Coe v Roth [2009] NSWSC 1386

New South Wales Supreme Court

CITATION : Coe v Roth [2009] NSWSC 1386

HEARING DATE(S) : 25 September 2009 JURISDICTION : Equity Division Commercial List

JUDGMENT OF : McDougall J at 1

EX TEMPORE JUDGMENT DATE : 25 September 2009

DECISION : See paragraphs [21] to [23] of the judgment.

CATCHWORDS : PRACTICE - cross-vesting - whether 'interests of justice' served by transferring proceeding - no question of principle.

LEGISLATION CITED : Jurisdiction of Courts (Cross-Vesting) Act 1987 Uniform Civil Procedure Rules

CATEGORY : Separate question

CASES CITED : BHP Billiton Limited v Schultz [2004] 221 CLR 400 Spiliada Maritime Corporation v Cansulex Limited [1987] AC 460

PARTIES : Michelle Terese Coe (Plaintiff) John Roth (Defendant)

FILE NUMBER(S) : SC 50125/09

COUNSEL : JR Clark (Plaintiff) GJ Nell SC (Defendant)

SOLICITORS : Esplins Solicitors (Plaintiff) Holman Fenwick Williams (Defendant)

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION COMMERCIAL LIST

McDOUGALL J

25 September 2009 (ex tempore – revised 9 December 2009)

50125/09 MICHELLE TERESE COE v JOHN ROTH JUDGMENT

1 HIS HONOUR: The Court is concerned today with an application by the defendant that these proceedings be transferred to the Supreme Court of Queensland. The application is brought on the basis that the interests of justice require that these proceedings be determined by the Supreme Court of Queensland. (See s 5(2)(b)(iii) of the Jurisdiction of Courts (Cross-Vesting) Act 1987.) 2 The plaintiff contracted with a company known as Shipworks Group Pty Limited ("Shipworks") for the construction of what is described as a "yacht". In essence, I think, the plaintiff's claim is that for various reasons, flowing from representations made to her through her employees, she was persuaded to advance funds substantially in excess of the true value of the construction work carried out, or of the value of that work as determined by the contract. She sues the defendant on a guarantee given by him for the construction agreement. 3 Mr Nell SC, who appeared for the defendant, submitted that there would be issues as to whether the guarantee has extended to the liabilities in question, and issues of fact as to the true value of the work carried out and, therefore, as to the extent of any over-payment. 4 Further, Mr Nell has said that it is likely that his client would seek to bring a cross-claim against three cross-defendants. That cross-claim would be brought pursuant to a deed of indemnity made between his client and those cross-defendants. 5 As I have said, the application is brought upon the basis that the interests of justice require the transfer. That is a very broad criterion. In BHP Billiton Limited v Schultz [2004] 221 CLR 400, the Court identified, as something capable of satisfying that criterion, that the transferee court be the "more appropriate" forum. To the extent that this formulation replaces one set of words for another, I am not sure that it really assists in resolving the issue. That is because it leads, in turn, to a consideration of a set of factors that have been identified as relevant to the issue; and they are relevant whether the question is framed in terms of the interests of justice or whether it is framed in terms of identification of the more appropriate forum. 6 Those relevant considerations include questions of costs and efficiency. That is to say, they direct the Court's attention to the costs and efficiency of conducting the proceedings in one jurisdiction rather than another. They have also been said to require attention to the connecting factors identified by Lord Goff of Chieveley in Spiliada Maritime Corporation v Cansulex Limited [1987] AC 460 at 478. If I may say with respect, it is necessary to apply some careful consideration to the factors identified by his Lordship. That is because his Lordship was speaking in the context of a dispute having international parameters, whereas in this case the choice of jurisdiction lies between two states in the one federation, in circumstances where the ultimate appellate Court of that federation has clearly identified the existence of a common law of the federation rather than of the individual states. 7 There was dispute as to whether any and if so what weight should be given to the plaintiff's choice of this Court and her reasons for it. In the view to which I have come, it is not necessary to resolve that dispute. 8 When looking at considerations of convenience and expense, and at the connecting factors, it seems to me that the starting point is to look at the witnesses who have been identified as relevant. The plaintiff's solicitor has identified some seven potential witnesses. They do not include the plaintiff. Of those seven witnesses, either four or five reside in New South Wales; either two or one reside in Queensland; and one resides in Victoria. 9 The dispute as to the witness who might or might not reside in Queensland (or might or might not reside in New South Wales) received an inordinate amount of attention in the evidence. I do not propose to summarise that evidence in detail. It is sufficient to say that in my view, in particular having regard to the circumstantial factors referred to in the affidavit of Mr Rush sworn on 25 September 2009, the better view, on balance, is that the witness in question - Mr David Price - lives in New South Wales. I accept that he has an alternative residential address in Queensland, that he has given that address for at least some purposes in documents filed with ASIC, and that he travels there from time to time. Accepting all that, and bearing in mind that Mr Rush's evidence was given on information and belief, I remain of the view, as I have said, that the balance of probabilities favours the proposition that Mr Price does indeed live in this State. 10 The consequence is that, in my view, of the identified witnesses some five reside in New South Wales, one resides in Queensland and one resides in the neutral venue of Victoria. 11 The plaintiff lives in this State. She has instructed solicitors in this State. The defendant lives in Florida in the United States of America. He has instructed solicitors in Melbourne. If it were necessary to take into account the plaintiff's convenience (and it may not be, because she has not been identified as a potential witness) her convenience would favour a continuation of proceedings in this State. The defendant's convenience is at best neutral. 12 However, relevant to the plaintiff's choice is the fact that she has instructed lawyers in this State. No doubt, if the proceedings were transferred to the Supreme Court of Queensland, those lawyers could retain agents in Brisbane. The knowledge built up to date would not be lost to the plaintiff. But there would be a element of additional costs flowing from double handling. Whether those additional costs are a relevant consideration, in the context of a yacht said to be worth in excess of $15 million and to have cost in excess of $22 million to construct, is a different matter altogether. 13 The construction agreement identifies the proper law of the contract (under which the plaintiff brings this action) as the law of Queensland. However, it has not been suggested that a resolution of the dispute is likely to turn on any peculiarity (if I can use that expression without being offensive) of the laws of Queensland. 14 To the extent that the issues will be governed by the common law, there is, as I have said, a common law of Australia. To the extent that there are relevant Queensland statutes, I have no doubt that the parties, with the capable representation that the present litigants have, will identify those statutes and bring them to the attention of the Court. I have no doubt that the Court will be able to construe them and apply them in the usual way. 15 The deed of indemnity pursuant to which the defendant proposes to cross-claim likewise identifies the governing law as the law of Queensland. The same considerations apply, it seems to me, in relation to the ability of this Court to inform itself of the law of Queensland. 16 The deed of indemnity goes a little further. Unlike the construction agreement, it contains a choice of jurisdiction clause. That constitutes an irrevocable and unconditional submission to the non-exclusive jurisdiction of the courts of Queensland. If this claim were brought pursuant to the deed of indemnity, then the parties' contractual choice should be respected and given weight. But the plaintiff does not sue on the deed of indemnity. In those circumstances, it seems to me, the significance of the choice of law clause in the agreement pursuant to which the defendant might cross-claim is of limited significance. 17 The vessel was constructed at a shipyard in Queensland. That seems to me to have very little to do with either the identification of the interests of justice or with any analysis of what might be the proper forum. However, the relevant documents are in Queensland. Shipworks has gone into external administration and all its documents (including, as I understand it, those relevant to the construction of the plaintiff's yacht) are held by receivers and managers in Brisbane. 18 In my view it would be more convenient, purely taking into account those documents, if the proceedings were conducted in the Supreme Court of Queensland. But there is no suggestion that the documents, or copies, cannot be brought to Sydney. That could be done either pursuant to a subpoena or pursuant to an order for third party discovery (UCPR r 5.4). It is difficult to see how in the real world the costs of copying and producing the documents would be substantially greater if the venue for the proceedings were Sydney rather than Brisbane. 19 It is likely that there will be a requirement for experts to examine the yacht to seek to identify the reasons for and the proper amount of any costs over-ride. The yacht is moored in Sydney (not surprisingly since the plaintiff lives in Sydney). It follows that inspection would be likely to take place in Sydney. Mr Nell submitted, correctly, that it did not follow that the experts would be resident in Sydney. However, wherever they reside, they are going to have to come to Sydney to see the yacht unless the plaintiff agrees to sail it to wherever they themselves might reside. 20 There were many other matters canvassed in submissions. I do not propose to deal with them. The inevitable conclusion, in my view, is that on the evidence in support of this application there is no basis for concluding that the Supreme Court of Queensland is the proper forum for the resolution of the dispute, so that the interests of justice require the transfer of these proceedings to that Court. 21 I order that the defendant's notice of motion filed on 12 August 2009 be dismissed with costs. 22 I list the proceedings for directions in the Directions list on 2 October 2009. 23 I order that the exhibit on the application be handed out. **********