Takla v Dennis - [2011] WASC 79

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: TAKLA -v- DENNIS [2011] WASC 79

CORAM: SIMMONDS J

HEARD: 21 MARCH 2011

DELIVERED : 21 MARCH 2011

FILE NO/S: CIV 2879 of 2010

BETWEEN: GEORGE KAMEL TAKLA
Plaintiff
AND
JOHN STRICKLAND DENNIS
Defendant

Catchwords:

Courts - Application to transfer Supreme Court proceedings to Federal Court - Crossvesting legislation - Whether in the interests of justice - Turns on own facts

Legislation:

Jurisdiction of Courts (Cross-vesting ) Act 1987 (WA), s 5

Result:

Application granted

Category: B

Representation:

Counsel:

Plaintiff: Mr A Metaxas
Defendant: Mr C M Slater

Solicitors:

Plaintiff: Metaxas & Hager
Defendant: Kott Gunning

Case(s) referred to in judgment(s):

Elias & Elias Pty Ltd as Trustee for The Elias Family Trust v Chidiac [2010] NSWSC 1364
Martin Bruce Jones and Darren Gordon Weaver and Andrew John Saker as Receivers and Managers of Narrogin Beef Producers Pty Ltd (Receivers and Managers Appointed) v Narrogin Beef Producers Pty Ltd (Receivers and Managers Appointed) [2010] WASC 327

SIMMONDS J:
(This judgment was delivered extemporaneously on 21 March 2011 and has been edited from the transcript.)

The present application is by Chamber Summons under the Jurisdiction of Courts (Cross‑vesting) Act 1987 (WA) (the Act) to transfer proceedings in this Court to the Federal Court.
The application is also to consolidate this action, if it is transferred, with Federal Court proceedings to which the parties to this action as well as a company, Chambers Investment Planners Pty Ltd, are the parties (WAD 292 of 2010).
It was conceded at the end of argument by counsel for the applicant that the consolidation order should, if a transfer order is made, not be made.
The argument before me principally centred upon whether or not the defendant in the State proceedings, the ones in this court, who was the applicant for the transfer order, had indeed provided a basis upon which it could be determined, consistently with the authorities on transfer and the other material properly before the court, that it was appropriate in the interests of justice to make the transfer.
It was accepted that it was not necessary for the defendant, the applicant for the order, to, as it were, make out its case in those proceedings. On the other hand, it was necessary, so the plaintiff, the respondent to the present application, submitted, for the applicant to establish at least a basis upon which it could be determined that the claim in the other jurisdiction in the Federal Court was of a character and the proceedings were of a nature where it could be posited that it was appropriate in the interests of justice that the matter be transferred.
I accept, without finally deciding, that the affidavit evidence in support needs to be of that character and, in particular, the affidavit evidence of the party to the proceedings in the other court who wishes the transfer, a person I called the applicant or the defendant to the proceedings in the State court.
It seems to me, however, that that evidence is appropriately to be read with the issues as framed, to the extent they are framed, by the pleadings both in this court and the other court, and, in the absence of it being apparent that the claims being made in the other proceedings are colourable, to draw from that larger body of material, comprising both the affidavit evidence of the party seeking the transfer and the other material as to the nature of the proceedings in the two courts, the conclusions it is necessary to draw in order to evaluate the application.
On that basis, in my view, the defendant's evidence, the applicant's evidence in the affidavit of Mr John Strickland Dennis with its attachments sworn 18 January 2011, read with the statement of claim in the State proceedings and the defence filed in relation to that statement of claim, as well as the statement of claim in the Federal Court proceedings and the defence filed in the Federal Court proceedings which was annexed to the affidavit of Ms Catherine Louisa Sadleir in support of the defendant's application for transfer, an affidavit sworn 21 March 2011, is sufficient, in my view, with the factors that I will shortly review to make the case for granting an order for transfer and I would do so.
The balance of these reasons explain the way in which I have arrived at that conclusion in the exercise of my power to order the transfer under s 5(1)(a)(iii) of the Act, it being accepted that that is the relevant statutory reference for this purpose.
In order to provide those reasons, I must firstly shortly describe the nature of the proceedings in the two courts before indicating the bases upon which an application of this kind should be approached and, in particular, the considerations relevant to the transfer application in this case.
The proceedings in the State court arise - as counsel for the plaintiff in those proceedings, the respondent to the application to transfer, properly reminded me - as an action for partition and sale between two co‑owners: the plaintiff with a co‑ownership interest in the nature of three‑tenths interest and the defendant, the applicant for the transfer, who holds the balance, so far as the title for the property is concerned, as appears on that title. That property is lot 44 on strata plan 8137, being the whole of the land comprised in certificate of title, vol 1957, folio 297 (the Property).
The action in the State proceedings in that respect is under s 126 of the Property Law Act 1969 (WA), and that section gives the court discretion to order a sale of land in an action for partition by co‑owners where the sale would be for the benefit of the parties interested. The discretion is of a broad character.
The action in the State court is, however, larger than that. It is also an order for repayment of a loan plus unpaid interest and, as well, there is also joined in the State proceedings a claim for the payment of unpaid rent agreed to be paid, so the statement of claim pleads, by the defendant who is occupying the premises to the exclusion of the plaintiff.
The defence seeks to oppose, to the sought relief for partition and sale, what is pleaded to be the true agreement between the parties at or about the time that the Property in question was acquired and the co‑ownership interests established, and that agreement is one of some little complexity.
It provides for, or it appears that it had features including, a loan made by the plaintiff to the defendant, as to which it is therefore some measure of common ground that a loan was made, if not as to the amount or its precise terms.
As well, rather than a rental arrangement in respect of the plaintiff's interest in the Property, the agreement was that the defendant would make payment to the plaintiff by way of interest on what it had cost the plaintiff to acquire its co‑ownership interest. Provision is also made for the repayment of the loan, including amounts paid by way of monthly interest, and payment out of what it had cost the plaintiff to acquire its co‑ownership interest, again allowing for monthly interest payments, as I have described them, as well in both cases as what is referred to as modest supplemental interest amounts, in return for which the plaintiff would transfer its interest to the defendant.
To allow for all of this to occur, or otherwise as features of the arrangement, there was to be no obligation to make the interest payments referred to if the personal financial circumstances of the defendant prevented this, and, in any event, there was to be a reasonable time allowed for the buy‑out concerned.
Founded on all of this, the defendant pleads, is the position that it would not be appropriate for the court in the exercise of its discretion to order a partition and sale. The matter of unpaid rent on the plaintiff's claim would fall away, as would follow from the pleadings that I have described.
The defendant also pleads in the State proceedings that it has commenced proceedings in the Federal Court for damages and he claims to set off against any amounts the plaintiff succeeds in recovering on his claim all amounts the defendant recovers in those proceedings in the Federal Court against the plaintiff.
In the Federal Court the defendant in the State proceedings, Mr Dennis, is plaintiff. He is suing in the Federal Court proceedings both the plaintiff in the State proceedings, Mr Takla, and Chambers Investment Planners, and the basis for the claim is an advice relationship which Mr Dennis claims he was involved in from a date in 1999 onwards with Chambers Investment Planners and with Mr Takla as representative of that company, under which financial advice was to be provided through Mr Takla to Mr Dennis, advice which was concerning agricultural products and tax‑effective vehicles but which also, as pleaded in the statement of claim in the Federal Court, extended as well to the joint or co‑ownership interests in the Property, the subject of the principal claim, perhaps, in the State proceedings.
In the Federal Court proceedings Mr Dennis pleads that advice was given in a form which represented a breach of contractual relations, of a duty of care, of fiduciary duties, and that it also constituted misleading or deceptive conduct within the meaning of the Australian Securities and Investments Commission Act 2001 (Cth), s 12DA, and breaches of statutory duties with respect to advice suitable to the client's financial circumstances and warnings as to advice to be given where there is inadequate financial information under the Corporations Act 2001 (Cth), s 945A and s 945B.
On a close reading of the pleadings in the Federal Court, being the statement of claim, it is evident to me that it is pleaded that the advice which the pleader says Mr Dennis received in respect of the Property, the subject of the State proceedings, was defective advice for which there is the remedy sought in the Federal Court proceedings, or the remedies sought in the Federal Court proceedings, on all of the grounds that I have described.
The defence in the Federal Court proceedings includes that whatever was the advice that Mr Takla gave Mr Dennis, it was not pursuant to any advice relationship Mr Dennis had with Mr Takla or with the company.
It is undoubtedly the case, in my view, that both the State and the Federal proceedings have some distance to go and that the Federal proceedings involve, as well as the issues in respect of the Property that I have referred to larger matters ranging over a wide array of financial investments, in respect of which there will be, I would expect, significant evidence both from the parties and, in my view, from others as to the practice in the financial investment industry.
That evidence from others in the financial investment industry, in my view, reflecting on the pleadings as I have them, will go to the financial circumstances of Mr Dennis over an array of periods, including the period both before, during and after the time at which the Property, the subject of the State proceedings, was acquired, this for the purpose of assessing whether the claims in the Federal proceedings as to the suitability of the advice received are made out, and whether, in the face of what Mr Takla, it is alleged, knew, he had incomplete information such that the warning required by the Corporations Act, s 945B, was called for. That evidence of the experts may also, it seems to me, have a bearing upon what should be made of whatever is established to be the terms of the arrangement between Mr Takla and Mr Dennis with respect to the Property, being the property the subject of the State proceedings.
It follows from that assessment that I have just provided that I believe it has been shown that there is, in respect of the subject matter of the State proceedings, being the co‑ownership interest in the Property as well as the loan which is also referred to in the Federal Court proceedings and the question of a buy‑out of the interest of Mr Takla in the Property also referred to in the Federal Court proceedings, through in all cases that I have just referred to the statement of claim, significant evidentiary overlap.
It was not in argument before me that the Federal Court would not have accrued jurisdiction in respect of the full range of subject matters of the State proceedings under the tests for accrued jurisdiction which, conveniently for my purposes, are to be found in Elias & Elias Pty Ltd as Trustee for The Elias Family Trust v Chidiac [2010] NSWSC 1364 [29] (Brereton J).
I turn then to the question of the bases upon which the present application should be approached. Useful statements of principle in that regard are to be found in a recent judgment of this court Martin Bruce Jones and Darren Gordon Weaver and Andrew John Saker as Receivers and Managers of Narrogin Beef Producers Pty Ltd (Receivers and Managers Appointed)v Narrogin Beef Producers Pty Ltd (Receivers and Managers Appointed) [2010] WASC 327 (the Jones case) as well as Elias & Elias.
From those authorities I would extract the following propositions of significance to me.
The first of these is that a party's choice of forum is not to be approached as if it is a matter which it would be unlikely would be overridden. This is clear from the High Court authority relied upon in the Jones case. Therefore, I do not invest with any significance the fact that in this case, as it is the fact, the Federal Court proceedings were initiated before the State Court proceedings.
Secondly, expressing the matter positively, the court in determining an application of the present kind is to do so by identifying a more appropriate forum and in weighing factors that are relevant for that purpose.
Thirdly, in determining appropriateness the court considers such factors as the location and subject matter of the proceedings, the parties and their witnesses. It is not in dispute here that this factor might be regarded as neutral where the proceedings in the Federal Court are in the Western Australia registry.
Further, one notes the overlap of issues. However, some overlap does not mean that there is a strong argument necessarily that the transfer should be made. For example, the transfer was not ordered in the Jones case where there was a clear issue overlap as between the State and the Federal Court proceedings in that case.
It is also relevant to determine how expeditiously the matter in the proceedings in this court will be resolved by comparison with proceedings in the Federal Court were the matter to be transferred there.
Here, it seems to me that that factor inclines to some extent against transfer. It inclines against transfer because there will be larger issues - I have already indicated in what way they are larger - in the Federal Court relative to the State court and this matter was quite properly pressed hard upon me, in addition to the other matter to which I have referred, by counsel for Mr Takla, the respondent to the present application.
That matter, however, also in my view has to be weighed with the extent to which evidence is expected to be given in both proceedings of the same kind, not only from the parties but from others.
I have already indicated why, in my view, I would expect not only evidence to be given by the parties in both proceedings to do with the lead‑up to and terms of the investment in the Property, the subject of the State proceedings - and I use 'investment' in the broad sense, not necessarily meaning by that financial investment because, of course, that is a major issue in the two proceedings - but as well, as I have previously indicated, evidence from others, I would expect, of an expert kind having to do with the relationship between the parties and its connection to this investment in the Property, the subject of the State proceedings, with the terms that such an investment might have or has been claimed to have by Mr Dennis and, of relevance to the operation of any such investment, the personal financial circumstances of Mr Dennis.
Indeed, the personal financial circumstances of Mr Dennis, for the reasons I have already indicated, are likely to be central to the Federal Court proceedings and to occupy a considerable proportion of the forensic activity in those proceedings.
In balancing all of the matters that I have described, it seems to me that the ones I have last mentioned assume some substantial significance. I repeat what I have said earlier, that no one of the factors is necessarily to be viewed as determinative, the discretion is a broad one and it is not in doubt that it is enlivened in this case.
Weighing all the matters as I have described, I would therefore make the order for transfer that is applied for in this case.