Australian Competition & Consumer Commission v Pauls Ltd [2002] FCA 71 (8 February 2002)

Last Updated: 11 February 2002

FEDERAL COURT OF AUSTRALIA

Australian Competition & Consumer Commission v Pauls Ltd [2002] FCA 71

PROCEDURE: application for leave to change the proper place and to fix the venue for the hearing of the trial

No question of principle

Federal Court of Australia Act 1975 (Cth) s 48

Federal Court Rules O 10 r 1(2)(f), O 30 r 6

National Mutual Holdings Pty Ltd & Ors v The Sentry Corporation & Anor (1988) 19 FCR 155 followed

Cycles & Wheelman Pty Ltd & Ors v Beltech Corporation Ltd (1988) 80 ALR 279 cited

AUSTRALIAN COMPETITION AND CONSUMER COMMISSION v PAULS LIMITED (ACN 009 698 015) AND OTHERS

NO D 23 OF 2001

O'LOUGHLIN J

DARWIN

8 FEBRUARY 2002

IN THE FEDERAL COURT OF AUSTRALIA
NORTHERN TERRITORY DISTRICT REGISTRY	D 23 OF 2001

BETWEEN:	AUSTRALIAN COMPETITION AND CONSUMER COMMISSION APPLICANT
AND:	PAULS LIMITED (ACN 009 698 015) FIRST RESPONDENT MALANDA DAIRYFOODS LIMITED (ACN 068 031 550) SECOND RESPONDENT AUSTRALIAN CO-OPERATIVE FOODS LIMITED (ACN 010 308 068) THIRD RESPONDENT ALAN ALEXANDER MCCRAY FOURTH RESPONDENT BARRY ROBERT JARDINE FIFTH RESPONDENT RICHARD GORDON LEONG SEE SIXTH RESPONDENT SYDNEY RICHARD MORGAN SEVENTH RESPONDENT
JUDGE:	O'LOUGHLIN J
DATE OF ORDER:	8 FEBRUARY 2002
WHERE MADE:	DARWIN

THE COURT ORDERS THAT:

1. The application to transfer the proper place to the Queensland Registry is refused.

2. The application for an order that the trial of these proceedings be held in Brisbane is adjourned with liberty to any party to bring the matter back for further consideration on seven days notice.

3. The costs of the present application and these orders are referred to the trial judge.

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

IN THE FEDERAL COURT OF AUSTRALIA
NORTHERN TERRITORY DISTRICT REGISTRY	D 23 OF 2001

BETWEEN:	AUSTRALIAN COMPETITION AND CONSUMER COMMISSION APPLICANT
AND:	PAULS LIMITED (ACN 009 698 015) FIRST RESPONDENT MALANDA DAIRYFOODS LIMITED (ACN 068 031 550) SECOND RESPONDENT AUSTRALIAN CO-OPERATIVE FOODS LIMITED (ACN 010 308 068) THIRD RESPONDENT ALAN ALEXANDER MCCRAY FOURTH RESPONDENT BARRY ROBERT JARDINE FIFTH RESPONDENT RICHARD GORDON LEONG SEE SIXTH RESPONDENT SYDNEY RICHARD MORGAN SEVENTH RESPONDENT

JUDGE:	O'LOUGHLIN J
DATE:	8 FEBRUARY 2002
PLACE:	DARWIN

REASONS FOR JUDGMENT

1 On 15 August 2001 the Australian Competition and Consumer Commission ("the ACCC") filed an application and statement of claim in the Northern Territory District Registry of this Court. In response some, but not all, of the respondents filed a Notice of Motion on 14 November 2001 seeking the following orders:

"(a) that the proceedings be transferred to the Federal Court of Australia, Queensland District Registry at Brisbane pursuant to section 48 of the Federal Court Act and Order 10 Rule 1(2)(f) of the Federal Court Rules;

(b) in the alternative, that the trial of this proceeding be held at Brisbane pursuant to Order 30 Rule 6 of the Federal Court Rules."

2 The respondents in the substantive proceedings can be divided into three groups. The first of these, "the Pauls Group" comprises the first respondent Pauls Ltd, the fourth respondent, Alan Alexander McCray, the general manager of Pauls Ltd and the fifth respondent, Barry Robert Jardine, the company secretary and legal manager of Pauls Ltd. Those three respondents are represented by the same solicitors and counsel and they are the respondents who have moved the Court on the Notice of Motion of 14 November 2001. The second group of respondents consists of the second respondent Malanda Dairyfoods Ltd ("Malanda"), and its chief executive officer, the sixth respondent, Richard Gordon Leong See. The third and final group comprises the third respondent, Australian Co-Operative Foods Ltd ("ACF") and the seventh respondent, its general manager, Sidney Richard Morgan.

3 When the notice of motion was called on for hearing in Darwin, Mr Gibson QC appeared for the Pauls Group. Mr Tonking appeared on behalf of the ACCC, opposing the orders that were sought by the moving parties. Mr Wylie appeared by video transmission from Sydney. He appeared on behalf of the second and third respondents, Malanda and ACF. Mr Lloyd, a solicitor who was representing the seventh respondent, Mr Morgan, also appeared by video from Sydney. Both Mr Wylie and Mr Lloyd informed the Court that they did not intend to make any submissions and that their clients would likewise abide such orders as the Court might make. The remaining respondent, Mr See was not represented, although his solicitors had written the District Registrar saying that their client did not "... wish to contest the application and will simply abide the order of the Court."

4 The substance of the allegations that have been made against each of the three corporate respondents, and which each of them has denied, is that between 19 April and May 1996 they made an arrangement or arrived at an understanding whereby the ACF group would supply, or cause to be supplied to Pauls in Darwin, all the unprocessed milk requirements of the three corporate respondents for the production of packaged milk products for sale in the Northern Territory, for a minimum period of five years at an initial delivered price of 52c per litre. The ACCC has alleged that this arrangement had a substantial purpose of fixing milk prices in the Northern Territory. It is separately alleged that the four remaining respondents, Messrs McCray, Jardine, See and Morgan were, to varying degrees involved in the making of the arrangement or arriving at the understanding.

5 The ACCC filed an amended statement of claim on 15 October 2001 and all respondents have now filed their defences. A directions hearing in this matter is listed for 29 April 2002. Present indications suggest that on that date pleadings will have closed, discovery will have been completed, witness statements will have been filed and served and the matter will then be ready to be set down for trial.

6 Section 48 of the Federal Court of Australia Act 1975 (Cth) provides that:

"The Court or a Judge may, at any stage of a proceeding in the Court, direct that the proceeding or a part of the proceeding be conducted or continued at a place specified in the order, subject to such conditions (if any) as the Court or Judge imposes."

As to this, a Full Court of this Court has said in National Mutual Holdings Pty Ltd & Ors v The Sentry Corporation & Anor (1988) 19 FCR 155 at 162:

"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 be defined more closely or precisely."

7 The interests of the parties include such matters as the place of residence or business of the parties and their witnesses, the nature of the proceedings, the place where the cause of action arose and any matters of public interest.

8 Order 10 rule (1)(2)(f) does not carry the matter any further save that it includes some directions of a procedural nature. It provides that the Court or a judge may:

"(f) direct that the proceeding be transferred to a place at which there is a Registry other than the then proper place. Where the proceeding is so transferred, the Registrar at the proper place from which the proceeding is transferred shall transmit all documents in his charge relating to the proceeding to the Registrar at the proper place to which the proceeding is transferred."

9 Order 30 rule 6 acknowledges that the place of trial of a proceeding is to be the proper place. At present, the proper place is Darwin, which is the location of the Northern Territory registry of the Court. However, O 30 r 6(2) provides that:

"(2) On the application of a party or of its own motion, the Court may direct that the trial, or part of the trial, of a proceeding be held at a place other than the proper place."

10 There are therefore, as counsel for the moving parties acknowledged, two different questions that have been raised by the orders that have been sought in the notice of motion. The first relates to the proper place. Should the proceedings, at least for the time being, be retained in Darwin, or should they, as the moving parties seek, be removed to Brisbane. The second and independent question is the ultimate location of the trial. If an order moving the proper place were to be made it would probably - although not conclusively - mean that the trial would be heard in Brisbane. On the other hand, if the proper place were to be retained in Darwin, it would not necessarily mean that the trial would have to be conducted in Darwin; there might be a case for arguing that it - or a substantial part of it - should be heard in Brisbane. I think that I can dispose of the question of the place of trial on a temporary basis. Although the moving parties argued that Pauls' place of business was in Brisbane and that Mr McCray and Mr Jardine lived in Queensland, neither they, the ACCC, nor any of the other respondents have placed before the Court details of their intended witness, their place of business, or their place of residence. It is true that most counsel and instructing solicitors come from the eastern states but not all of them are based in Brisbane. Some come from Sydney and another from Melbourne. It is really too early to make a decision about the ultimate location of the trial.

11 I turn then to the question of the proper place.

12 I have already mentioned that Pauls' principal place of business as well as its administration centre is situated in Brisbane. It does, however, have an office in Darwin. Mr Gibson also advanced, as part of his argument on the question of convenience, that the registered offices of Malanda and ACF and the place of residence of Mr See were all located in Brisbane. That particular argument cannot, in my opinion, assist Mr Gibson's clients. Those respondents could have, if they wished, supported his clients' application, but they chose not to do so. Although their position can only be regarded as neutral, it would not be appropriate to use their circumstances as matters in aid of the application, any more than it would be appropriate to use their circumstances as matters supporting the opposition of the ACCC to the orders sought.

13 Mr Gibson next argued that the solicitors and counsel representing his client reside in Brisbane but, as against that, the ACCC's counsel is based in Sydney. I have already noted that other legal representatives come from Sydney and Melbourne. It is, of course, the free and unfettered right of a litigant to arrange for legal representation from the State or Territory of its choosing. As Mr Gibson submitted, (although there was no evidence to this effect) a litigant might have a long standing relationship with its legal advisers and, for that reason alone, it might desire those advisers to act for it, irrespective of the location of the litigation. On the other hand, it was not submitted that competent solicitors and barristers are unavailable in Darwin. Therefore, if, in respect of a Darwin matter, a litigant denies itself the opportunity of competent local representation and chooses to be represented by interstate solicitors and counsel, it cannot then turn its free choice into a justification for a change of proper place. Its ongoing relationship with its advisers remains a matter to be weighed in the balance, but without the details of the relationship between the first, fourth and fifth respondents and their legal advisers, the application to transfer these proceedings to the Queensland Registry is not materially assisted by the fact that the first, fourth and fifth respondents' solicitors and counsel reside in Brisbane.

14 The affidavit of Mr Archos, the solicitor for the first, fourth and fifth respondents complains that the conduct of these proceedings in Darwin will mean that senior executives of Pauls will be required to spend time in Darwin thereby resulting in interference with their duties in their home state. That might well be the case but Pauls' chose to extend its business activities to the Territory. That choice presumably caused some time and energy to be expended in the Territory by some of its personnel. These proceedings are but a consequence of that time and energy. The subject matter of this complaint is one that is to be taken into consideration but because the business activities of Pauls are apparently extensive in the Territory it is not a matter to which I would attach great importance.

15 Save for the costs of travel no evidence was advanced by the moving parties that would point to further interlocutory issues being adversely affected by the location of the proper place. As to the costs of travel, they have been minimised in the past and, probably, would be minimised in the future by the use of video facilities. In any event no specific difficulty about future directions hearings or interlocutory applications was identified.

16 The remainder of Mr Gibson's submissions were directed, in the main, to the place of trial and, as I have already noted, they can remain for consideration on a later occasion. Questions such as travel and accommodation costs cannot properly be addressed at this stage because of the lack of particularity.

17 In Cycles & Wheelman Pty Ltd & Ors v Beltech Corporation Ltd (1988) 80 ALR 279, Gummow J heard a motion to direct the transfer of a proceeding from the New South Wales Registry to the Western Australian Registry. His Honour noted that the consequence of an order that the further conduct of the proceedings be at the Western Australian Registry was that Perth would be the "proper place" within par (b) of the definition of that term in O 1, r 4, with the result that under O 30, r 6 the trial of the proceedings would be at Perth unless fixed elsewhere. As to the test to be applied, his Honour observed:

"It is not, in my view simply a question of the Court locating the balance of convenience, because the Court must be satisfied by the applicant that there be a change in the status quo and in the identity of the `proper place' and that transfer be ordered. Nor, contrary to some of the submissions made this morning, is much guidance to be derived from cases in other jurisdictions, particularly those jurisdictions lacking the national character of this Court, and those providing for trial by jury of civil claims.

There is in my view no useful purpose served, and some risk of mischief, by seeking to place upon the discretion of the Court in disposing of applications such as the present the fetters of any precise verbal formula. Particularly is this so where the matter is one of practice and procedure: see generally Jess v Scott (1986) 12 FCR 187." (p 281)

18 These remarks of his Honour were quoted with approval by the Full Court in National Mutual Pty Ltd v Sentry Corporation.

19 These present proceedings were appropriately instituted in the Northern Territory Registry; hence the Court must be satisfied that there is a sound reason to direct that the proceedings be conducted or continued elsewhere. While the balance of convenience will generally be a relevant consideration, it is not necessarily determinative: National Mutual v Sentry Corporation at 162; furthermore, the test of "manifest preponderance of convenience" is not the appropriate test for this Court to apply in considering motions under s 48 of the Federal Court Act and the Court's Rules: National Mutual v Sentry Corporation at 167. Although there is no onus as such on the moving party, the Court must be satisfied, after considering all relevant matters, that there is a sound reason to direct that the proceeding be conducted or continued elsewhere: National Mutual v Sentry Corporation at 162. Those matters were identified in these terms:

"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."

20 There are three matters which, in my opinion, weigh the scales in favour of rejecting the application for a change in the proper place. The first is that most procedural steps and the pleadings have been handled without apparent difficulty through the Northern Territory Registry. The second matter is that the second and third group of respondents have remained silent with respect to this application. This raises a possible inference that they do not perceive a pressing need to change the proper place. The final matter is that this particular piece of litigation raises important questions of public interest for the Darwin community in particular and the Territory community in general. There is a most serious allegation that the respondents have engaged in a price fixing arrangement with respect to milk. Those allegations have been denied but until resolved they remain of intense interest to members of the public.

21 Other factors may, in due course, come to light that might outweigh this public interest and justify moving the trial - or part of it - to Brisbane. Until then, however, the matter should remain in Darwin.

22 It only remains to emphasise the national character of the Federal Court and its willingness, and the willingness of its judges, to assist litigants by engaging in cost-effective exercises. On occasions too numerous to mention, judges of the Court have sat in more than one location, both to accommodate the convenience of witnesses and to assist in reducing costs. I see no reason why that should not be an option to be explored by the parties to this litigation after they have finalised their preparations for trial.

23 The application to transfer the proper place to the Queensland Registry is refused. The application for an order that the trial of these proceedings be held in Brisbane is adjourned with liberty to any party to bring the matter back for further consideration on seven days notice.

24 The costs of the present application and these orders is referred to the trial judge.

I certify that the preceding twenty-four (24) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice O'Loughlin.

Associate:

Dated: 8 February 2002

Counsel for the Australian Competition and Consumer Commission :	Mr Ian Tonking
Solicitor for the Australian Competition and Consumer Commission:	Australian Government Solicitor
Counsel for the First, Fourth and Fifth Respondents:	Mr G J Gibson QC
Solicitors for the First, Fourth and Fifth Respondents:	Biggs & Biggs
Counsel for the Second and Third Respondents:	Mr I Wylie
Solicitors for the Second and Third Respondents:	Blake Dawson Waldron
No Appearance for and on behalf of the Sixth Respondent:
Solicitor for the Seventh Respondent:	Clayton Utz
Date of Hearing:	4 February 2002
Date of Judgment:	8 February 2002