Naude v Dra Global Limited
[2024] WASC 32
•13 FEBRUARY 2024
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION: NAUDE -v- DRA GLOBAL LIMITED [2024] WASC 32
CORAM: FORRESTER J
HEARD: ON THE PAPERS
DELIVERED : 13 FEBRUARY 2024
FILE NO/S: CIV 2262 of 2023
BETWEEN: ANDREW JAMES NAUDE
Plaintiff
AND
DRA GLOBAL LIMITED
Defendant
Catchwords:
Application for transfer of proceedings to Federal Court under cross-vesting laws - Need for interpretation of Commonwealth legislation - Overlap in subject matter
Legislation:
Corporations Act 2001 (Cth)
Jurisdiction of Courts (Cross-Vesting) Act 1987 (WA)
Rules of the Supreme Court 1971 (WA)
Result:
Proceedings to be transferred
Category: B
Representation:
Counsel:
| Plaintiff | : | No appearance |
| Defendant | : | No appearance |
Solicitors:
| Plaintiff | : | Bennett |
| Defendant | : | HFW Australia (Perth) |
Cases referred to in decision:
Access Group Australia Pty Ltd v Topper Hydraulic Platforms Pty Ltd [2019] WASC 265
BHP Billiton Ltd v Schultz [2004] HCA 61; (2004) 221 CLR 400
Cini v Pets Paradise Franchising (SA) Pty Ltd [2008] SASC 287; (2008) 102 SASR 177
Commissioner of Taxation v Residence Riverside Proprietary Ltd as Trustee for the D&J Discretionary Trust and as Trustee for the D&J Investment Trust [2013] FCA 720
Uon Pty Ltd v Hoascar [No 3] [2021] WASC 17
FORRESTER J:
Introduction
This is an application by the defendant for the proceedings to be transferred to the Federal Court of Australia, pursuant to s 5 of the Jurisdiction of Courts (Cross-Vesting) Act 1987 (WA) (the Act) and O 81E of the Rules of the Supreme Court 1971 (WA) (RSC).
The application is supported by the affidavit of Monika Mečević affirmed on 5 February 2024. The plaintiff consents to the application.
Pursuant to O 81E r 8 of the RSC, an application for the transfer of a proceeding under cross-vesting laws must be determined by a judge.
For the reasons which follow, I propose to make the order sought.
Background
The plaintiff was, at all material times, a director of the defendant (DRA Global) and other related companies (together, the DLA Group). He was an officer of DRA Global until 13 October 2022.[1]
[1] Affidavit of Andrew James Naude affirmed 21 November 2023 [8].
On 20 September 2023, DRA Global, the DRA Group and the DRA Group Holdings Share Purchase Trust commenced Federal Court proceedings under case number WAD 231/2023 against the plaintiff and five other respondents (Federal Court Proceedings).[2]
[2] Affidavit of Andrew James Naude affirmed 21 November 2023 [18].
In the proceedings in this court, commenced on 7 November 2023 (Indemnity Proceedings), the plaintiff claims that he is entitled to be indemnified by DRA Global for legal costs incurred by him in defending the Federal Court Proceedings,[3] pursuant to the Constitution of DRA Global and a director's indemnity and protection deed entered into by the plaintiff and DRA Global on 24 May 2021.[4]
[3] Plaintiff's Writ of Summons filed 7 November 2023 [12].
[4] Plaintiff's Writ of Summons filed 7 November 2023 [5].
The defendant seeks to have the Indemnity Proceedings transferred to the Federal Court on the basis that:
(a)the matters for determination in the Indemnity Proceedings are matters arising under or involving questions as to the application, interpretation or validity of a law of the Commonwealth; and
(b)the Indemnity Proceedings should be managed concurrently with the Federal Court Proceedings.[5]
[5] Affidavit of Monika Mečević affirmed 5 February 2024 [8].
The position of the defendant is that, in the Indemnity Proceedings:
(a)a court will have to determine, among other matters, whether the Federal Court Proceedings give rise to a liability for which it would be prohibited for DRA Global to indemnify the plaintiff under s 199A of the Corporations Act 2001 (Cth) (the Corporations Act); and
(b)the court would need to form a view on the extent to which the plaintiff's interests overlap with the other respondents in the Federal Court Proceedings, and the respective exposures of the respondents, in order to determine the percentage of the fair and equitable defence costs the plaintiff would be liable for in defending the Federal Court Proceedings.[6]
[6] Affidavit of Monika Mečević affirmed 5 February 2024, 8 (MM-1).
Each of these matters also fall for consideration in the Federal Court Proceedings.
Statutory framework and legal framework
The application is made pursuant to s 5 of the Act, which relevantly provides:
(1)Where —
(a)a proceeding (in this subsection referred to as the relevant proceeding) is pending in the Supreme Court; and
(b)it appears to the Supreme Court that, having regard to —
(i)whether, in the opinion of the Supreme Court, apart from any law of the Commonwealth or another State relating to cross‑vesting of jurisdiction and apart from any accrued jurisdiction of the Federal Court or the Family Court, the relevant proceeding or a substantial part of the relevant proceeding would have been incapable of being instituted in the Supreme Court and capable of being instituted in the Federal Court or the Family Court;
(ii)the extent to which, in the opinion of the Supreme Court, the matters for determination in the relevant proceeding are matters arising under or involving questions as to the application, interpretation or validity of a law of the Commonwealth and not within the jurisdiction of the Supreme Court apart from this Act and any law of the Commonwealth or another State relating to cross‑vesting of jurisdiction; and
(iii)the interests of justice,
it is more appropriate that the relevant proceeding be determined by the Federal Court or the Family Court, as the case may be,
the Supreme Court shall transfer the relevant proceeding to the Federal Court or the Family Court, as the case may be.
The applicable legal principles are well-established, and were recently set out by Archer J in Uon Pty Ltd v Hoascar [No 3],[7] distilling them from the analysis of Le Miere J in Access Group Australia Pty Ltd v Topper Hydraulic Platforms Pty Ltd:[8]
[7] Uon Pty Ltd v Hoascar [No 3] [2021] WASC 17 [19].
[8] Access Group Australia Pty Ltd v Topper Hydraulic Platforms Pty Ltd [2019] WASC 265 [23] - [26].
1.It calls for… a 'nuts and bolts' management decision as to which court, in the pursuit of the interests of justice, is the more appropriate to hear and determine the substantive dispute.
2.If the court is of the opinion that s 5(1) of the Commonwealth Act or the WA Act is satisfied, it must transfer the proceeding. There is no question of judicial discretion.
3.The interests of justice capture not just the interests of the parties – competing or conflicting – but may also capture interests wider than those of either party. The interests of justice concern those of both parties and, rather than the selection of the most advantageous or least disadvantageous forum for one of them, the interests of justice are to be judged by more objective factors which facilitate identification of the 'natural forum', in which objectively judged, the dispute would fall to be resolved, with its concomitant juridical advantages and disadvantages for each party, whatever they may be.
4.Each case turns on its particular facts when determining the more appropriate court or 'natural forum'.
5. Connecting factors are relevant. Connecting factors include
(a)factors indicating that justice can be done in one forum at substantially less inconvenience or expense such as the availability of witnesses;
(b)factors which may make a forum the 'natural forum' as being the forum with which the action has the most real and substantial connection, such as where the relevant transactions took place and where the parties carry on business.
6.An important consideration is which forum can provide more effectively for the complete resolution of the matters in issue between the parties.
Archer J continued:[9]
[9] Uon Pty Ltd v Hoascar [No 3] [2021] WASC 17 [20] - [21].
Further, as was said by Bleby J in Cini v Pets Paradise Franchising (SA) Pty Ltd:
Because it is necessary to identify the more appropriate forum, no specific emphasis can be given in favour of the choice of forum made by the plaintiff.
It is inapt to speak of the applicant for an order for transfer as bearing a burden of persuasion analogous to an onus of proof.[10]
[10] Cini v Pets Paradise Franchising (SA) Pty Ltd [2008] SASC 287; (2008) 102 SASR 177 [8], citing BHP Billiton Ltd v Schultz [2004] HCA 61; (2004) 221 CLR 400.
In Commissioner of Taxation v Residence Riverside Proprietary Ltd as Trustee for the D&J Discretionary Trust and as Trustee for the D&J Investment Trust,[11] McKerracher J noted that, ordinarily, the factors in support of cross‑vesting are obvious. He said that the decision as to whether a matter should be transferred will be 'readily instinctive' upon taking into account matters such as (numbering added):
1. the stage of the proceedings in the respective courts;
2.the commonality or diversity of the parties and the issues;
3. the nature of the proceedings;
4. the risk of conflicting findings of fact or conflicting orders;
5. a cost benefit analysis;
6. the potential unnecessary drain on judicial and other public and private resources; and
7. whether there is any particular judicial expertise residing in one court or the other.
[11] Commissioner of Taxation v Residence Riverside Proprietary Ltd as Trustee for the D&J Discretionary Trust and as Trustee for the D&J Investment Trust [2013] FCA 720 [17].
Disposition
The sole issue is whether, having regard to the matters set out in s 5(1)(b) of the Act, it is more appropriate that the Indemnity Proceedings be transferred to the Federal Court, which can then deal with both proceedings.
The Federal Court Proceedings allege the plaintiff committed breaches of the Corporations Act and the Australian Securities and Investments Commission Act 2001 (Cth).
A central issue in the Indemnity Proceedings is whether s 199A of the Corporations Act prohibits the defendant from indemnifying the plaintiff. To that extent, the construction of Commonwealth legislation is a significant issue.
Further, a factual issue arises as to the extent to which the plaintiff is liable for costs in defending the Federal Court Proceedings, having regard to the overlap between his interests and those of the other respondents to the Federal Court Proceedings. That factual issue will be determined in the Federal Court Proceedings, meaning that, if the Indemnity Proceedings are not transferred, both courts will need to determine the issue. The duplication of proceedings would be an unnecessary waste of court resources, and the resources of the parties.
The fact that the parties consent to the transfer is also a relevant factor.
I am satisfied that the Federal Court is the appropriate forum for the Indemnity Proceedings, that the transfer will more effectively enable the complete resolution of the matters, at the least inconvenience and expense to the parties, and that it is in the interests of justice to order the transfer.
Accordingly, I will order that, pursuant to s 5(1) of the Jurisdiction of Courts (Cross-Vesting) Act 1987 (WA), the Indemnity Proceedings (CIV 2262 of 2023) be transferred to the Federal Court.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
SI
Associate to the Honourable Justice Forrester
13 FEBRUARY 2024
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