Technilock (Australia) Pty Ltd & Ors v Mondami Pty Ltd & Anor No. SCGRG 96/1859 Judgment No. 5979 Number of Pages 6 Procedure Courts Jurisdiction

[1997] SASC 5979

COURT IN THE SUPREME COURT OF SOUTH AUSTRALIA DEBELLE J

CWDS
Procedure - courts - jurisdiction - action brought in South Australia for misrepresentation - defendants - Queensland - defendants applied for action to be transferred to the Supreme Court of Queensland - whether trial should be transferred to Supreme Court of Queensland - no evidence transfer would be in the interests of justice - convenience of the parties insufficient to transfer proceeding - application dismissed. Jurisdiction of Courts (Cross-vesting) Act 1987 s5(2), referred to. Maritime Insurance Co Ltd v Geelong Harbor Trust Commissioner (1908) 6 CLR 194; Cope Allman (Australia) v Celermajer
(1968) 11 FLR 488; Pegasus Leasing Ltd v Balescope Pty Ltd (1994) 63 SASR 51; McEntee v Connor (1994) 4 Tas R 18; Pegasus Leasing Ltd v Tieco International (Australia) Pty Ltd (1993) 171 LSJS 292; Bourke v State Bank of New South Wales (1988) 22 FCR 378, applied.

HRNG ADELAIDE, 15 January 1997 (hearing and decision) #DATE 15:1:1997 #ADD 19:2:1997

Counsel for applicants :     Mr J Morcombe

Solicitors for applicants :    Johnston Withers

Counsel for respondents:     Mr M Hoile with Mr G Feary

Solicitors for respondents:    Piper Alderman

ORDER
Application dismissed.

JUDGE1 DEBELLE J

1. In this application the defendants initially applied for orders that the action be stayed on the ground that this court is not the proper forum for the trial of the action, the defendants alleging that the Supreme Court of Queensland is the proper forum. In the alternative, the defendants applied for an order to transfer the action to the Supreme Court of Queensland.

2. When the application was called on for hearing, Mr Morcombe, who appeared for the defendants, abandoned the application to stay the proceedings on the ground that this court is not the proper or convenient forum for the trial of the action. I note in passing that the concession was properly made. In order to obtain the stay, the defendants would have had to satisfy the court that there would be something amounting to vexation, oppression or injustice to the defendants: Maritime Insurance Co. Limited v Geelong Harbour Trust Commissioner (1908) 6 CLR 194; Cope Allman (Australia) Ltd v Celermajer (1968) 11 FLR 488 and Pegasus Leasing Limited V Balescope Limited (1994) 63 SASR 51 at 57. For reasons which will subsequently appear, there is no vexation, oppression or injustice to the defendants in the prosecution of this action in this court. The application to stay would have been unlikely to have succeeded on that ground.

3. I note also that, given the enactment of the uniform legislation providing for the cross-vesting of jurisdiction throughout Australia and recent amendments to the Service and Execution of Process Act, it is open to serious question whether the common law principles as to forum non-conveniens arise in actions wholly within Australia: see McEntee v Connor (1994) 4 Tas R 18. It is unnecessary to determine that question, particularly as the issue was not debated in argument.

4. I turn then to consider the application to transfer this action to the Supreme Court of Queensland. The application is made pursuant to s.5(2) of the Jurisdiction of Courts (Cross-vesting) Act 1987.

5. There are four plaintiffs. The first plaintiff is a company called Technilock (Australia) Pty Ltd. It was incorporated in the State of Queensland and at all material times it carried on business selling products designed to provide security; it had offices in Queensland and in South Australia; it sold its products throughout Australia; and the main office of the company was in Queensland.

6. There are three directors of the company. They are the three individual plaintiffs. There are also shareholders in the company. The plaintiffs Keimeier and McNicholl both reside in South Australia. The plaintiff Tomkins resides in Queensland. All of the individual plaintiffs desire that the action proceed in South Australia. The three individual plaintiffs control the board of Technilock. I infer also from the fact of institution of proceedings that Technilock also desires that the action proceed in South Australia.

7. The first defendant, Mondami Pty Ltd, is a company which is incorporated in South Australia. It has an office in South Australia but the principal activities of that company are now conducted in Queensland. The second defendant, Mr Bacchiaz, is and was at all material times a director and shareholder of Mondami. He resides in Queensland.

8. The plaintiffs allege that Mondami has been granted exclusive rights to market in Australia and New Zealand a product called the Rielda locking system which is manufactured by an Italian company. They allege that at different times the second defendant, Bacchiaz, misrepresented to them the qualities of the Rielda locking system and the opportunities to sell that system in Australia and New Zealand. They further allege that, as a consequence of the alleged misrepresentation, the plaintiffs have at different times invested substantial sums of money in Technilock. When the plaintiffs Keimeier and McNicholl invested in Technilock, they were investing in a company to be formed. When the plaintiff Tomkins invested his money in Technilock, it had been incorporated. The plaintiffs allege that the Rielda locking system is defective and does not have the qualities represented to them by Mr Bacchiaz. They further allege that they, as individuals, have suffered loss and damage as a consequence of the misrepresentations and Technilock has also suffered loss.

9. Each of the plaintiffs Keimeier, McNicholl and Tomkins have invested substantial sums of money in Technilock. They seek to recover those sums and a loss of profits. The claims against the defendants are grounded on the Fair Trading Act of this State and upon the Fair Trading Act of Queensland and the Commonwealth Trade Practices Act. There are also claims in negligence.

10. The action was instituted on 9 September 1996. The application to transfer this action to the Supreme Court of Queensland was issued on 22 November 1996, shortly before the defendants were required to file their defence. The application came on for hearing before Master Bowen Pain on 11 December, who adjourned it to a judge for hearing. The application came on for hearing before Prior J on 20 December and was adjourned to this date. In the meantime, on 20 November 1996, the defendant Mondami had issued proceedings out of the Supreme Court of Queensland. In those proceedings, the defendants are the plaintiffs in this action. Mondami claims the sum of $200,000 which it alleges is due and owing to it by the defendants pursuant to an agreement made between Mondami and Technilock. At this stage, a writ has only been issued. It has not been served, notwithstanding that the writ states that the address of each of the defendants is care of the solicitors for the plaintiffs in this action.

11. It is to be noted also that, when this application came on for hearing before both Master Bowen Pain and Prior J, there was no disclosure on either occasion of the fact of the issue of that writ. The fact that that writ has been issued requires that I determine whether the two proceedings are related. There is nothing in the writ which is issued out of the Supreme Court of Queensland which shows that the proceedings are related other than that there is a reference to an agreement which will no doubt be considered in the course of the action instituted in this court. Nothing has been addressed to me by way of argument which shows that in any respect the proceedings are related. The defendant has not, therefore, discharged the onus of proof to show that the proceedings are related. In any event, whether or not the proceedings are related, it is necessary to consider whether, in the interests of justice, it is more appropriate that the relevant proceedings be determined by the Supreme Court of Queensland rather than by this court.

12. The defendants rely on several grounds in support of their application. First, it is alleged that the agreement executed between Mondami and Technilock provides in clause 8 that "the agreement shall be construed and governed in accordance with and subject to the laws of Queensland". That fact is of no assistance to the defendants at all. This is not a claim which involves the construction and interpretation of the agreement. Instead it is a claim for damages based on alleged misrepresentations and the negligence of the defendants. In any event, even if issues did arise which involve the interpretation of the agreement, this court is capable of applying the law of Queensland in relation to those issues which, as Mr Morcombe acknowledged, is, in all material respects, the same as the law of this State. Clause 8 of the agreement is, therefore, of no assistance to the defendants in this application. The defendants next point to the fact that it is common ground that all of the representations which the plaintiffs allege induced them to incorporate Technilock and invest in it were made in Queensland. The defendant Bacchiaz asserts that his wife was present when the representations were made. That latter fact is denied by the plaintiffs. However, for the purpose of this application, I will assume that what Mr Bacchiaz asserts is correct. The plaintiffs further allege that Mrs Keimeier and Mrs McNicholl were present when the representations were made.

13. The defendant Bacchiaz further asserts that in addition to himself and his wife, it will be necessary to call three other witnesses, Mr Franich, Ms Parker and Mr Harrison. Mr Franich is a chartered accountant in the firm of KPMG Peat Marwick who prepared a report which is annexed to the agreement between Mondami and Technilock. Ms Parker conducts her own business. She prepared a budget and cash flow for Technilock. Mr Harrison is an employee of Technilock and has prepared budgets for the company.

14. In addition, Mr Bacchiaz says he will have to call witnesses from Queensland in relation to products sold by Technilock in Queensland. Mr Bacchiaz further points to the fact that the business affairs of Mondami is, to all intents and purposes, conducted from his home in Queensland and have been so conducted since May 1990. Thus there will be witnesses from both South Australia and Queensland.

15. In addition, a substantial number of books of Technilock are in Queensland and the books of Mondami are, to all intents and purposes, in Queensland.

16. In large part, the submissions made by Mr Morcombe boil down to the contention that a greater number of witnesses will have to be called from Queensland than from South Australia and it is, therefore, more appropriate that the action proceed in Queensland. When courts are determining cross-vesting applications, they will, generally speaking, aim to select the court which, in all the circumstances, most facilitates the course of the litigation. Factors relevant to that decision are the place where the parties reside or carry on business, places where witnesses reside or carry on business, the place where other evidence is located, the desirability of avoiding unnecessary cost, and the law governing the questions which fall for determination in the action: Pegasus Leasing Ltd v Tieco International (Australia) Pty Ltd (1993) 171 LSJS 292, 295-296. The question whether one court is more appropriate than another does not depend merely on questions of suitability and convenience. Regard must also be had to the interests of justice. "The interests of justice" is a phrase which should be read widely. See Bourke v State Bank of New South Wales (1988) 22 FCR 378 at 392-393 and 395-396; Pegasus Leasing Ltd v Balescope Pty Ltd (supra) at 53-54. No submission has been advanced which demonstrates that the interests of justice will be better served by the action being heard in Queensland instead of South Australia other than the asserted inconvenience to witnesses.

17. When considering the interests of justice, it is necessary to identify some objective factor which makes it possible to say that the interests of justice will be better served by transferring proceedings to another court than by not doing so. It is quite impossible in this case to identify any such factor other than the balance of convenience to witnesses. There is no suggestion of any forum shopping on the part of the plaintiffs, nor could there be.

18. I turn to consider the respective convenience of the parties, albeit that in the particular circumstances of this case it is an issue of doubtful relevance. When the position is analysed it will be seen that the balance does not fall clearly from one side or the other. Each of the three individuals of all of the plaintiffs desire that the action be heard in this court. Messrs Keimeier and McNicholl and their wives all reside in South Australia. Mr Tonkin and Technilock agree that the action be heard in South Australia. Mr Harrison is an employee of Technilock and it is for Technilock to decide whether it will bring him to South Australia for the purpose of this action and incur the cost in doing so. It appears he will be a material witness in any event. It appears also that it will be necessary for Technilock and the other plaintiffs to call persons residing in different States of Australia for the purpose of proving their action. It will be as inconvenient for those witnesses to come to this court as it would be to go to the Supreme Court of Queensland. Admittedly the greater part of the business of Technilock is conducted from its office in Queensland but again it is for the plaintiffs to determine whether they will incur the costs in proceeding in this court. It is not a fact upon which the defendants can rely.

19. As far as the defendants are concerned plainly there will be a number of witnesses from Queensland, Mr Bacchiaz, his wife, together with Ms Parker and Mr Franich. I acknowledge also that the books of Mondami are in Queensland. That is not a fact to which much weight can be given. They are conveniently located for Mr Bacchiaz to work upon.

20. Thus, as already mentioned, at the end of the day all that is involved is the question of balancing the relative inconvenience to the parties to travel to one State as opposed to another. In these days of quick and efficient transport and communication, particularly with facsimile transmission, arguments of inconvenience have less force than hitherto. I do not think that there is anything in a relative convenience or inconvenience to the parties which justifies transferring these proceedings to the Supreme Court of Queensland.

21. There are two further reasons why I reach that decision. The first is that I do not think there is any justification for depriving the plaintiffs of their juridical advantage in being dux litis in these proceedings. In these proceedings there are a number of issues going to misrepresentation and negligence. The action which has been instituted in Queensland is nothing but an action to recover a debt. There is no reason why the plaintiff in Queensland could not counterclaim in these proceedings the debt it alleges is due to it. The second reason is that the delay of the defendant Mondami in issuing its claim and, in particular, in its delay in serving those proceedings, does not give rise to any confidence that it will promptly prosecute its action in Queensland. That only serves to underline why the plaintiffs in this action should not be deprived of the capacity to act as dux litis.

22. For all of these reasons the application is dismissed.

23. Order:
    1. Application dismissed.

2. The defendants shall pay the plaintiffs' costs of and
    incidental to the application as taxed and agreed.

3. The defendants file their defence and deliver their defence
    within 21 days hereof.

4. The parties to file and deliver list of documents within 21
    days hereof and inspection within a further seven days.