Rogan & Ors v Rushton (QLD) Pty Ltd

[2002] VSC 375

IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION
COMMERCIAL LIST

No. 2061 of 2002

PETER GEORGE ROGAN AND ORS	Plaintiff
v
RUSHTON (QLD) PTY LTD AND ORS	Defendant

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JUDGE:	WARREN J
WHERE HELD:	MELBOURNE
DATE OF HEARING:	30 August 2002
DATE OF JUDGMENT:	4 September 2002
CASE MAY BE CITED AS:	Rogan and Ors v Rushton (Qld) Pty Ltd and Ors
MEDIUM NEUTRAL CITATION:	[2002] VSC 375

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CROSS-VESTING – Interests of justice – Existing related proceedings in Queensland – Jurisdiction clause.

JURISDICTION OF COURTS (CROSS-VESTING) ACT (Vic) 1987, s.5(2)

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Mr R. Garratt Q.C.	Madgwicks
For the Defendants	Mr J. Delany	Gadens

TABLE OF CONTENTS

The Queensland Proceedings.......................................................................................................... 1

The Victorian Proceedings............................................................................................................... 2

The Agreement................................................................................................................................... 3

The Cross-Vesting Application....................................................................................................... 3

HER HONOUR:

1. The plaintiffs bring this proceeding seeking declaratory relief with respect to an agreement as relating to a deed of option. 

1. In general terms, the plaintiffs allege that they and the defendants and their related interests are parties to an agreement called the “Sale of Business Interests Agreement” entered into between those parties on about 22 October 1999 (“the agreement”). 

1. To state matters briefly there has been a falling out leading to other litigation between those parties. 

1. In summary, under the agreement it was resolved that if the Victorian interests were offered business in Queensland those parties would refer that business to the Queensland parties.  Similarly, where Queensland parties were offered business in Victoria they would refer such business to the Victorian parties.  It seems that the Queensland parties allege that the Victorian parties carried on their own work in Queensland and, also, Papua New Guinea, in breach of the terms of the agreement. 

1. In the intervening period the plaintiffs are desirous of entering into a contract for the sale of certain naming rights the consent to which is allegedly required by the defendants.  Accordingly, the plaintiffs in the present proceeding seek determination of questions of construction under the agreement as to whether the consent of the defendants is required.  In consequence, the defendants in the present proceeding served a notice pursuant to Rule 13.06 of Chapter II of the Supreme Court Rules of Victoria seeking to have these proceedings cross-vested to Queensland essentially on the basis that other litigation before the Supreme Court of Queensland warrants such cross-vesting order.  It is that application with which I am presently concerned.  It is appropriate, therefore, to generally describe the Queensland proceedings.

The Queensland Proceedings

1. The defendants in the present proceeding (“Rushton”) are plaintiffs in action 10771 of 2001 in the Supreme Court of Queensland (“the first Queensland proceeding”).  The proceeding was issued on 30 November 2001.  Generally, Rushton alleges that Rogan breached the terms of the agreement by conducting business within Queensland that should have been referred to Rushton and its related interests.

1. The plaintiffs in the present proceeding (“Rogan”) are plaintiffs in action 816 of 2002 in the Supreme Court of Queensland (“the second Queensland proceeding”).  Rushton are the defendants in the second Queensland proceeding.  It was commenced on 23 January 2002.  Broadly speaking, in the second Queensland proceeding Rogan seeks declaratory relief in relation to the agreement.  A default judgment was ordered by de Jersey CJ in the second Queensland proceeding on 23 March 2002.  The judgment is subject to an appeal.  A date for the hearing of the appeal by the Court of Appeal of Queensland is yet to be allocated. 

1. I was informed that interlocutory steps in the first Queensland proceeding have progressed expeditiously and that there is a possibility of the matter being fixed for trial in the latter part of 2002. 

The Victorian Proceedings

1. The Victorian proceedings were commenced on 26 July 2002.  The plaintiffs, being Rogan, seek declaratory relief in the nature of determination of construction issues arising with respect to clause 13 of the agreement.  In summary, clause 13 provides that Rogan grants an option and that Rushton (although in the context of the agreement described as “the Holzberger Group”) must provide written consent to a sale or transfer of an interest in certain naming rights.  Rogan alleges that a deed of option has been executed by an entity, OAMPS Limited in contemplation of a proposed purchase by the latter from Rogan of the particular name rights.  Rogan alleges that Rushton is not obliged to give its consent and execute a deed of option for the purpose of clause 13 of the agreement.  Rushton has filed a detailed defence in the Victorian proceeding denying that it is obliged to consent to or execute a deed of option for the purposes of clause 13.  In particular, Rushton alleges that Rogan is in breach of obligations under the agreement and that such breaches are the subject of the first Queensland proceeding.  Rushton also filed a counterclaim seeking declaratory relief that they are entitled to reasonably withhold their consent and that any consent is subject to Rogan not being in breach of obligations under the agreement. 

The Agreement

1. Clause 13 of the agreement recites the option already referred to.  Clause 11 provides that where a party is in breach notice may be served by the non-defaulting party on the other party specifying breach and requiring remedy of such breach within 14 days where appropriate.  In the event of failure to remedy the subject breach, clause 11.3 of the agreement requires the dispute to be referred to an arbitrator.  The reference to an arbitrator in the agreement is cast in mandatory terms.  It is not apparent why the disputes between the parties have been brought in forums other than before an arbitrator pursuant to clause 11.  Interestingly enough, clause 11.4 provides that an arbitrator shall be nominated in the absence of agreement by the President for the time being of the New South Wales Law Society.  The nexus wth New South Wales is not apparent. 

1. Clause 20.2 of the agreement is an exclusive jurisdiction clause.  It provides that the agreement is governed by the laws of Victoria and that the parties submit irrevocably to the exclusive jurisdiction of Victoria.  Clause 20.2(c) provides that the parties waive any objection to forum on the ground of inconvenience. 

The Cross-Vesting Application

1. Rushton, by way of summons, seeks orders that the Victorian proceeding be cross‑vested pursuant to s.5(2) of the Jurisdiction of Courts (Cross-Vesting) Act (Vic) 1987 to the Supreme Court of Queensland.  The summons also contemplated a stay of the Victorian proceeding pending the determination of both Queensland proceedings.  However, the stay application was not pursued before me. 

1. The grounds upon which reliance is placed by Rushton for its cross-vesting application are two fold.  

1. First the Victorian proceeding is related to proceeding 10771/01:

(a)This proceeding arises out of the same Sale of Business Agreement between the parties which is in issue in proceeding first Queensland proceeding.

(b)A number of the parties are common to both proceedings.

(c)There are common issues in both proceedings including whether or not the agreement was varied by a memorandum of understanding. This allegation is made and denied.

(d)A second issue common to all proceedings is whether Rogan are in breach of their obligations owed to Rushton.  That issue is the central issue in the first Queensland proceeding. Breach is denied by Rogan in the Victorian proceeding and in the first Queensland proceeding).

(e)Whether or not Rogan are in breach of their obligations is a question required to be decided in this proceeding. That question is anterior to the question of if in breach, are Rogan entitled or disentitled to relief having regard to:

(i)terms to be implied; and/or

(ii)equitable considerations relevant to the discretion to grant or deny relief.

(f)Rushton in the first Queensland proceeding seek declaratory and other relief the effectiveness of which is likely to be called into question or inhibited by an order for specific performance as is sought by Rogan in this proceeding.

1. Secondly, it was urged on behalf of Rushton that the interests of justice demand this proceeding be cross-vested to the Supreme Court of Queensland having regard to:

(a)The fact there will be an evidentiary overlap and duplication of proceedings involving common issues if the two proceedings go forward.

(b)The desirability of taking steps to guard against the risk of inconsistent findings by two Superior Courts upon the same issues involving the same parties or the majority of such parties.

(c)The fact proceedings in the Supreme Court of Queensland were instituted in 2001 and are ready to be set down for trial.

(d)The fact the Supreme Court of Queensland has the ability to deal with this proceeding expeditiously in conjunction with the first Queensland proceeding.

(e)The fact the plaintiffs in this proceeding have submitted to the jurisdiction of the Supreme Court of Queensland (in the first Queensland proceeding) and have chosen to institute proceedings in that Court arising out of the same agreement (being the second Queensland proceeding.

(f)The fact that if this proceeding is cross-vested and heard with the first Queensland proceeding it is likely to reduce the issues in this case. Such an approach is likely to obviate the need to determine whether the grant of relief sought in this case will impact upon the effectiveness of the Court to grant relief in the first Queensland proceeding and whether, accordingly, this proceeding constitutes an abuse of process.

(g)The desirability of avoiding multiplicity of proceedings.

(h)Duplicated proceedings result in greater costs and waste of the time of Courts and of the parties.

1. It is well established that in determining whether to order a transfer under the cross‑vesting legislation a court must be satisfied as to which court is the “more appropriate forum” for the hearing and determination of the dispute: Bankinvest AG v Seabrook (1988) 14 NSWLR 711, 714, 730; Schmidt v Won (1988) 3 VR 435, 450. It is also well established that the courts regard the “more appropriate forum” as the forum with the “most real and substantial connection” with the subject matter of the proceeding: Bankinvest, supra, 728; Spiliada Maritime Corporation v Cansulex Limited (1987) AC 460, 478. It is also generally accepted that the relevant factors to be taken into account in determining the more appropriate forum include three factors, the governing law of any agreement in dispute, secondly, the connection between the alleged conduct and the jurisdiction, and, thirdly, the cost and convenience for the parties as to the forum selected: see Bankinvest, supra, 729. 

1. A number of affidavits were filed by the Rogan and Rushton interests with respect to this application.  I was also taken to the pleadings in the Queensland proceedings.  It is apparent that the conduct alleged between the parties and the matter of cost and inconvenience falls equally between Queensland and Victoria.  It is not apparent to me from the affidavits filed and the pleadings filed in the two jurisdictions that there is any particular attraction to either jurisdiction subject to two observations.  First of all, the Queensland proceedings are already on foot and are well advanced.  It seems to me generally undesirable that an aspect of the agreement that is the subject of litigation in the Supreme Court of Queensland be determined by the Victorian Supreme Court when that subject on its face could be dealt with readily in the Supreme Court of Queensland.  The second aspect, however, is somewhat troubling.  It is the fact that clause 20 of the agreement subjects the parties to the exclusive jurisdiction of Victoria.  However, there has not been any matter put before this Court to demonstrate that there is a distinction between the law in Queensland and Victoria that would apply to the arrangements or agreements between the parties.  As I observed in Ross Mollison Group Pty Ltd and Anor v The Really Useful Company (Aust) Pty Ltd and Anor (2000) VSC 256 (at para 14) consideration can be given to the fact that no specific aspect of the subject agreement is governed by a law that is unique or peculiar to a particular jurisdiction. As in Ross Mollison, in the present matter there is no Victorian statute that apparently governs the agreement, if any, between the parties. 

1. The parties in the Victorian proceeding have obtained an indication of a trial date for that proceeding of 30 September 2002 on the basis that the matter could be determined in a day.  Since that indication was given the Court has had the benefit of considering the pleadings in both jurisdictions and the affidavits filed in support of and opposition to the present application.  I must say I now have some doubt as to whether the Victorian proceeding could in fact be determined within the limited time of one day.  It may be that the plaintiffs genuinely believe the matter can be disposed of in that day but if, on the other hand there are issues that Rushton wish to ventilate then properly they cannot be denied that opportunity merely because the matter has been fixed for one day.  A further observation is warranted.  The Victorian proceeding was instituted in the Commercial List of the Supreme Court of Victoria.  It is a list that is made available to parties to facilitate expeditious determination of commercial disputes of confined ambit.  It is apparent from the defence and counterclaim filed by Rushton in the Victorian proceeding and the pleadings filed in both Queensland proceedings that many of the issues are interrelated.  It seems to me undesirable that the construction issue as pursued by Rogan in the Victorian proceeding be dissected from the other issues in dispute between the parties that are the subject of the Queensland proceedings.  I observe, also, that the allegations that are the subject of the disputes in the Queensland proceedings occurred some time ago.  For the purposes of the requirements of the Commercial List of the Supreme Court of Victoria those proceedings will in all likelihood be regarded as “stale”, that is, unsuited to the expedition required by the list.  It seems to me that there is a substantial risk, therefore, that if the Queensland proceedings were ultimately transferred to Victoria there can be no guarantee that those proceedings would be heard at the same time as the existing Victorian proceeding. 

1. In the course or argument it became apparent that Rushton was anxious that all proceedings be heard together in the one jurisdiction.  It seems to me that there is much to be said for that view.  Obviously, the pending appeal before the Court of Appeal of Queensland must be determined in that State. 

1. It is apparent that the Queensland proceedings are well advanced.  It is of interest that Rogan was content to institute the second Queensland proceeding in that jurisdiction but, on the other hand, with respect to the subject of the construction of the agreement has issued proceedings in the Victorian jurisdiction. 

1. Weighing all these matters up I am satisfied that it is in the interests of justice that all proceedings be heard at the same time in the one jurisdiction and, if at all practicable, as occurred in the Ross Mollison case there is no special reason why the law of Victoria cannot be applied elsewhere.  Indeed, the parties seem to pay little heed or demonstrate the desire that their disputes be determined in Victoria notwithstanding the terms of clause 20 of the agreement.  I am satisfied, therefore, that the Victorian proceeding should be cross-vested to the Supreme Court of Queensland and I will order accordingly.

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