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  4. GGPG Pty Ltd v Golden Eagle Property Group Pty Ltd - [2022] QSC 205

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GGPG Pty Ltd v Golden Eagle Property Group Pty Ltd[2022] QSC 205

GGPG Pty Ltd v Golden Eagle Property Group Pty Ltd[2022] QSC 205

SUPREME COURT OF QUEENSLAND

CITATION:

GGPG Pty Ltd v Golden Eagle Property Group Pty Ltd [2022] QSC 205

PARTIES:

GGPG PTY LTD ACN 609 675 505 (RECEIVERS & MANAGERS APPOINTED)

(plaintiff)

v

GOLDEN EAGLE PROPERTY GROUP PTY LTD ACN 614 218 852

(first defendant)

AND

DAVID ALEXANDER JOHN WHITEMAN

(second defendant)

AND

MARC ANDREW CLANCY

(third defendant)

FILE NO/S:

3647 of 2022

DIVISION:

Trial Division

PROCEEDING:

Application

ORIGINATING COURT:

Supreme Court

DELIVERED ON:

28 September 2022

DELIVERED AT:

Brisbane

HEARING DATE:

8 July 2022

JUDGE:

Freeburn J

ORDER:

  1. The defendants file and serve their defence on or before 12 October 2022;
  2. This Supreme Court proceeding be transferred to the Federal Court of Australia (at Brisbane); and
  3. The parties be heard on costs.

CATCHWORDS:

PRACTICE AND PROCEDURE – TRANSFER OF PROCEEDINGS – CROSS-VESTING – where the transfer is opposed – where a breach of fiduciary and statutory duties proceeding commenced in the Supreme Court – whether the Supreme Court proceeding arose out of or was related to the Federal Court proceeding – whether there is a real risk of duplication and inconsistent findings – whether it is in the interests of justice for the proceeding to be cross-vested

Corporations Act 2001 (Cth) s 1337H

Jurisdiction of Courts (Cross-Vesting) Act 1987 (Qld) s 5(1)

Uniform Civil Procedure Rules 1999 (Qld) chp 9 pt 1

Commissioner of Taxation v Residence Riverside Pty Ltd [2013] FCA 720, considered

Valceski v Valceski (2007) 70 NSWLR 36, considered

COUNSEL:

MJ Downes (plaintiff)

AG Psaltis (defendants)

SOLICITORS:

Thynne + Macartney (plaintiff)

Bartley Cohen (defendants)

REASONS

  1. [1]
    This is an application by the defendants to transfer this proceeding to the Federal Court and a cross-application by the plaintiff for judgment in default of pleading.

The Background

  1. [2]
    The dispute in this case is part of a broad dispute between Mr So and Mr Clancy. Both men were jointly involved in property developments. Their principal work together involved a residential property development called Carver’s Reach at Park Ridge, a southern suburb of Brisbane. Golden Gate Property Group Pty Ltd (GGPG) was the corporate developer of the residential subdivisions, although there were a number of different corporate entities that were involved, including several special purpose vehicles for different stages of the project.
  2. [3]
    Mr So’s role was broadly that of Chief Financial Officer, although he also arranged finance including a loan of $7m through Ultimate Investment Portfolio Pty Ltd (Ultimate), an entity associated with Mr So. Mr Clancy was responsible for the development side of the business. Mr Whiteman was an employee of GGPG who worked closely with Mr Clancy.
  3. [4]
    The Carver’s Reach project was developed in stages along Park Ridge Road. According to Mr Clancy, he and Mr So had high hopes. They intended to develop nearly 600 lots, in 11 stages, and generate a profit of $30m at completion. The project continued through to 16 December 2021. On that day, Mr Watters was appointed as receiver and manager of the GGPG group. Presently, the receiver and manager is completing stage 6 of the project.
  4. [5]
    According to Mr So, the relationship between he and Mr Clancy soured when Mr So engaged lawyers to document the loan of $7m in November 2019. It may be that Mr Clancy agrees that Mr So’s desire to record the loan was a source of irritation.[1] However, Mr Clancy appears to say that he and Mr So only fell out when ‘out of the blue’ Mr So’s company, Ultimate, issued notices of loan default to GGPG in December 2021.     
  5. [6]
    The affidavits filed by the three protagonists also speak of another cause of friction. To progress the development, parcels of land were acquired along Park Ridge Road. One of the parcels investigated was 202 Park Ridge Road (202). Mr So says that he identified the site and in 2018 tried to negotiate to buy it but the approach went nowhere. He says that subsequently, in April 2020, he received an email from Mr Whiteman which discussed the potential purchase of 202. Mr So says that he left that acquisition to Mr Whiteman and Mr Clancy. He says that he has subsequently discovered that Mr Whiteman and Mr Clancy have acquired an interest in 202 for themselves via a put and call option in favour of Golden Eagle Property Group Pty Ltd (Golden Eagle).
  6. [7]
    In these proceedings, the receiver of GGPG contends that Golden Eagle, Mr Whiteman, and Mr Clancy have acquired 202 for their own benefit contrary to their fiduciary and related duties. They claim that the interest in 202 is held on trust for GGPG.   
  7. [8]
    Mr Whiteman, and presumably Mr Clancy, have a different version of what happened. Mr Whiteman speaks of the GGPG group having financial difficulties in late 2019 which escalated throughout 2020 with the onset of the Covid-19 pandemic. 
  8. [9]
    Mr Whiteman says that in March 2020, he approached both Mr Clancy and Mr So about acquiring 202. He says he kept them both up to date with his negotiations with the seller. A final offer of $2.5m came in from the seller in May 2020. He says that when he presented that offer Mr So said he should tell the seller to ‘get fucked’. He also recalls that Mr Clancy was not interested. At that time, according to Mr Whiteman, negotiations with the seller ceased. At the same time GGPG was unable to proceed with the purchase of 133 Park Ridge Road and lost its deposit. He says that Mr So told him that GGPG did not have any money available to fund further acquisitions and would not be making any more acquisitions. 
  9. [10]
    Mr Whiteman says that Mr Clancy then said to him that he wanted to undertake his own development after Carver’s Reach, asked Mr Whiteman if he was interested in working for him once Carver’s Reach was completed, and suggested that Mr Whiteman make inquiries about whether the owner of 202 was still interested in selling. Mr Whiteman then negotiated the purchase of 202. He executed the put and call option on behalf of Golden Eagle on 14 October 2020.

Litigation Commences

  1. [11]
    On 25 March 2022, entities associated with Mr Clancy brought an oppression proceeding in the Federal Court of Australia pursuant to s 232 of the Corporations Act 2001 (Cth). That proceeding was brought against Mr So, entities associated with him, and Golden Gate group entities.[2]
  2. [12]
    The subject of the Federal Court proceedings consists of the whole of the project undertaken by GGPG. The applicants in the Federal Court proceeding also sought to bring derivative action, involving allegations of breaches of duties under ss 180-182 of the Corporations Act 2001 (Cth), against Mr So and entities associated with him.
  3. [13]
    The Federal Court proceeding is being managed by Derrington J.
  4. [14]
    On 28 March 2022, some three days after the commencement of the Federal Court proceeding, this Supreme Court proceeding was commenced by the Receiver and Manager of GGPG Pty Ltd against Golden Eagle Property Group Pty Ltd and Mr Whiteman.
  5. [15]
    On 8 April 2022, the Supreme Court proceeding came before Williams J who, on certain undertakings given by the receiver of GGPG Pty Ltd, by injunction, required the first defendant to nominate an entity within in the Golden Gate group to exercise the option to buy 202. Her Honour also ordered that the proceeding continue as if commenced by claim and statement of claim, directing GGPG to deliver its proposed claim and statement of claim to the defendants and any party proposed to be joined as a party by 22 April 2022.
  6. [16]
    On 13 May 2022, pursuant to the Uniform Civil Procedure Rules 1999 (Qld) (UCPR) 14(2) and 377(1) Flanagan J ordered an extension of time and granted leave for GGPG to file and serve its claim and statement of claim. The claim and statement of claim was duly filed and served that day. Flanagan J also ordered that Mr Clancy be joined as the third defendant.
  7. [17]
    On 30 May 2022, GGPG applied, in accordance with Supreme Court Practice Direction 3 of 2022, to have the matter placed on the Commercial List.  The parties contemplated this proceeding to be likely to take no more than 5 days to hear. 
  8. [18]
    On 3 June 2022, in the Federal Court proceeding, Mr So and entities associated with him, filed an application seeking to stay that proceeding pending the determination of this Supreme Court proceeding. In the alternative, Mr So and his associated entities sought to join Mr Whiteman, Mr Clancy, and Golden Eagle Property Group Pty Ltd to that Federal Court proceeding. The joinder was sought so as to agitate a derivative claim in that proceeding relating to the conduct the subject of this Supreme Court proceeding and other conduct by Mr Clancy, Mr Whiteman, and others. 
  9. [19]
    On 7 June 2022, in the Federal Court proceeding, following a directions hearing on 6 June 2022, Derrington J made an order, amongst others, setting down Mr So’s interlocutory application, dated 3 June 2022, for a hearing on 20 July 2022.

Correspondence Battle

  1. [20]
    On 8 June 2022, Mr Clancy’s solicitors, Thomson Geer, sent a letter to the parties to the Federal Court proceeding, putting forward a proposal to merge the issues in this proceeding with those in the Federal Court proceeding. The proposal reads (in part):
    1. (a)
      The Supreme Court Proceedings be stayed or adjourned by consent until conclusion of the Proceedings to allow the 202 Park Ridge Road issues to be addressed in the Proceedings. The costs of the Supreme Court Proceedings could follow the outcome in the Proceedings as it pertained to the disputes in relation to 202 Park Ridge Road;
    2. (b)
      The So Entities consequently plead the 202 Park Ridge Road issues in their intended derivative claim;
    3. (c)
      With a view to immediately ending the monthly costs of the receivership, including the interest accruing against the alleged debt owing to Ultimate, the Receiver either accept…
  2. [21]
    The letter noted that the defendants’ solicitors in this proceeding, Bartley Cohen, had advised that their clients were agreeable with the Supreme Court proceeding being stayed or adjourned on the terms outlined in (a) above.
  3. [22]
    On 9 June 2022, Bartley Cohen wrote to the GGPG’s solicitors, Thynne & Macartney, referring to Thomson Geer’s letter dated 8 June 2022 and re-iterated their clients’ support for it.
  4. [23]
    On 10 June 2022, the day the defence was due, Bartley Cohen wrote to Thynne & Macartney indicating that, in light of the issues in the Federal Court, the defendants did “not propose to file their defence until the issues of what is to occur in relation to this proceeding is resolved”. The letter continued, more than a little imperiously, “Should your client object to that course, it can raise it with the Court”.
  5. [24]
    On 13 June 2022, Thynne & Macartney wrote to Bartley Cohen refusing to consent to deferring the defendants’ requirement to file a notice of intention to defend and defence in this proceeding. With a degree of disgruntlement, they said:

“Your clients’ approach is entirely disrespectful to the Supreme Court and ignores the duties of litigants generally. Any Notice of intention to defend was, and remains, required to be filed in accordance with the timeframe prescribed under the Uniform Civil Procedure Rules 1999 (Qld) and is now overdue.”

  1. [25]
    Thynne & Macartney advised Bartley Cohen that, if the defendants failed to serve their defence by 3:00 pm on 14 June 2022, GGPG would take steps to seek judgment.
  2. [26]
    On 13 June 2022, Thomson Geer wrote to the parties to the Federal Court proceeding. They said:

“In effect it is likely that the [Federal Court] Proceeding will become the forum for reckoning of all disputes regarding the quasi partnership between Mr Clancy and Mr So, save for 202 Park Ridge Road. We consider that issues regarding 202 Park Ridge Road could be moved into the [Federal Court] Proceeding as identified below, allowing the unnecessary costs of the receivership to be terminated.”

  1. [27]
    Thomson Geer indicated Mr Clancy’s intention to continue prosecuting the Federal Court proceeding.
  2. [28]
    On 14 June 2022, Bartley Cohen wrote to Thynne & Macartney repeating the request for consent to defer the delivery of the defendants’ defence pending resolution of the procedural issues in the Federal Court.
  3. [29]
    On 14 June 2022, Thynne & Macartney wrote to Bartley Cohen refusing to consent and Thynne & Macartney attached a draft application for default judgment which GGPG proposed to file.
  4. [30]
    On 15 June 2022, Bartley Cohen filed an application to defer their defence and, later that day, GGPG filed its default judgment application.
  5. [31]
    On 15 June 2022, in the Federal Court proceeding, Mr So’s solicitors wrote to Thynne & Macartney informing them that Mr So wished to rely on the conduct alleged in the Supreme Court Proceeding, to advance a derivative action in the Federal Court.
  6. [32]
    On 16 June 2022, Thynne & Macartney provided to Bartley Cohen a copy of Mr So’s solicitors’ letter dated 15 June 2022 and invited the defendants to this proceeding to consent to orders for delivery of the defences by the defendants to GGPG. GGPG sought that the defendants file and serve their defences by 4:00pm on 22 June 2022.
  7. [33]
    On 17 June 2022, Bartley Cohen wrote to Thynne & Macartney noting the overlap between the Supreme Court and Federal Court of Australia proceedings identified in Mr So’s solicitors’ letter and explaining that the most appropriate course was for this proceeding to be transferred to the Federal Court, enclosing the proposed amended application to that effect and inviting GGPG’s consent.
  8. [34]
    On 17 June 2022, by an amended application, the defendant sought to have this proceeding transferred to the Federal Court. Alternatively, pursuant to UCPR 7(1) the defendants sought that the time for the defendants to file and serve a notice of intention to defend and defence be indefinitely extended. 
  9. [35]
    On 20 June 2020, Callaghan J adjourned GGPG’s application and the defendants’ amended application to 8 July 2022.
  10. [36]
    On 8 July 2022, the two applications were ventilated in written and oral submissions.

The Statutory Basis for Transfer

  1. [37]
    The transfer application seeks to transfer this proceeding to the Federal Court of Australia pursuant to s 5(1) of the Jurisdiction of Courts (Cross-Vesting) Act 1987 (Qld) and/or s 1337H of the Corporations Act 2001 (Cth).
  2. [38]
    Section 1337H(2) of the Corporations Act 2001 (Cth) provides:

“Subject to subsections (3), (4) and (5), if it appears to the transferor court that, having regard to the interests of justice, it is more appropriate for:

  1. (a)
    The relevant proceeding; or
  2. (b)
    An application in the relevant proceeding;

to be determined by another court that has jurisdiction in the matters for determination in the relevant proceeding or application, the transferor court may transfer the relevant proceeding or application to that other court.” [emphasis added]

  1. [39]
    A similar test is set out in s 5(1) of the Jurisdiction of Courts (Cross-Vesting) Act 1987 (Qld).
  2. [40]
    Either proceeding could be transferred to either court. The Federal Court proceedings could be cross-vested to the Supreme Court, as the Supreme Court has federal jurisdiction in all matters in which the High Court has original jurisdiction or in which original jurisdiction can be conferred on it.[3] Likewise, the Federal Court has accrued jurisdiction to determine the non-federal claims advanced in this proceeding, even if the primary federal claim fails.[4]

The Parties’ Arguments

  1. [41]
    The defendants contend that all disputes between Mr So and Mr Clancy arising out of their quasi-partnership should be determined in one forum to avoid the risk of unnecessary duplication, waste of court and private resources, and the risk of conflicting findings of fact.
  2. [42]
    The plaintiff contends that there is no commonality of parties or issues between the two proceedings, and that there is no real risk of both courts hearing the same evidence, determining the same issues, making inconsistent findings or inconsistent orders. The plaintiff also contends that this proceeding is “narrow and ripe for swift determination” whereas the Federal Court proceeding is “inchoate and broad ranging” with the risk that, if this proceeding were lumped with the Federal Court proceeding, it will be slowed down.
  3. [43]
    Fortunately, there was little difference between the parties on the principles the court must apply.

The Principles

  1. [44]
    As is clear from the two legislative provisions discussed above,[5] the court has a wide discretion to transfer proceedings where, having regard to the interests of justice, it is more appropriate for the proceeding to be heard by the other court.
  2. [45]
    The defendants’ counsel neatly summarised the principles explained by Brereton J in Valceski v Valceski[6] as follows:
    1. (a)
      whether the interests of justice favour transfer requires that the transferee court be the more appropriate forum;
    2. (b)
      an applicant for transfer bears no burden of persuasion akin to an onus of proof; and
    3. (c)
      if the transferee court is more appropriate, however so slightly, a transfer to the more appropriate court is mandatory.
  3. [46]
    The defendants placed particular reliance on the following reasoning of Brereton J in Valceski v Valceski:[7]
    1. (a)
      Where the issues in the transferor court are a subset of those in the transferee court such that they are an aspect of a larger dispute already being litigated in the transferee court, a transfer is preferred;
    2. (b)
      It is usually inappropriate to permit exactly the same issue to be litigated in two different courts, principally because the evidence will be duplicated and there is a real possibility that the two courts might reach different conclusions.  
  4. [47]
    Thus, where the issues in the proceedings are related, the significance of the risk of conflicting findings of fact or conflicting orders, and the potentially unnecessary drain on judicial and other public or private resources is a factor of significance.[8] And, the court must acknowledge the wider concept that it is in the interests of justice that, as far as possible, all matters in controversy between the parties are completely and finally determined in the one proceeding and that a multiplicity of proceedings should be avoided.[9]
  5. [48]
    In Commissioner of Taxation v Residence Riverside Pty Ltd[10] McKerracher J expressed the view that where cross-vesting transfer occurs, the factors in support of transferring the proceeding tend to be obvious and the value judgment about whether it is in the interests of justice for the proceeding to be dealt with in another court will be readily instinctive taking into account a variety of matters, including:
    1. (a)
      the stage of the proceedings in the respective courts;
    2. (b)
      the commonality or diversity of the parties;
    3. (c)
      the nature of the proceedings;
    4. (d)
      the commonality or diversity of the issues;
    5. (e)
      the risk of conflicting findings of fact or conflicting orders;
    6. (f)
      a cost benefit analysis;
    7. (g)
      the potential unnecessary drain on judicial and other public and private resources; and
    8. (h)
      whether there is any particular judicial expertise residing in one court or the other.
  6. [49]
    Each factor in that useful guide will be considered in turn, although with some merging of factors, along with an additional factor raised by this case.

Stage of the Proceedings in the Respective Courts

  1. [50]
    As explained, the Federal Court proceeding was commenced shortly before this proceeding.[11] Neither has progressed beyond pleadings. 
  2. [51]
    In this proceeding, the key reason pleadings have not closed is the defendants’ decision, contrary to the timeline stipulated in the UCPR,[12] to not file a defence pending this application. It is difficult to understand why the transfer application justifies refusing to defend. Whether the claim by the plaintiff proceeds here or in the Federal Court a proper pleading by both parties was a necessary step, even if there was some later need to consolidate or otherwise re-work the form or even the substance of the pleadings.
  3. [52]
    There is little doubt that the Federal Court proceeding is a more significant burden to the resources of that court when compared with the burden of this proceeding in this court. The oppression claim in the Federal Court will involve an examination of the way in which the group operated and the roles and relevant corporate conduct of Mr So, Mr Clancy, and Mr Whiteman. On the other hand, the proceeding in this court is relatively narrow. Here, GGPG contends that Mr Whiteman and Mr Clancy’s conduct in securing a right to 202 breached their fiduciary and corporate duties. 
  4. [53]
    However, as explained, Mr Clancy and Whiteman have not yet pleaded a response. However, if Mr Whiteman’s affidavits are any guide, the likelihood is that he will contend that Golden Eagle was a private corporate vehicle separate from the GGPG group and that the 202 opportunity that was rejected by Mr So[13] because of the group’s financial position and Mr Whiteman’s understanding that the group was not undertaking further developments. Whether or not that is a defence to the breach allegations, the likelihood is that the defence will seek to characterise the acquisition of 202 as a separate and private transaction. That will inevitably require a wider focus than simply the 202 transaction.  
  5. [54]
    Nevertheless, there is some force in GGPG’s argument that the Federal Court oppression proceeding is likely to be significantly more time consuming than this proceeding. Some delay to the resolution of these breach allegations is likely to result from a joinder of the two proceedings.

The Commonality or Diversity of the Parties

  1. [55]
    The Federal Court proceeding arises out of a dispute between Mr Clancy and Mr So about the management of the Golden Gate Group. There are 20 parties to the Federal Court proceeding. The three applicants comprise companies connected to Mr Clancy and his wife. Mr So is the first respondent. Entities connected with Mr So and his wife comprise the fourteenth, fifteenth, sixteenth, and seventeenth respondents. The second respondent is GGPG, which is co-owned by interests associated with Mr So and Mr Clancy. Similarly for the third to twelfth respondents. The thirteenth respondent was a co-owned corporate vehicle that had an interest in the acquisition and restoration of rare cars.[14] Otherwise, all the respondents were involved in the Carver’s Reach developments.
  2. [56]
    At first blush, there appears to be little overlap in the parties to the two proceedings. GGPG is the only common party. GGPG is the plaintiff in this proceeding, but the claim is brought in circumstances where GGPG is in receivership. The receiver was appointed by Ultimate, Mr So’s company. GGPG does not intend to take an active role in the substantive Federal Court proceeding. The Federal Court applicants, Mr Clancy’s, seek leave to commence derivative proceedings in GGPG’s name. GGPG has employed different firms of solicitors and have different counsel acting for them in the Supreme Court proceeding as compared to the Federal Court proceeding.
  3. [57]
    However, in real terms, what is happening in the two proceedings can be distilled to this: in this court Mr So complains that Mr Clancy and Mr Whiteman secured for themselves an opportunity to acquire 202 when the opportunity was properly an asset of their quasi-partnership Carver’s Reach development. In the Federal Court, Mr Clancy complains that Mr So’s broader conduct of the Carver’s Reach development has been oppressive to Mr Clancy. Viewed in that way, the claims are broadly claim and counterclaim by Mr So and Mr Clancy against each other arising out of their quasi-partnership development of Carver’s Reach.
  4. [58]
    If it were not for the involvement of Mr Whiteman, which I will come to, there is a commonality of parties, at least in an indirect way.

Commonality/Diversity of Issues and Risk of Conflicting Findings of Facts

  1. [59]
    The breach of duty claims in this proceeding centres on 202. However, it is not difficult to envisage a situation where the issues in both proceedings will involve:
    1. (a)
      the roles of each of the three protagonists: Mr So, Mr Clancy, and Mr Whiteman and their conduct in performing those roles;
    2. (b)
      whether the project was a continuing one or whether, as Mr Whiteman contends, GGPG was in a financially precarious position and had determined not to make any further acquisitions; and/or
    3. (c)
      the circumstances of the acquisition of Golden Eagle and that entity’s acquisition of an interest in 202.
  2. [60]
    Through his lawyers, Mr So has said that his defence to the oppression action will “first and foremost” include the breaches by Mr Clancy and Mr Whiteman concerning the purchase of Lot 202. That seems likely given that Mr So’s recent affidavit filed in the Federal Court proceeding includes a detailed account of the 202 issues.[15] Even without that statement, it is difficult to imagine that the oppression proceeding could be conducted without at least some examination of the 202 issues. Indeed, in both proceedings the respective credibility of the three protagonists is likely to loom large.
  3. [61]
    It follows that the court cannot accept GGPG’s contention that it is difficult to see how 202 is likely to feature in Mr Clancy’s oppression claim given that it is alleged that Mr Clancy dishonestly secreted the opportunity for himself at the expense of GGPG. The indications are that Mr So will raise 202 as oppressive or similar conduct by Mr Clancy, in combination with Mr Whiteman. 
  4. [62]
    The defendants’ contention that the Supreme Court proceeding is a subset of the issues raised in the Federal Court proceedings, is not strictly accurate, at least not yet. The Federal Court proceeding is yet to include the derivative action or any mention of the option deed, or Lot 202. As it presently stands, there is no “overlap” in the issues in the two proceedings. But that is because both proceedings are in their early stages. Given the nature of the disputes, and the content of their affidavits, the likelihood is that there will be an overlap of at least some issues and thus a real risk that the respective courts might reach different conclusions based on the evidence before them.
  5. [63]
    Of course, justice can best be done by the one court resolving the whole justiciable controversy, in order to avoid both duplication and inconsistency.

Cost Benefit Analysis

  1. [64]
    Considerations relevant to the cost benefit analysis include the respective cost and benefit of one proceeding versus two proceedings, as well as convenience, expense, availability of witnesses, and places where the parties reside or operate their businesses. This factor is difficult to assess as it is early in both proceedings. Not even the pleadings are mature.
  2. [65]
    Looking at the disputes in a broad way, there is likely to be an overall benefit in having one piece of litigation, rather than two related proceedings.

Potential Unnecessary Drain on Judicial and Other Public and Private Resources

  1. [66]
    The Federal Court proceedings are the more extensive, covering much wider ground than the dispute before the Supreme Court. The Federal Court proceeding will therefore impose a significant burden on judicial and public resources. However, it is not the case that one can say that the burden is unnecessary. These disputes require resolution by superior courts with judicial expertise – which both courts possess.
  2. [67]
    And, adding the 202 dispute to the Federal Court proceeding will not significantly add that court’s burden. In all likelihood the disputes concerning 202 were likely to be agitated in that proceeding in any event. Certainly, Mr So has indicated that the 202 issues are likely to form part of his defence to the oppression case, means that a transfer would require the defendants in this proceeding to be involved in a much larger piece of litigation than would be the case if the Supreme Court proceeding were to remain in this court. It is worth noting that the defendants are the parties seeking such transfer.
  3. [68]
    On the other hand, if the proceedings were to continue to be managed and heard separately, there is a potential for wastage of public, private, and judicial resources. That is because, to some extent at least, there will be an overlap in the issues and evidence.

Whether There is Any Particular Judicial Expertise Residing in One Court or The Other

  1. [69]
    There is no particular advantage residing in either court. Both courts have expertise in corporate litigation.
  2. [70]
    GGPG argues that there is a forensic advantage if this proceeding remains in this court. Reliance is placed on UCPR rule 166, which requires the defendants to accompany any denial by a direct explanation for their belief why it is untrue or cannot be admitted. The Federal Court Rules have no equivalent, and thus bare denials are possible. However, the Federal Court Rules do require positive and constructive pleadings[16] – which is the objective of UCPR rule 166 – and it is doubtful a bare denial would survive the Federal Court’s case management process.
  3. [71]
    It is doubtful that there is any appreciable advantage in the rules of either court.

An Additional Factor – Trapped Litigants

  1. [72]
    An additional factor is relevant in a case like this where the application is to transfer one smaller case so that it can be heard with another larger case. In those cases, the court will be sensitive to the possible prejudice to a party who is a party to as small skirmish but by reason of the transfer may become trapped in a larger litigation war.
  2. [73]
    Mr Whiteman might have attracted such a concern because he is an employee who, in the event that these proceedings are transferred to the Federal Court, will be drawn into the forest of allegations between the two quasi-partners, Mr So and Mr Clancy. However, that is not a concern here. First, Mr Whiteman is one of the parties who applies for the transfer. Second, even on his own version, Mr Whiteman was a willing participant to the joint enterprise of Mr Clancy and Mr Whiteman to acquire an interest in 202 and to do so separate from the interests of GGPG and Mr So. In a real sense, Mr Whiteman does not appear to be a bystander drawn into a wider dispute between the owners. He is self-described as a close business associate of Mr Clancy. Third, the Federal Court’s case management will no doubt take into account how the case can be most efficiently run. On the other hand, leaving the cases in separate courts means that witnesses such as Whiteman would have to give evidence in two forums rather than one.   

Conclusions

  1. [74]
    The above combination of factors, particularly the likelihood that there will be an overlap of some issues and thus a real risk of different conclusions, and the desirability of one proceeding, means that it is appropriate to transfer the Supreme Court proceeding to the Federal Court.

The Cross-Application: Judgment in Default of Pleading

  1. [75]
    The defendants’ defence was due on 10 June 2022. Judgment in default of a defence would normally be given under UCPR Chapter 9 Part 1, where a defendant fails to file and serve a defence. Here, though, the defendants have refused to file and serve a defence.
  2. [76]
    In the circumstances there is no utility in entering default judgment. Any default judgment would be susceptible to being set aside under UCPR rule 290.
  3. [77]
    That said, as GGPG submitted, there is no good reason for the defendants to not have filed their defence. Even in the event of a transfer, the work in preparing the defence would not be wasted. In fact, as explained, a defence would have assisted in defining the issues. More than that, the defendants were bound by their implied undertaking to the court and to the other parties to proceed in an expeditious way.[17]
  4. [78]
    The defendants’ conduct in refusing to file and serve their defence can hardly be said to be consistent with that obligation.
  5. [79]
    The question is what this court should do about it. In my view, the appropriate course is to order that the defendants file and serve their defence within 14 days of today. It is true that the proceeding will also be transferred. That means that this court will have no capacity to ensure that the order be complied with. However, the Federal Court will be able to take into account the order and any breach of it. It is important that, to use counsel for GGPG’s language, the ‘state of inertia’ presently infecting the proceeding not continue and that the Federal Court be able to manage the case with the benefit of pleadings from both parties.

Footnotes

[1]A section of Mr Clancy’s affidavit in the Federal Court is headed ‘Insistence by Mr So that the funds advanced by Ultimate be documented’. The proposed statement of claim in the Federal Court speaks of a purported loan of $7m and some misrepresentations which occurred in the negotiations leading up to the execution of the documents.

[2]The following brief summary is based on the defendant’s useful procedural history’ annexed to its submissions.

[3]Judiciary Act 1903 (Cth) 39(2); Commonwealth Constitution (Cth) s 77(iii).

[4]Jurisdiction of Court (Cross-vesting) Act 1987 (Cth) s 4(2)(b).

[5]Section 5(1) of the Jurisdiction of Courts (Cross-Vesting) Act 1987 (Qld) and s 1337H of the Corporations Act 2001 (Cth).

[6](2007) 70 NSWLR 36 at [69], [70].

[7](2007) 70 NSWLR 36 at [69], [70].

[8]Re Sumo Australia Ltd (2020) 147 ACSR 561 (per Black J) – a case quoted by counsel for the defendants and accepted as relevant by counsel for the plaintiff.

[9]Zhu v Tech Universal (HK – Macau) Development Pty Ltd (2005) 53 ACSR 704 at [7], [8].

[10][2013] FCA 720 at [17].

[11]The Federal Court proceeding commenced on 25 March 2022, while the Supreme Court proceeding commenced on 28 March 2022.

[12]The statement of claim was filed (and presumably served) on 13 May 2022 meaning that the defence was due on 10 June 2022.

[13]Curiously, Mr So rejected the opportunity to acquire 202 at $2.5m in May 2021. The opportunity ultimately taken up by Mr Whiteman and Mr Clancy was an opportunity to acquire 202 at $2.15m or $2.25m in September 2021.

[14]The disputes concerning the car component of the business relationship look to be relatively minor.

[15]Mr So’s recent affidavit filed in the Federal Court proceeding at [44]-[68] and [116]-[128].

[16]For example, a general denial or an evasive answer will not be sufficient: Federal Court Rules 2011 Rule 16.02. Case management can also be a means to ensure pleadings are positive.

[17]UCPR rule 5(3).

Close

Editorial Notes

  • Published Case Name:

    GGPG Pty Ltd v Golden Eagle Property Group Pty Ltd

  • Shortened Case Name:

    GGPG Pty Ltd v Golden Eagle Property Group Pty Ltd

  • MNC:

    [2022] QSC 205

  • Court:

    QSC

  • Judge(s):

    Freeburn J

  • Date:

    28 Sep 2022

Appeal Status

Please note, appeal data is presently unavailable for this judgment. This judgment may have been the subject of an appeal.

Cases Cited

Case NameFull CitationFrequency
Commissioner of Taxation v Residence Riverside Pty Ltd [2013] FCA 720
2 citations
Jump To
Cite 1 - [2013] FCA 720
Cite 2 - [2013] FCA 720
Re Sumo Australia Ltd (2020) 147 ACSR 561
1 citation
Jump To
Cite 1 - (2020) 147 ACSR 561
Valceski v Valceski (2007) 70 NSWLR 36
3 citations
Jump To
Cite 1 - (2007) 70 NSWLR 36
Cite 2 - (2007) 70 NSWLR 36
Cite 3 - (2007) 70 NSWLR 36
Zhu v Tech Universal (HK-Macau) Development Pty Ltd (2005) 53 ACSR 704
1 citation
Jump To
Cite 1 - (2005) 53 ACSR 704

Cases Citing

Case NameFull CitationFrequency
GGPG Pty Ltd v Golden Eagle Property Group Pty Ltd (No. 2) [2022] QSC 2241 citation
Wharf Road Surfers Paradise 1 Pty Ltd v Clancy [2024] QSC 198 2 citations
1

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