Kurniadi v Loh
[2004] FMCA 5
•8 January 2004
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| KURNIADI & ORS v LOH & ORS | [2004] FMCA 5 |
| TRADE PRACTICES – PRACTICE AND PROCEDURE – Transfer to Federal Court – resources and interests of justice. |
Trade Practices Act 1974
Federal Magistrates Court Act 1999, s.39
Corporations Act, s.945
Hill v Rose (1990) VR 129
Kurniadi v Loh (2002) FCA 723
Kurnaidi & Ors v Loh & Ors (2003) FMCA 24
| Applicants: | HERMAN KURNIADI & OTHERS |
| Respondents: | SIMON THUANG CHYE LOH & OTHERS |
| File Nos: | Consolidated action WZ 156 of 2002 |
| Delivered on: | 8 January 2004 |
| Delivered at: | Melbourne |
| Hearing Date: | 30 October 2003 |
| Judgment of: | McInnis FM |
REPRESENTATION
| Counsel for the Applicant: | Mr Jacobs of Counsel (assisted by Ms Garrett, Solicitor for the Applicant) |
| Solicitors for the Applicant: | Stewart Green Mijovich |
| First Respondent: | Appearing on his own behalf |
| Counsel for the Second Respondent: | Mr Forbes |
| Solicitors for the Second Respondent: | Paiker & Overmeire |
| Counsel for the Third Respondent: | Mr N Pakes |
| Solicitors for the Third Respondent: | Murcia Pestell Hillard |
| Counsel for the Fourth Respondent: | Mr S England |
| Solicitors for the Fourth Respondent: | Lawton Gilllon |
ORDERS
Applications WZ 156, 157, 158, 159, 160, 161, 221, 222, 223, 224, 225, 226 and 227 of 2002 which were subject to an order on 2 September 2003 that they be consolidated and carried on as one action, with the consolidated action being WZ 156 of 2002, be transferred forthwith to the Federal Court of Australia pursuant to section 39 of the Federal Magistrates Act 1999.
The costs of and incidental to the transfer be costs in the cause.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT MELBOURNE |
WZ 156 of 2002
| HERMAN KURNIADI & OTHERS |
Applicants
And
| SIMON THUANG CHYE LOH & OTHERS |
Respondents
REASONS FOR JUDGMENT
In this matter, application is being made on behalf of the Second Respondent that the proceedings in all applications currently before the Federal Magistrates Court should be transferred to the Federal Court of Australia.
It has been agreed that I should determine the application for transfer based upon submissions made by the parties. The Second Respondent relies upon submissions filed on 27 October 2003. The Third Respondent has relied upon submissions filed 29 October 2003 and on the same date the Fourth Respondent likewise filed written submissions. The Applicant had filed submissions on 21 October 2003 dealing with another issue concerning leave to file a consolidated statement of claim following a registrar's order made on 2 September 2003 purporting to consolidate all applications into one application. The Applicant has thereafter relied upon submissions in reply dated 30 October 2003 which directly addresses the issue of the application for transfer. The Applicant further seeks to rely upon affidavits sworn by Ms Garrett on 26 July 2003 and 6 August 2003 setting out some background material, a great deal of which is more relevant to the issue of consolidation of the statement of claim.
In considering the issue of transfer, it is relevant to refer to section 39 of the Federal Magistrates Act 1999 which provides:
“Discretionary transfer of proceedings to the Federal Court or the Family Court
(1)If a proceeding is pending in the Federal Magistrates Court, the Federal Magistrates Court may, by order, transfer the proceeding from the Federal Magistrates Court to the Federal Court or the Family Court.
(2)The Federal Magistrates Court may transfer a proceeding under this section:
(a) on the application of a party to the proceeding; or
(b) on its own initiative.
(3)In deciding whether to transfer a proceeding to the Federal Court under subsection (1), the Federal Magistrates Court must have regard to:
(a)any Rules of Court made for the purposes of subsection 40(2); and
(b)whether proceedings in respect of an associated matter are pending in theFederal Court; and
(c)whether the resources of the Federal Magistrates Court are sufficient to hear and determine the proceeding; and
(d)the interests of the administration of justice.”
It is clear from the section that there is a discretionary power which the Federal Magistrates Court has in relation to the transfer of proceedings to the Federal Court. The most relevant factors in the present application are whether the resources of the court are sufficient to hear and determine the proceedings and the interests of the administration of justice. In my view the interests of justice require the court in an application of this kind to have regard to the fact that some of the applications commenced in the Federal Court were the subject of a transfer by that court on 14 August 2002 to the Federal Magistrates Court. Originally six matters were transferred by the Federal Court, namely:-
“Kurniadi v Simon Thuang Chye Loh & Ors – WZ156 of 2002 (formerly N1190 of 2001), Iwan Salim v Simon Thuang Chye Loh & Ors – WZ157 of 2002 (formerly N1191 of 2001), Liaw & Anor v Simon Thuang Chye Loh & Ors – WZ158 of 2002 (formerly W147 of 2002), Hardi v Simon Thuang Chye Loh & Ors – WZ159 of 2002 (formerly W148 of 2002), Soedarjanto v Simon Thuang Chye Loh & – WZ160 of 2002 (formerly W157 of 2002) and Poerwita v Simon Thuang Chye Loh & Ors – WZ161 of 2002 (formerly W168 of 2002).”
I had previously referred in my earlier judgment delivered 7 February 2003 (Kurniadi & Ors v Loh & Ors (2003) FMCA 24) to the summary of the applications set out in the decision of Carr J on 21 May 2002 (Kurniadi v Loh (2002) FCA 723) as follows:-
“ It appears from the application and the statement of claim that each applicant lives in Indonesia and is a citizen of that country. The claims made in each application appear to be very similar.
In the principal proceedings the applicant seeks damages pursuant to s 82 of the Trade Practices Act 1974 (Cth) or, in the alternative, pursuant to s 1005 of the Corporations Law against the respondents and one other respondent. In summary, the applicant claims that he was induced to enter into a contract relating to the agistment of ostriches with a company called Ostrich Meat and Marketing Co (Australia) Ltd (“the Company”). The respondents are said to be directors of the Company.
The applicant claims that he was induced into entering into the contracts with the Company by virtue of conduct which he says constituted misleading or deceptive conduct. The respondents are sued on the basis that they are said to have been involved in contraventions of the Trade Practices Act and the Corporations Law.”
Since the matter was transferred to the Federal Magistrates Court on 14 August 2002, applications have been made for security of costs, and to strike out paragraphs of the statement of claim. There has been extensive discovery and orders made in relation to that issue.
The discovery has involved arrangements for hundreds of documents to be made available by Ostrich Marketing Co (Australia) Ltd (in liquidation).
After these proceedings were transferred to this court, a judgment was delivered on 7 February 2003 dealing with security for costs, a strike‑out application and whether service had been effected on one of the parties. Orders were made dismissing certain notices of motion seeking security for costs and orders to strike out the statement of claim. On 21 February 2003 further orders were made granting leave to the Second Respondent to file and serve an application for security for costs. The Respondents were required to serve defences on or before 25 April 2003. The Applicant was required to issue a subpoena to the liquidator of the Fifth Respondent for the production of certain documents. Orders were made for the trial to proceed on affidavit and the parties were ordered to attend mediation. Otherwise orders were made for a further directions hearing for the parties to file and serve submissions on the issue of costs. The matter came before the court again on 28 March 2003 when orders were made in relation to the documents which were the subject of a subpoena to the liquidator of the Fifth Respondent. On 1 April 2003 a judgment was delivered ordering the Applicant to pay to court $6000 as security for costs of the Second Respondent within 28 days. Other alterations were made to earlier orders and directions given in relation to the copying of documents held by the liquidator for the Fifth Respondent.
It should be noted that a major activity throughout the course of the interlocutory proceedings has been the inspection and copying by the parties of hundreds of documents produced in answer to the subpoena by the liquidator for the Fifth Respondent.
The Second Respondent has submitted that the 13 applications currently before the court should now be transferred to the Federal Court. In the written submissions it was noted that on 2 September 2003 a registrar undertaking case management had made orders that the applications be consolidated and carried on as one action. It was submitted that at the time when the initial applications were transferred from the Federal Court to the Federal Magistrates Court, the total value of the claims was approximately $200,000. In the consolidated action, it was submitted the total value of the claims by all the Applicants would exceed the amount of $1 million.
The Second Respondent further submitted that the nature of the application had originally commenced as alleged breaches of the Trade Practices Act 1974 (the Trade Practices Act). Referring to the proposed consolidated statement of claim, the Second Respondent submits that the action has now been substantially expanded and includes actions based on fraud, breach of section 945 of the Corporations Act, breach of fiduciary duty (Hill v Rose (1990) VR 129), a breach of duty of care and insolvent trading. It was submitted therefore that there were now fresh particulars of claim with new causes of action.
Other submissions which do not, in my view, advance the matter any further include a suggestion that there has been some delay by the Applicant. The chronology to which I have referred indicates that many applications have been made by the parties, including Respondents, which have had the effect of delaying the matter though significant progress has been made in relation to discovery whilst the matter has been before the Federal Magistrates Court. Ultimately by way of case management, the orders were made for consolidation on
2 September 2003 and the parties have attended mediation. It is clearly incorrect for the Second Respondent to suggest that the Applicants have not advanced the case towards trial.
The Third Respondent's submissions adopt those of the Second Respondent in relation to transfer to the Federal Court. Likewise, the Fourth Respondent, after noting that the objective of the Federal Magistrates Court is to deal with less complex matters, adopts the arguments of the Second Respondent and concludes with the submission that the current complexity of the matter means that a speedy resolution in the Federal Magistrates Court cannot be achieved.
The submissions on behalf of the Applicants resist the application to transfer the proceedings to the Federal Court. Reference was made to the individual applications not exceeding the current monetary limit of the Federal Magistrates Court and that this was a matter known to Carr J at the time when he ordered the transfer to the Federal Magistrates Court. It was submitted that the Federal Magistrates Court is able to deal with the claim notwithstanding the alleged breaches of fiduciary duty and fraud, having regard to the court's original and accrued jurisdiction and that there is a common substratum of facts underlying all the claims.
The Applicants note that certain of the applications could be heard first and this would be consistent with the observations made by Carr J when the matter was transferred to the Federal Magistrates Court.
In my view, the issue of resources must be of paramount concern to the Federal Magistrates Court. There is little doubt that even if the parties were to reach agreement on a number of applications being heard and determined with the necessary variation to the consolidation order made on 2 September 2003, it is unlikely that the hearing would take less than 10 days. The proposed pleadings clearly add to the complexity of the matter and it is obvious that there are now 13 applications, which is considerably more than the number of applications which had been filed at the time of transfer by the Federal Court. The resources of the court must include not only the hearing of applications but also the delivery of a judgment in a timely manner.
These applications have involved numerous arguments concerning pleadings and security for costs which have had the effect of delaying the proceedings, though it should be noted that throughout the course of the various interlocutory hearings and in particular in the pursuit of detailed discovery and presentation of new causes of actions, the Applicants have to some extent contributed to that delay.
As the proceedings have unfolded, it has become apparent to me that the desire of the court to hear and determine the matter quickly with perhaps a selection of applications to be listed discretely cannot now be achieved.
In the circumstances, whilst there is no difficulty in this court in dealing with issues such as fraud and breach of fiduciary duty, it is clear that the duration of the hearing and the added complexity of the matter means that this court does not have the resources to hear and determine the matter in a timely manner.
In my view, it is not in the interests of justice to continue to make interlocutory orders in this court without there being a final hearing within a reasonable time frame. I anticipate that there will be further disputes over security for costs, pleadings, discovery and other procedural matters. The order consolidating the applications may potentially have the effect of causing the consolidated action to exceed the monetary jurisdiction of the court, although for the present purposes it is not necessary for me to decide that matter given that I am of the view that in all the circumstances the application should be transferred forthwith to the Federal Court of Australia.
In transferring the applications to the Federal Court of Australia, it is only necessary for me to order that the costs of the transfer be costs in the cause as I do not believe it is appropriate to award costs to any party at this stage, having regard to the history of the matter and the fact that the transfer order will hopefully be of benefit to all parties. Likewise, it is not appropriate for me to determine the issue of any reserved costs as those matters can be resolved by the trial judge.
It would be presumptuous of me to determine those matters particularly when disputes may arise in relation to pleadings, which may have some impact on at least part of the reserved costs of earlier hearings. No doubt the conduct of the parties up to and including the time of trial may be relevant to the trial judge and it would be inappropriate for me to determine the issue of any reserved costs at this stage.
As indicated earlier in this judgment, it is relevant to take into account the undesirability of a transfer back into the Federal Court of a matter originally filed in that court and transferred to the Federal Magistrates Court. However, for the reasons stated, it is my view that the Federal Magistrates Court does not have the resources to adequately deal with the applications now pleaded and it would not be in the interests of justice to simply retain the matter before the Federal Magistrates Court when the applications can be heard and determined in the Federal Court. Whether there is a delay in the final determination in the Federal Court will depend on the management of the applications in that court. As indicated earlier, an assessment of the time frame in matters of this kind must include adequate time to reflect upon and deliver a judgment in a timely manner. Given the current workload in this court including a high volume of migration matters, I am satisfied that there is a greater likelihood that the application will be finally determined in the Federal Court earlier than may be the case if the matter remained in the Federal Magistrates Court.
I certify that the preceding twenty-one (21) paragraphs are a true copy of the reasons for judgment of McInnis FM
Associate:
Date: 8 January 2004
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