Colan Products Pty Ltd v Luxon Pty Ltd [2002] FCA 1295

FEDERAL COURT OF AUSTRALIA

Colan Products Pty Ltd v Luxon Pty Ltd [2002] FCA 1295

PRACTICE & PROCEDURE – principles to be applied in application to transfer proceedings from New South Wales District Registry to Queensland District Registry.

Federal Court of Australia Act 1976 (Cth), s 48 Federal Court Rules, O 10, r 1(2)(f), O 1 r 4, O 30 r 6 National Mutual Holdings Pty Ltd v The Sentry Corporation (1988) 19 FCR 155, cited. Cycles & Wheelman Pty Ltd v Beltech Corporation Ltd (1988) 80 ALR 279, cited. Squires v Stephenson (1981) 53 FLR 164, cited. COLAN PRODUCTS PTY LTD v LUXON PTY LTD N 231 OF 2002 SACKVILLE J SYDNEY 22 OCTOBER 2002

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY N 231 OF 2002

BETWEEN: COLAN PRODUCTS PTY LTD

FIRST APPLICANT

ATACAMA PTY LTD

SECOND APPLICANT

AND: LUXON PTY LTD

FIRST RESPONDENT

ANDREW LUCAS

SECOND RESPONDENT

ROBERT LUCAS

THIRD RESPONDENT

JUDGE: SACKVILLE

DATE OF ORDER: 18 OCTOBER 2002

WHERE MADE: SYDNEY

THE COURT ORDERS THAT: 1. The application to transfer the proceedings to the Queensland District Registry of the Court be dismissed. 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 231 OF 2002

BETWEEN: COLAN PRODUCTS PTY LTD

FIRST APPLICANT

ATACAMA PTY LTD

SECOND APPLICANT

AND: LUXON PTY LTD

FIRST RESPONDENT

ANDREW LUCAS

SECOND RESPONDENT

ROBERT LUCAS

THIRD RESPONDENT

JUDGE: SACKVILLE

DATE: 18 OCTOBER 2002

PLACE: SYDNEY

REASONS FOR JUDGMENT 1 In these proceedings, the applicants, two related companies, seek relief against the respondents, former employees or agents of the applicants. The applicants' principal complaint is that the respondents breached fiduciary duties owed to the applicants in a variety of ways. In particular, it is said that the respondents entered into arrangements whereby the third respondent "procured the first applicant to make sales [of various products] to the first respondent at less than normal price", thereby enabling the first respondent to onsell the products at a profit. It is also said that the respondents appropriated to themselves trading opportunities available to the first applicant. 2 Prior to the first directions hearing, I asked the representative of the parties to consider whether the proceedings should be transferred to the Queensland Registry of the Court. At that hearing, the respondents' solicitor indicated that he wished to submit that the proceedings should be transferred to the Queensland Registry. The applicants' solicitor indicates that his clients wished the proceedings to remain in the New South Wales Registry. 3 In light of the competing positions, I made directions for the filing of affidavits and written submissions. The directions required the applicants to file their affidavits by 31 May 2002 and the respondents to file their affidavits by 14 June 2002. I indicated that the question of transfer would be dealt with at the next directions hearing, scheduled for 15 August 2002. As it happened, that hearing was vacated and adjourned, by consent, to 17 October 2002. 4 Both the applicants and the respondents filed written submissions prior to the adjourned hearing on 17 October 2002. The applicants also filed an affidavit prior to the hearing, which was read at the hearing. That affidavit establishes that Mr Coghlan, the managing director of the first applicant, has a serious illness which requires ongoing treatment. 5 The respondents did not file any affidavits prior to the adjourned hearing. However, at the hearing Mr Lyons, who appeared for the respondents, sought to file in Court and read two affidavits containing evidence said to support the respondents' submission that the proceedings should be transferred to the Queensland Registry. No notice of these affidavits had been given to the applicants' representatives and the respondents proffered no satisfactory explanation either for their failure to comply with the directions of the Court or to give the applicants advance notice of the contents of the affidavits on which they wished to rely. Moreover, Mr Connell, who appeared on behalf of the applicants, indicated that, subject to instructions, he would have wished to cross-examine the deponents on certain assertions made in their affidavits. In these circumstances, I declined to permit the respondents to read the affidavits. 6 Section 48 of the Federal Court of Australia Act 1976 (Cth) ("Federal Court Act") provides as follows: "The Court or a Judge may, at any stage of a proceeding in the Court, direct that the proceeding or a part of the proceeding be conducted or continued at a place specified in the order, subject to such conditions (if any) as the Court or Judge imposes." 7 The Federal Court Rules ("FCR"), O 10, r 1(2)(f), provide that at a directions hearing the Court may direct that the "proceedings be transferred to a place at which there is a Registry other than the then proper place". In the absence of contrary intention, the expression "proper place" means the place at which the proceedings were commenced or, where there has been a transfer, the place to which the proceedings were transferred: FCR, O 1 r 4. The FCR, O 30 r 6(2) empowers the Court, on the application of a party or on its own motion, to direct that the trial be fixed at a place other than the proper place. 8 The principles governing the Court's exercise of the powers conferred by s 48 of the Federal Court Act and by the Rules to which I have referred, were stated by the Full Court in National Mutual Holdings Pty Ltd v The Sentry Corporation (1988) 19 FCR 155, at 162: "The power conferred by s 48 recognises the national character of this Court. The factors which the Court is entitled to take into account in considering whether one city is more appropriate than another for interlocutory hearings or for the trial itself are numerous. The Court must weigh those factors in each case. Residence of parties and of witnesses, expense to parties, the place where the cause of action arose and the convenience of the Court itself are some of the factors that may be relevant in particular circumstances. The balance of convenience will generally be a relevant consideration, but not necessarily determinative of each case. A party commences a proceeding by filing an application in a particular registry of the Court. If that party or another party wishes to have the proceeding conducted or continued in another place he may apply to the court for an order under s 48 or O 10, r 1(2)(f) or O 30, r 6 as the case may be. There is no onus of proof in the strict sense to be discharged by the party seeking to conduct or continue the proceedings elsewhere … The Court must, however, be satisfied, after considering all relevant matters, that there is sound reason to direct that the proceeding be conducted or continued elsewhere. Its starting point is that the proceeding has been commenced at a particular place. Why should it be changed? On the one hand, if the party who commenced the proceeding chose that place capriciously the Court would be justified in giving no weight to the choice of place. At the other end of the scale, a proceeding may have continued for some time at the place of commencement with many steps having been taken there, for example, filing of pleadings and affidavits, discovery and inspection. Due weight should be given by the Court to such matters before directing that the proceeding should continue at a different place. The balance of convenience is important, but its weight must vary from case to case. Ultimately the test is: where can the case be conducted or continued most suitably, bearing in mind the interests of all the parties, the ends of justice in the determination of the issues between them, and the most efficient administration of the court? It cannot and should not, in our opinion, be defined more closely or precisely." See also Cycles & Wheelman Pty Ltd v Beltech Corporation Ltd (1988) 80 ALR 279, at 281-282, per Gummow J. 9 The applicants submitted that the proceedings had been regularly commenced in the New South Wales District Registry and that no sound reasons had been shown to transfer them to the Queensland Registry of the Court. The applicants acknowledged that the conduct alleged against the respondents took place very largely, if not entirely outside New South Wales. They relied, however, on several factors to support their contention that the proceedings should not be transferred: · the first applicants' principal place of business is in Sydney; · the directors of the applicants, including the two principal witnesses, live in Sydney; · one of those witnesses, Mr Coghlan, has a serious illness and would find it difficult to travel; and · none of the applicants' other witnesses lives in Brisbane. 10 Mr Lyons pointed out on behalf of the respondents that there is no "demonstrated nexus" between the allegations in the statement of claim and New South Wales. He also relied on the fact (as might be inferred from the statement of claim itself) that the first respondent has its principal place of business in Queensland and that the second and third respondents are residents of Brisbane. Both the second and third respondents, so it can be inferred, will give evidence in the proceedings. 11 The evidence bearing on the possible transfer of the proceedings is sparse. I am prepared to accept that the first applicant's principal place of business is in Sydney and that the directors of the applicants, including the two principal witnesses, live in Sydney. The evidence clearly establishes that Mr Coghlan has a serious illness and will find it difficult to travel. 12 So far as the respondents are concerned, I am prepared to accept that the first respondent's principal place of business is in Queensland and that the second and third respondents are residents of Brisbane. I also accept that the second and third respondents will give evidence in the proceedings. 13 On the basis of the factors I have identified, I do not think a case has been made out for the transfer of the proceedings to the Queensland Registry. The balance of convenience so far as witnesses is concerned does not clearly point to one venue rather than another. Nor do I think there is a basis for concluding that the applicants acted "capriciously" in choosing to institute the proceedings in the New South Wales Registry of the Court: cf Squires v Stephenson (1981) 53 FLR 164, at 176, per Keely J. The allegations made against the respondents in the statement of claim are by no means confined to conduct in Queensland. While the conduct alleged against them seems mostly to have occurred outside New South Wales, it involves activities in a number of Australian States and overseas countries. 14 The respondents, in their written submissions, identify a number of other considerations that they should be taken into account, such as the hardship that would be suffered by them if the trial were to be held in Sydney. For the reasons I have given, however, there is no evidence to substantiate the claim of hardship. Nor is there evidence to support the other claims that are referred to in the respondents' written submissions. 15 On the basis of the material before me, the application of the test stated by the Full Court in National Mutual Holdings v Sentry leads to the conclusion that the proceedings should remain in the New South Wales Registry of the Court. I certify that the preceding fifteen (15) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Sackville.