FEDERAL COURT OF AUSTRALIA
IN THE FEDERAL COURT OF AUSTRALIA
BECHTEL AUSTRALIA PTY LTD (ACN 006 334 505)
DATE OF ORDER:
THE COURT ORDERS THAT:
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
SOUTH AUSTRALIA DISTRICT REGISTRY
SAD 170 of 2014
YORK CIVIL PTY LTD (ACN 050 019 960)
BHP BILLITON MITSUI COAL PTY LTD (ACN 009 713 875)
BECHTEL AUSTRALIA PTY LTD (ACN 006 334 505)
23 DECEMBER 2014
REASONS FOR JUDGMENT
1 The applicant in this proceeding is York Civil Pty Ltd (“York Civil”). The company was registered in the State of South Australia on 27 August 1990. It carries on business as a civil works contractor, and its current registered office and principal place of business is at 27 Tikalara Street, Regency Park, South Australia. Four of the company’s five directors reside in South Australia. Whilst the company’s head office is in South Australia, it also has offices in Western Australia and Queensland. In material which appears on its website, the company states that the Queensland office or branch has “a rapidly growing resource base including project managers, engineers, site managers, safety officers, supervisors, plant and equipment”. Mr Simon Green is the State Manager of York Civil in Queensland.
2 The first respondent in this proceeding is BHP Billiton Mitsui Coal Pty Ltd. The company was registered in Queensland on 23 February 1962. It carries on business as a coal miner, and its current registered office and principal place of business is at Level 20, 1 Eagle Street, Brisbane, Queensland.
3 The second respondent in this proceeding is Bechtel Australia Pty Ltd. The company was registered in Victoria on 1 October 1984. It carries on business as an engineering consultant, and, as part of its business, it performs a function known as “engineering, procurement and construction management”. The company’s current registered office and principal place of business is at Level 3, 520-540 Wickham Street, Fortitude Valley, Queensland.
4 The first respondent has issued an interlocutory application in this proceeding wherein it seeks an order transferring the proceeding to the Brisbane registry of the Supreme Court of Queensland. In seeking this order, it relies on the power contained in s 138C of the Competition and Consumer Act 2010 (Cth), or in s 5(4) of the Jurisdiction of Courts (Cross-vesting) Act 1987 (Cth), or both. In addition, it refers to r 27.21 of the Federal Court Rules 2011 (Cth) (“the Rules”) in connection with its right to make this application.
5 The first respondent seeks, in the alternative, an order that the proceeding be transferred to and conducted at the Queensland registry of this Court. It relies on the power in this Court to make such an order in s 48 of the Federal Court of Australia Act 1976 (Cth) (“Federal Court Act”), or s 37P of the Federal Court Act, or both. In addition, it refers to r 2.02 of the Rules in connection with its right to make this application.
6 The second respondent supports the application made by the first respondent. The applicant opposes the transfer of this proceeding.
The Applicant’s claim
7 The applicant’s claim in this proceeding relates to a written contract between it and the first respondent. The written contract was executed by the second respondent acting as the first respondent’s agent. The contract provided that it was effective as of the 18th day of April 2011. The contract related to a project known as the South Walker Creek Coal Preparation Plant Upgrade Project, and it involved works at the South Walker Creek Coalmine, Queensland. The coalmine is approximately 120 kilometres southwest of Mackay, 75 kilometres east-northeast of Moranbah, and 970 kilometres north-northwest of Brisbane. Under the contract, the first respondent engaged the applicant to perform works described as site development and infrastructure works. The applicant described these works as the preparation of the site and foundation material for the subsequent placement of footings and slabs for building activity to follow. The contract contained an address for the applicant at 2/23 Breene Place, Morningside, Queensland, and it provided that Mr Simon Green was the contact point for the applicant. The contract contained an address for the first respondent at care of 100 Brookes Street, Fortitude Valley, Queensland.
8 The negotiations leading to the contract commenced in October 2010 and included various meetings, including a meeting at the South Walker Creek Coalmine. It appears that the negotiations took place in Queensland and involved representatives of the applicant in Queensland.
9 The applicant’s claims against the first respondent and the second respondent are for breach of contract as against the first respondent, and contraventions of the Competition and Consumer Act as against both the first and second respondents. The applicant’s claims as set out in the Originating Application are as follows:
1. Contract additional costs pursuant to the Contract for reverting to a Continuous Labour Roster as a consequence of CNNO6 in the sum of $1,825,780.66.
2. Additional costs pursuant to the Contract for the delays caused by the late issue of drawings in the sum of $2,528,536.93.
3. A claim pursuant to the Contract for an adjustment of agreed quantities in the sum of $1,126,772.85.
4. A claim pursuant to the Contract for an additional administrator in the sum of $113,048.95.
5. A claim pursuant to the Contract for pavement works in the sum of $204,630.26.
6. Damages pursuant to Australian Consumer Law s 236.
7. Compensation pursuant to s 243 of the Australian Consumer Law.
10 The contraventions of the Competition and Consumer Act are said to arise out of a direction which the second respondent gave to the applicant on 18 August 2011 and which was said to involve a representation. The applicant’s case is that the direction occurred in trade or commerce and that it:
95.1 was not in the form of a CCO issued under the Contract;
95.2 directed York to re-sequence the Works;
95.3 directed York to provide a 10-4 Continuous Labour Roster in order to achieve the amended Contract Milestone Dates identified in CCN-06;
95.4 directed York to commence a 10-4 Continuous Labour Roster by 22 August 2011; and
95.5 advised York that “Should there be any cost implication it will be considered in accordance with our agreement as GCC36 [sic] and SC17 of the Contract”.
11 The applicant alleges that, by the direction, the second respondent represented to the applicant that any costs incurred by the applicant in complying with the direction would be considered in accordance with GC-36 (i.e., General Condition 36), and SC-17 (i.e., Special Condition 17), of the contract, and that this was a representation as to a future matter within the meaning of s 4 of the Australian Consumer Law (“ACL”) (Competition and Consumer Act, Schedule 2). The applicant further alleges that the making of the representation created in the applicant a belief that it would be paid its costs for re-sequencing and accelerating the works.
12 The applicant alleges that, at the time of the direction, the second respondent knew, among other things, that, pursuant to CCN-02 (i.e., a Contract Change Notice issued pursuant to GC-36), a change by the applicant from a 10-4 Continuous Labour Roster to a 10-4 Non-Continuous Labour Roster involved a credit of $2.207 million to the first respondent, and that the direction, among other things, required the applicant to revert to a 10-4 Continuous Labour Roster.
13 Finally, the applicant alleges that the second respondent is liable as an accessory under s 75B of the Competition and Consumer Act and that, by the conduct of both respondents, the applicant suffered loss and damage within the meaning of ss 236 and 243 of the ACL. The applicant’s loss and damage is said to be that it had agreed to a credit of $2.207 million to the Contract Price believing that the Contract would be completed with a Non-Continuous Labour Roster when, in fact, the Contract required a Continuous Labour Roster.
14 It will be seen from the five claims made pursuant to the contract and identified in the Originating Application that at least one of them (i.e., the first claim) overlaps in terms of the loss or damage claimed with the claim for damages made by the applicant pursuant to the ACL.
15 On the present application, the respondents relied on an exclusive jurisdiction clause contained in the contract. Relevantly, that clause is in the following terms:
GC-38 DISPUTE RESOLUTION AND GOVERNING LAW
38.1 This contract is governed by the law in force in Queensland, Australia. To the extent that a Party is entitled pursuant to this contract to bring proceedings in a court pursuant to the clauses set out below, each Party hereby submits to the exclusive jurisdiction of the Courts of Queensland.
38.2 Any dispute or disagreement between the parties in relation to the Facility, the Work or the contract (“Dispute”) shall be resolved in accordance with the procedures set forth below.
38.3 CONTRACTOR shall not be entitled to claim and OWNER shall not be liable to CONTRACTOR or its Subcontractors in tort (including negligence) or contract except as specifically provided in this contract.
38.4 With respect to any Dispute arising under this contract, CONTRACTOR shall be deemed to have waived the right to resolve the Dispute unless CONTRACTOR has submitted such Dispute for resolution within one (1) year of the date that such Dispute first arose or the Final Completion of the Work, whichever occurs earlier.
38.5 If either OWNER or CONTRACTOR has a Dispute, it shall give written notice of the Dispute to the other party (“Notice of Dispute”) summarizing the facts in dispute and proposing a resolution. OWNER and CONTRACTOR shall thereafter promptly meet to resolve the Dispute.
38.6 If the Dispute is not resolved within ten (10) days of the date of delivery of the Notice of Dispute, no later than fifteen (15) days after delivery of the Notice of Dispute CONTRACTOR may request OWNER to provide, or OWNER may elect to provide, a written final determination setting forth the contractual basis for its decision and defining what contract adjustments it considers reasonable (“Determination”). OWNER will deliver the Determination within forty (40) calendar days of the date of delivery of the Notice of Dispute. Upon CONTRACTOR’S written acceptance of the Determination the contract will be modified and the Determination implemented accordingly or, failing agreement, OWNER may in its sole discretion pay such amounts and/or revise the time for performance of the Work in accordance with the Determination.
38.7 CONTRACTOR shall notify OWNER if the Determination is not acceptable within ten (10) calendar days of its receipt. OWNER and CONTRACTOR each shall, within fifteen (15) days after CONTRACTOR’S notification, nominate a senior executive to meet to resolve the Dispute. The parties shall promptly prepare and exchange memoranda stating the issues in dispute and their respective positions, summarizing the negotiations that have taken place and attaching relevant documents.
38.8 If the Dispute is not resolved with ten (10) days after the senior executives first meet, then either Party may commence litigation in respect of that Dispute.
38.9 Compliance with the above requirements of this clause in respect of a Dispute is a condition precedent to commencement of litigation in respect of that Dispute (other than for urgent interlocutory or injunctive relief).
16 The first respondent, which is the applicant for transfer, was content to proceed on the basis that the first question on the application was whether the proceeding should be heard by a court in Queensland, and the second question was which court in Queensland. In this case, the burden of the argument was that the case was “connected” with Queensland and that the balance of convenience favoured Queensland. In the circumstances, and perhaps in any event, I think the appropriate approach is to consider first whether the proceeding should be transferred from this registry to the Queensland registry of this Court. There is power to do that in s 48 of the Federal Court Act, and it is not necessary for me to consider whether such an order could be made under s 37P of the Federal Court Act. It is not clear to me that such an order could be made under that section.
17 The relevant principles in relation to s 48 of the Federal Court Act are well-known. They are set out in National Mutual Holdings Pty Ltd and Others v The Sentry Corporation and Another (1988) 19 FCR 155 (“National Mutual Holdings v Sentry Corporation”) and Cycles & Wheelman Pty Ltd and Others v Beltech Corporation Ltd (1988) 80 ALR 279 (see also Wepar Nominees Pty Ltd v Schofield  FCA 920 (“Wepar Nominees v Schofield”) at -). It is sufficient for me to refer to the following passages in the reasons of the Full Court in National Mutual Holdings v Sentry Corporation at 162:
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. A party commences a proceeding by filing an application in a particular registry of the Court. If that party or another party wishes to have the proceeding conducted or continued in another place he may apply to the Court for an order under s 48 or O 10, r 1(2)(f) or O 30, r 6 as the case may be. 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. It cannot and should not, in our opinion, be defined more closely or precisely.
18 With respect to the power of this Court to transfer a proceeding to the Supreme Court of a State, s 138C of the Competition and Consumer Act provides, relevantly:
138C Transfer of matters by the Federal Court
(1) Subject to subsections (2) and (3), if:
(a) a civil proceeding instituted by a person (other than the Commonwealth Minister or the Commission) is pending in the Federal Court; and
(b) a matter for determination in the proceeding arises under this Part or the Australian Consumer Law;
the Federal Court may, on the application of a party to the proceeding or of its own motion, transfer the matter, and any other matter for determination in the proceeding, to a court of a State or a Territory.
(2) The Federal Court must not transfer a matter to another court under subsection (1) unless:
(a) the other court has power to grant the remedies sought before the Federal Court in the matter; and
(b) it appears to the Federal Court that:
(i) the matter arises out of, or is related to, a proceeding that is pending in the other court; or
(ii) it is otherwise in the interests of justice that the matter be determined by the other court.
(3) [Not relevant to the issues on this application].
19 The relevant power is that contained in s 138C(2)(a) and (b)(ii), and the criterion is whether it is in the “interests of justice” that the matter be determined by the other court.
20 Section 5(4) of the Jurisdiction of Courts (Cross-vesting) Act provides, relevantly:
5 Transfer of proceedings
(a) a proceeding (in this subsection referred to as the relevant proceeding) is pending in the Federal Court or the Family Court (in this subsection referred to as the first court); and
(b) it appears to the first court that:
(iii) it is otherwise in the interests of justice that the relevant proceeding be determined by the Supreme Court of a State or Territory;
the first court shall transfer the relevant proceeding to that Supreme Court.
Again, the relevant criterion is the “interests of justice”.
21 Rule 27.21 of the Rules provides that a party may apply to the Court for an order that the proceeding be transferred to another court.
22 Section 5(4) of the Jurisdiction of Courts (Cross-vesting) Act requires the Court to transfer a proceeding once it has reached the conclusion that it is in the interests of justice to do so. Section 138C of the Competition and Consumer Act is not expressed in those terms, although it is difficult to foresee cases where an order for transfer would not be made where the interests of justice pointed in favour of that course.
23 The Court of Appeal in New South Wales considered the meaning to be given to “interests of justice” in an early case under the cross-vesting legislation: Bankinvest AG v Seabrook and Others (1988) 14 NSWLR 711; (1988) 90 ALR 407 at 409 per Street CJ, at 410 per Kirby P, and at 425 per Rogers A-JA.
24 The content of the interests of justice criterion was considered by the High Court in BHP Billiton Limited v Schultz and Others (2004) 221 CLR 400. In that case, the first defendant applied to the Supreme Court of New South Wales under the Jurisdiction of Courts (Cross-vesting) Act 1987 (NSW) for an order transferring the proceeding to the Supreme Court of South Australia. Gleeson CJ, McHugh and Heydon JJ said that a party seeking a transfer in the interests of justice was not required to show that the first court’s jurisdiction was not regularly invoked, or that it is a clearly inappropriate forum. It is sufficient if the second court is more appropriate. The interests of justice are not the same as the interests of one party, and, in fact, there may be matters relevant to the interests of justice which transcend the interests of both parties. The adjectival advantages of one court over another may be relevant to the interests of justice (at 421-422, ). The alleged adjectival advantages of one court over another were considered in an early case under the legislation: Bourke and Others v State Bank of New South Wales (1988) 22 FCR 378 at 394 per Wilcox J.
25 The exclusive jurisdiction clause deals with the law which is to govern the contract, provides that the Courts of Queensland have exclusive jurisdiction, and prescribes a pre-litigation dispute resolution procedure. For present purposes, the significant aspect of the clause is that it purports to provide that, to the extent that a party is entitled pursuant to the contract to bring proceedings in a court pursuant to the clauses set out in General Condition 38, each party submits to the exclusive jurisdiction of the Courts of Queensland.
26 In National Dairies WA Limited and Others v Wesfarmers Limited (unreported, Tamberlin J, 22 July 1996) (“National Dairies v Wesfarmers”), Tamberlin J considered an application filed by the respondent to a proceeding to have the proceeding transferred to the Western Australian registry for hearing by the Federal Court in that State, or, in the alternative, to cross-vest the proceeding in the Supreme Court of Western Australia. The applicant’s claim arose out of agreements for the sale of land, plant and equipment, shares, and other assets. There was a governing law clause which included an exclusive jurisdiction provision identifying the Courts of Western Australia as the appropriate courts. Tamberlin J noted that the clause did not purport to govern matters of jurisdiction, venue, or applicable law in relation to trade practices claims made by the applicant, and that it only related to contractual claims. Tamberlin J approached the matter by asking the following questions:
whether the matter should be heard in Western Australia;
whether the matter should be cross-vested to the Western Australian Supreme Court; and
whether a determination of the above questions is premature.
27 Tamberlin J considered that the governing law clause was relevant to whether the matter should be heard in Western Australia. Furthermore, he considered the governing law clause very significant in determining which court was the appropriate forum. His Honour said:
In deciding which Court is the appropriate forum the agreement of the parties as to the governing law is very significant. While the provision as to the governing law does not refer to the Federal Court, on a broad construction, this Court could possibly come within the description of “Courts of Western Australia”. However, the clause conveys to me a preference for determination of the contractual issues exclusively by the Courts of the State of Western Australia. This is understandable given the extensive references in the agreement to Western Australian regulatory laws.
28 In Todber Pty Ltd and Others v Glendale RV Syndication Pty Ltd and Others  FCA 1328; (2004) 211 ALR 390 (“Todber v Glendale RV Syndication”), Selway J considered an application by some of the respondents in a proceeding to have the proceeding transferred from the South Australian registry of the Federal Court of Australia to the Supreme Court of Victoria. There was no application before his Honour to transfer the proceeding to the Victorian registry of the Federal Court. The application was made pursuant to the Trade Practices Act 1974 (Cth) and the Jurisdiction of Courts (Cross-vesting) Act.
29 Selway J referred to the passage in National Dairies v Wesfarmers which I have set out and then said (at 396, ):
In this part of his reasoning his Honour would seem to distinguish the TPA claims from the contract claims in the case before him. However, the jurisdiction conferred on this Court by s 86 of the TPA is a jurisdiction in relation to a “matter” which will include an “attached non-severable” claim: see Re Wakim; Ex parte McNally (1999) 198 CLR 511 at 583-6; 163 ALR 270 at 310-13. It may be that in the case before his Honour the claims were relevantly severable. Apart from that possibility, I regret that I am unable to agree with that particular part of his Honour's reasoning. In this case it has not been argued that the relevant claims, whether based on the TPA or otherwise, are severable.
30 His Honour went on to say that he was not satisfied that the exclusive jurisdiction provision had any application. He then said (at 396, ):
... Even if it did, the parties cannot reach any agreement that this Court does not have jurisdiction to determine the “matter” in the current proceedings. If they cannot reach such an agreement then it cannot be “in the interests of justice” to give effect to it. It may be that the clause can be understood as an agreement that it is in the interests of justice that the proceedings be heard in Victoria. If so the clause has no application to the question whether the case should be transferred to the Supreme Court of Victoria or should be heard in this Court. It may have some effect on the question whether the proceedings should be transferred to the Victorian Registry of this Court, but that is a different question.
31 I agree with the observations of Selway J and propose to follow them.
issues on the application and their resolution
32 There was a suggestion in the written submissions of the first respondent that the Court may not have jurisdiction to hear and determine some of the applicant’s claims under the contract. After referring to Re Wakim; Ex Parte McNally and Another (1999) 198 CLR 511 (“Re Wakim”) at 563-564,  per McHugh J, and 583-586, - per Gummow and Hayne JJ, and Thomson Australian Holdings Proprietary Limited v The Trade Practices Commission and Others (1981) 148 CLR 150 at 163 per Gibbs CJ, Stephen, Mason and Wilson JJ, the first respondent put the matter in the following way in its written submissions:
The position with the remaining contract claims is less clear. While these claims relate to the same contract as the ACL claim, the subject matter of each claim is different. Accordingly, while the better view appears to be that the Court has jurisdiction to determine these claims, the contrary conclusion cannot be dismissed out of hand.
33 I have read the Statement of Claim and the passages in Re Wakim to which I was referred. I am satisfied that the Court has jurisdiction to determine the matters identified in the Statement of Claim.
34 The applicant has its head office in Adelaide, South Australia. It conducts business in this State. The solicitors it usually engages are based in this State. The law to be applied in the resolution of the applicant’s claim is as familiar and well-known to the Courts in this State as it is to the Courts in Queensland. In these circumstances, I reject the suggestion made by the first respondent that the applicant’s choice of forum was capricious.
35 Despite the considerations identified in the previous paragraph, I think there are sufficient reasons to conclude that the proceedings should be transferred to the Queensland registry of this Court. I will deal later with whether there is sufficient reason to transfer the proceeding to the Supreme Court of Queensland.
36 There are two broad matters which are relevant, and they are the place most directly connected with the applicant’s claim and the place where the proceeding will be most conveniently heard and determined.
37 Before addressing these matters, I should say that, at this stage of the proceeding, I have no more than the pleadings and the submissions of the parties. That is common in an application of this nature which, ordinarily at least, must be brought at an early stage.
38 The negotiations leading to the contract were conducted in Queensland. Both respondents are based in Queensland. The contact person for the applicant, as stated in the contract, was its State Manager in Queensland. The works performed by the applicant under the contract were carried out in Queensland. The activities which have given rise to the claims were carried out in Queensland. The applicant conducts substantial business activities in Queensland. The parties have nominated the Courts of Queensland as the appropriate courts for the resolution of their dispute.
39 The convenience of the parties points to Queensland as the appropriate place. Two of the three parties are based in Queensland. The third, the applicant, has an office in Queensland and carries out not insignificant business in that State. The parties made quite detailed submissions as to who is likely to be called as witnesses and where they reside. I do not propose to set those submissions out. Although it is difficult to be precise at this stage, it seems to me that most of the relevant witnesses are based in Queensland. The location of relevant documents was not a matter raised by any party. Even if the location of the applicant’s solicitors and counsel is a relevant matter, it is to be accorded relatively little weight and cannot outweigh other considerations (Wepar Nominees v Schofield at ).
40 Assuming the proceeding should be transferred to a court in Queensland, the question arises as to whether it should be transferred to the Supreme Court of Queensland.
41 For the reasons given by Selway J in Todber v Glendale RV Syndication, I do not think the exclusive jurisdiction clause is relevant to this question.
42 The other matters identified by the respondents related to expedition in hearing and determining the claim and the costs by way of hearing fees as between this Court and the Supreme Court of Queensland.
43 As far as expedition is concerned, the first respondent estimates a two week hearing. It pointed out that hearings predicted to go longer than 10 days in the Supreme Court of Queensland were placed in a Supervised Case List, whereas shorter hearings of a commercial nature were placed in the Commercial List. The difference in hearing fees between this Court and the Supreme Court of Queensland was said to be that this Court’s fees were double those of the Supreme Court of Queensland.
44 The second respondent estimates a four day hearing, and a hearing fee difference of approximately $1,660. Its affidavit evidence is to the effect that there is general availability in the Supreme Court of Queensland for a four day hearing.
45 The applicant advanced evidence that the Supreme Court of Queensland does not have an electronic filing system, and of the disadvantages said to result from this fact.
46 I am not persuaded that any of these matters mean that it is in the interests of justice to transfer this proceeding to the Supreme Court of Queensland. Even assuming the amount of the hearing fees is a relevant factor, it is almost impossible to assess its significance in the absence of a reliable estimate of the length of hearing. That also affects the question of expedition. In any event, both courts will make efforts to expedite a hearing in an appropriate case.
47 In my opinion, the appropriate order in this case is that the proceeding be transferred to and conducted at the Queensland registry of the Federal Court of Australia. I will hear the parties as to costs.