Wharf Road Surfers Paradise 1 Pty Ltd v Clancy
[2024] QSC 198
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- Notable Unreported Decision
- Wharf Road Surfers Paradise 1 Pty Ltd v Clancy[2024] QSC 198
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Wharf Road Surfers Paradise 1 Pty Ltd v Clancy[2024] QSC 198
Wharf Road Surfers Paradise 1 Pty Ltd v Clancy[2024] QSC 198
SUPREME COURT OF QUEENSLAND
CITATION: | Wharf Road Surfers Paradise 1 Pty Ltd v Clancy [2024] QSC 198 |
PARTIES: | WHARF ROAD SURFERS PARADISE 1 PTY LTD ACN 613 312 511 AS TRUSTEE FOR THE WHARF ROAD SURFERS PARADISE 1 UNIT TRUST ABN 25 346 580 793 (plaintiff) v MARC ANDREW CLANCY (first defendant) AND CIP GROUP PTY LTD ACN 610 483 577 AS TRUSTEE FOR THE CIP GROUP TRUST (second defendant) |
FILE NO: | BS 7573/23 |
DIVISION: | Trial |
PROCEEDING: | Application |
ORIGINATING COURT: | Supreme Court (Brisbane) |
DELIVERED ON: | 27 August 2024 |
DELIVERED AT: | Brisbane |
HEARING DATE: | 23 August 2024 |
JUDGE: | Freeburn J |
ORDER: |
|
CATCHWORDS: | COURTS AND JUDGES – COURTS – JURISDICTION AND POWERS – TRANSFER OF PROCEEDINGS UNDER CROSS-VESTING LEGISLATION – where the defendants apply to transfer the proceeding to be heard with a proceeding in the Federal Court – where a trial for the proceeding in the Federal Court has been set down – where there are overlaps between the proceedings and the Federal Court proceedings – whether the interests of justice favour the transfer of the proceeding to the Federal Court Jurisdiction of Court (Cross-Vesting) Act 1987, s 5(1)(b) GGPG Pty Ltd v Golden Eagle Property Group Pty Ltd [2022] QSC 205, explained Valceski v Valceski (2007) 70 NSWLR 36; [2007] NSWSC 440, applied |
COUNSEL: | W LeMass for the plaintiff/respondent G Beacham KC and A Psaltis for the defendants/applicants |
SOLICITORS: | Colin Biggers & Paisley Pty Ltd for the plaintiff/respondent Bartley Cohen for the defendants/applicants |
- [1]The defendants, Mr Clancy and his company CIP Group Pty Ltd, apply to transfer this proceeding to the Federal Court of Australia (Queensland Registry) because of its overlap with two Federal Court proceedings CIP Group Pty Ltd v So (QUD 93/2022) and GGPG Pty Ltd v Golden Eagle Property Group Pty Ltd (QUD 462/2022).
- [2]The application to transfer is made pursuant to s 5(1)(b) of the Jurisdiction of Court (Cross-Vesting) Act 1987. The question is whether the interests of justice favour the transfer of the proceeding.
- [3]In Valceski v Valceski Brereton J set out these principles:[1]
- whether the interests of justice favour transfer requires that the transferee court be the more appropriate forum;
- an applicant for transfer bears no burden of persuasion akin to an onus of proof; and
- if the transferee court is more appropriate, however so slightly, a transfer to the more appropriate court is mandatory;
- 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;
- 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]In an earlier battle in this litigation, I transferred another proceeding to the Federal Court.[2] In that case I explained that, where the issues in the proceedings are related, the risk of conflicting findings of fact or conflicting orders, and the potential for an unnecessary drain on judicial and other public or private resources, are factors of significance. And, the court must acknowledge 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.
- [5]The factors that support a transfer 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:
- the stage of the proceedings in the respective courts;
- the commonality or diversity of the parties;
- the nature of the proceedings;
- the commonality or diversity of the issues;
- the risk of conflicting findings of fact or conflicting orders;
- a cost benefit analysis;
- the potential unnecessary drain on judicial and other public and private resources; and
- whether there is any particular judicial expertise residing in one court or the other.[3]
- [6]It is worth considering each of those factors.
- Stage of the Respective Proceedings
- [7]A factor against the transfer is the stage which each of the proceedings have reached. Both the Supreme Court and the Federal Court proceedings are relatively well advanced.
- [8]In this proceeding pleadings have closed, there has been disclosure[4] and, subject to directions concerning evidence-in-chief (by affidavit or witness summary[5]), a trial date can be set. The Federal Court proceedings are also at an advanced stage. Those proceedings were set down for a four week trial in September 2024 (next month). However, the trial has been adjourned to four weeks in April 2025 because of a delay in the filing of evidence-in-chief by the Clancy parties (the applicants here).
- [9]Mr Cohen, the solicitor for the Clancy interests, deposed that if this Supreme Court proceeding were transferred to the Federal Court “(i)t would be capable (subject of course to the discretion of that court) of being heard with [the two Federal Court proceedings]”.
- [10]That is an easy thing to say.
- [11]However, the question of joining these proceedings to the Federal Court proceedings has not been raised with Derrington J – the judge case managing the Federal Court proceedings. And, the Federal Court proceedings involve other parties. Consequently, the views of those other parties to a joinder of this proceeding to the Federal Court proceeding are unknown. The parties and the Federal Court may have legitimate concerns about the joinder of a further cause of action at this late stage of that proceeding – particularly after it has been set down for a trial.
- [12]And so, whilst the joinder may be capable of being accommodated, that does not mean the joinder would be consistent with the efficient conduct of the Federal Court proceedings. Indeed, the adding of a further claim at this late stage carries on inherent risk of disrupting the Federal Court proceeding.
- [13]There is no logical reason why this application could not have been brought before both sets of proceedings were close to trial – and before the Federal Court proceeding had been set down for trial. As long ago as July 2023 – more than a year ago - the solicitors for the parties corresponded about whether these proceedings should be transferred.[6]
- [14]The fact that the transfer is sought so late in the life of the proceedings in both courts is a strong factor against transfer.
- Commonality of parties
- [15]In this proceeding, one of Mr So’s companies, Wharf Road, is the plaintiff and alleged lender. That company is not a participant in the Federal Court proceeding. One of the defendants in this proceeding, CIP Group Pty Ltd, is a party to the Federal Court proceeding.
- [16]Mr Clancy is not personally a party to the Federal Court proceeding, but allegations of breach of duty are alleged against him in those proceedings.
- [17]In this proceeding Wharf Road, acting through Mr So, is alleged to have lent money to Mr Clancy or alternatively CIP Group Pty Ltd. It follows that neither the lender nor one of the borrowers are parties to the Federal Court proceeding as it is presently constituted.
- [18]And, as mentioned, there are other parties to the Federal Court proceeding.
- [19]Thus, there is only a modest commonality of parties.
- The Nature of the Proceedings
- [20]In this court Wharf Road sues for $1.46m loaned to Mr Clancy or alternatively to CIP Group Pty Ltd. There is a further alternative claim for misleading or deceptive conduct. Both claims are based on conversations between Mr So and Mr Clancy in May and June 2018.
- [21]As counsel for the defendants explains, in the Federal Court there are two broad claims:
- a derivative claim which Mr Clancy’s shareholding applicants (including CIP Group Pty Ltd) have leave to bring in the name of entities in the Group; and
- an oppression claim by Mr Clancy’s shareholding entities (including CIP Group Pty Ltd) directly against Mr So and his shareholding entities.
- [22]The defence by Mr So and his shareholding entities contends that Mr Clancy breached his duties to various entities in the group. There is also the Golden Eagle proceeding which is a claim by GGPG against Mr Clancy.
- [23]Thus, the proceedings in the two courts are very different. The proceeding in this court is a relatively simple debt claim with an associated claim of misleading and deceptive conduct claim. The Federal Court claims are a relatively complex breach of directors’ duties cases and allegations of oppression. And so, whilst the issues all arise from the business relationship of Mr Clancy and Mr So, the claims in the two courts are very different.
- Commonality/Diversity of Issues
- [24]There is no direct overlap in the issues in the two courts. The loan and associated misleading or deceptive conduct does not directly form part of the breaches of duty claims pleaded in the Federal Court.
- [25]Counsel for Wharf Road describes the factual overlap between the proceedings in the two courts as “modest”. I accept that submission. Counsel for the defendants pointed out that a spreadsheet features as evidence in the proceedings in both courts. That may be so, but the spreadsheet comprises a list of more than 50 transactions from 15 September 2015 to 17 February 2019. It is hardly surprising that the broad scope of disputes in the Federal Court include some documents of relevance to the transaction in this court.
- [26]There is, though, no contested issue that is common in both courts. The overlap relates principally to the background facts.
- Risk of Conflicting Findings
- [27]There is only a minor risk of conflicting findings. Whilst the factual background has some commonalities there is no real or significant overlap in the pleaded issues. That makes the risk of conflicting findings rather low.
- Cost/Benefit Analysis
- [28]The considerations relevant to the cost/benefit analysis include the respective costs and benefit of having the proceedings in the one court, instead of two, as well as convenience, expense, availability of witnesses and places where the parties reside or operate their businesses.
- [29]In this case there is no geographical issue – the two courts are little more than a city block from each other.
- [30]There would certainly be an advantage in having all disputes between the Clancy and So interests case managed and determined in the one court. But that advantage is rather overwhelmed by the potential disruption to the proceedings in both courts by ordering a transfer at this late stage.
- Drain on Public Resources/Expertise
- [31]The disputes between the Clancy and So interests are likely to consume a fair level of judicial time and public resources. Transferring this proceeding to the Federal Court may ultimately save a relatively minor level of judicial time.[7] However, as there is no real or significant overlap in the issues, there is little difference.
- [32]There is no question that both courts have relevant expertise.
- A Further Factor – Accrued Jurisdiction
- [33]Counsel for Wharf Road also argued that the court could not be satisfied that the Federal Court would have jurisdiction to hear this proceeding. Alternatively, counsel argued that there was a least sufficient doubt about jurisdiction. Those submissions stand or fall on the accrued jurisdiction of the Federal Court which, in turn, depends on characterising the issues in this court as part of the same justiciable controversy as a federal claim.
- [34]Ascertaining whether a non-federal claim forms part of the same justiciable controversary as a federal claim is an evaluative inquiry and a matter of impression. It is an assessment not without its difficulties.[8] Whether the proceedings in this court form part of the same controversy is a matter in respect of which different minds may have different views.
- [35]For that reason, I accept Wharf Road’s alternative submission that there is at least sufficient doubt that the proceedings in this court would be comprehended by the accrued jurisdiction of the Federal Court. That is a further factor against the exercise of the discretion to transfer.
- Conclusions
- [36]Weighing those factors, the interests of justice do not favour the transfer of these proceedings to the Federal Court. That is especially the case given the stage at which this application is made.
- [37]I refuse the application.
Footnotes
[1] (2007) 70 NSWLR 36 at [69], [70].
[2] GGPG Pty Ltd v Golden Eagle Property Group Pty Ltd [2022] QSC 205.
[3] Commissioner of Taxation v Residence Riverside Pty Ltd [2013] FCA 720 at [17].
[4] In both the Supreme Court and the Federal Court proceedings there are some remaining disclosure issues: see Mr Cohen’s affidavit of 5 August 2024 at [48(c)].
[5] An oral loan is the central issue and so the parties anticipate directions for witness summaries rather than affidavits.
[6] In their letter of 4 July 2023 the solicitors for the So interests asked whether the Clancy interests would support a transfer. The Clancy interests replied on 12 July 2023 saying the proceeding could and should have been brought in the Federal Court. But no application was made until now.
[7] For example, the background to the disputes will not need to be explained twice. But, of course, the background is not likely to be controversial and so is likely to occupy little court time.
[8] This paragraph is paraphrased from the submissions of Wharf Road’s counsel – which I accept. The authorities quoted are CGU Insurance Limited v Blakeley (2016) 259 CLR 339 at [30] and DJ Builders & Son Pty Ltd v Queensland Building & Construction Commission (2021) 156 ACSR 539 at [20].