Monash IVF Pty Limited v Dr Lynne Burmeister (No 2)

By a notice of motion filed on 28 June 2017, the defendants (the Burmeister Parties) seek an order pursuant to s 5(2)(b) of the Jurisdiction of Courts (Cross-vesting) Act 1987 (NSW) (the Act) transferring this proceeding to the Supreme Court of Victoria.

The first defendant, Dr Burmeister, is engaged as a fertility specialist with the plaintiffs (together, Monash IVF) pursuant to:

Monash IVF has its head office in Melbourne but operates in a number of states, including New South Wales. Under the terms of the agreements, Dr Burmeister performs her services under the agreements in Melbourne.

Dr Burmeister also holds an equity interest in the second defendant, Monash IVF Group Limited, which is subject to an escrow deed between Dr Burmeister and Monash IVF Group Limited dated 5 June 2014.

Each of the agreements contains a clause by which the parties agree that the agreement is governed by the law applying in New South Wales and agree to submit to the non-exclusive jurisdiction of the courts of New South Wales.

Clause 10.1 of the Deed of Adherence imposes a cascading restraint on Dr Burmeister not to compete with Monash IVF for a period of time following termination of her employment. The details of the restraint are not important for present purposes.

On 10 March 2017, Dr Burmeister’s solicitors, Macpherson Kelley, wrote to Monash IVF giving notice of termination of the Deed of Adherence with effect on and from 11 September 2017. The letter also stated:

Following that letter, there were open and without prejudice discussions between Dr Burmeister and Monash IVF and their respective legal representatives.

It appears that those discussions broke down and on 9 June 2017 Monash IVF’s solicitors, Clayton Utz, wrote to Macpherson Kelley setting out Monash IVF’s position in relation to the Deed of Adherence and seeking undertakings to be provided by Dr Burmeister by 16 June 2017. The letter concluded:

On 16 June 2017, Dr Burmeister commenced proceedings in the Common Law Division, Employment and Industrial List of the Supreme Court of Victoria, seeking a declaration that the restraint clause contained in the Deed of Adherence was not enforceable.

On 21 June 2017, Monash IVF commenced this proceeding seeking relief in respect of the contractual restraints said to be binding on Dr Burmeister. This proceeding has been set down for an urgent final hearing commencing on 17 July 2017 and the court has given directions for the preparation of the case for hearing at that time.

On 26 June 2017, the Supreme Court of Victoria made an order the effect of which is that if the hearing in this court does not proceed, then the proceeding in Victoria will be listed for hearing on 1 August 2017.

Section 5(2)(b) of the Act relevantly requires this court to transfer proceedings to the Supreme Court of another state or territory where the proceedings are related to pending Supreme Court proceedings in that other state or territory and it is “more appropriate” for the relevant proceedings to be decided by the Supreme Court of that state or territory.

The “more appropriate” forum will ordinarily be the jurisdiction “with which the action has the most real and substantial connection”, having regard to objective factors: BHP Billiton Ltd v Schultz (2004) 221 CLR 400; [2004] HCA 61 at [170] per Kirby J (with whom Gleeson CJ, McHugh, Gummow, Hayne and Heydon JJ agreed). Those factors include:

The principal factors that point to the Supreme Court of Victoria as the more appropriate forum are:

The principal factors that point to the Supreme Court of New South Wales as the more appropriate forum are:

In my opinion, the first and fourth points in favour of Victoria carry little weight. The fact that the parties carry on business in that state is of itself of little significance where they agreed that their dispute would be governed by New South Wales law and submitted to the non-exclusive jurisdiction of New South Wales courts. No weight should be attached to the fact that proceedings were commenced first in Victoria. It is plain that those proceedings were commenced to try to forestall threatened proceedings which no doubt Dr Burmeister expected to be commenced in New South Wales.

Nor do I place much weight on the fact that Dr Burmeister has engaged lawyers in Melbourne. It is now common for interstate legal practitioners to appear in this jurisdiction and travel between Melbourne and Sydney is straightforward. Monash IVF has engaged lawyers in Sydney. Preparation for the hearing is well under way, and the likelihood is that neither party will want to change lawyers at this stage. Consequently, whatever happens the legal representatives of one party or the other will have to travel.

The real balancing exercise is between, on the one hand, the fact that all but one of the potential witnesses is resident in Melbourne and, on the other, the fact that the parties agreed that New South Wales law would govern their dispute and agreed to submit to the non-exclusive jurisdiction of courts in New South Wales.

The witnesses include a number of patients of Dr Burmeister who may be reluctant or who may find it difficult to travel. It is to be expected that Dr Burmeister will want to be present during the hearing and that she will give evidence. She has a busy practice and it will be more disruptive to that practice if she is required to come to Sydney. She currently has appointments booked on each of the days during which the case has been set down for hearing, which will have to be cancelled.

On the other hand, Dr Burmeister submits that the significance of the choice of law and jurisdiction clause has been exaggerated by Monash IVF. In support of that submission, she refers particularly to the decision of Barrett J in Professional Advantage Pty Ltd v Smart [2008] NSWSC 873 and of McKerracher J in PEP Community Services Inc trading as PEP Community Services v Job Futures Ltd [2008] FCA 1264. In the former case Barrett J said:

In the latter case, McKerracher J said:

However, neither of these cases is relevant in the present context. There was no choice of law or submission to jurisdiction clause in Professional Advantage Pty Ltd v Smart. PEP Community Services Inc was not concerned with the cross-vesting legislation. It was concerned with a change of venue application where federal legislation was involved.

Other cases – particularly those referred to in para 14(c) above – make it plain that choice of law and jurisdiction clauses, particularly where the law of the chosen jurisdiction is different from the transferee jurisdiction, carry particular weight because they embody the agreement between the parties concerning their preferred venue.

In the present case, Dr Burmeister proposes to challenge the validity of the choice of law clause on the basis that it is a connivance to obtain the benefits of the Restraints of Trade Act. However, she accepts that for the purposes of the current application the court should assume that the parties’ choice of law was a valid one. Dr Burmeister is obviously an intelligent and sophisticated person. The choice of law and jurisdiction clause was one that she voluntarily agreed to. Consequently, in my opinion, it carries substantial weight in determining which is the more appropriate forum.

Monash IVF accepts that Dr Burmeister’s patients should give evidence by videolink and its solicitors, Clayton Utz, have agreed to make the video conferencing facilities in their Melbourne offices available at no cost for that purpose. Consequently, those witnesses are unlikely to be inconvenienced if the case is heard in Sydney.

I accept that Dr Burmeister will suffer greater inconvenience if the case is heard in Sydney rather than Melbourne. But I do not think that that outweighs the choice of law and jurisdiction clause in this case. Wherever and whenever the case is heard, it will cause some disruption to Dr Burmeister’s practice. The case is expected to take only three days. As I have said, travel between Melbourne and Sydney is straightforward. The evidence is that arrangements can be made to care for Dr Burmeister’s patients in her absence. Those conclusions are consistent with the fact that Dr Burmeister has been travelling overseas for the past three weeks or so.

The case in Sydney is further advanced than the case in Melbourne and it has been fixed for hearing. Dr Burmeister submitted that, if her application for a transfer was refused, she would need to make an application to vacate the hearing date because it had become apparent that she would not be able to meet the 17 July 2017 start date. However, no application was made for vacation of the hearing date; and there is no reason to think that the court would not be able to accommodate a short delay in the commencement of the hearing if the application were made and the judge hearing it was satisfied that it should be granted. Consequently, no weight should be placed on that consideration.

Taking those matters into account, I am not satisfied that the Supreme Court of Victoria is the more appropriate forum.

It follows that the defendants’ motion filed on 28 June 2017 must be dismissed with costs.