Westpac Banking Corporation v Noel Francis O'Brien and Moira Frances O'Brien [1997] ACTSC 107 (19 December 1997)

SUPREME COURT OF THE ACT

WESTPAC BANKING CORPORATION v NOEL FRANCIS O'BRIEN AND MOIRA FRANCES O'BRIEN
No. SC 1057 of 1996
Number of pages - 5
Cross Vesting

COURT

IN THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY

HIGGINS J

CATCHWORDS

CROSS VESTING - Application to transfer proceedings to Supreme Court of New South Wales - Relevant considerations as to choice of jurisdiction in this case - Interpretation to be given to provisions for choice of law and jurisdiction in contracts of guarantee between parties - Interests of justice - Relevance of fact that related proceedings commenced and proceeding in this Court - Relevance of fact that contractual provisions at issue to be construed according to New South Wales law - Relevance of issue of alleged hardship to applicants - Application refused - No point of principle.

Jurisdiction of Courts (Cross Vesting) Act 1987 (Cth)

HEARING

CANBERRA, 5 September 1997 (hearing), 19 December 1997 (decision)

19:12:1997

Appearances

Counsel for the Plaintiff: R Crowe

Solicitor for the Plaintiff: Minter Ellison

Counsel for the First Defendant: The First Defendant appeared in person.

Counsel for the Second Defendant: The Second Defendant appeared in person.

ORDER

Order:

1. The application to transfer these proceedings to the Supreme Court of New South Wales be refused.

2. The costs of and incidental to this application be costs in the cause.

DECISION

HIGGINS J

The plaintiff, on 24 December 1996, caused a Writ of Summons to issue against the defendants seeking recovery of a sum of money from each of them pursuant to a contract of guarantee.

The defendants were alleged, on 5 September 1993 (first defendant) and 29 January 1996 (second defendant), to have guaranteed a debt to the plaintiff arising from the grant by the plaintiff of (overdraft) accommodation to Luxborn Pty Limited, a company in which, presumably, the defendants had some interest. It was alleged that the guarantee given by the first defendant was in relation to "all moneys" advanced to the company. The limit to the guarantee signed by the second defendant was "$65,000 plus government charges, expenses and interest".

The sum for which the first defendant became liable was alleged to be $125,083.38 of which, at 19 December 1996, $106,566.08 remained due and owing, attracting further interest on the capital sum of $96,726.92 at 11.25% daily "from 20 December 1996".

The sum demanded of the second defendant was $72,312.50. No claim for interest was made against the second defendant.

Service of the writ was not effected personally. On 27 June 1997 personal service was dispensed with. An Appearance was entered on 18 July 1997. The defendants applied for a stay of proceedings. The plaintiff applied for summary judgment. By then, the defendants were resident in New South Wales.

The Company's registered office, according to the affidavit supporting summary judgment, was at St Leonards, New South Wales. The defendants resided at Drummoyne, New South Wales.

However, there was a connection with the Territory. The purpose of the accommodation given to Luxborn Pty Limited was to acquire and operate a newsagency at Isabella Plains in the Territory. A co-director, Peter Glynn Croft, was a co-guarantor with the first defendant of the original loan facility. He had agreed to provide mortgage security over his home at Calwell in the Territory.

On 3 September 1997, the defendants applied to have this matter transferred to the Supreme Court of New South Wales pursuant to the provisions of the Jurisdiction of Courts (Cross Vesting) Act 1987 (Cth) ("Cross Vesting Act").

The affidavit in support relied primarily on financial hardship and family disruption. The defendants are self-represented and have two young school-age children.

Further, they assert that their prospects for pro bono legal representation would be better in Sydney, New South Wales, than in Canberra.

They also point to the provisions for choice of law and jurisdiction of courts appearing in the contracts of guarantee.

The first guarantee is far from being expressed in plain English. Clause 17 dealt with the jurisdiction of the courts. It provided,

"THAT the Debtor and the Guarantor agree that without limiting the jurisdiction of other courts having jurisdiction in any proceedings brought hereon the courts of each place in which is situated a branch of the Bank where an account of the Debtor is kept shall have jurisdiction in any such proceedings and hereby irrevocably submit to the jurisdiction of the courts of such place".

The "Debtor" is, of course, a reference to Luxborn Pty Limited.

However clause 18, if any party felt sufficiently motivated to read it, provided,

"THAT this instrument shall be construed in accordance with and governed by the law from time to time in force in the place of the address or registered office of the Guarantor ... or if two or more addresses or registered offices are so stated and all of them are not in a single State or in a single State or in a single Territory of Australia ... then it shall be construed in accordance with and governed by the law from time to time in force in the State of New South Wales".

The second guarantee was drafted in plain English. It provided in clause 30,

"Any court case involving this document can be held in courts of any state or territory of Australia or of a place where the Customer has an account at a branch of the Bank. You submit to the jurisdiction of those courts".

The term "Customer" is defined as meaning Luxborn Pty Limited.

Clause 31 stated,

"The law of the place of your address stated on the cover applies to this document. However, the law of New South Wales applies if:

* no address is stated as your address;
* your address is not in Australia; or
* more than one address is set out as your address, and they are not all in the same state or territory of Australia".

The cover records no address for the second defendant. The only address recorded is that of the "Customer" and that address is at North Sydney, New South Wales.

The applicable law is therefore that of New South Wales that being the place specified in default of any other choice in the case of each guarantee.

However, each guarantor is taken to have submitted to the jurisdiction of this Court, the company having had an account with the plaintiff within the Territory.

The defendants also filed an affidavit in answer to the application for summary judgment.

A responding affidavit was made by Mr Keith Wintour on 5 September 1997. It supports an inference that the account of Luxborn Pty Limited was with the Petrie Plaza, Canberra City Branch of the plaintiff.

Accordingly, it was open to the plaintiff to have commenced proceedings in this Territory. However, the jurisdiction of the Courts of New South Wales is not precluded. Each Guarantor had an address in New South Wales and resided there when proceedings were commenced.

It is also clear that the plaintiff also has recourse to security given to it by Mr Croft. Whether that provides or supports a contention by the defendants that they have an arguable defence is a matter presently to be addressed. However, it does raise the prospect that the defendants have a possible third party claim or claim for contribution against Mr Croft and, possibly, Mrs Croft. There have been proceedings commenced between the plaintiff and Mr & Mrs Croft. The plaintiff foreshadows an application to have those proceedings heard together with the present action.

Luxborn Pty Limited has been placed in liquidation. It is apparent that the company itself should be party in some capacity to the litigation.

There has been some recent delay caused by a change of address by the defendants. It had been notified to the Court Registry on 26 September 1997. However, the plaintiff's solicitors, having had a letter dated 17 September 1997 returned undelivered from the prior address did not search the Court file before applying on 28 October 1997 to set aside the Appearance.

It is apparent that the dispute is most closely connected with the Australian Capital Territory.

The hardship the defendants will experience in the process of defending this action in the Territory will no doubt be mirrored by hardship to Mr & Mrs Croft if their action is transferred to New South Wales. Undoubtedly, there is a strong case for all the actions arising out of the advance of funds by the plaintiff to Luxborn Pty Limited being heard together.

The test to be applied is whether the Court is satisfied that it is "in the interests of justice" to order the matter to be remitted to another Supreme Court.

There are related proceedings already commenced and proceeding in this Court. The connection of those proceedings to the Territory is such that it is not likely that there would be a successful application to transfer that action to New South Wales even if one of the parties desired to effect that result.

Further, although the defendants signed the security documents in New South Wales, the primary records and most, if not all, other likely relevant evidence will be found in the Territory.

There is no real issue about convenience to the legal system. Further, so far as interlocutory proceedings are concerned, this Court can receive written evidence and submissions and/or hear the parties by telephone link. Decisions on such matters can be handed down without all parties needing to be present.

There is no doubt that the defendants will need to be present if a final hearing with oral evidence takes place. That would be necessary wherever the proceedings were heard. The greater remoteness of Canberra compared with the Central Business District of Sydney is, in those circumstances, fairly marginal.

The only substantive reason to prefer New South Wales is the fact that the Court hearing the matter must construe the contractual arrangements between the parties according to New South Wales law.

However, insofar as statute law may become relevant, the Credit Acts of the Territory and the State are relatively uniform and the principles of law and equity otherwise to be applied are to all intents and purposes identical.

In my view, the application should be refused.

However, as it was not a frivolous or unarguable application or made at a late stage in the proceedings, it is in the nature of the seeking of directions. Costs thereof, unless the parties wish to be heard otherwise, should be costs in the cause.