Twigg v Pitcher Partners Holdings Pty Ltd

1. [1]

   The Twigg Group was a large waste and landfill business founded by the late Mr William Twigg.

2. [2]

   The first plaintiff, Mrs Diane Twigg, is the widow of Mr Twigg and the mother of the fourth defendant, Mr Max Twigg.

3. [3]

   During submissions, counsel referred to Mrs Twigg and Mr Max Twigg by their given names. I shall do the same. I intend no disrespect.

4. [4]

   In March 2019, [1] Diane and three companies of which she and her daughters are presently directors, and of which Diane is the sole shareholder (the “Corporate Plaintiffs”), brought proceedings in the Commercial List against Max and companies controlled by Max, including the fifth defendant in the current proceedings, Twigg Co Pty Ltd.

5. [5]

   In substance, Diane and the Corporate Plaintiffs alleged that Max had breached his fiduciary duties as a director of the Corporate Plaintiffs by causing those companies to distribute to Max the bulk of the sale proceeds of the Twigg Group in 2007; some $130 million.

6. [6]

   Those very complex proceedings (which I will refer to as the “Earlier Proceedings”) were resolved by judgments given by Ball J on 31 August 2020 [2] and on 11 December 2020. [3] Before Ball J, Diane and the Corporate Plaintiffs were, in substance, successful. They obtained orders entitling them to recoveries from Max and his associated companies in the order of $120 million.

7. [7]

   On 4 May 2022 the Court of Appeal, in substance, dismissed Max’s appeal from Ball J’s decision. [4]

8. [8]

   Diane and the Corporate Plaintiffs have recovered some $30 million from Max and his associated companies.

9. [9]

   On 25 May 2022, three weeks after delivery by the Court of Appeal of its decision, Diane and the Corporate Plaintiffs commenced these proceedings against three companies carrying on a business as Pitcher Partners. Pitcher Partners is a business advisory firm that was engaged to provide services to the Twigg Group and, it is alleged, to Diane.

10. [10]

    Diane and the Corporate Plaintiffs have also joined Max and Twigg Co as defendants.

11. [11]

    Diane and the Corporate Plaintiffs allege that Pitcher Partners breached fiduciary duties owed to them and knowingly assisted in a fraudulent design or plan undertaken by Max in respect of the misuse of the sale proceeds of the Twigg Group in 2007.

12. [12]

    Diane and the Corporate Plaintiffs make further allegations concerning Pitcher Partners’ role in the Earlier Proceedings as follows:

13. [13]

    Diane and the Corporate Plaintiffs also allege that Max caused Twigg Co to transfer “certain bonds” to himself in breach of his fiduciary duty and that one of the Pitcher Partners’ corporations, the second defendant, is liable for knowingly assisting in that breach of trust.

14. [14]

    Diane and the Corporate Plaintiffs seek to recover from Pitcher Partners equitable compensation being the “balance of their loss” [6] beyond that recovered from Max and his associated companies.

Motion to transfer these proceedings to the Supreme Court of Victoria

1. [15]

   By Notice of Motion filed on 7 June 2022, within weeks of the commencement of these proceedings, Pitcher Partners seek an order pursuant to s 5(2) of the Jurisdiction of Courts (Cross-vesting) Act 1987 (NSW) (the “Cross Vesting Act”) that these proceedings be transferred to the Supreme Court of Victoria.

2. [16]

   Pitcher Partners’ application is opposed by Diane and the Corporate Plaintiffs; as well as by Max and Twigg Co.

Principles

1. [17]

   The questions posed by s 5(2)(b)(iii) of the Cross Vesting Act is whether it is in the “interests of justice” that the proceedings be determined by the Supreme Court of another state or territory.

2. [18]

   This is an evaluative, rather than discretionary question as to which is the “more appropriate” forum. [7]

3. [19]

   An applicant for a transfer bears no burden of persuasion or onus of proof. [8] No significance attends to the plaintiff’s original choice of forum. [9]

4. [20]

   The “more appropriate” forum would ordinarily be the jurisdiction “with which the action has the most real and substantial connection” based on objective factors. [10]

5. [21]

   It is both necessary and sufficient that, in the interests of justice, the second court be more appropriate. [11]

6. [22]

   What is called for is a “‘nuts and bolts’ management decision as to which court, in the pursuit of the interests of justice, is the more appropriate to hear and determine the substantive dispute”. [12]

7. [23]

   The question is not merely where the balance of the parties’ competing convenience lies. [13]

Location of the events, parties, their legal teams, witnesses and documents

1. [24]

   Pitcher Partners is the eighth largest accounting firm in Australia. It has offices in Sydney, Melbourne, Adelaide, Brisbane, Perth and Newcastle. However, the three Pitcher Partners’ corporate entities named as defendants have their registered office and principal place of business in Melbourne and have Victorian residents as their directors.

2. [25]

   Mr Theodore, the solicitor for Pitcher Partners, deposed:

3. [26]

   Mr Elliott SC, who appeared for Diane and the Corporate Plaintiffs, submitted that it was unlikely that Pitcher Partners would, in fact, call some of these witnesses. I am not in a position to make any assessment about that matter.

4. [27]

   There was no dispute before me that it would be desirable that the evidence of the Pitchers Partners’ witnesses be given in person, rather than by Audio Visual Link. Thus, some inconvenience and expense would be involved in having those witnesses give their evidence in this Court.

5. [28]

   Pitchers Partners has a legal team in Sydney, retained to argue this application and also an application, made by Notice of Motion filed on 15 July 2022, to have these proceedings permanently stayed, dismissed or struck out as an abuse of process. That application is yet to be heard and I will return to it below. The point for present purposes is that Pitcher Partners has been obliged to engage a legal team in Sydney that, based on the quality of the argument before me, has clearly already gained a close familiarity with the details of the Earlier Proceedings and the nature of the allegations made in these proceedings.

6. [29]

   Mr Theodore is a partner of the national law firm Gadens. He is corresponding from Gadens’ Sydney office, but lives in Melbourne.

7. [30]

   Max in based in and operates out of Queensland. He has retained solicitors and counsel in Sydney. Twigg Co has its registered address in Victoria (at Pitcher Partners’ offices). Its principal place of business is, however, Max’s residence in Queensland.

8. [31]

   Diane lives in Melbourne but wishes to litigate these proceedings in Sydney, no doubt because of her connection with her current legal team, being Mr Elliott, his junior Mr Smith and their instructors, Messrs Christiaan Roberts and Anton Roberts.

9. [32]

   In his written submissions, Mr Elliott said:

10. [33]

    In oral submissions, Mr Elliott presented a more nuanced submission and accepted that there would be no reason why, were the matter to be transferred to the Supreme Court of Victoria, Diane’s four trusted legal representatives could not continue to have the primary conduct of the proceedings and travel to Melbourne for any necessary interlocutory applications and, ultimately, for the hearing. It is likely, as Mr Elliott submitted, that this would involve considerable expense, in terms of airfares and hotel accommodation and the like, which expenses would likely outweigh the expense Pitcher Partners would incur bringing witnesses to Sydney for a hearing.

11. [34]

    The Corporate Plaintiffs, until recently, had their registered office in Melbourne. Mr Williams SC, who appeared with Ms Jaffray for Pitcher Partners, emphasised the fact that the registered office of the Corporate Plaintiffs was changed to a Sydney address on the same day that these proceedings were commenced. I do not see that fact as having any particular significance. The Corporate Plaintiffs are, as I understand it, trustees, and they had no assets or business at the time that the Earlier Proceedings were commenced.

12. [35]

    The current activities of the Corporate Plaintiffs involve selling assets in respect of which constructive trusts were declared in the Earlier Proceedings. These activities are run out of Sydney, in accordance with orders of this Court, and concern assets in Queensland. I see the role of Corporate Plaintiffs as being a neutral factor.

13. [36]

    It appears that Pitcher Partners’ documents created prior to 2006 are located offsite in storage in Melbourne. Pitcher Partners has informed Mr Theodore that it does not know how many boxes of documents are so stored but anticipates they are quite likely to be “a significant number”.

14. [37]

    Since 2006, Pitcher Partners has managed documents using document management software.

15. [38]

    However, in the Earlier Proceedings, Pitchers Partners were subpoenaed to produce, and did produce, their files and records in relation to the transactions the subject of the Earlier Proceedings and thus, these proceedings. Mr Roberts has deposed that those documents are held in the subpoena registry of this Court.

16. [39]

    Although many of the relevant documents are already in the possession of this Court, overall, it would appear that, as Mr Williams submitted, so far as concerns the location of the parties, the likely witnesses and the events that occurred, these proceedings have a strong connection with Victoria.

17. [40]

    Nonetheless, as Mr Elliott submitted, I am persuaded that the inconvenience and expense for Pitcher Partners to litigate here would be less than that incurred by Diane and the Corporate Plaintiffs were the proceedings to be transferred; especially if Pitcher Partners were to retain its current legal team, a matter that is not yet certain.

18. [41]

    However, as I have said, the question is not simply where the balance of the parties’ convenience lies. It is a question of whether it is in the interests of justice that the proceedings be transferred.

19. [42]

    There are other matters to consider.

Commonality of issues in these proceedings to those in the Earlier Proceedings

1. [43]

   Mr Elliott submitted:

2. [44]

   In oral submissions, Mr Elliott accepted that the mere fact that these proceedings arise out of the same transactions as were the subject of the Earlier Proceedings is not, itself, a reason to resist transfer of these proceedings to the Supreme Court of Victoria.

3. [45]

   That must be so.

4. [46]

   Pitcher Partners were not parties to the Earlier Proceedings and are not bound by the findings made in those proceedings. Indeed, Mr Williams informed me that, in these proceedings, Pitcher Partners will seek to persuade the Court to come to differing conclusions than those to which Ball J came in the Earlier Proceedings; notably, as to whether Max engaged in the dishonest and fraudulent design that Ball J found and the Court of Appeal accepted. Mr Williams informed me that it will be Pitcher Partners’ case in these proceedings that Max did not engage in any such dishonest or fraudulent design. The question of whether Max and Twigg Co could adopt the same position in these proceedings was not explored in submissions before me.

Pitcher Partners’ conduct in the Earlier Proceedings

1. [47]

   As I have said, in these proceedings Diane and the Corporate Plaintiffs make allegations about alleged misconduct by Pitcher Partners and Max in the Earlier Proceedings “and how those parties did behave and ought to have behaved in this Court”.

2. [48]

   In his written submissions, Mr Elliott put the matter this way:

3. [49]

   Mr Williams submitted that there was no substance in any of the claims made in these proceedings about Pitcher Partners’ alleged misconduct in the Earlier Proceedings and that, in any event, Diane and the Corporate Plaintiffs have no prospect of showing that they have suffered any damage as a result of the conduct alleged.

4. [50]

   I am not able to make any assessment of that submission on this application.

5. [51]

   Serious allegations are made in the Amended Commercial List Statement as to Pitcher Partners’ conduct in the Earlier Proceedings and the substance of those contentions will have to be determined in due course.

6. [52]

   No doubt the Supreme Court of Victoria is as capable as this Court is in making an assessment as to the merit or otherwise of these contentions.

7. [53]

   However, I see substance in Mr Elliott’s submissions that this Court is the one best placed to consider and determine these claims, in that it would be more appropriate for this Court to determine whether Pitcher Partners have misbehaved in the manner alleged in proceedings before it.

8. [54]

   I see this as a factor pointing to the appropriateness of this Court determining these proceedings and against the proposition that it is in the interests of justice that the proceedings be determined by the Supreme Court of Victoria.

The Earlier Proceedings remain on foot

1. [55]

   Mr Elliott has also pointed to the fact that the Earlier Proceedings are not yet concluded in that the Court has made an order for reference to the Honourable Robert McDougall QC to make a determination of the rents and profits earned in respect of certain properties that Ball J found to be held on constructive trust for Diane and the Corporate Plaintiffs.

2. [56]

   The reference is listed for hearing on 7 to 11 November 2022. Diane and Max and their corporate associates are parties to that reference. A subpoena has been issued to Pitcher Partners in respect of it.

3. [57]

   Mr Elliott submitted that if these proceedings were transferred, “there will be two concurrent and related proceedings being conducted by differently constituted legal teams in different jurisdictions” and that “it is inefficient and undesirable to have one proceeding involving the parties being conducted here, and another in Victoria”.

4. [58]

   I see that factor as also pointing, although not strongly, to the conclusion that the interests of justice do not require transfer of the proceedings.

Exclusive jurisdiction clause

1. [59]

   Pitcher Partners referred to an exclusive jurisdiction clause contained within a document called “Terms of Engagement” said to have been attached to a letter sent by Pitcher Partners to the “Twigg Group” on 30 July 2007. The 30 July 2007 letter was signed by Max on 31 August 2007 and includes, under the heading “Terms of Engagement”:

2. [60]

   In a copy of that letter, annexed to Mr Theodore’s affidavit of 2 June 2007, the “Terms of Engagement” document is shown as an attachment, although the footer to that document refers to “Terms of Engagement dated 23 May 2007” rather than 1 May 2007 as stated in the body of the 30 July 2007 letter.

3. [61]

   Within the “Terms of Engagement” is this provision, under the heading “Applicable Law”:

4. [62]

   Mr Roberts has deposed that Diane, and her daughters, have informed him that they are not aware of any prior engagement letter. Mr Roberts said that no such prior engagement letter was produced during discovery or on subpoena in the Earlier Proceedings.

5. [63]

   There is a controversy, which I cannot resolve on this application, as to whether the “Terms of Engagement” document was in fact attached to the 30 July 2007 letter.

6. [64]

   Assuming that it was, there is a real question as to whether it is engaged. As Mr Elliott submitted:

7. [65]

   In any event, although an exclusive jurisdiction clause carries great weight on a transfer application, [16] it does not oust the jurisdiction of the Court. [17]

The forthcoming strike-out application

1. [66]

   Finally, I see Pitcher Partners’ forthcoming strike out application as a factor pointing strongly to the appropriateness of this Court determining these proceedings.

2. [67]

   By their Notice of Motion filed on 15 July 2022, Pitcher Partners seeks an order that pars 12D and 16B to 150 of the List Statement be stayed or struck out. In those paragraphs Diane and the Corporate Plaintiffs seek relief against Pitcher Partners arising out of the transactions that were the subject of the Earlier Proceedings. They include the allegations made concerning Pitcher Partners’ alleged misconduct in the Earlier Proceedings.

3. [68]

   In substance, Pitcher Partners contend that these proceedings are an abuse of this Court’s process.

4. [69]

   Thus, in a letter sent by Mr Theodore to Mr Roberts on 6 July 2022 foreshadowing that application, Mr Theodore outlined the basis upon which Pitcher Partners will argue that application:

5. [70]

   It is clearly appropriate that this Court, and not the Supreme Court of Victoria, determines whether its own process has been abused. I do not mean to suggest that the Supreme Court of Victoria could not adequately attend to the task. Of course, it could. But it would not, in my opinion, be appropriate for this Court, by transferring these proceedings to the Supreme Court of Victoria, in effect to impose on that Court the task of determining whether this Court’s process has been abused.

6. [71]

   I see that as a powerful, indeed, determinative, factor on this application. In my opinion, the proceedings must stay here for the determination of the strike out application. If the application is successful, these proceedings will be permanently stayed, dismissed or struck out. That will be that. But if the application is not successful, I cannot see how it would then be in the interests of justice to transfer them elsewhere for ultimate determination.

Conclusion

1. [72]

   Overall, I am not persuaded that it is in the interests of justice for the proceedings to be transferred to the Supreme Court of Victoria. On the contrary, I am persuaded that, primarily because of the impending strike out application, it would not be in the interests of justice to do so.

2. [73]

   The first to third defendants’ Notice of Motion filed 7 June 2022 is dismissed with costs.