Young v The NEIL Jenman Group Pty Ltd - [2009] FMCA 947

FEDERAL MAGISTRATES COURT OF AUSTRALIA

YOUNG & ORS v THE NEIL JENMAN GROUP PTY LTD & ANOR

[2009] FMCA 947

TRADE PRACTICES – Whether proceedings should be transferred to the Federal Court.

Federal Court Rules, O.16
Federal Magistrates Court Rules, rr.1.05, 1.06, 4.05, 8.02
Federal Magistrates Act1999 (Cth), ss.3, 18, 39, 40, 45
Trade Practices Act1974 (Cth), ss.52, 86AA, 87

Dow Jones & Company Inc v Gutnick (2002) 210 CLR 575; [2002] HCA 56
Duke of Brunswick v Harmer (1849) 14 QB 185
Genovese v BGC Construction Pty Ltd [2006] FMCA 1507
Kurniadi & Ors v Loh & Ors [2004] FMCA 5
NAQR, NAQS, NASY & NATM v Minister for Immigration [2002] FMCA 271
Rana v University of South Australia (2004) 136 FCR 344; [2004] FCA 559
Skipworth v State of Western Australia and Others (No 2) (2008) 218 FLR 16; [2008] FMCA 544
Verge & Anor v Devere Holdings Pty Ltd & Ors (No. 4) [2008] FMCA 1421
“Y” v Australian Postal Corporation [2005] FCA 1396

First Applicant:

KEVIN YOUNG

Second Applicant:

THE INVESTORS CLUB LIMITED

(ACN 077 935 865)

Third Applicant:

LISSON PTY LTD

(ACN 069 072 742)

First Respondent:

THE NEIL JENMAN GROUP PTY LIMITED

(ACN 063 990 803)

Second Respondent:

NEIL JENMAN

File Number:

SYG 1186 of 2009

Judgment of:

Barnes FM

Hearing date:

31 August 2009

Delivered at:

Sydney

Delivered on:

29 September 2009

REPRESENTATION

Counsel for the Applicant:

Mr A Dawson

Solicitors for the Applicant:

Colin Biggers & Paisley

Counsel for the Respondent:

Mr T Blackburn SC

Solicitors for the Respondent:

Champion Legal

ORDERS

The proceedings be transferred to the Federal Court of Australia under s.39(1) of the Federal Magistrates Act 1999 (Cth).

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
SYDNEY

SYG 1186 of 2009

KEVIN YOUNG

First Applicant

THE INVESTORS CLUB LIMITED
(ACN 077 935 865)

Second Applicant

LISSON PTY LTD
(ACN 069 072 742)

Third Applicant

And

THE NEIL JENMAN GROUP PTY LIMITED
(ACN 063 990 803)

First Respondent

NEIL JENMAN

Second Respondent

REASONS FOR JUDGMENT

On 15 May 2009 the applicants commenced proceedings in this Court alleging that the respondents engaged in misleading or deceptive conduct in contravention of s.52 of the Trade Practices Act1974 (Cth) and, in the alternative, that the publications complained of (consisting of material posted on two websites) conveyed imputations defamatory of Mr Young, the first applicant.
By application in a case filed on 26 June 2009, the respondents seek that the proceedings be transferred to the Federal Court of Australia. Rule 8.02(2) of the Federal Magistrates Court Rules (FMC Rules) provides that “[u]nless the Court otherwise orders, a request for transfer must be made on or before the first court date for the proceeding”. In light of this rule, the respondents’ request for transfer was made on the first court date at a time at which the only material before the Court in the proceedings consisted of the application and statement of claim filed on 15 May 2009. The request for transfer is supported by an affidavit of Geoffrey Mark Roberson sworn on 19 June 2009. It is opposed by the applicants.
The court has power under s.39 of the Federal Magistrates Act1999 (Cth) to transfer a pending proceeding to the Federal Court. The making of such an order is discretionary, but under s.39(3) in deciding whether to transfer a proceeding the Court must have regard to the following matters:
(a)any Rules of Court made for the purposes of subsection 40(2);and
(b)whether proceedings in respect of an associated matter are pending in the Federal Court; and
(c)whether the resources of the Federal Magistrates Court are sufficient to hear and determine the proceeding; and
(d)the interests of the administration of justice.
Consistent with s.40 of the Act, r.8.02(4) of the FMC Rules provides that in addition to the factors required to be considered by the Court under s.39(3) of the Act the following factors are relevant:
(a)whether the proceeding is likely to involve questions of general importance, such that it would be desirable for there to be a decision of the Federal Court … on one or more of the points in issue;
(b)whether, if the proceeding is transferred, it is likely to be heard and determined at less cost and more convenience to the parties than if the proceeding is not transferred;
(c)whether the proceeding will be heard earlier in the Federal Magistrates Court;
(d)the availability of particular procedures appropriate for the class of proceeding;
(e)the wishes of the parties.
In Verge & Anor v Devere Holdings Pty Ltd & Ors (No. 4) [2008] FMCA 1421 Lucev FM considered the construction of these provisions having regard to the purpose and object of the Federal Magistrates Act and FMC Rules and the fact that this court was established to deal with less complex matters previously dealt with by the Federal Court; and thus to ease the workload of the Federal Court and to allow more time for that court to deal with more complex matters as well as to enable “more complex matters” filed in this court to be transferred to the Federal Court (see Verge at [97]).
However, as his Honour pointed out at [98], while this court was established with the purpose of hearing the “simpler, less complex, smaller and high volume cases” leaving the Federal Court (and the Family Court) to hear more complex and longer cases, it “now exercises jurisdiction often concurrent (including concurrent but limited) jurisdiction, with the Federal Court in a number of areas of federal law including various aspects of administrative law, admiralty, bankruptcy, consumer protection (trade practices), copyright, human rights and equal opportunity, migration, privacy and workplace relations” and has associated jurisdiction to deal with common law claims which would often be within the jurisdiction of state superior courts of record (also see Skipworth v State of Western Australia and Others (No 2) (2008) 218 FLR 16; [2008] FMCA 544 at [37] and s.18 of the Federal Magistrates Act). Hence both the Court’s jurisdiction and the complexity of matters heard by it have increased since its inception.
Lucev FM also referred to the fact that while this court was initially not a court of pleadings (see Rana v University of South Australia (2004) 136 FCR 344; [2004] FCA 559 at [75] per Lander J) the FMC Rules were amended in 2007 to provide that a person may commence proceedings by filing a statement of claim or points of claim with an application (as occurred in this case) instead of a supporting affidavit with an application (see r.4.05 of the FMC Rules). Consideration should be given to the factors in s.39(3) of the Federal Magistrates Act and r.8.02(4) of the FMC Rules against this background and in light of the complexity of the proceedings in question insofar as that can be determined at this time.
In essence, these proceedings relate to five separate items posted on one of two websites for which the respondents (the first respondent being a corporation and the second respondent being said to be a director of the first respondent) are alleged to be responsible. The applicants seek declaratory relief, an order that the material be removed from the website, an order restraining publication, a corrective notice, compensatory damages and aggravated damages.
The statement of claim refers to five “publications”’ each of which is said to contain numerous specified representations that are misleading or deceptive or likely to mislead or deceive in particular respects and also to be defamatory of the applicant in conveying various imputations.
It is relevant for present purposes to have regard to the extent of the matters that will have to be determined in these proceedings. The material in question relates to aspects of the business known as “The Investors Club”. While the precise nature of “The Investors Club” will be a matter for determination at trial, counsel for the respondents suggested that it was not a “club” in the conventional sense of that term but rather a business operation where advice and recommendations as to the purchase of properties were provided to prospective property purchasers.
The first publication, “Credibility & The Club” is said to involve five representations to visitors to the website (that the first and second applicants were involved in the sale of properties they each “knew to be over-priced”; that “the first applicant personally obtained a six per cent commission from the sale of properties to members of The Investors Club”; that “the first applicant had agreed, on his own behalf or on behalf of the second applicant to re-purchase a property from a member of The Investors Club and had failed to do so” and that “the second applicant [was] a “front” designed to spruik overpriced properties”). It is alleged that each of these representations was misleading or deceptive as specified and that, in the alternative, the publication was defamatory of the first applicant by conveying three defamatory imputations about him by reason of which he was injured in his reputation and brought into public hatred, ridicule and contempt.
Similarly, the second publication, “Don’t Listen to Lisson” is alleged to contain 24 separate representations which are said to be misleading or deceptive or likely to mislead or deceive in relation to practices of each of the three applicants (for example, that they each “use misleading techniques to lure investors to buy over-priced properties”; deliberately use “the name “The Investors Club” to deceive investors into buying poor quality property at inflated prices”; sell “poor quality properties at over-the-top prices”; were paid by a developer to sell them; particularly target “blue collar workers because they are inexperienced in investment”; charge “an excessive commission in respect of the sale of properties to members of The Investors Club”; knowingly inflate “the price of properties sold to members of The Investors Club by charging outrageous fees”; “say that The Investors Club helps members but abused [a particular person] when she complained to the Club”; and “in 2001 deliberately falsely represented to members and/or potential members of The Investors Club that property values would increase by ten per cent per year”. In the alternative, these representations are said to convey eight imputations each of which is defamatory of the first applicant.
The third publication, “Christine and The Club, Friendship? Support? Financial Freedom? Update: June 4, 2008” is said to contain 16 separate representations about the conduct of either the first or second applicant some of which relate to their alleged dealings with a particular investor and others of which are said to involve representations generally to members and/or potential members, including that “property prices double approximately every seven years”. Again, in the alternative, this publication is said to convey nine imputations each of which is defamatory of the first applicant.
The fourth publication, “The Fake Club Scams” is said to involve some 15 representations about matters which in part relate to the English real estate market, such as the sale of properties known to be overpriced, the dishonest taking of commissions “triple the amount normally charged by real estate agents” which are not disclosed to investors; knowingly making “false claims about property prices”; making “false representations about opportunities to purchase property to the English real estate market”; and establishing “a fake investment club in England”. Again, these representations are said to have been made in relation to each of the first, second and third applicants and, in the alternative, it is alleged that that publication conveyed five imputations each of which was defamatory of the first applicant.
Finally, the fifth publication, “The Investors Club – It’s Not a club, it’s a sales outfit” is said to contain seven representations about either the first or second applicant in relation to matters such as the business practices of the applicants to suggest that the second applicant is “a marketing organisation for property developers” involved in the sale of properties known to be overpriced and, in the alternative, to convey four imputations each of which is defamatory of the first applicant.
Each of the contraventions alleged is said to be continuing. Mr Blackburn for the respondents indicated that, in essence, the respondents’ defence in these proceedings in relation to the trade practices claim will be that to the extent that the alleged representations were made, they were true, and that the defamatory imputations, to the extent that they have been conveyed to an ordinary, reasonable reader, were defensible as being substantially true or as constituting honest opinion, or as having been published on occasions of qualified privilege.
As the respondents contended, the question of whether misrepresentations had been made and constituted misleading and deceptive conduct within s.52 of the Trade Practices Act and whether defamatory imputations have been conveyed, are not identical questions and will require proof of different matters and satisfaction of different standards thus adding to the complexity and length of the proceedings.
The truth or falsity of the alleged misrepresentations and defamatory implications will involve determination of a wide range of issues including the knowledge of each of the applicants in relation to the various matters relied on in the statement of claim, whether the applicant’s advertising material gives a false impression of their operation and, in particular, whether the use of the term “club” gives prospective purchasers a false impression of that entity.
In addition, it was submitted that issues would arise in relation to the extent and gravity of the first applicant’s bankruptcy (the statement of claim refers to the fact that the first applicant is a former bankrupt) that may include whether the first applicant changed his name, the period of his undischarged bankruptcy, whether there had been criticism of his honesty by his trustee in bankruptcy, as well as the specific issue of whether the applicants had behaved dishonestly towards a particular investor, Ms Johns, in addition to the honesty of promises and representations made generally to potential investors.
Thus it was said that the proceedings would involve an examination of all the circumstances surrounding the conduct of the applicants and those to whom they are said to offer property, as well as the extent to which they, their servants and agents have fiduciary obligations to those persons and hence may be involved in breaches of fiduciary duty.
There was also said to be an issue in relation to whether any representations made by the respondents were made in trade or commerce (in particular in relation to the second respondent Mr Jenman).
Mr Blackburn also submitted that extensive expert evidence would be relied on in relation to some of the alleged representations (for example, whether properties offered by the applicants were overpriced; whether there were reasonable grounds for making representations about future increases in property values; and whether properties were of such quality as to be likely to increase in value, or were of poor quality as allegedly represented by the respondents).
In addition, Mr Blackburn told the Court that it was likely that the respondents would cross-claim against the applicants alleging a contravention of s.52 of the Trade Practices Act in respect of misrepresentations said to have been made on “The Investors Club” website.
It was submitted that the nature of these proceedings was such that interlocutory stages would be time consuming. It was suggested that discovery was likely to be extensive as it would have to encompass any documentation that lay behind the applicants’ extensive claims to expert research, including sales evidence, independent rent appraisals, valuations, and investment strategies. The possibility that the parties would not be able to agree on the width of discovery or even categories of discovery was raised.
It was also foreshadowed that interrogatories would be necessary. That would require consideration of s.45 of the Federal Magistrates Act, which provides that interrogatories and discovery are not allowed in relation to proceedings in this Court unless the Court or a Federal Magistrate declares that it is appropriate in the interests of the administration of justice to allow the interrogatories or discovery having regard to matters including the “fair and expeditious” conduct of the proceedings.
As discussed further below, it was also submitted that the issue of whether a fresh cause of action accrued to the applicants on each occasion the material in issue was downloaded was “ripe for reconsideration by the High Court” and that it was at least a significant possibility that the issue would be ventilated at the highest levels of appeal.
The respondents submitted that the ventilation of these issues and the likelihood that the trial would be lengthy (lasting some weeks) were such that the matter would more appropriately be heard in the Federal Court.
The applicants opposed the request to transfer the proceeding to the Federal Court, contending that the respondents had not established that it would be appropriate for the Court to exercise its discretion to transfer the proceeding having regard to the relevant factors.
Mr Dawson for the applicants referred to the fact that the law in relation to when and where a cause of action would arise in relation to material published on the internet was determined by the High Court in Dow Jones & Company Inc v Gutnick (2002) 210 CLR 575; [2002] HCA 56 and submitted that the case did not involve a question of general importance or an unsettled area of the law on that basis.
While it was acknowledged that the FMC Rules required the respondents to request a transfer early, it was submitted that the factual issues raised in this case were no more complex than in any other case heard and determined in this Court. It was also submitted that it could not be said that the case was of such complexity that it was appropriate, having regard to resources, to transfer the matter. Mr Dawson suggested that two weeks would be an adequate time for the hearing on the material presently before the Court. It was acknowledged that it may be otherwise, once a response, defence and affidavits were filed, but contended that at this stage the matter was properly one to be dealt with by the Federal Magistrates Court.
Mr Dawson suggested that this Court’s “informal” approach to litigation may enable discovery or interrogatories (which it was conceded would be necessary) to be limited to those categories truly necessary without the need for extensive interlocutory procedures.
It was also submitted that any issues raised in a cross-claim would overlap with what was in the statement of claim and so would not add significant time to the interlocutory stages of hearing. The procedures of this Court (including the docket system) were said to be such that the matter could appropriately be dealt with by this Court, which had been chosen by the applicants because of its informal approach to litigation and the need for speedy resolution of the issues involved in internet publications.

Complexity

While “complexity” as such is not a factor listed under s.39 of the Federal Magistrates Act or under r.8.02(4) of the FMC Rules, it is relevant to a number of factors to be taken into account in relation to an application for transfer, including the sufficiency of resources of this Court, the interests of the administration of justice, whether the proceeding is likely to involve questions of general importance, whether if the proceeding is transferred it is likely to be heard and determined at less cost and more convenience to the parties, and the availability of particular procedures appropriate for this class of proceeding.

As Lucev FM pointed out in Verge at [103], “[c]omplexity is a fluid concept, not necessarily determined by length or size of case.” In “Y” v Australian Postal Corporation [2005] FCA 1396 at [23], Finkelstein J suggested that one of the purposes of s.39 of the Federal Magistrates Act was to ensure that the Federal Magistrates Court “did not deal with important or difficult cases that were best determined by a superior court of record.” Clearly, the concept of “important” or “difficult” has to be seen in light of the respective jurisdiction of each of the Federal Magistrates Court and the Federal Court and the areas of concurrent jurisdiction, but it is obvious that factors such as the number of causes of action, number of parties, multiplicity of legal and factual issues, plus the possibility of extensive interlocutory issues are all matters which may contribute to complexity, in addition to determination of issues of law that may be said to be of some complexity.
A factor that distinguishes these proceedings from many other proceedings in which there is said to be a contravention of s.52 of the Trade Practices Act is that while there are often other claims made in such proceedings, the additional claim in this case is a substantial claim for defamation. It was suggested that it was relevant that most defamation proceedings in New South Wales are commenced in the superior court of the State, the Supreme Court (albeit the District Court also maintains a specialist defamation list). While the only material before the Court in relation to the scope of the proceedings is the statement of claim, I am satisfied that this is a more complex matter than the usual trade practices matter dealt with in this court. As counsel for the respondents submitted, defamation may give rise to its own interlocutory complexities. Interrogatories are routinely ordered in defamation proceedings. This may give rise to interlocutory disputes of a nature more frequently considered in the Federal Court, utilising the procedures and resources available in that court.
I have had regard to the fact that any cross-claim will arise out of and deal with, in essence, the same factual circumstances and on that basis should not add much to the complexity of the proceedings in terms of the difficulty of the issues involved. However it will add to the number of issues that have to be determined.
There are in this case three applicants and two respondents. The statement of claim refers to five different publications. The contraventions identified are said to be continuing and it is alleged that the representations relate variously to the first, second and third applicants. There are two respondents and it will be necessary to resolve the issue of whether the Trade Practices Act applies to the second respondent in the manner contended for in the statement of claim. While each of the publications are written publications on a website and there will be some common factors, the content of each of the alleged representations is such that there will clearly be a need for a considerable body of evidence, in some cases expert evidence, particularly in relation to the truth or falsity of the various alleged representations.
By way of example, as counsel for the respondents contended, there are a number of issues that on the statement of claim would appear to be central to these proceedings including: whether properties offered by the applicants were overpriced or offered at inflated prices; whether the applicants targeted inexperienced property investors; whether the applicants knowingly inflated the price of properties sold to investors; the honesty of promises and representations made to potential investors that they would become rich through increases in the value of their properties by purchasing through the mechanisms offered by the applicants; and whether the properties offered were of such quality as to be likely to increase in value.
These matters are likely to be the subject of expert and lay evidence at trial and inevitably pre-trial procedures. Interlocutory issues may also arise. I accept that the expert and lay evidence which may be presented in this case is likely to require a substantial amount of pre-trial case management and extensive consideration at trial.
Counsel for the respondents also suggested that it was possible that an issue may arise as to whether in all the circumstances, in particular in relation to the assistance rendered to members of the “club” by “mentors”, the applicants took upon themselves fiduciary obligations. Hence issues of fiduciary duty may have to be resolved in these proceedings. While such issues are dealt with by this Court, this is likely to add to the overall complexity of the matter.
One of the difficulties that faces the Court in assessing this issue is that, as indicated, no response, defence or affidavit evidence has been filed as yet. However, given that the FMC Rules proceed on the basis that it is appropriate to determine an application for transfer on the first court date for the proceeding, it is clearly contemplated that the Court should make such a decision having regard to what may be described as the anticipated complexity of proceedings and the likelihood that certain things may or may not happen as the proceedings progress. In this case I am satisfied that the legal and factual subject matter is complex, that this complexity is likely to be reflected in a trial of significant length, and that this factor weighs heavily in favour of a transfer of the proceedings to the Federal Court.
It is convenient to consider the matters in s.39(3) of the Federal Magistrates Act in light of the above.

Factors referred to in the Rules of Court

Whether questions of general importance are likely to be involved

The first of the factors relevant under r.8.02(4) of the FMC Rules is whether the proceeding is likely to involve questions of general importance, such that it would be desirable for there to be a decision of the Federal Court on one or more of the points in issue. Counsel for the respondents pointed to the fact that this term is apt to encompass a range of considerations (see Verge at [102]) and contended that most of the considerations referred to in Verge were present in this case in circumstances where it was apparent from the applicants’ statement of claim that their case was that a fresh cause of action accrued on each and every occasion on which the allegedly defamatory or misleading or deceptive material was downloaded. The respondents submitted that what was raised squarely in this case was whether every communication of defamatory matter founded a separate cause of action. It was acknowledged that such a principle had been accepted by the High Court in Dow Jones (at [27]), but suggested that the High Court was not closing the door on a reconsideration of the issue.
However, as counsel for the applicant pointed out, such a principle is a “well known and understood common law rule” (see Duke of Brunswick v Harmer (1849) 14 QB 185 (and Dow Jones at [27]). Even if there is a significant possibility that the issue would be ventilated at the highest levels of appeal, Dow Jones is clear in this respect and is binding upon both this Court and the Federal Court in the absence of any distinguishing matter. No suggestion of such a distinguishing matter was raised in these proceedings.
This is not a case in which it has been suggested that there are conflicting authorities or novel issues. The existence of this issue does not establish that the case is likely to involve a question of general importance such that it would be desirable for there to be a decision of the Federal Court on the issue.
However it can be said that there will be a considerable amount of evidence relevant to the remedies sought by the applicants who seek not only removal of the impugned material from the websites and injunctions restraining publication of such material, but also a corrective notice under s.87 of the Trade Practices Act, compensatory damages under that Act and also aggravated damages.

Cost and convenience

It is also relevant to have regard to whether if the proceeding is transferred to the Federal Court it is likely to be heard and determined at less cost and more convenience to the parties than if the proceeding is not transferred. There is no indication that it would be more convenient or less costly for the parties to have the matter heard in the Federal Court rather than in this Court.

When will the matter be heard?

I cannot be satisfied that the proceedings are likely to be heard earlier in this Court than in the Federal Court. Indeed, having regard to the length of the hearing and the listing practices of the courts, it may be that the matter might be heard earlier in the Federal Court. There is simply no evidence before the Court as to when such a matter could be heard in that Court. I do note however that the Federal Court has procedures to “fast track” hearings which may address the desire of the applicants for a speedy resolution.
One of the difficulties in assessing this factor is the disagreement between the parties as to the anticipated length of the hearing. Counsel for the respondents contended that the trial was likely to last some weeks. Counsel for the applicants disputed this and contended that having regard to the fact that the Court could require that both lay and expert evidence be by way of affidavit the hearing could well be completed within a week or two.
However, having regard to the extent of the representations relied on in the statement of claim, the number of parties involved and the defamation issue, I am of the view that the applicant’s estimate may well be unduly optimistic. Insofar as is possible to assess such a matter on the basis of the limited material before the Court, it would seem more likely than not that the hearing would occupy more than 10 days of hearing time. There are some practical difficulties in ensuring that sufficient time is set aside for such a trial in a court with a preponderance of matters requiring shorter hearing times.
In that respect I note the relevance of an assessment of the best use of the respective resources of this court and the Federal Court in the interests of administration of justice. On balance I consider that the likely length of the hearing may mean that it may be heard at an earlier time in the Federal Court which accommodates relatively lengthy trials on a regular basis and is a matter which weighs in favour of the transfer of the proceedings to the Federal Court, notwithstanding that at this stage determination of the length of hearing can be no more than an estimate.

The availability of particular procedures appropriate for the class of proceeding

The respondents suggested that the Federal Court has more appropriate procedures for this class of proceeding. However given the Federal Magistrates Court’s jurisdiction in relation to the Trade Practices Act (and I note that there is no suggestion that orders would be sought that would take the matter outside the monetary limit applicable in this Court under s.86AA of the Trade Practices Act), this factor is neutral in relation to transfer of proceedings to the Federal Court. It must be said however, that if the proceedings were to result in extensive pre-trial procedures then having regard to the purpose for which this court was established such “complexity” would more properly be dealt with by the Federal Court.

Wishes of the parties

The applicants do not want the proceedings transferred to the Federal Court. The respondents wish the proceedings to be transferred. It is appropriate to have regard to the fact that the parties who commenced the proceedings chose to file in this Court. Counsel for the applicants acknowledged that it may emerge that this was a matter appropriate for transfer to the Federal Court depending on the defence, cross-claim or affidavit evidence filed by the respondents. I accept that in some cases it would be preferable to defer any decision on transfer. However in this case, notwithstanding the wishes of the applicants, I am satisfied that sufficient likely complexity in a number of respects has been identified to warrant determination of the issue at this stage so that the docket judge has control of the proceedings at all relevant stages. I have borne in mind that the FMC Rules prima facie require determination of the question of transfer at an early stage based on the likelihood of certain matters occurring.

Pending proceedings in an associated matter in the Federal Court

There are no pending proceedings in any associated matter in the Federal Court.

Resources of the Federal Magistrates Court

While it was not submitted for the respondents that the resources of this Court were insufficient to hear and determine the proceeding, it was submitted that this was a case that would benefit from the resources and procedures available in the Federal Court. However, insofar as mention was made of the docket system in the Federal Court, the same may be said of this court, which has a docket system.
Both parties accept that discovery and interrogatories would be necessary. A declaration under s.45 of the Federal Magistrates Act would be required before discovery and interrogatories would be allowed in this Court. The Court must have regard to whether allowing the interrogatories or discovery would be likely to contribute not only to the fair conduct of the proceedings but also to the expeditious conduct of the proceedings.
Under O.16 of the Federal Court Rules the Federal Court may give leave to any party to require another party to answer interrogatories. It must be said that interrogatories are not the norm in the Federal Magistrates Court. In 2002 Driver FM suggested in NAQR, NAQS, NASY & NATM v Minister for Immigration [2002] FMCA 271 at [5] that the rebuttable presumption in proceedings in this Court that discovery and interrogatories will not be permitted was consistent with the direction in s.3 of the Federal Magistrates Act that the court should act informally and use streamlined procedures. That does not mean that interrogatories cannot and will not be regarded as appropriate in a particular case and the fact that discovery and interrogatories are procedures that are seen by the parties as appropriate in this case is not of itself such as to constitute a basis for a finding that the proceedings are of such complexity that that it is in the interests of the administration of justice that they be transferred to the Federal Court, given the availability of such procedures in this Court.
However use of such procedures has a potential impact on the Court’s resources. Where parties embark on proceedings which involve the use of pleadings and in circumstances where there is a wide range of issues, as in this case, it is not unlikely that if there is a dispute in relation to the scope of pre-trial procedures, such dispute will involve a considerable amount of court time, notwithstanding the ability of the court under r.1.06 to dispense with compliance or full compliance with the FMC Rules in the interests of justice or to apply the Federal Court Rules in whole or in part and modified or dispensed with as necessary under r.1.05(2) of the FMC Rules.
More generally in relation to the sufficiency of the resources of this Court to hear and determine the proceeding, at this stage the matter has not been listed for hearing but the likely length of the hearing in these proceedings and the impact on the time at which other matters will be heard is of relevance. As McInnis FM stated in Kurniadi & Ors v Loh & Ors (2004) FMCA 5 at [15], the issue of resources must be of “paramount concern” to this court. His Honour pointed out that the resources of the court include not only the hearing of applications but also the delivery of judgment in a timely manner.
Hence the possibility of interlocutory proceedings and the likely length of the final hearing, as well as the number of matters that may be raised to be resolved in these proceedings are all relevant to the relative sufficiency of resources of this court (bearing in mind that the alternative is transfer to the Federal Court) to hear and determine the proceeding.
I appreciate that this is being considered at a very early stage in the proceedings (as r.8.02(2) of the FMC Rules requires), but on balance I am of the view that the matters outlined by counsel for the respondents set out above are such as to suggest that the hearing would be likely to be of more than two weeks duration. The possibility of speedy resolution of such a matter is accordingly reduced by virtue of the need to list the matter at a time when a more lengthy hearing can be accommodated. These factors favour a transfer.

The interests of the administration of justice

In Genovese v BGC Construction Pty Ltd [2006] FMCA 1507 Lucev FM suggested that the notion of the interests of the administration of justice was directed to a consideration of the interests of the management of justice, which must mean management by the court of the proceedings pending before the court and having regard to the Rules which require proceedings to be resolved as efficiently and economically as possible and the objects of the Federal Magistrates Act and Rules in relation to the management of cases. Such matters weigh in favour of transfer to the Federal Court.
I have had regard to all of the factors relevant to the application to transfer proceedings. I note that the court has a discretion and that, as Lucev FM pointed out in Verge at [137], the exercise of the discretion “does not require the Court to give equal weight to each factor.”
While there are factors which weigh both for and against a transfer and there is a degree of uncertainty, insofar as most of these factors require a degree of speculation about the likelihood of certain things occurring in the future, on balance I consider that in light of the extent of the matters raised in the statement of claim and the issues that result therefrom this matter is of such complexity and would involve such a quantum of court time that it is in the interests of the administration of justice that it be transferred to the Federal Court.
As indicated above, in accordance with r.8.02(2) of the FMC Rules the application for transfer was brought on before the Court at the earliest occasion. The downside of such an approach is that the Court is put in a position where it is asked to exercise its discretion on the basis of incomplete information. It would be open to the Court to defer determination of this application (as foreshadowed by counsel for the respondents were the application not to succeed), but while in some cases that would be appropriate, in this case I am satisfied that it is in the interests of the administration of justice that this more complex matter ought to be transferred to the Federal Court as the court best equipped and intended to deal with more complex matters. Hence, insofar as possible, all aspects of the proceedings should be dealt with by that Court.

I certify that the preceding sixty-five (65) paragraphs are a true copy of the reasons for judgment of Barnes FM

Associate:

Date: 29 September 2009