Federal Court of Australia

Ashton v Pope (No 2) [2025] FCA 1121

ORDERS

THE COURT ORDERS THAT:

1.    The proceeding be transferred to the Supreme Court of Western Australia pursuant to s 5(4) of the Jurisdiction of Courts (Cross-vesting) Act 1987 (Cth).

2.    All reserved costs of the proceeding until the date of transfer be each party's costs in the cause.

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

REASONS FOR JUDGMENT

BANKS-SMITH J:

1    This transfer application concerns a proceeding in this Court about the conduct of the respondents, John Pope and Gregory Quinn, as directors of Welldog Pty Ltd.

2    The applicant, Simon Ashton, was granted the right to commence the proceeding in this Court by a deed of settlement and release entered into in 2019 which assigned to him all claims that either Welldog or its liquidators may have against Dr Pope and Mr Quinn.

3    In November 2022 I made service orders facilitating service of the originating application and associated documents on Dr Pope in the United States of America, and published reasons: Ashton v Pope [2022] FCA 1425.

4    As summarised in those reasons, Dr Pope was a director of Welldog from December 2010, and Mr Quinn was a director and the secretary from September 2016. Mr Quinn was also financial controller of Welldog from June 2016 to (at least) March 2017. Dr Pope was also relevantly the chief executive officer, president, and a director of Gas Sensing Technology Corporation (GSTC). GSTC is the ultimate parent of Welldog.

5    Mr Ashton alleges in the Federal Court proceeding that the respondents breached their respective statutory and equitable duties owed to Welldog, specifically by s 180, s 181, s 182 and s 183 of the Corporations Act 2001 (Cth), and cognate fiduciary duties. The breaches are said to arise from the respondents' involvement in causing payments to be made by Welldog to GSTC, rather than paying its outstanding creditors, including ProX Pty Ltd, and so contributing to Welldog's financial decline and ultimate insolvency. In the alternative it is said that the respondents prevented ProX and other creditors from being repaid their debts by the receiver. It is contended that the payments were also made contrary to the terms of a General Security Agreement dated 1 August 2016 between Welldog and ProX.

6    The allegations made against the respondents arise from the same factual background, including the insolvency of Welldog, that is the subject of proceedings commenced by GSTC in the Supreme Court of Western Australia.

7    The proceedings in the Supreme Court are GSTC v ProX Pty Ltd (ACN 094 930 480) (CIV 2859 of 2016) and GSTC v ProX Pty Ltd, Simon Ashton, John Mactaggart, Jontra Holdings Pty Ltd, Associated Construction Equipment Pty Ltd, Brisbane Angels Nominees Pty Ltd and Graeme Linklater (CIV 1876 of 2022). CIV 2859 of 2016 has subsequently been consolidated with CIV 1876 of 2022, and I will refer to the consolidated proceeding as the WASC proceeding.

8    Although the proceeding in this Court is more confined, there is a significant overlap between it and the WASC proceeding, in that the payments that form the basis of the allegations in the proceeding before me are part of the counterclaim filed by ProX and Mr Ashton in the WASC proceeding. According to the parties, common questions that will need to be resolved in this proceeding and the WASC proceeding include:

(a)    the proper construction of the terms of the General Security Agreement (raised in the WASC proceeding by the first and second defendants' amended defence and counterclaim (ADC) at [244] and raised in the Federal Court proceeding by Mr Ashton's concise statement at [14]);

(b)    the nature and propriety of the payments made by Welldog to GSTC ([246], [247], [254] and [255] of ADC and [16]-[17] of concise statement); and

(c)    the loss suffered by Welldog as a result of its insolvency, if any, and its cause ([225]-[226] of ADC and [27] of concise statement).

9    This factual and procedural overlay encouraged the parties to move by consent for a transfer of the Federal Court proceeding to the Supreme Court of Western Australia under s 5(4) of the Jurisdiction of Courts (Cross-vesting) Act 1987 (Cth).

10    Section 5(4) of the Act relevantly provides:

Where:

(a)    a proceeding (in this subsection referred to as the relevant proceeding) is pending in the Federal Court or the Federal Circuit and Family Court of Australia (Division 1) (in this subsection referred to as the first court); and

(b)    it appears to the first court that:

(i)    the relevant proceeding arises out of, or is related to, another proceeding pending in the Supreme Court of a State or Territory and it is more appropriate that the relevant proceeding be determined by that Supreme Court;

…

(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.

11    I summarised the principles relating to such transfer applications in JKC Australia LNG Pty Ltd v AkzoNobel NV (No 5) [2023] FCA 1248 at [30]-[37]. Those principles are well recognised, and it is not necessary to repeat them. It is sufficient to acknowledge that determining a transfer application under such provisions is a 'nuts and bolts' management decision as to which court, in the interests of justice, is more appropriate to hear and determine the substantive dispute. The question to be determined is where the balance lies in properly serving the interests of justice in each case.

12    In this case, I take into account that the parties seek the transfer by consent and that the potential for a transfer has been live between the parties since (at least) the time of the service orders.

13    I am also satisfied that the first pre-condition to a transfer (s 5(4)(b)(i)) is satisfied.

14    However, I must still be satisfied that a transfer properly serves the interests of justice.

15    There are three issues that are relevant and persuasive in deciding this application.

16    First, having regard to the commonality of issues to be determined, there is potential for inconsistent findings to be made. I do not place great emphasis on this risk, as it must rise to one that is said to potentially bring the justice system into question. Whether that is so is unclear at this stage on the basis of the information currently before me, but I accept there is at least a potential risk.

17    Second, I do not consider that a transfer will have the effect of prejudicing any party. It will not lead to delay or unduly involve the parties becoming intertwined in broader litigation. There appears to be little difference in the status of the respective proceedings. The matter in this Court has proceeded by way of concise statement and responses, but in general it can be said that the pleadings in the respective Federal and Supreme Court matters have closed. Both matters are at the document disclosure stage, although I was recently informed of some remaining contest in the matter before me as to certain categories of discovery, which will need to be resolved. Otherwise, both matters would appear to be at the stage where they can be programmed to trial.

18    Third, there is a potential benefit in terms of costs and efficiency in directing the transfer, so that the parties may pursue consolidation of the actions, appropriate directions to facilitate any concurrent hearings and appropriate directions as to reliance upon mutual discovery and evidence exchange. How the Supreme Court allocates and manages the conduct of the proceeding once transferred is of course a matter for the Chief Justice and the judge to whom the matter may be allocated.

19    However, for those reasons, and noting the consent of the parties, I consider it is in the interests of justice that the transfer order be made. I have revisited all costs orders made to date in this proceeding. One order (2 September 2025) was to the effect that costs of the application were in the cause. All other costs have been reserved. I will accordingly direct that all reserved costs of the proceeding to the date of transfer be each party's costs in the cause.

Associate:

Dated:    10 September 2025