FEDERAL COURT OF AUSTRALIA

Yara Pilbara Fertilisers Pty Ltd [formerly known as Burrup Fertilisers Pty Ltd] v Oswal (No 8) [2015] FCA 49

THE COURT ORDERS THAT:

1.    This proceeding be transferred to the Supreme Court of Victoria.

2.    The Registrar send forthwith each document filed, and any orders made, in this proceeding to the appropriate officer of the Supreme Court of Victoria.

3.    The costs of the proceeding to date in this Court (including the costs of this application but excluding costs in respect of which orders have already been made by this Court) be costs in the cause to be continued in the Supreme Court of Victoria.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

A TRANSFER APPLICATION

1    The applicant (YPF) seeks to transfer this proceeding to be heard with two other proceedings in the Supreme Court of Victoria. The interlocutory application is supported by various cross-respondents, including ANZ, ANZ Fiduciary and Messrs Carson, McEvoy and Theobald (Receivers).

2    These proceedings (which I will refer to as WAD 66) alone involve claims and cross-claims of hundreds of millions of dollars, as do the proceedings in the Supreme Court of Victoria (Victorian Proceedings)

3    The arguments for and against transfer are somewhat finely balanced, but all parties agree that whichever course is taken, all the proceedings must all be heard together in one court.

4    There are now several more parties involved in the Victorian Proceedings than in these proceedings.

5    The Victorian Proceedings are set down for trial (albeit a trial date which might be adjusted) in August this year. That trial date has been fixed with the knowledge that this proceeding may be transferred.

6    All parties in both proceedings, except the Oswals, support this application even though the Victorian Proceedings were commenced by the Oswals.

7    The other option, canvassed in argument, is for the Victorian Proceedings to be transferred to this Court, which is a course which Mr Pankaj Oswal, the first respondent, and his wife, Mrs Radhika Oswal, the second respondent, have both indicated that they would prefer. They have indicated that if this application is unsuccessful, they will seek to transfer the Victorian Proceedings to this Court. As the transfer question has come before me first, and in light of the very changed circumstances since my judgment refusing to stay these proceedings, in Burrup Fertilisers Pty Ltd (Receivers and Managers Appointed) v Oswal [2011] FCA 424 (from which leave to appeal was refused by the Full Court (Mansfield and Foster JJ, Dowsett J dissenting) in Oswal v Burrup Fertilisers Pty Ltd (Receivers and Managers Appointed) (2011) 85 ACSR 531), I am of the view that it is now appropriate for a transfer to be effected by this Court. I am also mindful that in an appropriate case, and I am not suggesting that this is necessarily one, such a transfer would not necessarily be irreversible. If circumstances were to change and it became more appropriate for this Court to deal with the issues in dispute, such as they may emerge from time to time, there appears to be no reason why the proceedings could not be transferred back.

8    In any event, for present purposes and for reasons set out below, I have granted the application to transfer this proceeding.

RELEVANT BACKGROUND

9    Several affidavits have been filed in support of this application and the background is derived essentially from the content of those affidavits, being affidavits of Mr Kenneth Adams on behalf of the interlocutory applicants, and Mr Philip Hoser and Mr Grant Pestell on behalf of Mrs Oswal and Mr Oswal respectively.

10    It is necessary to sketch some outline of the Victorian Proceedings in order to illustrate the overlap issue. There are two proceedings in the Supreme Court of Victoria, one brought by Mrs Oswal against ANZ and others (RO Proceeding) and one brought by Mr Oswal against Mr Carson and others (PO Proceeding).

11    The RO Proceeding was commenced on 2 September 2011 against ANZ, the Receivers and JP Morgan Chase Bank NA, which was an Escrow agent. Claims were made in relation to the validity and enforceability of security and other documents which had been executed by Mrs Oswal and ANZ in December 2009 and February 2010 following negotiations which took place in Melbourne between Mrs Oswal and her legal representatives, Mr Oswal and his legal representatives and ANZ and its legal representatives. As a result of those negotiations, the Oswals executed share mortgages and other documents in relation to, amongst other things, their shares in Yara Pilbara Holdings Pty Ltd (YPH), which was then known as Burrup Holdings Limited. In this application the parties have referred to the claims made by Mrs Oswal in the RO Proceeding as the ‘Duress Claims’.

12    A few months later, Mrs Oswal brought an application in December 2011 in the same Court seeking an injunction to restrain ANZ and the Receivers, who were appointed in relation to the mortgaged shares, from selling her shares in YPH (again then known as Burrup Holdings Limited) pursuant to the security documents which she had executed. That application was refused. ANZ and the Receivers then sold Mrs Oswal’s shares to Apache Fertilisers and Yara Australia Pty Ltd.

13    In April 2012, Mrs Oswal amended her writ and statement of claim raising new contentions against ANZ and the Receivers in relation to the procedure by which her shares were offered for sale and the terms, including the price obtained for them. She also joined Yara Australia and Apache Fertilisers seeking relief against them, including a retransfer of the shares and rectification of the register. This has been described by the parties as being the ‘Sale Claims’.

14    At approximately the same time, Mr Oswal commenced his proceedings in relation to the sale and the terms of the sale of Mr Oswal’s shares in YPH to Apache Fertilisers and Yara Australia.

15    Defences were filed in each of the Victorian Proceedings. On 30 April 2014, orders were made permitting the Oswals to make substantial amendments to their writs and statement of claim. They joined and sought relief against new parties, namely, Apache Corporation, Apache Northwest Pty Ltd, Apache Energy Limited and YPF (the Joinder).

16    At least on the present state of affairs, none of the issues raised by the proceedings in the background described to this point involves any of the issues forming part of WAD 66. Thus it may be seen that the Victorian Proceedings have a substantial life of their own. However at this point, the Joinder matters gave rise to pleadings which repeated the matters arising in WAD 66. Defences and counterclaims were filed in the Victorian Proceedings in response to the Joinder, as well as replies. Putting the matter very broadly, in July 2014, the Apache defendants, by defence and counterclaim, made allegations in relation to misappropriation and the alleged ‘Costs Overruns Agreement’ which arises in this proceeding. This is said to be an oral agreement made between Mr Oswal and YPF. Shortly after, Yara Australia filed a defence and counterclaim in each of the Victorian Proceedings, making allegations and seeking relief arising from, amongst other things, the alleged misappropriation which is the subject of claims in WAD 66. In response, in August and September 2014 replies were filed by the Oswals raising the matters in connection with the Costs Overruns Agreement consistent with the case advanced in WAD 66.

17    On 3 October 2014, the Hon Justice Sifris in the Supreme Court of Victoria ordered that the trial for both Victorian Proceedings be set down to commence on 3 August 2015. His Honour also made other programming orders for pre-trial steps.

18    It is also necessary to summarise what was happening in WAD 66. WAD 66 was commenced by YPF claiming, amongst other things, relief under the Corporations Act 2001 (Cth) against Mr Oswal for alleged breach of director’s duties imposed by the Corporations Act and against Mrs Oswal and a related family company, Comical Ali Militant Vegetarian Pty Ltd, now deregistered, for her alleged involvement in those breaches and receipt of benefits of the alleged breaches. YPF claims that Mr Oswal improperly caused it to misapply funds totalling some $200 million between September 2007 and December 2010.

19    Mr Oswal’s defence is that any payments made by YPF to his account in the relevant period were made in partial discharge of a debt owed by YPF to him pursuant to the Costs Overruns Agreement. The essence of this agreement was that Mr Oswal would fund costs overruns associated with the construction of an ammonia plant for YPF between 2003 to 2006. The details of the agreement and the surrounding circumstances need not be explored at present. The cross-claim by the Oswals substantially exceeds the claim against them.

20    There has been a focus on discovery in relation to the Costs Overruns Agreement and, of course, also to the claimed misappropriations.

21    His Honour Justice Sifris was informed about the intention to pursue the current application and to seek orders transferring WAD 66 to the Supreme Court of Victoria. His Honour noted that if it became apparent that the plaintiffs were not ready for whatever reason, then the trial date might be changed. If it became necessary to extend or vacate the trial date, that would be done. These remarks were made in the context of the possibility of WAD 66 being transferred.

GUIDING PRINCIPLES

22    The application for transfer was pursued initially under s 5(4) of the Jurisdiction of Courts (Cross-Vesting) Act 1987 (Cth) (Cross-Vesting Act) and later by amendment, alternatively, under s 1337H(2) of the Corporations Act. As the argument developed, the focus shifted to the Corporations Act, which the Oswals contend, and I accept, is the proper avenue for an application to transfer a proceeding which is brought under the Corporations Act.

23    In either event, there is a reasonably wide discretion involved. By s 1337H(2) of the Corporations Act, if it appears that the transferor court, having regard to the interests of justice, that it is more appropriate for the proceeding to be transferred to another court with jurisdiction to determine the proceeding, the transferor court may transfer the proceeding to that other court. Section 1337L, lists other matters to be taken into account by the Court (in addition to the interests of justice) when deciding whether to transfer a proceeding pursuant to s 1337H. They are:

(1)    the principal place of business of any body corporate concerned in the proceeding;

(2)    the place or places where the events that are the subject of the proceeding took place; and

(3)    that the other court has jurisdiction to deal with the proceeding or application.

24    The leading authority which canvasses many of the issues to be taken into account is BHP Billiton Limited v Schultz (2004) 221 CLR 400. As the case law reflects, it is necessary to conduct a balancing exercise between relevant factors that inform as to whether or not it is in the interests of justice to transfer a proceeding. The weighing of considerations, such as cost, expense and convenience, even when they conflict, is a familiar aspect of the kind of case management involved in many cross-vesting applications: BHP per Gleeson CJ, McHugh and Heydon JJ (at [19]). While BHP considered the cross-vesting regime, for practical purposes the criteria for determining whether a proceeding should be transferred are broadly consistent with the criteria for determining cross-vesting: see Dwyer v Hindal Corporate Pty Ltd (2005) 52 ACSR 335 per Debelle J (at [13]). The question is essentially practical, or in the words used in BHP, it is essentially a ‘nuts and bolts’ management decision as to which court, in the pursuit of the interests of justice, is the more appropriate to hear and determine the substantive dispute: BHP per Gleeson CJ, McHugh and Heydon JJ (at [13]); Bankinvest AG v Seabrook (1988) 14 NSWLR 711 per Street CJ (at 713-714). The ‘interests of justice’ is an expression to be interpreted broadly: BHP per Gleeson CJ, McHugh and Heydon JJ (at [15]).

25    The Court should not approach the transfer question with any presumption as to where the interests of justice lie: BHP per Gleeson CJ, McHugh and Heydon JJ (at [25]). It is not a circumstance in which an applicant has an onus of persuasion analogous to an onus of proof: BHP per Gummow J (at [71]). The disposition of an application for transfer of a proceeding does not require weight to be given to the plaintiff’s choice of forum, which is essentially a neutral factor: BHP per Kirby J (at [168]) and per Gummow J (at 77).

26    As I noted in Commissioner of Taxation v Residence Riverside Proprietary Limited as Trustee for the D& J Discretionary Trust and as Trustee for the D& J Investment Trust [2013] FCA 720 (at [17]), this Court has previously recognised many factors as being relevant to the decision, which will vary in weight from case to case, including:

(1)    the stage of the proceedings in the respective courts;

(2)    the commonality or diversity of the parties;

(3)    the nature of the proceedings;

(4)    the commonality or diversity of issues;

(5)    the risk of conflicting findings of fact or conflicting orders;

(6)    a costs benefit analysis;

(7)    the potential unnecessary drain on judicial and other public and private resources; and

(8)    whether there is any particular judicial expertise residing in one court of the other.

ARGUMENTS AGAINST TRANSFER

27    It is a sufficiently important feature of this application to reemphasise that there is common ground and substantial overlap between the issues in WAD 66 and the Victorian Proceedings. In the words of Mrs Oswal, she accepts that the Victorian Proceedings and WAD 66 should be ‘amalgamated’ so that the three proceedings may be case managed, tried and determined together. In her submission, however, the appropriate venue for the determination of WAD 66 and the Victorian Proceedings is this Court.

28    Both of the Oswals stress, and I accept, that the existence of the Victorian Proceedings is not determinative of the interests of justice question.

29    Mrs Oswal says that in order to properly appreciate how the issues in WAD 66 and the Victorian Proceedings interrelate and inform one another, it is necessary to understand a very broad chronology of the underlying facts and allegations. These have been set out by Mrs Oswal in tabular form as follows:

30    Mrs Oswal argues that when these facts are considered, the trial of the matters will involve a detailed examination of almost the entire history of YPF from 2000 to 2012. Whereas the Victorian Proceedings were previously confined to a relatively short period from December 2009, when the Impugned Documents were executed, to January 2012, when the Oswal shares were sold to Apache Fertilisers and Yara Australia, according to Mrs Oswal, this period is now ‘swamped by the much longer period’ of which it forms only the last few years.

31    Mrs Oswal argues that the history of the company will now have to include YPF’s relationship with its financiers, which originally included not only ANZ, but also Bank of Scotland International, BankWest and NAB, all of whom were originally parties to the senior bank subscription agreement executed in December 2002; its relationship with its gas suppliers; the construction of the ammonia plant and the funding of that construction; the running of its business, and in particular, the hundreds of payments allegedly made by it to, or for, the benefit of the Oswals; the relationship between the shareholders of YPF, and the end of the influence of Mr Oswal over the companies.

32    Thus it is said that WAD 66 is much broader than the misappropriation and the costs overruns claims, which are essentially two sides of the same coin, because they, in turn, are intimately connected with the structure of the construction contract and sub-contracts, and thus with what Apache Fertilisers alleges was a fraud practised upon YPF’s financiers and the gas sellers from 2002 until construction of the plant and beyond. All of this is said to have included creating value for the Oswals’ shares and the making of the alleged misappropriations and the execution of the Impugned Documents to be examined in the Duress Claims and the Sale Claims. Apache argues that this alleged fraud and concealment, and the benefits said to have been obtained by the Oswals, provides a complete answer on several bases to all of the claims by the Oswals, and is also the foundation of Apache Northwest’s counterclaim.

33    The Oswals, particularly Mrs Oswal, stress that YPF’s characterisation of the Victorian Proceedings into the duress components and the sale components is inaccurate if it is contended that they are standalone claims, separate and distinct from the misappropriation and costs overruns claims in WAD 66. That is because, it is said, as to Mrs Oswal’s claim to impugn the documents, Apache Fertilisers alleges that her execution of the Impugned Documents was an integral part of the fraud and concealment which Apache Fertilisers says the Oswals engaged in. The fraud was designed, it is said, to enable Mr Oswal to continue to misappropriate monies from YPF and to allow YPF to continue to enjoy cheap gas under the Gas Sale and Purchase Agreement (GSA).

34    The Oswals contend these claims by Apache Fertilisers simply echo and expand upon the allegations made by YPF in its pleading by defence and cross-claim in WAD 66. Apache Fertilisers claims mean, however, that the claim by Mrs Oswal to have the Impugned Documents avoided can only be determined once there has been an examination of whether the fraud alleged by Apache Fertilisers existed and what it consisted of, and what Mrs Oswal’s role in it was, if any. They argue that it is clear, therefore, that Mrs Oswal’s Duress Claims cannot be treated as being separate from the ‘later sale at an undervalue’ claims as it is contended that the Impugned Documents are all said to be part of an ongoing concealment of a long standing fraud.

35    Similarly, the Oswals highlight that the misappropriations relied on by YPF are picked up by Apache Fertilisers in its defence and, therefore, the costs overruns and misappropriation claims are said by Yara Australia to have amounted to breaches of the shareholders deed. It is this which grounds Yara Australia’s counterclaim. These breaches are said to have relieved Yara Australia of its obligations of loyalty to the Oswals and disentitle the Oswals to any relief on the basis of unclean hands.

36    The suggestion, therefore, that either the Duress Claims or the Sale Claims somehow form a standalone part of the Victorian Proceedings, having a greater connection with Victoria, is argued by the Oswals to be unrealistic given all the circumstances which require examination in connection with those claims.

37    While it is correct that the Impugned Documents and other security documents are governed by Victorian law, the Oswals point out that the property charged or otherwise the subject of those documents was based in Western Australia, or in the alternative, the shares were in a company whose assets were in Western Australia.

38    The Oswals argue with some force that the connection with Western Australia is substantial as the GSA is said to be of central significance to the value of the shares, and to the claim relating to the sale at an undervalue because of the favourable terms the GSA gave to YPF’s business.

39    The Oswals also complain about the allegedly collusive role played by Yara Australia in ultimately agreeing to the renegotiation of the GSA and the terms of the share sale agreements by which the Oswals’ shares were sold. Those complaints, together with the cross-complaints made by Yara Australia about Mrs Oswal’s and, primarily, Mr Oswal’s conduct, are all put in the context of alleged breaches of the shareholders’ deed, which was a deed governed by Western Australian law relating to relations between parties all based in Western Australia who were shareholders in a company based in Western Australia.

40    Contrary to the submission by senior counsel for the interlocutory applicants that the relevant ‘centre of gravity has been and remains Victoria’, the Oswals point to the following connections with Western Australia:

(a)    the construction of YPF's ammonia plant on the Burrup peninsula, and in particular, the source of payment of the many contractors who worked on the construction, and the amounts paid to them;

(b)    the negotiation - between YPF and Apache Fertilisers - of the GSA, an agreement governed by the law of Western Australia;

(c)    the operation of the GSA under which Apache Fertilisers and the other gas sellers provided gas from fields in Western Australia to the YPF plant on the Burrup peninsula;

(d)    the service and consequences of the force majeure notices served under it, also matters governed by the law of Western Australia, and the question whether, in the circumstances, those notices and the later reiteration of the position adopted in those notices, amounted to misleading conduct;

(e)    the negotiation of the project financing documents for the YPF plant, documents to which BankWest, NAB and HBOS, as well as ANZ, were originally parties;

(f)    the inception, variation and operation of the shareholders' deed, an agreement between Western Australian residents regarding Western Australian companies governed by the law of Western Australia;

(g)    the conduct of YPF's business - which was carried on entirely in Western Australia, the company having its plant on the Burrup peninsula and its offices in Perth - and in particular, the making of the many payments alleged to have been misappropriations;

(h)    the execution by Mrs Oswal of the Impugned Documents (which took place in Perth, and the negotiations for which occurred partly at meetings in Melbourne and partly over the telephone between Melbourne and Perth);

(i)    the reasons that led ANZ to appoint - receivers most of which appear to have to do with the running of YPF's business, or the actions for relations between YPH's shareholders, all of whom were based in Western Australia;

(j)    the conduct of the sale process which led to the sale of the Oswals’ shares - this was a process which, initially at least, included not only those shares but also the business of YPF, based in Western Australia, carried out ostensibly by receivers based in Melbourne and Perth, who had numerous staff running the operations of YPF and the receivership based in Western Australia, and who used numerous advisors, many of whom were in that State.

41    In contrast with this, the Oswals, particularly Mrs Oswal, point to the fact that the applicants in substance can point to only a limited connection with Victoria. The first of those is the suggestion that the Duress Claims and the Sale Claims are in some sense standalone claims, which do not involve the matters presently outlined in WAD 66. According to the Oswals, this is not so for the reasons set out above (at [41]). Secondly, although it is argued that a majority of ANZ’s witnesses reside in Victoria, I accept the Oswals’ submission that even if this were so as regards to the period from December 2009 to early 2010 when the Impugned Documents were executed and between December 2010 to January 2012 when ANZ and the Receivers took control of and conducted the sale process, that deals with only a narrow period to the exclusion of the entire period from 2002 when, as is argued to be apparent from the documents discovered, ANZ’s principal dealings with Mr Oswal and YPF appear to have been through officers located in Perth, who have been identified in the affidavit material.

42    The interlocutory applicants point to the fact that Mrs Oswal has, as this stage, served three witness outlines of evidence, one from herself and two from solicitors who acted for her in connection with the Impugned Documents, but, contrary to the interlocutory applicant’s submissions, Mrs Oswal points out they do not act for her in WAD 66. Rather, they act for Mr Oswal.

43    Mrs Oswal contends that none of these matters raised by the interlocutory applicants come near to establishing a stronger connection with Victoria, as the matters set out above indicate with Western Australia. Mrs Oswal relies on the decision of Mineralogy Pty Ltd v Sino Iron Pty Ltd [2013] NSWSC 466, in which an application was made to transfer the proceedings from the Supreme Court of New South Wales to the Supreme Court of Western Australia. The application was acceded to, but in relation to an argument against the application that the transferor court would determine the dispute faster than the transferee court, Justice Stevenson considered that he was unable, nor was it appropriate for him, to rule on that contention and that even if he could, that issue would simply be ‘but one factor weighing on the issue’ (at [22]). Mrs Oswal points to the analysis in that case by Stevenson J (at [23]-[40]).

44    Mrs Oswal also, entirely reasonably, points to the very early days of the WAD 66 proceeding, before Mrs Oswal’s RO proceeding had been commenced but when other proceedings between the parties were on foot in Victoria, and the Oswals’ application to transfer WAD 66 to Victoria and the interlocutory applicants resisted that course (the reverse of the parties’ present positions). On that occasion I declined to stay the proceeding or transfer it to Victoria. The Full Court in Oswal (2011) 85 ACSR 531 (Mansfield and Foster JJ, with Dowsett J dissenting) refused leave to appeal, making the following observations (at [84]-[86]):

84    Counsel appearing for [YPH] made submissions as to the appropriate venue for the hearing, namely that it should be Western Australia, because:

(1)    neither [YPH, Mr Oswal, Mrs Oswal, Comical] nor much of the subject matter of the claims have any connection with Victoria;

(2)    the alleged wrongful conduct by [Mr Oswal] occurred in Western Australia whilst [Mr Oswal] was the managing director of [YPH], whose head office was and is in Perth;

(3)    the real property of Mrs Oswal, which was allegedly improved or purchased by funds of [YPH] is situated in Perth and country Western Australia; and

(4)    the luxury launch which is the subject of the claim against [Comical] is penned on the Swan River in Peppermint Grove, Perth.

85    Senior counsel for [Mr Oswal] and [Mrs Oswal] was unable to indicate that any of those propositions were incorrect. Nor was their counsel able to suggest that any witness would be more conveniently heard in Victoria than in Western Australia. It may be accepted that the Victorian Action was properly instituted in Victoria by reference to the jurisdiction and choice of law provisions in the Deed of Charge. That is not in dispute. But there is in practical terms on the uncontested material now before the Court nothing substantial to support Victoria as an alternative venue. [Mr Oswal] and [Mrs Oswal] were on notice that such submission referred to in [84] was to be made to this Court. During the course of the hearing, the Court specifically sought a response. The Court was told that the head office of ANZ is in Melbourne, and that two of the three Receivers are in Melbourne. As ANZ through [YPH] exercising the power of their Receivers has instituted the WA Action in Western Australia, there does not seem to be any substance in those matters. This is not the occasion to decide the appropriate venue for the hearing of whichever proceeding or proceedings do go ahead. However, on the material before the Court, it seems to be almost irresistible that the appropriate venue for the hearing is Western Australia.

86    It would also seem to be almost irresistible that the legal representatives for the parties should confer, and that in the absence of any other substantial information about the proper venue, should agree that the appropriate venue for the hearing of the issues raised in the WA Action and in the Victorian Action should be heard in Western Australia. That is the level of cooperation which the Court is entitled to expect from the parties. No doubt in the flurry of an urgent application for leave to appeal, given the limited time within which such an application can be made, that step was not taken. There remains no reason why it should not now be taken or indeed why it should not have been taken at an early point.

45    Mrs Oswal stresses, in my view correctly, that the position is now very different. Yara Australia and Apache Fertilisers, who between them now own YPF, have by their recent pleadings in the Victorian Proceedings expanded upon those proceedings so that they now encompass, and fundamentally depend upon, everything contained in this proceeding. It is submitted that this leads, as their Honours felt in 2011, to the conclusion that the appropriate venue for the hearing is Western Australia. Mrs Oswal cites the Supreme Court of the United States in Piper Aircraft Co v Reyno 454 US 235 (1981) (at 260), citing its earlier decision in Gulf Oil Corp v Gilbert 330 US 501 (1947) (at 509), where it was said that ‘there is a local interest in having localized controversies decided at home’.

46    From a practical perspective concerning the convenience of witnesses, the Oswals argue that a trial in Western Australia would be more convenient for the multitude of witnesses who will, or may, be called to give evidence in relation to, particularly, costs overruns issues. The Oswals appear to recognise that if the convenience of the parties’ solicitors is relevant, it appears to favour a trial in Perth rather than in Melbourne as all solicitors have offices in Perth, but the solicitors for Mr Oswal, who are different solicitors from those for Mrs Oswal, do not have offices in Melbourne.

47    The parties did not, correctly in my view, treat this as a particularly important factor. It is clear, as the Oswals concede, that while they are able to carry on litigation in Victoria, it is equally the case that ANZ and the Receivers are more than able to continue to carry on litigation in Perth as they have done.

48    In relation to the relative stages of the proceedings, the Oswals stress that little emphasis should be placed on Justice Sifris’ setting a trial date on 3 August 2015, as his Honour expressly noted that the trial date may have to be revisited in the light of future events, including if WAD 66 were transferred or cross-vested to that court.

49    Mrs Oswal submits that, although there are factors which might indicate that the trial would progress at different rates if they remain separate, for example, there is likely to be substantially more expert evidence required in the Victorian Proceedings and some of the parties to those proceedings have not yet given any discovery at all, it appears inevitable that the three actions will be amalgamated somewhere and they will ultimately progress towards trial in tandem. It is said there is no basis for expecting that either proceeding would advance more speedily and, in particular, if the Victorian proceeding were transferred to this Court, the timetable in that court could be adopted by this Court.

50    One of the difficulties with these submissions is that it is not for me to pre-empt what might happen if this application were refused, nor if an application were brought in the Supreme Court of Victoria for cross-vesting or transfer to this Court and whether such an application would be likely to succeed. I am presently seized of an application and need to form a view on a practical basis whether it is in the interests of justice as matters presently stand to transfer WAD 66 to the Supreme Court of Victoria.

51    One of the important and valid points made by Mr Oswal is that the task of identifying the appropriate forum dictated by the interests of justice is not discharged by asking which proceeding is conceptually ‘larger’. The Oswals reject the submission that the Victorian Proceedings are larger, but contend that, in any event, this does not answer any of the practical questions the Court must consider in coming to a ‘nuts and bolts’ management decision about venue.

52    While senior counsel for the applicants made passing reference to the fact that all members of the senior bar appearing on this application are either from Victoria or Sydney, in a case of this substantial magnitude, the convenience of solicitors and counsel is, with great respect, not a primary consideration. It is an everyday event for senior counsel and others involved in very substantial litigation to appear in courts around the country. The real question which the interests of justice requires answering is whether there is a real prospect of litigants being disadvantaged by the location in which the dispute is to be determined. In my view, in this case, there is little such prospect. The history demonstrates the willingness of the parties to initiate and defend disputes wherever it is considered appropriate at whatever cost is regarded as being necessary.

53    Mr Oswal stresses that it is not possible for this application to be resolved without taking into account the proper place for determination of all of the proceedings because the application is premised on an assumption accepted by all parties that the proceedings must be heard together. According to Mr Oswal, it follows that it is necessary to consider the connecting factors between Victoria and Western Australia respectively and the proceedings as a whole.

54    Mr Oswal contends that the natural forum for the proceedings as a whole is Western Australia because: firstly, the events the subject of the two Victorian Proceedings occurred almost entirely in Western Australia; secondly, the two Victorian Proceedings concern companies and assets almost entirely based within Western Australia, specifically, an ammonia plant and a proposed technical ammonium nitrate plant located on the Burrup Peninsula in Western Australia, and the GSA, which concerned the supply of gas from the North West Shelf to the ammonia plant, which was central to the value of the relevant companies based in Western Australia; thirdly, all but two of the claims in WAD 66 are governed by the law of Western Australia or by national law, and a majority of the parties to the proceedings expressly chose Western Australia as the appropriate law and jurisdiction for the determination of their disputes in connection with matters in issue in the proceeding; fourthly, there will be ‘a preponderance of convenience’ to witnesses and parties if the proceedings are heard in Perth, rather than Melbourne; and finally, Mr Oswal contends his connection with Victoria is only marginal.

55    As to the first and second contentions, Mr Oswal argues that only discrete aspects of the events took place in Victoria. Mr Oswal points to an issue about a meeting or meetings which occurred in December 2009 in Melbourne, and also to ANZ, the Receivers and Flagstaff Partners conducting the sales process from Melbourne with prospective buyers located throughout the world, pointing out that buyers attended meetings in both Melbourne and Western Australia. Critically, Mr Oswal submits, the receivership and sales process concerned assets based in Western Australia and the secured creditor, based in Melbourne, entered into sale agreements governed by the law of Western Australia.

56    Regarding the third contention, Mr Oswal argues that the proceedings are governed, to a significant extent, by the laws of Western Australia. It is not apparent to me, I stress, that this makes a practical difference. There is and can be no suggestion that a judge sitting in Victoria would be faced with any difficulty in dealing with laws which may be peculiar to Western Australia. It must be said, I think, that the converse is also true, such that this is a very small factor in this dispute, if a factor at all in determining the interests of justice on a practical level.

57    In relation to the fourth contention concerning witnesses, Mr Oswal identified 11 key witnesses whose evidence is likely to occupy a relatively lengthy amount of trial time. Of those 11 witnesses, eight currently reside in or will shortly return to Western Australia. The three remaining witnesses are in neutral locations, that is, neither Western Australia nor Victoria. Although not necessarily key witnesses, it may also be necessary to lead evidence from contractors and suppliers involved in construction of the plant in relation to the cost of construction and/or guarantees that Mr Oswal said he provided to such suppliers. The evidence for Mr Oswal is that he has identified 103 contractors whose evidence may be necessary to prove the cost of construction. Eighty four of these are based in, or trade, in Western Australia. Only five of them are based in Victoria. The rest are in neutral locations. Of the six suppliers whose evidence may be necessary to prove guarantees, two are based in Western Australia and the others are in neutral locations.

58    Unlike the substantial entities involved as parties to this dispute, many of the contractors are small businesses who, Mr Oswal argues, are likely to be inconvenienced to a greater degree by the need to travel to give evidence, as opposed to witnesses employed or indemnified by the major corporations. There are 11 suppliers whose evidence is relevant to the allegation that Mr Oswal caused certain suppliers to issue inflated notices for works associated with the plant. Eight of those are based in Western Australia and the balance are in neutral locations.

59    It is anticipated that some questions in the proceeding are likely to depend upon a degree of local expertise including, in relation to the cost of construction in Western Australia, the domestic gas market in Western Australia and the technical ammonium nitrate industry in Western Australia at relevant times. Some of the witnesses may need to visit the plant and some of them may be required to give their views in relation to expert evidence based on local knowledge. It is more likely than not, it is argued, that such witnesses will be based in Western Australia. In contrast, the applicants have identified only six witnesses who reside in Victoria whom they expect to call. They are all officers or employees of ANZ, PPB Advisory, Flagstaff or the interlocutory applicants. Apart from the interlocutory applicants, this is a matter to be accorded little weight. The nature of the work undertaken by each firm requires them to travel within and outside of Australia where projects are located.

60    In addition to these matters, if any Melbourne based witness was particularly inconvenienced by the need to travel to give evidence, Mr Oswal points to the fact that this Court has the capacity to sit in Melbourne if necessary. I should say, however, that equally, where necessary, evidence may be taken by video-link by the Supreme Court of Victoria.

61    At this stage it is impossible to say which witnesses will be called by other parties. Nevertheless, as Mr Oswal points out, Apache Northwest, Apache Energy and Apache Fertilisers are based and carry on business in Western Australia. Their parent company, Apache Corporation, is based in Houston, Texas. Yara Australia’s registered office is in Sydney, with its parent company based in Norway. The location of officers and employees to be called by the Apache defendants and the Yara defendants in the Victorian Proceedings are likely either to favour Western Australia, insofar as Apache Northwest, Apache Energy and Apache Fertilisers are concerned, or to be neutral as two of the likely witnesses listed on company searches are said to reside in Norway and two in Singapore.

62    Mr Oswal also argues that the parties’ locations favour Western Australia. Apache Northwest, Apache Energy and Apache Fertilisers are registered in Western Australia and they carry on business in Western Australia in connection with the supply of gas from the North West Shelf. In contrast, Apache Corporation is registered in Houston, Texas. On the other hand, Yara Australia is registered in Sydney and has significant business interests in Western Australia, specifically its majority shareholding in YPH. Additionally, Yara Australia’s solicitors are Clayton Utz in Perth. Although ANZ has its registered office in Melbourne, it is clearly a substantial corporation with offices and officers in every state in Australia. I am required to take into account the location of the registered office, but the fact that the registered office of ANZ is in Victoria, specifically Melbourne, is a matter to which I will accord little weight in light of the fact that it is to be found in all locations in Australia. Mr Oswal points to the fact that although two of the Receivers are based in Melbourne and one is based in Perth, it was ANZ who chose to appoint Melbourne based receivers to conduct a Western Australian based receivership. The Receivers and their staff at PPB Advisory incurred about $1.5 million in travel and accommodation costs in the course of the receivership. Mr Oswal contends it should not be assumed, therefore, that the Receivers and their staff will be inconvenienced by the need to travel to Perth.

63    Mr Oswal also contends that he himself may be unfairly prejudiced if WAD 66 is transferred to Victoria. It is argued that his solicitors in WAD 66 are based in Perth with no interstate offices. If his legal team is to be relocated to Victoria to conduct the trial, he will incur significant additional expenses, including renting office space and providing regular flights and accommodation for his entire legal team for the length of the trial. Equally, if his solicitors were to cease acting for him in respect of WAD 66, he would lose the benefit of their detailed working knowledge of documents relating to the cost of constructing the plant payments made to contractors and the source of funding for such payments. He would incur significant additional costs for new solicitors to work up the same knowledge. Mr Oswal points out that, in contrast, all other parties to the proceedings have engaged large national firms to act for them. Once again, I stress that this factor is of minor weight.

64    As to the status of the proceedings, in terms of readiness for trial, I also consider that this is not a particularly weighty factor, given the potential for flexibility with the Victorian trial date. I accept that the Victorian Proceedings are slightly more advanced, but both proceedings are still at the stage of discovery. As I have previously indicated, if either party seeks to accelerate the trial timetable of WAD 66, that can be accommodated. The parties are substantial entities and are well advised. The matter has been proceeding at a pace which the parties and I have considered to be appropriate, having regard to the extent of discovery and issues involved.

65    In summary, the Oswals argue that the weight of considerations points overwhelmingly to the application for a transfer being rejected as:

(a)    the events the subject of this proceeding occurred exclusively in Western Australia, and the events the subject of the proceedings considered as a whole occurred primarily in Western Australia;

(b)    insofar as there is a Victorian nexus to the events in issue in the proceedings, those events concern a relatively confined period of time comparative to the relevant events in issue that have a Western Australian nexus;

(c)    most of the claims in the proceeding are governed by the law of Western Australia (or national law);

(d)    most of the parties to the proceeding have expressly agreed as between themselves that disputes arising in respect of transactions connected with the matters in issue in the proceeding are to be governed by the law of Western Australia, and determined by the courts of Western Australia;

(e)    most of the witnesses likely to be called in the proceedings are based in, or carry on business in, Western Australia, particularly witnesses who are not employed or indemnified by any party;

(f)    most of the parties to the proceedings are based in, or carry on business in, Western Australia;

(g)    Mr Oswal may be unduly prejudiced if the proceedings are transferred to Victoria, as his solicitors in this proceeding have no office in Melbourne, whereas the other parties to the proceedings have engaged national law firms;

(h)    any nexus to Victoria primarily arises because the secured creditor, ANZ, has its head office in Melbourne, and because ANZ appointed Melbourne-based receivers to conduct a Western Australian-based receivership. In the context of the proceedings as a whole, this connection is of marginal significance; and

(i)    this proceeding is not sufficiently advanced in order for it to be appropriately and efficiently managed in conjunction with the Victorian Proceedings in view of the existing trial date. Any case management orders that need to be made in order to maintain the existing trial date are likely to be adverse to the interests of justice as they will increase the cost and burden on the parties, witnesses, and the court.

APACHES’ POSITION

66    I should add that Apache Fertilisers, Apache Energy, Apache Northwest and Apache Corporation sought leave to intervene in the WAD 66 proceedings. As is clear from the preceding commentary, Apache is very much involved in the Victorian Proceedings, as is Yara Australia. Yara Australia’s position is that the three proceedings should be managed, heard and determined together and it does not object to the proceeding being transferred to the Supreme Court of Victoria. I infer that it is less concerned about the location of the trial, but, as with all parties, is concerned that the proceedings should be dealt with together.

67    Apaches’ firm support for the application for transfer of WAD 66 centres primarily on two main arguments. First, it is concerned to maintain the August 2015 trial dates and will suffer general prejudice if the trial was to commence later than August, which it infers will be the case if the matter continues to proceed in this Court. Specifically, it makes the point that the claims made by the Oswals in the Victorian Proceedings include a claim against Apache Northwest and Apache Energy (on behalf of Apache Northwest and Apache Corporation) for misleading and deceptive conduct. The Oswals allege that in and from at least July 2011, Apache Energy conducted meetings and discussions with entities bidding to purchase the Oswals’ shares in YPH. It is alleged that during those meetings and discussions, representatives of Apache Energy conveyed certain contentions to the bidders as to the extent of its obligations under the GSA. Obviously, where the alleged representations are oral, the reliability of the recollection of the persons involved recedes over time, such that the greater the time that elapses between the making of the alleged representations, the less confidence the Court can have in the memory of the persons involved: see the remarks of McLelland CJ in Watson v Foxman (1995) 49 NSWLR 315 (at 319).

68    I do consider that these are factors to take into account.

ANALYSIS

69    There is no doubt that some of the matters raised for the Oswals carry significant weight, some less so. Nonetheless, on assessing, as I do below, those arguments and others in favour of transfer, I consider that it is more appropriate to transfer WAD 66 to the Supreme Court of Victoria.

70    It is common ground that there is substantial overlap between the issues in each of the proceedings. The amalgamation of the proceedings in one court or the other will promote the efficient use of that court and the parties’ resources including time, financial and other resources in view of the substantial overlap of issues and the duplication.

71    It is relevant that the Victorian Proceedings range across a number of other matters. They also certainly now appear to embrace all the claims and cross-claims in WAD 66.

72    Importantly, the primary parties to WAD 66 are parties to the Victorian Proceedings, but the reverse is not true. None of Yara Australia, Apache Fertilisers, Apache Corporation, Apache Northwest or Apache Energy has been a party to WAD 66, with the Apache parties only recently being added as interveners.

73    All parties agree that the determination in one forum of the issues in dispute will reduce the prospect of witnesses having to give evidence more than once, avoid the risk of inconsistent findings and prevent multiple appeals in different jurisdictions.

Local law and jurisdiction

74    There is no doubt, for the purposes of s 1337L(c) of the Corporations Act, that the Supreme Court of Victoria has jurisdiction to deal with the proceeding.

75    The substantive law governing the proceedings involves either the Australian common law or federal statute. This is not a case involving a peculiarly local issue or local knowledge or custom. The events are at least national, if not international. That is evident from the residence of the witnesses and the source and location of electronic and hard copy documents.

Locations of businesses

76    The locations of the principal places of business of the bodies corporate have been considered. It is relatively neutral as a factor.

Events and witnesses

77    On the topic of events and witnesses, as matters presently stand, while the majority of the relevant events took place in Western Australia or relate to Western Australian assets, it is not apparent with any degree of certainty that that there will necessarily be a significant number of Western Australian witnesses required to give evidence in the Victorian Proceedings. Further, while it is entirely a matter for the Supreme Court of Victoria, if as matters unfold it appears quite clear that a significant number of witnesses who will actually be required to call evidence reside in Western Australia and cannot for some reason give evidence by video or some other modern means, then the question of transfer under the Corporations Act or Cross-Vesting Act is always capable of being revisited. In any event, given that some key witnesses, including the Oswals themselves, reside overseas and others in Victoria and others in Western Australia, the balance at this point is unclear.

78    As to the many potential witnesses which may be called in relation to the Costs Overruns Agreement, the relevance of that evidence turns on the highly disputed oral agreement. Notwithstanding this, Mr Oswal himself has not been identified as a witness who may be said to be certain to give evidence. In his affidavit, his solicitor Mr Pestell refers to Mr Oswal himself as a witness who may be called. I am told that to date there has been no indication that he will actually give evidence in the Victorian Proceedings.

79    It is contended by Mr Oswal in his defence and cross-claim that Mr Vikas Rimbal was involved in the relevant discussions, but the affidavits indicating the likely witnesses do not indicate whether Mr Vikas Rimbal is willing to give evidence and, if subpoenaed, what he might say.

80    I am also informed that outlines of evidence were to be filed by the plaintiffs in the Victorian Proceedings in 2013, no outline of evidence was filed by Mr Oswal in relation to his proceeding and no outline of evidence was filed for Mr Oswal in Mrs Oswal’s proceeding despite his involvement with the allegations made in that proceeding.

81    It is for those reasons, together with the evidence from Mr Pestell who refers to only witnesses who ‘may be called’, that I say that it is by no means certain that such witnesses will be required. I am not suggesting that Mr Oswal is required to satisfy me that certain witnesses will definitely be required. I am simply pointing to the fact that there is little certainty from the Oswals’ point of view about the identity of, location of and likelihood of calling those witnesses who have been included in the ‘possible’ category.

82    Quite clearly, the ultimate number and identity of witnesses will be affected by a range of matters to be determined between now and trial, including the evidence necessary to prove various amounts paid and claimed, the facts and payments are admitted and those in dispute. It is certainly not possible at this stage to assess how many and which of the possible witnesses are likely to be required. In any event, a significant number of these could no doubt be accommodated with video facilities which are readily available and universally used in trials conducted in superior courts in Australia.

Issues in the cases

83    Lest there be any doubt about the state of the Victorian Proceedings now as contrasted to 2011 when I considered the stay application, the fact of the matter is that the allegations made in the Oswal proceeding in Victoria are substantial. They arise only in that proceeding. As one example, I am told that Mrs Oswal’s statement of claim runs to 372 pages and pleads numerous (at least 14) different common law equitable and statutory causes of action in relation to the Duress Claims, and, amongst other allegations, pleads that ANZ and the Receivers each owed a significant range of common law equitable and statutory duties in relation to the Sale Claims. The prayer for relief to the statement of claim extends to 45 paragraphs. The sums involved in the Victorian Proceedings, as well as in WAD 66, extend to hundreds of millions of dollars. I am told that pleadings in the Victorian Proceedings, albeit including claims of misappropriation and costs overruns, run to 1188 pages. The most significant factor is that of recent times the Victorian Proceedings have been very substantial in their own right and were, of course, initiated by the Oswals themselves. Importantly, the claims in the Victorian Proceedings relating to the Duress Claims and Sale Claims find no equivalent in WAD 66. Almost everything in WAD 66 has now been subsumed in the Victorian Proceedings.

Legal representation

84    The interlocutory applicants stresses the convenience of solicitors and counsel in the following terms:

35.    Also relevant is the numbers and location of solicitors and counsel already engaged in the Victorian Proceedings and the inconvenience and cost involved if the Victorian Proceedings were transferred to Western Australia (whether the cost involves flights and accommodation in Perth for solicitors and counsel based in the eastern states, or the cost of replacing those solicitors and counsel with local or other representation). That the parties to the Victorian Proceedings have organised their resources and legal teams around the location and court in which [Mrs] Oswal and [Mr] Oswal issued the RO Proceeding and PO Proceeding is apparent from the following:

(a)    ANZ and the Receivers have retained two senior counsel and two junior counsel, all of whom are based in Melbourne, and Herbert Smith Freehills has a team of solicitors involving Mr Adams, a consultant, six senior associates and three solicitors all based in Melbourne.

(b)    The Apache defendants have retained a member of senior counsel (in Melbourne) and two junior counsel (one in Melbourne, one in Sydney), and have engaged Clyde & Co with solicitors in its Sydney office.

(c)    Yara Australia has retained a member of senior counsel (based in Sydney) and two junior counsel (in Melbourne and Perth) and has engaged Clayton Utz with solicitors in its Perth office.

(d)    [Mr] Oswal has retained members of senior counsel based in Melbourne and Sydney, and two members of junior counsel based in Melbourne, with solicitors (Watson Mangioni) based in Sydney.

(e)    [Mrs] Oswal has retained a member of senior counsel based in Sydney, and solicitors (Jones Day) based in Sydney.

(f)    The Escrow Agent has retained Corrs Chambers Westgarth (Melbourne office).

(g)    Fertilisers and Holdings have retained Maddocks Lawyers (Melbourne office).

85    For my part, I am not persuaded that special consideration needs to be given to the legal teams. This is litigation involving hundreds of millions of dollars. The parties have demonstrated a willingness to spend whatever they perceive as being necessary to do the job.

Relative stages of the proceedings

86    It is not insignificant, but not determinative in its own right that a trial date has been fixed in Victoria. It seems to be a factor of particular significance to Apache because it has not participated in WAD 66, other than to be joined as an intervener on 19 November 2014. It has been within the capacity of any of the parties in WAD 66 to press for a trial date. Had that been sought at the same time as the trial date was fixed in the Victorian Proceedings, a trial date could also have been allocated for August 2015. Realistically, however, to do so in light of the Victorian Proceedings embracing the same and many other matters would have been at least problematic.

87    Essentially because the issues in WAD 66 have recently become a subset of, or subsumed by, the Victorian Proceedings, it is necessary and desirable the proceedings be managed and heard within the Victorian Proceedings. That also accords with the preference of most of the affected parties.

CONCLUSION

88    All parties accept that the interests of justice are not served by three separate proceedings in two courts dealing with substantially overlapping issues being run concurrently. The risks involved are obvious. The potential for inconsistent factual findings and determinations arise in the same issues. Time, expenses and other resources of the community, the Court and the parties will be wasted.

89    I will make orders transferring this proceeding pursuant to s 1337H(2) of the Corporations Act having regard to the interests of justice and in light of the relevant factors, including the matters listed in s 1337L. The orders will be:

1.    This proceeding be transferred to the Supreme Court of Victoria.

2.    The Registrar send forthwith each document filed, and any orders made, in this proceeding to the appropriate officer of the Supreme Court of Victoria.

3.    The costs of the proceeding to date in this Court (including the costs of this application but excluding costs in respect of which orders have already been made by this Court) be costs in the cause to be continued in the Supreme Court of Victoria.

Associate:

Dated:    6 February 2015