S P Hay Pty Ltd v Allcorp Pty Ltd and Anor No. Scciv-02-550

S.P. HAY PTY LTD v ALLCORP PTY LTD and ANOR
[2002] SASC 386
Civil

PERRY J. The proceedings in this matter were commenced by the issue of a summons, to which was attached a statement of claim, on 9 April 2002.
By an application filed on 23 July 2002, the defendants seek orders that the statement of claim “be struck out in its entirety and that the within proceedings be dismissed”, or alternatively that the proceedings be cross-vested to the Supreme Court of Western Australia.
When the application came on for hearing before Duggan J on 2 August 2002, counsel for the defendants intimated that his clients wished to have an opportunity to file an amended defence. At the same time, he intimated that he expected to file shortly thereafter an application under SCR r 46A.09 seeking an order that the plaintiff furnish further facts by way of particulars of its claim. Duggan J directed that any application under SCR r 46A.09 be filed within seven days of 2 August 2002, and subject thereto, adjourned further consideration of the matter to 30 August 2002.
Before that date, the plaintiff took out a specially returnable application to strike out the defence.
On 30 August 2002 the matter came on for hearing before me. I intimated that rather than proceed with the application to strike out the defence, and to proceed any further with the question of the adequacy of the particulars furnished in the statement of claim, it would be better to deal with the cross-vesting application. This was on the footing that if the matter was to be transferred to the Supreme Court of Western Australia, it would be far better that that court had the opportunity of dealing with all interlocutory matters. As a general rule, it is better that interlocutory proceedings be dealt with in the court of trial.
Furthermore, a cross-vesting application should take precedence over any other interlocutory applications.
Later I gave directions as to the filing of affidavits on both sides relevant to the determination of the cross-vesting application, which I then heard on 29 October 2002.
By that time a number of affidavits had been filed, setting out factual matters advanced on both sides which were said to be relevant to the determination of the cross-vesting application.
Background
The plaintiff has its registered office in South Australia. It claims in the statement of claim that its principle place of business is in South Australia. But it has at all relevant times operated hay processing plants in Western Australia, and for the purposes of the present proceedings, its relevant business operations appear to be centred in that State.
The second defendant, Mr Blechynden, is a director and secretary of the first defendant Allcorp Pty Ltd (“Allcorp”). Allcorp is engaged, inter alia, in the buying of hay from hay-growers in Western Australia, and maintains a transport fleet for the delivery of hay to hay processing facilities in that State.
Pursuant to arrangements made in about April 2000, Allcorp commenced acting as agent on behalf of the plaintiff to purchase hay on the plaintiff’s behalf and deliver it to the plaintiff’s processing plant. I use the expression “arrangements” rather than “contract” or “agreement” as there is an issue as to whether there was an agreement, and if so, whether it is wholly evidenced in writing.
At all events, the plaintiff alleges that, amongst other things, it directed the defendants not to purchase hay unless contracts in respect of the purchases were returned or notified to the plaintiff.
In the statement of claim, the plaintiff levels serious accusations of improper conduct against the defendants, which it alleges breached the contract which it asserts was entered into and otherwise acted in breach of its fiduciary duties as agent, in particular in arranging the purchase of hay on behalf of the plaintiff which it delivered to processing facilities other than that operated by the plaintiff. The plaintiff further alleges that in such cases the defendants sold hay purchased on behalf of the plaintiff, secretly receiving and retaining the proceeds of sale.
Separately, the plaintiff alleges that the defendants converted to their own use and/or sold hay to which the plaintiff was entitled, and further, was guilty of misleading or deceptive conduct contrary to the Trade Practices Act.
There were previous proceedings (“the Western Australian proceedings”) between the parties in the Supreme Court of Western Australia. In those proceedings, Allcorp, Mr Blechynden and Blechynden Transport Pty Ltd sued S.P. Hay Pty Ltd (“S.P. Hay”) and three other defendants, including Stewart Barry Price, who is managing director of S.P. Hay.
In the Western Australian proceedings, the plaintiffs claimed damages for alleged misrepresentations associated with the establishment of a new company to be called W.A. Farms Pty Ltd which it was intended would grow, package and export hay to various countries, including Japan and Taiwan. The defendants assert that the Western Australian proceedings were settled on 11 July 2002 in terms of a memorandum signed by the solicitors for the parties setting out the terms of consent orders.
Put shortly, the defendants wished to defend the subject proceedings on the basis that the contract alleged to have been entered into between the parties was no more than a “proposed agreement which was never formalised”. Further, as it is put in an affidavit sworn by Mr Blechynden,[1] that insofar as there were “arrangements” between the parties, all hay sourced by the defendants was dealt with in accordance with the terms of the arrangements; that none of the growers from which hay was obtained assert that there is any outstanding liability to them; and that “much of the subject matter” in the within proceedings form part of the subject matter in the Western Australian proceedings and that given the settlement of those proceedings, could not form the basis of any further claim.
[1] Affidavit of Mr Blechynden filed 23 September 2002, para 22.
In support of the cross-vesting application, the defendants assert that during the period of the alleged agency, hay was purchased in various locations in Western Australia and supplied to S.P. Hay’s processing and baling plant located at Brookton in that State. It alleges that all dealings and arrangements made between the plaintiff and the defendants were made in Western Australia or related to Western Australian hay growers and Western Australian hay products.
The defendants all reside and carry on business in the State of Western Australia. The defendants further assert that the law governing the alleged agency is the law of the State of Western Australia.
S.P. Hay concedes that it may call the growers referred to in the statement of claim as witnesses, there being thirteen such growers.
Furthermore, it seems likely that one party or another will wish to call evidence of discussions leading to settlement of the Western Australian proceedings. Most of those witnesses are resident in Western Australia, notably Mr Kim Shardlow, the manager of S.P. Hay’s baling plant at Brookton and Mr Chris Zelestis QC, S.P. Hay’s Western Australian counsel.
I do not overlook that Mr Jonathon Horton, S.P. Hay’s Brisbane-based solicitor was present at the settlement meetings, as was Mr Price.
The defendants assert that, looking at the matter broadly, there appear to be two potential witnesses located in South Australia, at least 41 in Western Australia and one in Brisbane.
In its submissions, the plaintiff emphasised that its residence and principal place of business are in South Australia. It alleged further that what it asserts to be the agency agreement was entered into in South Australia, and further, that a principal factual issue will be as to the nature of the plaintiff’s instructions to the defendants, and that those instructions were mostly given in South Australia where most of the plaintiff’s business records are housed.
To the extent that it might be necessary to call any of the growers, the plaintiff concedes that they will need to be called by the plaintiff, but it asserts that, given that circumstance, there is no injustice to the defendant if the plaintiff is prepared to pay the cost of them giving evidence in Adelaide.
The plaintiff further asserts that insofar as the plaintiff’s claim is that the defendants made a secret profit, the resolution of this issue will turn primarily on an analysis of documentary evidence, and an examination of the plaintiff (who is resident in South Australia) and the defendant (who is resident in Western Australia).
Relevant Principles
The jurisdiction to make the orders sought arises under s 5 of the Jurisdiction of Courts (Cross-Vesting) Act 1987 (“the Act”). Relevantly, that section provides:
“5.(1) ..............
(2)Where-
(a)................
(b)(i) ..............
(ii)it appears to the first court that having regard to-
(A)whether, in the opinion of the first court, apart from this Act and any law of the Commonwealth or another State relating to cross-vesting of jurisdiction, the relevant proceeding or a substantial part of the relevant proceeding would have been incapable of being instituted in the first court and capable of being instituted in the Supreme Court of another State or Territory; and
(B)the extent to which, in the opinion of the first court, the matters for determination in the relevant proceeding are matters arising under or involving questions as to the application, interpretation or validity of a law of the State or Territory referred to in subsubparagraph (A) and not within the jurisdiction of the first court apart from this Act and any law of the Commonwealth or another State relating to cross-vesting of jurisdiction; and
(C)the interests of justice,
it is more appropriate that the relevant proceeding be determined by that other Supreme Court; or
(iii)it appears to the first court that it is otherwise in the interests of justice that the relevant proceeding be determined by the Supreme Court of another State or of a Territory,
the first court shall transfer the relevant proceeding to that other Supreme Court.
(3).............”
It is common ground that this application falls to be determined under s 5(2)(b)(iii). It follows that the question which I must address is whether it is “otherwise in the interests of justice” that these proceedings be determined by the Supreme Court of Western Australia rather than by this Court.
A number of authorities were cited by Mr Slattery, counsel for the plaintiff. He submitted that although there were differences across Australia in the decisions on the point, the better view was that expressed by Ipp J in Mullins Investments Pty Ltd and Anor v Elliott Exploration Co Pty Ltd and Ors.[2] In that case, Ipp J expressed the view that the expression “the interests of justice” in s 5(2)(b)(iii) does not bear the same meaning as the same expression in s 5(2)(b)(ii). He said:[3]
“It seems to me that the requirement that regard should be had to the particular matters set out in subpars (A) and (B) of s 5(2)(b)(ii) has the effect that the ‘interests of justice’ under subpar (C) would be more readily satisfied that the ‘interests of justice’ under s 5(2)(b)(iii).”
[2] (1989) 1 WAR 531. See also Pegasus Leasing Ltd v Tieco International (Australia) Pty Ltd and Ors (1991) 61 SASR 195, Dawson v Baker and Ors (1994) 120 ACTR 11, Bankinvest AG v Seabrook and Ors (1988) 14 NSWLR 711, Westley v Australian Red Cross Society [1996] 2 VR 24, and Whyalla Refinery Pty Ltd v Grant Thornton (a firm) and Anor (2001) 182 ALR 274.
[3] Ibid 537.
He said elsewhere in the judgment that the Act is not intended “to wipe the slate clean of those rules of the common law which would otherwise be relevant to the decision as to what is an ‘appropriate’ court”.
I agree with the latter observation. But I would not wish to express a view as to question of the meaning of the phrase “interests of justice” in the two contexts in which it appears in s 5(2).
It seems to me unnecessary to offer a view as to that aspect of the matter, as in my opinion, however the matter is to be approached, this is a case in which the cross-vesting application should be granted.
I accept that:
“A party who has regularly invoked the jurisdiction of a competent court has a prima facie right to insist upon its exercise and to have his claim heard and determined,”[4]
[4] Oceanic Sun Line Special Shipping Co Inc v Fay (1988) 62 ALJR 389 per Deane J at 408.
But the plaintiff’s right to choose a jurisdictionally competent jurisdiction in which to commence the proceedings must be balanced against the right of the defendant to invoke the jurisdiction conferred by s 5 of the Act to obtain an order transferring proceedings to another court where it is in the interests of justice to do so.
While the plaintiff’s right to choose the forum in which to initiate the proceedings must be recognised, it cannot be determinative of the outcome of an application for a cross-vesting order under the Act.
In this case, it appears to me that virtually all of the factors which could possibly be regarded as relevant to determination of the question as to where the interests of justice lie are centred in Western Australia. In my view, the Supreme Court of Western Australia will be in a much better position to try these proceedings.
The application to transfer the proceedings to that court must be granted.
I so order.
JUDGMENT CITATIONS
LISTED IN ORDER OF APPEARANCE IN JUDGMENT
1. Affidavit of Mr Blechynden filed 23 September 2002, para 22.
2. (1989) 1 WAR 531. See also Pegasus Leasing Ltd v Tieco International (Australia) Pty Ltd and Ors (1991) 61 SASR 195, Dawson v Baker and Ors (1994) 120 ACTR 11, Bankinvest AG v Seabrook and Ors (1988) 14 NSWLR 711, Westley v Australian Red Cross Society [1996] 2 VR 24, and Whyalla Refinery Pty Ltd v Grant Thornton (a firm) and Anor (2001) 182 ALR 274.
3. Ibid 537.
4. Oceanic Sun Line Special Shipping Co Inc v Fay (1988) 62 ALJR 389 per Deane J at 408.

[2002] SASC 386

26 November 2002