Kodak (Australasia) Pty Ltd v AWA Davis Pty Ltd
[2006] VSC 111
•23 March 2006
| IN THE SUPREME COURT OF VICTORIA | Not Restricted | |
AT MELBOURNE
PRACTICE COURT
No. 9715 of 2005
| KODAK (AUSTRALASIA) PTY LTD | Plaintiff |
| v | |
| AWA DAVIS PTY LIMITED AND OTHERS | Defendants |
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JUDGE: | Hollingworth J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 20 March 2006 | |
DATE OF RULING: | 23 March 2006 | |
CASE MAY BE CITED AS: | Kodak (Australasia) v AWA Davis | |
MEDUIM NEUTRAL CITATION: | [2006] VSC 111 | |
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Courts – Jurisdiction of Courts (Cross-vesting) Act 1987 (Vic) s 5(2)(b)(iii) – proceeding transferred to the Supreme Court of the Australian Capital Territory.
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| APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr P. Allaway | Blake Dawson Waldron |
| For the Defendants | Ms C. Harris | Deacons |
HER HONOUR:
The plaintiff, Kodak, sells health care products, services and information technology solutions to the medical and dental professions. Its registered office is in Collingwood, Victoria. The 17 defendants operate under a partnership in the name of Canberra Imaging Group (“CIG”), which is a radiology and nuclear medicine practice based in the ACT and surrounding areas.
On 5 December 2005, Kodak instituted a proceeding in this court, arising out of an agreement allegedly entered into by the parties at the end of 2004. The question before me is whether this court or the Supreme Court of the ACT is the more appropriate forum for determining this dispute.
By a summons dated 20 January 2006, CIG seeks:
(a) A stay under rule 23.01(1)(c) of the Rules of Court, or
(b)A transfer to the Supreme Court of the ACT pursuant to s.5(2)(b)(iii) of the cross-vesting legislation.
In fact no argument was put before me in support of the stay application and I have dealt with the summons simply as a transfer application.
The pleadings
Kodak alleges that on or about 30 December 2004, it entered into an agreement with CIG by which Kodak agreed to supply and install, and CIG agreed to purchase, an integrated radiology information and picture archiving communication system, for use at CIG's premises. It says that CIG breached the agreement by failing to cooperate with Kodak and do all that was necessary on its part to facilitate implementation of the system at CIG's sites, thereby effectively preventing Kodak from performing its obligations under the agreement.
Kodak seeks damages arising out of an alleged repudiation or, alternatively, breach of the agreement, including damages for wasted expenditure, loss of profits and loss of opportunity to build or enhance Kodak's commercial reputation.
On 9 January 2006, CIG entered a conditional appearance in this proceeding. No defence has been filed yet.
Relevant principles
The application is brought pursuant to s.5(2) of the Jurisdiction of Courts (Cross-vesting) Act 1987 (Vic), which relevantly provides:
"Where -
(a)a proceeding (in this sub-section referred to as the ‘relevant proceeding’) is pending in the Supreme Court (in this sub-section referred to as the ‘first court’); and
(b)it appears to the first court that –
...
(iii)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."
The principles in relation to an application under s.5 were comprehensively considered by the High Court in the recent decision in BHP Billiton Limited and Schultz[1].
[1](2004) 211 ALR 523.
The High Court has affirmed that, in determining pursuant to s.5(2)(b)(iii) whether it is in the interests of justice to order a transfer, a court must be satisfied as to which court is the “more appropriate forum”, in the sense that it has the most real and substantial connection with the subject matter of the proceeding.
The possible connecting factors have been described as "legion"[2]. Factors which may be relevant include, but are not limited to, the connection between the alleged conduct and the jurisdiction, the governing law of any agreement in dispute, and issues of cost and convenience to the parties, including where the parties and witnesses live and carry on business.
[2]Spiliada Maritime Corporation v Cansulex Ltd [1987] AC 460 at 465 per Templeman LJ, cited in Bankinvest AG v Seabrook (1988) 14 NSWLR 711 at 728 per Rogers AJA.
The High Court has also affirmed that it is inappropriate to start from a presumption, in determining the interests of justice, that a plaintiff's initial choice of forum carries independent weight.
It is not necessary for me to resolve the difference in various authorities as to whether there is any onus of proof on an applicant for an order for transfer under s.5[3]. That is because I am satisfied that the ACT is by far the most appropriate jurisdiction.
[3]In BHP Billiton v Schultz Gummow J, with whom Hayne J agreed, said at [74] that there is no such burden of proof; the other members of the court made no express observation on the point. In the subsequent decision of Ewins v BHP Billiton [2005] VSC 4, Gillard J expressed the opinion at [23] that an applicant does carry such a burden, albeit a low one. On the other hand, in McLeod v Munro [2005] VSC 375, Dodds-Streeton J has said that she considers the observations of Gummow J to be persuasive, an opinion which I share.
In the present case, CIG submits that it is in the interests of justice that this proceeding be transferred to the Supreme Court of the ACT for the following principal reasons:
(a)The predominance of connecting factors between the relevant conduct and the ACT;
(b) The location of most of the defendants and witnesses in the ACT;
(c)The very real difficulties which would arise for the radiology and nuclear medicine practice of the defendants and the public of the ACT and southern NSW who rely on those services, if the defendants and their witnesses were required to travel to Melbourne for the proceeding.
Governing law
The alleged agreement, the subject of this proceeding, includes a choice of law clause, clause 28, which is in the following terms:
"In this contract unless the context otherwise requires or specifically otherwise stated ... the law of Victoria applies to any disputes."
There is no choice of jurisdiction clause, exclusive or otherwise, in the alleged agreement.
Here the cause of action is one based on simple breach of contract, involving common law principles governing contract formation, breach, repudiation and remedies. Kodak does not rely on any statutory provision and there is no basis for believing that the agreement is likely to be governed by a law that is unique or peculiar to Victoria.
In the circumstances, the choice of law clause is a neutral factor or, at best for Kodak, a weak factor in favour of the retention of this matter by this court.
Relevant conduct
The central subject matter of the agreement between the parties was the supply and installation of the system for use at the premises of CIG in the ACT.
The following relevant conduct, which is relied upon by Kodak, occurred in the ACT.
(a) The meetings and discussions which preceded the alleged agreement.
(b)The work which was done pursuant to the agreement in conducting an initial survey and installing the system.
(c)The breach of contract is said to be constituted by alleged failures of CIG to facilitate implementation of the system at the CIG sites.
The only relevant connecting factor with Melbourne is that it is said that in order to perform its part of the agreement, Kodak bought and placed orders for software and hardware from its Melbourne office. Those orders were placed with various global suppliers, including two in the United States of America, one in Sydney and two in Melbourne. It is not apparent from the statement of claim or the affidavit material that there is likely to be any dispute between the parties relating to or arising out of the ordering or purchasing by Kodak of any software or hardware. Accordingly, any connection with Melbourne is minor and likely to be uncontentious.
The overwhelming connecting factors, in terms of the subject matter of the litigation, are with the ACT.
Location of parties
Kodak's place of business is in Victoria and its board members and company secretary live in Victoria. However, it is not suggested that those senior officers will be required to give evidence.
Of the defendants, ten of the 12 natural persons live in the ACT and two live in the Sydney metropolitan area. In the case of the five corporate defendants, four have their registered offices in the ACT and one is in Goulburn, NSW. All of the natural persons responsible for their management live in the ACT or NSW. The business conducted by CIG is based in the ACT and maintains premises and provides services in the ACT and southern NSW.
In other words, one side's headquarters are in Melbourne and the other’s are in and around the ACT. The location of the parties themselves is accordingly a neutral factor. However the location of witnesses is a matter of considerable importance in this case.
Location of potential witnesses
There is a dispute on the evidence before me as to how many of the defendants are likely to give evidence at trial. Kodak says that it will only require three of the defendants to be available for cross-examination. That may well be so, but it does not mean the defendants are only limited to producing the three defendants identified by the plaintiff.
CIG’s solicitor has deposed that at least ten of the defendants are likely to be required as witnesses, possibly more. Whatever may be the exact number of defendants who ultimately give evidence, all bar two of them live in the ACT.
There is also evidence that approximately half a dozen other people may be needed to give evidence in relation to CIG’s case, all of whom live either in the ACT or in a state other than Victoria.
As far as Kodak’s witnesses are concerned, none of them lives or works in the ACT. Of the five witnesses identified by Kodak as being likely to be required to give evidence for Kodak, only two are based in Melbourne; two are based in Brisbane and one other in Sydney. Those last three witnesses would have to travel, regardless of whether the trial is heard in Melbourne or Canberra.
I accept that it is no longer the onerous task for witnesses to travel from Canberra, Sydney or Brisbane to Melbourne, that it might have been many years ago[4]. I also note that, due to technological changes, evidence can more readily be given by video-link from another jurisdiction. But additional cost and inconvenience may well be incurred in adopting either of those courses. That is particularly so in the present case, because not one of the defendants or their potential witnesses lives or works in Victoria. Most of Kodak’s potential witnesses do not live here either.
[4]Contract Media Sales (Aust) Pty Ltd v Roads & Traffic Authority of NSW [1999] VSC 391 per Beach J; Ross Mollison Group Pty Ltd v The Really Useful Co (Aust) Pty Ltd [2000] VSC 256 per Warren J; Toll (FHL) Ltd v Finemore [2001] VSC 467 per Warren J.
If the proceeding was heard in Melbourne and the defendants were required to travel, either to give evidence or to give instructions through the course of the proceeding, that would have the potential to seriously hamper the ability of CIG to provide essential radiology and nuclear medicine services in ACT and southern NSW.
CIG is the largest private diagnostic imaging service within the ACT and NSW southern tablelands and one of only two private organisations providing diagnostic imaging in the ACT. It maintains facilities at Cooma, Queanbeyan and Goulburn, as well as at numerous hospitals and private rooms in the ACT.
CIG is the only organisation in the ACT routinely providing magnetic resonance spectroscopy. CIG is obliged to provide 24 hour a day, seven day a week, on-call essential services at five hospitals in the ACT and southern NSW. It also provides various diagnostic and consultant services in those areas.
Given the range of services that CIG provides, it is likely that if partners of CIG were required to attend a trial in Melbourne, it may be necessary to suspend the provision of some of these essential radiology and nuclear medicine services.
The requirements of the Health Commission that radiologists be on site and give direct supervision of CT scans, nuclear medicine and some ultra-sound scans, means that it is not possible for services to be provided by staff in the absence of at least one of the defendant radiologists.
Similar problems with the provision of services may arise if employees of CIG are required to attend a trial in Melbourne.
It follows that the consequence for CIG of a trial in Melbourne, rather than in Canberra, is not mere inconvenience and cost, although that will plainly be a factor, but may give rise to serious hardship in the conduct of the business of CIG.
Kodak's counsel pointed out that there will be some inconvenience to the defendants in having to give evidence wherever the trial may be held. I accept that may be so. But if the trial is held in the ACT, it is more likely that the defendants and their staff might be able to attend to their radiology practices whilst “on call” to attend court at relatively short notice; the inconvenience can thereby be minimised. If the trial is held in Melbourne, this court as well as the parties may well be inconvenienced if interstate witnesses are not readily available in the event that the evidence proceeds more quickly on some days.
A further consideration is this. Any suspension or limitation on the services provided by CIG would inevitably have an effect on those members of the public who require the various radiology and nuclear medicine services that CIG provides.
Kodak argues that although this is a matter of interest to the community in the areas where CIG provides services, it is not a matter which is relevant to the interests of justice. But courts do not operate in a vacuum, unaware of their impact on the broader community. In my opinion, in considering which is the more appropriate forum to determine this dispute, the potential impact on the public and the potential adverse impact on the availability of health services are relevant to the interests of justice. The transfer of the trial to Canberra would clearly minimise that potential impact on the availability of health services.
Location of lawyers
As far as other issues of cost and convenience are concerned, both Kodak’s lawyers, Blake Dawson Waldron, and CIG’s lawyers, Deacons, have offices in Melbourne and Canberra. Both are large, national firms with the capacity to conduct Supreme Court litigation in Canberra or Melbourne, using either Canberra or Melbourne solicitors. The proceeding is still in the early stages. I therefore regard the location of the individual solicitors who are currently handling the proceeding as a neutral factor.
Conclusion
Having weighed up the competing considerations, I am of the opinion that the ACT is clearly the more appropriate jurisdiction for this matter. I propose to order that the proceeding be transferred to the Supreme Court of the Australian Capital Territory.
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