Leal Boss Computer and Office Supplies Pty Ltd v Boss Computer and Office Supplies Pty Ltd and Skyjack Computer and Office Supplies Pty Ltd Nos. SCGRG 92/1486 and 92/1987 Judgment No. 3824 Number of Pages 9

[1993] SASC 3824

COURT IN THE SUPREME COURT OF SOUTH AUSTRALIA DEBELLE J

CWDS
Practice and procedure - Jurisdiction - Cross-vesting - Applications to transfer actions from the Supreme Court of South Australia to Supreme Court of Western Australia - Action in Supreme Court of Western Australia instituted first - Actions not related - Transfer of proceedings not otherwise in interests of justice - Relevance of probable hearing date - Applications refused.
Jurisdiction of Courts (Cross-Vesting) Act 1987, s.5(2). Oceanic Sun Line Special Shipping Co Inc v Fay (1988) 165 CLR 197; Bourke v State Bank of NSW
(1988) 85 ALR 61 and Perpetual Holdings Pty Ltd v Leviathan Ptv Ltd (1991) 30 FCR 524, applied.

HRNG ADELAIDE, 10 December 1992 #DATE 17:2:1993
Counsel for plaintiffs:         Mr A Besanko
Solicitors for plaintiffs:     Finlaysons
Counsel for defendants:         Mr M L Robertson QC
   With Mr P Mcnamara
Solicitors for defendants:     Knox and Hargrave

ORDER
Applications refused.

JUDGE1 DEBELLE J. Applications to transfer proceedings pursuant to the Jurisdictionof Courts (Cross-Vesting) Act, 1987 ("the Cross-Vesting Act"). 2. Leal Stationers Pty Ltd ("Leal Stationers") is incorporated in South Australia. It carried on business in South Australia and the Northern Territory as a supplier of office equipment and stationery. 3. Boss Computer and Office Supplies Pty Ltd ("Boss Computer") is incorporated in South Australia. It also carried on business in South Australia as a supplier of office equipment and stationery. 4. In February 1990, Leal Stationers and Boss Computer decided to enter into an agreement to cease trading separately in South Australia and to trade thereafter by means of a new entity. The parties have each described the arrangement in different terms. It has sometimes been called a joint venture agreement and sometimes a merger. For present purposes, the precise nature of the agreement does not matter. For convenience and without wishing to ascribe any precise legal definition to the arrangement, I will call it "the merger". The agreement to merge was made in Adelaide and applied in South Australia. Leal Stationers and Boss Computer created a new trading entity called Leal Boss Computer and Office Supplies Pty Ltd ("Leal Boss"), each taking a legal interest in the new entity. Leal Boss commenced to trade on 26 February 1990. The new trading arrangement did not last long. In January 1991 the parties agreed to dissolve the merger. On 16 January 1991, Boss Computer transferred one-half of its interest in Leal Boss to Leal Stationers. On 13 March 1991, Boss Computer sold its remaining one-half interest in Leal Boss to a Mr Declan Ryan. 5. Boss Computer is related to a company called Skyjack Computer and Officer Supplies Pty Ltd ("Skyjack"). Skyjack is incorporated in Western Australia and carries on business in that State as a supplier of office equipment and stationery. From about 4 December 1989 until 13 March 1991, Leal Boss was a subsidiary of Skyjack. It is no longer a subsidiary of Skyjack. 6. After the merger had been dissolved, Leal Boss and Boss Computer attempted to agree and reconcile the financial dealings which had occurred during the period of the merger. Those dealings included transfers of trading stock and inter-company loans. They were unable to resolve their differences. In the period of the merger and for a time thereafter, Leal Boss and Skyjack also entered into a number of financial transactions including transfers of stock and inter-company loans. Leal Boss and Skyjack have also attempted to produce a reconciliation of their financial dealings. These accounting exercises also involved the financial consequences of the sale of the interest of Boss Computer in Leal Boss. All of the parties have been unable to agree the amount due to each. Leal Boss and Skyjack have resorted to litigation. 7. The first action was instituted by Skyjack in the Supreme Court of Western Australia on 10 December 1991. The defendant was Leal Boss. Between 10 December 1991 and 30 April 1992 all parties again attempted to resolve their differences but were unable to do so. Skyjack decided to proceed with its litigation. An amended writ of summons was filed on 30 April and served on 2 May 1992. An amended Statement of Claim was filed on 13 May. In that action, Skyjack has claimed $317,035.91 for the cost of goods sold and delivered to Leal Boss during the period 1 March 1990 to 16 January 1991, the period of the merger. I will call this action "the Western Australian action". One of the affidavits filed in support of this application contains the assertion that the pleadings in the Western Australian action have closed. That is incorrect. On 2 September 1992, an amended writ of summons was filed joining three additional defendants and on 1 October 1992 an amended statement of claim was filed and served. At the date of hearing this application, no defences had been filed to the amended statement of claim. The additional defendants are Mr S.R. Winter, Mrs R.J. Winter and Mr Declan Ryan. That action is not yet ready for trial. 8. On 2 May 1992, Skyjack instituted a second action. It was in the District Court of Western Australia. The defendant was again Leal Boss. The writ of summons was served on 2 May 1992. Skyjack claims $31,673.61 for goods sold and delivered to Leal Boss during the period of 17 January 1991 to 30 April 1991, that is to say, at a time after the dissolution of the merger. Leal Boss has filed its defence and counter-claim in that action. The counter-claim raises issues under the Trade Practices Act. 9. On 25 June 1992, Leal Boss instituted action number 1486 of 1992 in this Court. In that action Leal Boss sues Boss Computer and claims $927,483.35. The claim relates to fifteen separate sets of transactions alleged to have occurred between Leal Boss and Boss Computer during the period of the merger. Each is said to have resulted in a debt due by Boss Computer to Leal Boss. On 20 July 1992, Leal Boss filed an application for summary judgment. Skyjack filed documents in opposition to that application. Leal Boss abandoned the application acknowledging that it was unlikely to succeed. At the time of the hearing of this application, Boss Computer had not filed its defence. 10. On 4 September 1992, Leal Boss issued another action in this Court, the action numbered 1987 of 1992. Skyjack is the defendant in that action. Leal Boss initially claimed $277,503.01, which it alleged is due by Skyjack in respect of two sets of transactions. The first set of transactions relates to a series of loans which Leal Boss alleges it made to Skyjack in the period 4 June 1990 to 11 October 1990 and which total $141,424.00. The second set of transactions relates to another series of loans which Leal Boss has claimed it made to Skyjack in the period of May 1990 to July 1992. The second set of loans totals $136,079.01. The two series of loans total the amount claimed, namely, $277,503.01. According to an affidavit filed on behalf of Leal Boss in answer to this application, Leal Boss intends to amend the latter part of its claim to reduce the amount claimed to some $80,000. At the time of hearing this application, no amendment had been made to the statement of claim and no defence had been filed by Skyjack. 11. On 27 October 1992, Boss Computer filed its application to transfer the action number 1486 of 1992 to the Supreme Court of Western Australia. An affidavit in support of the application contains an undertaking on behalf of Skyjack that, if an order is made transferring the action, Skyjack would apply to consolidate the action in this Court with the Western Australian action. On the same day, Skyjack filed an application to transfer the action number 1987 of 1992 to the Supreme Court of Western Australia. Skyjack has given an undertaking that, if an order is made transferring the action, it would apply to have the action heard with the Western Australian action. By consent these applications were heard together. 12. Both Mr Robertson QC, who appeared for the applicants Boss Computer and Skyjack, and Mr Besanko, who appeared for Leal Boss, agreed that so far as convenience in marshalling documents and witnesses was concerned, it was not possible to determine that one party would be any more inconvenienced than the other, if the action is to be heard in either Adelaide or in Perth. Each party has a large amount of documents in its home State. Each party has witnesses residing in its home State. Each of the parties would incur substantial cost and inconvenience if the proceedings were heard outside its home State. It is not possible to say that one party would suffer a greater degree of cost and inconvenience than the other. 13. The applications were made pursuant to s.5(2) of the Cross-Vesting Act. The applicants relied on the grounds in s.5(2)(b)(i) and S.5(2)(b)(iii). Those parts of s.5(2) which are relevant to this application provide:
    "(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;
    ...
    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." 14. Since there are actions pending in the Supreme Courts of both Western Australia and South Australia, the requirements of s.5(2)(a) are satisfied in the case of each application. Action No 1486 of 1992 I turn to the requirements of s.5(2)(b) and deal first with the application by Boss Computer in respect of action number 1486 of 1992. The criteria in s.5(2)(b) are expressed in the alternative. If any one of them are satisfied, the Court shall transfer the proceeding. It is unnecessary in the circumstances of these applications to determine whether the applicants carry any onus of proof. This court can only make an order for transfer of the proceedings if it is satisfied that one of the criteria described in s.5(2)(b) is present. In the absence of the required criteria, the court has no power to transfer; the judge cannot form an intuitive view that it would be appropriate to transfer: Bourke v State Bank of NSW (1988) 22 FCR 378, 394; 85 ALR 61, 76-77; Perpetual Holdings Pty Ltd v Leviathan Pty Ltd (1991) 30 FCR 524, 527. 15. Boss Computer principally relies on s.5(2)(b(i). The first question is whether the action in this Court arises out of or is related to the Western Australian action. It was not contended that the action in any way arises out of the Western Australian action. The question is whether the South Australian action is related to the Western Australian action. For the reasons which follow, I do not think that it is. 16. The first point of difference between the actions is that there are different parties in each of the actions. In the action in the Supreme Court of Western Australia, Skyjack is plaintiff and Leal Boss is defendant. In the action in the Supreme Court of South Australia, Leal Boss is plaintiff and Boss Computer is defendant. Skyjack, which is plaintiff in the Western Australian action, is not a party to the action in South Australia. Boss Computer, which is defendant in the South Australian action, is not a party in the Western Australian action. In addition, there are three parties who are defendants to the Western Australian action who are not parties to the action in South Australia, namely, Mr and Mrs Winter and Mr Declan Ryan. 17. The fact that Skyjack, Boss Computer and Leal Boss were related companies at the relevant time does not make the two actions related proceedings within the meaning of s.5(2)(b)(i). Skyjack and Boss Computer are separate legal entities and they have entered into separate legal transactions with Leal Boss. While it is true that the transactions which are the subject of each action occurred during the period of the merger or shortly after, that is not itself sufficient to cause the proceedings to be related to one another. The actions each concern different legal transactions between different parties. There are different facts relating to each transaction or set of transactions. The subject matter of each action is different. The cause of action in the Western Australian action is for the cost of goods sold and delivered by Skyjack to Leal Boss. The causes of action in the proceedings in this court are varied and do not include a claim against Skyjack. While there may be witnesses who will be common to each action and there may be an overlap of evidence, the questions arising for determination in each action are different. The actions are, therefore, not related within the meaning of s.5(2)(b)(i). 18. I turn to the issues in paragraph (b)(iii) of s.5(2) and the question whether it is "otherwise in the interests of justice" to grant the application. The expression "in the interests of justice" must be read widely: Bourke v State Bank of New South Wales (1988) 85 ALR 61, 77. 19. The same considerations which lead to the conclusion that these proceedings are not related to each other are also relevant in determining what order the court should make in the interests of justice. Leal Boss has brought an action in this Court seeking a determination of its rights. It is convenient for it to do so. Its documents and witnesses are in South Australia. The issues in the action concern an agreement made in South Australia in respect of a business which was to be conducted in South Australia. The parties in each action are different and the subject matter of each action is different from those which are the subject of the Western Australian action. The claims made by Leal Boss are for debts alleged to be due to it. The ordinary rule is that a debtor should seek out his creditor. All of these factors point to the interests of justice requiring that the action should proceed in this Court. To these considerations it is relevant to add that Boss Computer seeks to transfer this action to the Supreme Court of Western Australia to be heard with an action brought by a plaintiff who is not a party to the South Australian action, where there is no common party to the actions other than Leal Boss, and which involves different issues. It is not, therefore, in the interests of justice to transfer the proceedings. 20. There is a further reason why it is not in the interests of justice to transfer this action to the Supreme Court of Western Australia. In Bourke v State Bank of New South Wales (1980) 85 ALR 61 at 77, Wilcox J noted that one of the matters which could be considered under the rubric of the interests of justice is the likely hearing date of the actions. That was not the view of Northrop J in Monadelphous Engineering Associates (NZ) Ltd (in liq.); ex parte McDonald and Watson (1989) 7 ACLC 220, at 225 who stated that the question of which court can grant the more speedy hearing is not really a matter to be taken into account when considering the interests of justice. With respect, the view of Wilcox J should be preferred. The interests of justice would be denied if a party was required to postpone the prosecution of the action and wait a relatively long time for another court to determine the issues. According to an affidavit filed by Skyjack in support of its application, the period of time between entering an action for trial and hearing in the Supreme Court of Western Australia is approximately 18 months. In this Court, that period is considerably shorter: a period of approximately four to five months. When dealing with applications under the cross-vesting legislation, the courts should adopt an approach of judicial comity rather than judicial chauvinism: Scandrett v Carnley (unreported, Supreme Court of NSW, 28 April 1992). Without any degree of chauvinism, it can be fairly stated that, if the parties proceed with reasonable expedition to prosecute each action, the likelihood is that the action in this Court will be heard a good deal earlier than the action in the Supreme Court of Western Australia. Leal Boss is entitled to pursue its action in the court in which it is most likely to receive an earlier determination of the issues between it and Boss Computer. The transfer of the proceedings to the Supreme Court of Western Australia will, in all likelihood, delay the resolution of those issues and thus defeat the interests of justice. 21. If one action is determined before the other, consideration could be given as to whether a stay of execution should be ordered pending the resolution of the other action thus allowing a proper set off once the two actions had been determined. If granted, such a stay could be on terms as to interest and such other terms as are relevant. 22. Boss Computer has not satisfied the criteria in s.5(2)(b) and the application must, therefore, be dismissed. Action Number 1987 of 1982 I turn to the application of Skyjack in the action number 1987 of 1992. 23. Mr Robertson again contended that the two sets of proceedings are related within the meaning of s.5(2)(b)(i). Although the same persons are parties in both this action and the Western Australian action and although the transactions, the subject of each action, arise out of a course of dealing between those two persons, it is nevertheless the fact that the two actions concern separate sets of transactions and different causes of action. The action in the Supreme Court of Western Australia is for the cost of goods alleged to have been sold and delivered by Skyjack to Leal Boss. The action in this Court concerns a number of loans alleged to have been made by Leal Boss to Skyjack. Skyjack says that of the amount claimed in this action only $30,000 approximately is due by Skyjack to Leal Boss. It further asserts that the claim has failed to have regard to the amount due by Leal Boss to Skyjack, the subject matter of the action in Western Australia. Mr Robertson contended that in truth the claim made by Leal Boss in this Court could properly have been the subject of a counter-claim in the action in the Supreme Court of Western Australia. There may be a good deal of force in that argument. No doubt, it is desirable also that the parties should seek to resolve their differences in one action. However, the fact nevertheless remains that the claim by Leal Boss stands separate and apart from that made by Skyjack. The causes of action are different and arise out of different facts. Skyjack's claim is for the cost of goods sold: the claim by Leal Boss is for monies lent. The affidavits filed by Skyjack in support of its application reinforce the fact that the claims depend on separate factual issues. The claims are not related except in so far as that, at the end of the day, they are capable of being set off against each other. There may be some overlap in evidence but the issues are separate and distinct. It is unlikely that there will be any inconsistent findings of fact. Skyjack, therefore, fails to establish that the two actions are related proceedings within the meaning of s.5(2)(b)(i). 24. Mr Robertson submitted that Leal Boss could not dispute that the proceedings were related because it has applied to both the Supreme Court of Western Australia and the District Court in that State for orders transferring the Western Australian actions to this court pursuant to the Cross-Vesting Act of that State. In affidavits sworn in support of those applications, Mr Winter, a director of Leal Boss, had sworn that there is an overlap of issues between this action and the two Western Australian actions. Mr Robertson called in aid Mr Winter's statements in these affidavits. The short answer to that contention is that the question whether proceedings are related will be determined by legal principle and the true meaning and effect of s.5(2)(b). That question will not be determined by what a party states in support of an application under the cross- vesting legislation. 25. In considering the question whether the application is otherwise in the interests of justice under s.5(2)(b)(iii), the matters already mentioned indicate that it is not in the interests of justice to grant the application. There is no factor which in my view points to the conclusion that it is in the interests of justice to grant the application. By contrast, the evidence points to the conclusion that the application should be refused in the interests of justice. In addition, there is a real likelihood that this action will be heard before the Western Australian action. For the reasons given earlier, that is also a relevant factor. For these reasons, the application by Skyjack to transfer this action to the Supreme Court of Western Australia is refused. 26. There is a further reason why in the interests of justice both of these applications should be refused. Boss Computer and Skyjack seek to transfer these actions to the Supreme Court of Western Australia, not because of any jurisdictional limitations in this court, but for reasons of convenience and to enable one court to hear all actions arising out of the merger and the dealings between Skyjack and Leal Boss. The submissions of Mr Robertson for the applicants contain no hint of any suggestion that this court does not have complete jurisdiction to deal with the actions before it. In essence, his submissions concerning the interests of justice turn on the question of whether it is more convenient that the two actions in this court should be consolidated with or heard together with the Western Australian action. 27. The effect of these applications to transfer the actions to the Supreme Court of Western Australia is to deny Leal Boss the capacity to prosecute the actions in a court of its choice. These particular applications fall outside the spirit and intent of the Cross-Vesting Act. 28. As the preamble to the Cross-Vesting Act states, the Act is intended to deal with the removal of jurisdictional limits and to insure so far as practicable that proceedings concerning matters which, apart from the Act, would be entirely or substantially within the jurisdiction of the first court will be determined in that court. It is permissible to have regard also to the second reading speech to identify the mischief which the Act was intended to remedy: Wacando v The Commonwealth (1981) 148 CLR 1, 25; Rogers v Resi-Statewide Corporation Limited (1991) 101 ALR 377, 381-382. The second reading speech spells out the reasons for the cross-vesting scheme and clearly states that it is designed to remove the difficulties stemming from uncertainties as to jurisdictional limits (SA Parliamentary Debates (1987-1988), Vol 1, 56):

    "The essence of the cross-vesting scheme is that State and
    Territory Supreme Courts will be vested with the civil
    jurisdiction (except certain industrial and trade practices
    jurisdiction) of the federal courts (at present the Federal
    Court and the Family Court) and the federal courts will be
    vested with the full jurisdiction of the State and Territory
    Supreme Courts. The reasons for the proposed scheme are that
    litigants have occasionally experienced inconvenience and have
    been put to unnecessary expense as a result of-
    (a) uncertainties as to the jurisdictional limits of federal,
    State and Territory courts, particularly in the areas of trade
    practices and family law; and
    (b) the lack of power in these courts to ensure that proceedings
    which are instituted in different courts, but which ought to be
    tried together, are tried in the one court. 29. The primary objective of the cross-vesting scheme is to overcome these problems by vesting the federal courts with State jurisdiction and by vesting State courts with federal jurisdiction so that no action will fail in a court through lack of jurisdiction, and that as far as possible no court will have to determine the boundaries between federal, State and Territory jurisdictions. The Jurisdiction of Courts (Cross-vesting) Bill seeks to cross-vest jurisdiction in such a way that federal and State courts will, by and large, keep within their 'proper' jurisdictional fields. To achieve this end, the Commonwealth Bill, this Bill and the proposed legislation of other States make detailed and comprehensive provision for transfers between courts which should ensure that proceedings begun in an inappropriate court, or related proceedings begun in separate courts, will be transferred to an appropriate court. The provisions relating to cross-vesting will need to be applied only in those exceptional cases where there are jurisdictional uncertainties and where there is a real need to have matters tried together in the one court. The successful operation of the cross-vesting scheme will depend very much on courts approaching the legislation in accordance with its general purpose and intention as indicated in the preamble to the Commonwealth and State legislation." 30. It is equally clear from the preamble to the Act that it is not intended that the cross-vesting scheme should detract from the existing jurisdiction of any court. It is not intended to apply in the case where there is no issue as to jurisdictional limits and the plaintiff sues in respect of a cause of action or subject matter different from that which is the subject of an action in another jurisdiction. The right of a plaintiff to bring an action in a court of his choice can only be restricted by express words. As Deane J stated in Oceanic Sun Line Special Shipping Co Inc v Fay (1988) 165 CLR 197 at 241:
    "A party who has regularly invoked the jurisdiction of the
    competent court has a prima facie right to insist upon its
    exercise and to have his claim heard and determined. That prima
    facie right to the exercise of competent jurisdiction which has
    been regularly invoked can be displaced by a statute but 'the
    language of any such statute should be jealously watched by the
    courts, and should not be extended beyond its least onerous
    meaning unless clear words are used to justify such an
    extension': per Scrutton J In Re The Vexatious Actions Act 1896.
In Re Bernard Boaler (1915) 1 KB 21 at 36." 31. The terms of s.5(2)(b)(i) do not displace the right to which Deane J refers except where the proceedings are related. Where the subject matter of the two actions is different, a party is, therefore, entitled to bring a separate action in a forum of his choice instead of making a counter-claim in the other action or bringing another action in that other jurisdiction. 32. It might well be desirable that at least Leal Boss and Skyjack should resolve their differences in one action. It might be possible to effect economies of time and expense by proceeding in one set of proceedings in one court rather than by two separate actions in two different courts. But, if the parties choose to litigate their differences in this way, I do not think that, in the particular circumstances of these actions, the provisions of the Cross-Vesting Act provide a means to compel them to do otherwise. It is not in the interests of justice to require Leal Boss, which has brought actions properly within the jurisdiction of this Court in respect of subject matter which is not related to the Western Australian action, to be required to undertake the cost and inconvenience which would be associated with the transfer of the actions to the Supreme Court of Western Australia. 33. For these reasons, the applications of Boss Computer and Skyjack are refused.