Ross Mollison Group Pty Ltd v Really Useful Company (Aust) Pty Ltd [2000] VSC 256 (19 June 2000)

Last Updated: 21 June 2000

SUPREME COURT OF VICTORIA
COMMERCIAL AND EQUITY DIVISION COMMERCIAL LIST	Not Restricted

No. 2030 of 2000

ROSS MOLLISON GROUP PTY LTD & ANOR	Plaintiffs
v
THE REALLY USEFUL COMPANY (AUST) PTY LTD & ANOR	Defendants

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JUDGE:	Warren J
WHERE HELD:	Melbourne
DATE OF HEARING:	16 June 2000
DATE OF JUDGMENT:	19 June 2000
CASE MAY BE CITED AS:	Ross Mollison Group Pty Ltd & Anor v The Really Useful Company (Aust) Pty Ltd & Anor
MEDIUM NEUTRAL CITATION:	[2000] VSC 256

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JURISDICTION OF COURTS (CROSS-VESTING) ACT 1987 (VIC), S5(2) - governing law of contract - connection with Victoria - costs and convenience - original choice forum - interests of justice.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Mr G. Clarke	Aarons (G.W.P.) & Company
For the Defendants	Dr M. Collins	Mallesons Stephen Jaques

HER HONOUR:

1. The plaintiffs claim to have created an original dramatic work called "Cats - Runaway to the Circus" based upon the well-known musical work "Cats". The plaintiffs allege that in about December 1997 they provided an outline of the "Cats - Runaway to the Circus" production "("the production") to the defendants on a confidential basis. The plaintiffs allege that in about May 1998 they and the defendants agreed that if the production proceeded in Australia and New Zealand the first plaintiff and second defendant would be co-producers, the first plaintiff would market the production and permit the first plaintiff and first defendant to jointly use the production. As a consequence of the then arrangement between the parties the first plaintiff alleges that it created an original literary work in writing entitled "Cats Goes to the Circus a concept development". The first plaintiff alleges that it is the owner of the copyright in that work.
2. The plaintiffs allege, further, that in about July 1998 they employed substantial resources to market, produce and manage the presentation of the production in Australia.
3. The plaintiffs allege, also, that the parties entered into a marketing agreement whereby the first plaintiff was to market exclusively the production in Australia and, further, that a wholly owned subsidiary of the first plaintiff, Mollison Multimedia Pty Ltd was to be retained to provide design and artwork for the production. In addition to a number of terms the plaintiffs allege that there was a term that the first plaintiff would be paid a profit margin not exceeding $200,000, a weekly fee of $2,000 for marketing services and a further weekly fee of $1,500 for publicity.
4. The plaintiffs allege, also, that there was a further agreement between the parties referred to as the co-producers' agreement whereby the defendants would fund all budget and pre-production costs associated with the production in Australia subject to a reduction in the share of profits of the second plaintiff in the production. It is alleged that there were a number of terms of the co-producers' agreement including terms that the second defendant would pay to the second plaintiff a management fee of $105,000, a weekly fee of $2,000 for management services, a further weekly fee of $4,000 per week for production services and a royalty fee of a minimum amount of $2,000 per week.
5. The plaintiffs allege that the defendants breached the marketing agreement and as a consequence they have suffered losses in the sum of $711,298.20. They allege, further, that the defendants breached the co-producers' agreement and that as a consequence they have suffered specified damages in the sum of approximately $863,171 and unspecified damages based upon lost profits, fees and commissions. The plaintiffs allege, in addition, that the defendants have breached their copyright in the work and seek damages accordingly.
6. The proceedings were commenced in the Commercial List of this court on 31 March 2000.
7. The defendants deny the allegations of the plaintiffs but allege that certain contractual arrangements were in place between the plaintiffs and the defendants. The effect of the agreement alleged by the defendants was that the plaintiffs would provide marketing and production services but that, in any event, such agreement was terminated because of failure on the part of the plaintiffs to provide the services agreed to. The details of the arrangements as alleged by the defendants between themselves and the plaintiffs need not be the subject of detailed description for present purposes save that the defendants assert that the plaintiffs have been paid fair and reasonable value for the work performed and services provided.
8. However, the defendants allege that insofar as there was an agreement for marketing services between the plaintiffs and the defendants the first plaintiff breached such agreement and, as a consequence, the defendants suffered losses of over $1.2m together with other unspecified damages. The defendants allege, also, that as a result of breaches of the agreement for the provision of production services by the plaintiffs to the defendants, those defendants have suffered losses in the order of over $300,000 together with unspecified damages. Accordingly, the defendants' counterclaim for damages for breach of contract as alleged by them.
9. The defendants have issued an application seeking to transfer the proceeding to New South Wales pursuant to s.5(2) of the Jurisdiction of Courts (Cross-Vesting) Act 1987 (Vic). Section 5(2) of the Act provides:

"(2) Where -

(a) a proceeding (in this sub-section referred to as the 'relevant proceeding') is pending in the Supreme Court (in this sub-section 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 another State or of a Territory and it is more appropriate that the relevant proceeding be determined by that other Supreme Court;

(ii) have regard to -

(A) whether, in the opinion of the first court, apart from this Act and any law of the Commonwealth or another State relating to cross-vesting of jurisdiction, the relevant proceeding or a substantial part of the relevant proceeding would have been incapable of being instituted in the first court and capable of being instituted in the Supreme Court of another State or Territory;

(B) the extent to which, in the opinion of the first court, the matters for determination in the relevant proceeding are matters arising under or involving questions as to the application, interpretation or validity of a law of the State or Territory referred to in sub-sub-paragraph (A) and not within the jurisdiction of the first court apart from this Act and any law of the Commonwealth or another State relating to cross-vesting of jurisdiction; and

(C) the interests of justice -

it is more appropriate that the relevant proceeding be determined by that other Supreme Court; or

(iii) it is otherwise in the interests of justice that the relevant proceeding be determined by the Supreme Court of another State or of a Territory -

the first court shall transfer the relevant proceeding to that other Supreme Court."

10. The defendants base their application to transfer the proceeding on the following grounds:

1. Firstly, the defendants are incorporated in New South Wales and their principal place of business and registered office are in Sydney, New South Wales. 2. Secondly, the plaintiffs although incorporated in the State of Victoria maintained offices in Sydney New South Wales up until 19 March 2000. 3. Thirdly, the plaintiffs continued to maintain office premises in New South Wales. 4. Fourthly, the initial agreement alleged by the plaintiff in the statement of claim is said to be partly in writing, partly oral and partly to be implied. Insofar as the agreement was made orally the relevant conversation is alleged to have occurred at the offices of the first defendant, located in Sydney, New South Wales. 5. Fifthly, discussions between representatives of the plaintiffs and the defendants in relation to the agreement known as the marketing agreement were generally held in Sydney, New South Wales. 6. Sixthly, the law governing the initial agreement between the plaintiffs and the defendants is not prescribed by the terms of that agreement. However, the marketing agreement is governed by the law of New South Wales and the relevant parties agreed to submit to the 'non-exclusive jurisdiction of the courts of the State of New South Wales'. 7. Seventhly, similar to the 'co-producers' agreement', that agreement is governed by the law of New South Wales and the relevant parties agreed to submit to the jurisdiction of the courts of that State. 8. Eighth, important events relating to the production of the performance such as casting and rehearsals occurred in New South Wales during 1998 and 1999. 9. Ninth, the production opened in Darwin in the Northern Territory and moved thereafter to Ayers Rock, Alice Springs and subsequently to Sydney in New South Wales. 10. Tenth, most of the principal witnesses for the defendant reside in New South Wales, approximately seven persons, whereas the plaintiffs' witnesses in total approximately two persons are based in Victoria. 11. Eleventh, the defendants have a longstanding relationship with Sydney solicitors. The latter two matters combined mean that if the proceeding remains in Victoria the defendants will incur additional cost and inconvenience in having to fly witnesses from New South Wales to Victoria.

11. The evidence relied upon by the defendants in support of their application is set out in the affidavits of Emma McDonald particularly that sworn 5 June 2000. The plaintiffs rely upon a number of affidavits particularly those sworn by Ross Mollison on 13 June 2000 and Thomas Cantwell on 14 June 2000. In summary, the plaintiffs' affidavits assert the following:

1. The conversations between the relevant parties that formed the oral components of any agreement occurred in both Melbourne, Victoria and New South Wales. 2. Initially the terms of the written agreements between the parties contained a term to the effect that the governing law was the State of Victoria and that the parties submitted to the jurisdiction of the courts of that State. However, the term was altered to substitute New South Wales for Victoria on the basis that the defendants' representative asserted there was no substantive difference between the laws of the two States. 3. Various activities relating to the production, preparation and ultimate presentation of the relevant performance occurred at a number of venues across Australia including Melbourne, Victoria. 4. The defendants are wholly owned subsidiaries of The Really Useful Group Limited which has substantial resources including an asserted value of more than British £150m. As a consequence the defendants have greater resources available to them than the plaintiffs. 5. The plaintiffs intend to call a number of witnesses, approximately 20 in number, of whom the majority are based in Melbourne, Victoria. 6. The plaintiffs' solicitors have offices only in Melbourne Victoria whereas the solicitors for the defendants have offices in both Sydney, New South Wales and Melbourne.

12. In determining whether to order a transfer under s.5(2) of the Jurisdiction of Courts (Cross-Vesting) Act the court must be satisfied as to which is the "more appropriate forum" for the hearing and determination of the dispute: Bankinvest AG v Seabrook (1988) 14 NSWLR 711, 714, 730; Schmidt v Won (1988) 3 VR 435, 450. The courts have held that the "more appropriate forum" is the forum with the "most real and substantial connection" with the subject matter of the proceeding: Bankinvest, supra, 728; Spiliada Maritime Corporation v Cansulex Limited (1987) AC 460, 478. Relevant factors to be taken into account in determining the more appropriate forum have included three factors. Firstly, the governing law of any agreement in dispute. Secondly, the connection between the alleged conduct and the jurisdiction. Thirdly, the cost and inconvenience for the parties as to the forum selected: Bankinvest, supra, 729.
13. Dr M. Collins who appeared for the defendants urged that they had satisfied each of the criteria accepted on the authorities as demonstrating that the more appropriate forum was New South Wales.
14. Firstly, it was submitted that insofar as the governing law of the relevant agreements was concerned each of the marketing agreement and the co-production agreement contained governing law provisions specifying the law of New South Wales and a non-exclusive submission to the courts of that State. However, the defendants have denied in their pleading that the marketing and co-producers' agreements were ever concluded as alleged by the plaintiffs. It is ironic, therefore, that the defendants seek to rely upon terms of those agreements for the purposes of supporting their argument that the proceeding should be cross-vested to New South Wales on the basis that each of the agreements contained a provision stipulating the governing law of the particular agreement. In any event, there has not been any matter put before the court to demonstrate that there is a distinction between the law in New South Wales and Victoria that would apply to the arrangements or agreements between the parties. In other words, there is no specific aspect of the agreements between the parties governed by a law that is unique or peculiar to New South Wales compared with the law of contract as applied in Victoria. The present case can be distinguished from the factor considered by Rogers A-JA in Bankinvest (at 729). Here there is not a New South Wales statute that governs the agreement, if any, between the parties. On balance, therefore, I am satisfied that even if the plaintiff proves the terms of the marketing and co-production agreements, including a term of submission to the jurisdiction of New South Wales, that of itself is not sufficient to cause me to be satisfied that the more appropriate forum is New South Wales.
15. The second matter relied upon by the defendants is that there is sufficient connection between the alleged conduct and the jurisdiction of New South Wales. In this respect they rely upon the fact of incorporation of the defendants in New South Wales and the various matters adverted to already including the location of performance, casting and rehearsal and the like. Conversely, the plaintiffs are incorporated in Victoria and assert that their businesses are operated principally in Melbourne, Victoria. I observe that the plaintiffs, located in Victoria, claim copyright in the production which is wholly disputed by the defendants. If the plaintiffs satisfy a court of their copyright claim such copyright would lie with parties residing in Victoria. Insofar as the locations of the various activities are concerned on analysis I do not consider that the defendants have demonstrated a dominant New South Wales "situs" in relation to those activities. Whilst the copyright claim is based nationally, pursuant to the provisions of the Copyright Act 1968 (Cwth), the location of the relevant acts and activities appear to have been scattered across New South Wales, the Northern Territory and Victoria. Nevertheless there is a lacking of dominance of the New South Wales location.
16. Again, this case can be distinguished on a further basis from that in Bankinvest. It is not a case where the basis for cross-vesting is "overwhelming". Ultimately, I must be satisfied that the justice of the case calls for the matter to be transferred to New South Wales. As matters stand, for the reasons stated thus far, I cannot be so satisfied. These types of applications often come down to a matter of impression: Overall v Permanent Trustee Company Liimited (1999) FCA 1385; unreported judgment of Ryan J of the Federal Court dated 29 September 1999. The impression I have formed of this case is that it does not reveal a sufficiently strong nexus with New South Wales. On balance, therefore, I am not satisfied that there is sufficient connection between the alleged conduct and the jurisdiction of New South Wales to warrant transferring the proceeding to that State.
17. The third matter relied upon by the defendants is the matter of cost and convenience. An analysis of the location of the various witnesses and the solicitors for the parties leads me to conclude that convenience is finely balanced both ways. It was said by Dr Collins on behalf of the defendants that this court should approach the list of witnesses indicated by the plaintiff with some hesitation. Whereas, it was urged, I ought accept on the basis of the pleadings that the defendants' witnesses as listed will in fact be called. These are not matters I can form a definitive view upon at this point. It is too early in the proceeding. For the purposes of the application I accept that the plaintiffs and defendants genuinely believe they will need to call the witnesses listed. In Contract Media Sales (Aust) Pty Ltd v Roads & Traffic Authority of New South Wales (1999) VSC 391, unreported judgment of Beach J dated 15 October 1999, the learned judge observed that it is no longer the onerous task for witnesses to travel from Sydney to Melbourne as was the case many years ago. His Honour observed that the flight takes no longer than "a train trip from the outer suburbs of Melbourne to the city centre". In addition the Commercial List of this court has readily available the necessary technological aids to facilitate the giving of evidence from interstate. Moreso, in terms of preparation for trial it can be readily assumed that the respective instructing solicitors including those for the defendants would have available to them technological facilities such that there is minimal inconvenience to the defendants if the trial proceeds in Melbourne.
18. In terms of the other factors relied upon by the parties, that is, the competing convenience of solicitors being located in one State as distinct from another and the financial capacity of one party as against another I do not consider such factors are relevant to the present application. In my view if it was appropriate on the basis of the principles expressed by the authorities for the matter to be transferred to New South Wales I would do so without regard to the financial might of one party compared with another and, further, without regard to the fact that one party had solicitors in two capital cities whereas the other party did not. In each case the facts will be different. However, in the present matter such factors are not relevant for the reasons already expressed.
19. It was also urged on behalf of the defendants that the current season of the performance of the production will finish on about 1 September 2000 subject to any further extension of the running season. It was said that at that time the losses of the plaintiff in its substantive claim and/or the defendants in their counterclaim would fully crystallise upon the completion of the current season. For this reason it was urged that it was inappropriate for an expeditious hearing to be granted in any event in the Commercial List of this court. As matters presently stand a trial date will not be allocated in the proceeding prior to 1 September 2000. It is premature to contemplate a fixture at this point: It was said on behalf of the plaintiffs that a trial date would not be available for some time in the Commercial List of the Supreme Court of New South Wales if the matter was transferred to that forum and that I should take that matter into account in the exercise of the discretion. All these matters are academic at this time. No trial date has been fixed in this court for the proceeding and the parties can be given no more than a broad indication. In my view the likelihood or otherwise of the proceeding being heard earlier in this court as against another court is not a matter that I can properly consider at this point.
20. Finally, it was urged on behalf of the plaintiffs that the matter should remain with this court because of the very fact of the choice of forum by the plaintiffs in issuing the proceeding in this court. In Triumph International and Anor v ACP Publishing Pty Ltd (1997) 37 IPR 661, Ashley J observed (at 665) that the fact of the original choice of forum should be brought into the balancing exercise under s.5(2) of the legislation. The learned judge observed: "It might be, if the circumstances were otherwise neutral, that this would be a decisive fact in favour of not cross-vesting a proceeding". In Overall v Permanent Trustee Co Limited, supra, Ryan J took a different view (at para 14):

"I doubt, with respect, that there is any prima facie force in the applicant's choice of forum which a respondent has the onus of overcoming by demonstrating some overriding objective factor. The existence of such a prima facie force was suggested by Wilcox J in Bourke v State Bank of New South Wales (1988) 22 FCR 378. However, Rogers J in Seymour Smith v Electricity Trust of South Australia (1989) 97 FLR 160, after referring to the observations of Wilcox J in Bourke, said, at 174: 'With respect, I do not accept there is any weight to be ascribed to the fact that the court may be overriding the plaintiff's choice of venue. The court is, in my view, required to carry out a balancing exercise to determine the appropriate court'."

21. In Bourke v State Bank of New South Wales, supra, Wilcox J in considering the balance of the interests of justice in a cross-vesting application observed (at pp 395-396):

"The final subpar in s.5(4)(b) of the Jurisdiction of Courts (Cross-vesting) Act is framed in wide and vague terms. It must be made to appear that it is 'otherwise in the interests of justice' that the relevant proceeding be determined by the relevant Supreme Court. I take this to be a charter for the Court to take the course which appears to it to be more just, interpreting that word widely. However, for an applicant's choice of forum to be overridden, there must be some objective factor which makes it possible to say that the interests of justice will be better served by transfer than by non-transfer. Where, as here, it is impossible to identify any such factor, the subparagraph has no application."

22. In my view, as to whether the original choice of forum is a relevant factor is to be considered in assessing the basis for the original choice. For example, the place of incorporation, the location of a plaintiff's witnesses and the like. In my view, the fact of original choice of forum ought not stand alone as a determinative factor. It is a factor that ought be considered in the context of the reasons underlying the original choice of forum and on that basis forms part of the balancing process. In this matter, I accept the plaintiffs' reasons underlying the choice of forum as being place of their incorporation, the location of the majority of their witnesses, their general convenience and lack of sufficient connection with an alternative jurisdiction. On that basis, insofar as it is necessary to do so I consider that the fact that the plaintiffs originally chose Victoria as their forum is a factor that weighs into the balance and tips the scale in the plaintiffs' favour.
23. It follows that the primary application of the defendants, namely, to transfer the proceeding to New South Wales fails.
24. I turn to consider the secondary application brought by the defendants, namely, that the proceeding should in any event be transferred from the Commercial List to the Intellectual Property List. The proceeding brought by the plaintiff has mixed claims based in contract and also copyright. It is not at this point as pleaded a purely intellectual property case. In addition, there is the factor that the proceeding in all likelihood would obtain an earlier trial date in the Commercial List as distinct from the Intellectual Property List. At this point I cannot determine the ultimate position. On the face of the matters deposed to in the affidavits in support and in opposition to the present application it appears that in all likelihood the proceeding may be of such a length that it would ultimately when ready for trial be heard outside the Commercial List and allocated such priority as may be appropriate. On balance, therefore, it may be that in terms of trial dates the matter is no better off in the Commercial List as distinct from being in the Intellectual Property List. So far as this component of the application is concerned I consider that there are distinct advantages in the matter remaining within the Commercial List at this point in time so that it is subject to the usual rigorous directions of the list. However, in due course I am prepared to re-visit the matter and if it transpires that it has a stronger or greater flavour such as to cause me to consider it is appropriate that it be transferred to the Intellectual Property List I will do so. However, at this point I do not consider it is appropriate to accede to the request of the defendants.
25. Accordingly, I consider that the defendants' application fails and ought be dismissed.
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