Perdon Pty Ltd v Law Coast Mortgages Pty Ltd
[1999] FCA 512
•21 APRIL 1999
FEDERAL COURT OF AUSTRALIA
Perdon Pty Ltd v Law Coast Mortgages Pty Ltd [1999] FCA 512
INJUNCTION –injunction restraining publication of defamatory material – filing of defamatory material as annexure to affidavit in Court an attempt to make the publication privileged - abuse of process.
PRACTICE AND PROCEDURE – cross vesting of proceedings from Federal Court of Australia to Supreme Court of Queensland – proceedings brought by one set of interests in Supreme Court of Queensland, and proceedings brought by opposing set of interests in Federal Court of Australia – proceedings in Supreme Court of Queensland commenced prior to proceedings in Federal Court of Australia – proceedings in each court involve causes of action in respect of which the Federal Court of Australia would have jurisdiction only by virtue of the accrued jurisdiction.
Jurisdiction of Courts (Cross-vesting) Act 1987 (Cth) s5(4).
Defamation Act 1889 (Qld), s13(1)(c).Bankinvest AG v Seabrook (1988) 14 NSWLR 711 discussed.
PERDON PTY LTD V LAW COAST MORTGAGES PTY LTD & ORS
Q 1 OF 1999
GREGORY ERIC ROGERS V LAW COAST MORTGAGES PTY LTD & ORS
Q 2 OF 1999SPENDER J
21 APRIL 1999
BRISBANE
IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY
Q 1 OF 1999
BETWEEN:
PERDON PTY LTD
ApplicantAND:
LAW COAST MORTGAGES PTY LTD, KIM CHRISTIE, ALAN CHARLES PARRY, IAN CHARLES GRIFFITHS, CHRISTINE MATSINGER and MALCOLM DONALD McCOLM
Respondent
IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY
Q 2 OF 1999
BETWEEN:
GREGORY ERIC ROGERS
ApplicantAND:
LAW COAST MORTGAGES PTY LTD, KIM CHRISTIE, ALAN CHARLES PARRY, IAN CHARLES GRIFFITHS, CHRISTINE MATSINGER and MALCOLM DONALD McCOLM
Respondent
JUDGE:
SPENDER J
DATE:
21 APRIL 1999
PLACE:
BRISBANE
THE COURT ORDERS THAT:
1.Proceedings Q1 and Q2 of 1999 be transferred to the Supreme Court of Queensland pursuant to s 5(4) of the Jurisdiction of Courts (Cross-vesting) Act 1987 (Cth).
2.The costs of and incidental to the proceedings Q1 and Q2 of 1999 and the costs of and incidental to the notice of motion filed 24 February 1999 in proceedings Q1 of 1999 and the notice of motion filed 8 April 1999 in proceedings Q2 of 1999 be reserved to the order of the Supreme Court of Queensland.
3.On the applicants to the notice of motion giving the usual undertaking as to damages:
(i)The applicant, Perdon Proprietary Limited, by itself, its directors, servants and agents and Mr Gregory Eric Rogers, and every one of them, be restrained from publishing the words appearing in the document entitled “The Default Business A Report on White Collar Fraud Conceived and Operated by Solicitors Law Mortgages Australia, Griffiths McColm & Parry, Law Coast Mortgages P/L Law Mortgage Management P/L”, a copy of which is exhibit KC1 to the affidavit of Kim Christie, or publishing words to that effect until further order of this Court or of the Supreme Court of Queensland.
(ii)Annexure 6 to the affidavit of Gregory Eric Rogers filed 12 April 1999 and exhibit KC1 to the affidavit of Kim Christie filed 12 April 1999 each be placed in an envelope and sealed and marked "Not to be opened without the prior order of a Court or a judge".
4.The costs of and incidental to the notice of motion filed 12 April 1999 in proceedings Q1 of 1999 be reserved to the order of the Supreme Court of Queensland.
Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY
Q 1 OF 1999
BETWEEN:
PERDON PTY LTD
ApplicantAND:
LAW COAST MORTGAGES PTY LTD, KIM CHRISTIE, ALAN CHARLES PARRY, IAN CHARLES GRIFFITHS, CHRISTINE MATSINGER and MALCOLM DONALD McCOLM
Respondent
IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY
Q 2 OF 1999
BETWEEN:
GREGORY ERIC ROGERS
ApplicantAND:
LAW COAST MORTGAGES PTY LTD, KIM CHRISTIE, ALAN CHARLES PARRY, IAN CHARLES GRIFFITHS, CHRISTINE MATSINGER and MALCOLM DONALD McCOLM
Respondent
JUDGE:
SPENDER J
DATE:
21 APRIL 1999
PLACE:
BRISBANE
REASONS FOR JUDGMENT
The proceedings before the Court today concern three notices of motion, filed in two separate but related files.
It is first necessary to consider the notice of motion filed on 12 April 1999, in respect of which, on an ex parte application, Cooper J on the same day made the following orders:
“THE COURT ORDERS THAT:
Upon the applicants to the notice of motion giving the usual undertaking as to damages
1.The Applicant, Perdon Pty Ltd, by itself, its directors, its servants and agents and its authorised agent in these proceedings Gregory Eric Rogers and everyone of them be restrained and an injunction be granted restraining the Applicant, Perdon Pty Ltd, by itself, its directors, its servants and agents and its authorised agent in these proceedings Gregory Eric Rogers and everyone of them from publishing the words appearing in the document titled “The Default Business. A report on White Collar Fraud Conceived and operated by Solicitors Law Mortgages Australia Griffiths McColm & Parry Law Coast Mortgages P/L Law Mortgage Management P/L” a copy of which is exhibit “KC1” to the affidavit of Kim Christie, or publishing words to the effect that Law Mortgages Australia, Griffiths McColm & Parry or any of its partners or staff, Law Coast Mortgages Pty Ltd or Law Mortgage Management Pty Ltd have engaged in criminal, illegal or unethical behaviour in relation to the provision of mortgage loans until 4:00 pm on 21 April 1999 or until further earlier order;
2.The applicant, Perdon Pty Ltd, within four hours of service of this order upon it provide to the respondents a list of all persons other than the court staff to whom the applicant by itself or its authorised agent Gregory Eric Rogers, its directors, servants or agents had published the document titled “The Default Business. A report on White Collar Fraud Conceived and Operated by Solicitors Law Mortgages Australia Griffiths McColm & Parry Law Coast Mortgages P/L Law Mortgage Management P/L” whether the said document was so published as an annexure to the affidavit of the said Gregory Eric Rogers filed or otherwise.
3.The affidavit of Gregory Eric Rogers filed 12 April 1999 exhibiting the document styled “The Default Business. A report on White Collar Fraud Conceived and Operated by Solicitors Law Mortgages Australia Griffiths McColm & Parry Law Coast Mortgages P/L Law Mortgage Management P/L” be placed in an envelope and sealed and marked “Not to be opened without the prior order of the Court or a Judge of it”.
4.The costs of and incidental to this application be reserved.
5.Law Mortgages Management Pty Ltd, Peter Charles Drake, Mitchell Patrick Dwyer and Law Mortgages Australia (a firm) be granted leave to intervene as applicants on the within notice of motion.
6.Each party to the notice of motion have liberty to apply on one clear day’s notice.
7.The notice of motion be adjourned to 10.15 am on 21 April 1999 for further hearing before Spender J.
8.Service of this order be effected by sending a copy of the order to the respondent to the notice of motion by fax to (07) 32671992.”
It will be seen from those orders that the “report”, if I may so style it, was exhibited to an affidavit of Mr Rogers filed on 12 April 1999, and Cooper J, making the orders that he did, said:
“The document is defamatory of the respondents to the principal action and to the parties represented on this notice of motion by Mr Bland of counsel.
Having regard to the circumstances in which the document has been filed and the threat to disclose its contents to the press, I am satisfied that the document is primarily being filed in the proceedings as an abuse of process in order to attempt to cloak it with privilege, to protect the maker of the document in its threatened publication from a suit for defamation.
In those circumstances, although the Court is loath to intervene to restrain the publication of defamatory material, I am satisfied that, on an interim basis at least, this is a proper case to intervene, and on the balance of convenience as it appears to me at this stage is wholly in favour of the applicants on the notice of motion.”
When the question of an injunction was raised before me today, the question of abuse of process became important. It appears from the material before me that prior to the notice of motion seeking restraint Mr Rogers had forwarded a copy of the report to, amongst other people, the ASIC and to the Attorney General for the State of Queensland, as well as to a financial journalist employed by The Australian newspaper. I infer that those matters happened prior to the filing of a copy of the report as an annexure to Mr Rogers’ affidavit on 12 April. Notwithstanding that earlier history, however, it seems to be conceded by Mr Rogers (but as “a small part” of his consideration, he says, in publishing as he did) that the aspect of privilege from defamation proceedings which would flow from filing the report as an annexure to an affidavit was one factor in his adopting that course.
By a letter dated 7 April 1999 Mr Rogers had written to a Mr Chris Barfoot of the firm Griffiths McColm and Parry (“GMP”) enclosing a copy of his report. The letter said in part:
“I have it on good authority that the “press” will be attending the Federal Court on 21.4.99 when you will (with the consent of the Court) be cross examined.
I am getting to the bottom of the (this) matter now and the full import to the whole mortgage lending industry is now able to be proved.
Please pass a copy of this on to each of the Respondents.”
As a hand written addendum to that letter Mr Rogers wrote:
“Also copy to be filed as 'affidavit' prior to distribution to Press.”
It seems to me that the proper purposes which Mr Rogers sought to achieve by publishing the document to the ASIC and to the State Attorney General have been satisfied. No disadvantage will flow to him from any fair report of these proceedings or of the principal proceedings, but it would be quite wrong to give to the contents of his report any defence by virtue of being exhibited to an affidavit. That would truly be improper and amount to an abuse of the Court's process.
Having regard to that particular circumstance, it seems to me that this is one of those rare cases where the Court will continue the restraint on the publication of defamatory material. I do that the more readily because I do not think that any of Mr Rogers' legitimate objects will be frustrated by the making of that order, and the continuation of those orders would defeat any possibility of the Court's process being abused.
I will continue the injunction, until further order of this Court or of the Supreme Court. I do that in the special circumstances of the facts of this case and make it plain that notwithstanding my orders in respect of the publication of Annexure 6, there is not in any way at all any inhibition on any person from publishing a fair report of the principal proceedings or of this application.
The matters that are the subject of dispute in the principal proceedings can be the subject of a fair report and, pursuant to s 13(1)(c) of the Defamation Act 1889 (Qld), would be immune from successful prosecution for defamation, so that the issues that Mr Rogers seeks to agitate and the defences that are raised to those allegations can legitimately be the subject of report and discussion and comment. I am, as I say, concerned with rather special circumstances in relation to the publication of a particular document, or the repetition of the contents of it.
In those circumstances it seems to me that I should make orders continuing the effect of Cooper J’s orders.
The orders that I make are that:
On the applicants to the notice of motion giving the usual undertaking as to damages:
1.The applicant, Perdon Proprietary Limited, by itself, its directors, servants and agents and Mr Gregory Eric Rogers, who has been granted leave to appear in the principal proceedings on behalf on Perdon Proprietary Limited, and every one of them, be restrained from publishing the words appearing in the document entitled “The Default Business A Report on White Collar Fraud Conceived and Operated by Solicitors Law Mortgages Australia, Griffiths McColm & Parry, Law Coast Mortgages P/L Law Mortgage Management P/L”, a copy of which is exhibit KC1 to the affidavit of Kim Christie, or publishing words to that effect until further order of this Court or of the Supreme Court of Queensland.
2.Annexure 6 to the affidavit of Gregory Eric Rogers filed 12 April 1999 and exhibit KC1 to the affidavit of Kim Christie filed 12 April 1999 each be placed in an envelope and sealed and marked "Not to be opened without the prior order of a Court or a judge".
I should note that Law Mortgages Management Proprietary Limited, Peter Charles Drake, Michael Patrick Dwyer and Law Mortgages Australia (a firm) are applicants on the notice of motion. So far as costs of this notice of motion is concerned, I reserve all of the costs.
I will now deal with the two notices of motion seeking that proceedings Q1 and Q2 of 1999 be transferred to the Supreme Court of Queensland.
I indicate at the outset that I propose to cross-vest these two proceedings to the Supreme Court. The question of security for costs in the Federal Court is not the basis on which I make that decision, nor is it in any significant way an alternative basis for the order that I make as to cross-vesting.
In proceedings Q1 of 1999 Perdon Pty Ltd (‘Perdon’) is the applicant and Law Coast Mortgages Pty Ltd (‘LCM’), Kim Christie, Alan Charles Parry, Ian Charles Griffiths, Christine Matsinger and Malcolm Donald McColm, are the respondents. A notice of motion was filed in those proceedings on 24 February 1999 seeking that the proceedings “…be transferred to the Supreme Court of Queensland pursuant to s 5(4) of the Jurisdiction of Courts (Cross-vesting) Act (Cth) (1987)” and, alternatively to that order, an application that “…the applicant provide security for the Respondents’ costs in the sum of $50,000.00”, and “…that the proceedings be stayed pending the provision of security for the Respondents’ costs to the satisfaction of the registrar…” in that sum.
In proceedings Q2 of 1999, Gregory Eric Rogers is the applicant, and the respondents are the same respondents as in proceedings Q1. In those proceedings a notice of motion filed on 8 April 1999 sought that those proceedings “…be transferred to the Supreme Court of Queensland pursuant to s 5(4) of the Jurisdiction of Courts (Cross-vesting) Act (Cth) (1987)”.
Section 5(4) relevantly provides:
“5. (4) Where:
(a)a proceeding (in this subsection referred to as the “relevant proceeding") is pending in the Federal Court or the Family Court (in this subsection referred to as the “first court”); and
(b)it appears to the first court that:
(i)the relevant proceeding arises out of, or is related to, another proceeding pending in the Supreme Court of a State or Territory and it is more appropriate that the relevant proceeding be determined by that Supreme Court;
…
(iii)it is otherwise in the interests of justice that the relevant proceeding be determined by the Supreme Court of a State or Territory;
the first court shall transfer the relevant proceeding to that Supreme Court.”
The operation of the cross-vesting scheme was discussed by Rogers A-JA in Bankinvest AG. v Seabrook (1988) 14 NSWLR 711. His Honour referred at 725 to the explanatory memorandum and the second reading speech made when the Act was introduced into the Senate, and quoted from the memorandum which introduced the New South Wales Bill:
“The successful operation of the cross-vesting scheme will depend very much upon courts approaching the legislation in accordance with its general purpose and intention as indicated in the preamble to the Commonwealth and State legislation.”
Rogers A-JA said later:
“It is important that full effect be given by the courts to the imaginative and detailed code for ensuring that throughout Australia disputes are dealt with by the one court and that be the court most appropriate for the particular dispute.”
In this case, there are proceedings in the Supreme Court by LCM against Perdon seeking possession of certain property. The two proceedings in the Federal Court plead various causes of action, and seek relief arising out of dealings connected with the financing of the purchase of those properties.
A central matter of complaint in the Federal Court proceedings concerns the question of whether, or the extent to which, there was a representation, or the promotion of an understanding, that finance for construction costs would be provided to Perdon, in addition to finance for the purchase of realty. Mr Rogers personally guaranteed the loan made to Perdon and is the moving party behind that company. The proceedings Q2 of 1999 relate to his liability on his personal guarantees in respect of the obligations of Perdon.
The question of cross-vesting has to be approached in a realistic, common sense way. It is fundamental to acknowledge that where litigation the in Supreme Court and the Federal Court concerns substantially the same issues or matters, it is clearly undesirable that there be separate proceedings in each court. As Jessel MR observed in McHenry v Lewis (1882) 22 Ch D 397 400:
“…it is prima facie vexatious to bring two actions where one will do.”
Here, the situation is slightly different, in that one set of interests has brought proceedings in the Supreme Court, and another opposing set of interests has brought proceedings in the Federal Court. Clearly, it is a question of which is the more appropriate court in which the matters involved can be disposed of in one proceedings. That is to say, it is a question of whether the disputes between the parties are more appropriately to be resolved by litigation in the Supreme Court or by litigation in the Federal Court.
I think it is necessary to have regard to the chronology of events in this matter before turning to consideration of where the interests of justice lie, and therefore, to the question of which is the more appropriate court. A respondents’ chronology was handed up by Mr Conrick, counsel for the respondents in the Federal Court proceedings, and a chronology by Mr Rogers is Exhibit X to his affidavit filed 3 March 1999. I will merely highlight some aspects of the detail of those chronologies.
On 19 June 1997 Perdon entered into a contract, unconditional as to finance, to purchase designated realty. Some time in August Perdon engaged Barnes Mortgage Management Pty Ltd (“Barnes”), seeking its assistance in respect to the obtaining of finance. Barnes, on behalf of Perdon, sought bridging finance from LCM to acquire the land. A loan agreement for the sum of $637,000 from LCM to Perdon was reached on 10 September 1997.
A second loan of $155,000 was later sought, to construct a single house on each of lots 63 and 64, and a deed of variation of the first loan was discussed. On 12 December 1997 a loan agreement was executed. On 23 March 1998 there were dealings which may be important in the principal proceedings, wherever they are held, concerning the release of mortgage on lot 63, which was part of the security for the loan by LCM. The funds were to be deposited with GMP, to be used either to reduce the mortgage, or to be available for constructions, subject to LCM's approval and requirements.
On 23 May 1998 LCM served notice of default on Perdon. While the evidence is not clear, it seems that there was a payment of interest and costs in respect of the matters said to be in default, as specified in the notice issued in May 1998. There was an extensive series of negotiations and discussions in which Perdon sought further financial assistance on various proposed bases. An important aspect of these negotiations was a letter of 4 September 1998, when Mr Rogers, as director of Perdon, wrote to GMP. The letter is headed, "Mortgages to Perdon Pty Ltd", and says:
“This letter is [to] confirm our telephone conversation of today.
Thank you for extending the time for settlement to Friday 25.9.98.
I acknowledge that should settlement not occur on that date you will be obliged to enter into possession of the properties.”
I would however ask that should the finance institution advise you that they will settle by 5pm on the next business day that you will permit that extension. I ask for this as Friday is a bad day for settlements owing to the weekend break should something go wrong.”
On 14 October GMP wrote to Perdon, which letter says in part:
“We are not prepared to permit these matters to drag on any longer, and we advise that we will take possession of the two (2) security properties on Monday, 19 October 1998.
…
As earlier pointed out by us to you, should you resist or oppose our efforts to lawfully take possession of the two (2) properties on this date, we propose to seek a Court Order.”
On 15 October Mr Rogers wrote to GMP. The letter commenced:
“I find it incomprehensible that your client, and directors, have decided that they will attempt to take possession of my company's properties next Monday 19.10.98 at 11 am.”
Later in the letter he says:
“Despite the fact that we have obtained a loan to repay the debts, you continue to aggressively seek possession of the properties with a view to mortgagee sales.”
And later again:
“We are in a position to repay the loans to prevent you from taking possession of the Nudgee Beach properties. The legal and moral issues will not be ignored. In the absence of a response we intend to take civil action.”
Attached to this letter are five documents, the first of those described "Statement of Claim for lodging in the Supreme Court. (Draft)". The letter later states "…we are now in a position to have the matters determined in the Supreme Court."
On 21 October GMP wrote to Perdon. The letter commenced:
“You will recall that on 29 September 1998, following the Borrower Company's failure to refinance the two loans in question by 25 September 1998, we notified you that we intended to take possession of the two security properties on 7 October 1998 ...
An extension was then granted as we received written confirmation from Money Ideas Australia Limited and Liberty Financial Pty Ltd that conditional approval had been given by Liberty Financial Pty Ltd to refinance the second loan in question.
There is then a reference to the indication that if GMP was not provided with written confirmation that the loan was unconditional, it would re-enter the two security properties on 19 October. The letter later said:
“We note with concern that despite ongoing assurances, to date we have not received such written confirmation, so that we appear to be no closer to settling these two loans.
Accordingly, unless written confirmation as set out above is received by our office by 4.00 pm on 22 October 1998, the writer will re-take possession of the two security properties at 10.00 am on 23 October 1998. No further extensions will be given.”
This was met by a letter of 23 October 1998 by Perdon, through Mr Rogers, to GMP. The letter commences:
“I have arranged a loan with Liberty Finance to replace your first mortgage over the house at 7 O'Quinn Street, Nudgee Beach. I expect an unconditional letter of offer to replace the initial letter of offer that is in your possession.
Notwithstanding the fact that we have arranged the finance you have advised me that you will take possession of that property today at 2.00 pm.”
The letter then said:
“It is our intention to forthwith prepare an application, statement of claim, injunction application, notice of motion and supporting affidavits which will be lodged in the Federal Court at our earliest opportunity.”
And later:
“Be advised that my company will continue to arrange finance to pay the monies sought by your clients. Payment of those monies will not be an admission of your claims and our claims against your clients, jointly and severally, will continue in the Federal Court.
We have asked for more time and you have refused...”
This is the first reference to any proposed Federal Court action; all earlier references by Perdon or Mr Rogers had been to proceedings to be brought in the Supreme Court.
On 20 November, writ 10815 of 1998 for possession of the property was issued by LCM out of the Supreme Court of Queensland. This step had been proposed in the letter of 14 October from GMP to Perdon. On 23 November 1995, in a very lengthy letter from Perdon to GMP, (which is exhibit N to the affidavit of Mr Rogers filed 3 March 1998), Mr Rogers said:
“If and when this matter is before the Supreme Court as a result of your application for possession, my company will ask that the proceeds of the re-financing are held by the Supreme Court or the Federal Court pending a determination of my company's plaint against your client, Law Coast Mortgages Pty Ltd.”
[emphasis original]
And later in the letter:
“Our Federal Court plaint will include an application that, pending the hearing of the matter, the proceeds of the refinancing and the money you hold in the ANZ bank are held in trust by the Federal Court.
A similar application will be made when your application for possession is before the Supreme Court.
That way we have two Courts before which we can make the application to deprive your company of the opportunity to divest itself of the capital and interest, which we claim is unearned!!”
On 26 November 1998, LCM served a further notice of default. On 4 January, Perdon filed the proceedings in the Federal Court. Also on that day, Mr Rogers brought his proceedings in the Federal Court in proceedings QG 2 of 1999.
On 5 January 1999, a second Supreme Court writ, number 73 of 1999, was issued by LCM out of the Supreme Court of Queensland. On 2 February, LCM was served with the Federal Court proceedings.
Against that background, the question is which of the Supreme Court of Queensland and the Federal Court of Australia is the more appropriate Court to deal with the issues raised by the dealings between the parties in the Supreme and Federal Court proceedings?
It is urged by Mr Rogers, on behalf of himself and Perdon, that, at the core, the proceedings involve questions of consumer protection and the application of the provisions of the Trade Practices Act 1974, and that these were considerations which inclined to the matters being heard in the Federal Court. While it was the case that, for some time, the Federal Court had exclusive jurisdiction under the Trade Practices Act, at least since 1987 the jurisdiction in respect of matters under the Trade Practices Act, including the considerations of consumer protection, is invested not only in the Federal Court but in the several Courts of the States including, in particular, the Supreme Court of Queensland. So far as Trade Practices claims are concerned, the position is that both the Supreme Court and the Federal Court are able to deal with those matters, and there is no balance, one way or the other, as to which is the more appropriate court.
It is relevant to note that, in addition to the Trade Practices claims, Perdon and Mr Rogers want to litigate questions of breach of contract, negligence, fraudulent misrepresentation, breach of the Fair Trading Act 1989 (Qld), breach of the solicitor/client duty, deceit and breaches of the Property Law Act 1974 (Qld). All of those actions are referred to either in the Federal Court application or in the statement of claim filed in this court. In addition, there are other complaints in the material which do not appear specifically in the present application and statement of claim. There is an allegation of contempt of the Supreme Court of Queensland by a solicitor in the employ of GMP, allegations of undue influence and misappropriation. These allegations are contained in an affidavit by Mr Rogers of 22 March 1999.
I mention these matters because they show that the matter is not solely a trade practices matters and, moreover, but for the accrued jurisdiction of the court which confers jurisdiction on matters which are associated with the matter which is legitimately within the jurisdiction of the Federal Court, the Federal Court would not have jurisdiction in relation to many, if not all, of those further causes of action. Those causes of action, it is fair to say, are matters which are ordinarily within the jurisdiction of the Supreme Court of Queensland and would not be litigated in this court, but for either the cross vesting legislation or the accrued jurisdiction of the Federal Court.
The principal reason for my conclusion that the matters should be litigated in the Supreme Court flows from the detailed chronology of events to which I have referred. While I accept that the proceedings in the Federal Court are brought bona fide and appear to be at least arguable, I think that they have to be seen genuinely as the obverse of the claims on the part of the lender for possession, which matters were the subject of extensive negotiation, to put it in a neutral way, until the proceedings in the Supreme Court were commenced on 20 November 1998. There was a reference by Perdon to civil action and to proceedings in the Supreme Court in the letter of 15 October 1998; that letter follows the letter of the previous day in which GMP indicated its intention to seek a court order for possession. The first reference to any proposed action in the Federal Court was in the letter of 23 October 1998 but in fact the proceedings in the Federal Court were not commenced until 4 January 1999. In the circumstances, this is not a case where Law Coast Mortgages and the other respondents have initiated their Supreme Court proceedings only in response to threatened litigation by Perdon and Mr Rogers. Proceedings in the Supreme Court were contemplated (indeed by both sides) before any mention was made of the Federal Court.
Both the chronology of events and the nature of the matters which are to be the subject of the litigation in whichever court they are held point to the desirability of my making an order pursuant to s 5(4) of the Jurisdiction of Courts (Cross-vesting) Act 1987.
In the course of argument I referred to the question of security for costs, that being sought as an alternative to the cross-vesting claim. It is plain that impecuniosity in a natural person bringing proceedings ought not to be a basis on which security for costs should be ordered. Perdon Proprietary Limited, however, is a $2 company.
There is an absence of any evidence to suggest that those who stand behind Perdon have the financial resources to meet any order for costs or for security for costs. It is relevant also to note that its impecuniosity is said to be due to the conduct of the respondents to the Federal Court proceedings. It is, in those circumstances, a moot question whether an order for security for costs would be made if the matter remained in the Federal Court. I think, however, there's much to be said for the observation of French J in Bryan E. Fencott and Associates Pty Ltd v Eretta Pty Ltd (1987) 16 FCR 497 at 513 where his Honour said:
“The effect of the authorities is, in my opinion, that the probability or certainty that an order for security for costs will frustrate the plaintiff's claim will not automatically lead to such order being withheld. It is however a factor relevant to the granting of an order and will weigh against it where there is no party standing behind the company who is in a position to provide the necessary security.”
In those circumstances, the question of security of the costs does not bear heavily in the scales as to what is the appropriate order to make on the motion that the Federal Court proceedings be cross-vested to the Supreme Court.
On the whole of the material, and in particular the nature of the causes of action which Perdon and Mr Rogers wish to prosecute, and the history of the dealings between the parties, the Federal Court proceedings should be cross-vested to the Supreme Court.
In both Q1 and Q2 of 1999 I make the following orders: each of those proceedings be transferred to the Supreme Court of Queensland pursuant to s 5(4) of the Jurisdiction of Courts (Cross-vesting) Act 1987 Cth. The costs of and incidental to the proceedings and of and incidental to the notice of motion in Q1 of 1999 filed 24 February 1999 and the costs of and incidental to the notice of motion QG2 of 1999 filed on 8 April 1999 be reserved to the order of the Supreme Court of Queensland.
I certify that the preceding forty-three (43) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Spender. Associate:
Dated: 21 April 1999
Q1 of 1999
Mr Gregory Eric Rogers appeared in person on behalf of the applicant.
Counsel for the Respondent Mr M Conrick Solicitor for the Respondent: Griffiths McColm & Parry Counsel for the Interveners on the notice of motion filed 12 April 1999: Mr M R Bland Solicitors for the Interveners on the notice of motion filed 12 April 1999: Quinn & Company Q2 of 1999
The applicant appeared in person
Counsel for the Respondent: Mr M Conrick Solicitor for the Respondent: Griffiths McColm & Parry Q1 and Q2 of 1999
Date of Hearing: 21 April 1999 Date of Judgment: 21 April 1999
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