FEDERAL COURT OF AUSTRALIA ACCC v Harvey Norman Holdings Limited (ACN 003 237 545) [2002] FCA 1589 AUSTRALIAN COMPETITION AND CONSUMER COMMISSION v HARVEY NORMAN HOLDINGS LIMITED (ACN 003 237 545) & ORS V 768 of 2002 RYAN J 19 DECEMBER 2002 MELBOURNE IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY V 768 of 2002 BETWEEN: AUSTRALIAN COMPETITION AND CONSUMER COMMISSION Applicant AND: HARVEY NORMAN HOLDINGS LIMITED (ACN 003 237 545) & ORS Respondent JUDGE: RYAN J DATE OF ORDER: 19 DECEMBER 2002 WHERE MADE: MELBOURNE THE COURT ORDERS THAT: 1. The applicant file and serve its response to the Request for Further and Better Particulars of the first to eighteenth and twentieth respondents dated 11 December 2002 by 14 February 2003. 2. The respondents file and serve any Defences by 14 March 2003. 3. The applicant file and serve any Reply by 21 March 2003. 4. There be a further directions hearing on 3 April 2003 to be conducted by videolink or otherwise as the Court may direct. 5. Liberty be reserved to any party to apply on not less than 48 hours notice in writing to the other parties. 6. The costs of all parties of and incidental to the motion on notice dated 5 December 2002 and their costs of the hearing on 13 December 2002 be reserved. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY V 768 of 2002 BETWEEN: AUSTRALIAN COMPETITION AND CONSUMER COMMISSION Applicant AND: HARVEY NORMAN HOLDINGS LIMITED (ACN 003 237 545) & ORS Respondent JUDGE: RYAN J DATE: 19 DECEMBER 2002 PLACE: MELBOURNE REASONS FOR JUDGMENT 1 There is before the Court a motion on notice by the respondents dated 5 December 2002 seeking an order that the proceedings be transferred to the New South Wales District Registry of the Court. The motion is opposed by the applicant. The statement of claim alleges that a Harvey Norman Computers and Communications Catalogue published in or about June 2000 contained representations that were false, misleading and deceptive or likely to mislead or deceive. It is further alleged that similar representations were made in television commercials broadcast at about the same time. 2 The first respondent Harvey Norman Holdings Ltd ("Harvey Norman") is a listed public company incorporated in New South Wales and having its registered office in that State. Some of Harvey Norman's subsidiaries, including the second and third respondents which are incorporated and have their registered offices in New South Wales, are franchisors pursuant to an arrangement under which franchisees have conducted retail businesses throughout Australia under the name "Harvey Norman". Some of the franchisees are corporations. The fifth, sixth, ninth, tenth and eleventh respondents had, from March 2001, changed their registered offices to A-1 Richmond Road, Homebush West, New South Wales and shortly afterwards applications for the voluntary deregistration of those companies were lodged. Thereupon, on the application of the present applicant ("the ACCC"), the Supreme Court of New South Wales ordered the Australian Securities and Investments Commission ("ASIC") to reinstate each of those respondent companies to the register. 3 The seventh, eighth, twelfth, thirteenth, fourteenth and sixteenth respondents appear to be incorporated in New South Wales, but conduct businesses as retail store franchisees in Victoria. The principal officer of five of these six companies is resident in Victoria. The fifteenth respondent is incorporated in New South Wales and conducts business as a retail store franchisee in Queensland. The seventeenth and eighteenth respondents are incorporated, and conduct businesses as retail store franchisees, in New South Wales. The nineteenth and twentieth respondents are persons resident in New South Wales. 4 Mr Forster SC, for all respondents other than the nineteenth respondent, submitted that the officers of the first to third respondents and the nineteenth and twentieth respondents would be the respondents' principal witnesses in these proceedings, that they were all ordinarily resident in Sydney and that, if these proceedings were to be heard in Victoria, undue inconvenience and disruption would be caused to the business activities of the respondents for which those potential witnesses are responsible. I take his submissions to imply also that the respondents would be further disadvantaged if witnesses, whose credit could be a significant issue in the trial, were only able to give evidence by video-link. He further submitted that there was no evidence that particular inconvenience to the ACCC would be caused by the transfer of these proceedings to the New South Wales District Registry. It was noted that the witnesses for the applicant were consumers who were distributed across Australia. Nor, it was submitted, did any evidence point to particular difficulties for the ACCC in briefing solicitors and counsel based in Sydney, or arranging for Melbourne based solicitors and counsel already retained to travel to Sydney as required. He also submitted that the ACCC's administrative choice of Melbourne as the headquarters for its investigations that led to the present proceedings should be accorded little weight in determining the question of the proper place of the application. Mr Forster did, however, properly concede that these proceedings had not been filed in the Victoria District Registry of this Court capriciously and there must be a sound reason for transferring proceedings from one registrywhere they had been properly instituted to another registry. 5 Two affidavits of Peter Wright, sworn on 5 and 11 December, and one of Mr Adrian Shannahan, sworn on 11 December 2002 were read in support of the respondent's submissions. Ultimately, those submissions rested upon the contention that the concentration in Sydney of a significant number of key respondents' witnesses, whose conduct and credit would be important to these proceedings, caused the "centre of gravity" of this matter to be located in Sydney. 6 It is accepted on both sides that the applicable test is that stated as follows by a Full Court of this Court in National Mutual Holdings Pty Ltd v The Sentry Corporation (1998) 19 FCR 155 ("National Mutual") at 162; "The Court must, however, be satisfied after considering all relevant matters, that there is sound reason to direct 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? … Ultimately the test is: where can the case be conducted or continued most suitably, bearing in mind the interest of all the parties, the ends of justice … , and the most efficient administration of the Court." 7 Ms Gordon, of Counsel for the ACCC, made a number of submissions in resisting the respondents' application. In summary, she contended that proceedings had been properly, and not capriciously, commenced in Victoria and that a preponderance of the complaints made by consumers which had prompted the initiation of these proceedings had been received in Victoria. As well, she pointed out, due to an, admittedly proper, complaint by the respondents, the ACCC had already been required to retain new solicitors and counsel and that to do so again would involve significant delay, inconvenience and, presumably, expense. A significant volume of the affidavits filed on behalf of the ACCC had been directed to showing that a number of the respondents, at least at the time of the impugned conduct, had been incorporated and carrying on business in Victoria. An affidavit of Ms Bridget Peck, affirmed 12 December 2002, was read in support of Ms Gordon's submissions. 8 I do not regard as particularly compelling the historical material about where particular respondents were incorporated when the facts giving rise to these proceedings allegedly occurred. Nor, on the other hand, am I persuaded that the presence in Sydney of all or most of the key witnesses for the respondents shifts the "centre of gravity" of the case to that city. As I reminded Counsel in the course of argument, this is a national Court, with the capacity to make flexible arrangements for taking evidence and receiving submissions. If it is inconvenient for witnesses to travel from Sydney, and if they are of sufficient number and importance that receiving their evidence by video-link would be inappropriate, then there is no obstacle to this Court's sitting in Sydney for a day, or a number of days as needed, to take their evidence. 9 As both parties have agreed, the starting position is that once proceedings have been properly commenced in the Victoria District Registry of this Court, a sound reason must be shown for transferring the proceedings to another registry. It is manifest that there will be some degree of inconvenience to each party and to some witnesses as the focus of the Court's attention shifts between Melbourne and Sydney and, possibly, to centres in other States. 10 The facilities available to the Court permit it to conduct directions hearings by telephone or videolink and to receive submissions in writing on contested interlocutory issues. The convenience of the parties and their legal advisers and witnesses will be accommodated as far as possible when directions are given for the trial of the action. It is likely that those directions will make provision for taking evidence and receiving submission at various locations throughout Australia. In these circumstances, I am not persuaded that there is any utility in nicely weighing the competing claims of convenience in order to fix some notional "centre of gravity" for the proceedings. Although they were expressed before the pronouncement of the Full Court in National Mutual, I consider that the observations of Pincus J in Hodder v Australian Workers' Union (1984) 4 FCR 541 can be paraphrased to apply with equal force to the present case. His Honour there said, at 542; "It must often occur that, where proceedings begun in this registry relate to the affairs of an organisation whose headquarters are in some place other than Brisbane, it will be said that it suits that organisation better to litigate on its home ground. I do not think the court should too lightly accede to that plea, depriving the applicant for substantive relief of his or her chosen venue. To do so would place a significant barrier in the path of people who, in such cases, wish to invoke the court's jurisdiction. In this matter, however, it is enough to say that I am not satisfied that there is the necessary "manifest preponderance of convenience" in favour of a Sydney hearing." 11 For these reasons the motion on notice dated 5 December 2002 will be refused. I shall make the following interlocutory directions on which the parties are agreed; 1. The applicant file and serve its response to the Request for Further and Better Particulars of the first to eighteenth and twentieth respondents dated 11 December 2002 by 14 February 2003. 2. The respondents file and serve any Defences by 14 March 2003. 3. The applicant file and serve any Reply by 21 March 2003. 12 In addition, I shall order that there be a further directions hearing on 3 April 2003 to be conducted by videolink or otherwise as the Court may direct. I shall reserve liberty to any party to apply on not less than 48 hours notice in writing to the other parties. The costs of all parties of and incidental to the motion on notice dated 5 December 2002 and their costs of the hearing on 13 December 2002 will be reserved. I certify that the preceding twelve (12) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Ryan. Associate: Dated: 19 December 2002 Counsel for the Applicant: Ms M Gordon Solicitor for the Applicant: Australian Government Solicitor Counsel for the Respondents: Mr R Forster SC Solicitor for the Respondents: Gillis Delaney Brown Date of Hearing: 13 December 2002 Date of Judgment: 19 December 2002