Re Rock S Pty Ltd & Rock P Pty Ltd; Flood v Serra

[2024] VSC 362

IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE

COMMERCIAL COURT

CORPORATIONS LIST

S ECI 2024 01583

IN THE MATTER OF ROCK S PTY LTD (A PSEUDONYM) & ROCK P PTY LTD (A PSEUDONYM)
BETWEEN:
ANGUS FLOOD (A PSEUDONYM)		Plaintiff
v
CHARLEY SERRA (A PSEUDONYM) (and others according to attached schedule)		Defendants

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JUDGE:	Harris J
WHERE HELD:	Melbourne
DATE OF HEARING:	12 June 2024
DATE OF JUDGMENT:	25 June 2024
CASE MAY BE CITED AS:	Re Rock S Pty Ltd & Rock P Pty Ltd; Flood v Serra
MEDIUM NEUTRAL CITATION:	[2024] VSC 362

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PRACTICE AND PROCEDURE – Application for transfer of winding up proceeding to the Federal Circuit and Family Court of Australia – Winding up proceeding related to family law matters and application for oppression orders in the Federal Circuit and Family Court of Australia – Application of implied obligation referred to in Hearne v Street (2008) 235 CLR 125 to documents filed in the Federal Circuit and Family Court of Australia when sought to be used in this proceeding – Whether having regard to the interests of justice, the Federal Circuit and Family Court is appropriate court to hear winding up application – Proceeding transferred to Federal Circuit and Family Court of Australia – Corporations Act2001 (Cth), s 1337H.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	J Evans KC	Madgwicks Lawyers
For the Defendant	S Rubenstein	Russell Kennedy

TABLE OF CONTENTS

Facts relevant to the application...................................................................................................... 2

The Rock Group business............................................................................................................ 2

The family law proceedings in the FCFCA............................................................................... 4

Use of affidavit filed in FCFCA proceeding.............................................................................. 6

Legislation and authority relevant to the transfer of proceedings......................................... 14

Relevant provisions of the Corporations Act............................................................................ 14

Principles relevant to transfer pursuant to s 1337H of the Corporations Act....................... 17

The Parties’ submissions............................................................................................................ 21

The stage of the proceedings in the respective courts.................................................. 21

The commonality or diversity of the parties................................................................. 22

The nature of the proceedings and the commonality of the parties and diversity of issues.................................................................................................................................. 23

The risk of conflicting findings of fact or conflicting orders....................................... 25

A costs benefit analysis..................................................................................................... 25

The potential unnecessary drain on judicial and other public and private resources 26

Whether there is any particular judicial expertise residing in one court or the other 26

The interests of the public and third parties.................................................................. 27

The question of the appointment of a litigation guardian in the Supreme Court... 28

Harman undertaking / implied obligation issues........................................................ 28

Should the Winding Up proceeding be transferred to the FCFCA?...................................... 29

Commonality of issues and parties................................................................................. 30

Risk of inconsistent findings............................................................................................ 33

The stage of the proceedings in each court.................................................................... 34

Cost benefit analysis and the effect on judicial and other public resources............. 35

The interests of third parties............................................................................................ 36

Further interlocutory matters which may arise in this Court but not the FCFCA.. 37

Conclusion......................................................................................................................................... 38

Costs.................................................................................................................................................... 38

HER HONOUR:

1. The plaintiff, Angus Flood, has applied for orders for the winding up of the second and third defendants, Rock S Pty Ltd and Rock P Pty Ltd (the Winding Up proceeding). Mr Flood is a director of, and holds 50% of the shares in, both companies. The first defendant, Charley Serra, is the co-director of Rock S Pty Ltd and Rock P Pty Ltd and holds the other 50% interest in each company. He is also sole director and shareholder of Rock M Pty Ltd which, with Rock P Pty Ltd and Rock S Pty Ltd, form a corporate Group which operates a business providing services to the mining and quarrying industry in Victoria.0F*

   *Cognisant of s 114Q of the Family Law Act 1975 (Cth), which restricts publication of an account of proceedings under that Act that identifies, inter alia, a party to the proceedings or a person associated with them, the parties in this proceeding have been assigned pseudonyms.

1. Mr Serra is the former de facto partner of Ms Flood, who is the mother of Mr Flood. Mr Serra and Ms Flood have separated and Ms Flood commenced proceedings for property settlement orders in the Federal Circuit and Family Court of Australia (FCFCA) in 2022. Mr Serra’s interests in the Group form part of the property which is the subject of the FCFCA proceeding.

1. In the course of the FCFCA proceedings, Mr Serra has joined Mr Flood, Rock S Pty Ltd, Rock P Pty Ltd and Rock M Pty Ltd to the proceeding. He has also made an application for oppression remedies pursuant to ss 232 and 233 of the Corporations Act 2001 (Cth) (Oppression Application). The proceeding in the FCFCA, although originally instituted in Division 2 of that Court, has also been uplifted to Division 1 of the Court.

1. Mr Serra seeks orders pursuant to s 1337H of the Corporations Act that the Winding Up proceeding be transferred to the FCFCA. For the following reasons, I have determined that having regard to the interests of justice, it is appropriate to transfer the Winding Up proceeding to the FCFCA.

Facts relevant to the application

The Rock Group business

1. The companies in the Group have different roles in the business of providing services to the mining and quarrying industry in Victoria. The evidence was that the functions of each company in the Group were as follows:1F[1]

   [1]Affidavit of Angus Flood sworn 5 April 2024 (Flood Affidavit), [6]. Affidavit of Charley Serra sworn 22 March 2023 (Serra Affidavit), [12], [15]; Affidavit of Chantal Faye Reigo sworn 2 May 2024 (First Reigo Affidavit), [7].

(a)        Rock S Pty Ltd is the trading entity which provides services to customers, including ongoing repair and maintenance services, steel fabrication and construction of plant and equipment. Rock S Pty Ltd contracts with the customers.

(b)       Rock M Pty Ltd, of which Mr Serra is the sole director and shareholder, is the labour hire entity which provides labour hire and equipment and vehicle hire to Rock S Pty Ltd to enable the provision of services. Rock S Pty Ltd then pays fees to Rock M Pty Ltd for those services. The evidence of Mr Flood was that ‘the fees payable are usually agreed at the end of the financial year, with the intention that the fees will be sufficient to enable Rock M Pty Ltd to discharge all of its financial obligations (including employee entitlements, vehicle financing costs, taxation liabilities, etc) but so that the profits of the Rock S Pty Ltd contracts remain with Rock S Pty Ltd’.2F[2]

(c)        Rock P Pty Ltd is now a non-trading entity.

[2]Flood Affidavit, [6].

1. Mr Serra was a boilermaker and fitter who trained with his father.3F[3] Mr Flood commenced working with Mr Serra in 2003. Rock M Pty Ltd was incorporated in 2009, and Rock S Pty Ltd and Rock P Pty Ltd in 2012. Mr Serra had a motorbike accident in 2012 in which he incurred extensive physical injuries. Mr Flood took a greater responsibility for managing the business, the extent of which was the subject of differing evidence, but involving Mr Flood having complete or almost complete control of the financial management of the business.4F[4] As with many of the matters on which the evidence of the parties conflicted, it was not necessary for me to make findings on these issues for the purposes of this application for transfer of the proceeding.

   [3]Serra Affidavit, [13], [18.2].

   [4]Flood Affidavit, [12]-[13]; Serra Affidavit, [5], [14]-[17].

1. There was a considerable amount of evidence in the affidavits as to the deterioration of the relationship between Mr Flood and Mr Serra as business partners, and the reasons for the breakdown in the relationship. One of the few matters on which the parties agrees is that the relationship had broken down irretrievably.5F[5] The relationship between the parties had deteriorated, apparently progressively, over some years to the point where there was an altercation at the business premises of the Group in February 2023. In March 2024 Mr Flood refused to permit Mr Serra access to the business premises of the Group, in circumstances which were, again, the subject of conflicting evidence.6F[6] On 7 March 2024, Mr Flood applied on an ex parte basis for a family violence intervention order against Mr Serra. On 15 March 2024 an interim family violence intervention order was made which prohibited Mr Serra from going with 25 metres of Mr Flood and within 200 metres of the place where he works, which is the Group business premises.7F[7] This was later varied to remove the prohibition on Mr Serra attending the premises.8F[8] Mr Serra disputed that there was any basis for the intervention order to have been made.9F[9]

   [5]Flood Affidavit, [8]; Serra Affidavit, [24]

   [6]Serra Affidavit, [40]-[45]; Flood Affidavit, Exhibit LP1, 120-1 (Application for Family Violence Intervention Order).

   [7]Flood Affidavit, [15]-[16]; Exhibit LP1, 124-128; Serra Affidavit, [40]-[48].

   [8]Joint Chronology item 48, 3 June 2024.

   [9]Serra Affidavit, [40]-[48]; First Reigo Affidavit, [17]-[32].

1. Mr Serra’s evidence was that Mr Flood had taken steps over a number of years to shut him out of the Group’s business, with a view to setting up his own business in competition.10F[10] His evidence was that Mr Flood had set up a company in September 2022 called Steel Craft Pty Ltd, of which he was the sole director and shareholder, and which was recorded as having traded using names including ‘Rock M Pty Ltd Services’. As noted below, Mr Serra applied for injunctions in the FCFCA proceeding to restrain the activities of that company. The evidence for Mr Flood was that Steel Craft Pty Ltd was in the process of being deregistered.11F[11]

   [10]Serra Affidavit, [24], [27]-[28], [50]; First Reigo Affidavit, [8.9].

   [11]Affidavit of Lisa McNicholas affirmed 22 May 2024 (McNicholas Affidavit), [12]; Exhibit LMM, 12.

1. Mr Flood’s evidence was that he alone had, since 2012, through continuous hard work built Rock S Pty Ltd to a company with contracts servicing 6 sites, with four major clients, 25-30 employees and approximately $5.5 to $6 million in annual revenue. He gave evidence that Mr Serra was volatile and that staff, suppliers and customers preferred to deal with Mr Flood.12F[12]

   [12]Flood Affidavit, [13]-[14].

1. Both Mr Serra and Mr Flood gave evidence as to certain financial transactions with funds of the business made by the other party that gave them cause for concern.13F[13] Mr Flood also gave evidence of delays by Mr Serra in providing documents necessary to prepare a tax return for Rock M Pty Ltd.14F[14] Both parties agreed that there was a need to resolve the situation with the business with some urgency.15F[15]

   [13]Flood Affidavit, [19]; Serra Affidavit, [21]-[22], [37]-[38].

   [14]Flood Affidavit, [20]; Exhibit LP, 132.

   [15]Flood Affidavit, [24]; Serra Affidavit, [49]-[50], [55].

The family law proceedings in the FCFCA

1. The FCFCA proceeding16F[16] was commenced by Ms Flood in November 2022. By orders made 23 November 2022, Mr Serra was restrained from dealing with his interest in each company in the Group, which orders were varied by orders made 17 March 2023, providing that he is not permitted to deal with his interest in the Group without first giving Ms Flood 28 days’ notice.17F[17] In March 2023, orders were made for disclosure, for valuation of the Group business, and for mediation.18F[18] Mediation occurred in November 2023.19F[19]

   [16]Proceeding number MLC 13009/2022.

   [17]First Reigo Affidavit, Exhibit CR-1, 1-17; Affidavit of Chantal Reigo sworn 30 May 2024 (Second Reigo Affidavit), [13].

   [18]Order FCFCA 17 March 2023, First Reigo Affidavit CR-1, 10-14.

   [19]Joint Chronology item 20; Transcript 12/06/24, T83.16-.21.

1. On 26 March 2024, Mr Serra filed two interlocutory applications in the FCFCA proceeding, the first an application for injunctions (Injunction Application), joinder of the Group companies and Mr Flood, and the transfer of the proceeding to Division 1. The second was the Oppression Application,20F[20] in respect of which Division 1 of the FCFCA (but not Division 2) has jurisdiction.21F[21] The Injunction Application sought orders seeking to restrain conduct by Mr Flood in connection with the Group business, including orders to restrain him from hindering Mr Serra’s access to the business and from diverting business from the Group.22F[22]

   [20]First Reigo Affidavit, Exhibit CR-1, 18-30.

   [21]Corporations Act 2001, s 1337C.

   [22]First Reigo Affidavit, Exhibit CR-1, 24-29, see paragraph [4] ‘Urgent Injunctive Relief’.

1. The two applications were accepted for filing on 3 April 2024.23F[23] The applications and supporting affidavit were provided to the solicitors for Ms Flood on 27 March 2024. Sealed copies were provided to the registered office of the companies after they were accepted for filing on 3 April 2024.24F[24] Mr Flood gave evidence in his 5 April 2024 affidavit in support of the Winding Up application that he was aware that Mr Serra had ‘foreshadowed issuing a proceeding seeking orders that he be entitled to buy out my interest in Rock S Pty Ltd and Rock P Pty Ltd, by way of a cross-claim to be part of the Family Court proceeding’.25F[25] Mr Flood had exhibited to that affidavit (as discussed further below) Mr Serra’s affidavit in support of the FCFCA application, which set out Mr Serra’s claims as to oppressive conduct by Mr Flood, and the orders that he sought.26F[26] Mr Flood was on notice not just of a foreshadowed application in the FCFCA but the application that had already been made, and of the evidence put forward in support.

   [23]First Reigo Affidavit, [8.5]; Second Reigo Affidavit, [8].

   [24]First Reigo Affidavit, [8.6]; Exhibit CR-1, 31-37. The relevant rules in the FCFCA do not require service on the party to be joined.

   [25]Flood Affidavit, [24].

   [26]Flood Affidavit, Exhibit LP, 67-85 (Affidavit of Charley Serra in FCFCA sworn 22 March 2024, [51]-[58]).

1. The two applications filed by Mr Serra had a return date for a hearing before the FCFCA on 10 May 2024. Mr Flood did not appear. Ms Flood made submissions as to why the Oppression Application and the Winding Up proceeding in this Court were separate matters and why Mr Flood should not be joined.27F[27]

   [27]Second Reigo Affidavit, [36].

1. Judicial Registrar Diaz of the FCFCA made orders on 10 May 2024 joining Mr Flood, Rock M Pty Ltd, Rock S Pty Ltd and Rock P Pty Ltd as respondents to the FCFCA Proceeding. Orders were also made for the joined respondents to file and serve any response setting out the orders sought, and a supporting affidavit; and for the matter to be referred to the National Assessment Team of the FCFCA for consideration of transfer to Division 1.28F[28] Orders were made by Deputy Registrar Magee of the FCFCA on 16 May 2024 for the transfer of the proceeding to Division 1 of the FCFCA and for a directions hearing to be held in the matter on 5 July 2024.

   [28]Orders of Diaz JR dated 10 May 2024; Second Reigo Affidavit, Exhibit CR-2, 4-6.

Use of affidavit filed in FCFCA proceeding

1. The affidavit of Mr Flood which was filed in this Court in opposition to the transfer of the proceedings29F[29] exhibited the Serra Affidavit which had been sworn in the FCFCA proceedings. Counsel for Mr Serra raised before me the issue of whether it was permissible to rely on the affidavit,30F[30] on the basis that it was the subject of the obligation discussed by the High Court in Hearne v Street,31F[31] also referred to as the Harman undertaking. That obligation arises where one party to litigation is compelled to disclose documents or information in the course of that litigation. The obligation is owed to the Court in which the material has been produced, and has the effect that the party obtaining the disclosure may not use it for any purpose other than that for which it was given unless it is received into evidence.32F[32] Rules of court may modify both the obligation and the circumstances in which it ceases to exist.33F[33]

   [29]Flood Affidavit.

   [30]Transcript 12/06/24, T1.44-3.08.

   [31]Hearne v Street (2008) 235 CLR 125.

   [32]Hearne v Street (2008) 235 CLR 125, 154-155, [96] (Hayne, Heydon and Crennan JJ); Harman v Secretary of State for Home Department [1983] 1 AC 280, 304 (Lord Diplock), 319 (Lord Scarman and Lord Simon of Glaisdale).

   [33]Hearne v Street (2008) 235 CLR 125, 155, [98] (Hayne, Heydon and Crennan JJ).

1. Although the issue was resolved in the course of the hearing, it is appropriate to consider the issue in determining the substance of the proceeding. This is in part because it was said by counsel for Mr Serra that issues relating to the implied obligation would affect a range of materials filed in the FCFCA, and the time spent on arguing the issue before me demonstrated why it was important that all of the related proceedings were dealt with in one Court.34F[34]

   [34]Transcript 12/06/24, T106.14-108.11.

1. An affidavit of Ms Reigo filed in further support of the application for transfer in this Court had also referred to and relied on the Serra Affidavit which had been exhibited to Mr Flood’s affidavit. However in the hearing before me counsel for Mr Serra advised that he did not read the relevant paragraphs of Ms Reigo’s affidavit in light of the Hearne v Street obligation issues as he did not want to create a risk that Mr Serra would be in breach of the obligation.35F[35]

   [35]Transcript 12/06/24, T13.11-.23, T20.02-.10.

1. Mr Serra had filed the affidavit in the FCFCA proceeding in support of the Oppression Application and Injunction Application which also sought joinder orders.36F[36] The Federal Circuit and Family Court of Australia (Family Law) Rules2021 (FCFCA (Family) Rules) require an affidavit in support to be filed with:

   [36]First Reigo Affidavit, Exhibit CR-1, 18-30; Serra Affidavit, [2].

(a) an application to add a party under r 3.03 of the FCFCA (Family) Rules: see r 3.03(3)(a);

(b) any application for interlocutory injunctive relief under r 5.02 of the FCFCA (Family) Rules: see r 5.04(1); and

(c)        any interlocutory application for relief under the Corporations Act, under r 2.4 of the Federal Court (Corporations) Rules 2000, applied by r 1.18 of the FCFCA (Family) Rules.

1. The FCFCA had determined the application for joinder with orders made 10 May 2024.37F[37] It also made orders transferring the proceeding to Division 1 on 16 May 2024.38F[38] The application for injunctive relief remained on foot and had not been determined.

   [37]Second Reigo Affidavit, [16.3(a)], [36.4]; Exhibit CR-2, 4-15.

   [38]Second Reigo Affidavit, [16.3(b)]; Exhibit CR-2, 4-15.

1. Extensive argument was made on the issue of whether the Hearne v Street obligation would prevent use of the Serra Affidavit by Mr Flood in this proceeding. Counsel for Mr Serra relied on the rules referred to above to demonstrate that the affidavit had been, in the relevant sense, filed under compulsion and was subject to the implied obligation. Senior Counsel for Mr Flood contended that:

(a)        the Serra Affidavit was voluntarily made and filed in the FCFCA proceeding, and was not covered by the obligation in Hearne v Street.39F[39] This was later qualified by an acceptance that the affidavit was subject to the implied obligation ‘at the point when that [FCFCA] application was filed and the affidavit was served on [Mr Flood]’;40F[40]

(b)       the obligation would not in any event prevent use of the Serra Affidavit in these related proceedings in which Mr Flood sought to use it ‘in direct opposition by the same person, Mr Serra, in which he is seeking relief in this court’.41F[41] This proceeding is ‘sufficiently connected and also falls within the scope of the curial processes of this court in hearing the application’;42F[42] and

(c)        the obligation ceased to apply to the Serra Affidavit when it was read into evidence in the FCFCA on the application for joinder and injunctive relief. Although there was no transcript or other clear evidence that the affidavit had been tendered, I should infer that it had been read by the FCFCA in making the orders for joinder on 10 May 2024.43F[43]

[39]Transcript 12/06/24, T4.25-.31, T8.03-.07.

[40]Transcript 12/06/24, T35.12-.21.

[41]Transcript 12/06/24, T34.02-.07.

[42]Transcript 12/06/24, T36.01-.08.

[43]Transcript 12/06/24, T4.25-6.06.

1. I was satisfied that the affidavits, having been filed to comply with requirements associated with the making of applications under the FCFCA (Family) Rules, were filed under compulsion in the relevant sense required to attract the obligation in Hearne v Street.44F[44] At the time of the joinder application Mr Serra was the subject of an injunction restraining him from dealing with interests in those companies where those interests were part of the pool of assets the subject of the family law proceeding. Mr Serra made the joinder application having identified the companies and Mr Flood as necessary parties in the proceeding. The joinder application could not, under the FCFCA (Family) Rules be made without a supporting affidavit, so I accepted that the affidavit was filed under compulsion in the relevant sense having been filed in compliance with a rule of Court.

   [44]Hearne v Street (2008) 235 CLR 125, [96] (Hayne, Heydon and Crennan JJ).

1. I also found that the obligation would prevent use of the Serra Affidavit for the purpose of resisting the transfer application in this Court, which in my view was a ‘purpose other than the one for which [the affidavit] was given’.45F[45] No authority was identified for Mr Flood to support the contention that the obligation would not apply to prevent the use of the Serra Affidavit to oppose his application for transfer of this separate proceeding.46F[46]

   [45]Hearne v Street (2008) 235 CLR 125, [96] (Hayne, Heydon and Crennan JJ).

   [46]Reference was made to Esso Australia Resources Limited and Ors v Plowman (1995) 183 CLR 10, 32-33, (Mason CJ) where his Honour observed that the implied obligation ‘must yield to inconsistent statutory provisions and to the requirements of curial processes in other litigation, eg discovery and inspection,’ and to observations by Brennan J as to the limits on the terms of an undertaking which can be implied into an arbitration agreement. However it was not clear whether Mason CJ’s comments indicated a view that the obligation would not extend to use by a party in other litigation, or simply that the first Court would release a party from the obligation if the document was relevant to or obliged to be disclosed in other proceedings.

1. Although the purpose for which Mr Flood sought to use it in this Court could be a relevant one, the purpose of using it in this Court to oppose Mr Serra’s application for transfer of the Winding Up proceeding to the FCFCA was in my view a purpose extraneous to the purpose for which it was filed in the FCFCA proceeding. The related nature of this proceeding and its intended use in this proceeding did not in my view relieve him from the obligation to seek from the FCFCA a release from that obligation to use it in these proceedings, for as long as the obligation existed.47F[47] In this proceeding there was nothing compelling Mr Flood to use the Serra Affidavit to oppose the transfer. The Serra Affidavit was also being used for a purpose opposed to and ultimately undermining of Mr Serra’s original purpose in filing it in the FCFCA, which was to have matters relating to the Group resolved in that Court with the family law proceedings. In the circumstances, in the absence of specific authority being identified in argument, and noting that the obligation is formally owed to the FCFCA as the Court in which the material was originally filed, I considered that the better view was that the implied obligation would prevent use the Serra Affidavit in this application, if the obligation still applied.

   [47]Authorities recognising that a document which is the subject of the implied obligation may be used in separate proceedings are frequently in the context of an application for release from the undertaking. In Royal Express Pty Ltd (Recs and Mgrs Appointed) v Huang, in the matter of Royal Express Pty Ltd (No 5) [2021] FCA 1302, Anastassiou J referred to use of documents filed in proceedings in which receivers had been appointed, for the purpose of public examinations into the examinable affairs of the company, and concluded that the purpose for use was not collateral because the purpose for which the documents were sought to be used is the purpose for which the documents were obtained under the compulsory processes of the Court; and that the primary proceeding and the public examinations ‘ought to be viewed as symbiotic’ in the sense that the public examinations are intended to investigate the examinable affairs of Royal Express’: See [1]-[3], [17]-[21]. He referred to the decision in LCM Operations Pty Ltd, in the matter of 316 Group Pty Ltd (in Liq) [2021] FCA 324 in which the same conclusion was reached in similar circumstances. In Royal Express, Anastassiou J found that the undertaking did not apply but out of an abundance of caution proceeded to consider the application for leave to be released from the undertaking: at [21].

1. In preparing this judgment I have identified authorities more directly dealing with the issues, including R v Silverstein,48F[48] in which the Court of Appeal held that not every affidavit filed in compliance with a rule of court is relevantly produced under compulsion.49F[49] However it not necessary for the Court of Appeal in that case to define with precision the limits of the kind of documents which would be regarded as having been provided under compulsion, so that while a relevant authority for the purposes of the issue before me, it was not determinative of the issue.50F[50]

   [48][2020] VSCA 233.

   [49]R v Silverstein [2020] VSCA 233, [78], [82]-[85] (Kyrou, Kaye and McLeish JJA).

   [50]R v Silverstein [2020] VSCA 233, [89]. The Court had earlier acknowledged, for example, that witness statements, which are often filed in response to a court order, might not be regarded as voluntary given that the consequences of non-delivery of the witness statement may be that the relevant party may not be permitted to give the relevant evidence: at [88].

1. I also note the decision of the Court of Appeal in Hazell-Wright v 32 Domain Pty Ltd.51F[51] There, Mr Wright, the director of the respondent company had been a party to Family Court proceedings in which an issue to be determined was whether an apartment owned by the company was dealt with by a binding financial agreement. After resolution of the Family Court proceedings, Mr Wright caused the company to bring proceedings in the County Court claiming damages for lost rent from Ms Hazell-Wright for the period during which she and children of the marriage had resided in the apartment prior to the resolution of the Family Court proceedings. Mr Wright opposed leave to file an amended pleading in the County Court on the basis that the amended pleadings were based on affidavits he had filed in the Family Court, which were subject to the implied undertaking. The Court of Appeal did not determine the issue as the parties, following discussion with the Court of Appeal, agreed to cooperate to approach the Family Court to seek a release from the Harman undertaking by consent.52F[52] However the Court did make the observation that there was support for a general proposition that there is ‘a class of subsequent cases between the same parties, or their privies, where the connection between the two cases has the result that the Harman undertaking in the earlier case does not prevent use of documents or information subject to that undertaking in the subsequent proceeding’.53F[53] The Court observed that rather than using the documents for a purpose ulterior to the Family Court proceeding, the applicant sought to use them to demonstrate that the respondent sought to undermine the Family Court proceeding, but did not ultimately decide the question.54F[54] The fact that the party who had filed the affidavits in one court was seeking in another court to undermine the processes of the first court, and asserting the protection of the implied undertaking to do so, may have been relevant to the Court’s conclusions. In this proceeding, it could not be said that Mr Serra, in seeking to have the Winding Up proceeding transferred to the FCFCA, was seeking to undermine the FCFCA proceeding

   [51][2020] VSCA 129.

   [52]Hazell-Wright v 32 Domain Pty Ltd [2020] VSCA 129, [13].

   [53]Hazell-Wright v 32 Domain Pty Ltd [2020] VSCA 129, [19].

   [54]Hazell-Wright v 32 Domain Pty Ltd [2020] VSCA 129, [20].

1. In any event, if, by reason of ruling on the issue without considering the above authorities, I was wrong in my conclusions that the implied obligation did apply to the Charley Serra application by reason of being filed pursuant to rules of Court, and was being used for a different or collateral purpose in this proceeding, it made no difference to the outcome, as I ruled that the Serra Affidavit could be relied on. I decided for the reasons that follow that the implied obligation had come to an end by reason that the Serra Affidavit had been read by the FCFCA.

1. The Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules (FCFCA Rules) provide by r 14.11:

Use of documents

(1)Any order or undertaking, whether express or implied, not to use a document for any purpose other than for the proceeding in which it is disclosed does not apply to the document after it has been read to or by the Court or referred to in open Court in such terms as to disclose its contents.

(2)Subrule (1) is subject to any order of the Court on the application of a party or of a person to whom the document belongs.

1. The evidence did not establish that the affidavit had been formally tendered nor that it had been read in open Court. However, the orders made by the FCFCA on 19 May 2024 made the orders for joinder pursuant to rule 3.03(4) of the FCFCA (Family) Rules.55F[55]

   [55]Orders of Diaz JR dated 10 May 2024; Second Reigo Affidavit, Exhibit CR-2, 5-7.

1. Although the 10 May 2024 orders do not refer to the Serra Affidavit which was filed in support of the application, it is plain that the orders were made pursuant to the rules which also require an affidavit in support. In making the joinder orders it is likely that the Court read the supporting affidavit that had been filed with the application in compliance with the rules. In Action Scaffolding & Rigging Pty Ltd (in liq) v Citadel Financial Corporation Pty Ltd,56F[56] Gleeson J, then sitting in the Federal Court of Australia, inferred that affidavits filed in support of applications in the Federal Circuit Court had been read and taken into account by a registrar in making an order in that Court. Her Honour held that pursuant to rule 14.11 of the Federal Circuit Court Rules 2001, the affidavit was no longer subject to the implied undertaking.57F[57]

   [56][2019] FCA 327, (2019) 135 ACSR 372.

   [57][2019] FCA 327, (2019) 135 ACSR 372, 397 [155] (Gleeson J). There appears to have been no specific evidence that the affidavits had been read and it appears to have been purely an inference arising from the making of the relevant orders.

1. I was prepared to infer from the making of the 10 May 2024 orders that the affidavit had been ‘read by … the Court’ within the meaning of rule 14.11(1) of the FCFCA Rules, with the consequence that the implied undertaking no longer applied. Counsel for Mr Serra submitted that the affidavit was also relevant to the Oppression Application which had not been determined, and it was not possible to identify which parts of the affidavit had been read for the purposes of the joinder orders. Rule 14.11 does not, however, in providing for the termination of the obligation when the document is ‘read to or by the Court’, distinguish between the document being read in part or in full. It is also the case that it likely that the Judicial Registrar who made the 10 May 2024 orders considered it appropriate to consider the material generally before making orders joining Mr Flood and three corporate parties to the proceeding. I infer, to the extent necessary, that the Judicial Registrar did in fact in read the affidavit read it in its entirety.

1. I gave a ruling to that effect in the course of the hearing, and the parties proceeded on the basis that I could refer to the content of the Serra Affidavit.

1. In closing on this issue, I note that the Court in R v Silverstein also observed that it was the Court’s experience that ordinarily, parties to a proceeding, and in particular legal practitioners, err on the side of caution when seeking to use or rely on documents filed in a proceeding for another purpose that its extraneous to that proceeding, by first making an application to the court for leave to do so. The Court also stated:

We would encourage practitioners in this State to continue to observe that practice, where there is doubt about the application of the Harman undertaking, both as a courtesy to the courts, but, more importantly, to avoid the kind of dispute which has arisen in the present case.58F[58]

[58]R v Silverstein [2020] VSCA 233, [91].

1. I respectfully reiterate that observation in this case. It is relevant not least because solicitors for Mr Serra had suggested to the solicitors for Mr Flood, in correspondence over a month before the hearing in this case, that he should make such an application to the FCFCA for release from the undertaking.59F[59] It was unfortunate and avoidable that the issue took such a considerable amount of time to address in the course of the hearing in this Court.

   [59]McNicholas affidavit, Exhibit LMM-1, 1-6, and in particular [6.9] (Letter dated 9 May 2024 from Russell Kennedy Lawyers to Madgwicks Lawyers).

Legislation and authority relevant to the transfer of proceedings

Relevant provisions of the Corporations Act

1. The FCFCA (Division 1) has jurisdiction in civil matters arising under the Corporations Act. Section 1337C(1) provides:

1337CJurisdiction of Federal Circuit and Family Court of Australia (Division 1) and State Family Courts

(1)Jurisdiction is conferred on the Federal Circuit and Family Court of Australia (Division 1) with respect to civil matters arising under Corporations legislation.

1. ‘Civil matter’ is defined in s 9 of the Corporations Act as meaning ‘a matter other than a criminal matter’. ‘Corporations legislation’ is defined to include the Corporations Act and the Australian Securities and Investments Commission Act 2001 (Cth).

1. The FCFCA’s jurisdiction in oppression matters and winding up applications is also made clear by ss 232, 233 and 461(1) of the Corporations Act, which refer to the powers of ‘the Court’.

(a) The words ‘court’ and ‘Court’ are defined in s 58AA(1) of the Corporations Act, which states, relevantly:

(1)       Subject to subsection (2), in this Act:

court means any court.

Court means any of the following courts:

(a)       the Federal Court;

(b)       the Supreme Court of a State or Territory;

(c)the Federal Circuit and Family Court of Australia (Division 1);

(d)a court to which section 41 of the Family Law Act 1975 applies because of a Proclamation made under subsection 41(2) of that Act.

(b) Section 232 provides that the Court may make an order under s 233 if, relevantly, the conduct of a company’s affairs is either contrary to the interests of the members as a whole, or oppressive to, unfairly prejudicial to or discriminatory against, a member or members. Section 233 provides that the Court may make orders including that the company be wound up (s 233(1)(a)) or for the purchase of shares by any member (s 233(1)(d)).

(c)        Section 461(k), pursuant to which the present winding up application is brought, provides:

461     General grounds on which company may be wound up by Court

(1)       The Court may order the winding up of a company if:

…

(k)the Court is of the opinion that it is just and equitable that the company be wound up.

1. The transfer is sought pursuant to s 1337H in Part 9.6A, Division 1 of the Corporations Act, which provides, relevantly:

1337HTransfer of proceedings by the Federal Court and State and Territory Supreme Courts

(1)This section applies to a proceeding (the relevant proceeding) in a court (the transferor court) if:

(a) the relevant proceeding is:

(i)a proceeding with respect to a civil matter arising under the Corporations legislation; or

(ii)a subsection 1337B(3) proceeding; and

(b)       the transferor court is:

(i)        the Federal court; or

(ii)       a State or Territory Supreme Court.

(2)Subject to subsections (3), (4), and (5),60F[60] if it appears to the transferor court that, having regard to the interests of justice, it is more appropriate for:

(a)       the relevant proceeding; or

(b)       an application in the relevant proceeding;

to be determined by another court that has jurisdiction in the matters for determination in the relevant proceeding or application, the transferor court may transfer the relevant proceeding or application to that other court.

[60]Subsections (3), (4) and (5) relate to s 1337B(3) proceedings, which are matters involving or related to decisions made or proposed to be made under the Corporations legislation by a Commonwealth authority or an officer of the Commonwealth. They are not relevant for present purposes.

1. The original transfer application relied first on s 5(1) of the Jurisdiction of Courts (Cross-Vesting) Act 1987 (Vic), and on s 1337H(2) in the alternative. Counsel for the defendant in the course of the hearing accepted that s 1337H was likely to be the appropriate basis on which the transfer application should be made, as s 1337A(2) provides that in a civil matter arising under Corporations legislation, the transfer regime in Part 9.6A, Div 1 of the Corporations Act is an exclusive regime.61F[61] Section 1337A(2) provides:

   [61]See, to this effect, Vanis Capital Investments Pty Ltd (as trustee of the Vanis Capital Investment Trust) v Morris [2023] FCA 359, [25] (Anderson J); In the matter of Webster Consolidated (Holdings) Pty Ltd [2016] NSWSC 376, [5] (Black J).

1337A Operation of Division

…

(2)       This Division operates to the exclusion of:

(a)       the Jurisdiction of Courts (Cross-vesting) Act 1987; and

(b) section 39B of the Judiciary Act 1903.

1. Section 1337A(2) does not in terms address the position of the State legislation, the Jurisdiction of Courts (Cross-Vesting) Act 1987 (Vic). That Act was relied on in Mr Serra’s application.62F[62] Section 1337A provides that nothing in Division 1 affects any other jurisdiction of any court, which may demonstrate an intention to exclude the Commonwealth Jurisdiction of Courts (Cross-Vesting) Act 1987 but leave the jurisdiction of this Court under the Jurisdiction of Courts (Cross-Vesting) Act 1987 (Vic) unaffected. Section 5E of the Corporations Act, which provides that the Corporations legislation is not intended to exclude or limit the concurrent operation of any law of a State or Territory, is consistent with that conclusion.63F[63]

   [62]In submissions on his behalf it was acknowledged that the Jurisdiction of Courts (Cross-Vesting) Act 1987 (Vic) continued to refer to the ‘Family Court’ in s 5, so that it may not have empowered a transfer to the FCFCA in any case: Submissions of First Defendant in Support of Transfer dated 11 June 2024, fn 5.

   [63]This section applies if the legislation is capable of concurrent operation with the Corporations legislation: s 5G(2) of the Corporations Act.

1. In Re Sol Sana Pty Ltd; Magnamail Holdings IP Pty Ltd v SC Creative Pty Ltd, Leeming JA took the view that s 1337A(2)(a) also excluded the Jurisdiction of Courts (Cross-Vesting) Act 1987 (NSW),64F[64] however it is not apparent from his Honour’s ex tempore reasons in that case whether the matter was argued before him. The same conclusion was expressed by Brereton J in Re Lime Gourmet Pizza Bar (Charlestown) Pty Ltd.65F[65]

   [64][2018] NSWSC 570, [2].

   [65]Re Lime Gourmet Pizza Bar (Charlestown) Pty Ltd (2014) 104 ACSR 457, [11] (Brereton J); See also Re HIH Insurance Ltd (in liq) (2014) 104 ACSR 240, [6] (Barrett J). In Matyear v Prismex Technologies Pty Ltd (2006) 60 ACSR 210 at [2], Barrett J left the issue open, but in terms that suggest he took the view that only the Commonwealth Jurisdiction of Courts (Cross-Vesting) Act 1987 was excluded.

1. This issue as to whether the Victorian Jurisdiction of Courts (Cross-Vesting) Act 1987 was excluded by s 1337A(2)(a), having been raised on the day of hearing by Mr Flood, was also not the subject of comprehensive argument before me.

1. It is unnecessary for me in this application, which involves some urgency, to determine whether s 1337A(2)(a) does in fact exclude the operation of s 5 of the Jurisdiction of Courts (Cross-Vesting) Act 1987 (Vic). The primary difference between the power in s 5 and that in s 1337H of the Corporations Act is that the power to transfer proceedings under s 1337H is, unlike the Victorian legislation, discretionary rather than mandatory.66F[66] I have, as explained in my reasons below, determined that the factors in favour of the transfer of the proceeding to the FCFCA as the appropriate Court are comparatively strong in comparison with the factors weighing against transfer. I would, therefore, in any event consider it to be in the interests of justice, and appropriate in the exercise of my discretion, to transfer the proceeding to the FCFCA.

Principles relevant to transfer pursuant to s 1337H of the Corporations Act

[66]As observed by Black J in Webster Consolidated (Holdings), [7]; See also Re Sol Sana, [3] (Leeming JA).

1. It was uncontroversial between the parties that the FCFCA has jurisdiction to hear the Winding Up proceeding. The issues for determination related to the factors relevant to the interests of justice and which was the more appropriate Court to hear the Winding Up application.

1. Section 1337L provides that in deciding whether to transfer a proceeding under s 1337H, a court must have regard to the principal place of business of any body corporate concerned in the proceeding or application, the place or places where the events that are the subject of the proceeding or application took place; and the other courts that have jurisdiction. Neither party submitted that any of these factors were relevant in the present case and there is no need to address them further.

1. In Yeo, in the matter of Armstrong and Shaw Pty Ltd (in liq) v Whiteman, Anderson J summarised the principles relating to the exercise of power under s 1337H(2) of the Corporations Act in the context of an application to transfer proceedings from the Federal Court to the Family Court of Australia.67F[67] His Honour observed68F[68] that the meaning of ‘the interests of justice’ in the context of transfer of proceedings between courts had been considered on many occasions in different statutory schemes, including by the High Court in BHP Billiton Limited v Schultz.69F[69] In that case, Gleeson CJ, McHugh and Heydon JJ, in the context of cross-vesting legislation, referred with approval to the observation of Street CJ in Bankinvest v Seabrook that the decision to transfer or not to transfer 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’.70F[70] The Court also held that in a transfer application there is no onus of persuasion analogous to an onus of proof,71F[71] nor is it necessarily the case that the original choice of forum will be relevant to the interests of justice.72F[72]

   [67][2020] FCA 849, [26]-[31].

   [68][2020] FCA 849, [29].

   [69](2004) 221 CLR 400.

   [70](2004) 221 CLR 400, [13], citing Bankinvest AG v Seabrook (1988) 14 NSWLR 711, 713-714 (Street CJ).

   [71]BHP Billiton, [71] (Gummow J).

   [72]BHP Billiton, [14]-[16] (Gleeson CJ, McHugh and Heydon JJ); See also [77] (Gummow J), [168] (Kirby J).

1. In Yeo, Anderson J observed73F[73] that the following factors identified by McKerracher J in Yara Pilbara Fertilisers Pty Ltd (formerly known as Burrup Fertilisers Pty Ltd) v Oswal (No 8)74F[74] were relevant to the consideration as to whether to transfer the proceeding before him to the Family Court:

   [73]Yeo, [30] (Anderson J).

   [74][2015] FCA 49, [26] (McKerracher J), referred to with approval in numerous cases including in this Court: see Farley Bay Pty Ltd v Davis [2022] VSC 604 (Gardiner AsJ).

1.        the stage of the proceedings in the respective courts;

2.        the commonality or diversity of the parties;

3.        the nature of the proceedings;

4.        the commonality or diversity of issues;

5.        the risk of conflicting findings of fact or conflicting orders;

6.        a costs benefit analysis;

7.the potential unnecessary drain on judicial and other public and private resources; and

8.whether there is any particular judicial expertise residing in one court or the other.

1. This list of matters relevant to the exercise of the discretion was also referred to in Vanis Capital Investments Pty Ltd (as trustee of the Vanis Capital Investment Trust) v Morris,75F[75] on which Mr Flood relied, with the additional observation that the interests of the public, including those who deal with the companies the subject of the Winding Up proceeding, should be considered.76F[76]

   [75][2023] FCA 359, [29] (Anderson J).

   [76]Plaintiff’s Submissions on First Defendant’s Transfer Application dated 12 June 2024, [6]-[7].

1. Justice Anderson in Yeo also referred to an earlier example of the Federal Court transferring a proceeding to the Family Court under s 1337H(2) of the Corporations Act, in Zhu v Tech Universal (HK-Macau) Development Pty Ltd77F[77] and to the decision of Merkel J in Roff v Aqua Distributors Pty Ltd78F[78] in which his Honour transferred an oppression application to the Family Court pursuant to the then applicable provisions of the Corporations Act.

   [77](2005) 53 ACSR 704 (Gyles J).

   [78](1996) 22 ACSR 248.

1. In Roff, Merkel J, after having referred to reasons why a transfer of the proceeding to the Family Court was more appropriate having regard to the interests of justice, observed:

In my view it is no answer to the above factors to contend that the Federal Court is the more experienced and appropriate forum for resolution of commercial issues arising under the Corporations Law or that the Family Court will be more focussed on the family, rather than the corporate, law issues arising in the matter. Whilst those matters may have some relevance where third party interests are directly involved, in my view they have little, if any, force when the company is a family company owned and controlled by the parties to the marriage. I should add that even where third party interests are involved a transfer to the Family Court may nevertheless be appropriate in the interests of justice: see Re Sharpe; Ex parte Powell (17 October 1996, Fed C of A, Lindgren J, unreported). In that case, notwithstanding that the transfer of a bankruptcy proceeding to the Family Court was opposed by the trustee in bankruptcy and some third party creditors, Lindgren J concluded that considerations of “efficiency and economy” and ultimately the “justice of the case” required its transfer to the Federal Court.79F[79]

[79](1996) 22 ACSR 248, 251 (Merkel J).

1. The decision in Roff was referred to by Rees J in Re Peter G Ward Industries Pty Ltd80F[80] where her Honour also noted the observations of Gyles J in Zhu v Tech Universal that where a company is trading actively on a substantial scale or where a real question of insolvency arises ‘serious consideration would be required before a winding-up proceeding would be transferred to the Family Court’.81F[81] Notwithstanding that observation, Gyles J determined that the application to appoint a liquidator was entwined with the claims and counterclaims between the parties in the Family Court and determined that a transfer was in the interests of justice.82F[82]

   [80][2020] NSWSC 339, [28].

   [81](2005) 53 ACSR 704, [9].

   [82](2005) 53 ACSR 704, [10].

1. Justice Rees in Peter G Ward Industries also observed after reviewing the authorities:

Also of central importance is whether one court has the power to determine all matters in issue, whilst the other court does not: Roff v Aqua Distributors at 250, Burman v Zillman [2017] NSWSC 229 per Darke J at [15]-[20]; PJL Group at [24], [31] and [35].83F[83]

[83][2020] NSWSC 339, [30], referring to In the matte of PJL Group Pty Ltd [2018] NSWSC 756.

1. Her Honour concluded in that case that any benefit from a potential earlier determination of the oppression suit in the NSW Supreme Court was outweighed by the additional costs and dislocation of multiple proceedings.84F[84]

   [84](2005) 53 ACSR 704, [35]. The party seeking transfer in that case had conceded that if transferred the matter was likely to be heard much later in the Family Court than the NSWSC proceedings: at [48].

1. In Shepard, in the Matter of Grainpro Pty Ltd (In Liq) v Bonfante, a case dealing with an application to transfer insolvent trading claims from the Federal Court to the Family Court, Markovic J did not consider that the application turned on whether the Federal Court’s ‘core business’ includes determination of claims under the Corporations Act. Her Honour concluded that it was appropriate to transfer the proceeding, primarily because the Family Court had jurisdiction to determine all of the issues raised by the parties.85F[85]

   [85][2020] FCA 1618, [66], [82].

The Parties’ submissions

1. The parties’ submissions as to their respective positions on the application for transfer can be usefully summarised by reference to the matters identified as relevant to transfer applications in Yara Pilbara, as well as some additional factors identified by the parties.

The stage of the proceedings in the respective courts

1. Mr Serra submits that the FCFCA proceeding is significantly advanced. Disclosure, valuation and mediation orders were made in March 2023,86F[86] and mediation occurred in November 2023. The business has been valued by joint valuation in the FCFCA proceeding, with an indication that Ms Flood may seek an updated valuation of the Group.87F[87] Orders were made on 10 May 2024 in the Oppression Application for Mr Flood and the three Group companies to file responsive material. The matter was listed for directions in the FCFCA by orders made 16 May 2024.88F[88]

   [86]Reigo Affidavit CR-1, 10-14 (Order of the FCFCA 17 March 2023).

   [87]Second Reigo Affidavit, [9]-[12].

   [88]Submissions of the First Defendant in Support of Transfer dated 11 June 2024, [19], [42]; Transcript 12/06/24, T70.28-.31, T80.14-.17, T81.18-.21.

1. Mr Flood contends that both matters are at an early stage, and that there is nothing about the stage of the proceeding which makes it inconvenient or burdensome for this Court to determine the issues in this proceeding and any oppression claims. He submits that it was open to Mr Serra, on being served with the Winding Up application, to issue an interlocutory process in this proceeding in the same terms as the substantive relief he seeks in this proceeding. He submits that Mr Serra ‘elected instead to issue the present application for transfer on or about 2 May 2024, and on 10 May 2024, to pursue his application for joinder … and to have the matrimonial proceeding transferred to Division 1 of the FCFCA’.89F[89]

   [89]Plaintiff’s Submissions on the First Defendant’s Transfer Application dated 12 June 2024, [10(1)]; Transcript 12/06/24, T134.24-.27.

1. Mr Flood gave evidence of his concern that if the matter proceeds in the FCFCA there will be delays and additional costs by reason of it being part of a larger proceeding involving other parties. This was a serious concern given the untenable situation of the Group companies which, he says, cannot function given the collapse of the relationship between him and Mr Serra.90F[90] He submits there is nothing in the evidence to the effect that the transfer of the proceeding will result in the resolution of the shareholder issues in a more timely or efficient manner than if determined in this Court, and that the progress of the FCFCA proceeding and oppression claims to date ‘should give no confidence in this regard’.91F[91]

   [90]Flood Affidavit, [24].

   [91]Plaintiff’s Submissions on the First Defendant’s Transfer Application dated 12 June 2024, [10(2)].

The commonality or diversity of the parties

1. Mr Flood submits that the parties to this proceeding and to ‘any oppression claims which Mr Serra elects to issue in this Court’ are a subset of the parties to the FCFCA proceeding. Ms Flood is not a party to the proceeding and does not need to be, as she is not a shareholder of any company.92F[92] He also notes that Rock M Pty Ltd is not and need not be party to the Winding Up proceeding.93F[93]

   [92]Plaintiff’s Submissions on the First Defendant’s Transfer Application dated 12 June 2024, [10(3)].

   [93]Transcript 12/06/24, T49.18-.19.

1. Mr Serra refers to the fact that the shares in the Group companies are part of the asset pool; that Ms Flood has obtained orders in the FCFCA proceeding restraining Mr Serra from dealing with his interest in the Group companies;94F[94] and that she has been active in seeking a reconsideration of the value of the companies.95F[95] He refers to the fact that Rock M Pty Ltd will not be a party to the Winding Up proceeding as he is the sole director and shareholder. He submits for that reason, the Winding Up proceeding cannot achieve the resolution of the issues affecting the whole of the Group. He also submits that to permit the Winding Up proceeding to proceed separately in this Court without Rock M Pty Ltd, as the entity in the Group which incurs the cost of employing staff and leasing equipment, would not be just and equitable, as:

   [94]Submissions of the First Defendant in Support of Transfer dated 11 June 2024, [16]; Reigo Affidavit, Exhibit CR-1, 1-17 (Orders of the FCFCA made 23 November 2022 and 17 March 2023).

   [95]Submissions of the First Defendant in Support of Transfer dated 11 June 2024, [17].

(a)        it would leave Rock M Pty Ltd with substantial payment obligations including significant taxation obligations, which gives rise to a personal exposure on the part of Mr Serra alone;

(b)       it would immediately reduce the value of the Group’s business, and

(c)        it would mean that the relief sought by Mr Serra in the Injunction Application could not be brought or determined.96F[96]

[96]Submissions of the First Defendant in Support of Transfer dated 11 June 2024, [39]; Transcript 12/06/24 T105.06-106.06.

1. Mr Flood submits in response that it is possible for Rock M Pty Ltd to be a party to proceedings in this Court if the Oppression Application is brought in or transferred to this Court.97F[97]

   [97]Transcript 12/06/24, T122.25-123.07.

The nature of the proceedings and the commonality of the parties and diversity of issues

1. Mr Serra says that the proceedings in both Courts involve a commonality of many issues. He refers to the issue of the valuation of the Group companies as being central to each proceeding. He also emphasises that in considering the relief sought in the Winding Up proceeding, the Court is required to consider the alternative relief of a buy-out, which is sought in the Oppression Application. This is because in considering whether to make a winding up order on just and equitable grounds under s 461(1)(k) of the Corporations Act, which is the order sought in the Winding Up proceeding, s 467(4) of the Corporations Act requires the Court to consider whether some other remedy is available and whether the applicant is acting unreasonably in seeking to have the company wound up rather than pursuing that alternative remedy.98F[98] He refers to the decisions in Exton v Extons Pty Ltd99F[99] and In the matter of Wyndham Park Estate Pty Ltd100F[100] which establish that the Court will be extremely reluctant to wind up a solvent company and will consider whether any other relief will be preferable to a winding up order. In Exton, Sifris J declined to order a winding up of solvent companies because he found that one party wanted to be bought out at a fair and reasonable price, and the other was a potential buyer.101F[101] Similarly, in Wyndham Park Estate, his Honour declined to make winding up orders on the basis that the party seeking winding up was acting unreasonably in circumstances where a buy-out offer had been made.102F[102]

   [98]Submissions of the First Defendant in Support of Transfer dated 11 June 2024, [33]; Transcript 12/06/24, T85.07-.20.

   [99](2017) 53 VR 520, 541-545, [74]-[91].

   [100][2019] VSC 92, [35], [40]-[47].

   [101](2017) 53 VR 520, 544-545, [87]-[89].

   [102][2019] VSC 92, [43]-[47].

1. Mr Flood submits that the Winding Up proceeding and any oppression claims are ‘largely separate and discrete from the extant family law proceeding’. The only relevant connection between the two is that Mr Serra’s interests as a shareholder in the Group companies are a ‘matrimonial asset’ of Mr Serra and Ms Flood. He submits that because the available evidence indicates that this asset has been valued at $100, it is not a substantial asset in the context of the overall family law proceeding on the evidence as it stands.103F[103] He also submits that although the FCFCA proceeding now encompasses the Oppression Application and directly engages issues overlapping with the Winding Up proceeding, and there is ‘substantial commonality in the parties to both proceedings’, this is the result of a relatively recent change to the nature and scope of the FCFCA proceeding arising solely from the conduct of Mr Serra in issuing the Oppression Application.104F[104] He submits that although the Oppression Application and the Injunction Application was filed and served first in the FCFCA and Mr Flood was on notice of this, Mr Serra could easily have chosen, when the Winding Up proceeding was issued by Mr Flood on 5 April, to instead pursue his remedies in the Supreme Court.105F[105]

   [103]Transcript 12/06/24, T115.18-.28.

   [104]Plaintiff’s Submissions on the First Defendant’s Transfer Application dated 12 June 2024, [10(4)].

   [105]Transcript 12/06/24, T117.30-118.10.

1. Mr Serra submits in response to the reliance by Mr Flood on the valuation of the Group companies at $100 that it is clear that Ms Flood challenges that valuation, and also that this valuation is to be contrasted with the evidence of Mr Flood that it is a profitable business.106F[106]

   [106]Transcript 12/06/24, T145.25-146.02.

The risk of conflicting findings of fact or conflicting orders

1. Mr Serra submits that given the commonality of issues in the Winding Up proceeding and the FCFCA proceeding, there is a real risk of inconsistent findings of fact and contradictory legal outcomes between the Courts. It was argued that it is foreseeable that if the matters proceed separately, an outcome in one proceeding may render the relief in the other proceeding impractical or redundant. The example is given of orders first being made for buy-out in the Oppression Application and a winding up order being subsequently made in this Court.107F[107]

   [107]Submissions of the First Defendant in Support of Transfer dated 11 June 2024, [37]-[38].

1. Mr Flood contends that the risk of conflicting issues would only arise ‘if Mr Serra refuses to prosecute the Oppression Claims in this Court.’108F[108] However, senior counsel for Mr Flood did accept that it was not possible to exclude the possibility of conflicting findings in the family law matters in the FCFCA proceeding and proceedings in this Court if the Winding Up proceeding was not transferred, given the common issues relating to the value of the Group companies.109F[109]

   [108]Plaintiff’s Submissions on the First Defendant’s Transfer Application dated 12 June 2024, [10(6)].

   [109]Transcript 12/06/24, T136.02-.19.

A costs benefit analysis

1. Mr Serra submits that there would be significant wasted costs and additional costs for the parties if the proceedings progress separately in different courts.110F[110] He refers to the significant costs already incurred in the FCFCA proceedings to obtain the Group business valuation.111F[111] Ms Flood challenges the existing valuation112F[112] and seeks that the valuation be reconsidered.

   [110]Transcript 12/06/24, T102.05-.17.

   [111]Submissions of the First Defendant in Support of Transfer dated 11 June 2024, [36].

   [112]McNicholas Affidavit, [14]-[15]; Second Reigo Affidavit, [9]-[12].

1. Mr Flood contends that the FCFCA proceeding, which will entail the shareholder matters being heard in the same proceeding as the family law issues, will be more expensive with multiple parties. He says that it can be seen as a notorious fact that multi-party litigation is more expensive than bi-party litigation, because multiple parties will give rise to more complexity in the dealings between parties. He also notes that Mr Serra has two sets of lawyers, one in the corporations matters and family lawyers for the family law issues, so that there would be no obvious savings for him to have the matters dealt with in a single proceeding.113F[113] He also notes the absence of evidence as to costs already incurred in the FCFCA proceedings.114F[114]

   [113]Transcript 12/06/24, T127.03-.24, T135.13-136.01.

   [114]Transcript 12/06/24, T38.28-139.03.

The potential unnecessary drain on judicial and other public and private resources

1. Mr Serra contends that if the Winding Up proceeding is not transferred, the Supreme Court will need to allocate judicial and other resources to hear and determine it. The better course is to transfer this Winding Up proceeding to the FCFCA (Division 1) which is already seized of the Oppression Application and the Injunction Application.115F[115]

   [115]Transcript 12/06/24, T109.01-.07; Submissions of the First Defendant in Support of Transfer dated 11 June 2024, [42].

1. Mr Flood accepts that it would be best for the shareholder issues to be dealt with in the same proceeding but says this is ‘a matter wholly within Mr Serra’s power to achieve if this proceeding is not transferred’,116F[116] and is otherwise a neutral matter, including because the winding up and oppression issues will ultimately need to be resolved somewhere.117F[117]

   [116]Plaintiff’s Submissions on the First Defendant’s Transfer Application dated 12 June 2024, [10(7)].

   [117]Transcript 12/06/24, T136.23-.31.

Whether there is any particular judicial expertise residing in one court or the other

1. Mr Flood submits that the Winding Up proceeding should stay in this Court because the Supreme Court has specialist corporations expertise. He submits that although the FCFCA has jurisdiction, this was a different matter from accepting that it has specialist expertise.118F[118] He refers to the decision in Vanis Capital where Justice Anderson observed, in a decision where his Honour declined to transfer an oppression claim to the FCFCA, that the core functions of the Federal Court include the determination of oppression claims,119F[119] which can also be said of the Supreme Court.

   [118]Plaintiff’s Submissions on the First Defendant’s Transfer Application dated 12 June 2024, [9], [10(8)]; Transcript 12/06/24, T120.02-.12.

   [119]Vanis Capital [2023] FCA 359, [35]; See also Liquidators of UUB Pty Ltd v NWO [2020] SASC 121, [106] (Parker J).

1. Mr Serra refers to the broad jurisdiction of Division 1 of the FCFCA which is not limited to family law matters, and says there is no basis to assert that the FCFCA (Division 1) has insufficient experience in dealing with oppression cases.120F[120] Counsel for Mr Serra noted that Justice Anderson, although referring to the Federal Court’s core functions in oppression matters in Vanis Capital, had also recognised the appropriateness of the Family Court hearing corporations matters in certain circumstances, when he ordered the transfer of a corporations proceeding from the Federal Court to the Family Court in Yeo.121F[121]

   [120]Transcript 12/06/24, T148.19-150.08.

   [121]Transcript 12/06/24, T90.28-91.28.

The interests of the public and third parties

1. Mr Flood submits that it is necessary for the Court to consider the interests of the public, including those who deal with the companies in question. He submitted that the third parties dealing with the companies had an interest in the expeditious resolution of the matters.122F[122] This made relevant his submissions as to urgency and as to this Court being the Court that could more expeditiously determine the Winding Up proceeding.123F[123]

   [122]Plaintiff’s Submissions on the First Defendant’s Transfer Application dated 12 June 2024, [7]; Transcript 12/06/24, T126.10-.30.

   [123]Transcript 12/06/24, T126.10-.30.

1. Mr Serra submits that the entirety of the considerations relating to the proceedings has the effect that it will be more efficient to deal with all of the matters together in the FCFCA.124F[124] He also submits as to the concerns on urgency that Mr Flood’s Winding Up application could have been, but was not, supported by an application for injunctions if there was need for urgent relief.125F[125]

   [124]Transcript 12/06/24, T148.03-.18.

   [125]Transcript 12/06/24, T143.05-.15.

The question of the appointment of a litigation guardian in the Supreme Court

1. Mr Serra submitted that he has a litigation guardian in the FCFCA proceeding and if the Winding Up proceeding remains in the Supreme Court it would be necessary to apply to appoint a litigation guardian in this proceeding, which will result in additional delay and cost.126F[126] Although the application has already been made in the FCFCA, the application was made in February 2023127F[127] and the medical evidence in support of the application would need to be updated, involving cost and time.128F[128]

   [126]Submissions of the First Defendant in Support of Transfer dated 11 June 2024, [41]; Transcript 12/06/24, T108.07-109.30.

   [127]Second Reigo Affidavit, Exhibit CR-2, 32-34 (Orders of FCFCA dated 28 February 2023).

   [128]Transcript 12/06/24, T108.13-.27.

1. Mr Flood acknowledges that Mr Serra may need a litigation guardian in the Winding Up proceeding,129F[129] but submits that the application is unlikely to be more than a minor issue.130F[130]

   [129]Flood Affidavit, [10].

   [130]Transcript 12/06/24, T141.11-.19. Senior Counsel for Mr Flood did raise a potential issue with the appointment of a litigation guardian for Mr Serra in his capacity as shareholder of the Group companies, given that he holds the shares as a trustee: T141.22-142.09. Neither party submitted that this was relevant to the present application so I will not address the issue in these reasons.

Harman undertaking / implied obligation issues

1. Mr Serra submits that there are ‘significant Harman issues prohibiting Mr Flood from seeking to adduce, in the Winding Up Proceeding, evidence and documents created for the purposes of the Family Law Proceeding.’ He contended that Mr Flood had impermissibly relied on matters deposed to in the FCFCA, including exhibiting the Serra Affidavit to his affidavit in this proceeding. He says that issues relating to the implied undertaking will not arise if the Winding Up proceeding is transferred to the FCFCA to be heard as a cross-claim in that proceeding.131F[131]

   [131]Submissions of the First Defendant in Support of Transfer dated 11 June 2024, [40].

1. Mr Flood submits that there should be no difficulty with documents filed in the FCFCA proceedings being the subject of the implied obligation as Mr Serra has indicated that he would not oppose an application to be released from the undertaking.132F[132]

   [132]Transcript 12/06/24, T139.19-.24.

1. Mr Serra raises the difficulty that Ms Flood is also a party to the FCFCA Application and it is uncertain what her attitude would be to release of any implied obligations.133F[133]

   [133]Transcript 12/06/24, T101.09-.23.

Should the Winding Up proceeding be transferred to the FCFCA?

1. I am satisfied, having regard to the interests of justice, that it is appropriate for the Winding Up proceeding to be transferred to the FCFCA.

1. There are numerous considerations to be balanced, many of which, for the reasons below, favour the transfer of the Winding Up proceeding to the FCFCA. These considerations are not outweighed by the matters raised by Mr Flood in resisting the transfer. His primary concerns are first that if the proceeding is transferred, the issues involving the companies will not be heard as expeditiously and resolve the issues as quickly as they would be in this Court. Secondly he emphasises that this Court, rather than the FCFCA, has the specialist expertise to hear the Winding Up proceeding and the Oppression Application should it be brought as a cross-claim in this Court.

1. I address below the reasons why it is not possible on the evidence to conclude that the winding up and oppression issues will be resolved more rapidly or efficiently if the Winding Up proceeding remains in this Court. As to the submission that it is inappropriate to transfer the Winding Up application to the FCFCA because this Court has the specialist expertise with respect to Corporations Act matters, I observe at the outset that I do not regard this as a reason why the proceeding should not be transferred. This Court undoubtedly has specialist expertise in matters arising under the Corporations Act. However the FCFCA (Division 1), like the Family Court before it, in addition to having been given the jurisdiction to hear Corporations Act matters, has experience in hearing applications arising under the Corporations Act, particularly where, as here, the issues intersect with family law disputes. I have concluded that the specialist expertise in Corporations Act matters in this Court does not outweigh the range of considerations which make the FCFCA the more appropriate Court for the hearing of the Winding Up proceeding in conjunction with the other related matters.

Commonality of issues and parties

1. Turning to the specific matters raised by the parties, it is first apparent that there is a significant commonality of issues in the proceedings.

(a)        The pool of assets which is a subject of the family law proceeding in the FCFCA includes Mr Serra’s shares in the Group, which include the two companies the subject of the Winding Up proceeding. The value of the business will be an issue in each proceeding. I do not accept the submission for Mr Flood that because of the valuation of the business at $100 in the initial valuation in the Federal Court proceeding, it is an insignificant asset and a minor consideration. Mr Flood’s evidence was that it was a profitable business, with approximately $5.5 to $6 million in annual revenue, which he says he built up with continuous hard work. He gave evidence that he is deeply concerned to resolve the issues affecting the business and to avoid any harmful delay.134F[134] The FCFCA would plainly be required to have regard to what occurs in the Winding Up proceedings if it continued in this Court. That is because if the winding up orders were made (or, if the Oppression Application was made as a cross claim in this Court, the buy-out orders sought by Mr Serra) the valuation principles now applicable to the business as a going concern, as used in the FCFCA proceeding, would be inappropriate as they would not have taken into account the winding up or buy-out of the company. Valuation methodology reflecting the fair value of the shares after liquidation or buy out would be applicable.135F[135] This also creates the risk of inconsistent findings, which is discussed further below.

[134]Flood Affidavit, [13], [21], [24].

[135]See Peter G Ward Industries at [38]-[40] (Rees J), referring to the principles of valuation as adapted to an oppression case in In the matter of Scientific Management Associates Pty Ltd (2019) 141 ACSR 115, [309] (Rees J).

(b)       Injunctions were made on 23 November 2022, early in the FCFCA proceeding, restraining Mr Serra from dealing with his interest in any of the Group companies. The 23 November 2022 orders were discharged by orders made 17 March 2023 and replaced by orders which required Mr Serra to give at least 28 days’ notice in the event that he intends to transfer, dispose of or deal with or sell his interest in the Group companies. The original orders noted that Mr Flood (the son of Ms Flood as applicant for the injunction) had access to all accounts of the businesses the subject of the Order (including Rock M Pty Ltd).136F[136]

(c) There is also likely to be significant overlap in the factual matters raised in the Winding Up proceeding and the Oppression Application. The affidavits in support of each application, and the Injunction Application allege various forms of misconduct on the part of each party as director.137F[137] I do not need to make findings on any of those allegations in this application. However it is foreseeable that allegations of the kind made by Mr Serra in support of the Oppression Application are likely to be raised in the Winding Up proceeding, and Mr Flood is likely to raise matters of the kind referred to in his affidavit in support of the Winding Up application in his defence in the Oppression Proceeding.

(d) Importantly, given that the Winding Up application is made on just and equitable grounds, the Court will be required by s 461(1)(k) of the Corporations Act, to consider whether some other remedy is appropriate. Buy-out orders having been sought in the Oppression Application, this would be an alternative remedy which would no doubt be put to the Court by Mr Serra, whether the Oppression Application is brought as a cross claim in this Court or not.

[136]Orders dated 23 November 2022, Order 1 and Annexure A, orders 2(a) and notation E.

[137]See pars [8]-[10] above.

1. There is a significant overlap in the parties to each proceeding. Following the application for joinder in the FCFCA, and the transfer to Division 1 of that Court, the parties to the proceeding in the FCFCA proceeding are Mr Serra, Ms Flood, Mr Flood, Rock S Pty Ltd, Rock P Pty Ltd, and Rock M Pty Ltd. The Winding Up proceeding in this Court has the same parties with the exception of Ms Flood and Rock M Pty Ltd.

1. Although Mr Flood was not a party to the FCFCA proceeding prior to the joinder orders, the evidence was that he accepted that he was ‘involved in the subject matter of the Family Court [sic] proceeding to the very limited extent that the value of the business was in issue’.138F[138] Ms Flood, although not involved in the proceeding in this Court, would potentially be significantly affected by orders if made in the Winding Up proceeding given that she asserts an interest in Mr Serra’s interest in the Group companies. It is also desirable that Rock M Pty Ltd, which is not a party to the Winding Up application, but is party to the FCFCA proceeding, be party to the proceedings dealing with the Corporations Act issues. Rock M Pty Ltd plays a central role in the business of the Group in employing staff and leasing equipment, and would necessarily be affected by any winding up order of Rock S Pty Ltd, which is the entity by which the business contracts with clients, and to which Rock M Pty Ltd provides staff and equipment for a fee.

   [138]Second Reigo Affidavit, Exhibit CR-2, 21-22 (Letter dated 27 May 2024 from solicitors for Mr Flood to solicitors for Mr Serra at [6]).

1. The parties both accept that in light of the commonality of issues, it is appropriate that the Winding Up application should be heard together with the Oppression Application. Mr Flood submits, however, that the appropriate course is for Mr Serra to make the oppression claims as a cross-claim in the Winding Up proceeding. I do not accept that this is the most efficient or otherwise appropriate course. It would necessitate the discontinuance of the Oppression Application in the FCFCA, and an application for joinder orders in this Court. That would entail the Court again considering whether there was any aspect of the remaining FCFCA proceeding which may embarrass or delay the trial of the proceeding or prejudice a party or otherwise be inconvenient.139F[139] Bringing the Oppression Application in this Court would also not resolve the related Injunction Application, which involves claims relating to the Group companies’ business, and in respect of which procedural orders have already been made by the FCFCA.

   [139]Supreme Court (General Civil Procedure) Rules 2015, r 9.04.

1. The original choice of forum is generally a neutral factor in a transfer application under s 1337H.140F[140] The timing of the issuing of the Oppression Application and the Winding Up proceeding also does not carry particular weight in this case. The fact that Mr Serra issued his Oppression Application prior to Mr Flood issuing in this Court does not have any particular bearing on which is the appropriate Court to hear the Winding Up proceeding. However I can also see no basis on which it was incumbent on Mr Serra to discontinue his Oppression Application in the FCFCA, and bring it as a cross-claim in the Winding Up application in this Court, separate from the related family law proceeding including his application for injunctive relief.

   [140]BHP Billiton, 421-422 [14]-[16] (Gleeson CJ, McHugh and Heydon JJ).

Risk of inconsistent findings

1. There is a risk of inconsistent findings if the Winding Up proceeding is not transferred to the FCFCA. That plainly arises as between the Winding Up Application and Oppression Application and Injunction Application where the allegations of fact as to the conduct of each of Mr Flood and Mr Serra as directors and shareholders will have significant overlap in each Court, necessitating findings being made by the Courts with respect to specific incidents. In circumstances where not all the parties to the FCFCA proceeding are party to the Winding Up proceeding the risk of inconsistent findings will not be resolved by parties being bound by the finding of the Court which makes its decision first.141F[141] In any event, it would be desirable to avoid the complication of one Court having to have regard to findings in another Court when it is possible, as in this case, to have all proceedings heard in one Court, the FCFCA.

   [141]Cf Peter G Ward Industries, [37], [41].

1. Even if Mr Serra was to bring the Oppression Application as a cross claim to the Winding Up proceeding there remains a risk of inconsistent findings as between proceedings in this Court and the remaining FCFCA proceeding. Risks will remain of inconsistent findings in relation to each directors’ conduct because of the Injunction Application in the FCFCA which raises matters relating to Mr Flood’s conduct with respect to the business and Mr Serra. Further, as noted above, there is a risk of inconsistent findings on valuation of the business, which is relevant in the family law aspect of the proceeding, given the potential need for different valuation methodologies or considerations to be applied.

1. The fact that the risk of inconsistent findings even if the Oppression Application was brought as a cross claim in this Court could not be excluded was accepted by senior counsel for Mr Flood.142F[142]

   [142]Transcript 12/06/24, T136.08-.22.

1. The significant degree of common issues in the Winding Up proceeding with the various matters arising in the FCFCA and the risks of inconsistent findings makes it desirable that all of the proceedings be heard together in the same Court. The matters arising under the Family Law Act between Mr Serra and Ms Flood cannot be heard in this Court.

The stage of the proceedings in each court

1. There was nothing in the evidence which supported a conclusion that the hearing of the Winding Up proceeding, if transferred to the FCFCA, would be heard with less expedition than if heard in this Court. Unlike the application in Peter G Ward Industries, there was also no concession by Mr Serra that the proceeding would necessarily be heard later in the FCFCA.143F[143] The Winding Up proceeding has after the filing of the application and affidavit in support been the subject of a directions hearing, and this application, but no further steps are set down.144F[144] There has been some progress in the FCFCA proceedings, including orders for disclosure, a procedure for valuation of the Group business, and mediation made in March 2023. The mediation between Ms Flood and Mr Serra took place in November 2023.145F[145] More recently orders have been made on 10 May 2024 for material to be filed in the Injunction Application and there is a directions hearing listed in the FCFCA for all matters on 5 July 2024. The evidence does not otherwise address when the proceedings are likely to be heard in the FCFCA146F[146] but also does not indicate any significant delays or periods of inactivity in the progress of the applications in the FCFCA.

   [143][2020] NSWSC 339, [48].

   [144]Orders of Hetyey AsJ made 3 May 2024 at the first return date for the proceeding addressed the procedural steps for the hearing of this application.

   [145]Joint Chronology item 20; Transcript 12/06/24, T83.16-.21.

   [146]Cf Re Webster Holdings, [10]; Grainpro, [79].

1. It can be expected that the Winding Up proceeding would be heard with expedition in this Court. However, it appears likely that even if the Oppression Application was discontinued in the FCFCA and issued here as a cross-claim in this Court, issues arising from the related family law proceedings in the FCFCA may complicate the progress of the Corporations Law proceedings in this Court. That may include complications arising on business valuation issues and from the injunctions made in favour of Ms Flood in the FCFCA proceedings in March 2023 which require that he give notice of relevant dealings with the Group companies.

1. The FCFCA will be in a position, if requested by the parties, to consider appropriate case management procedures to facilitate, if appropriate, the prioritised hearing of the corporations law matters in the proceeding.147F[147]

   [147]Cf Grainpro, [73].

1. Taking these matters into account, it appears that the Winding Up proceeding may be heard equally expeditiously in the FCFCA as it would if it remains in this Court

Cost benefit analysis and the effect on judicial and other public resources

1. Each party raised valid reasons why the transfer of the Winding Up proceeding, or alternatively it remaining in this Court, would increase the costs to the parties. Mr Serra relies on the cost of proceedings in two courts, including the duplication of cost where there are overlapping issues to be resolved. Mr Flood notes the increased expense involved in multi-party litigation as compared to the more limited cost of ‘bi-party’ litigation in the Winding Up proceeding. Each is a valid submission, however the weight of both submissions is qualified given that Mr Serra is currently instructing two sets of lawyers, one in the family law proceeding and one in the corporations proceedings. On Mr Flood’s approach, which would involve the Oppression Application being brought to this Court, it could not be assumed that the proceeding here would remain a ‘bi-party’ proceeding.

1. There is insufficient evidence to assess that either course will be substantially less expensive than the other. For that reason I regard questions of cost to the parties as a neutral factor. Any costs considerations do not outweigh the considerations which favour the proceedings all being heard in the FCFCA.

1. Similarly, considerations relating to drain on judicial resources is, in this case, of limited weight. The family law related issues and the corporations law related matters will need to be determined, regardless of the Court in which they proceed. There may be expected to be some potential duplication of time, if the Winding Up proceeding remains in this Court, including time spent on matters relating to use of evidence (because of implied undertaking issues) and potentially on an application for a litigation guardian for Mr Serra. However, this potential is not so significant that it would favour transfer of the Winding Up proceeding and I treat it as essentially a neutral matter.

The interests of third parties

1. It is appropriate to take into account the interests of third parties in the application, including the clients and employees of the Group business. The interests of third parties identified by Mr Flood are primarily in the expeditious resolution of the dispute in respect of the Group companies, and in that respect the third party interests largely coincide with those of the parties. Having concluded that the Winding Up proceeding may be heard as expeditiously in the FCFCA as it might in this Court, this consideration is a neutral one.

1. The interests of third parties, primarily employees but also third parties trading with the Group could be expected to be significantly affected if the companies are wound up, as sought by Mr Flood. Equally, Mr Flood has given evidence that the business’ client relationships are all with him, so that their interests may be affected by a buy out. These are issues that are relevant to the resolution of the substantive proceedings, and have minimal relevance to whether the Winding Up proceeding should be transferred. It may be that the FCFCA will be in a better position, having all proceedings before it, to assess the interests of third parties and how the interests, if relevant, would be affected by a winding up or a buy-out. I do not give that consideration any significant weight in this application.

Further interlocutory matters which may arise in this Court but not the FCFCA

1. In making the ‘nuts and bolts’ assessment148F[148] of which is the appropriate Court to hear the Winding Up proceeding I take into account that in this Court there may be a need for an application to appoint a litigation guardian to Mr Serra, and that issues may continue to arise with respect to the application to documents already filed in the FCFCA of the implied obligation in Hearne v Street.

   [148]Bankinvest AG v Seabrook (1988) 14 NSWLR 711, 713-714 (Street CJ).

1. I accept that if the Winding Up proceeding remained in this Court  the issues of access to documents which may be subject to implied obligations could be addressed through joint applications to the FCFCA to release the relevant party from the undertaking. However, it does remain possible that Ms Flood, who is party to those proceedings, may not wish to consent to release of the obligation with respect to any documents produced by her. There was no evidence as to whether she would oppose or consent to any applications for release of documents subject to the implied undertaking. It is foreseeable, for example, that issues may arise as to use of the joint valuation which had been prepared by a valuer jointly appointed by Mr Serra and Ms Flood pursuant to orders of the FCFCA.149F[149]

   [149]Orders of Senior Judicial Registrar Hoult dated 17 March 2023, order 6; First Reigo Affidavit, Exhibit CR-1, 10-14.

1. I also take into account that the question of use of the Serra Affidavit should also have been capable of an efficient resolution, given that the possibility of an unopposed application to the FCFCA for release of the obligation was raised between solicitors for the parties. However, it occupied half a day of hearing. Although that application was ultimately resolved on the basis that the obligation no longer applied to the affidavit, that may not be the case with all documents from the Federal Court a party may wish to use. I also acknowledge that there may be arguments available that use of documents filed in the FCFCA in the Winding Up proceeding in this Court would not contravene the implied obligation; however, it is not free from doubt on the authorities and resolution of that question may itself involve further applications. Issues of this kind relating to use of documents would not arise if the Winding Up proceeding is transferred to the FCFCA.

Conclusion

1. Taking the above considerations into account, I consider that the interests of justice will be best served by the transfer of the Winding Up proceeding to the FCFCA. That Court can hear all of the related matters between the parties, which is not possible in this Court, has the relevant parties and other applications already before it, and is likely to be able to hear the proceeding in a way which involves fewer additional procedural complications.

1. I will make an order pursuant to s 1337H of the Corporations Act that proceeding S ECI 2024 01583 be transferred to Division 1 of the FCFCA.

Costs

1. Mr Serra seeks the costs of the transfer application. His evidence included a letter sent by his instructing solicitors to the solicitors for Mr Flood on 15 April 2024, seeking the consent for the transfer of the winding up application, providing reasons why the FCFCA was the proper forum to hear all matters.150F[150] Solicitors for Mr Flood declined to consent to the transfer, primarily because the proceeding was then in Division 2 of the FCFCA which did not have jurisdiction.151F[151] However Mr Flood’s position did not change after the orders were made by the FCFCA on 16 May 2024 for the transfer of the proceeding to Division 1, despite the question of transfer and the costs of the application to transfer being raised in correspondence after the orders, on 21 May 2024.152F[152]

   [150]First Reigo Affidavit, [10]-[11]; Exhibit CR-1, 39-42.

   [151]First Reigo Affidavit, [12]; Exhibit CR-1, 43-45.

   [152]Second Reigo Affidavit, Exhibit CR-2, 16-20, [6].

1. The current material is consistent with an order that the costs of this application follow the event and that Mr Flood pay Mr Serra’s costs of the application on a standard basis. It would appear to be appropriate for the costs of the Winding Up proceeding otherwise to be reserved to the FCFCA in the transferred proceeding. I will give the parties the opportunity to make submissions on costs in the event that there are any considerations to the contrary of my preliminary view.

SCHEDULE OF PARTIES

0BANGUS FLOOD

1BPlaintiff

2B-and-

3BCHARLEY SERRA

4BFirst Defendant

5BRock S Pty Ltd

6BSecond Defendant

7BRock P Pty Ltd

8BThird Defendant