BioAg Pty Ltd v Garry Joseph Hickey [2007] NSWSC 296

New South Wales Supreme Court

CITATION : BioAg Pty Ltd v Garry Joseph Hickey [2007] NSWSC 296

HEARING DATE(S) : 21 March 2007 JURISDICTION : Equity Division

JUDGMENT OF : Brereton J

EX TEMPORE JUDGMENT DATE : 21 March 2007

DECISION : Proceedings transferred to Queensland.

CATCHWORDS : JURISDICTION – Cross-vesting – Transfer of proceedings – between State Supreme Courts – relevant considerations – breach of confidence – when duties arose in NSW but breaches mainly occur in Queensland – where plaintiff resides in NSW and first defendant resides in Queensland.

(Cth) Corporations Act 2001 LEGISLATION CITED : (Cth) Service & Execution of Process Act (NSW) Jurisdictions of Courts (Cross-Vesting) Act

Bankinvest AG v Seabrook (1988) 14 NSWLR 711 BHP Billiton Limited v Schultz (2004) 221 CLR 400 CASES CITED : British American Tobacco Australia Ltd v Gordon & Anor [2007] NSWSC 230 James Hardie & Coy Pty Ltd v Barry (2000) 50 NSWLR 357 Spiliada Maritime Corporation v Cansulex Ltd [1987] AC 460

BioAg Pty Ltd (plaintiff) PARTIES : Garry Joseph Hickey (first defendant) IQ AG Pty Ltd (second defendant) Commissioner of Patents (third defendant)

FILE NUMBER(S) : SC 4333/05

COUNSEL : Mr T Porman (sol) (agent) (plaintiff) Mr G Hickey (in person - via telephone)

SOLICITORS : Gadens Lawyers (plaintiff)

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION DUTY JUDGE LIST

BRERETON J

Wednesday 21 March 2007

4333/05 BioAg Pty Limited v Garry Joseph Hickey JUDGMENT (ex tempore) 1 HIS HONOUR: By Statement of Claim filed on 3 August 2005 the plaintiff BioAg Pty Limited sues the first defendant Gary Joseph Hickey the second defendant IQ AG Pty Limited, and the third defendant the Commissioner of Patents, in respect of alleged breaches of duty arising from Mr Hickey having once been a director, and allegedly also an employee, of BioAg. 2 BioAg alleges that, arising from their former relationship, Mr Hickey owed it duties of confidence in equity, duties of fidelity as an employee and directors' duties under the (CTH) Corporations Act 2001. Although Mr Hickey disputes that he was an employee of BioAg, he admits in his Defence, filed on 7 November 2005, that he owed BioAg certain obligations of confidence and duties as a director. BioAg alleges that Mr Hickey's employment with it was terminated on or about 30 May 2001; that following termination of his employment, Mr Hickey, without authority, retained copies of certain formulae and recipes in relation to some of BioAg's products, and that in or about March 2002, Mr Hickey commenced employment with and was appointed a director of IQ AG, following which IQ AG solicited orders for customers on BioAg's customer list and used confidential information of BioAg allegedly provided to it by Mr Hickey for the purpose of developing, manufacturing, and selling its own products. BioAg further alleges that Mr Hickey will, unless restrained, continue to use its confidential information for his direct or indirect benefit and that, in breach of the duties to which I have referred, he has procured the registration of a patent which BioAg says in equity belongs to it. 3 When Mr Hickey was associated with BioAg, he resided on a property near Griffith in New South Wales. BioAg appears then to have conducted and now still to conduct its business from the same general vicinity, Griffith or Narrandera, and its directors and accountants are resident in that area. 4 Following the termination of his employment by BioAg, Mr Hickey moved to Queensland, where he now resides. IQ AG has as its address premises at Ashford in far northern New South Wales near the Queensland border. Mr Hickey, although he has not deposed to it, asserts that the directors of IQ AG have a business in Brisbane. He was a director of IQ AG for the first year of its existence just under five years ago. IQ AG has not filed a defence and does not appear to be taking any active role in the proceedings. But so far as I am aware, no application has been made for default judgment against IQ AG. 5 The proceedings have an unsatisfactory history in this Court. There have been many occasions on which Mr Hickey has failed to appear or has not complied with directions. 6 By Notice of Motion filed on 13 March 2007, Mr Hickey seeks an order under (NSW) Jurisdictions of Courts (Cross-Vesting) Act s 5(2)(b)(iii) that the proceedings be transferred to the Supreme Court of Queensland. The ultimate question on such an application is which is the more appropriate forum. The sub-section in question provides that proceedings are to be transferred to the transferee court if it is "in the interests of justice" that they be heard and determined in that Court, and the transferor court is obliged to transfer the proceeding to the other court whenever it appears to be in the interests of justice so to do. For this purpose, it is both necessary and sufficient for the transferee court to be the "more appropriate" forum [BHP Billiton Limited v Schultz (2004) 221 CLR 400, 421 [14], 434-435 [63]]. An applicant for a transfer bears no burden of persuasion or onus of proof [BHP v Schultz, 437 [71]; Bankinvest AG v Seabrook (1988) 14 NSWLR 711, 727], and no particular significance attends the plaintiff's original choice of forum [BHP v Schultz, 425-426 [26]-[27], 439 [77]]. 7 In identifying the "more appropriate forum", relevant considerations including the cost and efficiency of proceedings in the respective jurisdictions, and the connecting factors referred to by Lord Goff in Spiliada Maritime Corporation v Cansulex Ltd [1987] AC 460, 478 - including matters of convenience and expense such as availability of witnesses, the places where the parties respectively reside or carry on business, and the law governing the relevant transaction [BHP v Schultz, 422 [18]]. Sometimes, consideration of relevant connecting factors will identify a "natural forum". Ordinarily, the residence of the defendant is more significant than that of the plaintiff to establish jurisdiction and this may count in identifying the natural forum [BHP v Schultz, 423 [19]; British American Tobacco Australia Ltd v Gordon & Anor [2007] NSWSC 230 [44]]. In James Hardie & Coy Pty Ltd v Barry (2000) 50 NSWLR 357, Spigelman CJ said at 361 [7]: To determine which court is, in the interests of justice, the appropriate court, it is necessary to inquire, in the case of a tort, as to what is the place of the tort. Indeed, in the context of administering the co-operative national scheme in the Jurisdiction of Courts (Cross-Vesting) Act, where the place of the tort and the residence of the parties coincide, this will generally be determinative of the issue of "appropriate court", although other factors may need to be assessed in the process of determining where the interests of justice lie. 8 Thus, in British American Tobacco v Gordon I considered it significant that, in breach of confidence proceedings, the relevant breaches of confidence had taken place in Victoria and the apprehended future breaches of confidence would take place, if at all, in Victoria. 9 This case is not so clear as was British American Tobacco in identifying a natural forum; there are connecting factors with both NSW and Queensland. On the one hand, the duties on which BioAg relies arise out of a relationship during which all parties were resident in New South Wales. Any entrustment of confidential information to Mr Hickey took place in the State of New South Wales. Their relationship was governed by the law applicable in the State of New South Wales, but there was no cause of action at that stage because up to termination of the employment, it is not alleged that there was a breach. 10 So far as where the breaches allegedly took place, if at all, are concerned, BioAg alleges that upon termination of his employment or directorship, Mr Hickey retained, without authority, not only information in his mind but also copies of formulae and recipes in relation to the BioAg products. Mr Hickey denies this. If the allegation is correct, then that breach would apparently have occurred in New South Wales immediately upon termination of the employment, but continued by his retention of the relevant formulae and recipes upon his move to Queensland. However, so far as his alleged uses of the confidential information and disclosures of them to IQ AG for use by it are concerned, those breaches apparently took place, if at all, in Queensland. Insofar as it is alleged that he procured the registration of a patent to which BioAg claims to be entitled, that took place, on the evidence presently before me, in Queensland. As Mr Hickey is presently resident and engaged in work in Queensland, any threatened future breach is apparently likely to be committed, if at all, in Queensland. 11 Accordingly, when it is asked where the alleged breaches took place - which, by analogy with what Spigelman CJ said in James Hardie v Barry and my decision in British American Tobacco in an important consideration - the answer is at least largely, though perhaps not exclusively, in Queensland. It follows that the causes of action arose largely, if not exclusively, in Queensland. 12 So far as the location of the Defendants are concerned, the third defendant, the Commissioner, can be put to one side, the Commissioner having been joined only for the purpose of giving effect to any orders that might be made in respect of the patent. So far as the Second Defendant is concerned, it apparently has its registered office in far northern New South Wales, although there is some suggestion that its directors carry on business in Brisbane, Queensland. In any event, it does not appear to be an active party, and any liability it has is, in a sense, subsidiary to that of the first defendant from whom it allegedly gained the confidential information. So far as the first defendant is concerned, he was, at the time of institution of proceedings, resident in Queensland. As I have foreshadowed, this is of some jurisdictional significance because, but for the cross-vesting legislation and the (CTH) Service & Execution of Process Act, personal jurisdiction could not be exercised over him by this Court but only by the Supreme Court of Queensland. 13 As to the expense and convenience of proceedings, there is evidence that the plaintiff will call at least three witnesses who live and work in the Riverina in New South Wales. According to the plaintiff's solicitor, there is no witness located in Queensland whom the plaintiff intends to call. Although Mr Hickey has not in his affidavit deposed to what witnesses he will call, I can infer that he would be a relevant witness, and he lives and works in Queensland. He informs me that he would also call his daughter, who is resident in Queensland, and perhaps her partner, both of whom worked in the BioAg business while he was connected with it. 14 Ultimately, I think the natural forum for proceedings, particularly in this day and age of electronic communication and interstate travel, usually falls to be determined by more principled issues than where the preponderance of the witnesses reside and I do not consider that there is any significant preponderance of convenience such as to resolve the question of more appropriate forum on the facts in this particular case. 15 I do, however, think that ordinarily there would be some force in the submission made by Mr Porman for the plaintiff that this application is made at a late stage, approaching two years after the institution of the proceedings. In many cases it may not be in the interests of justice that proceedings be transferred to another State when they have been allowed to proceed for a considerable time under the management of the transferor court, particularly when the respondent to the transfer application has incurred costs in the forum which would have to be duplicated if the matter were transferred or has invested a substantial sum in lawyers in the forum, which would in part or whole be wasted as a result of the transfer. 16 However, in this case the proceedings are still a substantial distance from being set down for final hearing. The Court has so far essentially been engaged in disputes over discovery. So far as I can tell, neither party has yet served its evidence in chief. Even if it has, that evidence remains available for use in another court. Certainly no hearing date has been allocated, and no directions for trial have been made. None of this is the fault of BioAg, but it reduces the significance, in terms of the "interest of justice", of the application being made at this stage. Moreover, the solicitors acting for BioAg are neither in Queensland nor in New South Wales, but in Victoria, who act via city agents in this Court. If the proceedings are transferred to Queensland, then Brisbane agents will have to replace Sydney agents, but the principal solicitors with the conduct of the matter will not change. That still further reduces the significance of the application being made at this late stage. 17 Weighing the matters to which I have referred, on balance Queensland is the more appropriate forum, chiefly by reason of it being in Queensland that the alleged breaches of duty have mainly occurred and may in the future occur, and in Queensland that the first defendant resides. Having reached that conclusion, I am bound to transfer the proceedings to the Supreme Court of Queensland. 18 Pursuant to Jurisdiction of Courts Cross-Vesting Act s 5(2)(b)(iii) I order that the proceedings be transferred to the Supreme Court of Queensland. I order that costs of the application be costs in the proceedings. **********