eben dh oh ons IN THE FEDERAL COURT OF AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRY GENERAL DIVISION BETWEE Ns JUDGE MAKING ORDER: DATE OF ORDER: WHERE MADE: THE COURT ORDERS THAT: l. The proceedings be transferred to the Victorian District FRENCH J. 31 March 1988 PERTH MINUTE OF ORDER Zz ry JUDGME LIMITED DISTRIBUTION WAG 38 of 1986 ARFMAS PTY LTD First Applicant MAURICE JOSEPH RIOLI Second Applicant and VICTORIAN FOOTBALL LEAGUE Respondent ds & Registry, General Division. 2. The motion is otherwise dismissed. 3. Each party is to bear its own costs of the motion. Note: Settlement and entry of Orders is dealt with in Order 36 of the Federal Court Rules. No. J33..2 Bh. JUDGMENT No, N Te eee IN THE FEDERAL COURT OF AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRY GENERAL DIVISION LIMITED DISTRIBUTION WAG 38 of 1986 BETWEEN: ARFMAS PTY LTD First Applicant MAURICE JOSEPH RIOLI Second Applicant and VICTORIAN FOOTBALL LEAGUE Respondent CORAM : FRENCH J. 31 MARCH 1988 EX TEMPORE REASONS FOR JUDGMENT ON MOTION TO CHANGE VENUE AND FOR SECURITY FOR COSTS These proceedings are brought by a footballer and his corporate manager. Maurice Rioli is a name well known in Western Australian football circles. On 30 April 1986 he and his manager, Arfmas Pty Ltd (""Arfmas"), commenced proceedings against the Victorian Football League in the Western Australian Registry of the Federal Court. By their statement of claim, Rioli and Arfmas say that he was resident in Western Australia and played football here for South Fremantle Football Club for a number of years until 1981. He then transferred to Victoria and played for the Richmond Football Club in the years 1982 to 1985 inclusive. In 1985, he Sete... aspen aeRO a dBA 8 SNR he woh ban ahaa Pelt Nina laictte neo 2. says, Richmond's financial difficulties were such that it was unable to meet its commitments to him and agreed to release him to play with the Sydney Swans Football Club which, although based in Sydney, is, like Richmond, a member of the Victorian Football League ("VFL"). According to the statement of claim Rioli and Arfmas made agreements with successive controllers of the Sydney Swans whereby, for a substantial remuneration, Rioli was to play for the Club for three seasons in 1986, 1987 and 1988. He moved to Sydney and resigned from his employment with the Department of Youth, Sport and Recreation in Victoria. However, he alleges, and it is admitted, that the VFL refused to grant him a permit to play with the Sydney Swans. The basis of that refusal, as set out in the amended defence, was that the Sydney Swans had exceeded the limits on players' salaries permitted by VFL Rules. According to Rioli, he then entered into new arrangements with Richmond in 1986 on conditions much less favourable than those secured with the Sydney Swans. The statement of claim alleges that the VFL is a trading corporation, formed in Victoria by a number of football clubs, including Richmond and the Sydney Swans, and that it conducts professional Australian Rules Football competitions for remuneration in Victoria, New South Wales, Western Australia and Queensland. Rather unhelpfully, these allegations are neither admitted nor denied in the defence. 3. Rioli and Arfmas allege that the conduct of the VFL in refuSing a permit was in contravention of ss.45 and 47 of the Trade Practices Act and amounted to "an unlawful restraint of trade at common law". The conduct was also said to amount to "intentional, unjustified and unlawful interference ... with a contract" between Arfmas and Sydney Rules Pty Ltu, the relevant controller of the Sydney Swans. At this stage I make no comment on whether the pleading recited discloses any cause of action, although it is alleged by the amended defence that 1t does not. On 2 May 1986, Muirhead J. made an interlocutory order directing the VFL to grant such permit as might be necessary to enable Rioli to play for the Sydney Swans. That permit was granted but, in the event, Rioli's arrangements with the Club fell through and he reverted to Richmond. On 23 May a further order was made by Muirhead J. rescinding the substantive part of the order of 2 May so that Rioli could be permitted to play with Richmond. The application has progressed to the point that pleadings have been amended, particulars provided and discovery and specific discovery given. The VFL now moves for an order that the proceedings be transferred to the Victorian Registry of this Court. The motion is supported by an affidavit sworn by Jeffrey Michael Browne, who is the solicitor on record for the VFL. According to Browne, 4. whose affidavit was not subject to any contradiction by way of answering affidavit or otherwise, he has engaged senior counsel at the Melbourne Bar. He has interviewed and proofed a number of witnesses on advice from that counsel. Of those he has named only one, Brian Desmond Ward, a solicitor of Melbourne, as a person who will be called to give evidence. However, it is clear from his affidavit that the other persons named are potential witnesses. In addition, he says that it may become necessary for the VFL to call evidence from officers of the Richmond Football Club and the nine other Victorian clubs engaged in the competition. The VFL has also engaged the services of two Melbourne based economists as expert witnesses; they are on retainer and the expense to the VFL of bringing them to Perth would add substantially to the costs of the action. It may also be necessary, it is said, to call evidence from an officer of the Victorian Department of Youth, Sport and Recreation and an officer of the Sydney Swans. All the potential witnesses mentioned are resident 1n or about Melbourne, save for the officer of the Sydney Swans who would, no doubt, be called from Sydney. According to Mr Browne, the cost of bringing these witnesses to Perth would be substantial and a great deal of expense would be associated with their travel and accommodation which could be avoided if the matter were to be transferred to the victorian Registry of the Court. 5. There 1S no answering affidavit filed on behalf of either Arfmas or R1iol1i to indicate what, if any, prejudice the applicants would suffer were the matter to be transferred, and what benefits they would derive from its retention in the Perth Registry. It is common ground and, in any event, a notorious fact, that Rioli is now playing football in Western Australia. It also appears, from the evidence, that the officers of Arfmas are resident in Western Australia. Beyond that, I am unaided by the applicants in my ability to assess the impact of the proposed change of venue upon their interests. The rather disturbing explanation given for the absence of that evidence was that the matter had not been attended to by the relevant solicitor in the office of the solicitors for the applicants, but no application for an adjournment was sought and, after this lapse of time, it is doubtful that such an application would have been granted. The notice for change of venue is brought by reference to s.48 of the Federal Court of Australia Act and Orders 10 and 30 of the Federal Court Rules. Order 10 r.1(2)(f£) empowers the Court in any pending proceeding to:- "(f) direct that the proceeding be transferred to a place at which there is a Registry other than the then proper place. Where the proceeding is so transferred, the Registrar at the proper place from which the proceeding is transferred shall transmit all documents in his charge relating to the proceeding to the Registrar at the proper place to which the proceeding is transferred". 6. Order 30 r.6 provides that:- "(1) Subject to sub-rules (2) and (3), unless the place of trial has been fixed by the Court, the trial of a proceeding shall be at the proper place. (2) The Court on the application of a party or of its own motion may direct that the trial of a proceeding be fixed at a place other than the proper place. (3) In this rule a reference to the trial of a proceeding shall include a reference to any interlocutory hearing in the proceeding". The term "proper place" 1s defined in 0.1 4.4 as:- ""proper place" in relation to any proceeding - (a) where there has been no transfer means the place at which the proceeding was commenced; (b) where there has been a transfer means the place to which the proceeding was transferred." In TVW Enterprises Limited Vv Magna Techtronics (Australia) Pty Ltd (1987) ATPR (Digest) 46,022, I held that the criterion for determining whether or not the proceeding should be transferred to another venue was that enunciated by Pincus J. in Hodder v The Australian Workers Union (1984) 4 FCR 541. That is to say, the applicant for transfer must show a manifest preponderance of convenience in favour of the proposed change. On the material presently before me which largely comprises the uncontradicted evidence of the respondent, and in the absence of any evidence from the applicants, I am satisfied that it has been shown that there is a manifest preponderance of convenience in 7. favour of the Victorian Registry as the place to which this proceeding should be transferred. I propose to order that it be transferred to that Registry. In so ordering, I wish to make it clear that 1f there are elements of any further interlocutory proceedings or elements of the trial 1tself which may conveniently be heard in Perth, it 18 open to either party to make application to an appropriate judge for orders accordingly. At this stage however, the point has been reached where the matter is substantially ready for trial and the balance of convenience is manifestly in favour of it proceeding in Victoria. Subject to such adjyatments as might be made by particular orders in relation to ; y ether interlocutory proceedings or the venue for Raspects of the trial, the appropriate course of action Bhat motion, there is filed an affidavit, again sworn Sf, in which he points out that the annual return of the Rant for the year ended 30 June 1986, shows an excess gs over assets and that share capital and reserves is submitted by Mr Browne, in his affidavit, that ® the company will not cover the cost of a successful action. mfFfFers his estimate that the costs associated with . the proceedings will be approximately $100,000 and 8. that the party/party component will be avnproximately $70,000. That kind of global statement faces the difficulty that 1t 15 not supported by any draft bill of costs and ordinarily, in cases such as this, a detarled break-down of the basis unon which the estimate of costs is arrived at is expected. However, the figures are not contradicted by any evidence from the applicants and I can, I think, infer that the cost of conducting the defence of the proceedings will certainly be substantial and will, iff the matter goes forward to trial, run into tens of thousands of dollars, even if it 1s not as high as the figures proposed by Mr Browne. On the question of the delay that has occurred in seeking this order, Mr Browne said that it has only now become apparent to the respondent that the first and second applicants are determined to proceed given that interlocutory steps are nearing completion and the first and second applicants have not withdrawn. There is nothing in the material to suggest that there was any indication, at any stage in these proceedings, that the first and second applicants were not determined to proceed and in the absence of any such indication, I find it very difficult to accept the explanation proferred. Nevertheless, accepting that the costs will be substantial and that the company is not asset rich, there are discretionary considerations bearing upon whether an order for security should be made, There are two sources of the power for making such an order. One is s.56 of the Federal Court of Australia Act, the er 9. other which 1s relied upon in this case 18 sub-s.533(1) of the Companies (Western Australia) Code 1981, which provides:- "Where a corporation is plaintiff in any action or other legal proceeding, the court having jurisdiction in the Matter may, 1f 1t appears by credible testimony that there 1s reason to believe that the corporation will be unable to pay the costs of the defendant if successful in his defence, require sufficient security to be given for those costs and stay all proceedings until the security 1s given." That section can apply to proceedings in this Court by virtue of s.79 of the Judiciary Act and, in that respect, I refer to Bell Wholesale Company Pty Ltd v Gates Export Corporation 52 ALR 176, Sent v Jet Corporation of Australia Pty Ltd 54 ALR 237. I approach the discretion conferred by s.533 on the basis that it is a general discretion not fettered by any requirement for a predisposition in favour of a grant of an order for security for costs and have regard to various factors that were referred to by Mr Templeman in support of the motion. One of those is the question that has to be taken into account in such an application of whether the order sought would frustrate the applicant's claim. In this case, I cannot assume that the order sought would frustrate the first applicant's claim because there 1s absolutely no evidence as to the effect of such an order upon its ability to prosecute the proceedings. It is also open to the Court to take into account the merits of the applicants' claim and, in that respect, Mr Templeman 10. made reference to the reported view of seniot counsel for the defence that the respondent has a good defence to the action. I do not think that that 18S a factor of any significance in this consideration. What has to be considered is whether the claim 1s bona fide and 1f, prima facie, 1t 1s completely lacking in merit or has questionable bona fides, then that is a factor in favour of the grant of security. As I said to Mr Stevenson in the course of argument, I have considerable difficulty in extracting from the facts pleaded in the amended statement of claim just how it 1s that ss.45 and 47 of the Trade Practices Act are said to apply to the case. However, I have not come to any concluded view on that matter. It is just an expression of difficulty and certainly not a view that would support a conclusion, at this stage, that the applicant's claim is without merit. It is also relevant for the Court to consider whether, if the corporate applicant be impecunious, there is any evidence to show that that impecuniosity can be attributed to _ the respondent. If such is the case, it would weigh against an order for security. Here, there is no such evidence. Indeed, the first applicant has had nothing to say of its finances, beyond such submissions as Mr Stevenson put to me based upon the return exhibited to Mr Browne's affidavit. There is, however, a fourth factor, one which in this case is critical, and that is the matter of delay. It is well established that if an application for security is to be made, it ll. must be made promptly - Foss Export Agency Pty Ltd v Trotman (1959) 67 W.N. (NSW) 1, Buckley v Bennell Pesiqn and Construction Pty Ltd (1974) 1 ACLR 301. As I said, in discussing this principle generally in Brian fF. Fencott and Associates Pty Ltd v Eretta Pty Ltd (No. WAG 83 of 1984; unrep.; French J.; 31/3/87 at 39-40):- "The further a plaintiff has proceeded in an action and the greater the costs it has been allowed to incur without steps being taken to apply for an order for security for costs, the more difficult it will be to persuade the Court that such an order is not, in the circumstances, unfair or oppressive." The first applicant is not assisted in the application of this factor by its resounding silence on the question of any prejudice which might arise from delay. However, the point has been reached where almost all interlocutory proceedings are complete. The case was commenced early in 1986. It is now almost ready for trial. In my opinion, it is far too late in the day for the respondent to seek an order for security for costs from the first applicant and, on that basis, I propose to dismiss the motion insofar as it seeks such an order. I will therefore order that the proceedings' be transferred to the Victorian Registry, General Division and the motion be otherwise dismissed. As to the costs of the motion, it seems to me that one could fairly regard this as something of a draw, but I will hear the parties on that. 12. (The parties made submissions on the questions of costs) I propose to order simply that each party bear its own costs of the motion. I certify that this and the preceding eleven (11) pages are a true copy of the Reasons for Judgment of his Honour Justice French. Associate: "Dolundk Udo Ks Date: By Macd 1988 Counsel for the Applicants: Mr M.J. Stevenson Solicitors for the Applicants: Jackson McDonald Counsel for the Respondent: Mr A.J. Templeman Q.C. with Mr S. Scott Solicitors for the Respondent: J.M. Browne & Co., by their agents Stables & Co. Date of Hearing: 31 March 1988 Date of Judgment: 31 March 1988