Kodak (Australasia) v AWA Davis [2006] VSC 111

What the court decided

Kodak (Australasia) Pty Ltd sued 17 defendants operating in partnership as Canberra Imaging Group (CIG), a private radiology and nuclear medicine practice based in and around the ACT [1]–[2], [31]. Kodak's proceeding in the Supreme Court of Victoria alleged Kodak had agreed to supply and install an integrated radiology information and picture archiving communication system for CIG, and sought damages for repudiation or breach; it was at an early stage, no defence filed [2], [4]–[6], [40].

CIG's summons sought a stay or a transfer, and Hollingworth J dealt with it simply as a transfer application [3]. The limb relied on obliges the Supreme Court of Victoria ("first court") to transfer any pending proceeding to the Supreme Court of another State or of a Territory if it appears to the first court that it is otherwise in the interests of justice that the other court determine it [7].

The High Court, she said, had affirmed that a court must be satisfied which court is more appropriate as a forum (the one with the most real and substantial connection with the proceeding's subject matter) and that starting from a presumption that a plaintiff's initial choice of forum carries independent weight is inappropriate [9], [11]. She left open whether an applicant bears any onus, though agreeing with another Victorian judge that a High Court justice's observations denying such a burden were persuasive [12].

The alleged agreement had a clause applying Victorian law to any disputes, unless the context otherwise required or it was specifically otherwise stated, but no choice of jurisdiction clause [14]–[15]. The cause of action was simple breach of contract on common law principles; Kodak relied on no statute and there was no basis for believing a law unique or peculiar to Victoria likely to govern [16]. In the circumstances her Honour treated the choice of law clause as neutral or, at best for Kodak, a weak factor for retaining the proceeding in Victoria [17]. The pre-contract meetings, survey and installation work and CIG's alleged failures relied on by Kodak were in the ACT; the only relevant Melbourne connection, Kodak's alleged ordering of software and hardware from there, was minor and likely to be uncontentious, and the overwhelming connecting factors, in subject matter, were with the ACT [19]–[21].

She saw Kodak's and the defendants' location as neutral but witnesses' location as of considerable importance here [24]. However many defendants might give evidence, all bar two were ACT residents [26]. None of Kodak's five likely witnesses was ACT-based; two were Melbourne-based and three would travel either way [28]. She considered it likely that some essential services may need to be suspended if CIG's partners had to attend a Melbourne trial, risking serious hardship in the conduct of CIG's business, not mere inconvenience and cost (though that would plainly be a factor) [33], [36].

She found any suspension or limitation of CIG's services would inevitably affect members of the public needing them [38]. Kodak argued that, though of community interest, this was not relevant to the interests of justice [39]. She disagreed: "courts do not operate in a vacuum"; in her opinion, in considering which forum was more appropriate for the dispute, the potential impact on the public and the potential adverse effect on the availability of health services were relevant to the interests of justice [39]. Weighing the competing considerations, she concluded the ACT was "clearly the more appropriate jurisdiction" and proposed to order transfer to the ACT's Supreme Court [41].

Why it matters

Here (simple contract breach, no statute relied on and no basis for believing a law unique or peculiar to Victoria likely to govern), a Victorian choice of law clause counted as neutral or, at best for Kodak, a weak factor for retaining the proceeding in Victoria [16]–[17]. Hollingworth J treated a distant trial's potential effects on the community and its health services as relevant to the interests of justice [39].

Numbers in square brackets are paragraph numbers of the judgment. This note summarises a decided case for education and is not legal advice. See how the notes are written.