Insulations Inc v Bellis Australia Pty Limited (ACN 010197 672) [2006] FCA 399 (6 April 2006)

Last Updated: 27 April 2006

FEDERAL COURT OF AUSTRALIA

Insulations Inc v Bellis Australia Pty Limited (ACN 010 197 672)
[2006] FCA 399

PRACTICE AND PROCEDURE – application to change venue of proceedings to the Queensland Registry – whether transfer appropriate in the circumstances of the case – location of documents - balance of convenience


Federal Court Act 1976 (Cth) – s 48
Federal Court Rules – Order 10 Rule (1)(2)(f)




Arrowcrest Group Pty Limited v DTM Racing Wheels Pty Limited [2003] FCA 564 referred to
Austal Ships Pty Ltd v Stena Rederi Aktiebolag [2004] FCA 302 cited
Inverness Medical Switzerland GMBH v Advanced Clinical Systems Pty Limited [2002] FCA 1261 referred to
National Mutual Holdings Pty Ltd v The Sentry Corporation (1988) 19 FCR 155 applied
Wilson v Rambaldi [2001] FCA 1038 referred to







INSULATIONS INC V BELLIS AUSTRALIA PTY LIMITED (ACN 010 197 672) AND TREVOR ISBEL
NSD 406 of 2006

JACOBSON J
6 APRIL 2006
SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NSD 406 of 2006

BETWEEN	INSULATIONS INC APPLICANT
AND	BELLIS AUSTRALIA PTY LIMITED (ACN 010 197 672) FIRST RESPONDENT TREVOR ISBEL SECOND RESPONDENT

JUDGE:	JACOBSON J
DATE OF ORDER:	6 APRIL 2006
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1.	The notice of motion filed on 30 March 2006 is dismissed.
2.	The costs of the motion are to be the applicant’s costs in the cause.

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

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NSD 406 of 2006

BETWEEN	INSULATIONS INC APPLICANT
AND	BELLIS AUSTRALIA PTY LIMITED (ACN 010 197 672) FIRST RESPONDENT TREVOR ISBEL SECOND RESPONDENT

JUDGE:	JACOBSON J
DATE:	6 APRIL 2006
WHERE MADE:	SYDNEY

REASONS FOR JUDGMENT

1 This is an application made under s 48 of the Federal Court Act 1976 (Cth) to change the venue of the proceedings from Sydney to Brisbane. The proceedings were commenced in the New South Wales District Registry by an application and statement of claim filed on 1 March 2006.

2 The applicant is a company incorporated in the United States which claims to have entered into a joint venture with the first respondent. The second respondent is a director of the first respondent.

3 The joint venture relied upon by the applicant was for the supply of insulation material to Bechtel Australia for Bechtel's liquefied natural gas project in Darwin. The tender proposal for what is said to constitute the joint venture was accepted by Bechtel in October 2004 and the parties are said to have entered into the joint venture agreement in November 2004.

4 The application contends that the respondents breached the terms of the joint venture by failing to provide accounting information and failing to provide its share of profits. The claim is made for damages for breach of contract.

5 The applicant also claims under s 52 of the Trade Practices Act 1974 (Cth) ("TPA"). The applicant's claim is essentially that the first respondent represented that the parties were joint venturers and that the representation was misleading and deceptive because the first respondent now asserts that the parties are not joint venturers and has refused to pay its share of profits.

6 The second respondent is apparently the sole director and majority share holder of the first respondent and the claim which is made against him is for aiding and abetting the breach of s 52 of the TPA in contravention of s 75B(1).

7 An estoppel claim is also pleaded in the statement of claim.

8 An application to change the venue was supported by evidence of the second respondent, Mr Isbel. He has put on evidence as to the location of his company in Brisbane. He says that all of the communications by or on behalf of the second respondents were made or conducted in either Brisbane, Darwin or in the United States and he says that any witnesses for the respondent's case will be from either Brisbane or from Darwin. He has communicated with and instructed solicitors in Brisbane and Mr Gillard, who appears today for the respondents, appears as the agent of the Brisbane solicitors.

9 The applicant opposes the change of venue. The applicant has filed an affidavit of Mr Fazzone who is a partner in a law firm based in Washington but who now lives and works in Sydney. His family lives in Sydney and he travels regularly between the United States of America and Sydney to discharge the requirements of his legal practice.

10 The applicant has its head office in New Orleans and it does not have any offices or staff permanently located in Australia.

11 Mr Fazzone has been instructed to supervise the conduct of the proceedings. He takes instructions directly from senior executives of the applicant in the United States and in a practical sense is the applicant's representative in Australia. He has instructed Mr Collins of Clayton Utz Sydney office and he says that all of the documents and records of the applicant which are relevant to these proceedings are in his custody. The documents are located in Mr Fazzone's Sydney office. He contends in his affidavit that it would be more difficult for him to conduct the proceedings if he were required to retain new lawyers in Queensland; that even if the Clayton Utz Brisbane office is involved there would be additional expense and inconvenience in having to travel to Brisbane.

12 I have evidence before me that Clayton Utz has a Brisbane office with a substantial number of employees and that there is also a litigation department of Clayton Utz as one would expect in their Brisbane office.

Discussion

13 The principles upon which the discretion is to be exercised in an application under s 48 were stated by a Full Court in National Mutual Holdings Pty Ltd v The Sentry Corporation (1988) 19 FCR 155 ("Sentry"). The decision in that case has been followed on numerous occasions.

14 The Court referred at 162 to the unfettered nature of the discretion and pointed out that the discretion should be exercised flexibly having regard to the circumstances of the particular case. Their Honours observed that there is no onus of proof in the strict sense to be discharged; the court must be satisfied that there is sound reason to direct that the proceedings be conducted or continued elsewhere. Weight is to be given to the fact that the proceedings have been commenced in the proper place, which in this case is in Sydney. However, if the proper place has been chosen capriciously then no weight will be given to the choice of the proper place of the proceedings. The test was stated at page 162 as follows:

"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 be defined more closely or precisely."

15 In Austal Ships Pty Ltd v Stena Rederi Aktiebolag [2004] FCA 302 at [9], Crennan J observed that there is need on the part of an applicant to demonstrate "a sound reason" for the proceedings to be conducted or continued elsewhere.

16 Mr Gillard for the applicant accepts that it is necessary for him to demonstrate that there is a sound or good reason. What Mr Gillard puts in this case as the good reason for transfer is, in his submission, the fact that the communications between the parties for the establishment of what is said to be the joint venture consists of documents which were communicated between the respondent's offices in Brisbane and the applicant's offices in the United States. Accordingly, all of the respondent's documents are now located in Brisbane.

17 It is possible that some of the documents were originally in Darwin, which is where the project was undertaken, but the evidence establishes, as I understand it, that any documents of the respondents that were located in Darwin are now to be found in Brisbane.

18 Mr Gillard points to the fact that in the application the applicant seeks an order for inspection of all relevant documents which are defined in very wide terms in a note to the application. These documents are documents which concern the profits made from what is said to be the joint venture between the parties. There is further reference to this in [20] of the statement of claim, which pleads that the applicant has suffered loss and damage and states in the particulars that particulars will be provided after access is given to the relevant documents as defined in the broad terms which I have mentioned in the application.

19 Mr Gillard says that the interlocutory steps in the proceeding would be more conveniently carried out if the proceedings are transferred to Brisbane. He says that this is demonstrated by the need for the inspection of the documents which I have mentioned.

20 Although he pointed to a number of other matters including the fact that representations are pleaded in the statement of claim, these representations being perhaps sourced in some respects to the documents, it does seem to me that the substantial point which Mr Gillard puts is the convenience or inconvenience arising from the present location of the documents in Brisbane.

21 He says that if the proceedings remain in the Sydney Registry that the document will have to be brought to Sydney and that there will be additional expense involved in so doing that there may be the involvement of two sets of lawyers because the respondents have instructed the Brisbane solicitors that I have mentioned, and that questions of relevance of the documents and perhaps claims for privilege will have to be sorted out between Brisbane and Sydney.

22 On the other hand Mr Higgins points to the fact that his clients documents are located in Sydney, the evidence establishing that those documents are now in Mr Fazzone's office.

23 It seems to me that the issues between the parties are quite finely balanced. Mr Gillard accepts this but he submits that the one matter which does establish a good reason is the issue of the location of the documents. It does seem to me that the question of location of documents would not ordinarily be a good reason for exercising my discretion under s 48 to change the venue of the proceedings.

24 It would be just as inconvenient for the applicant to have to move its documents to Brisbane as for the respondents to bring the documents from Brisbane to Sydney. I doubt that ordinarily that could amount of a good reason for the change of venue. It is not suggested and, indeed, Mr Gillard accepted that the choice of Sydney as the proper place for the proceedings was not capricious.

25 Accordingly, I do have to give some weight to the fact that the applicant has properly commenced the proceedings here.

26 What does concern me, however, is that it is not merely the fact that the documents are located in Brisbane but that these documents form the foundation of what the applicant contends to be the joint venture between the parties and the claim for damages arising from the alleged breach of contract. However, the documents which are sought in the application and in [20] of the statement of claim seem to be confined to the claim for damages.

27 In Wilson v Rambaldi [2001] FCA 1038 ("Wilson v Rambaldi"), Tamberlin J exercised the court's power under s 48 to change the venue from New South Wales to Victoria. He pointed at [11] to the fact that the evidence did not establish any relevant connection of the matter with New South Wales with the exception of an assertion that it was not possible to obtain legal representation in Victoria.

28 However, in that case, all of the parties were residents of Victoria and his Honour went on to find at [13] that in the absence of any indication of a substantive connection with New South Wales, it was in the interests of justice and in the interests of the most effective administration of the court within the principles stated in Sentry that the proceedings be removed to the Victorian Registry pursuant to s 48 of the Act.

29 On the other hand, in Inverness Medical Switzerland GMBH v Advanced Clinical Systems Pty Limited [2002] FCA 1261, Stone J, in circumstances which are quite similar to the present case declined to exercise the discretion under s 48. Her Honour observed at [5] that the relative inconvenience for the parties seemed to be finely balanced. That seems to me to be the position in the present case.

30 Her Honour referred to the fact that the Federal Court is a national court and that the court has power under Order 30 rule 6(2) to minimise inconvenience by ordering that part of the proceeding be heard in Brisbane. That was a consideration to which Mansfield J referred in Arrowcrest Group Pty Limited v DTM Racing Wheels Pty Limited [2003] FCA 564 at [4].

31 His Honour there pointed out that it is not uncommon that the court in the exercise of its power, and having regard to the convenience of the parties or witnesses and the most efficient and economic means of conducting a trial to direct that part of the trial be heard in another place.

32 These proceedings are at a very early stage. The respondents have not yet filed their defence and no evidence is before me on the applicant's case. It seems to me that the considerations which led Tamberlin J to exercise the discretion under s 48 in favour of a change of venue in Wilson v Rambaldi are not present here. This is because, as I have said, in that case all of the parties were resident in Victoria.

33 Here, the applicant has a presence in New South Wales and the choice of venue is not capricious. Accordingly, the considerations which led Tamberlin J in Wilson v Rambaldi to find an absence of any substantive connection with New South Wales are not present here.

34 I have given the matter very careful consideration and I consider that notwithstanding the fact that the documents of the respondents are presently in Brisbane and will have to be transported to New South Wales, from the material so far put before me, the case can be most suitably conducted in New South Wales in the interests of all the parties and in the interests of the ends of justice and the most efficient administration of the court, consistently with the statement of principle referred to in Sentry at 162.

35 Accordingly, I have come to the view that the order I will make is that the motion be dismissed.

36 I will make an order that the costs of the motion be the applicant's costs in the proceedings.

I certify that the preceding thirty six (36) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jacobson.

Associate:

Dated: 10 April 2006

Solicitor for the Applicant:	Clayton Utz
Solicitor for the Respondent:	Hemming + Hart
Date of Hearing:	6 April 2006
Date of Judgment:	6 April 2006