FEDERAL COURT OF AUSTRALIA

Wyllie Group Pty Ltd v ANZ Securities Ltd [2000] FCA 1382

PRACTICE AND PROCEDURE – transfer of proceeding – whether proceeding should be transferred from Western Australia District Registry to Victoria District Registry – application based on alleged contravention of the Trade Practices Act 1974 (Cth) s 52, breach of fiduciary duties and breach of duty of care – interests of justice – balance of convenience – meaning of “proper place” – similar proceedings in Victoria District Registry involving same respondents – case management – applicants reside in Western Australia – relevant factors.

Federal Court of Australia Act 1976 (Cth), s 48

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

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

Australian Workers Union v BHP Iron Ore Pty Ltd [2000] FCA 39 referred to

AMC Investments Ltd v Willey & Ors (unreported, Federal Court of Australia, von Doussa J, 23 November 1989) referred to

K C Park Safe (SA) Pty Ltd v Adelaide Terrace Investments Pty Ltd [1998] FCA 601 referred to

Australian Co-operative Foods Ltd v National Food Milk Ltd [1998] FCA 376 referred to

WYLLIE GROUP PTY LTD v ANZ SECURITIES LTD

W90 of 2000

CARR J

13 SEPTEMBER 2000

PERTH

THE COURT ORDERS THAT:

1.         The proceeding be transferred to the Victoria District Registry of the Court.

2.         Costs of the motion be costs in the cause.

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

REASONS FOR JUDGMENT

(EX TEMPORE)

introduction

1                     By notice of motion filed on 3 July 2000 the respondents seek orders pursuant to s 48 of the Federal Court of Australia Act 1976 (Cth) and/or Order 10 rules 1(1) and 1(2)(f) and/or Order 30 rule 6 of the Federal Court of Australia Rules, that this proceeding be conducted or continued, and/or that the trial of this proceeding be held in the Federal Court of Australia (Victoria District Registry) in Melbourne in the State of Victoria.  The respondents also seek an order that the applicants pay the costs of their motion.  The applicants oppose the motion to transfer the application.  Their position is that there is a possibility that, at a later stage, it might be appropriate to change the venue of the trial.  At this stage, they anticipate that they would, at that time, oppose such change in venue.

The legislative framework

2                     Section 48 of the Federal Court of Australia Act provides:

“48.  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.”

3                     Order 10 rule 1(1) of the Federal Court Rules provides that on a directions hearing the Court shall give such directions with respect to the conduct of the proceeding as it thinks proper.  Order 10 r 1(2)(f) relevantly specifies that, without prejudice to the generality of sub-rule 1, the Court may direct that the proceeding be transferred to a place at which there is a registry other than the then proper place.  That sub-paragraph also provides that 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.  The term “proper place” is defined in Order 1 rule 4 as meaning (a) where there has been no transfer, the place at which the proceeding was commenced, and (b) where there has been a transfer, the place to which the proceeding was transferred. 

4                     Order 30 rule 6 deals with the venue for the trial of proceedings in the Court.  It provides that subject to sub-rule (2) the place of trial of a proceeding is to be in the proper place.  Sub-rule (2) provides that 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.

5                     I shall first consider that part of the respondents’ motion which seeks an order in effect that the proceedings be conducted or continued in Melbourne.  But before doing so I shall summarise the nature of these proceedings. 

6                     In the principal application the first applicant Wyllie Group Pty Ltd, which I shall describe as an investment company (although it carries on other activities as well) and the second applicant, Mr Ian Malcolm Hoad, its managing director, sue the first respondent ANZ Securities Ltd which carries on investment advice and securities businesses and the second respondent Australia & New Zealand Banking Group Ltd which, of course, is a bank and which is the ultimate holding company of the first respondent.  The application arises out of the purchase from the first respondent by the first applicant and the second applicant respectively of shares in a company and units in two unit trusts.  The company and one of those unit trusts held either directly or indirectly an interest in a consortium which owned and managed the Loy Yang “A” coal-fired power station and associated Loy Yang coal mine in Victoria. 

7                     The investments were offered and purchased in units of $500,000.  The first applicant bought eight such units (i.e. an investment of $4 million) and the second applicant bought one unit.  As I have said, the vendor of the investments was the first respondent.  The second applicant borrowed $300,000 from the second respondent in order to make his investment.  That involved the second applicant entering into various agreements including a margin lending agreement and a share mortgage agreement. 

8                     Both applicants sue the first respondent and the second applicant also sues the second respondent.  The applicants claim that the respondents misrepresented the supposed benefits of the investments and failed to disclose relevant information to them.  They raise three causes of action, namely, for misleading or deceptive conduct contrary to s 52 of the Trade Practices Act 1974 (Cth) (the conduct comprising both representations and non-disclosure), breach of fiduciary duties and breach of a common law duty of care.  The application and statement of claim were filed on 6 June 2000.  The respondents filed this notice of motion together with their notice of appearance on 3 July 2000.  They have also filed their defence and the applicants have filed a reply.  The respondents can be seen to have filed their motion at an early stage in the proceedings.

9                     The approach which a court should take when deciding a motion of this type was explained by a Full Court of this Court in National Mutual Holdings Pty Ltd v Sentry Corporation (1988) 19 FCR 155 at 162 in the following terms:

“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.”

10                  Both sets of parties to the motion have filed written outlines of submissions in relation to it.  There have also been oral submissions from both sides today.  I have read those submissions, but I do not propose to recite all of them.  I shall refer to the main arguments. 

11                  The respondents submit that on the application of the National Mutual Holdings approach, this matter should be transferred to Victoria.  Their main argument relates to five applications in this Court currently proceeding in the Victoria District Registry.  I shall refer to those proceedings as “the Victorian proceedings”.  In the Victorian proceedings, four of which commenced on 23 June 2000 with the fifth application having been lodged on 30 August 2000, a total of thirteen different applicants are suing the two respondents to these proceedings.  The application and statement of claim in each of those proceedings are annexed to affidavits filed by the respondents in support of this motion.  In their written submissions the respondents describe the Victorian proceedings as “involving virtually identical issues” to those raised in this matter.  In a supporting affidavit, sworn on 15 August 2000 by Mr Timothy Connard, a corporate lawyer employed by the second respondent, Mr Connard describes the issues as being “… similar to the issues in this proceeding …”.  I have read the five applications and statements of claim in the Victorian proceedings and I think that Mr Connard’s description is closer to the mark.  However, the matter has to be very much one of impression, given that I have had access only to those pleadings.  Nevertheless my impression is that whilst not identical, the issues in the Victorian proceedings are very similar to the issues raised in this matter.  At the very least there are substantial common issues.  For example (and I stress that these are only examples) common issues include whether the express representations were false, whether the respondents were aware or should have been aware of matters which were said not to have been disclosed, whether the respondents observed any requisite fiduciary duties, whether the respondents were negligent and, depending upon the findings on liability, whether the investments were worth what the applicants paid for them.  The events described in the various statements of claim in the Victorian proceedings and in this matter occurred during much the same period.  I note that some of the paragraphs in the statement of claim are in the same terms, word for word, as some of the paragraphs in at least one of the statements of claim in the Victorian proceedings.

12                  The respondents submit that the orderly and efficient conduct of the business of the Court requires that this proceeding be managed during both the interlocutory and trial phases in conjunction with the other five proceedings.  They contend that it may emerge that it is appropriate that the respondents give discovery in respect of certain subject matters on only one occasion rather than on six occasions.  It might be appropriate, so it was put, that the trial of all proceedings occur simultaneously or that part of the trials of the various proceedings occur simultaneously.  The holding of a single trial is likely to be appropriate, so the respondents contend, in order to consume the least overall judicial resources and in order that the risk of inconsistent findings on common issues can be avoided.

13                  The applicants submit that the facts of this case differ from the facts of the Victorian proceedings in that their claims concern breaches of duties and obligations arising from a then existing relationship between the applicants and respondents and concern representations made by two employees of the respondents, unlike (so it is contended) many of the other Victorian proceedings.

14                  For the purposes of this motion, I accept that there exist the differences upon which the applicants rely.

15                  However, as I have mentioned earlier, despite those differences I consider that the issues raised in this matter and the issues raised in the Victorian proceedings are very similar. 

16                  The applicants concede that there are “some commonalities” in the six applications, but argue that it is too early to transfer this matter to Victoria.  Mr M J McCusker QC, senior counsel for the applicants contended that there was good reason why one application, and in particular this matter, should go forward first.  He pointed out that often where there is a group of cases such as this, if one case goes first as a test case, the decision in that case avoids the need for any further hearings in the other cases.

17                  My difficulty with that submission is that I do not think that it can be assumed that this matter would go to trial first as a test case.  The interlocutory proceedings, in terms of pleadings, are slightly further advanced in this matter when compared to the Victorian proceedings.  However, four of the defences in the Victorian proceedings are due to be filed by tomorrow and directions hearings are to be held in all five of the Victorian proceedings next Monday, 18 September 2000.  If there were to be a test case, generally speaking it would be desirable for a docket judge, handling all six cases, to decide which of the cases best fits the category of a test case.

18                  I accept Mr McCusker’s submission that there is a possibility that six sets of proceedings in Victoria would not progress as expeditiously to trial as might this application on its own in Western Australia.  However, that would depend very much on case management.  I am not satisfied that the five Victorian proceedings would not be ready for trial until a significant period after this matter would be ready for trial.  There may well be economies and efficiencies in handling the overall litigation which will bring all of the matters on for trial earlier than would otherwise occur here in Western Australia.

19                  Given the existence of six very similar proceedings, I think that it is in the interests of justice and good case management for the same judge to oversee the interlocutory steps so that all of the matters proceed together to trial.  For example, orders could be made for discovery on common issues, expert evidence and the obtaining of documents from third parties.  Even at an interlocutory stage there could be a saving in judicial resources with one judge dealing with the interlocutory matters rather than two.  There would certainly be a saving of that type if all of the matters were heard at the one hearing.

20                  In terms of all three main factors identified by the Full Court in National Mutual Holdings the existence and current status of such very similar proceedings in the Victoria Registry weigh, in my opinion, very heavily indeed in favour of transfer from Western Australia to Victoria.

21                  The applicants place reliance on the fact that they chose to commence the proceedings in Western Australia and that Western Australia is thus the “proper place” (as defined in the Federal Court Rules). 

22                  The authorities show that due weight should be given to the place at which the applicants choose to initiate the proceedings, unless that choice was made capriciously – National Mutual at 162 and Australian Workers Union v BHP Iron Ore Pty Ltd [2000] FCA 39 at paragraph 65.  There is no evidence from which it can be inferred that the applicants in this matter chose capriciously to lodge their application in Western Australia.  I take into account the applicants’ choice, but it must be weighed against all the other factors advanced by the respective parties. 

23                  The applicants make further submissions, along the following lines:

·          the first applicant’s registered office is and all of its employees reside, in Western Australia as does the second applicant;

·          the applicants two principal witnesses will be a Mr Bill Wyllie (chairman of the first applicant) who resides in Western Australia and the second applicant;

·          it is preferable for Mr Wyllie and the second applicant to be based in Perth and be available to supervise staff to perform their duties properly;

·          the respondents’ solicitors have instructed their Perth office and have engaged counsel and thus, so it is put, there would be no detriment in costs for the respondents if the proceedings remained in the Perth Registry;

·          the applicants have spent considerable time collating evidence and reviewing documents which would be wasted by having to instruct new solicitors and counsel in Victoria;

·          the applicants disagree that expert witnesses will be limited to experts residing in Victoria;

·          the representations were made in Western Australia either by way of telephone conversations or by correspondence sent to the applicants in Western Australia; and

·          all of the applicants’ documentation is located in Western Australia.

24                  In terms of Mr Wyllie and Mr Hoad’s residence and the need for them to remain in Western Australia, I am inclined to think that the applicants have overstated the significance of this.  As the respondents submit, the preparation of evidence can take place in Perth and my impression is that Mr Wyllie and Mr Hoad would not be required to be in Victoria for very long.  On the other hand, I doubt whether their evidence at trial would be such as would normally be taken in Perth by video if the application were transferred to Victoria.  But that, of course, would be a matter for the trial judge.  I accept that if the applicants choose to instruct Victorian solicitors and brief different counsel, then this will involve additional expense and that is a factor which must be weighed as part of the applicants’ interests which must be considered.  However, I do not regard that course as being inevitable.  These days Victorian counsel appear in Western Australia and vice-versa on a fairly regular basis.  Similarly, where the work of solicitors is done, is becoming a matter of wider choice.  I would imagine that most of any interlocutory applications could be dealt with by video-link. 

25                  I accept that given the importance of evidence as to the electricity market in Victoria and the securities market at the relevant times, it is likely that most of the experts will be based either in Victoria or New South Wales.  At the same time, it may well be that the applicants call expert evidence from elsewhere. 

26                  I was told from the bar table, without objection, that the principal lay witnesses to be called by the respondents, Messrs Tin and Macaw, are no longer employed by them.  They are thus, technically, in the category of third parties.  There is authority that the interests of third parties should be considered when deciding where proceedings should be conducted – see AMC Investments Ltd v Willey & Ors (unreported, Federal Court of Australia, von Doussa J, 23 November 1989 at 8).  While I take this factor into account, I would not regard it as being of substantial weight.

27                  The management of discovery of documents and issues of confidentiality in respect of those documents and any documents produced by third parties should, in my opinion, be conducted by one judge rather than a judge in Victoria for the Victorian proceedings and a judge in Western Australia for these proceedings.

28                  I take into account the fact that the representations upon which the applicants rely in this matter were made in Western Australia, but then it can be seen that they originated from Victoria.  The fact that all of the applicants’ documentation in located in Western Australia is, in my opinion, to a large extent counter-balanced by the fact that the respondents’ documentation is likely to be in Victoria.

29                  I also take into account the fact that Victoria was specified as the governing law of the investment transactions.  This is a relevant factor, but not a determinative one – see K C Park Safe (SA) Pty Ltd v Adelaide Terrace Investments Pty Ltd [1998] FCA 601 and Australian Co-operative Foods Ltd v National Food Milk Ltd [1998] FCA 376.  Mr McCusker pointed out that the respondents had not demonstrated that there was any relevant difference between Western Australian law and Victorian law.  That is true, but that does not, in my view, preclude the taking into account of a choice of law clause.

30                  I appreciate that there is likely to be some inconvenience and a degree of extra expense on the applicants’ side if these proceedings are transferred to Victoria, but after weighing up all of the factors, my firm impression is that in terms of the three main considerations identified in the passage from National Mutual Holdings, the factors advanced by the respondents constitute overwhelmingly good reason why this application should be transferred to Victoria.  There will be an order that this proceeding be transferred to the Victoria Registry of this Court.

Associate:

Dated:              27 September 2000