Egans Plant Hire Pty Ltd v Australia and New Zealand Banking Group Ltd [2013] VSC 418 (16 August 2013)

EGANS PLANT HIRE PTY LTD ACN 077 737 396	Plaintiff

and

AUSTRALIA AND NEW ZEALAND BANKING GROUP LTD ACN 005 357 522	Defendant

JUDGE:	SIFRIS J
WHERE HELD:	Melbourne
DATE OF HEARING:	9 August 2013
DATE OF JUDGMENT:	16 August 2013
CASE MAY BE CITED AS:	Egans Plant Hire Pty Ltd v Australia and New Zealand Banking Group Ltd
MEDIUM NEUTRAL CITATION:	[2013] VSC 418

COURTS – Cross-vesting – Application for transfer to New South Wales – Related proceeding in each jurisdiction – More appropriate forum – Interests of justice – Application dismissed and transfer not ordered – Jurisdiction of Courts (Cross-Vesting) Act 1987 (Vic) – Section 5(2)(b)(i) and (iii).

APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr P G Cawthorn SC and Mr C G K Madder	Lord Commercial Lawyers

For the Defendant	Mr J Lockhart SC and Ms A Folie	Ashurst Australia

1 Pursuant to an agreement entered into on or about 10 December 2012 between:

(d) Heavy Machinery Pty Limited (ACN 152 638 894) (Receivers and Managers Appointed) (Administrators Appointed) (‘HM’);

(e) Heavy Plant 1 Pty Limited (ACN 151 074 869) (Receivers and Managers Appointed) (‘HP1’);

EM hired out, fitted out and maintained earth moving and other heavy plant and equipment (‘Equipment’) on behalf of HPL (‘Management Agreement’).

2 The Equipment was either owned or leased by HM and HP1 and each company entered into a Master Lease Agreement with HPL on or about 20 December 2012. The Equipment, owned or leased by HM, was encumbered by way of a fixed and floating charge in favour of the Australia and New Zealand Banking Group Ltd (‘ANZ’) (‘ANZ Equipment’). The Equipment, owned or leased by HP1, was encumbered by way of a fixed and floating charge in favour of Westpac Banking Corporation Ltd (‘Westpac’) (‘Westpac Equipment’). A graphic representation of the structure of the companies is attached.[1]
3 Pursuant to clauses 4.1(a), (c), (f), (h) and (i) of the Management Agreement, EM was responsible, for, inter alia:

(b) day to day possession, custody, care, control and management of the Equipment;

(c) ensuring that the Equipment complied with the requirements and specifications of a hirer as stipulated in a hire contract;

(d) advising HPL of the maintenance requirements in respect of the Equipment and if requested by HPL, arranging for such maintenance to be performed at a quoted price; and

(e) managing the maintenance and administration requirements for the individual items of the Equipment.

(a) a management fee, being 5 percent of the gross hire contract revenue billed and actually received as cleared funds (clause 1.1); and

(b) permitted costs, being actual costs incurred by EM for any work it had done, plus a margin of 15 percent where such works were performed exclusively by external contractors and/or service providers for the purpose of fitting out, repairing and maintaining the Equipment as incident to EM discharging its obligations under the Management Agreement or a hire contract.

5 The Management Agreement is governed by the law of New South Wales (clause 13). There is no jurisdiction clause in the Management Agreement.

6 On 14 March 2013, Quentin Olde of Taylor Woodings and Michael Ryan and Brendan Copeland of FTI Consulting (Australia) Pty Ltd were appointed as receivers and managers of HPL and HM (‘ANZ Receivers’).
7 On 15 March 2013, Westpac and St George appointed Jason Preston and Christopher Honey as receivers and managers of HP1 insofar as they had a fixed and floating charge over HP1’s assets including earth moving and heavy plant and machinery (‘Westpac Receivers’). EM has lodged a proof of debt with the ANZ Receivers in relation to HPL in the sum of $9,230,221.40.

8 By Notice of Termination of the Management Agreement dated 2 April 2013 the ANZ Receivers terminated the Management Agreement.

9 Upon termination of the Management Agreement, a dispute emerged between each of the Westpac Receivers and the ANZ Receivers (respectively) and EM and EPH with respect to the delivery up of the Equipment following termination.
10 Consistently with the performance of its functions pursuant to the Management Agreement EM from time to time arranged for EPH to undertake repair and maintenance works to the Equipment (being both the ANZ Equipment and the Westpac Equipment).
11 The Equipment was located in Queensland and the repair and maintenance works were carried out there.
12 At the time of termination of the Management Agreement, considerable sums were allegedly due and owing to EM and EPH for such repair and maintenance works.

13 By letter from Lord Commercial Lawyers on behalf of EM to the Westpac Receivers dated 11 April 2013 (following termination of the Management Agreement):

(b) demanded payment for the sums owed for repair and maintenance work performed by it, or EPH, pursuant to the Management Agreement.

14 By letter from Lord Commercial Lawyers on behalf of EM to the ANZ Receivers (FTI Consulting) dated 31 May 2013:

(b) demanded payment for the sums owed for repair and maintenance work performed by it, or EPH, pursuant to the Management Agreement.

15 Following the letter to the ANZ Receivers asserting a lien, the ANZ Receivers advised EM and EPH on or about 6 or 7 June 2013 that it would not continue to retain or enter into any further agreement with EM and EPH to provide the Services. From the date of termination of the Management Agreement, to on or about 7 June 2013, EM and EPH had continued to perform the Services for HM for, and on behalf of, and at the request of the ANZ Receivers.
16 Immediately following confirmation of the ANZ Receivers position on or about 6 June 2013, EPH commenced this proceeding to enforce its claim to the lien as asserted in its letter dated 31 May 2013.

17 By summons on originating motion filed on 23 May 2013 EPH commenced proceedings in the Supreme Court of Victoria No 2013/02590 – Egans Plant Hire Pty Limited v Westpac Banking Corporation (ACN 007 457 141) & St George Finance Limited (ACN 001 094 471) (‘Westpac Victorian Proceedings’).
18 Originally, EPH sought a declaration that it was entitled as a matter of law, to a lien in respect of certain items of the Westpac Equipment.
19 The Westpac Victorian Proceedings was first returnable before me on 7 June 2013. On that day it was agreed that the defendant (Westpac) would conduct an inspection of the equipment on or around Thursday, 13 June 2013.
20 By letter dated 21 June 2013, EPH:

(a) advised Westpac of its intention to prepare a Statement of Claim in the proceeding and to join the companies in receivership to the proceeding; and

(b) alerted Westpac to the operation of Order 37.05 of the Supreme Court (Civil Procedure) Rules 2005 by which Westpac might apply (by way of counterclaim) for the delivery up of equipment following the payment by it, into Court, of the value of any sums claimed pursuant to a lien and interest and costs.

(a) advised Westpac of additional sums claimed, in the amount of $678,935.27, by way of an action in conversion, for equipment improperly seized by the Westpac Receivers at the time of entry into receivership;

(c) confirmed EPH intended to claim the additional sums claimed ($678,935.27) by way conversion in the Westpac Victorian Proceeding, amend the form of originating motion to a statement of claim and join the company in receivership (HP1) to the proceeding.

22 By letter dated 11 July 2013 Hall & Wilcox Lawyers for Westpac sought substantive answers to facts or matters that may be in dispute in the Westpac Victorian Proceedings.
23 By letter dated 17 July 2013 Westpac advised of its proposed application for a separate trial of questions pursuant to rule 47.04 of the Supreme Court (Civil Procedure) Rules 2005.
24 By letter dated 17 July 2013, EPH:

(a) rejected any suggestion that any matter in the proceeding ought be heard by way of a separate trial; and

25 At the return of the Westpac Victorian Proceedings on 26 July 2013 for directions I made orders, inter alia, that the plaintiff be granted leave to:

I adjourned the application for leave (pursuant to s 440D of the Corporations Act 2001 (Cth)) to proceed against HPL, a company in administration, to 9 August 2013. I made the order granting leave on 9 August 2013.

26 On 9 August 2013 I made further orders for the filing of pleadings and affidavits by the plaintiffs. I declined to make any order in relation to Westpac’s application that certain preliminary questions be determined first. That application was adjourned to the next directions hearing on 4 September 2013.

27 By summons on originating motion filed on 7 June 2013, EPH commenced this proceeding. A copy of the originating motion and summons was served on Ashurst (lawyers for ANZ and ANZ Receivers) on Friday, 7 June 2013.
28 By the originating motion EPH sought a declaration that it was entitled, as a matter of law, to a lien in respect of certain items of the ANZ Equipment over which ANZ holds a fixed and floating charge.
29 By correspondence between Lord Commercial Lawyers and Ashurst over the period 19 June 2013 to 18 July 2013, EM and EPH expressed the view, that:

(a) EPH would seek leave to file and serve a Statement of Claim and to join EM as a plaintiff and HPL and HM as defendants;

(e) the proper forum for the determination of EM and/EPH’s claim is in Victoria; and

(f) details additional claims to be made by EM/EPH against the ANZ and companies in receivership for conversion of items of Equipment by the Receiver.

30 The ANZ Victorian Proceeding first returned before me on 19 July 2013. On that day I adjourned the directions hearing to 2 August 2013.
31 On Friday, 26 July 2013, EPH served on Ashurst copies of its:

(b) affidavit of Alison Stacy Kingston sworn 26 July 2013 in support of the plaintiff’s summons seeking leave to file and serve a Statement of Claim, join EM as plaintiff to the proceeding and join HM and HPL as defendants to the proceeding.

32 On 30 July, EPH served on the administrators for HM and HPL (Deloitte Touche Tohmatsu) copies of its:

(b) affidavit of Alison Stacy Kingston sworn 26 July 2013 in support of the plaintiff’s summons.

33 The proposed Statement of Claim, although relating to the ANZ Equipment, is substantially in the same form as the Statement of Claim in the Westpac Victorian Proceedings. Although the Equipment is different, similar issues are raised.

34 By summons dated 11 June 2013 (four days after the ANZ Victorian Proceedings were served on ANZ) the ANZ Receivers on behalf of HPL and HM [2] filed a notice of motion in the Supreme Court of New South Wales seeking the following relief:

(b) to pay any hire monies received by EM after 3 April 2013 under any of the Hire Contracts in respect of the ANZ Equipment;

35 Orders were made by consent by Justice Sackar on 12 June 2013 in relation to the redirection of monies paid pursuant to the Hire Contracts.
36 On 25 June 2013, further orders were made by consent by Justice Stevenson in relation to the delivery up of the ANZ Equipment. In addition, ANZ was required to provide to EM and EPH a bank guarantee in the sum of $1,631,637.56 to secure and preserve EM and EPH’s claim to a lien. The orders are in the following terms:

37 The relief sought by the ANZ Receivers was concerned with the redirection of hire payments and the delivery up of the ANZ Equipment. The question of asserting and establishing a lien was a matter for the lien holder (EM and EPH) to propound. Of course, prior to the ANZ New South Wales Proceeding, EPH had on foot a proceeding in Victoria directed to the determination of that very question. It should also be noted that EPH is not a party to the ANZ New South Wales proceeding.
38 Following the making of orders on 11 June and 25 June 2013, EM and EPH sought the discontinuation of the ANZ New South Wales Proceeding, on the basis that there was no further claim, pleading or action on foot in the New South Wales Proceeding.
39 It was not until 22 July 2013 that the ANZ Receivers made a further application by way of a Third notice of motion and Commercial List Statement seeking the determination of EM’s claimed lien by the separate determination as to whether on a proper construction of the Management Agreement, EM was capable of accessing the lien.
40 By summons dated 25 July 2013 the defendant to the New South Wales Proceeding (EM) filed its application to cross-vest the ANZ New South Wales Proceeding to Victoria pursuant to s 5(2) of the Jurisdiction (Cross Vesting) Act 1987 (NSW). The application is to be heard on 13 September 2013.
41 ANZ applied to transfer this proceeding to the Supreme Court of New South Wales pursuant to ss 5(2)(b)(i) and 5(2)(b)(iii) of the Jurisdiction of Courts (Cross-Vesting) Act 1987 (Vic) (the ‘Act’).

42 The relevant principles are not in dispute.
43 ANZ relies on ss 5(2)(b)(i) and 5(2)(b)(iii) of the Act which provides as follows:

(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; [or]

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

44 In Beston Parks Management Holding Pty Ltd & Ors v Roger Neil Sexton and Stephen Gerlach,[4] Hollingworth J said:

45 I gratefully adopt her Honour’s short summary of the relevant legal principles.

46 ANZ submitted that the Supreme Court of New South Wales was the more appropriate forum. The following matters were relied on:

47 EM and EPH (the ‘Egans parties’) submitted that the Supreme Court of Victoria was the more appropriate forum. In addition to rejecting the matters suggested by ANZ, the following matters were relied on:

48 Although the matter is finely balanced and there are good arguments each way I do not consider, at this stage, that the Supreme Court of New South Wales is the more appropriate forum to manage and determine this proceeding or that it is in the interests of justice that the proceeding be transferred.
49 No particular forum stands out or suggests itself. There are documents, witnesses and Equipment in Victoria, New South Wales and Queensland. There is a further complicating factor. The forum for resolving any preliminary questions relating to the existence of the asserted lien, and issues relating to the loss of any lien, may not necessarily be the appropriate forum for the determination of the other issues. Nevertheless, in my opinion, at this stage it is convenient and desirable that the proceeding remain in List E of the Commercial Court and be managed together with the Westpac proceeding.
50 Some matters may easily be disposed of. In a case like this I am not concerned about the governing law clause in the Management Agreement. New South Wales law is hardly foreign law in Victorian courts and nothing more need be said.
51 Further, I do not consider that the witnesses or documents favour any jurisdiction. It is too early to identify with any degree of confidence who the witnesses will be and which issues will be determined when. More precision is required before this aspect has any real significance.
52 Finally, before I deal with what I regard as the more relevant matters, and subject to what is set out hereunder, I do not regard the ANZ New South Wales Proceeding as spent and I do not regard the negative declaration point as a sufficiently relevant factor.
53 Although the procedure in New South Wales is a little different to Victoria, it is more so in form than in substance. I do not regard the fact that ANZ has issued and dealt with (by consent) two notices of motion directed to desirable interlocutory relief as an indication that the ANZ New South Wales Proceeding is spent. The notices of motion merely brought about a desirable holding position to enable the main dispute to proceed. The procedure was specifically permitted by s 74 of the Supreme Court Act 1970 (NSW) and enabled the parties to focus on the substance of the dispute. The third notice of motion and the Commercial List Statement of Claim are directed to this end notwithstanding some suggested deficiencies. Whilst the first two Notices of Motion may be spent the proceeding is not.
54 As pointed out by Senior Counsel for the Egans parties, the main vice of the negative declaration is in the context of forum shopping. There is no basis to suggest that there is any forum shopping in this case. The ANZ New South Wales Proceeding can clearly deal with all of the matters that the Egans parties wish to agitate. Whether New South Wales is the more appropriate forum is another matter. The point is that it is not less appropriate merely because of the form of the proceeding.
55 Senior Counsel for ANZ regarded the fact that the NSW proceeding was significantly further advanced as an important factor. In some cases it may be. In this case it is not. It follows from what I have said in paragraph 54 that the ANZ New South Wales Proceeding is really no more advanced than this proceeding and after this judgment and orders that I propose to make, this proceeding will accelerate so that by 13 September 2013, pleadings will be completed, the Egans parties will have filed their evidence and the argument as to a separate hearing of preliminary questions will probably have been heard. As pointed out, it is convenient at this stage to manage this proceeding in tandem with the Westpac Victorian Proceeding.
56 The first and second notices of motion have not significantly advanced the real substance of the case. They were it must be said necessary and dealt with appropriately by consent without the need for argument. As pointed out they achieved the desired result of a holding position to enable the real dispute – the existence and extent of the lien – to take place. In New South Wales there is a statement of claim and notice of motion to be heard on 13 September 2013. No directions have been made or will be made until this date at the very earliest and probably later. In this proceeding there is also a proposed Statement of Claim and directions will be made when this judgment is handed down. This proceeding will progress quicker through the interlocutory stages.
57 Further, I do not regard the extant obligations of the ANZ Receivers pursuant to the orders of Stevenson J as a reason to transfer the ANZ Victorian Proceeding. The orders contemplate that the issue of substance may be determined in Victoria.[6]
58 Finally, at this stage and for the purposes of the present application, I regard the existence of the Westpac Victorian proceeding as a decisive factor.
59 Both the ANZ dispute and the Westpac dispute in the Victorian Supreme Court involve broadly the same legal issues. At the centre of both proceedings is the very same Management Agreement and the relationship between the Egans entities and HPL. HPL is a central party to both proceedings.
60 So far as the Management Agreement is concerned the legal argument in relation to one of the proposed (by both Westpac and ANZ) preliminary questions, namely whether as a matter of construction there can ever be a lien, is exactly the same. The other proposed questions relating to the loss of the lien involve both legal and factual matters. Although it may be expected that the factual matters may differ, the legal points are the same. The nature and extent of the factual matters, and the extent of divergence between the two proceedings, that underpin each case will be more apparent on 4 September 2013 when the proceedings next come back before the Court. In relation to the nature and extent of the repairs and the reasonableness thereof [7] there may well be many common, or sufficiently common, technical and factual matters that may make for some synergy in the conduct of the two trials. It is too early to tell but I am inclined to the view that there may well be sufficient common issues to make it desirable that the matters be managed together.
61 The application will be dismissed.

WESTPAC
Heavy Machinery Pty Limited (“HM”)

ANZ
Heavy Plant Leasing Pty Limited (“HPL”)

^[2] ANZ is not a party not this proceeding. However for convenience I have referred to the proceeding as the ANZ New South Wales proceeding.

^[5] Ibid [5] and [6]. Her Honour referred to BHP Billiton Ltd v Schultz [2004] HCA 61, [13] and [14] (Gleeson CJ, McHugh and Heydon JJ), citing with approval Bankinvest v Seabrook (1988) 14 NSWLR 711, 713-714 (Street CJ).

^[6] I do not regard order 1 as consent (or election, estoppel or waiver) on the part of the ANZ Receivers to the dispute being heard and determined in Victoria as contended by the Egans parties.

^[7] Of course the matters may never get to this stage if the Court accepts that there should be the determination of preliminary questions and they are determined in favour of either ANZ or Westpac or both.