Lidden, J. v Composite Buyers Ltd

[1992] FCA 507

LIMITED DISTRIBUTION

IN THE FEDERAL COURT OF AUSTRALIA	)
)
AUSTRALIAN CAPITAL TERRITORY	)
1 No. ACT G 19 of 1992
DISTRICT REGISTRY	j
1
GENERAL DIVISION	1

BETWEEN: JAMES LIDDEN

First Applicant

MARGARET THERESE LIDDEN

Second Applicant

AND: COMPOSITE BUYERS LIMITED

First Respondent

PAYLESS SUPERBARN (NSW1

PTY LIMITED

Second Respondent

LIGON 105 PTY LIMITED (Receiver

and Manaaer A~~olntedl

Third Respondent

MINUTE OF ORDER

JUDGE MAKING ORDER :  Neaves J .

36 of the Federal Court Rules.
DATE OF ORDER	17 July 1992
WHERE MADE	Canberra
THE COURT ORDERS THAT:

1.    The motion notice of which was given on 6 July 1992 be dismissed.

2.   The respondents pay the applicants' costs of the motion.

Note: Settlement and entry of orders is dealt wlth in Order

IN THE FEDERAL COURT OF AUSTRALIA	)
\
AUSTRALIAN CAPITAL TERRITORY	j
) NO. ACT G 19 of 1992
DISTRICT REGISTRY GENERAL DIVISION

BETWEEN: JAMES LIDDEN

First Applicant

MARGARET THERESE LIDDEN

Second Applicant

AND: COMPOSITE BUYERS LIMITED

First Respondent

PAYLESS SUPERBARN (NSW)

PTY LIMITED

Second Respondent

LIGON 105 PTY LIMITED (Receiver

and Manaaer ADDointedl

Third Respondent

CORAM: Neaves J.

DATE: 17 July 1992

REASONS FOR JUDGMENT

On 19 May 1992 James Lidden and Margaret Therese Lidden ("the applicants") commenced a proceeding in this Court	against the first respondent Composite Buyers Limited
("Composite"), the second respondent Payless Superbarn (NSW) Pty Limited ("Payless") and the third respondent Ligon 105 Pty Limited (Receiver and Manager Appointed) ("Ligon") by filing in the Australian Capital Territory District Registry of the Court an application and statement of claim. Ligon was joined as a respondent as the receiver and manager declined to be joined as an applicant.
The proceeding was llsted for a directions hearing on 5 June 1992. However, as the respondents had not then been served with the application and statement of claim the directions hearing was adjourned until 10 July 1992. On 6 July 1992, the respondents gave notice of a motion for an order that the proceeding be transferred to the New South Wales Registry of the Court. The affidavit of Van Angelo Moulis sworn on 6 July 1992 and filed in support of the motion stated that the order was sought pursuant to s.48 of the Federal Court of Australia Act 1977 (Cth) and Order 10, r.l(2)(f) of the Federal Court Rules.
The statement of claim alleges that, at all material times, Composite was the ultimate holding company of Payless; that Composite carried on business in New South Wales and elsewhere as a grocery and liquor wholesaler; that Payless carried on business in New South Wales as a grocery and liquor retailer; and that Payless was lessee of premises situated at Bombala in the State of New South Wales where it carried on
Bombala " . The events out of whlch the applicants' claim the business of a supermarket under the name "Payless
arises are summarised in par.13 of the statement of claim as follows -

"(a) the applicants entered into an establishment agreement with Composite dated 16 February 1988;

(b) Ligon was established as the trustee of the Rite-Way Bombala Unit trust and the applicants became directors of Ligon;

(C) the applicants became holders of 100 'A' class shares in Ligon and Composite became the holder of 101 'B' class shares in Ligon;

(d)	a unit trust in respect of the Rite-Way Bombala Unit Trust was established by declaration of trust of which Ligon was the trustee;
(e)	the applicants subscribed for and were allotted ordinary units in the trust for which they paid $90,000 and Composite subscribed for and was allotted preference units in the trust;
(f)	Ligon entered into a contract with Payless dated 16 February 1988 to purchase the business of the Payless Bombala supermarket;
(g)	Ligon entered into a sublease of the Payless Bombala supermarket premises from Payless;
(h)	Ligon entered into a chattel lease agreement with a bank in respect of certain assets of the Payless Bombala supermarket;

(i) Ligon entered into a banner agreement with Composite dated 16 February, 1988;

(j)	Ligon entered into a debenture with Composite dated 16 February, 1988;
(k)	the applicants entered into a guarantee and indemnity with Composite dated 16 February 1988 in respect of Ligon's obligations to Composite."

It is alleged that the applicants and Ligon were induced to

certain representations made by Composite and Payless which	enter into the agreements and arrangements referred to by
were false and misleading.
The applicants allege that Composite and Payless engaged in conduct in contravention of s.52 of the Trade Practices Act 1974 (Cth) and s.42 of the Fair Tradino Act, 1987 (N.S.W.). It is alleged that, in the circumstances in which they were made, the establishment agreement and the guarantee and indemnity between the applicants and Composite both dated 16 February 1988 were, so far as they concerned the applicants, unjust within the meaning of s.7(1) of the contracts Review Act, 1980 (N.S.W.). It is further alleged that, Composite and Payless had invited the public to enter into arrangements and transactions of the kind referred to and that, by reason thereof, those companies were inviting the public to subscribe for and purchase a "prescribed interest" in contravention of S. 171 of the Comuanies (New South Wales1
. An allegation is also made that, in the circumstances, Composite and Payless acted in breach of a fiduciary obligation owed by them to the applicants and Ligon.
The affidavit sworn by Mr Moulis sets out the following matters as supporting the order sought by the respondents -

"(a) the First and Second Respondents have offices in Sydney. Each has no office in the Australian Capital Territory;

(b)	the agreements, arrangements and transactions referred to in the Statement of Claim were entered into in Sydney;
(c)	the financial arrangements of the Applicants relating t o agreements, arrangements and transactions referred to in the Statement of Claim were entered into in Sydney;
(d)	the negotiations which resulted in the entering into of the agreements, arrangements and transactions referred to in sub-paragraphs (b) & (c) were conducted in Sydney;
(e)	at least three of the witnesses to be called by the Respondents are in Sydney; and
(f)	discovery and inspection will be required. In that event, the First and Second Respondents are in possession of voluminous documents which may be relevant to the Issues in these proceedings and those documents are situated in Sydney."

The affidavit does not explain what the deponent meant when he described the documents as "voluminous".

The applicants filed no affidavit in relation to the matter but the Court was informed that the applicants reside in Bombala; that, while negotiations preceding the entry into the agreements referred to in the statement of claim took place in Sydney, some dealings took place in Bombala; that a potential witness who gave financial advice to the applicants prior to the agreements being entered into resides in Canberra; that other potential witnesses reside in Canberra; that the applicants' legal and financial advisers are in Canberra; and that documents which the appl~cants will be obliged to discover are in Canberra. The receiver and manager of Ligon is said to be in Melbourne.

A defence has not been filed on behalf of any of the

respondents so that no attempt has yet been made to identlfy the issues truly in dispute between the parties. However, it 1s not suggested by any party that there is any juridical advantage in having the proceedings continued in either Canberra or Sydney.

The proper principles to be applied in considering questions arising under s.48 of the Federal Court of Australia Act and Order 10, r. l(2) (f) of the Federal Court Rules were examined by a Full Court of thls Court in National Mutual Holdinas Ptv Ltd v. The Sentrv Corooratioq (1988) 19 F.C.R.

155.  At p.162, the Court said:

"The balance of convenience is important, but its weight must vary from case to case. Ultimately the test is: where can the case be conducted or continued most suitably bearing in mind the interests of all the parties, the ends of justice in the determination of the issues between them, and the most efficient administration of the court. It cannot and should not, in our opinion, be defined more closely or precisely."

I have also had regard to the decision of Gummow J. in Cvcles

& Wheelman Ptv Ltd v. Beltech Corooration Ltd (1988) 80 A.L.R.

279; the decision of Sweeney J. in National Mutual Holdinas Ptv Ltd v. The Sentrv Cor~oration (31 January 1989 - unreported); the decision of a Full Court of thls Court refusing leave to appeal from that decision (14 April 1989 - unreported); the decision of von Doussa J. in A.M.C. Investments Ltd v. Willey (23 November 1989 - unreported) ; the

decision of French J. in v. Rex~lex Ptv Ltd (20 December 1989 - unreported) and the decision of O'Loughlin J. in Arrow

v. Stoneman (22 December 1989 - unreported).

There is no suggestion that the applicants' choice of the Australian Capital Territory District Registry as the registry in which to commence the proceeding was made

capriciously. That being so, some sufficient reason must appear justifying a transfer of the proceedings to a different registry. In a proceeding such as this, it is lnevltable that one or other of the parties will suffer some inconvenience and incur some additional expense depending upon the place where the proceeding is to continue. The respondents will be affected in that regard if the proceeding continues in the Australian Capital Territory District Registry of the Court. The applicants will be similarly disadvantaged if the proceeding is transferred to the New South Wales District Registry.

The material before the Court falls far short of satisfying me that the order the respondents seek should be made. The proceeding will, therefore, contlnue in this registry. However, after the necessary interlocutory steps have been taken, the question whether, in the light of the circumstances then known, the hearing should take place elsewhere than in Canberra can be further considered.

The respondents' motion 1s d~sm~ssed. The

respondents must pay the applicants' costs of the motion.

I certify that this and the

preceding 6 pages are a true copy of the Reasons for Judgment herein of the Honourable Mr Justice Neaves .

Associate

Dated: 17 July 1992

Counsel for the applicants	: Mr M.T. Goodwin
Solicitors for the applicants	: Gallens Crowley &

Chamberlain

Counsel for the respondents : M r U.D. Boettcher

Solicitors for the respondents	: Goldsmiths Solicitors
Date of hearing	: 10 July 1992
Date of judgment	: 17 July 1992