Wesoky v Village Cinemas International Pty Ltd

[1999] FCA 1386

FEDERAL COURT OF AUSTRALIA

Wesoky v Village Cinemas International Pty Ltd [1999] FCA 1386

CHARLES J WESOKY & ANOR V VILLAGE CINEMAS INTERNATIONAL PTY LTD

N 816 OF 1999

MATHEWS J
SYDNEY
30 SEPTEMBER 1999

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N 816 OF 1999

BETWEEN:

CHARLES J WESOKY
First Applicant

ICFC, LLC
Second Applicant

AND:

VILLAGE CINEMAS INTERNATIONAL PTY LTD
Respondent

JUDGE:

MATHEWS J

DATE OF ORDER:

30 SEPTEMBER 1999

WHERE MADE:

SYDNEY

THE COURT ORDERS THAT:

1.The proceeding be transferred to the Victorian Registry of this court;

2.The matters raised in the applicants’ notice of motion dated 16 September 1999 be stood over to be dealt with by the docket judge in Melbourne;

3.The further conduct of these proceedings be stayed unless the applicants provide, within 14 days, to the satisfaction of the Registrar of the Court, security for the respondent's costs in these proceedings in the sum of $10,000;

4.The respondent seek any particulars of the applicants’ statement of claim on or before the close of business on 8 October 1999;

5.The applicants furnish such particulars on or before 15 October 1999;

6.The respondent's defence be filed and served within two weeks after receipt of the particulars as sought;

7.The costs of today be reserved, with the exception of the respondent’s costs referable to the transfer of the proceedings, which are to be paid by the applicants.

Note:   Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N 816 OF 1999

BETWEEN:

CHARLES J WESOKY
First Applicant

ICFC, LLC
Second Applicant

AND:

VILLAGE CINEMAS INTERNATIONAL PTY LIMITED
Respondent

JUDGE:	MATHEWS J
DATE:	30 September 1999
PLACE:	SYDNEY

REASONS FOR JUDGMENT

1. This is the first directions hearing of this matter.  Two notices of motion are before the court: one from the applicants seeking that the hearing of the proceedings be expedited, and that there be immediate discovery in the proceedings as sought by the applicants' solicitor's letter dated 16 September 1999.  The applicants also seek directions as to the further progress of these proceedings.

2. The respondent has filed a notice of motion seeking that the application be transferred to the Victorian registry of the court, and also seeking an order that the applicants provide security for costs in the amount of $77,350.

3. The logical sequence for dealing with these various applications is to commence with the application for a transfer of the proceedings.  For if, as I believe to be the case, this order should be made, then some of the other matters should appropriately await direction from the judge who will ultimately be dealing with the matter.

4. The application for transfer of proceedings is based, as is usually the case, on the balance of convenience.  In this case, the respondent and, more significantly, the respondent's officers who are familiar with this matter and are likely to be giving evidence at the hearing, are all based in Melbourne.  Insofar as they are not in Melbourne, they reside outside Australia.  None of them is based in Sydney.

5. The first applicant lives in Rome, although his home and much of his assets appear to be in the United States.  He has no residential or other contact with Australia, and the only reason for commencing the case in Sydney was that when he visited Australia, he consulted Sydney solicitors and sought the services of a Sydney-based expert to advise on issues relating to damages.  When he took this step, he would have been well aware that the respondent's relevant officers were all based in Melbourne.

6. It is clear that the balance of convenience favours the transfer of the proceedings to Melbourne.  It is also preferable, in my view, that they be transferred immediately so that the judge who ultimately hears the matter will have the conduct of the proceedings throughout.  In this regard, there are a number of outstanding interlocutory issues which will need to be raised before the hearing, and which should ideally be dealt with by the docket judge.

7. Amongst these is an application on behalf of the applicants that the proceedings be expedited.  The grounds for expedition were ventilated before me today by Mr Slattery QC on behalf of the applicant.  I think it unnecessary to go through them here.  Undoubtedly they will be ventilated again before the docket judge in Melbourne.  Suffice it to say that it is not, in my view, a case of pressing urgency.  On the other hand, I can understand the applicants' desire that the matter be dealt with and that at least certain issues of law be determined as soon as possible.

8. Accordingly, I propose to stand over the notice of motion seeking an expedited hearing. 

9. The applicants' notice of motion relating to discovery will also need to be adjourned.  It would appear from the available affidavit evidence that the documents sought are extremely broad.  I think there is much to be said for the suggestion made by Mr Drummond, for the respondent, that discovery take place according to categories.  However, in my view it is premature to deal with the issue of discovery at this stage.  Particulars have not been sought or provided and a defence has not been entered.  Accordingly, although Mr Slattery says that the parties are well aware of the issues between them, it is certainly not a matter which is self-evident to the court.  Accordingly, the whole of the matters raised in the applicants' notice of motion dated 16 September, namely that the proceedings be expedited and that there be discovery by the respondent, will be stood over and may be raised again before the docket judge in Melbourne.

10. The respondent's notice of motion, as already mentioned, seeks not only that the application be transferred to Victoria (an order I propose to make), but also that the first and second applicants provide security for costs in the amount of $77,350.  That amount is detailed (if that is the correct word to use) in the affidavit of the respondent’s solicitor, Henrick Lassen, sworn on 21 September 1999.  The total anticipated professional costs of the respondent's solicitor is said to be $40,000, with anticipated disbursements of $37,350.

11. Mr Slattery opposes the making of an order for security.  He acknowledges that this is the normal order in relation to a non-resident applicant with no local assets, but says that this case raises special features.  In this regard he relies on an affidavit of the applicants’ solicitor, Gregory Duffy, sworn on 29 September 1999, in which some reference is made to property held by one of the applicants in the United States.  Mr Wesoky, the first applicant, also undertakes in the affidavit to consent to any judgment in the respondent's favour in these proceedings, being entered against him and the second respondent in any court in the United States of America where their assets are located.

12. There is an immediate problem in accepting an undertaking of this nature.  By the time the undertaking would need to be fulfilled, the proceedings before this court would of necessity be completed and the court would have no practical way of enforcing any failure to meet it.  On the other hand, the respondent is continuing to pay to the first applicant a significant amount of money – approximately $28,000 per month – under the consultancy agreement between them.  The money is paid to the applicant in the United States, and is therefore not a local asset.  Accordingly, the fact of its payment does not affect the respondent's right to obtain security for costs.  But it does provide a potential means whereby agreement might be reached between the parties for an acceptable method of providing security.

13. Mr Slattery has (rightly in my view) pointed out that it is inappropriate at this early stage of the proceedings to make an order for security in an amount which will take the proceedings through to finality.  It would be appropriate for sequential orders to be made, and for an order at this stage to cover the respondent's costs up to the closure of pleadings.  The amount which I propose to order is $10,000.  It goes without saying that the respondent will be able to make further application as the proceedings progress.

14. In the event, the orders I propose to make are those I have already indicated, together with directions relating to the future conduct of the matter.  The orders I make are as follows:

    ·     that the proceeding be transferred to the Victorian Registry of this court;

    ·     that the matters raised in the applicants’ notice of motion dated 16 September 1999 be stood over to be dealt with by the docket judge in Melbourne;

    ·     that the further conduct of these proceedings be stayed unless the applicants provide, within 14 days, to the satisfaction of the Registrar of the Court, security for the respondent's costs in these proceedings in the sum of $10,000;

    ·     that the respondent seek any particulars of the applicants’ statement of claim on or before the close of business on 8 October 1999;

    ·     that the applicants furnish such particulars on or before 15 October 1999;

    ·     that the respondent's defence be filed and served within two weeks after receipt of the particulars as sought;

    ·     that the costs of today be reserved, with the exception of the respondent’s costs referable to the transfer of the proceedings, which are to be paid by the applicants.

I certify that the preceding fourteen (14) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Mathews.

Associate:

Dated:            8 October 1999

Counsel for the Applicant:	Mr M Slattery, QC, Mr JM Hennessy
Solicitor for the Applicant:	Michael Frankel & Company
Counsel for the Respondent:	Mr J Drummond
Solicitor for the Respondent:	Gilbert & Tobin
Date of Hearing:	30 September 1999
Date of Judgment:	30 September 1999