Cultivaust Pty Ltd v Grain Pool of Western Australia [2001] FCA 1749 (12 December 2001)

Last Updated: 14 December 2001

FEDERAL COURT OF AUSTRALIA

[2001] FCA 1749

Cultivaust Pty Ltd v Grain Pool of Western Australia

PRACTICE AND PROCEDURE - whether to transfer proceedings pursuant to O 10 r 1(2)(f) of the Federal Court Rules - whether there is a sound reason that the proceeding be conducted or continued elsewhere - whether the balance of convenience lies with transferring the proceeding or retaining the current venue - consideration of the respective financial positions of the parties - consideration of the efficient administration of the Court.

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

National Mutual Holdings Pty Ltd v The Sentry Corporation (1988) 19 FCR 155 - applied

CULTIVAUST PTY LTD & THE STATE OF TASMANIA v GRAIN POOL OF WESTERN AUSTRALIA & THE STATE OF WESTERN AUSTRALIA

S 104 of 1999

MANSFIELD J

12 DECEMBER 2001

ADELAIDE

IN THE FEDERAL COURT OF AUSTRALIA
SOUTH AUSTRALIA DISTRICT REGISTRY	S 104 OF 1999

BETWEEN:	CULTIVAUST PTY LTD FIRST APPLICANT THE STATE OF TASMANIA SECOND APPLICANT
AND:	GRAIN POOL OF WESTERN AUSTRALIA FIRST RESPONDENT THE STATE OF WESTERN AUSTRALIA SECOND RESPONDENT
JUDGE:	MANSFIELD J
DATE OF ORDER:	12 DECEMBER 2001
WHERE MADE:	ADELAIDE

THE COURT ORDERS THAT:

1. The application of the first respondent to transfer the proceeding is refused.

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

IN THE FEDERAL COURT OF AUSTRALIA
SOUTH AUSTRALIA DISTRICT REGISTRY	S 104 OF 1999

BETWEEN:	CULTIVAUST PTY LTD FIRST APPLICANT THE STATE OF TASMANIA SECOND APPLICANT
AND:	GRAIN POOL OF WESTERN AUSTRALIA FIRST RESPONDENT THE STATE OF WESTERN AUSTRALIA SECOND RESPONDENT

JUDGE:	MANSFIELD J
DATE:	12 DECEMBER 2001
PLACE:	ADELAIDE

REASONS FOR JUDGMENT

1 This is an application by the first respondent to transfer these consolidated proceedings to the Western Australian Registry of the Court pursuant to O 10 r 1(2)(f) of the Federal Court Rules (the Rules). It is supported by the second respondent, and opposed by the applicants. It is not the first such application. If the proceedings are transferred to the Western Australian Registry, that registry becomes the "proper place" of the proceedings and, subject to any other order, the trial then will take place in Western Australia: O 30 r 6(2) of the Rules.

2 On 5 July 2000, Heerey J dismissed an application by the first respondent to the same effect. The material then relied upon by the first respondent was contained within the affidavit of Peter Thomas Wells sworn on 27 May 2000 (the Wells affidavit). The applicants opposed that application based upon material in the affidavit of Timothy Jon Teague sworn on 15 June 2000 (the first Teague affidavit). The parties accept that the principles applicable to exercising the discretion to make an order under O 10 r 1(2)(f) of the Rules are those to which Heerey J referred in his reasons for decision, based upon the observations of the Full Court in National Mutual Holdings Pty Ltd v The Sentry Corporation (1988) 15 FCR 155 at 162, in particular:

"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. It should be noted that the Court may exercise its powers under O 30, r 6 either on the application of a party or of its own motion. 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."

3 The first respondent now again relies upon the material in the Wells affidavit, supplemented by the material in the affidavit of Michael Grant Lundberg sworn on 12 September 2001. The applicants again rely upon the material in the first Teague affidavit, supplemented by the material in the affidavits of Timothy Jon Teague sworn on 5 October 2001 (the second Teague affidavit) and of Mark William Kurtze sworn on 28 September 2001 (the Kurtze affidavit). It is apparent that the grounds upon which the application before Heerey J was supported and opposed are in general terms the same as the grounds advanced by the parties on the present application.

4 Before considering afresh those grounds, and including considering the extent to which changes of material matters after the decision of Heerey J may have arisen, it is appropriate to refer briefly to the decision of Heerey J.

5 His Honour described the case put by the first respondent in support of the transfer of the proceedings to be based "in large measure on what were said to be the cost and inconvenience of conducting proceedings, and in particular the trial, in South Australia." He referred to the fact that very many of the witnesses who would be called by the first respondent are residents of Western Australia, based upon the analysis of the factual issues which then emerged from the pleadings. Heerey J also referred to the fact that there will also be important witnesses who are resident in South Australia and in Tasmania. His Honour was alert to the possibility that many of those factual issues might become non-contentious, or might be established by documentary evidence.

6 Heerey J also regarded the fact that von Doussa J, in whose docket the matter then lay, had a detailed knowledge of the case and would be able to direct the future management of the matter in a way consistent with his earlier directions and the parties' expectations arising from those directions. His Honour called that "an important feature" in the application then before him. He described the proposed transfer of the proceedings as "a disruption to the efficient management of the case".

7 There were three further matters to which Heerey J adverted. One was the position of the applicants' counsel. The transfer of the proceedings would, he considered, involve considerable additional expense to the applicants either because of the substantial travel costs of counsel which would then be incurred, or because it would be necessary to retain counsel in Western Australia who would then have to bring themselves up to the present state of knowledge. The second matter was the relative financial impact of the transfer upon the capacity of the first applicant to conduct the proceedings in Western Australia, compared to the capacity of the respondents to conduct the proceedings in Western Australia. He was satisfied that, having regard to the existing resources of the first applicant on the one hand and the first respondent on the other, the extra expense involved in a transfer of the proceeding to Western Australia would be a "substantial burden" on the first applicant and "would exacerbate the existing imbalance of financial resources" between those two litigants. The third matter was the prospect of mitigating the disadvantage to the first respondent of retaining the case in South Australia by having some part of the trial in Western Australia or by having some evidence given by video link.

8 Heerey J concluded:

"It is true that as the matter approaches trial it may be possible so to mitigate such disadvantage as has occurred to Grain Pool by retaining the case in South Australia by perhaps having some part of the trial in Western Australia and/or some part of the evidence given by video-link. These sorts of considerations are mentioned by the Full Court in Andrew and Frewin Pty Ltd v Arrow Ltd, unreported, 6 June 1990. That is true and relevant, although in present circumstances perhaps not carrying a great deal of weight because trial is a substantial way off and it is not really practicable, particularly for me, who has not had the previous management of the case, to give worthwhile intimations in any detail as to how the trial should take place.

For all those reasons, while Grain Pool have put forward a not insubstantial case in support of their application, taking all factors into account I am not persuaded that the order sought should be made. The motion by notice dated 29 May 2000 will be dismissed. The respondent must pay the applicants' costs of the motion."

9 What has changed? On 23 April 2001, the High Court ordered the remittal to this Court of the proceedings in action No.A11 of 1998. Those proceedings raised issues as to the validity of certain provisions of legislation upon which, in part, the applicants' claim is based or upon which the respondents' rely to justify the conduct of the first respondent. On 29 June 2001, von Doussa J ordered those remitted proceedings to be consolidated with the proceedings already on foot in this Court. The consequence was that the State of Western Australia became the second respondent to these proceedings. Secondly, in August 2001 solicitors for the parties were informed that von Doussa J would no longer be the docket judge and would not be the trial judge. At that time, the proceedings had progressed to the stage where it was appropriate to address the fixing of a date for the hearing. Directions had been given setting in place a timetable for outstanding steps to be completed to ensure the matter is ready for trial, including the exchange of experts reports, and the Court has indicated that the hearing can commence from the last week in March 2002.

10 I do not regard the consolidation of the proceedings with the remitted High Court action, or the fact that the State of Western Australia is now a party to the consolidated proceeding, as of particular moment in the present circumstances. The issues which thereby arise can be argued relatively discretely for the purpose of the hearing. The parties have engaged counsel to argue those discrete issues, and it is proposed that a particular period of about a day will be set aside for those arguments to be presented.

11 It is somewhat ironical in the circumstances that the respondents rely upon the change of the docket judge as a reason for renewing the application to transfer the proceedings. That change occurred because the parties were desirous of securing a trial date, and von Doussa J had existing commitments which made it unlikely that he would be available for the time it was contemplated as necessary for trial in the period in which the parties' reasonable expectations for a trial date could be met. The change of docket judge was at a point where most of the directions necessary for the matter to be ready for trial were in place, and for the purpose of providing a timely trial date at the completion of those pre-trial procedures. Nevertheless, it is necessary to address the application of the first respondent in the light of that changed circumstance and the material now before the Court.

12 The respondents have correctly described the causes of action pleaded (identified by reference to a document entitled "Consolidated Amended Statement of Claim" filed on 29 August 2001 although that document was filed after leave to file and serve an amended statement of claim had elapsed) as being based on facts largely "anchored" in Western Australia, and with a strong Western Australian flavour. That position obtained when the proceedings were first instituted, and when Heerey J refused the first respondent's earlier claim to have the proceedings transferred to Western Australia. It was not then contended, nor is it now contended, that the institution of the proceedings in the South Australian Registry was capricious or irrational, so that the proceedings when instituted were not in a "proper place". The proceedings have a relevant connection with South Australia as the first applicant has its principal place of business as a grain trader in South Australia and to a substantial extent the relevant documentary material is and was at material times in South Australia. Many of the communications relevant to the proceedings were in writing, and were exchanged between the first applicant in South Australia and the first respondent in Western Australia. Certain supplies of Franklin barley seed to which the proceedings relate emanated from South Australia. There are also elements of relevant communications which took place between Western Australia and New South Wales.

13 The balance of convenience, as I presently assess it, lies strongly in favour of retaining South Australia as the proper place for the proceedings so that the trial will take place in South Australia, subject to any special orders about particular evidence. The applicants' solicitors and counsel are and have been at all times located in South Australia, save for senior counsel to argue the discrete issue arising from the consolidation of the remitted High Court action. The first applicant's documents are in South Australia, and its principal proposed witnesses are located in that State or have residences there. Given its administrative structure, its day to day operations would be likely to be significantly impaired if its senior active management were required to be in Western Australia for lengthy periods. I note that it is likely that it will call witnesses also from Tasmania and Victoria, and perhaps one from overseas. I have no reason to think that, in the case of those witnesses, either South Australia or Western Australia is a more convenient venue for their evidence. In addition to that administrative burden, I also accept that the first applicant's annual revenue is such that the additional expenses involved in the matter now being conducted in Western Australia, in particular the trial, would impose a very real financial burden upon its operations. Its annual revenue is now much less than it was at the time of Heerey J's decision. The revenue available to the first respondent is of a much higher order, and the costs which it will incur by the proper place of the proceeding remaining unchanged are unlikely to impose anywhere near such a practical burden. Although I accept that the first respondent is likely to call a number of witnesses in Western Australia, the Court may (as Heerey J observed) mitigate the practical difficulties and expense of all those witnesses being brought to South Australia by directing that the hearing take place partly in Western Australia or by taking certain evidence by video link. The number and location of witnesses to be called by the parties is not yet clear enough to presently address the making of such orders.

14 The imbalance of administrative and financial resources to which I have referred is, as the first respondent contends, to be viewed in the context that the second applicant clearly would have the ability to participate in, and support the conduct of, the proceedings wherever their proper place. In that sense, both the second applicant and the second respondent should be regarded equally. It is unclear to what extent the second applicant is undertaking the expenses for professional fees of the first applicant in the preparation and presentation of the case. I regard the first Teague affidavit and the second Teague affidavit as indicating that it is the first respondent which is really absorbing that costs burden. There was no attempt to cross-examine him on that topic. The first respondent does not appear to have taken this point when the issue was argued before Heerey J. Moreover, the first applicant is the party for whose monetary benefit these proceedings are principally being conducted. The second applicant will clearly benefit from the making of the declaratory orders sought, and may also benefit monetarily in a derivative sense by receiving the benefits applicable under the licence agreement between itself and the first applicant.

15 The determination of this application, having regard to the matters to which I have referred and to which the respective submissions of the parties referred, is not without difficulty. In the end, I have come to the view that I should refuse the application. There are factors which weigh heavily in the scales in favour of granting the application, including that the causes of action arose in Western Australia and a significant number of likely witnesses reside there as well as the fact that the solicitors for each of the respondents are located there. There will be an increased burden on those parties and their solicitors and counsel if the proper place of the proceedings remains in South Australia, although if appropriate orders are made that certain evidence be taken in Western Australia or by video link that burden will be somewhat eased. (I note the suggestion in the first Teague affidavit that counsel for the first respondent are not counsel based in Western Australia, but that issue has not been further explored in the later affidavits, and I have not assumed that is the case in reaching my conclusion). The factors pointing towards refusal of the present application include that the proceeding was instituted in the South Australian Registry without caprice or irresponsibility. To some extent, relevant transactions or communications emanated from or were received in South Australia, and facts relevant to the proceedings extend beyond Western Australia. In a practical sense, the first applicant resides in South Australia, and it has a number of witnesses resident in that State. I also have placed considerable weight on my assessment of the administrative and financial burden likely to be experienced by the first applicant if the proper place of the proceeding is moved to Western Australia. It has significantly less resources than the first respondent. The preparation of its case has been undertaken in South Australia; its documents are in that State; its expert witnesses on damages are located in that State. To transfer the proper place of the proceedings to Western Australia would impose the need to engage other solicitors and counsel in Western Australia at a very late stage of the proceedings or would involve a substantial additional cost and logistical burden upon a party with limited resources. To the point when the matter was assigned to another judge to ensure a prompt hearing, the first applicant following the decision of Heerey J was entitled to proceed upon the basis that the proper place of the action, including for the trial, would be South Australia.

16 Finally, but not insignificantly, I have considered the efficient administration of the Court. The matter was transferred from the docket of von Doussa J to provide a timely trial date after the matter is ready for trial. The interests of justice are best served by the issues being brought to trial promptly after the parties are ready for trial. It would, in my view, undermine the efficient administration of the Court if the allocation of a judge to hear a matter to meet the parties' expectations of a timely trial should provide the occasion for an application such as the present. More importantly, however, the Court having put in place the administrative arrangements to secure the timely hearing of this matter, the efficient administration of the Court is then best served by adhering to those arrangements. The fact of the change of docket judge is a matter to which I have had regard, but in the circumstances I do not consider that it provides any significant reason to warrant the transfer of the proceeding. It removes from the balancing exercise a consideration to which Heerey J had regard, but in my view it does not itself in the circumstances positively weigh much if at all in favour of the present application.

17 I do not consider, in this matter, that there are any differential substantive or procedural law provisions which might be relevant to the exercise of my discretion.

18 For these reasons, I refuse the application.

I certify that the preceding eighteen (18) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Mansfield.

Associate:

Dated: 11 December 2001

Counsel for the First & Second Applicants:	Dr M Perry
Solicitor for the First & Second Applicants:	Corsers
Counsel for the First Respondent:	Mr RL Hooker
Solicitor for the First Respondent:	Mallesons Stephen Jaques
Counsel for the Second Respondent:	Mr RM Mitchell
Solicitor for the Second Respondent:	Crown Solicitor for the State of Western Australia
Date of Hearing:	8 October 2001
Date of Judgment:	12 December 2001