Advantage Retail Management P/L v Security Dynamics Australia P/L and Anor [2014] QMC 14

MAGISTRATES COURTS OF QUEENSLAND CITATION: Advantage Retail Management P/L v Security Dynamics Australia P/L and Anor [2014] QMC 14 PARTIES: ADVANTAGE RETAIL MANAGEMENT PTY LTD ABN 88 135 543 994 (plaintiff) v SECURITY DYNAMICS AUSTRALIA PTY LTD ACN 006 765 493 (first defendant) and PAULINE ANNE COPE (second defendant) FILE NO/S: M13435/13 DIVISION: Magistrates Courts PROCEEDING: Stay of proceeding ORIGINATING COURT: Magistrates Court at Brisbane DELIVERED ON: 2 June 2014 DELIVERED AT: Brisbane HEARING DATE: 15 April 2014 MAGISTRATE: The Hon Judge Tim Carmody QC ORDER: Application dismissed with costs CATCHWORDS: PRACTICE AND PROCEDURE – INTERSTATE SERVICE – APPLICATION FOR STAY UNDER S 20 SERVICE AND EXECUTION OF PROCESS ACT 1992 (CTH) – APPLICABLE TEST – where Brisbane company agrees to provide lease negotiation services for Adelaide retail business– where place of formation of contract disputed but debt payable in Queensland – where claim issued out of Brisbane Magistrates Court registry and served in South Australia – whether balance of convenience favours the issuing court. COUNSEL: DH Locke for the plaintiff P White for the defendant SOLICITORS: Robinson Locke Litigation Lawyers for the plaintiff Corrs Chambers Westgarth as agents for Kelly & Co Lawyers for the defendant -- 1 of 8 -- 2 The application [1] This is the determination of a contested “on the papers” hearing of the defendant’s application for restraining orders under s 20 Service and Execution of Process Act 1992 (Cth) (the 1992 Act). The salient facts [2] Advantage Retail carries on business in the Brisbane suburb of Milton. [3] Security Dynamics “resides” and trades from a shop in South Australia. [4] In late 2012 Advantage Retail was engaged under a service contract (RE1) to negotiate the renewal of Security Dynamic’s retail shop lease on the best possible terms. [5] Performance fees due to Advantage Retail under RE1 were payable within seven days from the date of invoice and to be received in Queensland via electronic funds transfer. Litigation history [6] Advantage Retail filed the claim in the Brisbane Registry on 17 December 2013. It was served on Security Dynamics by post on 23 December 2013. [7] Default judgment granted on 21 January 2014 was set aside by consent on 10 March 2014. [8] Security Dynamics was directed to file and serve a Notice of Intention to Defend and Defence by 28 March 2014. [9] A defence lodged filed on 24 March 2014 admitted non-payment but denied any entitlement to the claimed fee. [10] The present application was made on 1 April 2014. [11] The hearing was adjourned to allow the parties to exchange outlines and affidavits in support. Service ex juris [12] Under the general law a State court’s adjudicative authority over personal actions depends on the plaintiff being able to validly serve a regularly issued claim on the defendant within the jurisdiction (Laurie v Carroll (1957-1958) 98 CLR 310). [13] The claim must demonstrate ex facie that the plaintiff’s right to relief is within the court’s geographical and monetary jurisdiction (Startune Pty Ltd v Ultra-Tune Systems (Aust) Pty Ltd [1991] 1 QdR 192). [14] Unless commenced in a central registry such as Brisbane the court in which civil proceedings must be brought and determined is the one the parties or the cause of action have a sufficient connection with (s 15 of the Magistrates Courts Act 1921). [15] However, Part 2 of the 1992 Act confers nation-wide territorial in personam jurisdiction on State and Territory courts and enables initiating civil process to be -- 2 of 8 -- 3 served throughout Australia, without leave, despite contrary court rules and irrespective of any nexus with the parties on subject matter of the litigation. [16] In McEntee v Connor (1994) 4 Tas R18 (where a writ claiming damages for assault committed in Japan was issued in Tasmania where the plaintiff resided and served in Western Australia where the defendant lived) Underwood J held at [16] that, with respect to causes of action that arise solely within Australia, the 1992 Act has, in a practical sense, ousted the common law of service ex juris. [17] By reason of s 15(1) and s 16 of the 1992 Act service of the claim in South Australia was lawful and conferred jurisdiction on this court to determine the action (Kontis v Barlin (1993) 115 ACTR 11 at 18). [18] Nonetheless, Security Dynamics and Ms Cope have a right to contest the overall convenience of the court (s 20(2)). [19] The statutory remedy is to restrain not transfer proceedings but the stay may be made subject to conditions including the commencement of proceedings in the more appropriate forum within a specified time (see s 20(5), Seymour-Smith v Electricity Trust of South Australia (1989) 17 NSWLR 648). Forum convenions [20] In proceedings under s 20(3) of the 1992 Act a discretionary choice has to be made between two but not necessarily equally appropriate jurisdictional options (R Mortensen, et al, Private International Law in Australia (2nd ed) Lexis Nexus 2011 at 4.50 cf Programmed Maintenance Services Limited v The Shell Company of Australia Ltd [2000] QDC 249). [21] This reflects the approach taken to applications to change of venue under UCPR 39 and 57 and transfer proceedings under the cross vesting laws. It involves the identification of the forum conveniens; that is, the court with which the action has the most real and substantial connection and which can be regarded as the natural forum in line with the approach adopted by the House of Lords in Spiliada Maritime Corp v Cansulex Ltd [1987] 1 AC 640 (St George Bank Ltd v McTaggart [2003] 2 Qd R 568 at [10] and [20]; cf Bankivest AG v Seabrook (1988) 14 NSWLR 711, World Fire Fighters Games Brisbane 2002 v World Firefightrs Games Western Australia Inc (2001) QSC 164). [22] The test for granting a stay of proceedings on the alternative basis under the Uniform Civil Procedure Rules 1999 (Qld) (“the UCPR”) is much stricter requiring the defendant to prove that the court of issue is a “clearly inappropriate” forum (or forum non conveniens) (see Voth v Manildra Flower Mills Pty Ltd (1990) 171 CLR 538; Oceanic Sun shine Special Shipping Company Inc v Fay (1988) 165 CLR 19). [23] In either case the onus is on the applicant to the court on the balance of probabilities that the application should be granted (cf St George Bank Ltd v McTaggart at [11] per McPherson JA). [24] The making of a stay order under s 20(3) is subject to the issuing court being satisfied that “all the matters in issue” can be more appropriately determined by an interstate counterpart. -- 3 of 8 -- 4 The matters in issue [25] The defendants submit without contradiction that the matters in issue relate to the construction of a contract and are summarised in paragraph 8 of its written outline as follows:- (a) whether or not the second defendant was a party to the contract; (b) whether or not the plaintiff engaged in discussions with the first defendant’s landlord to negotiate a new lease on the best possible commercial terms; (c) if so, whether or not the plaintiff achieved lease savings as defined in the contract in the amount of $75,104.38 or other sum; (d) whether or not the contract was validly terminated on 29 March 2013; (e) whether or not the plaintiff is owed the claimed amount; (f) whether or not the plaintiff was entitled to issue an invoice to the first defendant for that amount.” [26] Of these (b) and (c) are of central importance. There is also a dispute about whether the contract was formed in Queensland or South Australia. The rival jurisdictions [27] Magistrates Courts in this State have a defined statutory jurisdiction in civil cases which is exercised summarily; that is, expeditiously and without undue incidental formalities (Dowson v McGrath (1956) 58 WALR 27 at 32). [28] By a combination of sections 2 and 4 of the Magistrates Courts Act 1921, Queensland Magistrates have power to decide personal actions (including payment of a debt) where the monetary limit does not exceed $150,000. [29] The Magistrates Court of South Australia, by contrast, has jurisdiction to hear and determine money claims less than $100,000 pursuant to s 8 Magistrates Court Act 1991 (SA). [30] Accordingly, Magistrates Courts in Queensland and South Australia have concurrent jurisdiction over all matters in issue. The only question, therefore, is which of them is the more appropriate to exercise it. [31] In making that determination the court is entitled to consider the pleadings and any other material it has. Connecting factors [32] A court determining a stay application must take into account the matters stated in subsection 20(4) namely, the residence of the parties and of any witnesses, the place where the subject matter of the proceeding is situated, the financial circumstances of the parties, any forum clause, the law of the cause and whether a related or similar proceeding has been commenced. -- 4 of 8 -- 5 [33] There may be a range of additional matters pertinent to convenience and fairness (St George Bank Ltd v McTaggart at [11]). [34] In the analogous but not identical cross vesting context, for instance, Philippides J identified the following as relevant in assessing which court is the more appropriate to exercise jurisdiction: (a) the application of the substantive law if it is peculiar to a particular jurisdiction; (b) forensic advantages or disadvantages conferred by the competing procedural laws; (c) the plaintiff’s choice of forum and the reasons for that choice; (d) substantive connections with the forum (eg resident, domicile, place of occurrence and choice of law); (e) balance of convenience to parties and witnesses; (f) comparative cost and delay; (g) convenience of the court system (World Firefighters Games at [32]) [35] The factor in (c) is, of course, explicitly irrelevant to applications under the 1992 Act. [36] The others are equally applicable. The parties submission [37] The defendants submit that the Magistrates Court of South Australia is the more appropriate forum because:  the defendants principal place of business and residence are both in that State  the subject matter (a shop lease) is situated in South Australia  four of the likely five witnesses, including two representatives of the lessor’s agent, live in South Australia  the contract was formed in South Australia by Ms Cope’s acceptance on behalf of Security Dynamics of Advantage Retail’s offer made by its manager when visiting South Australia and  Security Dynamics will be put to great cost and disruption if required to defend the proceedings in Queensland. [38] Advantage Retail, by contrast, favours this court because:  the contract was entered into in Brisbane on 9 October 2012 ie when it was accepted and signed by Advantage Retail’s manager  of the nine witnesses it intends to call all (but one) work and reside in Brisbane. Five of them are current employees  the contract debt is owed in this State and -- 5 of 8 -- 6  the disadvantage to the plaintiff of having to restart and continue the litigation in South Australia outweighs any suggested prejudice to either defendant of having to defend here. The balance of convenience [39] The proceeding relates to a contract which, in terms of s 20(4)(d), does not make any reference to the place or the court in which the proceeding should be started or the governing law. [40] As regards s 24(4)(e) there is no discernable difference between the law of Queensland and that of South Australia applicable to the contested issues. [41] Neither forum is, therefore, any more appropriate than the other on that account. No party suggests that they will be procedurally disadvantaged in the other’s jurisdiction. [42] In such cases the court is guided by the real or presumed intention of the parties. The court must select the proper law of the contract being the place with which the transaction has its closest and most real connection (Bonython v Commonwealth [1951] AC 201 at 219). [43] The making or breach of a contract in Queensland may provide the necessary link. [44] Under Australian law a contract is formed at the place where the final act regarded as completing it occurred. Where the postal rule applies the contract is made in the place were the acceptance was posted. Otherwise, it will be the place where acceptance is received (Express Airways v Port Augusta Air Services [1980] Qd R 543). [45] Although there is a disagreement about where the relevant contract was finalised the pleadings and Exhibit RE1 are more consistent with Advantage Retail’s version. The defendants admit in paragraph 2(a), for instance, that the agreement was entered into between the parties on or about 9 October 2012 which is the date it was counter signed by Advantage Retail’s manager in Brisbane not when it was signed by Ms Cope in South Australia on 1 October 2012. [46] Moreover, a breach of contract occurs at the place where the payment obligation should have been performed. Where, as here, a debtor has agreed to pay a debt to a creditor at a particular place the natural forum is that place ie Brisbane. [47] Thus, assuming the expression “subject matter of the proceeding” in s 20(4)(b) refers to the cause of action or the relief claimed eg an unpaid debt, rather than leased property, then, irrespective of where the contract was made, Queensland appears to be where it is situated. [48] Turning now to the matters stated in paragraphs (a), (e) and (c) and any other unspecified considerations connected with the competing courts. [49] It is common for stay applications to turn on the location of witnesses or proposed witnesses and the travel costs likely to be incurred the resources of each party may be a material factor. -- 6 of 8 -- 7 [50] However, in DStore Ltd (in liq) [2005] SASC 24 refusing the defendants applications to transfer an action by a liquidator’s in South Australia to Victoria, Debelle J observed: “In these days of quick and efficient transport and communication, questions on convenience have less force then hitherto. The speed and facility of both electronic and telephonic communication enables ready contact (with the court) while a party is interstate.” [51] His Honour added: “The availability (cheap and frequent) of air transport reduces the inconvenience of interstate travel.” [20] [52] There is no direct evidence of the comparative financial circumstances of the parties but both are trading corporations and I doubt it would be overly onerous for either of them to fly witnesses to Queensland if audio-visual facilities were not available or appropriate. [53] The first and second defendants are resident or carry on business in South Australia and the plaintiff has its registered office in Queensland but apparently conducts commercial transactions in both jurisdictions. [54] With respect to witnesses likely to be called in the proceedings it seems clear that those in support Advantage Retail’s case are mostly resident in Queensland while those relevant to the defendants, including the lessor’s agents, live in South Australia [55] As far as can be told at this early stage there will probably be more for Advantage Retail to prove in the action. More local witnesses will, therefore, probably be needed than interstate ones. [56] Assessing comparative convenience and economy of litigation also includes having regard to where relevant documents and records evidencing transactions are kept (cf Acton Engineering Pty Ltd v Campbell (1991) 31 FCR 1 at 3 (per Black CJ) and at 4 (per Davies J). [57] There is nothing in the material indicating where most of the relevant documents are situated or how documentation will need to be produced at trial. Nevertheless, it can be reasonably expected that Advantage Retail’s business and banking records are more accessible to it in Queensland. [58] After weighing the stated and other relevant factors I believe the balance favours an order dismissing the application. The cost and inconvenience to witnesses to be called by each party tend to cancel each other out. Furthermore, any breach is likely to have occurred in Brisbane where payment by direct debit arrangements was due. Consequently, there appears to be a closer and more natural connection overall with the Brisbane Magistrates Court than South Australia. [59] For these reasons the Magistrates Court of South Australia is not manifestly the more appropriate forum. Thus, the applicant has failed to discharge the onus of demonstrating a clear and compelling basis for relief (Rick Cobby Pty Ltd v Podesta Transport Pty Ltd (1997) 139 FLR 54, 58 per Olsson J). -- 7 of 8 -- 8 [60] Accordingly, the application is dismissed with costs either to be agreed within 7 days or assessed on the standard basis. -- 8 of 8 --