Re National Mutual Holdings Pty Ltd; Acc Holdings Limited; Acc Financial Management Limited; Acc Life Limited; Acc General Insurance Limited; Australian Casualty Company Limited (Applicants); the Sentry Corporation; Peat Marwick Mitchell; Sentry Assuran [1989] FCA 119 (14 April 1989)

FEDERAL COURT OF AUSTRALIA

Re: NATIONAL MUTUAL HOLDINGS PTY. LTD.; ACC HOLDINGS LIMITED; ACC
FINANCIAL MANAGEMENT LIMITED; ACC LIFE LIMITED; ACC GENERAL INSURANCE
LIMITED; AUSTRALIAN CASUALTY COMPANY LIMITED (Applicants); THE SENTRY
CORPORATION; PEAT MARWICK MITCHELL; SENTRY ASSURANCE INTERNATIONAL LTD.
and WILLIAM CLARKE O'KANE (Cross-Applicants)
And: THE SENTRY CORPORATION and PEAT MARWICK MITCHELL & CO. (Respondents);
ACC HOLDINGS LTD.; ACC FINANCIAL MANAGEMENT LTD.; ACC LIFE LTD.; ACC
GENERAL INSURANCE LTD.; AUSTRALIAN CASUALTY CO. LTD.; SENTRY ASSURANCE
INTERNATIONAL LTD.; PEAT MARWICK & CO.; THE SENTRY CORPORATION; ANDREW
THOMAS GREGORY; WILLIAM CLARKE O'KANE; ACC HOLDINGS LIMITED; ACC
FINANCIAL MANAGEMENT LIMITED; ACC LIFE LIMITED; ACC GENERAL INSURANCE
LIMITED; AUSTRALIAN CASUALTY COMPANY LIMITED; PEAT MARWICK MITCHELL &
CO. and AMERICAN HOME ASSURANCE LIMITED (Cross-Repondents)
No. VG173 of 1987
FED No. 143
Practice and Procedure

COURT

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
GENERAL DIVISION
Woodward(1), Beaumont(1) and Foster(1) JJ.

CATCHWORDS

Practice and Procedure - change of venue - test to be applied - application of test - whether too early for final decision as to place of hearing - whether leave to appeal should be granted.

National Mutual Holdings Pty. Ltd. v The Sentry Corporation (1988) 83 ALR 434

HEARING

MELBOURNE
14:4:1989

Counsel and Solicitors Mr. A.C. Archibald Q.C. and
for Applicants: Mr. C.M. Scerri instructed by

Mallesons Stephen Jaques

Counsel and Solicitors Mr. D. Horton Q.C.,

for First Respondent: Mr. J. Karkar and Ms. M. Sloss

instructed by Phillips Fox

Counsel and Solicitors Mr. Rares instructed by

for Second Respondent Allen Allen & Hemsley

Counsel and Solicitors Mr. J.R.P. Lewisohn instructed

for Cross-Respondent by Madden Butler Elder & Graham

ORDER

Leave to appeal be refused.

The respondents pay the applicants' costs of the motions for leave to appeal.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

DECISION

Applications are made by both respondents for leave to appeal from an interlocutory judgment of Sweeney J. dismissing motions seeking a change of venue in these proceedings from Melbourne to Sydney. A similar application had been previously dismissed by Jenkinson J. but an appeal from that decision was allowed by the Full Court (Bowen C.J., Woodward and Lockhart JJ.) see (1988) 83 ALR 434.

2. The principal proceedings were commenced in the Victorian Registry of this Court on 3 July 1987. Directions have been given from time to time with a view to defining the issues for trial. Although a general indication of the issues has emerged at this stage, the issues have not yet been finally ascertained. Indeed counsel for The Sentry Corporation foreshadowed before this Court a substantial area of inquiry, potentially involving a considerable number of witnesses, which had not been referred to in argument before Sweeney J. The proceedings, in which several cross-claims are made, are complex and the process of settling the issues of fact and law for determination will, we think, not be a simple task. Having had the benefit of some explanation of the questions likely to arise at the trial from counsel in the course of the present application, it would seem to us that, at an appropriate directions hearing, the parties might with advantage be directed to bring in a draft statement of the issues arising on the pleadings for settlement by the Court. Discovery and inspection have taken place pursuant to the directions given. However, we were informed during the course of argument that The Sentry Corporation, the first respondent in the principal proceedings, was considering whether it should discover some further documents.

3. The history of the present interlocutory applications commences on 26 April 1988 when Jenkinson J. dismissed the motions for change of venue. Jenkinson J. concluded his reasons for judgment with the following observation:

"On the evidence adduced and the submissions advanced on
the hearing of this motion I would be inclined to
think, but not without doubt, that the proceeding and
the cross-claim may be tried in Sydney more suitably
for the interests of all the parties and the ends of
justice than in Melbourne. But I certainly cannot find
a manifest preponderance of convenience in trying those
causes in Sydney..."

4. In so holding, Jenkinson J. applied a test of "manifest preponderance of convenience". The Full Court said (at pp 441-2):

"The power conferred on the court or a judge by s.48 is
in terms wholly unfettered. It should be exercised
flexibly having regard to the circumstances of the
particular case....
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...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 would 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."

5. The Full Court referred to an argument put on behalf of the applicants in the principal proceedings that, if the venue were changed, they would lose two legitimate juridical advantages. It was suggested that the applicants would be entitled to pre-judgment interest in Victoria but might not be so entitled in New South Wales. It was further suggested that the applicants which are cross-respondents would be entitled to claim contribution pursuant to the Wrongs Act 1958 (Vic.) in circumstances where the equivalent right might not be available under New South Wales legislation.

6. Of these points, the Full Court said (at p 447):

"In our opinion the relevance and weight to be given to
these matters should be determined after the parties
have considered whether further evidence touching them
should be adduced, after full consideration has been
given to them by the parties and further argument
addressed to the court. In these circumstances and in
the light of the statement by Jenkinson J. in the
concluding passage of his judgment to which we referred
earlier that, although he could not find a manifest
preponderance of convenience in trying the proceeding
in Sydney, he 'would be inclined to think, but not
without doubt, that the proceeding and the cross-claim
may be tried in Sydney more suitably for the interests
of all the parties and the ends of justice than in
Melbourne', we think the preferable course is to allow
the appeal but remit the motion to Jenkinson J. or
another single judge of this court for further hearing
and determination."

7. In his reasons for judgment, Sweeney J. first quoted a lengthy "chronology of events and statement of material facts" agreed upon by the parties. Amongst other things, the statement of facts referred to the possibility that the parties may wish to call witnesses who were resident in Melbourne in some cases and witnesses resident in Sydney in others. Then Sweeney J. referred to the submissions advanced in argument with respect to the two suggested "legitimate juridical advantages". His Honour said,

"In my opinion, one should not attempt to reach a
concluded view upon these questions in determining an
application such as this. One thing can be said with
confidence and that is that if the venue remains as the
applicants have chosen it, they will have the right to
argue that s.79 (of the Judiciary Act) entitles them to
the benefit of the Victorian statutes dealing with
interest and contribution, without the necessity of
overcoming the difficulties which may well arise if
they are driven to rely upon the alternative arguments
recommended to them by their opponents, if the venue be
changed."

8. In the principal proceedings, the applicants have sued The Sentry Corporation claiming substantial damages for alleged breaches of warranties given in an agreement for the sale of shares to certain of the applicants. The applicants also allege misrepresentations and misleading conduct in that connection. The applicants have further sued Peat Marwick Mitchell & Co., chartered accountants, the second respondent, alleging breaches of audit contracts, negligence and misleading conduct. Several cross-claims, said to arise out of the allegations in the main proceeding, have been made.

9. In concluding that the motions should be dismissed, Sweeney J. said,

"I have taken into account the residence of the parties
and witnesses, so far as the latter could be
identified, and the question of expense to the parties.
It is, of course, to be borne in mind that, while the
cause of action against Sentry did not arise in New
South Wales, the audits by PMM were carried out in
Sydney by their Sydney office, for New South Wales
clients. However, the claim against PMM is intertwined
with that against Sentry and with the various
cross-applications.
It has not been possible to identify the witnesses to
be called but it is clear that some will be from
Melbourne, some from Sydney and the remainder from the
United States. Their port of arrival in Australia will
be Sydney. It is necessary to bear in mind the
national character of this Court, to which the Full
Court referred..., the discretion of the trial Judge to
conduct parts of the trial in different cities as
circumstances may suggest, and the difficulty of
predicting what may in the end, after the exchange of
expert opinions and reports, turn out to be the issues
of fact which will occupy most time at trial. There is
no discernible balance of convenience with favours a
change of venue.
As the Full Court said...
'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 is not, of course, practicable to attempt to decide
a matter such as this by seeking to allot points under
the various headings and so to reach a conclusion
mathematically. It remains a question of impression in
the light of the circumstances generally. That
impression must be formed at a stage when the final
shape of the trial cannot be precisely determined.
Bearing in mind the principles which the Full Court has
laid down, I am left with the clear impression that
this case can be continued most suitably in Melbourne."

10. In seeking leave to appeal, the respondents submit that his Honour's discretion miscarried. They contend that he acted upon a wrong principle by applying, in substance, a test similar to that applied by Jenkinson J. Alternatively, they submit that his Honour did not, or did not clearly, explain the process of reasoning which led him to his conclusion. It is said, on behalf of the respondents, that it does not appear how the judge "has reached the result embodied in his order but...upon the facts it is unreasonable or plainly unjust....(with the consequence that) the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance" (see House v. The King [1936] HCA 40; (1936) 55 CLR 499 at p 505). The applicants further say that his Honour should have formed a concluded view on the question whether the change of venue would have deprived the applicants of the juridical advantages relied on.

11. Whilst these submissions were argued forcefully on behalf of the respondents, we do not think that leave to appeal should be granted.

12. As has been said, the issues to be contested in the litigation have not yet been settled. It is true that the pleadings have closed and that most of the discovery process has been completed. But in a complex case of this kind, it is usually necessary for the Court to look beyond the statements in the pleadings in order to ascertain the real nature of the matters which are truly in dispute. In the present case, the factual dimensions of the litigation are, on any view, considerable. It is estimated that the trial will take some months of hearing time. A number of difficult legal questions may well arise on the claims and in the cross-claims. Until the Court is in a position to know exactly what is, and what is not, seriously in dispute, it is not possible for it to make a fully informed judgment as to what is the suitable venue for this case.

13. Put differently, we think that it is, as yet, premature to express any final or concluded view as to the more suitable venue here. Such an opinion could only usefully be formed when the litigation has proceeded to an advanced stage, when the issues have been finally identified and when the matter is ready to be set down for trial. Only against the background of knowledge of what is, in truth, in contest, can a proper assessment be made by the parties, in the first instance, and then by the Court, of the witnesses to be called, and of the nature and duration of their evidence. Only then can a realistic estimate be made of the length of the trial. The suggested length of the trial (a number of months) may well pose some administrative questions for the Court which will need to be referred to the Chief Justice. These could possibly influence the final choice of venue.

14. That a final decision would be premature is well indicated by the attempts made, before Sweeney J. and before us, to argue that the suggested juridical advantages might be lost on a change of venue. It is difficult, if not impossible, to embark upon a consideration of that argument without the benefit of knowledge of the real issues in the case. The factual and legal context in which these matters could arise may well be critical. That context must be adequately defined before any useful assessment of the argument can be attempted. We are not satisfied that this context has yet been sufficiently identified.

15. When the issues have been settled, fresh consideration may be given to the question of the suitability of the venue proposed in the light of the circumstances then known; and to attempt to form a judgment on that question before the definition of what is, in truth, in contest would, as we have said, be premature and, thus, inappropriate. It follows that we are unable to find that Sweeney J.'s decision to leave the matter where it stands amounted to a miscarriage of discretion. We do not believe his Honour acted on any wrong principle or that his decision was unreasonable or plainly unjust.

16. We are, however, persuaded that, by the time the matter is ready for trial, there may be a discernible balance of convenience in favour of a change of venue, either for the whole hearing or for the hearing of the respondents' cases. This could justify a re-appraisal of all the relevant factors referred to above. We recognize that it is unsatisfactory to leave the question of venue still open but, for the reasons given, we believe it is better that the place or places of hearing be determined when the most just and convenient conclusion can best be reached.

17. In the meantime, leave to appeal must be refused with costs.