs of section 5(2)(b).

Section 5(2) assumes that a matter can be cross-vested in three different circumstances, namely: under s5(2)(b)(i) if the relevant proceeding arises out of or is related to another proceeding in another court and it is more appropriate that the relevant proceedings be heard by the other court; under s5(2)(b)(ii) where the relevant proceeding gives rise to a jurisdictional problem and in the interests of justice it is more appropriate that the relevant proceedings be heard in another court; under s5(2)(b)(iii) when it is otherwise in the interests of justice that the matter be determined by the other court.

Section 5(2)(b)(ii) is not relevant so if the defendant is entitled to relief it must be under s5(2)(b)(i) or s5(2)(b)(iii).

The test under s5(2)(b)(i) is whether it is more appropriate to cross-vest the litigation.  The test under s5(2)(b)(iii) is whether it is otherwise in the interests of justice.  I suppose it could only be more appropriate to cross-vest the litigation if it is in the interests of justice to do so.  Moreover it would only be in the interests of justice to cross-vest if it was more appropriate.  Whilst both tests include a consideration of the other test they must be different.  They must also be different from s5(2)(b)(ii) which provides that it must be both in the interests of justice and more appropriate to make the order.

I think the end result is that proceedings arising out of or related to proceedings in the Supreme Court of another State should be cross-vested if it is more appropriate that the relevant proceedings be heard in that other State.  Section 5(2)(b)(ii) aside, proceedings in the Supreme Court of this State should be cross-vested to another State if it is otherwise, i.e. otherwise than in the circumstances in s5(2)(b)(i) or s5(2)(b)(ii), in the interests of justice to do so.

Whilst there is no onus upon the party moving for the cross-vesting of the litigation (Bankinvest AG v Seabrook (1988) 14 NSWLR 711 at 722) the court in the end result must still be satisfied that it is either more appropriate or in the interests of justice to cross-vest the litigation.

Section 5(2)(b)(i) only applies if it appears to this Court that the proceedings in this Court arise out of or are related to proceedings in the Supreme Court of Victoria.  It is said on behalf of the plaintiff that these proceedings do not arise out of and are not related to the proceedings in the Supreme Court of Victoria.

I cannot accept that submission.

It might be right to say that the proceedings in this State do not arise out of the proceedings in the Supreme Court of Victoria but they are, in my opinion, certainly related.  They arise out of the same course of dealings over the same period of time and in a number of respects out of the same contracts.

There are two distinguishing features.  First, in the proceedings in this State a number of causes of action are raised which are not raised by either party in the Supreme Court of Victoria.  Secondly, the proceedings in this State involve a number of parties not parties to the proceedings in the Supreme Court of Victoria.

I think, however, the causes of action are sufficiently similar that it can be said that the proceedings are related. 

I think therefore the defendant would qualify under s5(b)(i) if the defendant can satisfy this Court that it is more appropriate that these proceedings be determined by the Supreme Court of Victoria.

In any event the defendant does come within s5(2)(b)(iii) in as much as that placitum picks up any circumstances where it is otherwise in the interests of justice that the proceedings in the Court considering the application be determined by the Supreme Court of another State.

Therefore, if the defendant on this application can make out that it is more appropriate or otherwise in the interests of justice that these proceedings be heard in the Supreme Court of Victoria then the order must be made. 

In my opinion there is no doubt that the defendant has made out matters of convenience.  It would be convenient for the defendants to have the matter heard in Victoria and it would be correspondingly inconvenient to the plaintiff.  However, the defendant must establish that it would be more appropriate that the proceedings be heard in the Supreme Court of Victoria.

Apart from the defendants’ own convenience nothing has been advanced, in my opinion, on behalf of the defendants which could allow it to be said that it would be more appropriate for the matters to be heard in Victoria.

The convenience of the defendants cannot be the determining factor in an application of this kind.

It would always be convenient for a defendant to claim that it ought to be sued in its own State.  If all other things were equal that cannot, in my opinion, simply make it more appropriate for the matter to be heard in the home State of the defendant.

It was said that there was a likelihood that a third party, a company incorporated in Queensland, would bring proceedings in Victoria against the defendant arising out of these transactions.  I do not think that is particularly relevant.  So far the third party has not done so, I suspect, because it is waiting upon the result of this application and a like application by the plaintiff in these proceedings in the Supreme Court of Victoria.  The third party will no doubt choose its forum having regard to the results of these applications.

The defendant, in my opinion, has not made out that it is more appropriate that the matter be determined in the Supreme Court of Victoria.

It is also my opinion that the defendant has not established that it would otherwise be in the interests of justice that these proceedings be heard in Victoria.

It is in the interests of justice that these matters are disposed of as soon as possible.  That will save the parties cost and inconvenience.

This Court can apparently offer an earlier hearing date than would be available in the Supreme Court of Victoria.  Inconvenience aside there are no other relevant factors. 

In my opinion the defendant has not established that it would be otherwise in the interests of justice that the matter be transferred to the Supreme Court of Victoria.

For all of those reasons the application fails.