Lolliland Pty Ltd v Dollar Sweets Company Pty Ltd - [2009] FMCA 257

FEDERAL MAGISTRATES COURT OF AUSTRALIA

LOLLILAND PTY LTD v DOLLAR SWEETS COMPANY PTY LTD

[2009] FMCA 257

TRADE PRACTICES – Allegation of misleading or deceptive conduct, unconscionable conduct, breach of contract and cross-claim of breach of contract.

PRACTICE AND PROCEDURE – Venue – application to have the proceeding heard in another Registry of the Court – matters for consideration.

Federal Court of Australia Act 1976 (Cth), s.48
Federal Magistrates Act 1999 (Cth), s.52
Trade Practices Act 1974 (Cth), ss.51AC, 52, 82
Federal Magistrates Court Rules2001 r. 8.01

AMC Investments Ltd v Willey (unreported, 23 November 1989 Federal Court of Australia)
Aquila Resources Limited v Pasminco Limited [2004] FCA 39
Australian Competition & Consumer Commission v Pauls Ltd [2002] FCA 781
Autodesk Inc & Ors v Ginos Engineers Pty Ltd & Anor [2007] FMCA 1848
ESCO Corporation v Wundowie Foundry Pty Ltd [2003] FCA 587
Kennedy v Collett [2003] FCA 1412
Mortimer v Opes Prime Stockbroking Limited (ACN 086 294 028) (Administrators Appointed) (In Liquidation) [2009] FCA 227
National Mutual Holdings Pty Ltd and Others v The Sentry Corporation and Another (1988) 19 FCR 155
Neil v Reward Property Group Pty Ltd [2008] FMCA 1583
Omiros Pty Ltd v PM Developments Pty Ltd & Ors (No 2) [2005] FMCA 234
PM Developments Pty Ltd v Omiros Pty Ltd [2005] FCA 1090
Rafferty v Time 2000 Systems (Australia) Pty Ltd [2008] FCA 1925
Re Arrow Limited v Stuart Rusden Stoneman; Andrew Frewin Pty Ltd and DT Andrew & Co [1989] FCA 545
Sherwood Overseas Co Pty Ltd v Jaymac International Pty Ltd [2008] FMCA 495
Tidswell Financial Services Limited (ACN 010 810 607) v Sovereign Capital Limited (ACN 085 821 218) [2008] FCA 586
WG and B Manufacturing v Telsa Farad Pty Ltd [1999] FCA 859

Applicant:

LOLLILAND PTY LTD
(ABN 82 003 618 808)

Respondent:

DOLLAR SWEETS COMPANY PTY LTD

(ABN 46 006 044 159)

File Number:

SYG 3190 of 2008

Judgment of:

Barnes FM

Hearing date:

3 March 2009

Delivered at:

Sydney

Delivered on:

1 April 2009

REPRESENTATION

Counsel for the Applicant:

Mr S Philips

Solicitors for the Applicant:

Mulally Mylott Solicitors

Counsel for the Respondent:

Mr C Truong

Solicitors for the Respondent:

Macpherson & Kelley

ORDERS

That the respondent’s application for a change of venue be dismissed.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
SYDNEY

SYG 3190 of 2008

LOLLILAND PTY LTD (ABN 82 003 618 808)

Applicant

And

DOLLAR SWEETS COMPANY PTY LTD (ABN 46 006 044 159)

Respondent

REASONS FOR JUDGMENT

This application

On 3 December 2008 the applicant (Lolliland) commenced proceedings in the Sydney registry of this Court against the respondent (Dollar Sweets) seeking damages and other orders in relation to an alleged breach of s.52 of the Trade Practices Act 1974 (Cth), unconscionable conduct within s.51AC of the Act and breach of contract.
In essence the substantive proceedings involve allegations by Lolliland (a wholesaler, re-packager and retailer of confectionary) that Dollar Sweets (a manufacturer and wholesale supplier of confectionary) made misleading representations about delivery times and manufacturing capacity in relation to chocolate compound Easter eggs and that a contract for the supply of such Easter eggs was breached. It is also alleged that confidential information was used to sell machinery to an unnamed third party in breach of contract and constituting unconscionable conduct. Dollar Sweets opposes the orders sought and has made a cross-claim alleging breach by Lolliland of a contract to purchase other confectionary products to have been supplied to an address in New South Wales.
On 23 January 2009 Dollar Sweets filed an application in a case seeking that: “The venue be changed to Melbourne, Victoria.” Each of the parties filed affidavit evidence and written submissions in relation to the application for a change of venue. Dollar Sweets relies on affidavits of Stuart Graeme Walter, the solicitor for the respondent, sworn on 21 January 2009, 30 January 2009 and 2 March 2009. In essence Dollar Sweets contends that, having regard to all relevant factors, the interests of the administration of justice favour a change of venue to Melbourne. Lolliland relies on an affidavit of Peter James Costelloe sworn on 18 February 2009 and submits that Dollar Sweets’ application should be deferred until any mediation has occurred and the substantive evidence in the case file and served. In the alternative Lolliland submits that the application for a change of venue should be refused.
In the substantive proceedings pleadings have been filed and the applicant has addressed the respondent’s request for further and better particulars by letter of 19 February 2009 which is before the Court as an annexure to the affidavit sworn by Stuart Graeme Walter on 2 March 2009. At this stage no affidavits have been filed in relation to the substantive proceedings.
The issue before the Court is whether the proceeding should be transferred to and heard in the Melbourne registry of the Court instead of the Sydney registry.

The law

Section 52 of the Federal Magistrates Act 1999 (Cth) recognises the national nature of this Court. It provides in sub-section 1 that the Court may sit at any place in Australia. Sub-section 2 deals with change of venue in the same manner as s.48 of the Federal Court of Australia Act 1976 (Cth). It provides:
The Federal Magistrates Court or a Federal Magistrate may, at any stage of a proceeding in the Federal Magistrates Court, order that:
(a) the proceeding; or
(b) a part of the proceeding;
be conducted or continued at a place specified in the order, subject to such conditions (if any) as the Federal Magistrates Court or Federal Magistrate imposes.
Rule 8.01 of the Federal Magistrates Court Rules provides:
(1)     A party who files an application or response in a proceeding may apply to have the proceeding heard in another registry of the Court.
(2)     In considering an application, the Court must have regard to:
(a)     the convenience of the parties; and
(b)     the limiting of expense and the cost of the proceeding; and
(c) whether the matter has been listed for final hearing; and
(d)     any other relevant matter.
In contrast, under Order 10 Rule 1 and Order 30 Rule 6 of the Federal Court Rules, the Federal Court has power to direct that the proceedings be transferred to a place at which there is a registry other than the proper place (that is, the place where the proceeding was commenced) or that the trial, or part of the trial, of a proceeding be held at a place other than the proper place. The Federal Court Rules do not specify considerations that must be taken into account such as are contained in r.8.01(2) of the Federal Magistrates Court Rules.
Each of the parties referred to the approach taken by the Full Court of the Federal Court in National Mutual Holdings Pty Ltd and Others v The Sentry Corporation and Another (1988) 19 FCR 155. However a difference of opinion emerged between the parties as to the extent to which the principles considered in that case are applicable in this Court, given that the Federal Court has an unfettered discretion when considering an application for a change of venue or place of proceeding.
The Full Court in Sentry stated that the proper principles to be applied had to be considered in the context of the statutory provisions and rules of the Federal Court. Their Honours referred to the fact that the Federal Court is a court of jurisdiction throughout Australia with registries in each capital city whose judges may sit at any place in Australia. The same may be said of the Federal Magistrates Court (albeit its jurisdiction is not as wide as that of the Federal Court). Section 52 of the Federal Magistrates Act, like s.48 of the Federal Court of Australia Act, recognises the national character of the Court.
In Sentry the Full Court pointed out (at 162) that the power conferred on the Federal Court or a judge of the Federal Court by s.48 of the Federal Court of Australia Act was “in terms wholly unfettered” and suggested that it should be exercised “flexibly having regard to the circumstances of the particular case.” Indeed their Honours suggested (at 162) that it would be “regrettable and unwise if the Court were to circumscribe the general power conferred by s 48 with inflexible rules or impose inelastic constraints upon its exercise”. Section 52 of the Federal Magistrates Act is similarly unfettered. However in this Court, when a party applies to have the proceeding heard in another registry, r.8.01 is applicable. It adopts an approach akin to that previously applicable in the Family Court of Australia (see Order 27 Rule 3 of the 1984 Family Law Rules and compare the present Rules 11.17 and 11.18 of the Family Law Rules 2004). It requires the Court to have regard to certain matters specified therein as well as to any other relevant matter.
In Sentry the judge at first instance had applied the test that the place of proceeding should not be changed unless the court was satisfied that there was a “manifest preponderance of convenience in support” of the change (Sentry at 156). The appellant contended that this was an inappropriate test to apply, that the correct test was which place was more appropriate for securing the ends of justice in the determination of the issues and that the primary consideration must be the balance of convenience.
The Full Court suggested (at 162) that the factors the court was entitled to take into account in considering whether one city was “more appropriate than another” were numerous and that relevant factors in particular circumstances may include the residence of parties and of witnesses, the expense to parties, the place where the cause of action arose and the convenience of the court itself. The relevant factors must be weighed in each case. However their Honours found that: “The balance of convenience will generally be a relevant consideration, but not necessarily determinative of each case” (at 162).
The Court continued (at 162):
A party commences a proceeding by filing an application in a particular registry of the Court. If that party or another party wishes to have the proceeding conducted or continued in another place he may apply to the Court for an order under s 48 or O 10, r 1(2)(f) or O 30, r 6 as the case may be. There is no onus of proof in the strict sense to be discharged by the party seeking to conduct or continue the proceedings elsewhere. It should be noted that the Court may exercise its powers under O 30, r 6 either on the application of a party or of its own motion. The Court must, however, be satisfied, after considering all relevant matters, that there is sound reason to direct that the proceeding be conducted or continued elsewhere. Its starting point is that the proceeding has been commenced at a particular place. Why should it be changed? On the one hand, if the party who commenced the proceeding chose that place capriciously the Court would be justified in giving no weight to the choice of place. At the other end of the scale, a proceeding may have continued for some time at the place of commencement with many steps having been taken there, for example, filing of pleadings and affidavits, discovery and inspection. Due weight would be given by the Court to such matters before directing that the proceeding should continue at a different place.
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.
Each party accepted that what the Full Court said in Sentry about what is ultimately the test was applicable in this Court, but counsel for Dollar Sweets contended that because there were mandatory factors to be taken into account under r.8.01 of the Federal Magistrates Court Rules it could not be said that there was a “starting point” in considering a change of venue application in this Court (that the proceeding had been commenced in a particular place so that one should ask “Why should this be changed?”). Dollar Sweets also contended that, contrary to the submission of Lolliland, it could not be said that there was a “prima facie presumption” that where proceedings had been properly and not capriciously commenced at a place where the applicant (or the parties) and the subject matter of the dispute had a significant connection, the proceedings should be heard and determined at that place of commencement.
Counsel for Dollar Sweets referred to the fact that the latter part of what was said at 162 in the Sentry Corporation case (about the ultimate test) was referred to with approval in this Court in Sherwood Overseas Co Pty Ltd v Jaymac International Pty Ltd [2008] FMCA 495 at [20] and [21] and in Neil v Reward Property Group Pty Ltd [2008] FMCA 1583 at [48] in relation to applications to have proceedings heard in another registry of the court. However in Sherwood Lucev FM not only referred to and applied the test identified as correct by the Full Court of the Federal Court in Sentry but also referred with approval to the statement that the “starting point” was that the proceeding had been commenced at a particular place (see Sherwood at [8] – [12]). Lucev FM also noted (at [9]) that the Full Court of the Federal Court had expressly found that the test of “manifest preponderance of convenience” was not the appropriate test to be applied in considering motions under the Federal Court Act and Rules and noted that that court had, in a number of cases, identified a number of other factors that warranted consideration when applying the test identified in Sentry.
As Lucev FM observed in Sherwood (at [20]), in determining a change of venue application this Court is constrained by the mandatory requirements of r.8.01(2). In that respect its approach differs from that of the Federal Court “insofar as the Federal Court has unfettered discretion as to which factors it will consider”. Nonetheless, as his Honour continued: “That said, the Federal Court authorities on change of venue … are relevant insofar as they consider the three mandatory factors in r.8.01(2)(a) – (c), and other factors considered by the Federal Court in those cases might well be other relevant matters for the purpose of rule 8.01(2)(d) of the FMC Rules” (at [20]).
In Neil Lucev FM adopted the same approach as in Sherwood, considering the factors in r.8.01(2) and referring with approval to the approach taken in Sentry and in other decisions of the Federal Court in relation to relevant matters.
In Sherwood Lucev FM referred to Omiros Pty Ltd v PM Developments Pty Ltd & Ors (No 2) [2005] FMCA 234 per McInnis FM at [3] in which the test in Sentry was applied having regard to the relevant factors under r.8.01(2). Importantly, in dismissing an application for an extension of time in which to apply for leave to appeal in Omiros (see PM Developments Pty Ltd v Omiros Pty Ltd [2005] FCA 1090), Gray J made the point that there was a distinction (which the applicant in that case was said to have tended to confuse) between the issue of venue (which his Honour described as the registry in which the case was managed) and the issue of the place of the conduct of the trial. His Honour referred to r.8.01 of the Federal Magistrates Court Rules and stated at [3]:
Like this Court, the Federal Magistrates Court is a national court and can sit in any part of Australia to deal with all or part of a trial. Once the issues in the proceedings are clear, and it is known what witnesses will be called, it will be possible for the present applicant to seek a direction as to the place of the trial, and to seek directions as to the manner in which the trial is to be conducted.
It is clear that, as Lucev FM recognised in Sherwood at [21], it is appropriate for determination of the matter to proceed on the basis that the mandatory considerations set out in r.8.01(2)(a) – (c) of the Federal Magistrates Court Rules are to be addressed as well as any other relevant matters.
In this Court, as in the Federal Court, there is no onus of proof in the strict sense to be discharged by the party seeking a change of venue.

I am not persuaded that the fact that there are particular factors that the Court must take into account if r.8.01 is applicable (which includes any other relevant matter) means that there is no starting point in considering an application for a change of venue that the proceeding has been commenced at a particular place. Whether or not r.8.01 is applicable, the issue before the Court in relation to the venue or place of the proceeding is: “Why should it be changed?”
In other words, the fact that the r.8.01(2) lists certain factors that must be taken into account in determining an application for change of the place of proceeding does not mean that the essential nature of the inquiry differs from that to be undertaken when this Court considers the issue of the place of proceeding on its own motion under s.52 of the Act (when r.8.01(2) does not apply). However, where r.8.01 applies, certain factors must be taken into account in determining whether the venue or place of proceeding should be changed. The “starting point” is that the proceeding has been commenced at a particular place and the issue is whether the Court is satisfied after considering all the relevant matters, including the mandatory factors listed in r.8.01(2), that there is a sound reason to order that the proceeding be conducted or continued elsewhere.
I do not, however, accept that the fact that there is such a “starting point” means that it is appropriate or helpful to express these principles in terms of a “prima facie presumption” in favour of the status quo (cf Autodesk Inc & Ors v Ginos Engineers Pty Ltd & Anor [2007] FMCA 1848 at [20]), given the absence of any onus of proof in the strict sense to be discharged by a party seeking a change of venue and the fact that the court may exercise its powers under s.52 either on the application of a party or on its own motion. Further, while the convenience of the parties is a mandatory factor under r.8.01(2) and is important, as the Full Court stated in Sentry, the balance of convenience is not necessarily determinative of each case and its weight must vary from case to case.
Hence, consistent with Sentry (at 162) and as Lucev FM recognised in Sherwood at [38], it is necessary to have regard to the mandatory factors under r.8.01(2) of the Federal Magistrates Court Rules in determining at this stage where the case can be conducted or continued most suitably, bearing in mind the interests of the ends of justice in the determination of the issues between them and the most efficient administration of the Court.
For the sake of completeness I note that if I am wrong and it is not appropriate to have regard to a “starting point” in applications for a change of venue of the nature presently before the Court, I would in any event, for the reasons outlined below, come to the same conclusion on the basis of consideration of the ultimate test having regard to the mandatory considerations set out in r.8.01(2), including any other relevant matters under r.8.01(2)(d).
Consideration of this issue should proceed by reference to the mandatory matters in r.8.01(2) of the Federal Magistrates Court Rules. I have had regard to the matters specified in r.8.01(2)(a) – (c) and also to any other relevant matters raised by the parties in these proceedings. I note that the pleadings are complete, but that no affidavits other than those relied on in support of or opposition to the application for a change of venue have been filed.

Convenience of the parties

Lolliland’s registered office and principal place of business are in New South Wales, on the fringe of metropolitan Sydney. Dollar Sweets is registered in Victoria and its principal place of business in Victoria (although, according to the ASIC current and historical company extract annexed to the affidavit of Mr Walter sworn on 21 January 2009, its registered office is in Unley, South Australia).
Dollar Sweets submitted that all eleven of its proposed witnesses resided in Victoria and that they were all relevant to the question of liability. Mr Walter, the solicitor for Dollar Sweets, stated in his affidavit of 21 January 2009 that he believed that all staff involved in the manufacture of the Easter egg line in issue over the relevant period and aware of its capacity resided in Victoria. Three employees and one ex-employee of Dollar Sweets were said to be critical witnesses. It was foreshadowed that a further five employees and ex-employees who also resided in the Melbourne area may be called as witnesses, subject to the answers to the request for particulars and further conduct of the proceedings, as well as two Victorian resident representatives of the Victorian company said to be the third party referred to in the statement of claim.
The principal and managing director of Lolliland (Mr Costelloe) is said to live and work in metropolitan Sydney. According to the affidavit of Mr Costelloe sworn on 18 February 2002, all of Lolliland’s proposed witnesses live or work in New South Wales. Twelve possible witnesses were identified. Mr Costelloe attested that, at this stage, he anticipated that it was likely that three named employees of Lolliland would give evidence at the hearing (in addition to himself). They are said to have had significant roles in connection with the matter the subject of the proceedings. He also anticipated that Lolliland would need to ask eight witnesses who were independent of the claim to give evidence, on the basis that it appeared that Dollar Sweets would put the applicant to strict proof on every aspect of its claims. These possible witnesses were identified as a witness from Australian Sweets Pty Ltd, (the supplier of chocolate replacing the chocolate that the respondent was said to have failed to supply). That company and witness are located in New South Wales. Other potential witnesses were named customers, said to be required to provide evidence on matters such as confirmation that the agreement Lolliland had with them was to supply Easter eggs by particular dates and as to the importance of those dates. It was also anticipated that it would be necessary for Lolliland to call evidence from a number of its customers about having been approached either by Dollar Sweets or by a third party of whom it is alleged that Dollar Sweets provided part of Lolliland’s customer list and customer contact details in relation to the purchase of 2008 and 2009 Easter stock. Mr Costelloe named seven such witnesses from entities in New South Wales.
Counsel for Dollar Sweets took issue with the weight to be given to Lolliland’s identification of its potential witnesses, suggesting that the supplier of replacement chocolate was relevant only to the question of loss not liability and that it was difficult to conceive what relevance third party witnesses had to the question of the alleged agreement between the applicant and the respondent. Issue was also taken with the fact that the customers identified by Lolliland as potential witnesses were all based in New South Wales, although the statement of claim pleaded more tonnage of Easter eggs to be delivered to Victorian customers than to those in New South Wales.
In response, Lolliland contended that there were only 4 out of about 23 customers who took delivery of goods in Victoria, that the overwhelming majority of its customers took delivery of the goods the subject of the claim outside Victoria and that Victorian customers constituted only 25 percent and 22 percent (by volume) of those recipients of the Easter eggs referred to in paragraphs 11 and 12 of the statement of claim. Lolliland also submitted that the fact that a witness’ evidence may relate only to the issue of damages would not make it any less inconvenient for the witness to have to travel to Victoria to give evidence; that the evidence of the third-party witnesses would be relevant to the content of the terms of the agreement between the parties; and that, on any view, a minority of the recipients of the product to be delivered by the respondent were located in Victoria.
Lolliland claimed that documents relating to the dispute (both the principal claim and the respondent’s cross-claim) were located at its offices in New South Wales, whilst Dollar Sweets pointed to the fact that all manufacturing of the Easter egg product took place at its facilities in Victoria and contended that all necessary data and information in that regard would be located at the offices of Dollar Sweets in Victoria.
Dollar Sweets’ lawyers are all located in Victoria. Lolliland’s lawyers are all located in New South Wales.
Each party took issue with whether the level of inconvenience in relation to witnesses and location of documents would be greater for the respondent or for the applicant depending on where the matter was heard.
Dollar Sweets contended that notwithstanding the early stage of the proceedings this was not a case in which the number, identity and residence of witnesses or the location of discoverable documents was not yet known (cf Sherwood at [25] – [30]). In contrast Lolliland contended that given the “nascent” status of the case, the final number of witnesses and the location and volume of discoverable documents was not yet known, that witness statements or affidavits had not yet been exchanged and that the scope of disputed facts and therefore the need for particular witnesses to be called still remained unclear.
Dollar Sweets submitted that the evidence established that the convenience of the majority of the persons closely involved in the litigation be would be better served by a hearing of this matter (in relation to directions, any further interim hearings and the final hearing) in Melbourne (see Neil at [75]). Lolliland contended that it was not correct to say that the majority of persons involved in the litigation were located in Melbourne, referred to the independent witnesses which it anticipated calling and submitted that the proceedings would inevitably involve a degree of inconvenience for at least one of the parties, but that the evidence did not establish that it would be significantly more convenient for the majority of persons closely involved in the litigation for the matter to be heard both with respect to interlocutory matters and on a final basis in Melbourne rather than in Sydney.
The parties at this stage each indicate that they intend to call a comparable number of witnesses. While Dollar Sweets suggests that it intends to call a greater number of internal witnesses, it is not definite in relation to some of those witnesses. Lolliland did not dispute that the third party referred to in the statement of claim is a Victorian company. For its part, Lolliland indicated a possible need to call a comparable number of witnesses, some closely identified with it and also a number of independent witnesses.
It is clear that, as both the parties concede, whichever venue is adopted one party or the other will be inconvenienced. As Dollar Sweets contended, it would be preferable for certain witnesses (given the nature of the allegations of misrepresentation) not to give evidence by way of video link (see Kennedy v Collett [2003] FCA 1412 at [7] and Neil at [70]). It may emerge that other witnesses may be appropriately cross-examined by way of video link. It is too early to tell. It is not possible at this early stage of the proceedings to draw firm conclusions as to the number of witnesses. While Dollar Sweets submitted that this was not a case in which the number, identity and residence of witnesses and the location of discoverable documents was not yet known, in fact on the evidence of the parties themselves, it is not yet possible to be clear as to precisely who or how many witnesses will in fact be required to give evidence in these proceedings. I am of the view that at this early stage in the proceedings the identity and number of witnesses and their location is not sufficiently clear to enable findings to be made that this factor points to one venue rather than the other.
Moreover, at this stage of the proceedings it is premature to attempt to determine the relative “significance” of particular witnesses, other than those who appear to be principal witnesses. The parties identified Mr Costelloe for Lolliland and two employees said to have made representations for Dollar Sweets. At this stage Lolliland proposes to call more “independent” witnesses. No affidavit evidence has yet been filed in the substantive proceedings.
What can be said is that on the evidence before the Court the question of the convenience of the parties is fairly evenly balanced. Generally speaking, on the evidence before the Court the level of inconvenience, whether the final hearing is in Sydney or Melbourne, will not be materially different whichever party is the non-resident party, although this may change before the hearing.
At this stage it has not been suggested that there will be a need for other interlocutory proceedings. Except in relation to the location of mediation, the level of inconvenience to each of the parties prior to the trial should not be materially different, as directions hearings and interlocutory proceedings can be conducted through telephone or, if necessary, by video link.

Limitation of the cost and expense of the proceedings

Dollar Sweets submitted that significant expense and cost would be likely to be saved and the cost of the proceeding would be likely to be less (having regard in particular to the matters considered above) if there was a change of venue from the Sydney to the Melbourne registry. Lolliland submitted that nothing in the material relied upon by either party indicated that the cost and expense of the proceeding would in fact be limited or reduced if the matter proceeded in Melbourne rather than Sydney.
Neither party has pointed to any factor that would lead to an overall reduction in the costs of the proceedings if they were to be transferred to Melbourne. At present the convenience and cost factors appear to be finely balanced. Any saving in terms of costs that might be achieved by Dollar Sweets if the matter was transferred to Melbourne would on the face of it appear at this stage to be balanced by the approximately equal additional costs that would necessarily be incurred by Lolliland as a result of its officers, employees, witnesses and lawyers having to travel to Melbourne.
At this stage it is not possible to determine the extent of relevant documents held by each party and how the location of such documents may impact on the cost of the hearing. At this stage each party proposes to call a similar number of witnesses. There is clearly a degree of uncertainty on each side as to the actual number, identification, extent of evidence and location of all witnesses. It is too early to tell with any certainty what impact the location of particular witnesses will have on the cost of the proceeding, in particular in relation to travel expenses.
Notwithstanding the endeavours of each of the parties to identify potential witnesses, it is not possible to make an informed decision one way or the other about the relative cost of conducting the proceedings in Melbourne rather than in Sydney. On the evidence as it now stands, the position appears to be fairly evenly balanced.
The same may be said in relation to the costs associated with the location of the parties’ lawyers. Wherever the hearing is, one party or the other will have to incur additional travel and remote consultation expenses or employ new lawyers.
Lolliland seeks an order for mediation. Mediation is desirable in proceedings of this nature (see s.23 of the Federal Magistrates Court Act 1999 (Cth)). Whether mediation occurs in Sydney or Melbourne, one party will incur additional expense by reason of the venue.
As indicated above, there is otherwise no suggestion that issues associated with pre-trial case management are likely at this stage to increase costs for either party (whether the venue is in Sydney or Melbourne) as the matter can be managed by way of telephone link directions hearings.

Whether the matter has been listed for final hearing

The proceeding has not been listed for final hearing. The application seeking a change of venue was filed early and was returnable on the first return date. The time at which this application came before the Court meant that the usual directions, including listing the matter for final hearing, were not made. No directions have been made to progress the substantive matter other than in relation to pleadings. There is no procedural or administrative obstacle to the transfer.
There is also not adequate evidence before the Court as to the likely length of the hearing and whether or not the matter would be heard more quickly in Sydney or in Melbourne. This last matter is a factor which might be of some significance in a case such as this one if, as is presently suggested, there are in fact some 23 witnesses and they are all required for cross-examination. However, as indicated, at this stage in the proceedings the extent to which relevant facts will be disputed and as to which witnesses will ultimately be called at the hearing cannot be determined with any degree of accuracy. I consider that in these circumstances the fact that the matter has not been listed for final hearing is of neutral significance.
I also note that as matters now stand it would be convenient for the Court in Sydney to deal with this matter – both the pre-trial proceedings and the hearing. As indicated above, there is no evidence about the availability of Melbourne-based Federal Magistrates or likely hearing times in Melbourne. The Court is, in any event, a national court. It can sit, take evidence and hear witnesses anywhere in Australia. The convenience of the Court, on the information presently available, does not provide support to the application for a change of venue.

Any other relevant matter

Connection with venue

Dollar Sweets drew attention to the fact that all the manufacture of the Easter egg products in dispute occurred in Victoria and that all the products supplied between 15 February 2007 and 29 March 2007 that were the subject of its cross-claim, were also manufactured in Victoria and supplied from its premises in Victoria. The Easter eggs were to be delivered to various States. The products, the subject of the cross-claim, were to be supplied to an address in New South Wales. Dollar Sweets’ cross-claim is that Lolliland failed and refused to make payments of amounts due to it for such products.
Dollar Sweets contended that it was relevant that a greater proportion of Easter egg product was to be delivered to locations in Victoria than to New South Wales, that all relevant staff involved in the manufacture of the Easter egg products resided in Victoria, that it had no New South Wales office or branch and that all relevant communications between the parties in relation to the contract in relation to the Easter eggs were by telephone or facsimile to its representatives in Victoria (although it was conceded that this may not be the case in relation to the contract the subject of the cross-claim). All invoices for the supply of Easter egg products were said to have been furnished from Dollar Sweets’ Victorian premises, with payment to be made to its bank account in Victoria.
On the basis of these factors it was submitted that either the relevant cause of action accrued in Victoria or that, in any event, the subject matter of the dispute had a stronger degree of connection with Victoria than with New South Wales. It was submitted that there was no evidence from Lolliland as to where the relevant cause of action accrued and/or as to the connection of the subject matter of the dispute with a particular locality.
Lolliland submitted that as it was based in New South Wales, almost all of the relevant communications were received in New South Wales and that the majority of product the subject of dispute was to be delivered in New South Wales or outside of Victoria. It was contended that the Court should not conclude that the subject matter of the dispute had a stronger degree of connection with Victoria than with New South Wales or that the relevant causes of action arose in Victoria rather than in New South Wales.
The principal relief sought by both parties is damages, either pursuant to the Trade Practices Act or under the general law. At this stage no issue has arisen as to the proper law of the contract. Lolliland submitted that, to the extent that it had any relevance, as it alleged that it suffered loss or damage in New South Wales its cause of action accrued in New South Wales presumably on the basis that a cause of action under s.82 of the Trade Practices Act accrues not when a contravention occurs, but when loss or damage is suffered as a result, although there was no evidence before the Court in that respect.
For present purposes it is not necessary to make findings about where the various causes of action arose. In some cases the place of the conduct the subject of the litigation or where the cause of action arose is of considerable significance (for example, where the cause of action arises under state legislation as considered in Sentry at 163). This has not been shown to be such a case.
The place where the alleged contracts were made might be regarded as almost fortuitous, as it is said to depend on whether communications were by way of facsimile or by way of letter (see ESCO Corporation v Wundowie Foundry Pty Ltd [2003] FCA 587). In this case Dollar Sweets argued that the Easter egg contract had a stronger connection with and was made in Victoria (through an exchange of facsimile letters), while acknowledging that this may not be so in relation to the contract the subject of the cross-claim which, it appears, may have been made by exchange of letters. Assuming for present purposes that the Easter egg contract was made in Victoria, both contracts involved communications between the two States and the delivery of product outside Victoria to a significant extent (totally in relation to the cross-claim). It cannot be said that there is a minimal connection or no connection with New South Wales. On balance, insofar as these proceedings relate to contractual matters, at this stage there appears to be a closer (although not significantly closer) connection with Victoria. There is no suggestion that there are any relevant differences in the applicable law in New South Wales and Victoria.
The conduct relied on to found the claims under the Trade Practices Act which are the bases for this Court’s jurisdiction, consists of alleged representations apparently said to have been made in Victoria both before and after the contract was entered into and also unconscionable conduct which is said by Lolliland to relate to the possible supply of product to its customers (of whom only 4 of 23 are said to have been in Victoria). While the loss or damage is said to have been suffered by Lolliland in New South Wales, the precise significance of the location of events relevant to these proceedings may become clearer once affidavits in the substantive matter are filed.

Where the proceedings were instituted

The place where an applicant chooses to initiate proceedings is a relevant factor to which weight must be given, unless the choice was made capriciously, although it is but one factor to be weighed against all the others (see Aquila Resources Limited v Pasminco Limited [2004] FCA 39 at [20] per RD Nicholson J).

O’Loughlin J stated in Australian Competition & Consumer Commission v Pauls Ltd [2002] FCA 71 at [19] that if proceedings are appropriately instituted in a particular registry the Court must be satisfied “that there is a sound reason to direct that the proceedings be conducted or continued elsewhere” (and see Rafferty v Time 2000 Systems (Australia) Pty Ltd [2008] FCA 1925).
More recently, in Mortimer v Opes Prime Stockbroking Limited (ACN 086 294 028) (Administrators Appointed) (In Liquidation) [2009] FCA 227 at [15], McKerracher J suggested that the principles applicable to an application to direct that a proceeding be conducted or continued elsewhere were “not controversial”. His Honour stated that there must be sound reason to direct that proceedings be conducted or continued elsewhere, but observed (at [15]) “if the party commencing the proceeding chose the place capriciously the Court would be justified in giving no weight to the choice of place.”
There was no suggestion or evidence of caprice in Lolliland’s choice of venue or that it was inappropriate to institute these proceedings in Sydney. If, as suggested in Sentry and subsequent Federal Court cases, there must be a sound reason to direct that such a proceeding be conducted or continued elsewhere, I am not satisfied that there is such a sound reason given (as discussed below) the relatively evenly balanced considerations having regard to all relevant matters.
Even if the test is not to be couched in terms of a “starting point”, weight should be given to the applicant’s choice of place as a factor against the proposed change of venue. The absence of caprice in such choice and the appropriateness of institution of proceedings under the Trade Practices Act in the Sydney registry of the Court by a Sydney-based applicant are factors to be weighed against all the others, including the respondent’s location in Melbourne and the degree of connection of the matter with Victoria.

Time of application

Dollar Sweets pointed to the fact that it made the application to transfer the proceeding bona fide and in good faith and at an early stage in the proceedings. This is not disputed. Had there been inappropriate delay or mala fides that would be a factor against a change of venue.
Lolliland’s principal contention was that Dollar Sweets’ application was premature. It referred to the fact that it requested early mediation in this matter. This was said to be relevant because if the proceedings were resolved in mediation the question of the appropriate venue for the hearing would fall away. It was also submitted that the Court would be in a better position to judge whether there should be a change of venue once discovery was complete and the parties had exchanged witness statements or filed affidavits and could confidently inform the Court as to the number and identity of witnesses.
Lolliland contended that the matter should be sent for mediation in Sydney and that any question relating to the appropriate venue should be deferred until after conclusion of the mediation. It was submitted that it was not possible at present to properly determine any questions relating to the appropriate venue for the ultimate hearing of the matter.
Dollar Sweets submitted that to delay a decision on the change of venue application would in one sense favour the party opposing the application, given that it was mandatory to have regard to whether a final hearing had been listed. It was submitted that there should be certainty as to venue and that it was appropriate that mediation and all interlocutory steps take place in Melbourne.
In the alternative, Lolliland contended that if I was not disposed to defer making a decision, the application for a change of venue should be dismissed. It was contended that where proceedings have been properly commenced at a place which was connected to the subject matter of the dispute, the proceedings should be heard at the place of commencement and that on the evidence the balance of convenience and the relevant considerations were fairly evenly balanced between Sydney and Melbourne.
A distinction can be drawn between whether it is premature to decide an application and whether at this early stage of the proceedings the Court can be satisfied that, having regard to the relevant mandatory considerations, a change of venue or place of hearing is warranted.
While in some cases it may be appropriate to defer determination of an application that has been argued before the Court, I consider that in this case it is preferable to determine the application. Dollar Sweets seeks not only that the hearing be in Melbourne, but also that all directions hearings and any mediation be conducted in Melbourne.
It is apparent that there is something to be said for both sides of the question of whether the proceeding should be referred to the Melbourne registry of the Court. Lolliland’s choice of venue was not a capricious or inappropriate one. The cause of action on which the jurisdiction of the Court rests is based on a law (the Trade Practices Act) applying throughout Australia. No New South Wales or Victoria legislation has been identified as relevant. Nor is anything said to turn in these proceedings on where the contracts were made or whether New South Wales or Victorian law is otherwise applicable. There is no suggestion that the alleged contracts involve any choice of law of a particular State.
A degree of inconvenience and cost will be occasioned to one or the other of Lolliland or Dollar Sweets whichever registry deals with the proceeding. At present considerations relating to potential witnesses are quite evenly balanced. I have endeavoured, insofar as possible, to make some assessment of the evidence and assertions in this respect – although it is not for me to determine whether particular proposed witnesses will be necessary or important.
None of the factors which must be taken into account under r.8.01(2), including any other relevant matters, are significantly in favour of a conclusion that proceeding in Melbourne would be more convenient or involve savings in costs or expenses compared to Sydney. This may well change, particularly when there is some certainty as to witnesses, their affidavit evidence and location. However at present the respective cases for and against transfer are fairly evenly balanced. I am not satisfied that, having regard to the factors in r.8.01(2) and all the circumstances of the case, it is in the interests of the parties, the interests of justice in determination of the issues between them and the most efficient administration of the Court that the whole of the case be conducted or continued most suitably in the Melbourne registry of the Court. In particular, in my opinion the pre-trial part of the proceeding should continue to be conducted in the Sydney registry of the Court.
However, as indicated, it may be that once further pre-trial procedures and preparation for the trial have taken place the position may change. Dollar Sweets may wish to re-agitate the issue of change of place of proceeding in relation to the place of hearing (see Omiros per Gray J, Tidswell Financial Services Limited (ACN 010 810 607) v Sovereign Capital Limited (ACN 085 821 218) [2008] FCA 586 and cf the approach taken by the Federal Court in WG and B Manufacturing v Telsa Farad Pty Ltd [1999] FCA 859). It is normally desirable for the one judicial officer to take charge of a case from its inception, deal with all interlocutory applications and, where possible, hear the trial. However, in the particular circumstances of this case, while taking that factor into account, given that I accept that it is not possible to make a properly informed decision on all matters relevant to the question of venue for the hearing at this stage of the proceedings, this factor should not be such as to mean that there could not be a change of venue for the trial if it emerges that that is the most appropriate course to adopt.
Neither party should be precluded from raising this issue in relation to the place at which the trial is to be conducted. If a further application for change of venue is brought before the Court by Dollar Sweets, Lolliland should not be able to raise as an issue the fact that interlocutory steps have taken place in New South Wales or to argue that a transfer may result at that stage in it losing the services of its current legal advisers given that (as in WG and B Manufacturing) Lolliland contended that the Court should defer ruling on the application for a change of venue until such a later stage.
In all the circumstances, while I consider it appropriate to dismiss the present application, that would not preclude an application that there be a change of venue in relation to the place of hearing or, indeed, that a part of the trial be conducted elsewhere than in Sydney, in particular once the issue of witnesses is clarified (see to similar affect Re Arrow Limited v Stuart Rusden Stoneman; Andrew Frewin Pty Ltd and DT Andrew & Co [1989] FCA 545 at [19] per O’Loughlin J and Tidswell Financial Services Limited at [16] and note that there is no suggestion that this case involves expert witnesses such as to suggest a need for early determination of the place for trial that ought not to be subject to the possibility of change, AMC Investments Ltd v Willey, unreported, Federal Court of Australia, 23 November 1989 discussed in Re Arrow Limited at [20] – [21]). Indeed, whichever “venue” is adopted for the final hearing, it may be appropriate for the Court to hear evidence in a number of places.
Hence, while I am not satisfied that it is appropriate to transfer the matter to the Victorian registry of the Court at this stage, the respondent would not be precluded from making a further application for a change of the place of the trial at a time when interlocutory steps have been completed and when it is clear how many witnesses will in fact be called by each party and what will be the likely nature and duration of their evidence. A more informed decision could then be made as to the place of the trial itself. Given that directions hearings and any other interlocutory hearings would normally be able to proceed by way of telephone link, I do not believe that either of the parties would be significantly disadvantaged by such an approach. As Gray J pointed out in Omiros at [4] an order dealing with an application under r.8.01 is interlocutory: “No estoppel arises from it. It can be revisited, either as a result of a change of circumstances or, as I have suggested, in the way of seeking directions as to the conduct of the trial, as distinct from attempting to change the venue of the entire proceeding.”
It is appropriate that further directions hearings (via telephone link if necessary) and mediation take place in Sydney and that orders be made for the filing of evidence.

I certify that the preceding seventy-nine (79) paragraphs are a true copy of the reasons for judgment of Barnes FM

Associate:

Date: 1 April 2009