FEDERAL COURT OF AUSTRALIA
ALCOHOL COUNTERMEASURES SYSTEMS CORP.
GUARDIAN INTERLOCK SYSTEMS AUSTRALASIA PTY LTD (ACN 062 932 932)
DATE OF ORDER:
THE COURT ORDERS THAT:
2. The applicants pay the respondents’ costs of and incidental to the respondents’ interlocutory application dated 27 August 2019 and filed 29 August 2019.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
Introduction and summary
1 This proceeding was commenced in the Victoria District Registry of this Court by Felix Comeau, who lives in Canada, and Alcohol Countermeasures Systems Corp. (ACS), a corporation based in, and operating its business out of, Canada, against Les Libbesson, who lives in Sydney, and Guardian Interlock Systems Australasia Pty Ltd (Guardian), a corporation with its main office in Sydney.
2 The respondents seek an order under s 48 of the Federal Court of Australia Act 1976 (Cth) (Act) that this proceeding be transferred to, and continue in, the New South Wales District Registry of the Federal Court of Australia. For the reasons below, I am satisfied that the balance of convenience weighs in favour of the proceeding being transferred to the New South Wales District Registry.
3 On 31 July 2019, the applicants commenced this proceeding by way of an originating application and concise statement. In summary, the applicants allege the following:
(a) the first applicant, Mr Comeau, is a Canadian businessman and specialist in the development of alcohol interlock devices and the proprietor of the second applicant, ACS;
(b) the first respondent, Mr Libbesson, is an Australian citizen and managing director of the second respondent, Guardian, an Australian company that supplies alcohol interlock programs to road traffic authorities in Australia;
(c) in about 1993, it was agreed between Mr Comeau and Mr Libbesson that Mr Comeau by his company would provide to Mr Libbesson all of the hardware and software in order to market and distribute the alcohol interlock devices in the Australasian region (1993 Agreement);
(d) Mr Libbesson would install and maintain the alcohol interlock devices and use his best endeavours to promote, distribute and sell the devices within the Australasian region;
(e) the terms of the 1993 Agreement included that:
(i) Mr Libbesson and Guardian would not compete or engage in activities prejudicial to the sale of the devices in the Australasian region;
(ii) Mr Libbesson and Guardian would keep confidential certain information made available to them by the applicants; and
(iii) the parties would give reasonable notice to each other of their intention to terminate the 1993 Agreement;
(f) by further agreement made on or about 17 November 2005, the parties renewed certain terms and extended their agreement until December 2020 (the Agreement);
(g) the applicants allege that the respondents wrongfully terminated the Agreement without giving reasonable notice and engaged in misleading and deceptive conduct contrary to the Australian Consumer Law by continuing to promote their businesses under, or by reference to, certain brand names even though the relationship between the applicants and the respondents had ceased.
4 The respondents have not yet filed a response to the applicants’ concise statement.
Respondents’ interlocutory application
5 The respondents by their interlocutory application dated 27 August 2019 seek an order pursuant to s 48 of the Act that the proceeding be transferred from the Victorian District Registry of the Court to the New South Wales District Registry of the Court. The terms of s 48 are set out below at .
6 In support of their application, the respondents filed an affidavit of a solicitor, Nathan Croot. Mr Croot deposed generally to the additional costs which the respondents will incur if the proceeding is heard in Victoria rather than New South Wales. He also deposed to the fact that he had, on behalf of the respondents, sent the letters that, according to the applicants’ concise statement, terminated the Agreement.
7 The respondents also filed an affidavit of Mr Libbesson, in which deposed to the following matters:
(a) Mr Libbesson lives in North Rocks, a suburb in north-western Sydney. The head office of Guardian is located in the nearby suburb of Castle Hill. Prior to January 2006, Guardian’s office was located nearby in Baulkham Hills. The second office of Guardian is in Edwardstown, South Australia. The law firm representing the respondents is located in Macquarie Park, New South Wales;
(b) to the best of Mr Libbesson’s knowledge, Mr Comeau lives in Toronto, Canada. ACS has headquarters in Toronto, Canada. The law firm representing the applicants in this proceeding, Davies Collison Cave (DCC), has offices in Sydney and Melbourne;
(c) Guardian provides alcohol ignition interlock systems designed to prevent the operation of vehicles by impaired drivers and manages offender interlock programs on behalf of transport authorities across all Australian states and territories;
(d) until about May 2019, Guardian sourced its interlock systems from ACS. The business practices of the parties included the following:
(i) Guardian would order interlock systems by email from ACS at its Toronto office;
(ii) ACS would ship the ordered interlock systems to Guardian’s Sydney office;
(iii) Guardian would ship interlock systems from its Sydney office to service centres around Australia where the service centre would install the interlock systems in vehicles of individuals signed up to an interlock program;
(iv) Guardian arranged for ACS to manage and store the data collected by the interlock systems and servers controlled by Guardian;
(v) most communications between the parties had been by way of telephone calls, letters and emails, which were generally sent or received on behalf of Guardian at its office in Sydney;
(vi) Guardian visited the applicants in Canada on a number of occasions and key staff members made annual trips to Canada for training and development updates;
(e) Mr Libbesson does not believe that there is a direct Victorian connection to the business arrangements between Guardian and ACS other than ACS collecting and installing data on Guardian’s behalf for the Victorian interlock program. Guardian provides the same service for the New South Wales interlock program and the interlock programs in other states. The data is sent electronically to ACS in Canada;
(f) the respondents have identified four potential witnesses:
(i) Stacey Hughes, who lives in Adelaide and travels to Sydney to work out of the Guardian’s Sydney office every second week;
(ii) Erin Laws, who lives in Sydney and works out of Guardian’s Sydney office;
(iii) Susanne Beckham, who lives in Sydney and works at Guardian’s Sydney office; and
(iv) Nerida Wiles, who recently finished employment at Guardian but who lives in Sydney; and
(g) Mr Libbesson deposed to the difficulties he will have managing Guardian if he is away from the office during a trial held in Melbourne.
8 In opposition to the interlocutory application, the applicants relied upon an affidavits of Andrew William Sutherland, a solicitor at DCC, and Larisa Vella-Xuereb, a process server. Ms Vella-Xuereb’s affidavit deposed to the circumstances of service of the proceeding on the respondents.
9 Mr Sutherland deposed in his affidavit to the following:
(a) DCC was retained in early May 2019 to act on behalf of the applicants;
(b) DCC has acted on behalf of the applicants since the inception of this dispute, including in relation to all matters leading up to the institution of this proceeding;
(c) the applicants engaged Melbourne-based counsel who had been involved in the drafting of court documents for the institution of this proceeding and the applicants’ opposition to the respondents’ transfer application;
(d) the members of DCC in Melbourne who have worked on this matter since inception of this dispute currently reside in Melbourne and work on a full-time basis from DCC’s Melbourne office. If the proceeding was transferred to the New South Wales District Registry, the current DCC team working on the matter would continue to have carriage of this matter;
(e) all instructions which DCC receives on behalf of the applicants or have dealings with them have been taken remotely by telephone and by email. There is no reason to believe that that position will change;
(f) Guardian’s business is an Australia-wide business. Guardian operates service centres in 33 locations in Queensland, 32 locations in New South Wales, 31 locations in Victoria, 13 locations in South Australia, 13 locations in Western Australia, 3 locations in Tasmania and 2 locations in the Northern Territory; and
(g) Guardian promotes its business nationally, including through newspaper articles.
10 In relation to the last matter, Ms Hickey, counsel for the applicants, took the Court at the hearing of the application to two newspaper articles. The first was an online article entitled “Call to make drink-drive interlock rules tougher” in The Age dated 25 February 2013. The second was an online article entitled “The car device that allows known drink-drivers back behind the wheel – safety” in The Sydney Morning Herald dated 23 April 2016. In both articles, Mr Libbesson, identified as either the managing director or owner of Guardian, provided brief quotations in relation to the use of interlock devices. In the latter article, Mr Libbesson cited a particular example of a person in Victoria relying on an interlock device for long periods of time.
Change of venue
(1) 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.
12 The principles relevant to the exercise of the Court's discretion under s 48(1) of the Act have been discussed in a number of recent decisions of this Court: see Australasian Jet Pty Ltd v Air Affairs (Australia) Pty Ltd  FCA 452 at - per Markovic J; Custance v SC Admin Pty Ltd  FCA 511 at - per Besanko J; Plankton Australia Pty Limited v Rainstorm Dust Control Pty Limited  FCA 1616 (Plankton) at - per Lee J; TCL Airconditioner (Zhongshan) Co Ltd v Castel Electronic Pty Ltd, in the matter of TCL Airconditioner (Zhongshan) Co Ltd  FCA 1015 at - per McKerracher J; Walsh, Liquidator of D&R Community Services Pty Ltd (Receivers & Managers Appointed) (In Liq) v Commissioner of Taxation  FCA 1739 at  per Greenwood J and Auschem Pacific Group Pty Ltd v Tismor Health & Wellness Pty Limited  FCA 1216 at - per Anderson J.
13 A useful summary of the relevant principles was provided by McKerracher J in Mortimer v Opes Prime Stockbroking Ltd (ACN 086 294 028) (Administrators Appointed) (in liq)  FCA 227 (Mortimer) at -:
The relevant principles presently arising, in my view are these:
• There must be sound reason to direct that the proceeding be conducted or continued elsewhere. If the party commencing the proceeding chose the place capriciously the Court would be justified in giving no weight to the choice of place. The balance of convenience is important but its weight must vary from case to case. What needs to be ascertained is where the case can be conducted or continued most suitably bearing in mind the interests of the parties, the ends of justice and determination of the issues between them, and the most efficient administration of the Court …
• The location of parties and witnesses, the place where the cause of action arose and the convenience of the Court are all factors …
• Typically there is no factor that is determinative but rather it is necessary to weigh all the relevant factors that might connect the proceedings to one jurisdiction or the other …
• The national character of the Court including its capacity to make flexible arrangements for the taking of evidence and the receipt of submissions is relevant. …
• The question of which District Registry should conduct the proceedings does not raise matters of high principle. Essentially it is a matter of case management and proper recognition of the legitimate interests of each of the parties reflected in the balance of convenience as between them and the convenience of the Court and any economies and efficiencies which may attach to one choice or the other …
• There may be flexibility - one Registry could conduct pre-trial management while allocating the trial to a judge in another Registry …
• There is no burden of proof governing the exercise of the discretion in s 48 of the Act …
• The existence of related proceedings which may be case managed jointly may be important …
Factors which may be relevant for consideration include:
• the residence of the parties, the residence of the witnesses, the expense and prejudice likely to the respective parties, the likelihood of delay being a significant consideration, whether there is, in respect of the competing suggestions as to venue, any possibility of an interference with a fair trial of the hearing, the balance of convenience in regard to all considerations …
To these points I would add, perhaps an obvious point, that a judge to whom management of a case has been allocated will be reluctant to transfer that duty to another judge unless there is good reason to do so.
14 As alluded to in the first dot point set out in this passage, the ultimate test under s 48(1) of the Act was expressed by Bowen CJ, Woodward and Lockhart JJ in National Mutual Holdings Pty Ltd v The Sentry Corporation  FCA 133; 19 FCR 155 (Sentry Corporation) at 162 as follows:
[W]here 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.
15 Section 48(1) of the Act must now be applied in a way that best promotes the overarching purpose of the civil practice and procedure provisions governing this Court. This was explained by Lee J in Plankton at  and :
It was said in Sentry Corporation (at 162) that the "power conferred on the Court or a judge by s 48 is in terms wholly unfettered". This is not now strictly accurate by reason of legislative changes since the decision in Sentry Corporation was delivered. In particular, s 37M(3) of the [Act] provides that any civil practice and procedure provisions must be interpreted and applied, and any power conferred by them must be exercised or carried out, in a way that best promotes the overarching purpose. In accordance with the dictates of s 37M(1) of the [Act], the overarching purpose is, of course, the facilitation of the just resolution of disputes according to law and as quickly, inexpensively and efficiently as possible.
This is a national Court. It is not a collection of federated courts. The National Court Framework was a fundamental reform of how the Court operates, its key purpose being to facilitate the Court operating "as a truly national and international Court". As is now well known, the Court's workload is now organised by reference to National Practice Areas and matters are allocated nationally, focusing on responding to the needs of the case and the parties. Considerations which loomed large in earlier transfer cases (decided at an earlier stage of the Court's evolution) now need to be assessed by reference to these significant changes. Apart from the introduction of Part VB of the [Act] and the changes wrought by the National Court Framework, in exercising the broad discretion conferred by s 48 of the [Act], relevant considerations in transferring cases include the increasing ability of commercial parties to have access to economical airfares, and the increasingly national character of the legal profession.
16 Ultimately, the balance of convenience as to the proper Registry for the conduct of the proceeding must be sufficiently pronounced to warrant positive action to change the status quo: Cycles & Wheelman Pty Ltd & Ors v Beltech Corporation Ltd (1988) 80 ALR 279 at 281 per Gummow J, quoted in, amongst other decisions, Australian Competition and Consumer Commission v Pauls Ltd  FCA 71 at  per O'Loughlin J and Wepar Nominees Pty Ltd v Schofield  FCA 920 at  per Besanko J. Generally, there must be a sound reason to direct a proceeding to be conducted or continued elsewhere: Sentry Corporation at 162, cited in Mortimer at  per McKerracher J.
17 Having considered the matters referred to in the parties’ submissions, both written and oral, and the matters deposed to in the affidavits referred to above, I am satisfied that the balance of convenience weighs in favour of the proceeding being transferred to the New South Wales District Registry of the Court. In reaching this conclusion, I am particularly influenced of the following matters:
(a) this proceeding is brought by Canadian applicants against an individual respondent living in New South Wales and a corporate respondent operating its business from premises in New South Wales;
(b) this proceeding concerns a dispute arising out of a long-standing business arrangement between the parties such that the subject matter of the dispute is more closely connected to New South Wales and Canada than Victoria;
(c) apart from the location of the team members of the applicants’ solicitors working on this proceeding, there is no other connection between the matters in dispute in this proceeding and Victoria. The respondents do have 31 service centres in Victoria (in addition to service centres in all other states and territories of Australia). However, Mr Libbesson provided uncontested affidavit evidence that:
(i) he was not aware of any interlock systems being shipping from or received in Victoria;
(ii) he did not believe that any individuals at service centres will be able to give evidence in relation to the agreements pleaded by the applicants; and
(iii) he was not aware of anyone in Victoria who could provide relevant evidence about the issues pleased by the applicants.
Moreover, I do not view the newspaper articles raised by the applicants, as outlined above at , as lending material weight to the applicants’ resistance of the transfer application;
(d) the applicants’ concise statement makes no connection between the matters in issue in the proceeding and Victoria. In particular, it does not connect the alleged breaches of the agreements to Victoria. For instance, there is undisputed evidence that it was Mr Croot, a Sydney-based solicitor acting on behalf of the respondents, who sent the letters which the applicants say terminated the Agreement. Neither does the concise statement express that the alleged misleading and deceptive conduct by the respondents to have taken place in Victoria (although there is reference to the respondents engaging in such conduct through promotion of their businesses generally);
(e) the communications between the applicants and the respondents in the course of their business dealings were either in person in Canada or by telephone, written correspondence or email between New South Wales and Canada;
(f) the likely witnesses are based in New South Wales and Canada:
(i) the applicants have not yet determined their witnesses in the proceeding beyond two Canadian based witnesses, including Mr Comeau. These witnesses will need to travel to Australia for the hearing. It is no more onerous for those witnesses to travel to Sydney than Melbourne; and
(ii) three of four potential witnesses for the respondents are based in Sydney, with the fourth based in Adelaide who regularly travels to Guardian’s office in Sydney; and
(g) the applicants’ solicitors, DCC, have offices in Sydney as well as Melbourne, amongst other locations. Their primary means of obtaining instructions from the applicants is by telephone and by email. This will not be made any more difficult or onerous if the proceeding is transferred to the New South Wales District Registry. Moreover, I note in this regard that, in the age of national firms and modern technology, the location of the parties’ legal representatives is, generally speaking, accorded little weight: Wepar Nominees Pty Ltd v Schofield  FCA 920 at  per Besanko J, citing Baxendale’s Vineyard Pty Ltd v Geographical Indications Committee  FCA 22; 156 FCR 444 at  per Mansfield J. See also Australasian Jet Pty Ltd v Air Affairs (Australian) Pty Ltd  FCA 452 at  per Markovic J.
18 At the hearing of the application, the applicants relied by way of analogy on the observation of Rares J in Atrum Coal NL v Moran  FCA 1530 at  that there was no “juridical advantage” warranting transfer of the proceedings in that case. However, Rares J expressed that statement in the different context of an application to transfer proceedings to the Supreme Court of Western Australia where there were related proceedings pending in that court. His Honour viewed that there was only limited overlap between the two proceedings and concluded at  that “[t]here are no juridical advantages or differences between the capacities of the Supreme Court or this Court to apply the law to the facts of the case”. There is no need to assess the competing juridical advantages between alternative jurisdictions in this case.
19 The applicants moreover contended that it was too early in the proceeding for the Court to form a view on certain factors influencing the determination of the respondents’ transfer application. The respondents’ application was, in their characterisation, premature. The applicants highlighted that, as conceded by the respondents, it was too early to determine precisely where the cause of action for each of the claims was based. And, in their submission, it was too early to draw any conclusions about the location of likely witnesses. However, in my opinion, the material before me is sufficient to form a view as to whether the Victoria District Registry or the New South Wales District Registry is the appropriate location at which the proceeding should be continued.
20 Although the location of the arising of the causes of action may yet to be identified, there does not appear to be any suggestion, albeit at this preliminary stage, that they arose in Victoria. On the uncontested material, they either arose in Canada or New South Wales. And although the sources of relevant evidence may of course evolve throughout a proceeding, there does not seem to be a reasonable suggestion that the bulk, if not all, of the relevant witnesses for the purposes of the dispute will be located in either Canada or New South Wales. My view is that I can rely on the matters deposed to by Mr Libbesson, which were undisputed by the applicants, about the lack of connection between this dispute and the state of Victoria.
21 I am consequently satisfied that the facilitation of the just resolution of the dispute between the parties according to law, as quickly and inexpensively and efficiently as possible, requires the positive action of changing the status quo. In my view, the determination of the issues between the parties, and the most efficient administration of the Court, taking into account the overarching purpose of the civil practice and procedure provisions governing this Court, is best met by the proceeding being transferred to the New South Wales District Registry.
22 For these reasons, the respondents’ interlocutory application will be granted. Pursuant to s 48 of the Act, the proceeding will be transferred to, and continued at, the New South Wales District Registry of the Court. I also order that the applicants pay the respondents’ costs of and incidental to the transfer application.